Meeting Customer Needs - Apple - Case Study Example

Meeting Needs Table of Contents Introduction 3 Overview of Company 4 Segmentation 4 Involvement of Target Market within the Service 4 SWOT Analysis 5 Identification of Business Problems 5 Operational and Marketing Issues Related with Apple 5 Relationship between Marketing and Operational Aspects of Problem 6 Customer Expectations 6 Discrepancy between the Customer Expectation and the Apple’s Service 7 Mismatch between Promise and Delivery 7 Strategies to meet Customer Demand 7 The Marketing Mix: 5 Ps of Marketing 8 Product 8 Price 8 Place 8 Promotion 8 Profit 8 4 V’s of Marketing 8 Positioning 9 Research Objective 9 Methodology 9 Research design 9 Research Method 9 Sampling Method 10 Results 10 Correlation Analysis 11 Pearson Chi - Square Analysis 12 Servqual Model 12 Ethical Issues of the Methods 13 Conclusion 13 Recommendation 13 Reference List 15 Appendices 17 Appendix 1 17 Appendix 2 21 Appendix 3 21 Appendix 4 22 Appendix 5 23 Appendix 6 24 Appendix 7 25 Appendix 8 26 Appendix 9 27 Appendix 10 28 Introduction In this fast evolving world of information technology, a clear understanding of customer needs is very important. To offer good service to customers, it is necessary for the companies to know who their customers are as well as what they desire. The excellence of customer service is determined by the ability of companies in order to meet their customer expectations (Business, 2014). Apple Inc is considered as the leading player in the Smartphone market. The paper will focus on the business problems and other issues related with the company from both operational and marketing perspective. Further, an analysis of customer expectation will also be carried out along with the ability of the company to meet those expectations. Overview of Company The introduction of Apple iPhone revolutionise the Smartphone market across the world. It designs, expands, and sells online services, computer software, personal computers, and consumer electronics. It had launched the 3G iPhone in 2008 that had not shattered up first release of its phone a year ago (Egan, 2014). The company has adopted various marketing campaign to advertise its handset through various methods which indicates the simplicity of use of product. It focused on how internet can be easily used in the Smartphone and explains that how the use of iPhone could enhance the life of its possessor in an easy way (Brooks et al, 2010). Customer Segmentation Customers are segmented according to their lifestyles, economic status, social class, age, geographic location, needs, and marital status. The current customers of Apple are teenagers, university and college students, business people, kids and young children, and adults; and they are very much involved with the service provided by the Apple Smartphone (Egan, 2014) (See Appendix 2). The result shows that 50% of 24-40 years old with a yearly income of $25,000 are Apple Smartphone owners. The 70% of customers under the age group of 30-50 with a yearly income of $25000 – 35000 also use Apple Smartphones. Involvement of Target Market within the Service Teenagers make use of iPods for various reasons such as listening to music, go on twitter and Facebook, and socializing with their friends. There are several gaming apps also that plea to them. University and college students are also the target segment of Apple Inc. They use iPhone’s, MacBook’s, and IPad’s to promptly record their notes. The business people or professionals also use iPhone’s, MacBook’s, and IPad’s in their daily life because the products engross the business quality and are used to complete work professionally as well as to converse with clients effortlessly. The products of Apple are also used by kids and young children. The reason besides this is that the devices like iPads and iPods are simple to use because of their good quality of touch screen which is excellent for children. The other target customer is adults as they make use of iPhone for their daily needs like map directions, phone calls, cameras, documents, and internet connection. SWOT Analysis It includes the analysis of weaknesses, strengths, threats, and opportunities and thus it investigates both the external and internal as well as positive and negative issue of a company (Pahl and Richter, 2009). By doing this analysis, Apple can formulate the market strategy by making use of its strengths and avoiding the weaknesses (McDonald, Rogers and Woodburn, 2000). Strengths: The excellent promotion and marketing capabilities; strong distribution channel; good reputation and brand awareness. Weaknesses: Lack of innovation due to the increase in company size; lack of offerings at dissimilar price points; and it depends on the sale of its iPads and iPhones. Opportunities: The opportunities which the Apple has are the acquisition of costly companies and wearable gadgets. Threats: The challenges which are faced by the company is that it is exposed towards more competition from other Smartphone companies as they