Marketing Audit: Apple iPhone's Market Segmentation in Australia

This report provides a comprehensive analysis of Apple's iPhone marketing management in the Australian market. It begins by examining the industry's growth and profitability, followed by a PESTLE analysis focusing on political, economic, social, technological, environmental, and legal factors affecting Apple's iPhone. The report includes a SWOT analysis, comparing Apple's strengths and weaknesses against its main competitors. It then delves into market segmentation, identifying demographic, geographic, behavioral, and psychographic segments for the iPhone in Australia. The analysis identifies primary and secondary target markets and discusses Apple's differentiated marketing strategy and positioning. The report concludes with an overview of promotional schemes used by Apple to enhance its market presence and sales in Australia.

APPLE COMPANY
MARKETING MANAGEMENT- MASTERS LEVEL
RUNNING HEAD: MARKETING MANAGEMENT

MARKETING MANAGEMENT 1
Table of Contents
Introduction:..........................................................................................................................................1
Growth and Profitability:.......................................................................................................................2
Pestle factors governing Apple Company’s I Phone product:................................................................3
Political factors..................................................................................................................................3
Economic factors...............................................................................................................................3
Social factors.....................................................................................................................................3
Technological factors........................................................................................................................4
Environmental factors........................................................................................................................4
Legal factors......................................................................................................................................4
Swot analysis and competition:.............................................................................................................5
Strengths............................................................................................................................................5
Weakness...........................................................................................................................................5
Opportunity.......................................................................................................................................5
Threats...............................................................................................................................................5
IPhone and its segmentation in Australia:..............................................................................................6
Demographic segmentation...............................................................................................................6
Geographic segmentation..................................................................................................................6
Behavioural segmentation.................................................................................................................6
Psychographics segmentation............................................................................................................6
Targeting, competition and positioning:................................................................................................6
Apple uses differentiated marketing strategy:........................................................................................8
Positioning map:....................................................................................................................................9
Primary and secondary market analysis:..............................................................................................10
Promotional schemes:..........................................................................................................................12
Conclusion:..........................................................................................................................................12
References:..........................................................................................................................................13

MARKETING MANAGEMENT 2
Introduction:
Apple Inc. is a renowned American multinational incorporation which engages in engineering
and manufacturing of electronics and computer software linked products for ultimate
consumers. It is headquartered in the region of Cupertino, California. The company was
founded by Steve Jobs, Ronald Wayne and Steve Wozniak on April 1, 1976. The well-known
hardware products constitute IPod, Macintosh computers, iPhone, Apple TV media player
and Apple smart watch. The operating system of apple includes software’s of macOS, I tunes
media, ilife, iwork, Xcode, logic Pro and iOS. The services yield by the company comprises
of iOS App store, Mac app store, Apple Music, iCloud in addition with iTunes store (Levy,
2018).

MARKETING MANAGEMENT 3
Growth and Profitability:
The mobile industry has experienced remarkable phases of growth in context of business
history. This in return leaves the executives from several other sectors to have an eye with
envy. The bulging popularity of smart phones in addition with mobile bandwidth is expected
to outstrip the supply in upcoming years as well. In the same aspect, this industry has given
birth to the world's most entrepreneurial and innovative companies. Consumers have
increased the demand for the access of business information and application via mobile
technology. The drive towards mobility is thriving with all ends in almost every corner of the
world. With the advent of aforesaid technology, the handling of complex information has
become a way more easily. This ranges from the access to worthy presentation and
documents to the limit of processes and initiatives taken. The linkage of mobile devices with
tablets and laptop computers, smart phones and PDAs with numerous software and
application yields extraordinary profit in business (Genakos & Valletti, 2015). The rise in
urbanization among the increased population is the prominent key driver for growth.
The worldwide cell phone industry is predicted to continue ahead the same
profitability speed and reach an estimated figure of $334.8 billion in 2018 along with the
CAGR of nearly 6.8% in the past period of 2012- 2017. The industry is currently dominated
by Asia pacific region which includes the areas of Russia, Brazil, India and China (Giachetti
& Dagnino, 2014). The sale is highest among premium segment i.e. >US$400 as wholesale
price which counterparts almost 80% of the universal market of handset profit during the
period of Q2 2017. The revenue generated from the sale of Smartphone in the year 2017
amounts to 478.7 billion US dollars. China ranks topmost with 130 billion US dollar, which
is followed by United States as second in the row with 55.6 billion respectively (Bharadwaj,
El Sawy, Pavlou, & Venkatraman, 2017).
Pestle factors governing Apple Company’s I Phone product:
This report has been prepared in context of Apple company product- iPhone and target
market selected as teenagers of Australia.
Political factors
The political environment prevailing in Australia consists of a liberal capitalistic democracy.
The democracy is built up on the grounds of constitutional monarchy in addition to British

