Consumer Behavior
Consumer behavior is the behavior that consumers display when selecting, purchasing, using, evaluating products and services they expect to satisfy their need. Apple was not the first company to develop a Smartphone but the Iphone has changed the Smartphone category and consumer behavior in profound ways. Since the release of the first Iphone people have lined up outside of Apple retail stores and At&t stores around the country and waited hours and even days for this phenomenon. Now more and more people get in the massive lines to get their hands on the newest version. Every version offers more capabilities and programming we all thought was impossible. Every model becomes faster, have stronger cameras and more applications. The latest versions offer Face-time, which is a video-to-video phone call from two Apple devices. On the Newest version is Siri, which a voice activated assistant for your phone. Siri learns from you and gives you directions, types emails and text messages, sets up appointments and even searches the web for you.
The personal consumer has jumped all over this technology by the masses. The technological societies that we live in these days keep people purchasing the latest and greatest thing. The have been blogs all over the Internet about what people would do if their Smartphone disappeared. Apple out does their selves at every release and has built brand locality. This is why I can buy a new Iphone today and I will probably pay full price for the newest version in six months. I am that person who loves Apple products and I continue to purchase the latest and greatest Apple products. I currently own a Macbook Pro, Ipad 2, Apple TV, and have had every version of the Iphone. Now the Iphone is coming to me at work, which brings me to the second type of customer, the organizational consumer.
The organizational consumer consists of businesses, government agencies and other institutions (for profit and non profit) that buy and use products and services. Apple has reached this growing success by offering business platforms that people established by having their personal Iphone’s. While standing in line to get my newest version of the Iphone I met a gentleman who worked for Coca-Cola. He explained that he was there to get the new Iphone as well. He was not only getting himself one but for his whole staff in the research and development department. They had designed their own proprietary software for the Iphone strictly for their company use. Companies are using their Iphone’s all over the world. One of the newest technologies are now turning their Iphone’s in to barcode scanners, credit card machines and GPS trackers. Companies from large retailers like Nordstrom’s to large parking companies like Ameripark are taking advantage of these new technologies.
Strategy
With more people becoming Iphone users Apple is hoping to convert more people to their other products (MacBooks, Imacs, Ipads, and Apple TV). Apple has now came up with many new ways to access your information that will change the way we operate. They do this by linking products together like being able to show your Iphone on your flat screen TV through Apple TV. You can also do this with any other Apple device. Apple had a bunch of strategies for the release of the new Iphone but didn’t realize that the day of the first release they would sell out in six hours. This showed that the demand superseded the actual supply. Apple has always been the leader for the music and video industries and realized they would become the top dog in the Smartphone realm.
There are plenty of market opportunities for Apple to expand the client base. Apple is developing more applications for businesses to use to increase productivity. They also focusing huge on the direct consumer market. On the consumer side Apple’s primary target market is the upper-middle income professionals to coordinate their busy schedules and communicate with colleagues, friends and family. Their secondary consumer targets are high school, college and graduate students who need one portable multifunction device. Apple’s Iphone main strategy is brand awareness, ease-of –use, compatibility with other apple products, secrecy about new product launches and promoting the Iphone as both professional and hip.
Product Design
Apple hired Sir Jonathon Paul Ive a British born designer. Ive is the senior vice president of industrial design and is the lead designer behind most of Apple’s products. The Iphone was probably one of the most anticipated products before it was even created. One of Apple’s designs was based on the minimalist approach by having only four buttons (volume, mute, power and home button) and the rest is all interaction with the touch-screen. Some of the main features are a 3.5-inch touch-screen, digital camera, web browsing, phone, e-mail browser, game player and Ipod mp3 player. The also added some advance features including to a high definition video recording and editing, dual sided cameras, videophone, multitasking and a retina display.
The Iphone comes in 2 different colors including black and white and 3 different memory sizes form 16 GB, 32 GB and 64GB. The Iphone 4s weighs 4.9 ounces, 4.5 inches in height, 2.31 inches in width and .37 inch in depth. The cellular and wireless features include world phone technology, CDMA, 802.1 Wi-FI and Bluetooth 4.0 wireless technology. The Iphone’s screen includes a retina display, 960-by-960-pixel resolution, an 800:1 contrast ratio and a fingerprint resistant coating. The camera offers a 8 megapixel iSight camera, autofocus, tap to focus, facial detection in still images and a LED flash. For power the Iphone has a built-in rechargeable lithium-ion battery, 8 hours of talk time, 200 hours on stand by, 6 hours on the internet, to hours of video playback and 40 for audio. The Iphone comes packaged in a small box with Apple earphones with remote and mic, dock connector to USB cable, USB power adapter and documentation. All this is included with a one-year warranty and the option to by an extended warranty through Apple Care.