also offers same features at less price; and lawsuits above patent infringements (Jackson, 2006). Identification of Business Problems The problems which are faced by Apple are crashing issue; bending issues related to Apple iPhone 6 plus; dropped connection and slow Wi-Fi after the up gradation to OS X Yosemite of Apple; faulty update on Apple iOS 8; issues with internet services, and imperfect marketing strategy. Among them the operational issues related with Apple are the bending issues related to Apple iPhone 6 plus, crashing issue, dropped connection after the up gradation to OS X Yosemite, and the issues with the internet services. The marketing issues are the imperfect marketing strategy and faulty update on Apple iOS 8. Operational and Marketing Issues Related with Apple Bending issues with Apple iPhone 6 plus: With regular use, a slight bend in the iPhone is very rare but this has happen with the Apple iPhone 6 Plus. They faced condemnation on their bending issue. The complaints regarding the bending problem might affect the revenues of Apple iPhone 6 Plus. The company defends itself by explaining that the only mode of having bend in the iPhone is when someone place it in the back pocket as well as sat on it for extremely long time. Customers are hoping for replacements or exchange for their iPhones having bending issue (Ndtv, 2014). Crashing issue: Another problem reported by customers about the Apple iPhone 6 plus is that the devices were unaccountably crashing and getting wedged in the reboot loop. Faulty update on Apple iOS 8: The Company has placed a faulty update about the Apple iOS 8 on the website. Apple stated that they are working to fix the matter about the iOS update on their website (Ndtv, 2014). Dropped connection and slow Wi-Fi after the up gradation to OS X Yosemite: The Mac operating system of Apple i.e. OS X Yosemite emerges to have issues related to its Wi-Fi connections. The users have reported about the dropped signals and dawdling transfer speed after upgrading. Imperfect marketing strategy: The Smartphone supremacy of Apple is not as secure as it is hoped by the Company. Apple is reporting decreasing financial performance due to the continuous dwindling shipments of the iPhone 5 and it results in deflating profits for the 1st time. Issues with internet services: It has been noticed that there are issues with the internet services also such as the Apple maps sometimes does not work due to slow internet services (Forbes, 2013). Relationship between Marketing and Operational Aspects of Problem Operation and marketing departments are considered as the strength of any organization. They are together responsible for resolving what the consumer needs and what the company actually creates and delivers. Together they are considered as strength as well as problem for any business if the Company does not deliver what it promises. There is a great relationship between both aspects of problems. The negative issues related with the operational aspects hamper the marketing of the product. Marketing is accountable for the customer needs, desires and wants. Operations are accountable for satisfying them. The operational aspects of problems of Apple are bending issues related to Apple iPhone 6 plus; crashing issue; dropped connection and slow Wi-Fi after the up gradation to OS X Yosemite of Apple. The marketing aspects of problems are faulty update on Apple iOS 8 and imperfect marketing strategy. Due to these problems the sales of Apple’s products may decrease and it may result in deflating profits. Customer Expectations Customers view the products of Apple specially the iPhone and iPods as the high-technology products, so they expect excellent services such as good internet facility, excellent touch-screen facility, simple to use, and good downloading facility. Apple delivers those services through its products such as iPods and iPhones. Teenagers and youngsters use iPods for socializing with their friends. Their internet facility helps them to download several gaming apps which please them and provides them the entertainment package. The good downloading facility helps the university and college students to promptly download the documents and notes of their use. Discrepancy between the Customer Expectation and the Apple’s Service Apple always provides good services to its customers according to their expectations but recently it has been found that there occur several problems in its services. The most recent one is the bending issue with Apple iPhone 6 plus. The customers are facing the bending problem in their devices with the normal use of iPhone which is very rare. Moreover, there also occur problems like dropped connection and slow Wi-Fi together with the Bluetooth problems. The problems which are caused by the discrepancy are that the interest level of the customer regarding the Apple’s products declines due to the poor services. It resulted in the dwindling shipments of the iPhone 5 and declining profits. Its share price has declined by twelve percent (Birkinshaw, 