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Marketing Segmentation Targeting And Positioning Marketing Essay

Introduction

In marketing segmentation, targeting and positioning of the product is necessary, it is also known as STP process. Segmentation helps the manager to identify which area they have to focus on according to geography, demographics, social or other factors. After segmentation targeting is done which requires the needs of target customers to be fulfilled. After segmentation and targeting the positioning comes which refers to the way the consumer have the image of the product. Segmentation, targeting and positioning go hand in hand for an organisation to achieve the desirables.

Market segmentation is a process of grouping people together with similar needs or smaller segments who show similar buying pattern. Segmentation is done either for differentiating a product or to target a specific group of people to earn profit. It is a form of critical evaluation rather than a prescribed system or process.

According to Kotler 2010 the requirements of effective segmentation must be:

Measurable

It depends upon the buying capacity of the consumer.

Accessible

For effective segmentation the product should be easily accessible and the needs of the consumer are fulfilled.

Substantial

There should be enough number of people to buy the product.

Differentiable

This market segment has made different segments and they act accordingly according to the market need.

Actionable

This depends on how the product attracts and serves the segments.

When the focus is on segmented markets a company is allowed to use its resources more effectively and efficiently thereby increasing the chances of its success in the market.

According to Kotler 2010 for the effective segmentation of Apple iPhone the buying capacity of the consumer is a little low due to laws of economics. An Apple iphone costs around £299 which is a lot of money and people think a lot before buying it. The Apple iPhone is widely accessible to USA, UK and many European countries but Apple does not launch its iPhone in countries where they feel people won’t be able to pay the price. According to (West & Mace, 2007) Apple differentiates itself from its competitors through innovation. The iPhone offers unique features which cannot be imitated and offers the latest feature which attracts customers to buy the product.

Blackberry on the other hand like iPhone has a low buying power due to the fact that it is regarded as a business phone but it has its own market in which it excels. Blackberry sells everywhere and in the business world there are enough people to buy the product. Blackberry is regarded as a business phone which differentiates it; apart from being a business phone Blackberry also differentiates itself by its unique Blackberry messenger service in which a person can send and receive instant text messages anywhere and in any part of the world without being charged. The Blackberry messenger service differentiates this phone from its competitors. Blackberry has attracted a lot of business personnel as the phone serves the purpose of being connected with the business anytime.

Nokia is different from both Blackberry and the Apple iPhone it has high buying power because it has a phone for everyone may be rich or poor. Nokia has entered the markets of both Blackberry and Apple iPhone and is doing quite well. The Blackberry is competing with Nokia E – series which is the business edition of Nokia and for the Apple iPhone it is the N – series. Apart from these series there are other series as well which focuses on the different segments of the society. Nokia has its products in every segment and which is at a lower price than its competitors which help Nokia to differentiate itself. Nokia sells its products in every part of the world unlike the iPhone and Blackberry and at a lower price. This low price is achieved because of economies of scale, since it serves a large number of the population. Due to Nokia phones being cheap, reliable and long lasting than its competitors it attracts a lot of customer. Nokia offers similar features as offered by its counterparts. Nokia products are not always cheap it has a product range called the Vertu which offers the world’s most exclusives phones.

According to (Dibb et. al. 2006) the advantages of segmentation of a market can be done by:-

Understanding the customer – This requires a careful study and research to understand the customer needs and wants. Therefore an organisation can focus on the key factors and put more emphasis on understanding the customer thereby improving brand loyalty.

Understand the competitor – This requires a study of the market to know who the main competition for an organisation is and which segment is been targeted. So that the organisation pays more emphasis on the product.

Effective resource allocation – After understanding the customer and the competitors an organisation is in a better position to utilize the company resources effectively.

Strategic Marketing Planning – Dividing the market into segments helps the marketers to develop special plans to gain the attention of the competitors.

Market segmentation

According to Dibb et. al. 2006 market can be segmented according to

Demographic Variables

Age Occupation

Gender Family Size

Race Family life cycle

Ethnicity Religion

Income Social Class

Education

Geographic Variables

Population City Size

Region Market Density

Urban, Suburban, Climate

rural

Psychographic Variables

Personality attributes

Motives

Lifestyles

Behaviouristic Variables

Volume usage

End use

Benefit expectations

Brand loyalty

Price sensitivity

(Adapted from Dibb et. al. 2006 pp – 228)

Demographic Variables

It is the characteristics of the population such as age, gender, race which help in knowing the needs and buying behaviour and can be recorded. These types of variables can be measured easily. It helps an organization to know what type of population they are going to target. According to Kotler 2010 by segmenting according to the age helps the companies to develop the product according to the needs and wants of that age group. Segmentation according to gender or income divides the market accordingly and it helps to understand what type of products a company has to deliver in order to achieve

Geographic Variables

The need of customers changes according to the population, region, and climate. The geographic variables play a very important role in the market segmentation because the needs of customer may be different for different customers. An organization can decide in which countries they would like to operate in or what kind of population they are going to target.

