Segmentation and Target Marketing
Introduction
Marketing is one of the most important aspects requiring which should be addressed with the required attention in order for the business to reach its objectives and goals. Effective marketing strategies ensure that the business gains more and more customers and grow with time. Apple Inc will incorporate an intensive distribution strategy in order to ensure that the product is available to the customers at the recommended company price. The iTime watch from Apple has unique characteristics and features and the technology incorporated in manufacturing the device is absolutely modern. Although the price of the product is high compared to other products, these features will ensure that the consumers enjoy the quality of services from the product.
Segmentation and Target Marketing
The Identification and evaluation of the attractiveness of the target market segment for iTime consumers
Market segmentation is the combination of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action (Weinstein, 2004). It includes variables such as demographic, geographic, economic, socio-cultural, political-legal, technological, natural and financial aspects of a particular market. The traditional approach to segmentation is based on the classic '4 Ps' which are (Product, Price, Place and Promotion). Yet, in the iTime marketing overview, we will be using the extended approach of the eight Ps (price, product, place, promotion, people, programs, process, and performance) which will be further outlined in the integrated marketing mix section.
The UAE is mainly reputable as a private business, franchise market, which makes it an attractive place for the younger, more energetic age group. This exact marketing segment would be suitable for the iTime watch due to their need to be trendy. The segment purchases a product due to its trendy nature rather than its general usefulness. Thus, it is exactly the core market crowd to target market wise.
Gender plays an important role in the marketing of this particular product. UAE is largely a male dominant market, so 50/50 marketing split here won't be possible in this region. The marketing of our product in the region will therefore have to target the males rather than the female. This does not mean that we will rule out the female market all together. The product can be marketed to the female demographic as the perfect gift to that special male member. While gender is a very important aspect of any marketing, the male population generally prefers apple products globally. Also, if one is to examine the buyer profile of Apple products globally, it is a clear skew towards men.
A combination of these marketing demographics would provide a target market of an individual who is a young male in the prime of their life and who lives a particular indulgent lifestyle. Such an individual earns a good salary and can afford to indulge in a particular extravagant hobby or two.
Let’s look at case study one of Mohamad, 32, works as a business director at a global advertising agency out of Dubai. Mohamad is passionate about three things in life, football, cars and gadgets and so on. While cars are on the expensive side, he can afford to collect as many gadgets as he wants to more so those that are trending and those he sees with his friends when he interacts both socially and during his business meetings. Due to his love for gadgets, and more so those that are trending in the market Mohamed cannot resist purchasing the iTime watch.
Thus, based on the above marketing evaluation the sales of our product would be as follows:
- Priority consumer - 75% of overall sales will come from individual consumption. This would include short-lived product purchasing, emotional purchasing, highly sensible to purchasing experience.
- Education purchasing - emphasis on simplicity (the 'watch' + health side of it) and reliability, typical solutions consist in one watch for every student and teach, along with the installation of a wireless network
- Business, government and creative purchasing
The target market for the iTime watches in UAE is majorly the youth who are between 18-35 years of age whereby in this case, both the female and male gender will be targeted but a strong emphasis will be placed on the male market.
Case study 2 is Amina, 25, a sales representative at a multinational company based in Dubai. Amina has been engaged to Sharif for the past four years. Sharif’s birthday is a few weeks away and Amina is aware of her fiancés love of gadgets. From experience, she knows that he is particular about apple products and would like to surprise him with the latest trendy apple product in the market. The iTime would be a perfect gift to her gadget loving fiancé.
Product
The product is the central point that marking energy is focusing. iTime watch from ale is a new product which comprises of unique features which will attract the people of United Arab Emirates (Mintz & Currim, 2013). Some of the unique characteristics of iTime include a Bluetooth-equipped smart wristwatch that can connect to an iPhone and allows consumers to ‘pull’ e-mails as well as Twitter posts and other pieces of text to a two-inch square screen. iTime watches from Apple will also have tracking device and the ability to play music and display text, the weather and other information from an iPhone.