2013). Mismatch between Promise and Delivery Customer service as well as satisfaction of customer is the main concern of every business (Grigoroudis and Siskos, 2009). When mismatch happens between the customer expectation and the delivery of service, its outcome is the dissatisfaction of customers which leads to their complaints. Consequently, the complaints of customers lead to significant as well as reliable verification on the service quality, procedures, and systems. Efficient and prompt consumer service is very important for the growth of business (Evenson, 2007). Strategies to meet Customer Demand The main objective of the marketing tactics is to satisfy the needs and wants of customers more efficiently than competitors (Jenster, Hayes and Smith, 2005). The marketing strategies need detailed research on the market in order to find out the requirements of customers, developing of correct products to meet the needs of customers (Needham and Dransfield, 2000). The strategies which Apple adopted to meet the demand and expectations of customers are tackling the problem related with price, relationship building with bloggers and media, created fantasy of scarcity in order to raise demand, focused on friendly user experience, attract customers through packaging and design of products, and created brand culture. Apple has slashed the prices of some of its products, such as the introduction of low-cost Macintoshe, which is valued at an affordable price level for office and personal use. This allows them to penetrate low-end market segment (Paley, 1999). The company created the fantasy of scarcity of products to increase demand and to meet the requirements of customers. Their strategy is to provide the limited time offer for their products. It increases the product value and sales. Apple products are intended to be delightful, different and friendly and the features are very simple and easy to use (Paley, 1999). The Marketing Mix: 5 Ps of Marketing The 4 Ps of marketing of Apple are discussed below: Product The customers were satisfied with the range of products offered by Apple except for the iPhone 6 plus bending issue. The products of Apple were online services, computer software, personal computers, and consumer electronics. The iPod and iPhone are very much popular among the youngsters and business professionals. Price As Apple offers premium products to middle and high income group people, so its range is quite high but it does not affect the sale of its products. It is because of the superiority of its design and features and also because of ease of use. Place Apple made the sales of its products through online and also through its store. The store is generally located in the most prosperous areas of the city. This allows the possessor to charge high price for the product. Promotion The Company has adopted several promotion strategies for meeting the needs of customer and also to add to its revenue. It chose unique advertising method. It advertises its products through trendy magazines which are linked to fashion. The website of Apple is itself a great marketing tool. It gives information about how to make use of new gadgets, other new products, and also the contact information of customer service (Curwen and Whalley, 2012). Profit Making profit is one of the main aims of the company. Apple Inc increases its profits by adopting different strategies such as building relationships with bloggers and media, focused on friendly user experience, attract customers by providing excellent service along with technology advancement. 4 V’s of Marketing Validity: It explains that the company should not just develop their products according to the needs of customer but also take into consideration other factors such as safety and environment friendly. Value: The Company should provide worth for money as the standards of living of many customers are rising. Venue: It means that the company should not just provide services or products on the suitable places however also provide home delivery services. Vogue: It signifies that two way interactions is not enough but the promotion must be in support of public as well as accepted by customers. Positioning Apple Inc does the positioning of its products through online marketing, public relation, and advertising through billboards and television commercials. In terms of public relation, Apple forward weekly newsletters for those subscribers who were connected with their products. There is also a yearly conference often held by the company where new editions of the products are unveiled (Curwen and Whalley, 2012). Research Objective The AAA product does not perform well because of the unethical issues related with the product. In case of Apple Smartphone, the iPhone 6 plus does not perform well in the market because of its bending issues which dissatisfied the customers. Customer dissatisfaction takes place because Apple always provides premium products with unique features and this happens the first time that it failed to stand on customer