Positioning of Apple, Blackberry and Nokia

Apple Inc. is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company’s best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad. Apple software includes the Mac OS X operating system; the iTunes media browser; the iLife suite of multimedia and creativity software; the iWork suite of productivity software; Aperture, a professional photography package; Final Cut Studio, a suite of professional audio and film-industry software products; Logic Studio, a suite of music production tools; and iOS, a mobile operating system. As of August 2010, the company operates 301 retail stores in ten countries, and an online store where hardware and software products are sold.

Established on April 1, 1976 in Cupertino, California, and incorporated January 3, 1977, the company was previously named Apple Computer, Inc., for its first 30 years, but removed the word “Computer” on January 9, 2007, to reflect the company’s ongoing expansion into the consumer electronics market in addition to its traditional focus on personal computers. As of September 25, 2010, Apple had 46,600 full time employees and 2,800 temporary full time employees worldwide and had worldwide annual sales of $65.23 billion.

For reasons as various as its philosophy of comprehensive aesthetic design to its distinctive advertising campaigns, Apple has established a unique reputation in the consumer electronics industry. This includes a customer base that is devoted to the company and its brand, particularly in the United States. Fortune magazine named Apple the most admired company in the United States in 2008 and in the world in 2008, 2009, and 2010. The company has also received widespread criticism for its contractors’ labor, environmental, and business practices.

Segmentation:

According to Michael J. Croft (1994), segmentation is to divide a market by a strategy directed at gaining a major portion of sales to a subgroup in a category, rather than a more limited share of purchases by all category users.

Market segmentation is one of the steps that goes into defining and targeting specific markets. It is the process of dividing a market into a distinct group of buyers that require different products or marketing mixes.

A key factor to success in today’s market place is finding subtle differences to give a business the marketing edge. Businesses that target specialty markets will promote its products and services more effectively than a business aiming at the “average” customer.

Opportunities in marketing increase when segmented groups of clients and customers with varying needs and wants are recognized. Markets can be segmented or targeted using a variety of factor. The bases for segmenting consumer markets include:

Demographical bases (age, family size, life cycle, occupation)

Geographical bases (states, regions, countries)

Behaviour bases (product knowledge, usage, attitudes, responses)

Psychographic bases (lifestyle, values, personality)

A business must analyze the needs and wants of different market segments before determining their own niche. To be effective in market segmentation keeps the following things in mind:

Segments or target markets should be accessible to the business

Each segmented group must be large enough to provide a solid customer base.

Each segmented group requires a separate marketing plan.

Apple is such a band whose core competence in innovation. For apple to keep its market share it needs not only to concentrate on its research and development but also on segmenting its market efficiently and reaching them with its new products.

Customers View of Segmentation:

Customers segment themselves and take no notice of how companies segment their market(s). When choosing between competing products and services, customers select the proposition that meets their needs better than any other. To win market share, therefore, a company must ensure that their offers meet these needs better than any other at a price they perceive as providing superior value for money (which does not necessarily mean it has to be the cheapest). As this is how customers operate in a market, then a segmentation project should have these as its segmentation criteria.

On its own this approach to segmentation, while able to provide you with an invaluable insight into how to win a customer’s business, still requires you to know how to reach them. The input to this part of a winning proposition, provided by a detailed understanding of who the customers are and where they are to be found, is clearly very important and plays a crucial part in our segmentation process. In addition, by really understanding what underpins a customer’s choice we gain an insight into their motivations, which will lead you to understand what promotional stance to take?

Interestingly, all the reputable marketing books and marketing courses which look at the alternative approaches to segmenting markets include ‘needs-based’ segmentation (sometimes called ‘benefit’ segmentation) in their reviews. They also conclude that ‘needs-based’ segmentation is by far the most successful approach. This is the approach taken by The Market Segmentation Company, for which we have developed a series of practical steps, tried and tested in numerous markets around the world, and incorporated into our segmentation process.