Promotion
Apple know all about promoting products through advertising, using spokes persons, promotions with cell phone companies, personal selling. In 2009 Apple spent 501 million dollars on advertising according to the 10-k tax forms. The year before they spent 486 million and the year before that 467 million. 500 million seems like a large amount of money but their largest competitor spent 1.4 billion at almost 3 times the amount. According to tech.fortune.cnn Apple has actually decreased their advertising budget based on sales. The 501 million they spent on advertising was only 1.37 percent of their actual revenue. Apple has effectively used their advertising budgets by creating ads are memorable and the ads are well placed. Over the years Apple has set a presence in the tech word so their products speak for themselves. When Apple designs and created ne products the understand that there only option is to deliver the best available products to create a good word of mouth advertising. And last they put in their own retail stores were people could put their hands on the products and test them on their own.
When using spokespeople for your products what is better than the CEO Steve Jobs is a tech work icon. Apple also used some advertising icon including Sarah Whistler, Janie Porche and Tess Bethune. Apple uses the film industry filmmaker Errol Morris and actors including Vern Troyer and Justin Long. Apple has tried to use a lot of celebrities from all different industry including professional basketball player Yao Ming and comedian John Hodgman. But their biggest new spokesperson is Lady Gaga who is the first musician to get this role. Most of Apple’s TV campaigns involve one person be a Mac and the other being a PC. The commercials explained how easy and useful Macs are and how difficult and slow PCs are. Everyone has seen one of the commercials and I have enjoyed them all.
The biggest plan Apple did was to sign an exclusive contract with At&t for the first 3 years of production. This gave At&t the rights to be the only company in The Unites States who could provide service for the Iphone. By doing this it helped both companies tremendously well by giving the companies exclusivity. Part of this deal was that At&t would give a discount to anyone purchasing an Iphone and signed a new 2 year contract with At&t. Apple did not offer any other discounts but you could purchase A phone at the new retail price.
Distribution
When Apple decided to release the Iphone the sigh exclusive contracts with one carrier in each country the entered. The Iphone was released in the United States first and was planed to be released to other countries soon after but fell short due to the lack of supply. The other delay for distribution to other countries was coming up with agreeable parameters for both companies. An example of this was China, they did not get their first Iphone until August 2009 and china is the larges market for handheld mobile devices. Apple chose a hybrid distribution channel including At&t, the Apple Store and Apples online website (). At the At&t store you could test drive the Iphone, select a rate plan, sign the contract and walk away with your new phone. You could also do the same thing at the Apple store itself and walk away with your new phone. Despite the ability to walk away with your new phone many people chose to order online instead of waiting in line. Purchasing on line involved creating an Apple account, selecting your rate plan, purchasing the phone and waiting for delivery of their new phone.
I waited in line for a new Iphone because I wanted it my hand then. The Apple store is an amazing store to enter but can be a bit daunting at some times. Every time I enter the Apple store it is packed and I manage to find some one to help me. They make it real easy to purchase their products and you don’t have to stand in line to check out. It is really cool to purchase your new product and the Apple employees are using the same product to check you out. They scan your credit card on a new Iphone, type in your email address, e-mail you the receipt and you out the door.
Pricing
Pricing I feel was one of Apple’s weakest points so far with the Iphone. At first release the 4 GB was 499 and the 8 GB was 599. At&t offered a special discount with the signing of a 2-year contract of 300 off retail price. So when the new phone was released you could get the 4 GB versions for 199 dollars. These prices showed a lack of new Iphone’s the first day by selling out in just a couple of hours. This shows that a price increase might have been completely possible because of the demand. After the release of the Iphone and the second version was released the price stayed the same just with more memory options a 8 GB, 16 GB and 32 GB and the first versions price was reduced to 99 dollars with a new contract. Apple has continued to use this method for all new versions of the Iphone where the previous version goes on sale. This helps people who really can’t afford the newest version to still own a new Iphone.
Evaluation
I think the overall impressions the Apple Iphone is most people continue to love this product and I feel this is shown because Apple’s stock has increased 300 percent over the last couple years. People continue to purchase the latest versions so they don’t get left behind. Apple spends 100’s of millions of dollars in advertising that people remember the commercials. I feel that the only misstep that Apple made with the release of the Iphone was the price. Does price really matter when you have a dominating product that people can’t wait to get their hands on?
Work Cited
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"Apple's 2009 Ad Budget: Half a Billion." - Apple 2.0. N.p., n.d. Web. 21 July 2012. <http://tech.fortune.cnn.com/2009/10/28/apples-2009-ad-budget-half-a-billion/>.
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