Consumer Behavior and Marketing Psychology

This document discusses the consumer behavior and marketing psychology of Apple iPhone. It analyzes the marketing strategy, segmentation, marketing mix, and gaining competitive advantage in the market. It also provides strategic recommendations for improving sales and customer satisfaction.

Running head: CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
Consumer Behavior and Marketing Psychology
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1CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
Table of Contents
Overview of the Product: Apple iPhone....................................................................................3
Critical Analysis.........................................................................................................................4
Marketing Strategy and Marketing Mix of Apple iPhone.....................................................4
Segmentation......................................................................................................................4
Marketing Mix...................................................................................................................5
Gaining Competitive Advantage in the Market.................................................................6
Strategic Recommendations.......................................................................................................8
References..................................................................................................................................9

2CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
Executive Summery
Apple iphone, being a pioneer in the sector of innovation and technology, has carefully
planned the marketing strategy and marketing mix that will enable them to tap the better
section of the consumers. Segmentation is the key concept while determining the marketing
strategy. In the first assignment, the segmentation of the consumers of Apple iPhone was
analyzed. It was found that the rich and upscale segment that iPhone had targeted in the
beginning was too limited. They changed their strategy and collaborated with the telecom
companies to provide the middle class consumers installment opportunities. The first
assignment gives the idea of consumer decision-making process that leads the consumer to
buy an Apple iPhone has changed dramatically since last five years. The needs and wants
have changed and consumers now compare the Pros and Cons before they buy any product
from the market. After much consideration and comparison with other products belonging to
the same product segment do they take any final decision. In order to maintain the
competitive edge, iPhone should engage in social media marketing, brand promotion and
offers so that larger brand consciousness can be created. Depending on the psychology of the
consumers, recommendations for increasing the battery life, free application, increasing the
number i-stores have been made. The second assignment specifically deals with a survey
conducted among 12 random customers of Apple iPhone and 3 managers that answered
specific questions about buying or choosing iPhone and the psychology and decision making
process that they went through before they came to a decision. The survey supports the
opinions of the first assignment that the buying decision for Apple is mostly based on price,
quality and technological features. The personal lifestayle and behavior, their own personality
also influence this decision. The impact of word-of-mouth cannot be denied for any luxurious
product as that is the most powerful form of marketing for the product segment. The use of
social media and other web services has further enhanced their sale in universal market.

3CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
Overview of the Product: Apple iPhone
Steve Jobs, the former CEO of Apple, introduced Apple iPhone on 9 January 2007. Its
sale started on 29 June. By the year 2011, Apple had already sold a 100 million iPhones and
became the leading mobile phone manufacturer. The initial models that iPhone introduced
were unique in their design and interface. They use Mac software and combines the facilities
of iPod, phone and camera into one device, thus making it one of the most desired in the
world. When iPhone was introduced to the market, no other mobile company had yet offered
a truly smart and touchscreen device (Căpătînă and Drăghescu 2015). This became the unique
selling point for the product. Later they added many more features and upgrades that led to
the latest version, the iPhone X. in this model, iPhone even removed their traditional Home
button and replaced it with a complete touch interface making the phone much high end and
better looking. The initial models that iPhone offered had Wi-Fi recognition and Bluetooth
connectivity. In their latest model, they have come up with innovative technologies like
fingerprint and face recognition (Bhagavatula et al. 2015). The models appearing since
iPhone 7 and 7 Plus were given the characteristics of being water and dust resistant. The
cameras that comes with the phone have features like Augmented Reality and Night Cameras.
They have access to the i-Cloud services that makes the information stored in the device
more secure. IPhone has remained the leader in the market of mobile phones and new
technologies even now when hundreds of other competitors have entered the market with
products having similar features offered at a lower price. In the following section, the
marketing strategy that has enabled iPhone to maintain it competitive advantage and how
they have interpreted the consumer behavior so that they can apply that knowledge to
increase sale, has been analyzed. Moreover, recommendations that will enable the
organization to improve their sales and customer satisfaction have been made.

4CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
Critical Analysis
Marketing Strategy and Marketing Mix of Apple iPhone
From the very beginning, Apple has depended on cutting-edge technologies, which
became the USP for the product. From the first assignment it is clear that iPhone has always
remained on the higher side of the price thus making it difficult for the mass to buy that
product. Due to the expensive price range of the product, the marketers knew that they had to
select particular segments from the market. The marketing strategy that they applied are
discussed below:
Segmentation
It is necessary for every marketer that he or she identifies and understands the needs
and wants of different consumer segment. With the help of this understanding, they will be
able to determine the segments of the consumer in the market that need or want the product
(Chen et al. 2014). They will also be able to understand the kind of advertising, stimulus and
coercion that would work on that segment. For iPhone, the target segment has been the rich
people who can spare that kind of money on mobile phones. In order to determine the
consumer segment, the marketers in Apple had to consider the demographics, consumer
behavior and their decision making process before they can create a strategy to influence
them. The most important demographic factor here is income and societal status. The price
range dictates that it is only the high-income group, mostly those with high education and
technological awareness will be interested in buying the product. The first assignment too
supports this demographic preference. Due to the innovative technologies and the upper
range of price, the consumers belonging from this sector would prefer this product as it will
reflect status and technological advancement (Davis, Muzyrya and Yin 2014). Considering

5CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
this, the advertising of iPhone is extremely limited, thus depending on the marketing strategy
of word-of-mouth.
Marketing Mix
The marketing mix is the practice of centering the plans related to marketing a
product or service around the psychological behavior, desires and habits of the targeted
customer segment. Four considerations are made while creating a marketing mix. These four
considerations are:
Product: in order to cover the product aspect of marketing, the company releases a
new product every year that has new features that exceeds the previous version. This has
several pros. First, the new products that they come up with every year, makes the existing
customers desire the product as the trend that is popular now a days is of most recent or most
updated products. Second, the older versions that remain in the market are sold at a relatively
lower price range. The consumer segments that could not afford the phone earlier can now
buy the phone due to the reduction in price. As per the assignment done earlier, due to the
uniqueness of its operating system, security and interface, it remains at the top of most
desired items by most people. People that are using other Apple products like MacBook or
iPad are able to connect all the devices and transfer data seamlessly. These aspects provide
the USP or Unique Selling Point from the product aspect (Khan 2014).
Price: due to the uniqueness of the iPhone mobiles as well as the high quality, iPhone
has adopted the strategy of price skimming. In this strategy luxurious brands like iPhone
stands out in the market from its competitors by placing themselves in the high pricing band.
The first assignment also focuses on this price segmentation. The product that they launch
each year comes with an X factor that contributes to the high popularity in the market. The
target segment of the consumers are willing to pay the price thus creating a very loyal

6CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
customer base for the brand. They never provide any discount neither do they advertise for
sale increase (Thorbjørnsen et al. 2015). The focus of iPhone is on research and development
so that their customers can have a product that is unrivalled.
Place: when it comes to location, iPhone follows the same strategy as pricing. The
distribution of iPhone is high end as they sell only through i-stores, some upscale
independent stores, and online platforms only. People who are highly skilled and
knowledgeable generally supervise I-stores and work hard to explain to the customers the
technical specifications of the product. This increases the expectations and buying
experiences of the consumers and their loyalty to the brand is formed (Londhe 2014).
Whenever they buy a new mobile, this experience will draw them to the brand. The shops
that sell iPhones are generally located at prime locations and shopping malls. All these incurs
high pricing for the sellers and distributors, which makes the brand much sought out by the
consumers. Online platforms like e-bay, Flipkart and Amazon also sell iPhones. Second hand
iPhones are also sold in the market through online e-platforms thus making the status of the
phone even higher. The after sale experience is also extremely satisfactory for the customers
(Išoraitė 2016).
Promotion: the promotion strategy of iPhone is also different from other companies
that sell mobiles. Their projection of their brand is never from a competitive angle, where
they compare with other brands. Rather they show themselves as the force that is making
changes in the lives of their consumers and in turn, in the world. The features that they launch
each year are mostly promoted through online platforms and in shop advertisements (Ashley
and Tuten 2015). They use unique taglines for each product to give an idea about what the
customers should expect. The second hand sale offers, the skilled staffs that they keep in their
brand stores all contribute to make iPhone a standard that many companies strive to achieve.

7CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
Gaining Competitive Advantage in the Market
The market that iPhone mainly targets is the upscale rich segment. The problem with
this strategy is that the target segment becomes very limited. To overcome this problem,
iPhone collaborates with telecom service providers and provide schemes that allow the
middle-income customer group to pay for the phone on a monthly installment. This is
profitable to both as the telecom service providers’ sale increase exponentially and Apple can
tap the consumer segment that remained uncaptured before (Kim and Mauborgne 2014). This
strategy was developed by considering the behavior of the middle class consumers who
aspire to own high-end products but lack the immediate resource that is needed to purchase
those items. With the option for monthly installments, the middle class consumers now can
afford the product easily. Another method that they have adopted for customer segment
extension is the sale of second hand iPhones. With the launch of new models, the market
value of old models decrease. Moreover, the richer section now wants to buy the new product
to remain updated and upgraded. With the option of exchanging their phones with minimal
additional cost, iPhone has increased the sale of their new launch and acquired a range of old
phones that they sale at a reduced value to other middle-income customer segments.
The customer survey done in previous assignment shows that the youngsters are more
likely to buy iPhones, are mostly satisfied or overwhelmed with the experience of the
product, buying procedure and after sale services. Most of the respondents have agreed that
the popularity of the brand and the subsequent decision to buy iPhones are largely directed by
cultural values, familial practices and changing lifestyle behavior of people in Australia.
Other factors that affect them are brand consciousness, brand identity (Dissanayake and
Amarasuriya 2015). Most of the consumers believe that the premium pricing technique,
social media marketing, and word of mouth are the three major marketing strategy that works
for iPhone (Naz 2013).

8CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
Strategic Recommendations
Depending on the discussion above, it can be easily inferred that iPhone’s marketing
strategy is well thought out and goal oriented. Still, there is scope for further improvement in
regard with the marketing strategies and product.
First, iPhone should concentrate on making the batteries more powerful. From the
beginning, the consumers have complained about the less than satisfactory battery backup.
With new brands coming to the market, and old competitors gaining momentum with the
same technologies that iPhone offers, it is time that they improve those aspects that have been
overlooked until now to give preference to innovation (Pisano 2015). This will make the
customers more loyal as they would not have to think about any alternative due to reduced
battery backup.
Second, they should consider promoting their brand more. Apple never gives any
discount or offers by themselves. The only offer that people get are through telecom service
provider. It increases sale of the phone but fails to create any loyal consumer base among the
middle-income group. They do not realize that the opportunity is being given by the brand
but rather they might think that the offer is because of the service provider (Bevolo and
Gofman 2016). When given better and more reasonable option, they will turn to those
options. Campaigning and promoting the brand through offers will intrigue the consumers
from this segment, loyal customer base will increase, and the competitive advantage in the
market will remain intact.
Third, the application center for iPhones have limited software and among those, all
of them are paid software. This incurs extra cost for the consumers. While this is not of any
concern for the upscale consumers, middle class consumers may find them difficult to bare.
IPhone should make the essential software free of cost or inbuilt into the phone. Most people

9CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
need at least some software as mobiles have partially replaced the personal computers. By
providing them with these software options built in the phone, the consumers would not feel
obligated to spend more money. This would lead to then reduction of competition as
consumers are less likely to go for other options if they get all the perks from their favorite
brand. Advertising through social media is effective as well (Yadav, Joshi and Rahman 2015)
Fourth, Apple should consider opening more i-stores and dedicated retail outlets so
that more customers can be reached and brand awareness can be created. Consumer
psychology implies that the name that they see more frequently, is more likely to remain at
the forefront of their mind. They should also consider the environmental and eco-footprint
factor that have become mandatory for every organization recently (Misra et al. 2016).

10CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
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Bhagavatula, R., Ur, B., Iacovino, K., Kywe, S.M., Cranor, L.F. and Savvides, M., 2015.
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11CONSUMER BEHAVIOR AND MARKETING PSYCHOLOGY
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