Sample Business Paper on Apple Inc. Marketing Mix

Company Background

Apple Inc. is one of the most recognizable brands in the world because of its array of
successful products in the technology sector. As of February 2021, Apple Inc.’s market
capitalization is $2.104 trillion, which is the largest of all companies in the world
(, n.d.). Over the past decade, Apple Inc. has consistently been one of
the most valuable companies. Apple Inc. traces its origins to 1977 when it was incorporated
(Apple Inc., 2020). At the time, its primary business was the manufacture and sell personal
computers created by Steve Jobs and Steve Wozniak.
Throughout its first two decades of existence, Apple derived most of its sales from the
sale of computers. The introduction of the iPod in 2001 saw the company introduce a successful
product away from its primary business. Today, Apple Inc.'s business is diverse. Besides
products such as personal computers, smartphones, tablets, and accessories, the company also
sells services such as advertising and cloud computing (Apple Inc., 2020). The high quality of
Apple Inc.’s offerings has made the company endeared by consumers. The company is
universally seen as a premium brand, a perspective that has driven its value further.

Consumer Segmentation

As a technology company, Apple Inc. has a broad market to target. This necessitates the
division of the market into groups. The resultant segments are distinct and include consumers
with similar needs that might need to be fulfilled using a variety of marketing strategies (Kotler
and Armstrong, 2018, p.75).


Geographical Segmentation
Apple Inc. targets both the United States market and the international market. Viewing
the two segments as distinct enables the company to devise appropriate marketing strategies for
each market. Apple Inc. targets urban populations in these markets (Tien, 2019, p.26). Urban
consumers are more likely to consume its Apple products than their rural counterparts are.
Demographical Segmentation
Apple Inc. primarily targets the adult population. While devices such as the iPhone and
iPad could attract all adults within the range of 18-45 years, services such as Apple Music and
Apple Fitness + are more likely to target younger adults within the range of 18-30 years
(Duvoskiy, 2021). Apple targets males and females at different stages of their lifecycles.
Bachelors and newly married couples consume all Apple products and services. Individuals in
the full nest stages are targets of devices and accessories rather than subscriptions. Apple Inc.’s
target segment regarding income is high earners. The company’s products and services are
premium, therefore demanding higher prices in the market.
Behavioral Segmentation
Brand loyalty is a major influencing factor in the buying decision. Apple segments
potential customers as either loyals or switchers. The former will buy every product from the
company while the latter wants to try out the Apple ecosystem. The personality of Apple’s target
segment is ambitious. These consumers want the latest Apple product since they view it as a
status symbol. Concerning benefits sought, consumers will buy Apple products as a form of self-
expression, to feel a sense of achievement, and to enjoy the products’ efficiency and reliability.
Psychographic Segmentation

Due to the premium nature of the company’s products and services, its target segment is
the medium and upper social classes. Lifestyle characteristics associated with Apple customers
include aspirer, succeeder, and explorer. The characteristics conform to Apple’s modern and
adventurous image (Kim et al., 2020, p.101909). With clearly defined market segments, Apple
can target segments to enter based on their appeal and long-term viability.

Focus Group

While Apple products appeal to a wide range of consumers, some segments create more
value than others by being consistently profitable. In this context, the focus group of choice is
young adults. The group is an interesting proposition since it comprises tech-savvy individuals.
Additionally, they are more informed than previous generations. With baby boomers leaving the
workplace, this focus group will dominate the workforce for generations. The purchasing power
of young adults means that they are targets for the array of Apple’s products and services. An
important consideration when marketing products and services to young adults is their
relationship satisfaction. Ndubisi and Nataraajan (2018, p.10) emphasize that if young adults are
satisfied with the trust and commitment of the service provider, they pay back with loyalty and
switching restraint.

Marketing Mix

The Apple product selected for the marketing mix is the iPhone. The phone brought forth
the era of the touchscreen smartphone when it was launched in 2007 (Merchant, 2017, p.99).
Since then, Apple releases a new iPhone each year, with the newer model harboring better
features and building on the deficiencies of its predecessor. The latest model is the iPhone 12,

which was announced in October 2020 (Apple Inc., 2020). Besides, the iPhone 12, the company
also released the iPhone SE in 2020. In the formative years of the iPhone, the company only
released one version of a phone. However, the current trend is releasing several versions of a
smartphone. For example, the iPhone 12 family comprises four siblings: iPhone 12, iPhone 12
Pro, iPhone 12 Pro Max, and iPhone mini (Jake, 2020). All members of the family have similar
base features such as 5G, the A14 processor, and an XDR display (Whitney, 2020).
The essence of the different models is to give the consumer variety. The young adult
market segment appreciates choice. Rather than being compelled to buy the latest iPhone
version, the young adult consumer is encouraged to use their resourcefulness and discretion. The
iPhone 12 mini is reminiscent of early iPhone models that were compact but still had the best
features in the market. The model would favor an individual seeking to own a small phone,
which is against the current trend in the smartphone market. The iPhone 12 Pro targets the power
user with its photography enhancements over the regular model. Young adults, who are a
photogenic generation, would enjoy additional features such as the telephoto lens and the new
LIDAR sensor. The target of the iPhone 12 Pro Max is the young adult who sticks to the “bigger
is better” trend and seeks the ultimate smartphone experience. The last member of the 2020
lineup, the iPhone SE, is a throwback to earlier models. Despite looking like an iPhone 8, it
houses the A13 processor used in the iPhone 11 (Apple, n.d.). The phone targets the young adult
who seeks a quality phone while maintaining the familiarity of past models.
The iPhone is a premium smartphone, which is adored by its users for quality and status.
Accordingly, Apple uses the price skimming strategy for its products. It entails a company
setting high initial prices for its products and services to attract consumers who are willing to pay

