MBA7003 Marketing
MBA7003 Marketing
Section A
Question 1: Market segmentation of iPhone 14 by Apple
Market segmentation can be considered as the marketing strategy which works on selecting specific groups of consumers along with identifying their needs and preferences for specific products. As per the opinion of Elliott et al. (2021) market segmentation can be a complicated concept in the practical world as the needs and demands of a group of consumers can differ. It can be difficult for marketers to determine the potential consumers that solely belong to any specific segment. Thus, the disproportionate targeting to any segmentation in the market can lead to achieving the aim of the marketing along with reaching the target audiences.
Market segmentation is indeed a complex approach used by market practitioners to get a precise idea about the desired audience by dividing market groups into smaller groups. Market segmentation helps business firms to identify market segments characterised by relatively low levels of purchasing power (Kiss et al., 2020). The iPhone 14 by Apple gains competitive agility in a marketplace based on their capability of categorisation and segmentation. Price of the iPhone is relatively high compared to other similar products of market and specific market segmentation has helped company to maintain its competitive edge.
Implementation of demographic segmentation on iPhone 14 by Apple can be seen which helped in elevating sales of product. As mentioned by Furman et al., (2020), demographic values like age and income influence consumption approaches of individuals. On the other hand, Apple generally targets upper section or white collars of social pyramid as their income statement is higher in comparison to others. Mentioned group can afford high price of iPhone 14 by Apple and considering this approach Apple practises demographic segmentation.
Considering approaches of demographic segmentation Apple also selects its targets based on age. As per reports, Gen Z is at the forefront of technological shifts through the mass adaptation of several (Forbes.com, 2024). Apple also uses new technologies in their iPhone 14 like 4K video recording at 24 fps, 25 fps to cater for innovation in their products. As Gen Z is early adopters of technology Apple targets them through practising demographic segmentation. Targeting potential consumers based on age group indicates that Apple uses demographic segmentation to improve sales rate of iPhone 14 in competitive market. Apart from that, Gen Z often makes their purchase decisions based on brand value and reputation in market. Considering brand-based decision-making approaches of Gen Z, Apple targets Gen Z for increasing sales of iPhone 14 by Apple.
Consideration of alternative segmentation like geographic segmentation might help companies to improve sales approaches of organisation in a specific marketplace. As mentioned by Zhu et al., (2020), geographical segmentation considers regional and lifestyle differences for determining purchase decisions. Application of geographic segmentation for iPhone 14 by Apple would consider purchase rate of consumers. As per statistics for 2020, over 368 million units of Smartphone have been sold in Greater China (Statista.com, 2024). Considering this aspect Apple needs to bring changes in marketing orientation for increasing iPhone sales in Greater China.
Geographic segmentation also allows businesses to develop an interactive relationship with mass consumer base of a particular region. Marketing efforts of Apple also get synchronised and organised for sales of iPhone 14 in the Greater China market. Factors like population density also need to be considered during practising geographic segmentation. Orientation of target group due to application of geographic segmentation gets changed and that also influences sales approaches of company diversity. Buying trends of regions also need to be monitored while practising geographic segmentation. As sales rate of mobile phones in Greater China is higher than other countries using geographic segmentation, Apple needs to increase sales rates of iPhone 14 in that region.
The statement “market segmentation is far too complicated for it to practically work in the real world” is incorrect as the market segmentation simplifies the complexities of targeting the potential consumer base. Segmentation helps companies like Apple to find out target market and initiate their marketing approaches as per characteristics of their targeted consumers. Market segmentation would also help companies to analyse behaviour and approaches of consumers to influence their purchase decisions. Hence, market segmentation practically works in real world to support organisations in identifying market trends and selling their products by aligning with those requirements.
Question 3: Critical evaluation of BCG framework for applying on organisation’s product and service portfolio to enable future market priorities
Market share and market growth approaches of products need to be taken into consideration by organisations for analysing current condition of their existing product along with evaluation of their prospects. BCG matrix can be recommended in this context for evaluating product lineup of Starbucks. Four quadrants of the BCG matrix are question marks, stars, cash cows, and dogs (Kader and Hossain, 2020). Selected products of Starbucks are Almond Biscotti Oat Latte (Star), Chocolate Croissant (Cash Cow), French Roast (Dogs), and Jughead’s Gingerbread Latte (Question Marks). Based on the market share and growth opportunities of particular products they have been established in particular quadrants.
Starbucks makes most of their revenue from their beverage items and improves its reputation value based on this approach. Almond Biscotti Oat Latte is one of best-selling products of Starbucks and considering this approach it can be assumed as a star product (Starbucks.co.uk, 2024). The sales rate of this product is relatively high in comparison to other products of brand. It indicates a high market share of Almond Biscotti Oat Latte in a competitive marketplace. On the other hand, demand for Almond Biscotti Oat Latte in marketplace is increasing. Concentrating on this approach, market growth opportunities of Almond Biscotti Oat Latte are also high in comparison to other products. Increased investment in this product would help Starbucks in increasing its revenue lineup significantly.
