iBummed

Consumer Behavior Report – Apple iPod

Executive Summary
In 1971, Steve Jobs introduced the Apple Company. Since then it has become a brand to reckon with. Apple has always delivered as well as produced the best products that have made them one of the most well-known electronics companies of the world. Apple consumers are very brand loyal and tend to associate themselves with the brand. One of the most innovative and technological advanced products has been the iPod. iPod is the market leader in the product category of portable music players and has created a niche for itself. The ease of use, and the stylish looks attracted people of all demographics, and there was no specific target market defined. Moreover, the teens play a major role in the growth as they gave the iPod an image of being young and trendy. This paper has conducted a behavioral analysis, which includes Role of Individual factors like perception, learning and memory, motivation and values, personality and life, attitudes, and individual decision-making. Also, Role of Group factors and finally its suggests marketing strategies to promote the brand in the light of behavioral analysis.

Introduction of the Organization
Apple Inc. is a brand focusing on consumer electronics and software based in America. Steve Jobs, Steve Wozniak, and Ronald Wayne established it on April 1, 1976 in California. The organization produces and markets different variety of products like portable music players, personal computers, mobile phones and also provides software’s, services, and peripherals. It is ranked at number 178 on the Forbes 2000 List (Forbes, 2008). Apple Inc. has based a unique position in the minds of consumers due to its products appeal and distinctive advertising campaigns. Many consumers are loyal and devoted to Apple Inc. as a company and a brand name (Wikipedia, 2008). The brand apple has high level of competition in all its product lines. For example, in the personal computers category there are many well-known competitors like HP, Sony, IBM, etc. In the portable music player category there are competitors like Microsoft Zune, Creative Zen, etc portable players that offer similar or advanced features when compared to the iPod. Apple Inc. is well known for its design and innovation present in its products and also its loyal brand consumers. This paper will mainly deal with the iPod product line of Apple Inc.
Target Market
Initially, iPod was targeted to teenagers and travelers. Later it became a necessity for everyone who wants to listen to music. The target market grew as the hype of iPod spread like fire in the forest. It formed a community of its own, and anyone who did not belong to it was considered an alien. The ease of use, and the stylish looks attracted people of all demographics, and there was no specific target market defined. Moreover, the teens play a major role in the growth as they gave the iPod an image of being young and trendy (D’souza 2005). Nonprofit organizations Pew Internet and American Life Project conducted telephone interviews of a sample size of 2,200 people in order to define the market for iPod. The study revealed that consumers who fall under the demographics of young age, high income and techno savvy are highly inclined to purchase the iPod. (Cnet News, 2005). In the year 2005, “There were 22 million adults who owned iPods. In the US, this means 13 per cent of men have an iPod, as compared to 9 per cent of women. Interestingly, 16 per cent of African-Americans and English-speaking Latinos have music players, compared to just 9 per cent of non-Latino whites, the report explains. Age demographics reveal that 14 per cent of people of age group 29-40 have iPods; as do 11 per cent of those around 41-50. Just 9 per cent of 18-28-year olds and 6 per cent of those aged around 51-59 have an Apple music player. Finally, 6 per cent of those 60-69 have them, while 1 per cent of those 70 and older have them.” (Macworld, 2005). Apple targets the iPod towards customers who need to listen to music on the go. It consists of people who belong to various professions, which include students, corporate workers, entrepreneurs and even housewives.
Role of Individual Factors
Perception
There are several individual factors which are related to the iPod. Firstly, the sensory receptors like vision, touch and hearing. The iPod looks simple yet classy, stylish and attractive. The wheel below the screen for the controls is an innovative technology and was never seen before. The screen size was large enough for people to see the songs list and other functions. The materials used to build the iPod are of high quality and smooth to touch (Varian, 2007). The wheel has touch sensing ability for voice controls. The word iPod has the initial ‘i’ which is makes it sound light and attractive. Also, the product is a digital music player which plays all the favorite tracks of the owners. Behavioral pricing is used as the quality is high of the iPod and therefore the pricing is high when compared to its competitors. It is normally hedonic consumption as mostly all sensory organs are associated with it and the purchase decision for specifically iPod cannot be justified. Also, it provides a feeling of being young and trendy, and a certain belonging to a culture or group which the iPod has created. The form of advertising was mainly targeted to the young audience. There could be many reasons for it like the younger consumers are more likely to use the product and be brand loyal for a longer period. Also, the younger consumers will be more attracted towards the stylish looks and giving it a young and trendy look. When considering semiotics, portable music players were referred as iPods and were associated with it even though they were from different brands. The diagram related to it is drawn in the appendix.
Learning and Memory
Positive Reinforcement plays an important role as the consumer of iPod joins a community and has a sense of belonging to it. Also, he is considered to be young, trendy, stylish and attractive by the society which can help boost his image and morale. Moreover, the consumer can listen to his favorite music on the go which is a bonus. Also, there is a form of observational learning (vicarious learning) as many people buy the iPod because they see many famous celebrities, models, actors, loved ones owning an iPod and sharing their playlists and songs with each other. Also, many designers are creating luxury accessories for the iPod to personalize it (Costello 2008). According to the Associative Network below, it can be seen that the portable MP3 players have been associated with the iPod. That is why often, people refer the product category of MP3 players as iPods and consider it as a point of reference for it.
Motivation and Values
The goal for the motivation process is the need to listen to music while on the move, and also, to be trendy, young and belonging to the iPod community. The drive is the pressure created by the people around the consumer which exposes the iPod to him. The want is the final purchase of the iPod when the consumer is satisfied as he has achieved his goal. The motivational strength can be measured by the expectancy theory as the consumer expects the iPod to play his favorite music. iPod is purely related to hedonic needs as iPod is a need for excitement. In detailed, it also displays need for affiliation as the iPod owners can exchange music, playlists and even iPods with each other and form a community. Also, it can display need for achievement partially as Apple is considered as a luxury brand and iPod is considered a luxury technological product. Moreover, iPod belongs to two bands in the Maslow’s hierarchy, Self-actualization and belongingness. The reasons for that are firstly, iPod owners are mostly people who are on the move, and would like to listen to their favorite music as a hobby or to entertain themselves. And the sense of belongingness is associated with the iPod as it has created a community and every iPod owner is a part of it. Also, a certain type of channel is created in the community called Podcast; name derived from iPod broadcast, which has news, favorite T.V. shows, music, albums, talk shows etc relayed on the portable music player, primarily iPod (PCMag, 2008). iPod is a high involvement product as the consumers have different choices of iPods depending on their needs. Moreover, they are highly related with their iPods and like to accessorize it according to their needs. Moreover, the capacity decides the number of songs an iPod can store, which is an important decision as the price is high when compared to its competitor’s products. iPod cannot be considered as a materialistic possession as the need to purchase an iPod is to listen to music. Moreover, it is for personal satisfaction and entertainment. Therefore, Non-materialists are highly inclined to purchase it.