Psychographic Variables

The personality characteristics, motives and lifestyles are sometime used to segment the market. It can be used alone or mixed with any other type of market segment. It is useful when the competition is intense. The marketers may also segment according to the social classes of different people; this helps an organization to know who their customers is and what kind of products they would like to have.

Behaviouristic Variables

The market can also be segmented according to the consumer behaviour towards the product. It may depend upon brand loyalty or on the price of the product. According to Kotler 2010 a market can be segmented according to loyalty also. If the product has made an impact on the customer then the company has achieved what was required.

Market segmentation of Apple iPhone

The Apple iPhone is targeted for the people lying in the age group of 18 to 40 year olds because they are the ones who are interested in buying the technology. Mainly males rather than females are targeted for the iPhone because of the applications, games and features such as wireless internet which are generally used more by the male population as compared to the latter. The customers buying the Apple iPhone are usually students who belong to higher class as well as higher middle class as the phone is quite expensive they even involve early adopters and the early majority. The iPhone is launched and sold first mainly across USA, UK and some parts of Europe because they have the infrastructure ready for it and also because the competition in these countries is quiet intense. Apple iPhone has a strong brand image in the mind of the customer as Apple says it’s not a phone it’s an experience. The after sales service provided by Apple is very good which helps in creating brand loyalty among the customer. The price positioning strategy of the Apple iPhone 4 is premium strategy which means that the iPhone 4 is of very high quality and to get that quality the consumers have to pay a higher price.

Market segmentation of Blackberry

The blackberry is regarded as a business phone it is not targeted towards a particular age group but it is targeted towards the business segment consisting of business professionals. There is no social class for the blackberry because it targets the whole business segment. The phone offers business features like access to e – mail wireless internet and many other but the most remarkable feature it has is the blackberry messenger by which a person can send and receive text anywhere, anytime in the world free of charge. This is the most unique feature of the blackberry phone it gets connected to any blackberry phone in the world through a pin number which is different for every blackberry phone. Once the connection is set a business personnel can send and receive texts which is very helpful a person can receive important messages delivered to him on the go.

Market segmentation of Nokia

Nokia on the other hand has gained entry into all the segments it has something for everyone. Nokia has customers of all age group demographically it targets younger age groups who want the latest features at an affordable price. There is no social class involved for Nokia as it has a phone for every social class. The people buying Nokia phones can be student, business professionals.Nokia through high production has been able to reduce the cost of it phones which helps it to capture a large market. Nokia has a product for every customer in every bracket. The E- Series of Nokia is designed for the business class, the N – series is for the teenagers and has normal phones for other people as well. Nokia has developed a phone for the highly social class known as the Vertu which is an exclusive for the higher class. Nokia has diversified with the range of products it has in the market. Nokia has different models and they fall in different price brackets according to the features they provide. Nokia has made its brand image as a reliable and value for money kind of phones.

CONCLUSION

According to the segmentation techniques utilised by Apple iPhone, Blackberry and Nokia it is evident that Apple iPhone segments itself from Blackberry and Nokia by innovation, Blackberry segments itself from others with its Blackberry messenger service and Nokia segments itself from others through reliable and value for money phones.

POSITIONING OF iPhone 4

According to Kotler 2010 positioning can be defined as the perspective of a consumer mind on what he thinks about the brand. According to Dibb et. al. 2007 it is the image that a consumer perceives about the product. The position of Apple iPhone 4 in peoples mind is quite high it is a premium product having very high involvement of research and development and is targeted towards people who are rich, having a good lifestyle. It is a premium product having a high price and having exclusive features which other mobile phone manufacturers don’t have. There is a price for this exclusivity because the way Apple has made an image of the iPhone 4 is remarkable the punch line for iPhone 4 is This changes everything.Again. which means that the iPhone 4 has changed the way we used to look at mobile phones it is something different than traditional or it can be defined as an innovation or it is an experience rather than a phone. Due to the exclusivity and the features involved Apple can set a premium price for the iPhone 4 as the features and the experience of iPhone 4 cannot be imitated by any other mobile manufacturer.

