The Acquisition and Retention of Customers - Essay Example

? Introduction acquisition strategy is one of the main plans used by businesspersons to attract and retain customers. It is a strategy that gives a particular business a competitive edge over other rival companies. Quality and price play an important role in the acquisition and retention of customers. Companies, which seek to become price leaders, tend to attract more customers if they also ensure quality of products. With the increased competition between companies, there is need to have unique strategies to attract and retain customers. To achieve this, the market mix becomes imperative. Some of the main factors under this include product, place price, and promotion. Building a strong brand is vital since it has psychological effect on the customers. The perception of customers towards a particular product dictates the number of sales that one will make. Conducting a marketing research before the introduction of a given product becomes vital. It assists a businessperson in obtaining information about the attitudes of individuals towards a particular product. Through a marketing research, one is able to know the strategy with which to approach the market. The introduction of new products in the market faces a number of challenges. This is due to some internal and external factors, which determine the success or failure of businesses. If the employees for instance do not have skills that ensure proper communication with customers, this may lead to increased losses for the company. Customers are retained by the quality of services they receive from a company. It is imperative to note that marketing also plays an important role in acquitision of customers. It is the process through which a business information the customers about the products. In the following discussion, the introduction of iPhone 5 and acquisition of customers will be dealt with. Brief history of Apple Inc., which produces iPhone Started in 1976, this multinational company is one of the most successful, dealing with the production of operating systems and communication gargets. With its headquarters in California, the company has been able to have about 14 subsidiary companies throughout the world (Duhigg 23). In addition to that, it operates more than 393 stores worldwide to facilitate the sale of its state of art products. Apart from the production of iPhones and operating systems, the company also produces computers, macs, and iPods and currently seeks to introduce smart TVs. The company has been able to create more employment opportunities to the society members. The statistics released in 2012 indicated that the company had 72,800 permanent employees and thousands of others under temporal contract (Duhigg 23). In the same year, the company had total revenue of about $156 billion (Duhigg 24). This was unprecedented and attributed to increased sales of products particularly the iPhone 5, which was introduced in the same year. It is estimated that about 27.4 million handsets of this product were sold in 2012 (Duhigg 24). This was much higher than that of the closest rival Samsung Galaxy S 111 introduced the same time. Despite the success of the Apple Inc. there are various challenges threatening the stability of this business. Competition has been a major concern for the company. Apart from Samsung Company, which has been a major rival in the production of smartphones, others include Nokia, Huawei, and Motorola companies. The goods of these companies are of lower price compared to that of the Apple Inc. Introduction of iPhone 5 in my location It is a state of art smart phone, which runs on Apple operating system. It is a main rival to other smart phones produced by other companies such as Samsung and Huawei. Unlike the previous generations of this product, iPhone 5 is not only lighter but also thinner making it more convenient and portable. This may explains the high number of sales in 2012. Despite this though, the sale of this phone is significantly lower in my location owing to the perception of the customers. The increased substitute products, which are also selling at a relatively lower cost, have been the major contributing factor. Smart phones from rival companies have taken control of the market, affecting not only the sale of iPhone 5 but also generally all Apple products. The attitude of the customers towards these products has also played a major role. Most of them think that the Apple products only target the high-income earners. The high prices of these products are perceived as not affordable by the low-income earner and the unemployed people especially the students. However, there is need to change this perception for the purpose of increasing the sales revenue for the products in all geographical locations. In this particular geographic location, the young people make the majority. There are a number of institutions of higher learning, which is also a major market for the smartphones. Noticed also is the low decreased number of Apple products. This may be attributed by the fact that there is low demand of these products in this region. However, given the opportunity, I seek to reintroduce the Apple products in this region, and in particular, the iPhone 5. The rationale behind the choice of this product is the fact that it has better features and designs compared to others. Strategies of customer acquisition and customer segment Customer segment Segmentation is vital in business in the sense that it assists in major decision-making process. It refers to the process through which a marketer subdivides the market based on a number of criteria (Dan 87). This includes the age, level of income and occupation. For the purpose of this report, the market will be subdivided based on occupation and income levels. The target customers are the students, high and low-income earners. The three criteria will assist in determining the price of the iPhones in the market. Market segmentation plays a major role in price discrimination, as it shall be discussed later under the marketing mix. Strategies of customer acquisition Customer behavior is one of the main determinants of whether particular products will be demanded or not. It refers to attitudes, beliefs, perception or tastes and preferences of customers towards a given product (Dan 132). As indicated before, one of the main reasons why the Apple products have not been common in the market is because of the perceptions that customers have about them. The beliefs have been that the products are not only expensive but also targeting the high-income earners. One of the main strategies will therefore be to change this kind of perception. This will be achieved through aggressive marketing strategy. This will include direct selling strategies that will make it possible to communicate directly with customers. Secondly, customers will be attracted and retained through pricing strategy. The Apple products are avoided by many customers due to the issue of price. Compared to other rival products, the Apple products a bit expensive, though they are also made through state of art technology. Through market segmentation and price discrimination, this issue will be resolved to attract more customers. Thirdly, the SWOT analysis will enable the make it possible for the new product to gain competitive edge in the market. With the increased companies dealing with the production of smartphones, it will be important to understand their strengths, weaknesses, opportunities, and threats. This will assist the marketer to have an informed strategy to introduce the new iPhone in the market. Marketing mix Price, place, product, and promotion are the major marketing mix that will play an important role in the acquisition of customers (Malcolm 112). The four are the main determinant of