Sales rates of food items of Starbucks are not increasing and considering this approach the food items can be assumed as the cash cow. Considering this approach Chocolate Croissant as a food item can be assumed as a cash cow product of Starbucks. Market growth of this product is low while market share of this product is high and considering this approach Chocolate Croissant can be assumed as a cash cow product. As the price of Chocolate Croissant is high their market shares are also while their consumption rate is low growth rates are also low. As the growth rate of Chocolate Croissant is low Starbucks can utilise funds raised from products to invest in star products. It would also help Starbucks to improve market growth and market share of Almond Biscotti Oat Latte (star product) to achieve competitive agility during revenue generation. Approaching future investment in the Almond Biscotti Oat Latte not only helps in increasing the growth rate of the mentioned item but also helps to utilise the funds of Chocolate Croissant strategically for maintaining competitive agility. The fund can also be utilised in question mark products to ensure its future market growth and market share in a competitive market.
Application of “BCG matrix” in the current scenario helped to critically understand product portfolio development in business performance of “Starbucks” in accordance to recognising market priorities. Evaluation of product portfolio on “Almond Biscotti Oat Latte (Star)” assists “Starbucks” to develop future market investment in emerging success on new product development such as French Roast (Dogs), and Jughead’s Gingerbread Latte (Question Marks). As asserted by Andersen et al. (2023), product portfolio development in different markets within process industrial domain helps to accommodate changing market demands. Implementing “BCG matrix” in product development and portfolio management might be effective for “Starbucks” to fulfil demands of the supply side and focus on platform-based product development. On the other hand, Jolly (2023) informed that Starbucks has revealed the plan of investment approximately £30 million in UK towards opening 100 new cafes after considering selling remarkably of coffee chains. Significant investment in product portfolio development assisted Starbucks to expand business into the local as well as national market.
Based on this, Starbucks would focus on platform-based product portfolio developments strategy for enabling future market priorities. However, Keränen et al. (2023) proclaimed that, changing demands of supply side and rising market competitiveness within product development have been crucial for managing sustainable innovation in business processes. Analysing these issues, Starbucks might face potential difficulties in product development strategies established associated with French Roast (Dogs), and Jughead’s Gingerbread Latte (Question Marks). Despite such issues, Abd Rasyid et al. (2023) suggested that marketing performance of a business has been developed by enhancing platform-based product development. In light of this, it would be recommended to Starbucks towards aligning with platform-based product development to optimise market priorities related to French Roast (Dogs), and Jughead’s Gingerbread Latte (Question Marks).
Incorporating “BCG matrix” in the scenario of market and product portfolio development of “Starbucks”, developing customer-centric approach has been effective to enable sustainability mindset in product development at different markets. As narrated by Aghajani et al. (2023), in product portfolio management in accordance with sustainability mindset, focusing on customer’s requirements helps to maintain competitive agility in business offerings. Development of customer-centric activities in product portfolio development would be considered strategic approach adopted by “Starbucks” towards enabling future market growth as well as market share within competitive market. Thus, focusing on customer-centric activities in product portfolio development would positively affect future market priorities alignment in business performance of “Starbucks” effectively.
Section B
Question 5: Market research
Recommended process for conducting market research
Market research plays a crucial role for companies in gaining strategies about marketing strategies along with evaluating business decisions with the use of appropriate data. As per the opinion of Stocchi et al. (2021), market research includes the activities of gathering information regarding the target demographics and the consumers of the business to improve business efficiency. Accordingly, market research has become a vital part of the business including big or small business, B2B or B2C businesses. The decision-making ability of the companies can be significantly improved by focusing on the collected data through market research. However, Zhao et al. (2021) have argued that there are two main categories of performing market research which concludes “primary market research” and “secondary market research”. Thus, primary market research includes the activities of collecting information directly from the consumers that are served by the businesses. On the other hand, the secondary research includes gathering information from previously published articles, journals or other secondary sources (Pederson et al. 2020). The choice of primary market research is considered to be more reliable as the marketers receive the opportunity to collect data directly from the original sources in comparison to secondary market research. Therefore, the selection of primary market research processes can be recommended to marketers for effective market research.
Figure 1 shows the process associated with performing market research which starts from the “identification of the problem area”, “developing market research plan”, “collecting relevant information”, “analysing the collected data” and “applying the research into action”. Accordingly, marketers can focus on selecting the problem area based on which the market research needs to be performed. Moreover, it is important for marketers to select the right plan including surveys, interviews, and article reviews for researching and gathering information associated with the problem area. Effective market research of the organisations can be considered as the path of success (Cluley et al. 2020). Thus, after the selection of the market research plan the marketers can work on collecting data according to the plan. Additionally, the next step in the market research process includes appropriate analysis and examination of the collected data in the context of gathering insights. The final step of the market research process involves the activities of applying the gathered information within the actions of the businesses and significantly improving its marketing campaigns along with customer services.