expectations. This bending problem may affect the revenue of Apple but it does not mean that it cannot retain its old customer just because of one bending issue. The company explained that the only mode of having bend in the iPhone is when someone place it in the back pocket as well as sat on it for extremely long time. So, this issue can be resolved by replacing the iPhones of all customers, which encompasses the bending issue. Methodology Research design Primary research has been carried out in order to understand the expectation and satisfaction level of the customers from the products of Apple and also to know the relationship between the needs of customer and the service delivered by the company. Research Method The customers were asked to complete a questionnaire of ten questions which comprises of both open and closed-end questions. The questionnaire was designed in order to find out that how customers used and perceived their service and whether they are satisfied with the products of Apple specially the Smartphones. Likert scale and multiple choice questions were used in order to access customer satisfaction. This enabled to understand the perception of the customer about the service they receive. Sampling Method Random sampling method was used. It gives everyone an equal opportunity of being integrated in the test or sample. The implication of this sampling is that it provides each element with an equal opportunity of getting included in the sample as well as all alternatives is autonomous or independent of each other (Kothari, 2011). A total of 25 questionnaires were completed by the customers which includes students, professionals, and adults. Results It has been analysed that across all questions of customer satisfaction 75 % of the respondent were satisfied with the service of Apple Smartphones. The users of the Smartphones are between the ages of 24-50. The professionals who fall between the income groups of $35,000-$45,000 prefer the Smartphone. They consider all the three elements i.e. features, application, and design when choosing a Smartphone. 78% of the respondents prefer Apple Smartphone. They also agree that the screen resolution of Apple Smartphone is better in comparison to other. 73% agrees that the battery life of Apple Smartphone is good and it also provides them with superior technology. 82% of them who were university student and professionals strongly agree that it gives the benefit of downloading the documents quickly and the ample of storage space helps them to store sufficient documents. Among the respondents, 72% of them strongly agree that the internet connection and Wi-Fi facility is very good and the after sale service of Apple Smartphone also satisfies them. 73% of respondent agrees that they get the worth of their money through its excellent service. The chart shows the customer satisfaction responses. What customers like most about Apple Smartphone: Customers really liked the features and application of the Smartphone especially of iPod and iPhone. The screen resolution and wrap-speed facility also satisfies them a lot. The superior technology and plenty of storage space helps them to store enough documents. They get the worth of their money. Overall, they had a good experience with the Apple Smartphone. What customers dislike most about Apple Smartphone: Most of them left this section blank and of those responded, they were disappointed with the bending issue related with the iPhone 6 plus. Correlation Analysis The variables which are taken for correlation analysis are customer satisfaction, technology, design and packaging, internet connection, after sale service, screen resolution, and customer receive worth of money. The result shows that there is a positive correlation between customer satisfaction and technology, customer satisfaction and internet connection, customer satisfaction and after sale service. However, the outcome also indicates the negative correlation between customer satisfaction and design and packaging, customer satisfaction and screen resolution, as well as customer satisfaction and the worth of their money. Technology is positively correlated with customer satisfaction, internet facility, and after sale service. Design and packaging of Smartphone is positively correlated with only internet facility. Internet facility is positively correlated with customer satisfaction, technology and design and packaging. After sale service is positively correlated with customer satisfaction, technology, and screen resolution of Smartphone. Screen resolution is positively correlated with only after sale service (See Appendix 3 and 4). Pearson Chi - Square Analysis Based on the sample of 25 people it is analysed that there is positive relationship between customer satisfaction and technology; customer satisfaction and internet facility; and customer satisfaction and after sale service. The asymptotical significance between customer satisfaction and technology comes at .055 i.e. 5% which means accepting the alternative hypothesis and