MARKETING MANAGEMENT 4
west minister structure along with American federal hierarchy. There is an ongoing concern
of financial relationship in between states and federal constitution. Nearly, more than half of
the sales of products recuperate from rest of world rather than its origin (Rigney, 2017).
Apparently, apple is primarily dependent on china because of its low cost manufacturing. As
a result, the political relations of Australia with china and U.S. have a major impact on its
demand generating in former.
Economic factors
Australia is ranked as one of the principal entrepreneurial economies in the world. Because of
apple’s expensive range, usually customers in Australia are less inclined towards buying
motives. The strong value of dollar would be resultant determinant in exchange rates as it
could affect purchase in positive and negative manner. The economic stability of Australia
can create opportunities for the multinational companies like apple for the growth and
exposure.
Social factors
Australia is a collective mix of diverse people residing in relative young society of teenagers.
There is no official religion subjective in nature. The flow of education and skills prevailing
in Australians is beyond and commendable. There is behavioural shift in the way in which
Australian teenagers are using smart phones which have adversely affected the USP of the
tablet’s target market. Significantlywith the increase in the rise of phablets i.e.
smartphones,the errands of online shopping, visualizing video content and gaming has grown
on leaps in market. The social outlook of people in Australia governs the consumption habits
of quality and luxury products which reflect the status symbol as well (Gifford & Nilsson,
2014). The cost of living in superior cities such as Adelaide, Perth, and Melbourne is
eventually less than that of expensive cities.
Technological factors
New and updated technologies keep on emerging in the process of creation of fresh products
and services. This results in minimisation of costs and improvement of quality as well as
innovation. The continuous amendment benefits both the organisations and ultimate
consumers. Australian market is in support with Common wealth scientific and industrial
research organisation (CSIRO) and Defence science and technology organisation (DSTO).
The research and development contributes nearly 55% out of overall government funds
(Khan, Alam & Alam, 2015). There has been a generous and keen competition among

MARKETING MANAGEMENT 5
traditional players to come up with new upgrades and innovation to sustain revenue. The
upcoming technology of wireless charging is expected to rule the market. Apple needs to
extend more safety resolutions towards the peril of cybercrimes to cover good market capture
in Australia.
Environmental factors
In the era of growing technology, companies push the efforts to bring out the best of results
along with causing minimum of harm to environment. The major ecological concern in
Australia is of water availability and its quality. Second in this direction comprises of inland
damage caused due to soil corrosion. In order to overcome the above, Apple released a
Greenpeace protest on 17thApril 2012 which reflects its commitment towards end in use of
coal and shift in the direction of 100% renewable clean energy. Apple has been using 100%
renewable energy since 2013 to control the data centres (McLachlan, 2013).
Legal factors
The Australian legal mechanism is grounded on the fundamental belief assisting rules of
justice, law and independency of judges. The constitution of 1901 laid down a federal system
in between proportionate of government and state. The criminal laws governed by state and
territory affects the day live of people in Australia. Apple has been claimed or participant in
numerous lawsuits since the start of its operation. In 2009, Apple has been sued by Nokia in
context of wireless technology infringement matter (Jie & Hasan, 2017). Some other cases
were with the rivalry parties like HTC, Samsung etc. It arrives the highly delimited financial
sector by the pay of apple.
Swot analysis and competition:
Strengths
Apple is the second biggest money-making company worldwide which provides it financial
muscle for bring outs. The retail store Apple owns is attractive and impressive in its design
and facilities. The after sale services and advisory benefits are also praiseworthy. The
innovative style keeps on launching which keeps and raises the company’s brand image in
limelight of potential customers e.g. Apple watch. However, it also enjoys exclusive and
distinctive positioning specifically among 16-24s forming teenage group. Apple has been
voted by InterBrand as immense valuable brand, 4 consecutive years in a row (Abraham,
2013).

