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Consumer Behavior Report: Apple

  1. Situation analysis of the company

1.1a Background
Apple Inc. is one of the highest performing technology companies globally alongside companies such as Google, Facebook, and Amazon. It is largely involved in designing, developing, and selling consumer electronics, online services, and computer software. One of the most significant and profitable products of Apple is the iPhone which has been upgraded into various models over the years. The latest design of this product is known as iPhone XR. Apple Inc. was founded in 1976 by Steve Jobs, Steve Wozniac, and Ronald Wayne and was initially known as Apple Computer Company (Khan, Alam & Alam, 2015). After the resignation of Steve jobs in 2011 due to health issues, the company has been under the leadership of Tim Cook up to date. Apple has a huge presence worldwide and it is estimated that 1.3 billion people in different regions are currently using its products. Besides, the business runs 504 stores which are located in 24 countries and has employed approximately 123, 000 employees on a full-time basis.
1.1b Vision statement
“We trust that we are on t earth to make extraordinary items and that is not evolving. We are continually concentrating on improving. We have faith in the straightforward, not the complex. We trust that we have to claim and control the essential innovations behind the items that we make, and take an interest just in business sectors where we can make a noteworthy commitment” (Khan, Alam & Alam, 2015)
1.1cMission statement
Apple develops Macs, the best PCs on the planet, alongside OS X, iLife, iWork, and expert programming. Apple has reexamined the cell phone with its progressive iPhone and App store and is characterizing the eventual fate of versatile media and figuring gadgets with iPad (Khan, Alam & Alam, 2015).
1.1d Market Situation
SWOT analysis

Strengths
1.      The ability to develop innovative products is one of the most strengths of Apple Inc. At first, the company released Mac Book followed by iPod, iPhone, and iPad (Khan, Alam & Alam, 2015). Their most recent product is the iwatch.
2.      Apple is also the leading business worldwide in terms of technology with a huge market share. In 2018, the company’s total yearly revenue was $265 billion. During the same year, the company Apple was the first public company in the history of the U.S to attain a value of $1 trillion.
3.       Moreover, the company’s marketing strategy which focuses on the value but not the price has made the company to attract a loyal base of customers who are concerned with the worth.
Weaknesses
1.      One of Apple’s main weakness is the difficulty in matching the high expectations placed upon them by the consumers since it is a big company with a large share in the market.
2.      Additionally, most of their products are not compatible with software or accessories from other companies, making consumers to only continue using Apple products only (Khan, Alam & Alam, 2015).
3.      The current leadership at Apple is also considered a weakness as Tim Cook, who is the CEO is an expert in operational excellence yet the company is popular for innovation.
 
Opportunities
1.      Apple’s market is rapidly expanding and this presents a perfect chance for the company to establish in other countries and have a stronger presence around the world.
2.      Technological improvement is also another opportunity that Apple can use to develop other innovative products in the years to come (Khan, Alam & Alam, 2015).
3.      The company is currently seeking to develop Apple car which is may attract individuals who like to identify with the brand.
Threats
1.      Competition in the smartphone market is a big threat to Apple. Some of the company’s competitors in the mobile phone sector include Samsung, Lenovo, and HTC.
2.      Apple also risks losing its competitive advantage due to technology which is also available to its rivals.
3.      Moreover, with the uncertainty of the economy, it may be difficult for Apple to achieve their goals since their market may shrink (Khan, Alam & Alam, 2015).
 

PESTEL analysis

Political
·         Free trade between countries enables Apple to sell its products in other countries.
·         Firm political statuses in developed countries impact Apple in the sense that it makes the company secure and run smoothly.
·         Democratic leader in the U.S has enables Apple to be run their operations independently (Khan, Alam & Alam, 2015).
 
Economic
·         Continuous growth of the emerging nations provides an opportunity for Apple to enlarge their business.
·         The economic stability of developed states benefits Apple as many people can afford to purchase their products (Khan, Alam & Alam, 2015).
·         Affordability of labor is beneficial to Apple as they can save more on the production costs of their items.
 
Social
·         Increased usage of mobile phones presents Apple with a perfect chance to manufacture more gadgets that even low income-earners can afford.
·         Social media increases the need for the company to manufacture more computers and phones.
·         Increased migration impacts Apple by creating the need to develop devices where people can communicate effectively remotely (Khan, Alam & Alam, 2015).
Technological
·         Apps market is an opportunity that the company can use to create its own app for its customers.
·         Technological integration has helped Apple by expanding its base of customers.
·         Cloud computing has made it easier for Apple to collaborate with other companies.
 