Price
Price is used to create sales revenue of all other costs (Sreenivas et al., 2013). The price of iTune needs to be reasonable and affordable to all customers. In this case, the company will consider offering lower prices as compare to that of competitors in order to ensure that the product penetrates the market. Discounts will also be offered for the customers who will be the first to purchase the product. Price of any product is an important determinant of the value of sales made. However, the price of the iTime watch will be set in a manner to ensure that the company does not incur loss but generates the required income.
Place
Place is concerned with the location of the stores as well as various methods of transporting goods (Brei, et al, 2011). iTime watches will be available in all retail shops, supermarkets, and shopping malls in UAE thus making it easily accessible to customers. Customers will also access the product through an e-commerce site as well. Place should be accessible in order to make the product available to all customers. In this case, the Apple management will identify effective distribution channel whereby products will be transported by road means to the major cities and towns of UAE since these are the only places where the supermarkets and many businesses selling the product are found.
Promotion
Promotion is regarded as the business of communicating with various customers and creating awareness about the new product. It provides information that assist customers to make decision of purchasing the product. The company will incorporate television, billboards, and radio advertisement in order to enhance the product awareness. In addition, advertising through social media will also be incorporated whereby the company will have pages in the popular social sites such as facebook, twitter, LinkedIn, and Yahoo.
The market for iTime watches will also depend on the geographical aspect whereby individuals in the urban regions are the major target since the urban population is more or comprises of many youths as compared to the rural population and they are usually the working class (Lamb, Hair, & McDaniel, 2012). However, the product will also expand its market to the neighbouring countries after gaining a substantial market share in the United Arab Emirates market. In terms of psychographic segmentation, the market of iTime watches will target individuals who have desire for leisure or classic materials. For instance, majority of the youths like to wear or poses the modern materials which incorporate the new technology such as the iTime.
Competitive Analysis and Positioning
Comparative analysis of the iTime competitors
As current as this year, there has been no smart watch market established in the UAE except for Sony smart watch which is not being advertised at all. The only other such product is the pebble which is only available in virgin. Other than the two there is no physical evidence that indicates a strong market for the smart watch. However, research indicates that as of the beginning of this year, the smart watch is becoming a trending topic. This means there has been a spike in interest and that the market is slowly blooming. This is good for our product because it means that there is no direct competition. However, the fact that there are other similar products in this particular market means that we face indirect competition once interest in the product spikes higher.
Indirect competition would disadvantageous for our product. This is due to the nature of apple products. The standards set by the apple products are high thus they warrant high pricing. Currently, the price of a Sony smart watch is 550 AED. Chances are that the apple iTime would cost 950 AED. This would mean that if an individual was not purchasing our iTime they would save an extra 400 AED which would be used to purchase something else. The extra 400 be set aside and added to the vacationing kitty or if one added 150 AED they would be able to purchase two Sony smart watches.
Marketing Positioning of the iTime in the UAE market
Disadvantages:
- The product may be technologically behind the rest of the world. The market is buzzing and super excited with new news, especially after the pebble phone invention success at this year's Las Vegas consumer electronics show. On the ground, the technology consumers want is a color screen that stays on and is legible in any lighting, and a battery that lasts and lasts. Until sufficient tests have been done, it's hard to say 100% satisfaction with the product, especially in the techy-savvy UAE.
Advantages:
- New entry – Due to the unwaivered loyalty of the Apple consumers, the company really has a chance of being the first and really owns the market.
- Create a killer offer - back when the first iPod was launched it came with 1000 free songs, what will come with iTimes that the consumer will consider using it individually and not as an appendage to the Smartphone.
Apple has incorporated strong technology and this is the reason why the product will be of high price. However, being with strong technology is not enough to win the market. The product also had to have the personality and life-fit. Thus, while the product is stacked up with unique features, the consumer is still unaware of this fact. There is need to broadcast these uniqueness and let the consumers know of their existence. These features include
- Seamless integration- to make the unaware consumer interested, we need to make them need the iTimes product and the easiest way to do that is by showing how it can seamlessly be integrated into people's lives.