MARKETING MANAGEMENT 6
Weakness
The higher price range of its products narrows downs the market size of its customers. As a
result, it is not economical for teen group to become the participant of such expensive range.
The strategies of pipeline development for a budget iPhone are penetrating in emerging
markets. The expansion in number of outlets is less with just 499 stores operating in 22
countries. The overreliance on iPhone is biggest threat. The surveys revealed teen group
opted for Android operating system (55%) in comparison with Apple’s iOS i.e. merely 30%
(Sammut‐Bonnici & Galea, 2015).
Opportunity
Still there has been huge exposure and areas of growth in common wealth countries of the
time. Apple Pay assures to be yet another lucrative revenue base company in potential terms.
Increasing demand of its qualitative products, viable market conditions, iTV launch and some
of the revised cloud based services are the key determinant areas where the company names
pioneer. These newly ventures are expected to influence the targeted customer of teenage.
Threats
The exponential growth factor of credible rivals in the market with lowers pricing and greater
benefits such as Xiaomi has been a constant threat. The challenging and problematic
economic as well as political conditions in the key markets prevail to dampen discretionary
expenditure. With the entrant of rivals, there has been market saturation of smartphone phase.
Other dimensions include tax increment, Android OS, changing technology and stiff
competition.
IPhone and its segmentation in Australia:
Segmentation includes separating of population into definite groups as per the characteristics.
Common bunch of features which is shared by target customer segment of iPhone includes
the increased appraisal of quality, design and activation of technology products over and
above their prices (Brian, 2015).
Demographic segmentation
This particularly involves the categorisation into the groups of family size, age, gender,
income, education, religion, race as well as era of generation. In Australia 49% of male and
51% of female uses iPhone respectively. While out of 100 in total android users, male
contribute nearly 56%, rest 44% are females (Vallespín, Molinillo & Muñoz-Leiva, 2017).

MARKETING MANAGEMENT 7
Geographic segmentation
This divides the targeted market into several sub units within such as regions, nations, state,
cities and neighbourhood. In Australia there are 22 retail stores in operation which focus
upon primary customers and yield commendable services (Anusha, Yashaswini &
Manishankar, 2016).
Behavioural segmentation
This segmentation divides the targeted consumer market on the basis of attitude, loyalty,
knowledge and its respective uses and response. LG, Samsung and Apple almost cover about
80% of the Australian smartphone market. The statistics revealed that teenagers using iPhone
in Australia are loyal towards their choice of brand which covers about 79% while rest of the
individuals amounts to 56% and 47% for Samsung and LG market area respectively (Zaidi,
2018).
Psychographics segmentation
This emphasis upon the consumers on the respective social class, personality traits and
lifestyle etc. The expensive cost of iPhones reflects and justifies the status symbol among the
prevailing class of group. On the contrary note, Android Smartphone has influential impact
upon both middle and upper class.
Targeting, competition and positioning:
Targeting implies the choice of specific group chosen or identified as an outcome of
segmentation to sell produces, like for example teen group selected as primary targeted
market in Australia.
Apple’s direct competitors like Google, Samsung and Xiaomi offers the same
products and services as delivered by the former. It results in losing of signature remarks of
apple that were once active. It took Google almost less than a year’s time to come up with the
app of Google pay which is same as of Apple pay. The rivalry showed the capability to
imitate its products and services which can threaten the market capture of Apple. The iPhone
7 flagship market in Australia has shown significant growth despite of fact of decrementing
shipment in the region. There has been a susbstainal increase of 5.1% in market share as
compared to last fiscal quarter (Statista, 2018). Some of the iPhone’s biggest contestants did
not manage to achieve successful results in Australian market. Samsung testified a decline in
total of almost 6.9% in sales (Ramakrishnan, 2016).