the high price (Deshpande, 2018, p.76). The company capitalizes on this layer of the market
before lowering the price of its products to attract the next layer of consumers in the market.
Apple’s pricing strategy has been successful, with the company accounting for 92 percent of
profits in the smartphone industry (Kotler and Armstrong, 2018, p.332). Apple can use the
strategy because it invests heavily in research and development, thus unveiling products that
stand out from their peers.
The prices of 2020’s iPhone models are as follows: iPhone Pro Max from $1099, iPhone
Pro from $999, iPhone 12 from $799, iPhone 12 mini from $699, and iPhone SE from $399
(Apple, n.d.). While the five models give consumers variety in pricing, the phones are still
expensive compared to similar products from competitors such as Samsung. For example, the
128GB version of the iPhone 12 Pro Max goes for $1099 while the 128GB version of the newer
Samsung Galaxy S21 Ultra 5G goes for $999 (GSM Arena, n.d.). However, the young adult
segment comprises many Apple loyalists. Such individuals will accept the initial price quoted by
apple no matter how high. The availability of cheaper options such as the iPhone mini and the
iPhone SE would appeal to young adults seeking to switch to the Apple ecosystem. Such
individuals might not have enough money to afford the premium models. However, with the
cheaper models, they can still enjoy the Apple experience. An important aspect of Apple’s
pricing strategy is that it does not provide discounts for its products. The rationale is that
discounting would dilute the premium image cultivated by the company.
Apple has a strong distribution network that ensures that customers can buy their favorite
iPhone models at their convenience. Apple Stores are the direct distribution outlet for iPhones
(Miles et al., 2019, p.75). The stores are owned by the company, which guarantees shopping

assistance by specialists. The result is a great experience for the consumer. For a young adult
switching from another smartphone platform, the premium experience at an Apple Store could
turn them into loyalists. Besides company-owned stores, iPhones are also available at
independent stores. These distributors provide convenience to individuals who cannot access an
Apple Store.
Online marketplaces such as Amazon and Apple Store Online enable consumers to
purchase iPhones from the comfort of their homes. Such convenience is a plus for young adults
who engage in online shopping more than any other age group. Apple has partnerships with
various carriers ensuring consumers receive special carrier offers. Besides, the distribution
aspect, Apple has exemplary after-sales service. The company’s highly skilled service
representatives provide direct call support and online chat to ensure customers get the most out
of their new iPhones.
Apple has marketed the iPhone variously since its inception. In the formative years, the
focus was on the device’s exclusivity. As a pioneer of the slate form factor, Apple was able to
distinguish itself from its competitors. The strategy was perfect for the young adult market
segment since everyone was keen to own a premium device that they could show off to their
friends. Throughout most of the 2010s, the focus on the product’s design, with an emphasis on
iPhones being the coolest smartphones in the market (Holmes, 2020). For 2020’s iPhone lineup,
product promotion focused on features of the phone such as its speed, cameras, and drop
performance. The focus on features is based on the rationale that young adults are tech-savvy and
they would like to know the specific improvements made on the new iPhones.

Apple also uses product placement as a marketing strategy. According to Guo et al.
(2019, p.1), product placement is an important method of influencing the audience, which is
illustrated by the industry being worth $21 billion. The strategy influences potential customers
subconsciously without taking too much of their attention. Apple has strict rules on product
placement to ensure the depiction of their products sends the right message to the audience. As
explained by Sweney and Shoard (2020), Apple ensures that villains do not use iPhones on
camera. The positive depiction of iPhones helps them maintain their position as premium
smartphones. The young adult market segment might be attracted to the iPhone if they see a
protagonist using it on their favorite movie or TV show.
Apple vs. Competitors

Apple’s marketing mix focuses on maintaining its products’ superiority over competitors.
The focus on its product has enabled it to maintain its standing as a premium brand. Competitors
like Samsung and Huawei have flagships that compete with the iPhone. However, the marketing
strategy of Samsung, for example, has severally focused on mocking the iPhone and
emphasizing that its products are better (Clark, 2020). To Apple’s loyalists, such strategies are
further proof that the iPhone is indeed superior to its peers. The focus on the product and how it
can be improved has contributed to the company’s dominance of the smartphone market in terms
of profitability. The current strategy to focus on new features also emphasizes the company’s
commitment to research and development. This justifies other aspects of Apple’s marketing mix
such as the price skimming strategy.



Apple’s application of the marketing mix has successfully captured the young adult
market segment. According to a study by Flurry Analytics, young adults make up 48 percent of
iPhone ownership (Moshfegh and Bansal, 2020). Apple’s targeting of this demographic has
made them emotionally attached to the iPhone thus increasing the likelihood of young consumers
transforming to loyalists. With teenagers also preferring the iPhone to other smartphones,
Apple’s future is safe. However, as the young adult demographic grows older, Apple should
consider modifying its advertisements to be more inclusive of older consumers.


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