Background Information
The primary focus of this report is to discuss the impact of market size, market segmentation and competitors on consumer behavior (Kotler, 2015, p. 184). It is important to say that many Companies exist with the aim of generating a profit regardless of the market situation. That is where the three factors will come in purposely to give a business premise an advantage over the others. In this report, I am going to discuss how Apple Airpods, products of Apple Company have enhanced an aspect of customer retention regardless of the introduction of similar products like Louis Vuitton Horizon Earphones. The introduction of these products in the market has provided direct competition to Apple. Released in September 2016, Apple Airpods have harnessed more substantial sales compared to other products. This is according to Forbes Report of 2016. The latest Apple Airpods products will be launched before the end of March 2019, and this got me thinking. Is the Company already aware of the number of potential consumers? Does the success of Apple emanate from marketing strategy? Is Apple familiar with the marketing trend? How is the Company implementing their marketing techniques? The third question forms the core of my report.
Apart from Louis Vuitton Horizon Earphones, Bose and Beats by Dr. Dre constitute other wireless headphones, and the two have provided indirect competition to the Apple products. After researching more about Louis Vuitton Earphones and Apple Airpods, I discovered that Apple Company was more conversant with the market size. This aspect is all about knowing the number of potential buyers before a product is launched. In this regard, I found that concrete information regarding market size can only be accrued if top management knows how to distinguish between the marketing mix and marketing strategy.
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Many organizations see a similarity between the two. Marketing mix entails information on product, promotion, place, and price- 4Ps. This technique will promote a competitive edge if the company exist in a market where there are few competitors (Kotler, 2015, p. 26). Marketing strategy is a general term. However, techniques such as market segmentation are entangled on it. Market segmentation implies a division of components forming buyers’ behavior on the merit of demographic profiling, values that form similar behavior and psychographic information (Kotler, 2015, p. 558).
Identification of Target Markets- Behavioral Segmentation
Appeal to Specific Adopter Category
The identified primary segment happens to be the behavioral segment. This is because it can be influenced by the other two layers such as demographic as well as psychographic. In the case of Apple Airpods, immediately after it was launched in 2016, people in most parts of the world were familiar with the audio jack. This is because the product was supported by hardware and this eased its operation (Vacoc & Buchalcevova, 2017, p. 21). In an era where technology is appreciated, this was regarded as a perfect product and according to a research conducted by Slice Intelligence in 2016, Apple Airpods enjoyed a massive online sales which stood at 25%. That in itself demonstrated that the Company through prioritization of digitalization appealed to a specific adopter category. In the United States, the millennial constitutes a significant portion of the overall population, and from the recent public addresses by Apple, it is evident that Airpods products have been made primarily to meet the needs of the young generation. Age as a factor forms part of demographic information.
The reason I am linking the age factor to behavioral segmentation is that it promotion, price, and product are considered when determining the usage rate. That aside, culture constitutes integral values that control a lifestyle. Technology forms part of the culture not only in the United States but also in most nations around the world. By abandoning audio jack, many thought that the sales would decrease. However, that was not the case since by December the same year, Apple Airpods accounted for up to 75% of total wireless headphones sold through various online platforms like the Amazon. How then did Apple manage to obtain such a success?
How Product and Promotion can influence Buyer’s Behavior
Usage rate is a reflection of the customer experience. When the experience is poor, the usage rate will not be appealing. The features of a product determine the user experience. About Apple Airpods product, it was an improvisation of beats brand.
It should be noted that beat brands are an accessory made by the parent Company Apple. I had a privilege of using both the beat brand and Apple Airpod, and from that experience, their features were different. That meant that their experience were also different. Unlike Apple Earpods, the users can now connect Airpods with not only iPhones but also other devices. An iCloud has enhanced this configuration.
