Ch. 8 - Segmenting and Targeting Markets

In 2014, when Apple realized that the market for “phablet phones” was increasing and the customers were opting out for its business rival Samsung. To address the demand, they released the new iPhone 6 in two variants. They increased the screen size of its base model and released another 5.5-inch screen variant to compete with Samsung for the target market. A year later, when they thought they were losing its own customer base, customers who preferred the traditional small-sized iPhone. Apple released new 4-inch iPhone, called iPhone SE, which look very much like iPhone 5 and 5s packed with the latest technologies including A9 processor, Apple Pay and a 12mp Camera.

Besides providing specific products for precise target market, Apple also uses strategies for segmenting the market such as Geographic segmentation. Apple’s use of Geographic Segmentation can be clearly evident from the uneven distribution of their retail stores. Domestically, Apple has 53 stores in California and 21 in New York. Out of 21 stores in New York, it has 7 stores in Manhattan. Here, we can clearly see Apple Inc. using income segmentation. California and New York are the states with some of the highest buying powers and Apple clearly don’t want to miss out on any of that dollar. On other hand, India with the world’s second largest population but relatively low buying power has no Apple Retail Store yet. Apple also uses psychographic segmentation, which appeals to our personalities, attitudes, motives, and lifestyles. Apple has always tried to promote themselves as lifestyle brand and has been successful to do so mainly among tween and teens.