Marketing Environment and Consumer Buyer Behaviour regarding iPhone 6 in China - Coursework Example

External marketing environment & Consumer buyer behaviour – iPhone 6 in China Table of contents Part A – The External Marketing Environment A Economic and Technological Environment – definition and justification in relation to the chosen product 3 A.2. How each environment impacts the specific product? 3 A.3. Opportunities presented for the chosen product in each environment 4 A.3.1. Opportunities in Economic Environment 4 A.3.2. Opportunities in Technological Environment 5 A4. Threats presented for the chosen product in each environment 5 A.4.1. Threats in Economic Environment 5 A.4.2. Threats in Technological Environment 6 Part B - Consumer buyer behaviour B.1. Type of buying decision used for the chosen product 6 B.2. How might need recognition be triggered for the chosen product? Explanation of how one factor influences this stage 7 B.3. How could information search be undertaken for the chosen product? 7 B.4. Provision of an example of a typical evoked set for the chosen product and description of how alternatives could be evaluated for the chosen product. Explanation of how one factor influences this stage 8 B.5. How might the decision to purchase be made for the chosen product? Explanation of how one factor influences this stage 9 B.6. How might a consumer undertake post-purchase evaluation for the chosen product? Explanation of how one factor influences this stage 10 References 11 Part A – The External Marketing Environment A.1. Economic and Technological Environment – definition and justification in relation to the chosen product As an element of marketing strategy, Economic Environment has been used for referring to ‘a series of factors that influence buying power of consumers’ (Boone and Kurtz 2011, p.76). These factors are the following: ‘business cycle, the global economic crisis, inflation, income, unemployment and resource availability’ (Boone and Kurtz 2011, p.76). In addition, the level of ‘supply and demand’ (Hisrich, 2000, p.16) in a market denotes the market’s economic potentials, thus it is considered as a factor that can influence the market’s economic environment. In regard to the promotion of iPhone 6 in China the country’s economic environment needs to be checked in order to decide whether Chinese consumers would be able to pay for the specific product or not. As for the technological environment, this refers to the ‘means used for transforming materials into goods and services’ (Sahaf 2008, p.57). In other words, in each country the technological environment denotes the country’s performance in regard to manufacturing and services (Lancaster and Reynolds 2005). The technological environment of China would be checked when developing the marketing plan for iPhone 6; indeed, in a market where products of advanced technology are highly appreciated the chances of iPhone to achieve high sales would be more, as also explained in the next section. A.2. How each environment impacts the specific product? The economic environment can highly impact the sales of iPhone 6. The influence of economic environment on the particular product would have the following form: a) in regard to local economic environment: in case of the increase of unemployment, as related to the decrease of the income, people in China would face difficulties in buying this product (West et al. 2010); also, if inflation across the country is increased then the prices of products would follow a similar path. In this case, consumers could decide that they do not want to pay a significantly high price for the particular product (West et al.2010), b) in regard to the global economic environment: the increase of turbulences in global markets or the possible appearance of a strong financial crisis at international level could make Chinese consumers less willing to pay for products of high technology, such as the iPhone 6. In fact, in the above case, their priorities in regard to the goods purchased would be changed: products aiming to cover basic needs would be preferred (West et al. 2010). The technological environment could impact the sales of iPhone 6 in the following ways: a) in case of failures in the product, the technology required for fixing the particular problem is available across China; b) the country has the technology necessary for the appropriate marketing of iPhone in the Chinese market (Solomon et al. 2010); c) also, in case that Apple would decide to upgrade the iPhone 6 through a relevant application, then such scheme could be developed locally (Baines and Fill 2014), meaning that Chinese customers could have access to such benefit without having to wait for their mobile to be sent out of the country for appropriate programming; d) technology is also related to transportation (Solomon et al. 2010); through the existing transportation system Chinese would be able to reach all the stores where the iPhone is available. A.3. Opportunities presented for the chosen product in each environment A.3.1. Opportunities in Economic Environment iPhone has been a quite popular product worldwide. Its latest version, iPhone 6, is expected to appear in the market within 2014 but the exact date is still unknown (Beavis and McCann 2014, par.5); according to Crothers iPhone 6 is likely to appear in the market by September (Crothers 2014). The price of iPhone 6 has not been announced. It is estimated to be at levels similar with those of iPhone 5, maybe a bit more expensive. In this context iPhone 6 is expected to cost at least between $199 and $849, the current prices for iPhone of 16GB and 64GB accordingly (Apple store, 2014). With such pricing iPhone 6 would be welcomed in the Chinese market, since customers could choose among models of iPhone 6 at different prices. A.3.2. Opportunities in Technological