Executive Summary

Apple has come up with a revolutionary gadget which they named iPhone. This phone

combines power with simplicity to deliver an experience like no other. Overall, its hardware is

superior to any other phone in the market, with its operating system considered one of the best.

However, the work did not stop here for iPhone, with continuous research and development they

have come up with improvements that continue to capture the imagination of its customers.

From communication to entertainment, this phone has everything to keep a person

preoccupied and connected to this fast paced world. Which Apple has focused on providing

quality apps for its users, it has also focused on providing apps to help businesses increase their

efficiency.

Targeted to young adults, this phone has made Apple a leading player in the phone

market, even though the iPhone costs a lot compared to its competitors, there is a large market

for this phone. The iPhone 4s has opened up new avenues in the mobile phone industry. Packed

with innovative features, this phone is a result of the rigorous research Apple has done in order to

satisfy its customers and take them a step beyond the rest.
 Table of Contents

Executive Summary....................................................................................................................................... 1

Background Information ............................................................................................................................... 3

Consumer Analysis ........................................................................................................................................ 4

Market Segmentation ................................................................................................................................... 6

Benefits Sought by Consumer ................................................................................................................... 6

Demographic Variables ............................................................................................................................. 7

Behavioral variables .................................................................................................................................. 7

Psychographic Variables ........................................................................................................................... 7

Market Segmentation Groups ...................................................................................................................... 8

Teenage group .......................................................................................................................................... 8

Young Adult Group.................................................................................................................................... 9

Professional Group.................................................................................................................................... 9

Primary Target Audience .............................................................................................................................. 9

Young Adult Group as a Primary Market Segment ................................................................................. 10

Influence of Reference Groups on Purchase Decision................................................................................ 11

Primary Groups ....................................................................................................................................... 11

Secondary Groups ................................................................................................................................... 11

Recommendations for Marketing Channels ............................................................................................... 12

Conclusion................................................................................................................................................... 12
 Marketing Consumer Behavior

Background Information

As we know, business reports play a vital role in the process of decision making under

different circumstances. A number of factors are looked upon when a business report is prepared.

There should be a well defined objective of preparing a business report which would serve the

manager as an important tool to make an appropriate decision.

The purpose of preparing this report is to identify the market segments for our product

which is Apple’s smart phone, iPhone 4s. The main aim of this report is to focus on the

segmentation of this product in the market and identify the target audience for this product and

the factors that would influence consumer’s purchasing behavior in regard to the selected

product (Davis, 2004).

Apple is famous for introducing its consumers with innovative designs of their products and

improved technology to provide its consumers an opportunity to experience the best technology

based phone with improved and innovative features. This report is based on the marketing

aspects and behavior of consumers relating to Apple’s product iPhone 4s. Iphone 4s falls in the

category of fifth generation of iPhone and it is a smart phone based on touch scree technology.

The consumers who were waiting for Apple’s new product experienced a feeling of

disappointment because of the design or appearance of the new phone. The design of iPhone 4s

was same as its previous version iPhone 4 (Trautschold, 2012). A number of new features were

introduced by the company in this product which provided the consumers with satisfaction and

an opportunity to experience the innovative touch-screen based smart phone developed by

Apple.
 Consumer Analysis

Consumer Analysis is basically referred to identifying the needs of the consuners, their

purchasing power and segmentation of the market to improve the process of targeting the

valuable consumers and increase profitability of the organization. It is very important for an

organization to understand that all individuals are not the same and some policies should be

made and implemented by an organization to identify the demands of individuals and the ways

through which they get motivated, and then relate them to the attributes and features of its

products.

Iphone 4s has dual core graphics and dual core A5 processor of iPad 2 which allows this

phone to give more detailed 3D graphics to its users. Apple claims that iPhone 4s becomes seven

times faster on games and twice the time faster in other normal tasks with its combination of

hardware. It has higher internet speed which runs on HSPA+ networks which are fast enough and

allows this phone to download files from the internet faster

(www.computerandvideogames.com).

The phone also has 8 megapixel camera with a new lens and sensor sysem, these

innovations in the new product of the company allows the user to shoot video at 1080p temporal

noise reduction and real time stabilization of image. The company claims that the battery timing

will not be impacted by the new processing system of the phone. A change in the antenna design

has also been made to solve signal problems and this phone is available with multiple storage

options like 16, 32 and 64 GB of internal memory (www.engadget.com).

The most innovative feature introduced in iPhone 4s is the smart assistant named Siri

which is voice recognition software which actually interprets the commands of the users and

performs the functions that the user asks the phone to do and replies back to the user.
 Apple is known for its strong brand positioning in the market. After the success of iPhone

4, the company collected thousands of preorders for iPhone 4s which were above the expected

amount of orders to be received and the shares also increased by 4%. Apple’s products are

different and innovative as compared to its competitors, so the company is not afraid of less sales

because it has a huge number of loyal customers (www.apple.com). It is concluded that Apple

places itself at the top position among its competitors and therefore has a strong positions its

brands strongly in the market.

