Categories
Marketing

Segmentation variables

Introduction

The purpose of this paper is to identify segmentation variables for the Apple IPhone for the consumer and business market.

Consumer Market

In the consumer market, variables will be identified in the following categories: demographics, psychographics, geographic, and behavioristic areas

In the consumer market, there is a clear delineation between certain demographic groups.  For example, age is an important market category: for younger individuals (18-34), a smartphone functions as the center of their social ecosystem.  Indeed, the phone allows access to many of the web sites (e.g., Facebook) and social media platforms (e.g. Twitter) that forms the basis of their  social interaction.  Older consumers, however, likely see an I-phone differently: they see the convenience of being in touch with other people, particularly the ability to run “apps” (applications) that allow their life to be easier.

Another important personal demographic variable is socioeconomic status, or to be more specific: income.  Iphones are by no means inexpensive: while the actual cost of the phone may be subsidized by carriers that provide  contract service, there is a prohibitive  element to the cost of the phone. Thus income, or any other proxy for socioeconomic status, would be a useful segmentation category as some individuals will simply not be able to afford the phone at is current price point.

Geographic variables in the case of the Iphone do not necessarily have a common thread except for carrier signal and the ability to download available items.  Thus, it might make sense to segment based on more urban versus rural settings in this area.

Finally, behaviorialistic variables might also play a key role in the customer segmentation.  That is, individuals who play video games and have more robust data needs might be different from other individuals that use smartphones more to keep in touch with individuals that are not so data intensive.

Business Market

The business market is different from the consumer market, at least in how it is segmented. This is likely the case for two reasons: 1) The business market depends more on company characteristics more so than marketing to individual consumers; 2) There is an element of cross over between the markets as business users simultaneously use their smart phone device for personal use.  The latter factor is particularly important for Apple to consider in their segmentation analysis: Blackberry, made by RIM, essentially leveraged its popularity.

The main segmentation decision in the business market is the type of company and the functionality the company is looking for. That is, creative companies, as well as technology companies, usually have a preference for Apple technology and that preference may also be carried over to the smart phone space. Thus, the segmentation for company’s should be based on the business user’s company and their function in the company.  Also, further segmentation variables might be existing IT preference (Apple versus non-Apple) and the overall size of the company.

Overall, the segmentation of business users will be more difficult than for that of  personal users.  The variables listed in this paper could successfully be used for market segmentation.

Sources:

Apple website.

Techcrunch.  Apple’s Share of US Smartphone Market.  Available at: http://techcrunch.com/2012/09/04/comscore-apples-share-of-u-s-smartphone-market-now-over-33-rim-drops-to-under-10/.