MARKETING MANAGEMENT 8
Positioning states the selection of most viable marketing mix to influence and endorse
brand image in the mind-set of teenage segment within Australia. Apple Company has been
using mono segment kind of positioning and targets towards a single and particular segment
say for e.g. Teenage group in Australia. Moreover, this multinational incorporation positions
itself under the tag of premium brand proposing products and services with updated functions
and competences by charging additional cost within. Henceforth, the targeted market
comprises well off teenage that are alacritous to pay the more amount in regards of
advancement served and qualitative products (Weaver, Horyniak, Jenkinson, Dietze & Lim,
2013).

MARKETING MANAGEMENT 9
Apple uses differentiated marketing strategy:
The marketing tactics of product differentiation is used to distinguish the relative product
from those of rivalry forces. In this regards, since the era of 1980s, Apple has been
continuously formulating the aforesaid policy to build up a distinctive image of its products
and services in electronic segmentation. Apple has significantly employed the former dogma
in its products ranging from MacIntosh home computers to the extent of iPod music players
in addition with iPhone and iPad which ultimately serves the needs of people in varied
dimensions (Hanks, 2018).The selection section of consumer market is thereafter conveyed a
powerful message.

MARKETING MANAGEMENT 10
Positioning map:
The above map signifies that within the various choices of brands available. Each one holds a
distinctive image and market capture within the targeted population. Throwing the limelight
on Apple Company, it has been a continuous leader since 4 years in the mobile and
technology industry. The brand image it shares in the mind-set of customers and the relative
quality served are the two prominent factors. On the contrary note, among its various rivalry
partners such as Samsung, Motorola, blackberry, LG etc. the variety of choices available in
Apple’s product is limited which ultimately narrows down the customer’s choice. For e.g.in
the categorisation of iPhone series only few models are available such as iPhone 7, iPhone 7
plus.

MARKETING MANAGEMENT 11
Primary and secondary market analysis:
Types of
segmentation
Segmentation criteria Devices: iPhone, iPad,
Mac, iPod
Primary market Secondary
market
Geographic Region covered
Density
Australia and
international
Urban
Australia and
international
Urban
Demographic Age limit
Income group
Gender
Life cycle stage
Income
Occupation
18-30
$75000-$125000
Both male and
females of teen group
Bachelor stage
Moderate and high
earners
Majorly students,
professionals,
managers
30-45
Above $50000
Elder age group
Newly married
couples and
Full nest 1
Full nest 2
Low income
earners
Retired
individuals and
house wife’s
Behavioural Degree of loyalty
Benefits sought
Hard-core loyalty
Sense of achievement
and belonging,
Efficiency and speed
Switchers
Recreation
Self-expression

MARKETING MANAGEMENT 12
Personality
User status
Determined and
ambitious
Potential and fixed
users
Non ambitious
Unstable users
Psychographic Social class
Lifestyle
Upper class
Aspirer
Succeeder
Middle and
lower class
Retired,
Resigned and
family
caretaker’s
(Zhiqiang, 2013).

MARKETING MANAGEMENT 13
Promotional schemes:
The substantial work in the Apple Mac is the songs which can played from iTunes.
Henceforth, it turned into the formation of a strategic coalition with PepsiCo. This scheme
calls for the people to find and use the winning code inside the caps of Pepsi bottle and
redeem the former from Apple’s iTunes music Store. This tactic has showcased increased
consciousness of iTunes presence in market. Howsoever, as a resultant impact Apple’s
Australian market share increased from 40.41 percent in last quarter to 46.42 percent till this
quarter by the launch of iPhone 7 series (Milan, 2018). This represented a year on year gain
as well. The initial high prices for capturing higher income group individuals and then later
on cutting down of prices for targeting middle and lower group teenagers is also a captivating
strategy.
Conclusion:
Therefore, it can be concluded that iPhone are expensive in nature but on the same hand user
friendly also. Moreover, iPhone are more of a reflective symbol status as compared to a
personal commodity. To gain the momentum and profits in the long run, iPhone need to keep
pace with the updated technology in regards of shape, design and technology used. Teenagers
are more passionate to become the users of iPhone as it adds social image to the respective
personality. As a result, schemes should be launched to cut down the high prices or make it
easy for the group to purchase likewise instalment policy etc. Timely research and
development should be given due importance.
However, as an outcome of intense competition the participant with high
performance, high quality served and high features along with reasonable prices can only
survive. IPhone manufactures should rely the efforts on minimisation of cost in order to beat
Chinese smartphone market.