rejecting the null hypothesis (See Appendix 5). The asymptotical significance should be 5% or less than 5% otherwise there exist a negative relationship between the variables. The asymptotical significance between customer satisfaction and internet facility comes at 0.021 i.e. 2.1% and that of between customer satisfaction and after sale service is 0.045 i.e. 4.5% (See Appendix 6 and 7). Therefore, it means that accepting the alternative hypothesis and rejecting the null hypothesis for these two variables. The asymptotical significance between customer satisfaction and other three variables are more than 5% which means that there is negative relationship between them (See Appendix 8, 9 and 10). The overall percentage should also be less that 20%. The overall percentage for customer satisfaction and technology, customer satisfaction and internet facility; and customer satisfaction and after sale service comes at 20%, 16%, and 18%. Servqual Model The Servqual Model is regarded as one of the effective models in order to highlight the quality issue (Baourakis, 2004). The quality of service is supposed to be acceptable when the service delivery exactly matches with the service which is expected by the customers (Verma, 2007). This model suggests that users take five major aspects into their account when evaluating the service quality they have obtained. These five major factors are discussed below: Reliability: It suggests that the service of products is delivered in the same manner in which it is promised and expected. The service of Apple Smartphone is reliable as it delivers the service in the same manner in which it is promised except the service of iPhone 6 plus. Assurance: It is the level of confidence and trusts that customer feel they will get from the service provider. The survey result shows that the customers are satisfied with the service and ease of use of Apple products. Tangibles: It encompasses the appearance of equipment, physical facilities, personnel as well as information material. All the Apple Smartphone is excellent in their appearance and is also regarded as a premium product due to its features and also physical appearance. Empathy: When service provider view things with respect to the view point of customers, they provide better service and stand on the expectation of customers. This ability of service provider is referred as empathy. The survey result indicates that Apple Inc stand on the customer’s expectation in terms of service, technology, battery life, etc. Responsiveness: This signifies to the ability and willingness of service provider to adapt and meet the requirements of customers. The service provider should respond to the complaints of customers on the similar day on which the complaints are registered (Withey and Lancaster, 2013). Apple Inc respond to the complaints related to iPhone 6 plus. Ethical Issues of the Methods The ethical issues related to open and closed-end questions are that customers were free to express their feeling about the quality and service of Apple products. It helped the company to know the perception of customers about their products. Random sampling method gives each and every person an equal opportunity of being integrated in the test or sample. Nobody was forced to fill the questionnaires; they participated in the sample method on their own decision. Likert scale and multiple choice questions help the company to understand whether customers are satisfied. The ethical issues related to this method were that the customers were not manipulated to give their decision in favour of Apple products. They express their own feeling and viewpoint about the service and products. Most of the customer’s response was in favour of Apple products. Conclusion Meeting customer needs is the most important purpose of every business. The report has been carried out in order to analyze the target market of Apple Inc and their involvement within the service. It has focused on the operational and marketing issues related with Apple and also analyzed the relationship between marketing and operational aspects of problem. The expectations of customers from the Apple products are very high and therefore the discrepancy occurred when the news of bending issue with iPhone 6 plus came in front of the customers. The Servqual model has also been addressed which states that users take five major aspects into their account when evaluating the service quality of products. Apple has adopted several strategies to meet the customers’ expectations. A survey was conducted to know the satisfaction level of customer from the Apple Smartphone. Multiple choice questions and Likert scale were used in order to access customer satisfaction. This helped them to know the customer’s perception about the service they receive. It was analysed that maximum customers are satisfied with the technology and service of Apple Smartphone products. They had a good experience with the Apple products. Recommendation It is recommended that Apple should lower the price of its iPhone so that