My friend Alexander Arnold deemed an iPhone as an expensive product. However, he found an AirPod to be an exciting product but was worried about whether or not the linkage was restricted to only Apple devices. However, the price of an AirPod is pocket-friendly. Since he was in the dark at first, he was hesitant in purchasing Apple Airpod.
However, after Apple’s Chief Executive Officer Tim Cook provided clarification about the Concept of ‘truly wireless headphones’ in December 2016, the perception of my friend regarding the usage of Airpod changed since he was informed that any device could be connected to Airpod as long as it had a Bluetooth application. His Samsung S8 had Bluetooth. When giving assessments regarding the introduction of latest Apple Airpods in the market, Cook said that “moving away from audio jack was to give a platform for improvisation of software (Vacoc, 2017). This came in the wake of uproar since people were already familiar with the technology that eased connection with the hardware. Apple Company strived in improving customers’ experience as far as the relation with software was concerned (Vacoc, 2017, p. 21). From high public involvement that was initiated by the Company’s CEO, it is evident that Cook alongside a team of marketers knew the importance of integrating marketing mix, product, and promotion for that matter.
Internal Influence: Needs and Motives
What Influences Consumer Behavior?
Many theories like Abraham Maslow theory of hierarchy needs have explained the urge to influence the decisions of customers as far as purchasing a product is concerned. Many companies have implemented some approaches with success while others have failed. In awareness, to acquire an accurate understanding of such functionalism, it is essential to differentiate market segmentation of Airpods with other similar products. What is it that influence consumer behavior and prevent Airpods from being substituted in a competitive local and global markets? To answer this question, I asked myself another question. Do the features of the Apple Airpods conform to the needs and motives of consumers?
This is an important question I asked myself before engaging further on this report. Besides, to answer this better, it was essential to be conversant with relevant theories of information processing and their impact on the lifestyle pattern. This discussion is similar to that of the marketing mix, but the difference is demonstrated by features that encourage maximum satisfaction. By meeting maximum comfort, I meant the ability of elements to meet essential human needs.
Apple has positively motivated consumers by implementing psychographic segmentation which in turn has formed a critical part of their marketing plan. According to the CEO, Tim Cook, the principal purpose for innovating Apple Airpods was to make the usage effective compared to other products like Louis Vuitton Horizon Earphones. When a product is expensive, a potential buyer, more so the one belonging to the lower social class becomes demoralized. In this case, buying becomes impossible. An Airpod retails for 159 dollars while that of Louis Vuitton Horizon retails at 995 dollars. For young adults who are lovers of technological features, the price acts as a determinant of consumer behavior. It is vital to mention that price constitutes a marketing mix. When researching various types of marketing segmentation, from this point (Lamb, p. 80, 2018), I became informed of the reason behavioral segmentation happens to be my primary segment (Lamb, 2018, p. 13). Pricing as a marketing mix can be linked to demographic segmentation- socio-economic factors.
How is the Product Positioned to Satisfy Needs?
Abraham Maslow theory of hierarchy needs delves on the importance of making a person happy. If a buyer becomes satisfied after purchasing a particular product, he or she will have attained the level of self-actualization (Conley, 2017, p.6).
This level is occupied at the helm of Maslow’s hierarchy. Market positioning focuses on the customers’ perception regarding a specific product. The judgment will become meaningless if it is devoid of comparison and that is why I previously brought the issue of price and how it compounded to socio-economic factors. The relatively cheap cost of Apple Airpods has encouraged positive perception as far as product purchasing is concerned.