After a brief overview of the attributes of iPhone 4s, now the needs and motivation of the

individuals that would arouse the feeling of purchasing this product should be recognized.

Motivation is defines a s the feeling or emotional forces that arouse an individual to perform a

particular action. According to the attributes of iPhone 4s, an individual would be motivated to

purchase this phone due to the emotional forces that would cognitively arouse within an

individual. Individuals who would want themselves to stand out in the crowd would be

motivated to purchase this product.

Cognitive arousal is basically defined as awareness of needs in an individual which lead

to the personal achievement of that individual. The consumer’s basic needs that would be

fulfilled by this phone will include his recognition among people. IPhone 4s being a high class

technology based phone is noticed by everyone in the crowd. So, a person who would be having

this phone would definitely be recognized by everyone and that an individual will feel a sense of

recognition and achievement among other people.

The basic needs of an individual that would be associated with iPhone 4s would be to use

internet on the go. The teenage group would require this smart phone to socialize with their

friends and family instantly regardless of their location, listen to songs and watch videos. The
individuals who work and those at executive level would be requiring remaining updated with

their business activities and coordinating with their colleagues and communicating effectively.

This is a brief discussion about the relationship between the attributes of iPhone 4s and

the needs and motivation that arouse an individual to purchase this valuable product. This needs

assessment is very important for the organization as it helps the organization to improve

segmentation of a particular product.

Market Segmentation

Market segmentation is basically referred to a process of identifying a potential group of

people with the same needs and that would respond to the market in a similar way. It is very

important for an organization to identify the group of people to target in order to result in

improved segmentation of market. There are some variables on the basis of which an

organization segments its products. According to the attributes and features o iPhone 4s, there

would also be some important variables on the basis of which the market will be segmented for

this product. There are four potential variables that would be considered for market segmentation

of this product which are discussed as follows.

Benefits Sought by Consumer

The basic variable that will be considered for market segmentation of iPhone 4s will be

the benefits that different consumers will be seeking by this product. Different consumers will be

looking for different benefits from this product based on their age, educational level and status.

Young individuals will be seeking benefit from this phone from entertainment perspective while

individuals who have an executive status would be seeking benefit from the perspective of
coordinating and communicating with his subordinates and keep in touch with his organizational

activities. This variable is a wide perspective which involves other major variables of segmenting

the market for the product.

Demographic Variables

These are the variables which include the basics about defining an individual. These

factors involve age, gender, occupation, income, education level, occupation, religion and

nationality of the individuals. The demographic variables are very important to be considered

while segmenting the market for iPhone 4s. These demographic variables will play an important

role in the market segmentation of Apple’s iPhone 4s.

Behavioral variables

These are the factors or variables that include a consumer’s attitude towards the product

and his knowledge about the product. These variables include benefits of the product, price of

the product, rate of usage and the loyalty of the consumer towards a particular brand. These

variables also play an important role in the market segmentation of iPhone 4s. The attitude of an

individual towards the previous versions of this phone is important to consider and the

knowledge that an individual has about the new version is essential to consider targeting a

specific group of people for the product.

Psychographic Variables

These are the variables which actually define the lifestyle, personality and status of an

individual. Usually, psychographic variables will include the personality, interests, activities,
opinions, values and attitude of an individual. These variables will also be considered very

important to identify proper segmants of the market for iPhone 4s. The most important factors in

determining the right group of people will include the personality, interests and activities of an

individual to segment the market for this phone. Different interests and activities of different

individuals will lead to segmenting specific group of people for iPhone 4s.

Market Segmentation Groups

After identifying the different variables that would serve as a basis for the market

segmentation for iPhone 4s, three specific groups of people are selected to segment the market

for this product. These three groups were selected to be targeted on the basis of demographic,

psychographic, behavioral and the benefits sought variables of individuals from different age

groups. The benefits sought by different groups are discussed as follows.

Teenage group

This is a group which will include individuals ranging from 13 years old to 19 years old.

This group will be targeted because of their need of getting entertained from this product. They

would be seeking a phone to listen to music, watch videos and socialize with friends using the

internet facility for using social networks regardless of the location they are present at. This

group of individuals will be targeted by Apple because all these attributes which the consumers

of this group need to be present in their phone are available in iPhone 4s.
Young Adult Group

This is a group which includes individuals ranging from the age of 24 years to 30 years.

These people are those who work and as well are fond of entertainment because of their age

group. These individuals require both business applications as well as entertainment software in

their phone so that they could balance their professional and entertainment needs accordingly.