Environmental
·         The need to be energy efficient is a challenge to Apple since its production sites need to mind about the surroundings, requiring few products to be made.
·         Labor rights trend enables the company’s workers to operate in friendly environments and not to be discriminated against, which boosts their performance (Khan, Alam & Alam, 2015).
·         Business sustainability is important as Apple plans on its long-term survival.
 
Legal
·         Privacy laws are helpful to the company since they make workers be more careful about whom they share sensitive information with.
·         Many telecommunications restrictions are a threat to Apple as they might be charged heavy fines if they are not careful.
·         Tax laws have an impact on Apple’s finances
  1. Target Market description

2.1a Demographic
Age: 20-45
Income: High-income earners
Gender: male and females
Occupation: Individuals in executive positions and professional managers
Lifecycle stage: bachelors, University and college students, and newly wedded couples
2.1b Psychographic
In this classification, social class is the premise of the division. The market is sectioned dependent on the diverse premiums, feelings, mental self-portraits, values, identities, dispositions, and exercises of the purchasers. Distinctive individuals may have diverse interests. For instance, individuals who are keen on iPhone 4S will, at any rate, have a few interests in cutting edge item. In addition, individuals in the various way of life with various identity will likewise affect their decision. The objectives of iPhone 4S are individuals who live in an in vogue life and who are interested in novel developments (Khan, Alam & Alam, 2015).
2.1c Behavioral
The principal target group is individuals who have high loyalty to Apple and act as the primary consumer. Essential gathering buyers are for the most part individuals who are diehard fans of Apple goods such as iPhone as well as items in a different arrangement, for example, iPod, iPad, and iTouch. Individuals in this gathering may have more than one item from the firm (Khan, Alam & Alam, 2015). They think well about the highlights and the advantages of the items and they are happy to pay for the additional cash to get these highlights. They are the general population from the center to high class in the general public and can pay for the new items in the organization. They are the primary shopper gathering of the organization. This is additionally the primary motivation behind why Apply can have a more expensive rate than the vast majority of its rivals.
The second group onsists of individuals who are pulled in by the novel plan and elements of Apple products. These individuals are grown-ups in the working class, who are interested in new innovative items. They utilize advanced cell calm incessant. An unrivaled item could streamline one’s day by day life. The third gathering is individuals who pursue a societal position. Social acknowledgment and design are the fundamental reason for them to buy (Khan, Alam & Alam, 2015). They are competent to pay for iPhone 4S as their day by day supplement, regardless they have to utilize outer material to separate with others and make them feel certain.
2.1d Geographic
Geographic Segmentation depends on factors such as district, city size, thickness, and atmosphere. Most of Apple’s products are targeted for the U.S citizens and also for overseas users (Khan, Alam & Alam, 2015). People located in the urban centers and in densely populated areas are also the center of focus for Apple products.