MARKETING MANAGEMENT 14
References:
Abraham, S. (2013). Will business model innovation replace strategic analysis? Strategy &
Leadership, 41(2), 31-38.
Anusha, K., Yashaswini, C., & Manishankar, S. (2016). Segmentation of Retail Mobile
Market Using HMS Algorithm. International Journal of Electrical and Computer
Engineering, 6(4), 1818.
Bharadwaj, A., El Sawy, O., Pavlou, P., & Venkatraman, N. (2017). Digital business
strategy: toward a next generation of insights.
Brian, J. (2015). Segmentation Marketing: A Case Study on Performance Solutions Group,
LLC.
Genakos, C., & Valletti, T. (2015). Evaluating a decade of mobile termination rate regulation.
The Economic Journal, 125(586).
Giachetti, C., & Dagnino, G. B. (2014). Detecting the relationship between competitive
intensity and firm product line length: Evidence from the worldwide mobile phone industry.
Strategic Management Journal, 35(9), 1398-1409.
Gifford, R., & Nilsson, A. (2014). Personal and social factors that influence pro‐
environmental concern and behaviour: A review. International Journal of Psychology, 49(3),
141-157.
Hanks, G. (2018). Apple Differentiation Strategy. Retrieved April 2, 2018 from
https://bizfluent.com/way-5815745-apple-differentiation-strategy.html
Jie, C. T., & Hasan, N. A. M. (2017). APPLE VERSUS SAMSUNG PATENT LAWSUIT:
AN ISSUE AND CRISIS MANAGEMENT APPROACH. International Journal, 2(5), 1-12.
Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of internal and external
environment of Apple Inc. International Journal of Economics, Commerce and
Management, 3(6), 955-961.
Levy, S. (2018). Apple Inc. Retrieved April 2, 2018 from
https://www.britannica.com/topic/Apple-Inc

MARKETING MANAGEMENT 15
McLachlan, R. (2013). Deep and Persistent Disadvantage in Australia-Productivity
Commission Staff Working Paper.
Milan (2018). THE IPHONE 7 IS APPLE’S MAIN STRATEGY TO GROW ITS MARKET IN
AUSTRALIA. Retrieved April 2, 2018 from https://www.cctnews.com/iphone-7-apples-main-
strategy-grow-market-australia/
Ramakrishnan, A. (2016). T1 2016 MPK 732 MARKETING MANAGEMENT (CLUSTER B).
Retrieved April 2, 2018 from https://mpk732t12016clusterb.wordpress.com/category/blog-
topic-2-segmentation-targeting-and-positioning/
Rigney, L. I. (2017). Indigenist research and aboriginal Australia. In Indigenous peoples'
wisdom and power (pp. 61-77). Routledge.
Sammut‐Bonnici, T., & Galea, D. (2015). SWOT Analysis. Wiley Encyclopedia of
Management.
Statista (2018). Market share held by smartphone operating systems in Australia from 2013
to 2017, by month. Retrieved April 2, 2018 from
https://www.statista.com/statistics/245191/market-share-of-mobile-operating-systems-for-
smartphone-sales-in-australia/
Vallespín, M., Molinillo, S., & Muñoz-Leiva, F. (2017). Segmentation and explanation of
smartphone use for travel planning based on socio-demographic and behavioural
variables. Industrial Management & Data Systems, 117(3), 605-619.
Weaver, E. R., Horyniak, D. R., Jenkinson, R., Dietze, P., & Lim, M. S. (2013). “Let’s get
wasted!” and other apps: characteristics, acceptability, and use of alcohol-related smartphone
applications. JMIR mHealth and uHealth, 1(1).
Zaidi, M. (2018). Marketing Analysis of Apple Inc. Retrieved April 2, 2018 from
http://www.academia.edu/26008396/Marketing_Analysis_of_Apple_Inc
Zhiqiang, X. (2013). Research of iPhone Target Customer Segmentation and Business
Analysis Application. Telecommunications Science, 1, 025.