it could be purchased by middle income group people also. The prices of most of its products are very high but it may be harmful for the company in the short term because economic crisis can change the verdict of purchasing the products of Apple. So, it could initiate free peripherals and seasonal discounts. The Company should not place faulty update of their products as it will hamper their brand image of Apple. It is also recommended that Apple Inc, should formulate an action plan to re-launch its Apple iPhone 6 plus with no defect in order to boost its sales. The action plan should also involve lowering its iPhone’s cost in the next one year in order to increase its sales in the Chinese market because Chinese customer generally prefer low cost quality products. They can also adopt total quality management techniques in order to improve the quality of product so that further problem such as bending issue may not occur in future. Reference List Baourakis, G., 2004. Marketing Trends for Organic Hood in the 21st Century. London: World Scientific Publishing Co. Ltd. Birkinshaw, J., 2013. Apple: Expectations vs. Reality. [online] Available at: [Accessed 13 Dec 2014]. Brooks, G., Mortimer, R., Smith, C. and Hiam, A., 2010. Marketing for Dummies. United States of America: John Wiley & Sons Inc. Business., 2014. Meeting Customer’s Expectations. [online] Available at: [Accessed 12 Dec 2014]. Curwen, P. and Whalley, J., 2012. Mobile Telecommunications in a High-Speed World: Industry Structure, Strategic Behaviour and Socio-Economic Impact. England: Gower Publishing Limited. Egan, J., 2014. Marketing Communication. California: SAGE Publication. Evenson, R., 2007. Award-winning Customer Service. New York: AMACOM. Forbes., 2013. The 5 Big Problems Facing Apple – None of Which is Too Much Cash. [online] Available at: < http://www.forbes.com/sites/ericjackson/2013/02/26/the-5-big-problems-facing-apple-none-of-which-is-too-much-cash/> [Accessed 13 Dec 2014]. Grigoroudis, E. and Siskos, Y., 2009. Customer Satisfaction Evaluation: Methods for measuring and implementing service quality. London: Springer Science & Business Media. Jackson, J.B., 2006. First, Best or Different: What Every Entrepreneur Needs to Know about Niche Marketing. United States of America: Dog Ear Publishing. Jenster, P.V., Hayes, H.M. and Smith, D.E., 2005. Managing Business Marketing & Sales. Denmark: Copenhagen Business School Press. Kothari, C.R., 2011. Research Methodology: Methods and Techniques. New Delhi: New Age International. McDonald, M., Rogers, B. and Woodburn, D., 2000. Key Customers: How to manage them profitably. United kingdom: Butterworth-Heinemann. Ndtv., 2014. Apple Defends iPhone 6 Plus on Bending Issue. [online] Available at: [Accessed 13 Dec 2014]. Needham, D. and Dransfield, R., 2000. Advanced Business: For the 2000 Standards. Oxford: Hienemann Educational Publishers. Pahl, N. and Richter, A., 2009. SWOT Analysis – idea, methodology and a practical approach. Germany: GRIN Verlag Publication. Paley, N., 1999. The Manager’s Guide to Competitive Marketing Strategies. United States of America: CRC Press. Verma, H.V., 2007. Services Marketing: Text and Cases. New Delhi: Pearson Education India. Withey, F. and Lancaster, G., 2013. CIM Coursebook Marketing Fundamentals. London: Routledge. Appendices Appendix 1 A survey has been conducted in order to evaluate the satisfaction of customers towards the Apple products. 1. How old are you? A) 18-24 B) 24-30 C) 30-40 D) 40-50 E) 50 above 2. Which group includes your monthly income? A) Less than $25,000 B) $25,000 - $35,000 C) $35,000 - $45,000 D) $45,000 - $50,000 E) More than $50,000 3. How often do you use Smartphone? A) Regularly B) Rarely C) Very Rarely D) I don’t use Smartphone 4. What do you consider most when choosing a Smartphone? A) Features B) Application C) Design D) All of the above 5. Which Smartphone brand do you prefer most? A) Apple Smartphone B) Nokia Smartphone C) Samsung Smartphone 6. The screen resolution of Apple Smartphone is better than other Smartphone. A) Yes B) No 7. How would you rate the following? Questions Strongly disagree 1 Disagree 2 Neutral 3 Agree 4 Strongly agree 5 I use Apple Smartphone because of its good battery life. The Apple Smartphone provides me with superior technology. The wrap-speed facility of Apple Smartphone helps me to download the documents quickly. The crystal clear display of Apple Smartphone helps me to view video and movies. The design and packaging of Apple products is very good. The internet connection and Wi-Fi facility is very good. The after sale service of Apple Smartphone satisfies me. The plenty of storage space helps me to store enough documents. The upgradation facility is very good. I get the worth of my money through its excellent service. Appendix 2 Customer Segmentation of Apple Smartphone Age Income Teenagers 18-24 50,000 Appendix 3 Correlation Analysis (Excel) Appendix 4 Correlation analysis (SPSS) Appendix 5 Chi-square analysis Appendix 6 Appendix 7 Appendix 8 Appendix 9 Appendix 10 Read More