  1. Target market decision-making process

3.1 Problem /need recognition
3.1a-In this case, many consumers need to continue belonging to a higher class. Many people who use the iPhone mainly belong to the middle to high social classes since the devices are expensive (Khan, Alam & Alam, 2015). As such, a consumer wants to identify with such groups and hence the need to purchase the iPhone.
3.1b-The desire to have experience with the latest model of electronics released by Apple. This is mainly for loyal customers who, for instance, already have a previous model of an iPhone and they do not want to be left behind.
3.1c-A customer may want to buy an iPhone because of its outstanding features compared to other devices available in the market. For example, Apple phones have one of the fastest operating systems compared to other brands, are the sleekest, and have a high-quality camera (Khan, Alam & Alam, 2015). These features attract individuals to buy an iPhone.
3.2 Information search
3.2a-After recognizing the need, consumers proceed to information search, which can either be internal or external. Memory is the main internal source of information. In this case, if an individual has already had an experience with whichever model of iPhone and they want to buy another one, they might already have a clue as to what Apple products are.
3.2b-However, for persons who do not know anything or have insufficient internal information about the iPhone, they tend to rely on external sources to decide whether they will purchase the devices. They may get information about Apple products on various social media platforms such as Facebook, Twitter, Google, and chat rooms. In these environments, people may share views about the product, share images, or even personal messages (Khan, Alam & Alam, 2015).
3.2c-They might inquire from others about the device’s features, for instance, the durability of the battery, the screen’s sensitiveness, among others. The level of product knowledge and perceived risk are often used to determine the level of external search needed.
3.3 Evaluation
3.3a-A buyer might evaluate the following alternatives: iPhone X iPhone XS Max, and iPhone XR. These are the most recent Apple phone models. XS and XS Max have dual sim slots, faster face ID and dual camera systems, as well as wider sounds (Khan, Alam & Alam, 2015).
3.3b-Their prices are also almost the same.
3.3c- On the other hand, iPhone XR is more expensive and has more improved features, such as advanced smartphone LCD, 6.1-inch retina display, an all-screen glass covering, and the ability to develop quality portraits with the help of a single camera lens.
3.4 Purchase
After evaluating the options available, and in this case the three designs of iPhone, a consumer decides to make a purchase.
3.4a-They can decide to make a trial purchase. This is when a buyer had no prior experience with the device and wants to give it a try. They might have heard about the phone from a friend or seen a celebrity with it. By trying, it means that they are taking a risk as the product might not turn out to be as they thought or it meets their expectations.
3.4b-A consumer can also make a repeat purchase. This occurs when an individual buys the same device they had already bought and they already know how it functions. Most likely, this procurement can be as a result of misplacing the former iPhone or wanting to have more than one.
3.5 Post-purchase evaluation
After buying the phone, the individual examines the decision they made based on their initial expectations.
3.5a-If it exceeds what the consumer needed, they tend to be delighted. For instance, one might expect that iPhone XS’s battery can go up to 4 hours when the data is off only to find out that it can last up to 8 hours. This makes one more than satisfied. On the other hand, if a purchase meets the initial expectations, this triggers satisfaction. This means that if one bought iPhone XS due to its sleek nature and finds out it is that way, they get fulfilled. Lastly, if the item bought did not meet the initial requirements for what it was bought, one becomes dissatisfied. For instance, a consumer who bought iPhone XS Max thinking that it was super-fast and realizes that it is not different from their former phone might be unhappy.
3.5b- If customers are happy, they might market the brand to other potential buyers. If they get disappointed, the company may have a bad reputation. A marketer should ensure that information is available to the consumers to enable them make appropriate decisions and avoid being disappointed.

  1. Social influences on buying behavior

4.1-One of the external influences that can affect the customer’s decision-making process is the reference groups. They include people whom an individual compares themselves to and interacts with them regularly. For example, friends, family members, and co-workers could be a person’s reference groups (Rani, 2014). They can play a significant role in determining which type of electronic one should buy. For instance, in this case, the buyer might have settled on iPhone XR if his or her friends have the same model.
4.2-Another social influence that can affect the above decision-making process is the consumer’s social status. If the purchaser belongs to an upper middle class, they might settle on the most expensive gadget.
4.3-Moreover, the role of the individual in society is an external influence on buying behavior. For instance, an executive officer in a highly reputable company might be compelled to buy an iPhone since it fits their position.

  1. Psychological influences on buying behavior

5.1-Motivation is one of the internal influences that can affect the decision to buy either of the three types of iPhone. Generally, motivation is the reason for behaving in a particular manner. In this case, a possible motivation could be the need to experience the latest iPhone model. Besides, a person may also want a phone with the most advanced features. It could also be the desire to have a sense of belonging and to symbolize that one belongs to a high social class. With these motives which are internal, the consumer can be manipulated to buy the mobile device which fulfills or meets their desires.
5.2-The other internal factor that can influence the consumer to decide which design of the iPhone to buy is known as perception. Typically, an individual’s view of a product is known as perception. Different people may have different opinions about an item since they have diverse ways of interpreting things (Rani, 2014). For instance, one may perceive iPhone XR as unworthy of the price it is being sold. In this case, a customer’s perception about the different models of iPhone might trigger him or her into preferring one than the others. For example, a purchaser can decide to buy iPhone XS because they consider it as the most attractive compared to the other two (Latif, et al. 2014).
5.3-Thirdly, learning can also affect the decision-making process regarding which iPhone a consumer should buy. Many things are learned through experience. In other words, it is only when a person has used a certain product that they will know of its pros or cons (Rani, 2014). When a customer is satisfied with a particular product, they may be inclined to buy it once more. In this case, a buyer who has used iPhone XS before knows more about the gadget including its goodness or badness (Latif, et al. 2014). If they had a good experience with it, they can buy it again rather than buying another model which they are not sure of its durability.