Positioning of Apple, Blackberry and Nokia:

Blackberry handset is no longer concerned with the occurrence of iPhone. Because of not all people switch off from their Blackberry handset to iPhone gadget,

this statement was stated by researchers from UBS Investment Jeffrey Fan after successfully interviewed 222 people in UK and 106 people in United States when they would buy iPhone 3G. According to Cellular News, 106 of iPhone buyers in United States, only five people, or 4.7 percent are Blackberry users. In fact, three of that number doesn’t intend to sell their Blackberry after buying Apple iPhone. “About 30 percent of 106 people use Motorola and Samsung. With each contributing is 15 percent,” said the Cellular news.

In UK, from 222 people who purchased the iPhone, only eight people or 3.6 per cent claiming to have it switch from Blackberry to iPhone. Only one person is interested in using them, iPhone and Blackberry. However, 18 percent of these respondents claim to have a corporate Blackberry so that they cannot take down the handset made by Research in Motion (Rim).

“From 222 people in UK, the 28 percent is former Nokia users, while 20 percent is former Sony Ericsson users,” Fan explained. Fan detailed more about this research, although the research is limited, but it can prove that the market segment of Blackberry and iPhone users is very different so it will not become a significant threat to Rim.

In above countries, the majority of iPhone 3G buyers have used first version of iPhone. In UK is about 29 percent and in United States is about 37 percent. Even, some iPhone operator in several countries also sells Blackberry handset as alternative of iPhone by selling Blackberry with cheaper price. For example, the T-Mobile of United States reduced the price of Blackberry Curve by USD 50, to USD 99.

According to Wilbur Schramm (1954), Schramm’s third model is based on the convergence or network approach. Due to various kinds of noise there are chances that the message gets distorted till it reaches the receiver, to overcome the problem he introduced the concept of feedback which helps the sender to modify the information from what he observes or hears from the receiver or the audience. The communication process now takes a circular form as both parties take on the roles of sender and recipient. Schramm’s model emphasizes on the importance of feedback for the information to reach the receiver in the same manner as desired by the sender. Feedback is essential in the business environment to ensure that the constituencies interpret the information correctly from the companies.

Apple, Blackberry and Nokia:

The iPhone was growing explosively, but its market share was barely a third of Nokia’s 68 million smart phones. Despite the massive coverage of the iPhone success in the United States, RIM with its Blackberry still leads the U.S. Smartphone market, with a share of over 30%. Apple had less than 30%, while Android-based phones (Google) were catching up fast. In the second quarter of 2010, Nokia held onto 33% of the mobile phone market. In the Smartphone market, Nokia sold 24 million such devices, up 42% from a year earlier.

The overall Smartphone market grew at about the same rate, so Nokia held its share from a year ago, at 40.3%, and actually grew share slightly from the first quarter of this year. So in the global Smartphone rivalry, Nokia still had the lead, while RIM and Apple followed. The winners of the Smartphone market will be determined by global success. So is Nokia; in so much internal turmoil that it is reportedly considering replacing its CEO.

Despite the softening of Nokia’s market share in the United States, Nokia has managed to expand its global position, especially in the high-growth large emerging markets; including China, India, Brazil and Indonesia. In a global rivalry, it would be a fatal mistake to think of these markets as second-tier. Apple is yet to open a store in India. India has such a huge market. Nokia with leading market share in India Apple should look at it if it sights at global leader in mobiles. True, until the 1980s, the lead customers in the most advanced industries were still in the United States, Western Europe and Japan. The G-7 nations dominated talks on international economics. And what was good for California was good for the world.

Today, the lead customers are increasingly in the emerging world. The G-7 has been replaced by the G-20. The U.S. market is no longer enough for global leadership. In the global markets, the new mantra is, to paraphrase Frank Sinatra: If you can make it in Shanghai, you can make it in New Delhi, too. And yet, as Nokia has found out the hard way, the United States remains necessary for sustained global success. And the U.S. market is the main source of concerns about Nokia’s corporate future. In high-tech business, a solid presence in the United States is not just about a market share. It is about ensuring a role in cutting-edge innovation.