whether this process will succeed or not. As indicated before, price is plays an important role as far as getting a competitive edge is concerned. Customers are very sensitive to the issues of prices and may always seek to get substitute goods that provide similar satisfaction. To attract new customers, the issue of price will be imperative. However, lowering the price to reach the customers may not be in the best idea of the customers. This owes to the fact that the company may end up making loses due to high cost of operation. Instead, it would be vital for the price discrimination strategy to play a role in finding the solution to this major challenge (Malcolm 122). The term refers to the process through which a business decides to have varied price of similar product based on the level of income of the target customers. In the higher income-earning customers, the marketer may decide to have higher cost for the products. As indicated above, the main consumers in this product are the young college students. It has also middle and high-class members with a high demand for smartphones. The smartphones for instance have been on high demand amongst the college students. This is because such gargets are imperative for research purposes. However, such students have been purchasing most of their products from other rival companies due to the issue of price and the perception on the Apple products. With the number of the institution of higher learning likely to increase in the area, it is clear that the market for smartphones will also increase. To tap into this market, lowering the price for the students will be imperative. This is the only way through which this market will be unlocked, and gain a competitive edge. With thousands of students who have high affinity for the smartphones, acquiring them means that the iPhone 5 sales will be on the increase. With the prices relatively lower, the perception of the students towards the Apple products will change in favor of iPhone sales. However, while the sales are likely to increase, the revenue may decrease due to low prices. To overcome this, there is a plan to ensure that the price of the iPhone only remains low only in the stores targeting the students. Such stores will be operating near the institutions of higher learning. However, in the main shops, which target the high and middle-income earners, the price will remain relatively higher, bur other strategies such as aggressive marketing, will be used to attract more customers. As observed, majority of the high-income earners are not really affected by the issue of price, like their low-income earners. They purchase products that match their lifestyles and status. For that purpose, the more expensive a product becomes, the more it is demanded by such a group of people. With the increased employment opportunities in this area, the number of people high-income earners is also likely to increase. This means that the demand for iPhones will also be on the increase. This is important since it will assist in recovering the revenue lost in areas where this product is sold at a low price. Product This refers to what the marketer intends to sell to the customers. In this case, the main product is iPhone 5. It is one of the latest smartphones, which the Apple Inc. has introduced in the market with an aim of competing favorably to other rival goods. Some of the main striking features about this product are its portability. It is one of the lightest smartphones in the market, despite the fact that it is also the most sophisticated. As indicated before, it runs through an operating system that makes it more appealing and user friendly. This product targets all people, but especially the researchers, due to the fact that it has one of the highest internet connectivity. This explains the main reason why the product has been able to be beat its rival products. Promotion Addressing the issue of price alone may not significantly lead to increased sales of the iPhones. To address the perceptions and customer behavior, various promotion strategies become important. Advertisement is one of the major marketing strategies that will be used to attract more customers (Cialdini 109). More money will be allocated towards advertisement to facilitate in the marketing of the iPhone 5. In marketing however, the medium used to pass the information ought to be selected depending on the target customers. With the increased technological advancement, most of the customers spends most of their times on the social interaction sites such as the Facebook and twitter. It is for this purpose that many businesses have decided to use such sites to attract as many customers as possible. As a marketer for the iPhone 5, the use of this interaction medium will be imperative. This is especially for the purpose of targeting the college students. Almost all of them have access to both or one of the social interaction site. The use of these channels of communications is advantageous owing to the fact that it is not only cheap but also reaches many people at the same time. It also makes it possible for the marketer to interact with potential customers. In addition to that, personal selling will be used for advertisement. This will be achieved through the introduction of a live chat that will make it possible to talk to customers and have instant feedback. The chat session is vital in the sense that it gives the customer a chance to make any recommendations, appreciate, or make a complaint about the product or a service rendered. The direct communication with the customers also provides the business management with an opportunity to change the negative perception of the customers towards the product. This is a competitive edge especially if there is a competition in the market. Promotion will be effective in attract new customers as well as retaining them. Place This refers to the area that a marketer seeks to introduce a particular product and attract customers. In this case, the target area is a geographical location where the sale of Apple products has not made a significant in the market. In this location, though there is high demand for the smartphones, only the products of the rival companies have continued dominating the market. This location offers a large market for the iPhone 5 products owing to a large number of college students, middle and high-income earners. However, one of the main hindrances to the sale of the iPhones has been the attitude of the potential customers towards the Apple products. The perception has been that such products sell at a high price and therefore only target the high-income earners. Despite this perception, the customers in this location appreciate the fact that the Apple products are of high quality and made from state of art technology. For that reason, with proper marketing strategies, this perception can be changed, leading to more sales of iPhones. In conclusion, the introduction of the iPhones in the market will be met with a lot of challenges. This owes to the increased competition from companies such as Samsung, Huawei, and Nokia. However, with strategies such as price discrimination and marketing segmentation, the introduction of iPhones will succeed. Addressing the perceptions, attitudes, and beliefs of the customers will assist in increasing sales and profits in any business. Work cited Cialdini, R. Influence: Science and Practice (5th Edition, ISBN-13: 9780205609994), 2008 Dan Ariely's Predictably Irrational: The Hidden Forces That Shape Our Decisions (Paperback: Revised and Expanded Edition: ISBN-13: 9780061854545). 2010 Duhigg, Charles "How Apple Sidesteps Billions in Taxes."] New York Times. 2012 (Retrieved 9-06-2013) Malcolm Gladwell's The Tipping Point: How Little Things Can Make a Big Difference (ISBN-13: 978-0316346627). 2002 Read More