PRODUCT OFFERING

The iPhone 4 provides a wide range of stunning features the iOS 4 is the heart of the phone, it is the world’s most powerful mobile operating software which distinguishes it from other mobile phones. The technology and the features used in the operating system will keep the iPhone 4 at least 4 years ahead of its competitors. The operating system also helps the phone to do a lot of things at once without even slowing down the performance of the phone. The 3.5 inch widescreen multi touch display of the iPhone 4 has a resolution of 960 X 640 pixels which is very high and it helps in giving a sharp pictures. The 5 megapixel camera along with LED flashlight helps in taking pictures in low light. The iPhone 4 is the world thinnest smartphone ever built and the glass used on the screen is made up of aluminium silicate which helps it to be durable and scratch resistant and is recyclable too. Apart from the hardware Apple has a collection of over 3,00,000 applications in the App Store which helps in improving the performance of the iPhone as well as it updates the phone automatically. It has a built in flash drive of 32 GB or 16 GB and the built in battery provides a longer backup for calls and internet.

POSITIONING MAPS

According to Kotler 2010 the position maps are used by marketers to know the perception of the brand in consumer minds. The positioning of iPhone 4 lies in the luxury segment with high performance along with a high price than its competitors.

BRAND EQUITY

According to Dibb et. al. 2007 brand equity can be defined as the value of brand which goes above the functional benefits of the product.

(Adapted from Dibb et. al. 2007, pp - 319)

Brand equity plays an important role in the positioning of the product in the market it is the value of the brand which the consumer keeps in mind.

Brand Name Awarness

The brand name awareness helps the consumer to get familiar with the brand which helps in the selection of the brand. In the case of iPhone 4 the brand is known to everyone and the consumers are switching to iPhone 4 because it is reliable and is of high quality as compared with other brands.

Brand Loyalty

Brand loyalty is an important aspect of the brand equity because it reduces the competition with other mobile phone brands. It helps in retaining the existing customers and provides a potential for new customers to be loyal. Apple with the launch of iPhone 4 has been loyal to its customers by delivering the most innovative features and exclusivity that earlier version of iPhone had. this helped Apple in retaining their customers and inviting new customers.

Perceived Brand Quality

Customers see quality with the brand. Apple is a brand and has high level of quality so the consumer has in mind that whatever product Apple will make will be of high quality and standards that is why Apple is able to sell the iPhone 4 at a premium price allowing it to reduce competition.

Brand Association

Apple has created a lifestyle for itself; the statement associated with iPhone 4 is This changes everything. Again. This means that Apple has introduced the iPhone 4 as a unique product which has the best features and value amongst its competitors.

BRAND ELEMENTS

Brand elements can be defined as the different criteria’s by which a product is defined.

Brands elements should be

Memorable

Apple iPhone 4 has a strong brand image and is easily recognized by the consumer. Apple has been ranked among the top 10 brands of 2010 in the world it holds third position therefore there is a very strong image of the company in the minds of the consumers and the consumers is able to identify the brand.

Meaningful

After the launch of the Apple iPhone 4 the consumers have started switching their phones to the iPhone 4. This shows that the product that is iPhone 4 has been up to the mark in terms of creating the brand image.

Likability

The Apple iPhone 4 with its unique features and its futuristic looks has become a favourite for many consumers.

Transferability

Apple iPhone 4 has been successful in maintaining as well as improving the brand image that previous version of iPhone had, so the transfer between the iPhone 3GS and iPhone 4 has been handled quite well by the company.

Adaptability

The iPhone 4 with its applications has adapted itself in the market and the engineering involved in every part of the phone helps it to be adaptable.

Protectability

The iPhone 4 is an exclusive phone aimed at the higher social class, it protects itself from its competitors by innovations. The Apple iPhone 4 is not easily accessible to everyone as the price is quiet high which helps in giving exclusivity to the customers therefore apple is able to protect its brand image.

CONCLUSION

Brand equity plays a vital role in the positioning of the product and the brand elements support the brand to which the product is associated to. Apple sells the iPhone 4 at a premium price because it is the value that is associated with the product has been created using brand equity. Apple has shown a high involvement of research and development for the iPhone 4 and the features it offers are remarkable.

References

Kotler, P & Armstrong, G (2010) ‘Principles of Marketing’ 13th edition, New Jersey: Pearson Prentice Hall

Dibb, S., et.al. (2006),’ Marketing : Concepts and Strategies’, Boston, MA ; Abingdon : Houghton Mifflin

West, J., & Mace, M. (2007). Entering a mature industry through innovation:Apples iPhone strategy. Druid summer cofrence.

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