Immediately after it was launched in 2016, Apple Company wanted to create an image out of the Airpods. This was to create the element of brand awareness. In awareness, even today, Airpods are slim in size, and by the look at it, you can be mistaken that it can easily fall when performing a vigorous exercise. At the time of launching, a senior marketing strategist of the Company called Tim Bajarin implied that Apple Airpods were positioned in a way to fulfill the Company’s futuristic goals. He said, “The accessory is now vital to Apple’s future.” Such evaluations demonstrate that the company integrated value-based positioning. This type of positioning creates a brand, at least gauging it from Apple’s point of view. In other words, the image was formed by the selected choice of the product instead of dividing elements promoting consumer behavior (Kotler, 2015, p.2). And true to their prediction, three years later after the products were launched, Apple has registered massive sales not only for Airpods but also other products like smartwatches, iPhones and beat brands. According to Forbes’s survey regarding firms’ revenue generation, it was found out that Apple made a profit 0f 10 billion dollars in the calendar year of 2017 and 2018. This in itself showed that the Company’s needs were met and after the introduction of maligned headsets, customers’ needs were to be met soon. This was according to the CEO, Tim Cook.
What Needs have Airpods helped in Meeting after it was launched?
From a personal point of view, product experience has been exciting since it has met most of my requirements (Conley, 2017, p. 6). Here, it is realistic to reflect on Maslow’s theory of hierarchy needs. I already mentioned something regarding the perception of an Airpod ‘falling out’ when conducting a physical exercise or doing strenuous activity. Let not its appearance deceive you since I discovered that I could do all those activities with a lot of ease while listening to some good music. Also, it Airpods boast superior sound system which is appealing to the ears. Some buyers have criticized Louis Vuitton horizon earphone because it produces more base compared to Airpods.
While reading books related to Psychology, I came across the concept of positive psychology and how specific mechanisms like leisure time can promote happiness. Other tools entangled in positive psychology include brainstorming and mindfulness. During my free time, I like listening to music. I also want to jog. The introduction of Apple Airpods in this perspective created an opportunity for me to enjoy both hobbies at the same time. For that reason, I can say that the release of Airpods has helped me attain happiness in the form of double standards. This connotes to Abraham’s point of self-actualization. This is level in Maslow’s pyramid which can be obtained after an individual becomes happy (Colney, 2017, p. 7). After charging Airpod, it can last up to five hours, and this made it possible for me to attend to other activities while the headset is on my ears. Airpod also is energy efficient, and this encourages money saving. Money which could have been used to cater for power bills can now be saved. With the imminent release of Airpods in March, many people have anticipated that the features which meet the needs of customers will only get better.
Just like Xiamo smartwatch which is fitted electrocardiogram, it has been expected that Airpods 2 will be equipped with a heart sensor. This will significantly help in detecting the state of the heart and in turn help in preventing heart diseases. However, I do not want to speculate about that since March 2019 is not yet over.
Operant Conditioning and how it has been used to Influence a Particular Lifestyle
I first thought that operant conditioning was restricted to family therapists. This is a technique used by psychologists during a counseling session of an aggressive or moody young child. However, marketing strategists at Apple Company seem to have applied reason versus operant conditioning when marketing their products. In psychology, operant conditioning entails eradicating unwanted behavior through punishment while at the same time promoting good ones through rewards. As for the case of Apple Airpods which was released in 2016. The same year, Apple Company conducted a major public presentation that created a platform for the top managers to showcase update in technology (Davidson, 2017, p. 1). Through its CEO Tim Cook, Apple reported an update in charging technology. This was in the wake of innovating of AirPower, a wireless charging device culpable of charging not only Airpods but also other Apple products. Such a transformation demonstrated the application of operant conditioning. Also, Apple applied operant conditioning when they decided to shift to Airpods from audio jacks. The aim was to promote an excellent customer experience through improvisation of certain features. The same year of Airpods release, even though the Airpods have a pair of batteries, (Davidson, 2017, p. 2), the Company was cautious enough not to mention something regarding inductive charging.
Until today, the issue of technology charging has been avoided by the top management since research is still ongoing. However, it has been rumored that Airpods 2 is an improvisation of the five hours lasting battery. The world is still waiting to see whether or not such an initiative will come to fruition come end of March.