Primary market research can be performed with the selection of a range of processes which includes surveys, interviews, focus groups, social media listening and field trials. As illustrated by Braun et al. (2021) the various strengths associated with surveys have made it one of the significant processes for conducting primary market research which includes higher representatives. Accordingly, surveys help in providing the capability of representing a larger group of the population. The selection of the close-ended questions within the surveys helps in generating responses from larger groups of people which further contributes to diverse information collection. As a result, it becomes beneficial for the markers to extract the attributes of a larger population with the help of surveys in comparison to any other market research process. In contrast, Grow et al. (2020) have argued that conducting surveys in market research requires comparatively lower costs as the costs are associated only with the development of the questionnaires. Thus, it becomes easier for marketers to avoid the budget limitations of conducting market research. However, the activities like providing incentives or rewards to the respondents within the survey can require extra costs. Therefore, the selection of the survey process in primary market research can be recommended to marketers.
The selection of the survey process in market research comes with the benefit of contributing to convenient data gathering. As stated by Varadarajan (2020) surveys can be administered remotely which has made it one of the significant processes in reaching the target populations. Accordingly, the selection of online surveys ensures convenient data gatherings from people all across the globe. Conversely, according to Taylor and Ryan (2020), the survey-based data has quality statistical significance. Higher statistical significance of the survey-based data can lead to developing a diverse understanding regarding the developed survey questions. Thus, gathering statistical data with the help of surveys can help marketers make effective business decisions and lead toward business success.
Application of the process in practice
The market research with the use of the survey can be applied by the marketers in their organisation for gathering real-time information regarding the business problem areas. In this context, the marketers need to first identify the problem area within the business. Furthermore, a number of close-ended questions can be formed by the marketers based on the problem area. For instance, the type of question in market research can include “Do you agree that the customer service provided by our company is beneficial in responding to your concern?”. In addition, it is important to provide appropriate response options to the participants which can be selected to answer the question. Marketers can work on developing the survey planning with the use of Google Surveys or Survey Monkey. Additionally, the developed close-ended questionnaire can be distributed among the participants over social media platforms or with the use of email. Besides, the responses from the participants can be gathered with the use of the same path of distributing the questionnaire. This can help in gathering a large rate of responses directly linked with the developed question area associated with the problem area in business.
The completion of data collection can be preceded with data analysis which delivers the benefits of developing insights about the collected data. As narrated by Moisander et al. (2020) data analysis is one of the significant parts of market research which helps marketers in understanding the patterns in data along with making assumptions. Thus, it can be beneficial for marketers to generate an understanding of the collected survey results with the use of graphical data analysis. The use of graphs and tables can help in improving visualisation and insights regarding the market research data. Furthermore, the step of the survey-based market research can include the activities of applying the findings within the actions of the organisations. For instance, if the majority of the respondents disagreed regarding the potentiality of the customer service of the organisation, the marketers can work on improving the area of customer service within the company. Thus, market research contributes toward improving business decision-making along with leading businesses toward success within the competitive environment.
Critically evaluating the relative merits of using primary and secondary data
Market research is considered a key tool in generating understanding regarding the needs and preferences of consumers. As highlighted by Taherdoost (2021) the key metrics of using primary data in market research include the collection of more reliable, relevant and accurate information reflecting research objectives. Accordingly, the use of primary data can be beneficial in generating detailed and direct insights into the target audience, their needs, behaviour and preferences. In addition, it can be beneficial in generating news indeed about the market and the consumers by performing primary market research. On a contrary note, Mwita (2022) has argued that the choice of “primary market research” can be expensive, highly time-consuming and complex. It can be required for the marketers to appropriately design, test along implement specific data collection methods for gathering primary data. Besides, it is also important to use statistical tools for examining the “primary data” which is another significant limitation in case of lack of experience. Consequently, marketers can experience a range of benefits and limitations to the time of choosing “primary market research”.
“Secondary data collection” can also be selected by the markers at the time of performing market research due to the convenience of this data collection process. As opined by Bolander et al. (2021) it is easier to access and collect secondary data with the integration of lower cost, time and effort as this type of data is available over the internet. Accordingly, time and cost-effectiveness can be considered significant metrics for “secondary data” in market research. In addition, the use of secondary data can be beneficial for marketers in generating deeper and broader perspectives associated with the market. The markers can also identify the gaps and opportunities within the marketers by examining pre published secondary data. However, Baldwin et al. (2022) have argued that secondary data can be less reliable, relevant and accurate according to the market research objectives. Thus, the lack of accuracy of the secondary data can create difficulty in making informed business decisions and improving business efficiency. Secondary data is collected by other marketers for different market research perspectives. Therefore, it can be difficult for marketers to generate an understanding of the specific group of consumers and their behaviours with the selection of “secondary market research”.
References
Section A
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Jolly, J., (2023), Starbucks to open 100 new UK coffee shops as tax bill on British sales falls, available at: https://www.theguardian.com/business/2023/mar/06/starbucks-open-new-uk-coffee-shops-tax-cafe-chain [Accessed on 2 January, 2024]
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Section B
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Varadarajan, R., (2020). Customer information resources advantage, marketing strategy and business performance: A market resources based view. Industrial Marketing Management, 89, pp.89-97.
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