Marketers manage product positioning by focusing their marketing activities on a positioning strategy. This essay will discuss the multiple factors that are crucial to optimal market positioning. The factors that impact the chosen organisation, Apple, and the chosen product, laptop computers, include market segmentation, market positioning, and the marketing mix, which comprises price, promotion, place and product.
Established in the United States of America in April 1976, Apple Inc is a multinational corporation that designs and manufactures consumer electronics, computer software, and personal computers. The company's best-known hardware products include Mac computers, the iPod, the iPhone and the iPad. As at January 2010 the company operates 284 retail stores in ten countries, and an online store (www.apple.com/investors). Apple has established a unique reputation in the consumer electronics industry. This includes a customer base that is devoted to the company and its brand, particularly in the United States. Fortune magazine named Apple the most admired company in the United States in 2008, and in the world in 2008, 2009, and 2010 (http://money.cnn.com).
Before discussing how Apple positions its laptop computers in the market, it is important to understand how markets are segmented. Market segmentation is “the segmentation of markets into homogenous groups of customers, each of them reacting differently to promotion, communication, pricing and other variables in the marketing mix” (themanager.org) and is essential when trying to understand customers and what will influence their values and perceptions. A challenge that any marketing plan faces is whether or not to broadly class buyers and segment the market accordingly by using segments such as age, sex, income levels or whether to try and target the smaller buyers and their specific needs and wants. Through segmentation of an aggregated population, Apple can determine what appeals to specific groups, how to target that group and where to position their product and brand.
For Apple and the laptop computer retail markets can be divided into segments such as; demographic, useage, age and lifecycle, gender, income, psychographic, beneficial and behavioural segments. One of the main segments Apple uses in the laptop computer market is behavioural segmentation. This is done by segmenting the market into groups based on consumer knowledge, attitudes towards, uses for and responses to laptop computers. This basis of segmentation was chosen as it was the easiest way to identify the largest group of consumers with the highest potential for growth.
After segmenting the market, the next essential step is product positioning. This is the process of positioning the product relative to competing products in the minds of consumers (Peter & Olson, 1999). Marketing positioning is defined as “arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers; formulating competitive positioning for a product and creating a detailed marketing mix” (Kotler et al, 2008 p105).
Dibb and Simkin (2007) establish that for a company such as Apple to be successful it must carefully and precisely decide where to aim their laptop computers in its chosen segments. Furthermore they state that “the needs and wants of targeted customers must be translated into a tangible mix of product, price, promotion and distribution- the brand must stand out and have a clearly defined position” (Dibb & Simkin, 2007, p8).
Jackson (2007) argues that in many cases organisations forget the market positioning stage of the marketing plan process and confuse market segmentation with market positioning. Apple has not done this. Apple very effectively position its laptop computers within the market. Apple actually attacks the category they are in- in this case the laptop computer market. Apple has positioned themselves as being so different than other PCs that they should be in their own separate category. When Apple attacks their competition, they attack the whole category which is quite rare in marketing. Usually smaller brands single out the leader and attack them, not one brand positioning themselves against the whole category.
For Apple to effectively position its laptop computers in the market it must formulate an effective marketing mix. The marketing mix is defined by Kotler et al (2008, p.106) as “the set of controllable marketing variables that the company blends to produce the response it wants in the target market.” The marketing mix comprises of the “four P’s”- product, price, promotion and place.
Kotler et al (2008, p.57) define product as a “goods-and-service combination the company offers to a target market”. The satisfaction and value perceieved by the consumer is dependant on whether these attributes are satisfied, or exceeded. To achieve optimal market positioning, all product attributes for Apple’s target market, tangible and intangible, must be recognised in conjunction with their weighted importance. Product attributes considered important by Apple’s target market are seen to be: competitive pricing, range, functionality, information provided, friendly service, quality assurance and added value.
The time necessary to learn about a product or service and to travel to purchase it, as well as time spent in a store, can be important costs to the consumer. From a consumer’s point of view, price is usually defined as what the consumer must give up to purchase a product or service (Peter & Olson, 1999). In the mean time, price is set to appeal that the quality that the customer will get from the product is worth the money they spend. Apple have a very simple pricing strategy, most laptops in Apple’s product range have only one per category, therefore pricing seems reasonable and is easily identifiable to consumers. The “bigger and better” the laptop the higher the price is.
“Promotions are developed by marketers to communicate information about their products in order to persuade consumers to buy them” (Peter & Olson, 1999). Apple has a simple and consistent promotional message. During 2008, Apple ran a series of TV advertisements whereby Apple attacks the PC in a humorous way, often making fun of the PC's vulnerabilities to viruses, the difficulty of use, and so on. When Microsoft tried to counter the attacks by showing various people saying they are a PC, Apple responded by directly attacking Microsoft's disappointing Vista.
Each and every Apple store no matter where in the world has the same look and feel, consistent with its branding. Apple also distributes its laptop computers through carefully selected third party suppliers, who have strict guidelines on branding and location of their stores. Store atmosphere primarily involves affect in the form of in- store emotional states that consumers may not be fully conscious of when shopping (Peter & Olson, 1999).
It can be concluded from this essay that Apple’s success in the laptop computer market has been no accident. Through careful marekting planning, creating the right marketing mix and positioning, Apple has become a leading and preferred brand in the laptop computer industry.