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mkt 571 Segmentation, Targeting and Positioning Apple Iphone 4s

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Marketing

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Segmentation, Targeting and Positioning Apple Iphone 4s
Module 1 SLP: Segmentation, Targeting and Positioning
Abstract
Purpose: the purpose of this paper is to identify a branded product or
service to be examined through the session; examining elements of
consumer behavior as they relate to market segmentation, targeting,
and positioning for it. This paper, and subsequent papers, will lead to
a SWOT marketing analysis of the chosen branded product.
Methodology/approach: the branded product for this paper will be
Apple’s iPhone4S. Data to be covered in this first paper will include
the following:
Product/Brand Analyzed
Corporate Background
Market/Industry Analysis and Competition
Market Segmentation and Target Marketing
Relevant External Factors
Module 1 SWOT Analysis
Findings: Apple is a leader in sales and production in US Markets;
with products that appeal across target markets. iPhone 4S sales have
eclipsed internal Apple brands, as well as other smartphone
companies in the U.S. market. Recent sales dominance, however, has
not established an industry lead. Samsung, in partnership with
Google’s Android Operating system, owns the global marketplace
with something like 21% of total market share. Apple faces both
technological and political challenges in the largest smartphone
market, China, as it is unable to establish a partnership with the
largest carriers there due to non-4G/LTE products. SWOT Analysis
section provides specific details regarding branded product strengths,
weaknesses, opportunities and threats.

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Conclusion: while Apple reigns supreme in US markets in terms of
sales, and is indeed a global force, it has not established itself overall
as the industry leader. It must build on brand/product strengths
through release of newer 4G technology; reduce liability to market
threats and capitalize on market opportunities (both in the U.S and
globally) in order to overtake competitors, and overcome the
widening gap created by Google and Samsung’s growing Android
user base.
Paper type: Module 1 SLP
Introduction
During the Session Long Project, I will be analyzing the iPhone 4S, a
branded product from Apple, Inc.; examining elements of consumer
behavior as they relate to market segmentation, targeting, and
positioning.
This paper, and subsequent papers, will lead to a complete SWOT
marketing analysis of the iPhone 4S.
Section 1: Branded Product: Apple iPhone 4S
Key Features
The iPhone 4S is a touchscreen-based smartphone developed by
Apple Inc. It is the fifth and recent generation of the iPhone and
retains the exterior design of its predecessor, the iPhone 4, but is host
to a range of improved hardware specifications and software updates
(Wikipedia.org, 2012). Robinson (2011), late last year, reported that
the upgraded A5 chipset in the iPhone 4S would handle data twice as
fast as before; with gamers enjoying seven times the computing
power over the standard iPhone 4; an 8 megapixel camera with 1080p
video recording, including face recognition; and the new iCloud
service which would allow users to store and access all of their data
wirelessly. With so much of the new iPhone 4S’s capabilities based
upon wireless computing, it was initially thought that the phone
wouldn’t live up to such lofty expectations, not unlike its predecessor
the iPhone 4 (Rothman, 2011); however, after reviewing the iPhone
4S’s WLAN connectivity and local WIFI transfer speed, Shimpi and

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Klug (2011) concluded that not only was the performance better than
the previous model; it was better than all of the competition as well,
with a download speed of 36.7 Mbit/s.
Sales and Profit Margin: iPhone 4S Sales v. iPad and iPod
For the three months ending March 31, 2012, Gustin (2012) reports
that Apple sold more than 35.1 million iPhones; an increase of 88%,
year over year. Sales were heaviest in the United States at $13B; with
the Asian markets running behind at $10B overall. In terms of unit
sales, iPhone trounced all other product sales; again, with 35.1 million
units sold; compared to iPad sales of 11.8 million units sold, and iPod
sales of 7.6 million units sold. According to Apple’s 10-Q filing of 25
April, 2012 iPhone sales accounted for $22.7B of the overall $39.2B
in net sales during the quarter; that’s approximately 57% of net sales
from a single product line. iPhone 4S sales were almost
singlehandedly responsible for the company’s Q2 profit margin gain,
year over year, of approximately 5% (24% in 2011, to 30% in 2012).
No other product line was over $10B in revenue, let alone breaking
$20B. CFO Peter Oppenheimer rather matter-of-factly confirmed
these impressive quarterly numbers as “extremely successful”
(Apple.com, 2012). Ogg (2012) restates the importance of the iPhone
to Apple as “the driver” of earnings going forward.
Market Share
Let’s look at total sales through the major U.S. telecom carriers to
determine the impact of iPhone 4S. Siegler (2012) reports that during
Q1 FY 2012, iPhone accounted for the following sales percentages
among the big three carriers: AT&T, Verizon and Sprint. At AT&T,
iPhone sales were 78% of all smartphones sold; at Verizon, iPhones
were 51% of all smartphones sold; and at Sprint, although
unconfirmed, the number is estimated at 60% of all smartphones sold.
Looking at these three in particular, we see numbers one (Verizon),
two (AT&T) and three (Sprint) in the industry; and iPhone sales
account for more than 63% of their sales (Yarrow, 2012). Most
tellingly, Siegler (2012) further reports that the big three account for
approximately 80% of the US smartphone market. With Apple’s
iPhone product carving out sales in the 60th percentile among the big

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