  1. Personal factors on buying behavior

6.1-Age would play a significant role in making a decision on which phone to go for. Different age groups tend to show more interest in different things (Rani, 2014). For instance, young people are more fascinated with technology, unlike the older generation. In this case, given that iPhone XR is more enhanced features compared to the other two, a college student might be compelled to buy it. On the other hand, people who are in their mid-thirties might buy iPhone XS as it seems less complicated to use (Latif, et al. 2014). As for the old people, they may find it unnecessary to purchase either of the three models of iPhone since they may not know how to operate them at all.
6.2-Another personal factor that may affect an individual’s buying behavior is their lifestyle. Lifestyle generally means the way of life that a person has adopted. It involves assuming certain behaviors to maintain one’s status and image. In this case, people who use apple phones often like luxurious lifestyles (Latif, et al. 2014). As such, they tend to buy an iPhone as it is the only way other people can know that an individual earns a high income. However expensive the device might be, they would still buy it.

  1. Qualitative research analysis

Analysis of the collected data
Out of the 20 participants, 16 of them had used Apple products and 4 had not. Out of the 16, 10 had purchased iPhone, 3 had bought iPods, and 3 possessed watches. Also, 10 of the Apple customers were male while 6 were females. The average age of the users of Apple products was 27 years and all of them resided in the urban areas. 80 percent of them were well-paid workers in highly reputable organizations. Most of them said that they had bought the various Apple products due to the highly advanced features which make them stand out amongst other companies’ products. Moreover, many of their decisions to but the gadgets had been influenced by their social peers such as workmates and friend. 75 percent of the customers indicated that they had been satisfied by the Apple products while 25 percent said that the items had exceeded their expectations.

  1. Marketing strategy recommendations

Price
Generally, Apple products are expensive. A good marketing strategy would individuals’ financial status to determine the price. This is because many people who purchase the iPhone often earn a high income. Based on the financial status of potential customers, Apple’s management should set a price based on people’s social statuses.
Product
It is crucial for marketers to understand their target market in terms of their needs. For instance, as for the iPhone, one should know that potential customers may be interested in a product due to its advanced features and others because they want to associate with the brand for prestigious purposes. With such information, a marketer will be able to know how to make information about the item to the potential customers. The availability of information for instance, through advertising, will enable the consumers to make informed decisions before making a purchase and eventually avoid being disappointed.
Promotion
The advertising correspondence procedures and systems all fall under the advancement heading. These may incorporate publicizing, deals advancements, uncommon offers, and advertising. Whatever the channel utilized, it is important for it to be appropriate for the item, the cost and the end client it is being promoted to. It is vital to separate advertising and advancement. Advancement is only the correspondence part of the whole showcasing capacity.
Place
Spot or situation has to do with how the item will be given to the client. Appropriation is a key component of the position. The arrangement technique will help survey what channel is the fittest to an item. How an item is gotten to by the end client additionally needs to complement the remainder of the item technique.

  1. Conclusion

Overall, Apple is one of the biggest technology companies in the world. It has a big market share but it faces stiff competition especially in the mobile phone sector from companies such as Samsung and Lenovo. Its major strength is the ability to develop innovative products which stand out in the market. Apple’s products mainly targets high income earners aged between 20-45 years who live in the cities. Besides, Apple focuses on meeting the needs of its loyal customers. As for the consumer behavior, social factors such as social groups and social status determines whether one will buy an Apple phone. A person’s age, lifestyle, motivation, and perception also contribute to an individual buying behavior. As such it is important for Apple to bear these factors in mind when determining a marketing strategy as it enables customers to have sufficient information about the product. Therefore, the consumers are less likely to regret about the purchase decisions they make.
 
 
References
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 Management3(6), 955-961.
Latif, M., Jaskani, J. H., Ilyas, T., Babar, Z. K., & Gulzar, H. (2014). Issues faced by Apple Inc in smart phones industry. International Journal of Accounting and Financial Reporting4(2), 50.
Rani, P. (2014). Factors influencing consumer behaviour. International journal of current research and academic review2(9), 52-61.
 
 
Appendices

  1. Questionnaire on consumer behavior
  2. What is your name? ( )
  3. Please indicate your gender ( )
  4. How old are you? ( )
  5. Where do you live? ( )
  6. What do you do for a living? ( )
  7. Do you know anything about Apple? If so, what do you know about us? ( )
  8. Have you ever bought any of our products? ( )
  9. What exactly did you buy? ( )
  10. What made you buy the product? ( )
  11. Were there any other options available for the same product from other companies? ( )
  12. What was the experience with the product you bought? Did it meet your initial expectations? Were you satisfied? ( )
  13. Would you recommend the product to other people? Why or why not? ( )
  14. What is your general view about Apple? ( )
  15. What do other people think about our products? ( )