- Superior ease of use: multi touch interface, click wheel
- Innovative industrial design: it is the greenest environmental company
Once that is done, the product will be looked at as 'desirable' and 'differentiating' from other similar products. Once achieved, all the company will have to grapple with will be the ‘deliverable’ side of the product. The target consumers would want a product like this because it is long lasting, easy to use, typically in style, and it fits the demands of their busy schedules. Moreover, young people want a product that caters to an active lifestyle and therefore need a product that is hassle-free and entertaining. Thus, the iTime would be ideal for them besides the fact that owning it would be trendy.
Distribution Strategy
There are many modes that can be used to distribute our product. This includes mas distributions from the factory. However, for this particular market, we will rely on two main modes of distribution. The first will be retail store purchasing. This will involve stores, supermarkets, malls and any other franchise that can sell the product at a retail level. This will ensure that the product is taken to the customers and is readily available for any individual interested.
The second mode of distribution to be used is the on-line store. Due to the changing nature of sales to a more internet oriented market, people prefer making their purchases on line. This ensures that the company is directly responsible for delivering their product directly to the purchaser. This also allows the consumers to make purchases anywhere as long as they have the internet with them.
Thus the product will go from the manufacture to the retail stores then to the consumer or directly from the manufacture to the consumer.
Integrated Marketing Communications Plan
The company will seek to organize a launce for the iTime in the UAE market. The main objective for the launch is to get as many people to try out the product at the apple store as possible. The communication objectives from the launch will be to get people to see how the iTimes can help them run their lives more efficiently. Note that the price will not be revealed at the launch event. The idea is to test-pilot the feedback at the 'launch'. Once we have the feedback we will then re-group internally and officially launch the product after one week.
While we acknowledge the fact that loyalty of the Apple brand will help boost our sales, we also acknowledge that there are consumers who have never used apple products. Thus our target is integrate our products in stores as well as in the web. This ensure that we are able to sell not only to our brand loyal customers but also to the market that has never used our brand but are attracted by this particular product.
Suggest communications objectives for the initial launch
The main objectives of the initial launch of the product will be to ensure that among other reasons that our product gains total control over this particular market. Once we have established total control we will ensure that we create and retain a margin in this particular market. It is important that we retain quality service to our customers as well as reduce any necessary demand pressure from the buyers. Some of strengths include the fact that the apple brand has set up golden standard for its buying experience. This ensures that support and inspiration to retailers of its products.
Through our launch we will be able to establish weaknesses that the product may face in the market. This include the expenditure needed, the integration into the market of the product and competition that the product may face in the retail marketing segment of the region.
The launch will enable us establish opportunities available in that market. Opportunities such as exposure, positive brand effects, bigger market share and increased customer loyalty are an added advantage to our product marketing.
Recommend the appropriate communications tools that iTime should use during the first year of market launch to achieve these objectives
Advertising
The major objective of advertising is to create awareness to the customer about the product. Advertisement is considered a very effective communication tool especially if the product is new in the market (Waller, 2012). In this case, Apple Inc should consider incorporating advertising through the social media such as crating adverts to be incorporated in the YouTube where many viewers who watch YouTube videos will first view the advert. This will ensure that customers get the right information about the product. Media has benefits of reaching people within a large geographical region both regionally and internationally. Social media is just but one of the communication tools that Apple Inc cannot miss to incorporate.
Sales promotions
Sales promotion is the use of discount coupons, loyalty clubs as well as membership coupon with the incentives of creating awareness to the customers about the product (Waller, 2012). Apple Inc needs to consider incorporating this tool for ensuring that they attain the required market in the first year.
Conclusion
The report suggests that Apple considers applying strategies such as reducing the price of the product in order to penetrate the market and secure a substantial market share. Although the product may be unique once compared to the others from the competitors the management of Apple Inc needs to incorporate the most effective communication tools to create awareness to the customers about the product. The company also needs to ensure that there are no delays experienced in delivering the products to the customers by choosing an effective distribution strategy.
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