The purpose of targeting this group of people is that iPhone 4s is configured with all business

applications as well as entertainment software for its users. This is a group which utilize both

these attributes of this phone and could give a boost to this phone’s sales and profitability of the

company.

Professional Group

This is a group of people which include people ranging from the age of 35 years to 40

years and above. These people require a smart phone to just stay connected to their professional

life. These people are mostly at executive level in their professional life so they need improved

business applications in their phone that would allow them to get updates about their

organizational business activities and stay connected to their subordinates to supervise and

organize various business activities. Apple identifies the needs of this age group and segments

this market because all these requirements are present in iPhone 4s and allow these consumers to

get the most out of this phone.

Primary Target Audience

It is very important for an organization to identify the primary target audience for its

product. It is important to identify the primary target audience because it will help the
organization to identify the potential group of consumers who require the organization’s product

and could purchase the product and increase the profitability of the organization more as

compared to other target segments identifies for the product (www.huffingtonpost.com).

In this case where our product is iPhone 4s, it will be equally important to identify the

primary market segment of consumers to target and market to improve the segmentation process.

The primary market segment of consumers according to the conducted research and the attributes

of iPhone 4s will be the young adult group of people because their needs match with the

attributes of this phone to a greater extent as compared to the other market segments of

consumers that were identified.

Young Adult Group as a Primary Market Segment

The young adult group consists of people who are working professionals at a reasonable

young age. These individuals will be in their working phase of life and would be requiring

managing their professional life and personal and entertainment life. They would need the

entertainment applications of this iPhone 4s for playing games, watching videos and listening

music. These people would also require this phone to stay connected with their family and

friends through social networks and upload and download various files and documents from

internet through the fast internet speed provided in this phone. They would also require business

applications to stay connected and get updated with their job related tasks and coordinate with

his colleagues and communicate business tasks with other employees of his business

organization.

So, iPhone 4s provides this primary segment market with all the necessary features which

they need to be in their phone. Apple targets this group of people because this group has more
potential to purchases this product. The people of this group have more potential of this group to

purchase this phone as compared to the other segment of consumers identified above in the

market segmentation section of the report. The individual’s decision of purchasing iPhone 4s will

be influenced by a number of variables that will include his age, occupation, income, price of the

phone, the benefits that he will be getting from the product.

Influence of Reference Groups on Purchase Decision

It is not the marketing that attracts customers; rather the society influences people to

purchase this phone. iPhone is not a regular communication device. It is a device that portrays a

status. Therefore, while the features do attract customers, it is actually the society that influences

people to purchase it. There are basically two groups of people who influence the buyer’s

decision; primary groups and symbolic groups.

Primary Groups

The primary group includes friends and family members. This group has the biggest

influence on potential buyers. People are influenced by this group because they wish to adapt to

the prevailing trends in the society.

Secondary Groups

The second group that influences people to use iPhones is the symbolic group. They

include coworkers and celebrities. This group may have a higher influence when compared to the

primary group. The reason is that coworkers belong to almost the same socio economic class
since their salaries may be similar. Therefore, if one coworker owes an iPhone, others are most

probably to follow the suit.

This concludes that iPhone is not a necessity rather it is a device that portrays a person’s

status and class. This has led Apple to charge a premium on its brand since customers will still

purchase it even though it may be quite expensive. Therefore, as long as Apple continues to

make innovations in its product and keeps it a step ahead of its competitors, it will remain one of

the best phone companies in the world.

Recommendations for Marketing Channels

Apple is marketing is phone very well, all that it required is some improvements in the

channels. Social media is the best marketing media to showcase the phone but unfortunately

iPhone is not doing that well in this medium. But despite this, iPhone is very popular on social

medium since customers keep sharing their experiences about this phone. Whenever a new

model of the phone is launched, it goes viral on the net. The reason is that although the phone is

expensive, it is within the reach of the upper middle class (www.thenextweb.com).

Another area that needs to be targeted is direct marketing to businesses. Since several

companies give their employees a phone as a benefit. Targeting these companies can increase the

sales of iPhone. Over time, these companies will consider repurchase the product; hence, sales

can be increased to a great extent. These are the two most important channels through which

Apple could market its product iPhone 4s effectively to its segmented groups.

Conclusion

Apple’s new phone, iPhone 4s is an innovative smart phone which provides its users with
improved software applications enabling them to keep connected with family and friends, play
games and enjoy music. So, the increasing developments that Apple provides its consumers
make its products valuable to consumers and makes the organization the leader in the consumer
market.
 References

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McFedries, P. (2012). IPhone 4S. Indianapolis, IN: John Wiley & Sons.

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Davis, G. (2012). How to do everything: iPhone 4S. New York: McGraw-Hill.

Trautschold, M., & Ritchie, R. (2012). iPhone 4S made simple. New York: Apress.