Environment During the last decade China has emphasized on research and development especially in regard to products of advanced technology (Segal 2013). This means that in China iPhone 6 could be quite successful at the level that this product is based on unique technological features, such as larger screen, ‘between 4 and 7 inches’ (Allsopp 2014), compared to 4 inches as in iPhone 5, and extremely high image resolution (Allsopp 2014). Chinese consumers who highly appreciate the products of advanced technology would be highly interested in acquiring an iPhone 6. A4. Threats presented for the chosen product in each environment A.4.1. Threats in Economic Environment The Chinese economy is one of the strongest worldwide, if taking into consideration the rate of economy’s growth the last three decades. In 2013 the Chinese economy showed signs of downturn (Arnold 2014), a fact related to the decrease in the performance of the economy’s key sectors, i.e. ‘exports and real estate’ (Mourdoukoutas 2014, par.1). If the pressures against the Chinese economy become stronger then it is possible for the sales of products of advanced technology, such as the iPhone 6, to be reduced. According to Lim and Yao (2014) the Chinese economy is expected to face more pressures in the future, unless important measures are introduced for securing economic growth. A.4.2. Threats in Technological Environment In the global market there are already mobile phones of similar characteristics with iPhone 6; reference should be made, for example to: ‘HTC One M8, Sony Xperia Z2, and Samsung Galaxy S5’ (Beavis and McCann 2014, par.9). These mobile phones are expected to be also available in the Chinese market. The potential of iPhone 6 to compete its rivals in China cannot be guaranteed in advance, meaning that it will be a bit difficult for iPhone 6 to secure a leading position in the Chinese market. In addition, in China there is an extensive network of cyber-gangs (BBC News 2014); iPhone 6 should be appropriately designed so that it can secure for its users safety and privacy. Part B - Consumer buyer behaviour B.1. Type of buying decision used for the chosen product The decision of consumers to buy a product/ service can be depended on various factors; under the influence of these factors, a consumer can be involved in this decision at lower or at higher level (Boundless 2013). The buying decision that a consumer would be expected to use for iPhone 6 would be based on the ‘differentiation of the product from other products of similar characteristics’ (Boundless 2013, p.117). More specifically, Chinese consumers would be expected to decide to buy iPhone 6, even if so far they use the mobile phone of another firm, in order to have access to the benefits that iPhone 6 offers to its users. In the context of such decision, which is also called ‘a variety seeking decision’ (Boundless 2013, p.117) a consumer realizes the advantages of a brand towards another brand but ‘he is not highly involved in the decision process’ (Boundless 2013, p.117). At the same time, since iPhone is a quite popular brand worldwide, the ‘habitual buying decision’ (Boundless 2013, p.116) of consumers, i.e. their desire to buy iPhone 6 just because they have already all previous versions of this model, cannot be excluded. B.2. How might need recognition be triggered for the chosen product? Explanation of how one factor influences this stage. In general, need recognition is activated in two ways:’ a) either because of an internal stimulus or b) because of an external stimulus’ (Lamb et al. 2011, p.190). In the first case, a person is expected to take a buying decision for covering emergent biological needs; in the second case, buying decision is related to an event in the external environment, such as an advertisement (Lamb et al. 2011). In other words, need recognition reflects the first phase of ‘the buying decision process’ (Ferrell and Hartline 2012, p.119). In this phase, consumers accept that ‘they have a need that has not been met yet’ (Ferrell and Hartline 2012, p.119). In the specific case, the need recognition for iPhone could be triggered in the following way: an external stimulus would rather intervene; an individual who sees an advertisement for new iPhone, the iPhone 6, would search for it (Ferrell and Hartline 2012, p.119). In other words, advertising, as combined with social media, should be considered as a key factor influencing the buying decision of consumers at this stage. B.3. How could information search be undertaken for the chosen product? Information search refers to the second phase of the consumer buying decision. More specifically, after accepting that he needs a product/ service, at the need recognition stage, a consumer is likely to search for information on this product service (Ferrell and Hartline 2012). In regard to iPhone 6 a consumer is expected to develop an active information search, meaning that he would not, solely, wait to see an advertisement in order to check the qualities/ characteristics of a product/ service; rather, he would start seeking for information for this product/ service using all available sources (Ferrell and Hartline 2012). The sources could be classified using two, key, criteria: a) internal sources, i.e. ‘the personal experiences and memories’ (Ferrell and Hartline 2012, p.120) and external sources, such as the Internet or print media (Ferrell and Hartline 2012). In the specific case, consumers would be influenced in their decision for buying a product/ service mostly from their personal experiences and perceptions on the particular product; then, other factors, such as the information available for the product/ service on Internet should be taken into consideration (Ferrell and Hartline 2012). In any case, personal sources, such as personal experiences or conversations with other people