Apple has hugely targeted youth and people having higher interest in technological products. The major setback for apple is it doesn’t support office applications. Apple needs to concentrate on overseas expansion of its market. It is able to reach its target audience in some of the developed countries, but not having full length operations in a country like India is a big loss for any industry.

Apple Ad Campaigning:

In the past two decades, Apple Inc. has become well known for its advertisements, which are designed to reflect a plan of marketing their products to creative individuals. Their most significant ad campaigns include the “1984” Super Bowl commercial, the 1990s Think Different campaign, and the “iPod people” of the 2000s. Apple’s portable music player, the iPod, has been showcased as a piece of contemporary art in New York’s Museum of Modern Art. Since the original Macintosh Super Bowl commercial in 1984, which mimicked imagery from George Orwell’s 1984, Apple has maintained a style of homage to contemporary visual art in many of its more famous ad campaigns. For example, the Think Different campaign linked Apple to famous social figures-including artist John Lennon and social activist Mahatma Gandhi.

Apple has been criticized for its sometimes questionable use of modern art as an inspiration for its marketing campaigns-at times re-creating a short film or music video shot-by-shot for its commercials. Some artists have documented entering into rights-negotiations with Apple, only to have Apple pull out of the discussions, then use the artistic imagery anyway. As a result, several lawsuits have been filed against Apple by artists and corporations alike, such as visual artist Louie Psihoyos and shoe company Lugz. These claims were later confirmed. In 1997, the Think Different campaign introduced Apple’s new slogan, and in 2002 the Switch campaign followed. The most recent advertising strategy by Apple is the Get a Mac campaign.

Today, Apple focuses much of its advertising efforts around “special events”, and keynotes at conferences like the MacWorld Expo and the Apple Expo. The events typically draw a large gathering of media representatives and spectators. In the past, special events have been used to announce products such as the Power Mac G5.

Apple Branding:

Unique design, sign, symbol, words, or a combination of these, employed in creating an image that identifies a product and differentiates it from its competitors. Over time, this image becomes associated with a level of credibility, quality, and satisfaction in the consumer’s mind. Thus brands help harried consumers in crowded and complex marketplace, by standing for certain benefits and value. Legal name for a brand is trademark and, when it identifies or represents a firm, it is called a brand name.

Apple Computers is the epitome of self-empowerment and self-fulfilment combined in one brand. How else to describe a Cult Brand whose original slogan for the Macintosh was, “the computer for the rest of us”? Of course, “the rest of us” were those brave individuals who wanted to control their own destinies and break free of the system’s controlling grip and authoritarian ways. In the eighties, Apple painted this dark controlling force as being IBM, while in the nineties it became Microsoft and Bill Gates. As Christopher Escher, former VP of Corporation Communications, noted: “They turned computers, which are essentially a product for business people to crunch numbers with, into symbols of self-realization and liberation against social constraints.” Apple has a branding strategy that focuses on the emotions. The Apple brand personality is about lifestyle; imagination; liberty regained; innovation; passion; hopes, dreams and aspirations; and power-to-the-people through technology. The Apple brand personality is also about simplicity and the removal of complexity from people’s lives; people-driven product design; and about being a really humanistic company with a heartfelt connection with its customers.

The 2009 results of Virtue’s ranking of the most social brands is in, and Apple came out on top.  Apple is one of the most powerful relationship brands, so it’s not surprising that people talk about it across the social Web.  In fact, Apple’s iPhone brand took the ultimate top spot in the list of the most social brands, while Apple’s iTunes brand ranked 6th, and the Apple parent brand ranked 8th.  Interestingly, according to an article from Adweek, the only other companies to have multiple brands ranked in the top 20 of Virtue’s list were Sony (for both the parent brand and PlayStation) and Microsoft.

Apple was successful till the launch of Iphone4 but after the launch of Iphone4 it faced problems regarding the signal problem. The issue relates to the mobile phone signal, with users reporting a drop in signal strength when the phone is held. After knowing from the analysts that recalling Iphone4 would cost the millions, Apple boss Steve Jobs held a meeting after the launch and tried to suppress the problem by offering free bumpers for the customers perceiving it would boost the signal. But, there were still a lot of customers left behind un-satisfied.

