Apple uniquely used STP and became the only US company to hit market capitalization of US$2 trillion in August 2020.
Steve Jobs and Steve Wozniak co-founded Apple in 1977. The company went public in 1980, but Jobs eventually left—only to return after several years. Apple's success is mainly attributed to strategic and innovative vision that transformed simple desktop to mobile devices and eventually into wearables. Key success drivers of Apple are its performance and unique design. Apart from this, application of Segmentation, Targeting and Positioning (STP) framework is a marketing strategy which Apple used to succeed in the long run.
Segmentation is dividing the target population of customers with similar interest, demography, needs, etc., into certain smaller, meaningful groups. Common characteristics to target such customers by Apple is based on appreciating design, quality, and performance of technology used.
Below is the table representing Apple’s segmenting and targeting strategy:-
Among the above segmentation conditions, lifestyle is the most important segment for Apple as it is a premium brand and this segment is usually located in the urban area which has the buying power to purchase premium apple products. These people are early adopters but they are so influential that even laggards start buying the products.
Next, to determine the target market, Apple considers four major segments which are as follows:-
- Teenagers: Usage of iPad, iTunes are more in this segment as these facilitate teenagers to socialise, listen to music, watch movies, and do video calling.
- College and University Students: Usage of iPad, MacBook, to record notes and quickly save them. Also these devices are light in weight making them comfortable to carry to college.
- Business People: iPad, MacBook, iPhone are loved by business professionals due to its swift user interface and their capability to pay for such premium products.
- Adults: iPhone is the most useful product for adults as it helps to view Apple’s in-built direction map, use high quality camera, and use FaceTime for video calling.
Next is positioning the brand in the minds of the customer to gain brand equity. Apple has positioned itself as a premium brand targeted towards business professionals, innovators, and high earners. Apple has managed to make such a premium image that its high price is overlooked by customers. For such positioning, Apple used the following:-
- Product Features: Unique features which are exclusive to Apple such as animated emojis.
- Product Class: Premium brand which deserves premium price.
- Competition: Distinguishing features have retained Apple to be in the “White hot zone”. This is where a company sits in the centre with all attention from the customer, where the competitors are neglected.
However, implementing STP is incomplete if 4P’s of marketing are not addressed. With regards to Apple, 4P’s are as follows:
- Product: iPhone, iPad, AirPods are the record innovations.
- Price: Premium price to maintain the premium image.
- Promotion: Strategically choses background and product color to grab customers attention.
- Place: Only licensed authorities sell Apple products to maintain the premium-image.
STP has been extremely useful for Apple as it helped to attract the right customer, reduce risk of marketing failure, customer retention, building brand loyalty- all factors being pivotal for Apple’s vibrant success.