in regard to a particular product/ service (Rao 2009) seem to be the most important factor that influences the buying decision at the particular stage. B.4. Provision of an example of a typical evoked set for the chosen product and description of how alternatives could be evaluated for the chosen product. Explanation of how one factor influences this stage. When referring to the buying decision process, an evoked set reflects the choices, i.e. the products/ services, available to the consumer, as these choices have been identified through the two stages mentioned above (Verma 2012, p. 289). In the case under examination, an evoked set would include mobile phones of different firms but of similar characteristics such as innovative platforms/ user face and advanced features; the mobile phones based on a specific software application would also constitute an evoked set. For example, the list resulted through the first two stages of the consumer’s buying decision process would include the following mobile phones: ‘the Android smart-phones, the iPhones and the Windows phone, of Microsoft’ (Ferrell and Hartline 2012, p.121). The first two categories refer more effectively to the problems set in the case study: both ‘Android smart-phones, iPhones and the Windows phone’ (Ferrell and Hartline 2012, p.121). Among all these phones only those of the first two categories, i.e. Android-phones and iPhones mostly meet the criteria set by the customer in phases 1 (Ferrell and Hartline 2012, p.121). Moreover, because iPhone is a product, the evaluation of its quality/ characteristics would be based on specific criteria (Verma 2012, p.291); in a mobile phone these criteria would include weight, easiness in giving the commands, order of signs/ images related to functions, range of options, additional features, such as exchanging files or accessing social media accounts and so on. It should be noted that in order for a buying decision to be credible ‘it is necessary for the alternatives, i.e. the products/ services, to be part of the evoked set’ (Ferrell and Hartline 2012, p.121). B.5. How might the decision to purchase be made for the chosen product? Explanation of how one factor influences this stage. The decision to purchase is at the end of the buying decision process. The decision to purchase is based on the findings of the previous stages of the buying decision process (Boone and Kurtz, 2011). At this stage, the consumer has to identify the place from which he will buy the particular product, iPhone 6. Probably a well known mobile phone retailer would be preferred because of the following reason: the particular retailer would have followed all rules related to the safety of products/ mobile phones within its unit (Boone and Kurtz 2011). On the other hand, it would be possibly for the customer to decide to proceed to an online purchase. Such decision would be related to an important risk: the customer would not be able to check the physical condition of the mobile phone. In this way, after receiving the product any potential claim for compensation because of failures/ problems when using the specific device would not be accepted. The market image of the mobile phone provider would be, therefore, critical for consumers to develop their buying decision: buying the iPhone 6 from a popular mobile phone provider, consumers would have fewer chances to face problems, at a later level, such as non-visible damages on the device or failures in the programming of the software application on which iPhone 6 is based. B.6. How might a consumer undertake post-purchase evaluation for the chosen product? Explanation of how one factor influences this stage. The post-purchase evaluation is used by marketers as a tool for building customer loyalty (Ferrell and Hartline 2012, p.122). More specifically, the evaluation of a product/ service by consumers ‘does not end with the purchase of the product/ service’ (Palmer 2012, p.127). Of course, at the second phase of the buying decision process consumers need to develop a research on the information available in regard to the type of products needed. However, at that stage it is possible for failures of the products not to be revealed. In regard to iPhone 6 the existing publications seem to be quite supportive for the quality of the product (Lovejoy 2014, Pfanner and Chen 2013, The Week 2014). However, the evaluation of the product cannot be fully completed without testing the product (Palmer 2012). Indeed, in the post-purchase evaluation phase consumers continue to check the characteristics and the performance of the product/ service, as compared to their thoughts in regard to this product’s/ service qualities and potentials (Palmer 2012). In regard to iPhone 6 a consumer could undertake post-purchase evaluation by checking the functions of the product, as these functions have been used for promoting the product in the market. Through this process, the customer will be able to check whether his expectations in regard to this product will be met or not; if the relevant research leads to a negative answer then there is the issue of ‘cognitive dissonance’ (Palmer 2012, p.127), a term denoting that the customer has overestimated the product’s potentials. References Allsopp, A., 2014. “iPhone 6 release date, rumours & leaked images: Large screen envy could encourage Apple to release iPhone 6 soon.” March 24, 2014. MacWorld. Available at http://www.macworld.co.uk/news/iphone/iphone-6-release-date-rumours-leaked-images-3414914/ Arnold, W., 2014. “Chinas Economy Under Mounting Stress.” Mar 26, 2014. The Wall Street Journal. Available at http://online.wsj.com/news/articles/SB10001424052702303779504579463270072584930?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303779504579463270072584930.html Apple, 2014. Apple store. 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