Consumer Decision Making Process
Here, I deemed it essential to evaluate how potential consumers went about shopping for Apple Airpods. Apple Company has prioritized online marketing as a way of improving consumers’ perception regarding their goods. With the aid of digital platforms, one is required with a smartphone or a laptop with internet coverage to go about the shopping process. That is how I shopped for my Airpod, and the process took less than seven minutes. The shipping period from Amazon online shopping platform took three days. I was satisfied with the services I received during the delivery period. This should be the same for you. When in need of Airpods, there is no need to visit a shop in person since it will be a waste of time (Davidson, 2017, p. 2). I already mentioned something concerning customer retention. It is all about the desire to purchase a similar product again (Vacoc, 2017, p. 22). This process is called loyal brand awareness, and the typical buyers are referred to as brand loyal purchasers. Post-purchase behavior in this regard can be encouraged by giving discounts to new customers. However, it can be reduced by selling expensive products (Vacoc, 2017, p. 24). Consumers may feel discouraged. This limits another purchasing scenario. If this happens to be the case, it is evident that demographic segmentation differs in their loyalty to the existing Apple Airpods.
About socio-factor, some people will not be in a position to afford the 159 dollars- the purchasing price while others will regard it a less high price.
Comparing Marketing Approach of Apple Airpods and that of Louis Vuitton Horizon Earphones
Both Vuitton and Apple have incorporated online marketing as part of their marketing strategy. The two companies have websites which have enhanced brand awareness. Company profiling can be easily accessed through the established websites, and this has bolstered customer relation (Vacoc, 2017, p. 21). Even after facing an uproar from esteemed customers, Apple still managed to generate a revenue of 10 billion dollars. Also, Apple primarily depends on the design and product placement. Unlike Vuitton Headphones where the connection with other devices can become complicated, the connectivity features of the Airpods guarantee an automatic connection (Lamb et al., 2018). This makes a purchaser enjoy a ‘cool’ customer experience (Conley, 2017, p. 6).
Evaluation and Recommendations
Usage Rate and how Marketing Mix can influence it
Usage rate forms part of behavioral segmentation. Some marketing strategists in recent years have employed a marketing mix with the aim of obtaining an aspect of the marketing mix which in turn impacts the usage rate. During Open Days, for instance, managers typically involve potential consumers with the aim of informing them about changes or introduction of new products in the market. This aims at influencing buyer behavior. When this becomes so, the Company is said to have done promotion, an element of marketing mix.
At the same time, consumers are made aware of the physical features of the latest products. Still, many consumers like myself are eagerly waiting to hear about elements of the latest Apple Airpods to be introduced this March. On that front, it is evident that marketing strategists can use the 4Ps of marketing mix with the primary aim of improving sales (Kotler, 2015, p. 559). Was that the case of Apple Company when it abandoned audio jacks?
Conclusion
In acknowledgment, advertisement campaigns of Apple Company need to be stickier. When Apple failed to clarify the issue of inductive charging after immediately releasing Airpods, it showed that they lacked confidence in informing potential consumers about the functionalism of the product. To avoid this type, Apple Company should be conversant with the theory of reasoned action. It is a type of consumer behavior theory. This theory was pioneered by Martin Fishbein (Yzer, 2017, p. 1). The Theory of Reasoned Action puts focus on attitudes portrayed by each staff member while making vital decisions. In that case, there will be a need for the Apple Company to incorporate SWOT Analysis. Identification of Company’s Weakness could have avoided Cook’s ignorance when asked about charging induction. The Company needs to fulfill the interests of its consumers (Davidson, 2017, p. 3).
Since Apple Company operates in the 21st Century, it is vital to prioritize technology. Apple has done so by implementing online marketing. Companies need to employ qualified marketing strategists who understand various forms of marketing segmentation (Kotler, 2015, p. 244). Identification of the primary segment, for instance, will positively impact the decision-making process. When appropriate decisions are made at the top management, a company will know how to position specific products in a competitive market. A perfect example is Apple Company through the production of Airpods.
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