Positioning:

In marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. Re-positioning involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market. De-positioning involves attempting to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market.

It is widely recognized that Apple is a premium brand that demands and earns a price premium.  This price premium spans the entire Apple product line-up encompassing the Macintosh, iPod, iPhone, software, and accessories.  Apple’s positioning is aligned with targeting a less price sensitive customer.  As a result, Apple’s culture and internal activities are structured to meet the needs of these customers; strategists call this needs-based positioning.  Apple has thus created a culture and a set of activities to differentiate it from rivals in order to meet the needs of their target customers. If Apple were to attempt to compete for all customer segments, it would have to lower product prices.  The danger with such an approach is that it would not only undermine and erode the company’s premium brand image but it would also undermine the company’s culture and internal activities.

Andreasen and Kotler, (2008) suggest three levels of product features. They are: Core, Tangible, and Augmented (Refer to appendix 1).

Core Product. What is the core benefit your product offers?. Customers who purchase a camera are buying more than just a camera they are purchasing memories. For Apple core product is its brand.

Actual Product: All cameras capture memories. The aim is to ensure that your potential customers purchase your one. The strategy at this level involves organisations branding, adding features and benefits to ensure that their product offers a differential advantage from their competitors. These are tangible. IPhone come with a beautiful packing. Apple made iTunes the activation agent for the IPhone, thus making customers familiar with its product.

Augmented product: What additional non-tangible benefits can you offer? Competition at this level is based around after sales service, warranties, delivery and so on. John Lewis a retail departmental store offers free five year guarantee on purchases of their Television sets, this gives their `customers the additional benefit of ‘piece of mind’ over the five years should their purchase develop a fault. Apple has setup a Genius bar and offers warranty for the product. This helps its customers to have confidence in the brand thus enables them to buy their product.

Apple took care that its product not reaching the decline stage. When 2G seemed to reach decline stage it came forward with 3G and it continued till 4G.Each time it kept on increasing the price which benefited the company.

Competitor Actions:

Brand attitude also depends on competitor actions. A downturn in Hewlett-Packard’s attitude occurred during two quarters in which Canon ran some hard-hitting comparison advertising about Hewlett-Packard’s printers, the most visible Hewlett-Packard product with respect to advertising exposure. More dramatic was the impact of Windows 95. A product intended to neutralize Apple’s “user-friendly” comparative advantage, on Apple’s brand attitude. For the first quarter of 1994 (when Techtel respondents, some of whom were beta version testers, first began to provide opinions about Windows 95) to the fourth quarter of 1997, we find a very strong negative interrelationship (i.e., a correlation of -.95) between the attitudes toward Apple and toward Windows 95.

Conclusion:

Brand is all-important. Apple is one of the most established and healthy IT brands in the World, and has a very loyal set of enthusiastic customers that advocate the brand. Such a powerful loyalty means that Ample not only recruits new customers, it retains them i.e. they come back for more products and services from Apple, and the company also has the opportunity to extend new products to them Apple is definitely perceived as a premium brand from the customer’s perspective. But in case of Iphone4, Apple lost reputation from its customers. It felt in a race for cannibalizing their own products and tried to skim off the profits. Even it tried to repair its lost reputation from the customers it was not acceptable from such highly perceived company. Customers expect high valued products from Apple they might take all possible measures to care about its next product. Else, they may fall behind by miles in this market competition.

Biblography:

Brassington, F., & Pettitt, S. (2007). Essentials of Marketing. Essex: Prentice Hall.

Dibb, S., Simkin, L., Pride, w. M., & Ferrell, O. C. (2006). Marketing Concepts and Strategies (5th ed.). London: Houghton Mifflin.

Fill, C. (2007). Communications: Contexts, Strategies and Applications. London: Financial Times Press.

Johnson, G., & Scholes, K. (2008). Exploring Corporate Strategy: Text and Cases. London: Prentice-Hall.

Kotler, P., & Armstrong, G. (2006). Principles of marketing. New Jersey: Pearson Education Inc.