Personality and Lifestyles
The survey conducted has helped to understand the type of personality iPod holds in people’s mind. iPod has a personality focused on simplicity, emotions, imagination, lifestyle, innovation, and passion. According to my analysis, I would associate iPod with Individuality or Social Acceptance in the Dichter’s Motives of Consumption. Unique song lists and playlists along with the exclusive accessorizing iPods show individuality and the need for belonging to the community of iPod could portray social acceptance. Further analysis of the personality characteristics help to define BrandAsset Valuator Archetypes devised by Young and Rubicam. iPod has two major archetypes that is Queen Being and Actress. Queen being has the characteristics of relaxing, comforting, and sociable which are similar to that of iPod that is it helps relaxing, comforting, and is very sociable device. Actress has traits of glamorous, dramatic, and involved and similarly users of iPod are highly involved with the product, and consider it a trend setter. The type of lifestyle iPod consumers have is vast. People on the move, going for vacation, work, outdoor activities, etc. all of them are included as mostly all like to listen to their favorite music while they are doing their activities. Also, people relaxing at home or individuals who don’t like carrying music CD’s wherever they go, purchase iPod as it is a personal music library which fits in the pocket and is convenient.
Attitudes
According to Functional Theory of Attitudes, iPod is related to Utilitarian Function as it involves Rewards and Punishments. The rewards of owning an iPod are listening to quality music whenever and wherever, storing and possessing huge music collection in a device that can fit into one’s pocket, and to belong to a community. Punishments for not owning one could be alienation, discomfort and maybe purchasing a competitor brand.

Since iPod is a product of high involvement, standard learning hierarchy is applicable to it. According to which initially the consumer has the phase of cognition where he has a belief about iPod. Later that belief is converted to the feeling he builds up for the iPod, and finally he decides to purchase it or any actions related to the iPod.

There is no restoring required for the Balance Triad as the Consumer who loves music will love iPod as the primary function of the iPod is to play music.

Individual Decision Making
The decision making process can be individualistic or collectivistic. If the decision-making is individualistic, then it is highly experiential perspective as the individual buys the iPod completely because of the products appeal. It includes extended problem solving as it is a product of high involvement and the decision to purchase the iPod consists of a certain risks. The decision of purchasing the iPod has Opportunity Recognition as the Actual state remains the same, where the consumer is using the CD player and buying several CD’s, but the Ideal state is uplifted where the consumer can carry all his songs in one device which can fit in the pocket. Thorough External search is done by visiting the company website, blogs, reviews, catalogs, friends, and family. Moreover, a lot of search is done to buy the product as it is a high involvement product and valuable information is needed to make decision on the purchase. The only perceived risk involved is the price involved, as it is expensive when compared with its competitors. The people belonging to the Apple community do not look for any alternatives, and therefore buy it instantly. People out of the community have very limited competitor’s choice and the only competitor matching iPod is the Microsoft Zune. Since iPod has created a niche of its own and is at the top level of the product category, it dominates the market of portable music players and according to the Zipf’s Law, it is 50% more profitable when compared to its nearest competitor that is Microsoft Zune.
Role of Group Factors
When purchasing an iPod, consumers can approach a group of friends or family for help. The main reference group will be the family, following with friends and colleagues. Many offices have the culture of sharing the iPod playlists with each other and sometimes even sharing the iPods. Moreover, people with the similar taste for outdoor activities, love for music, etc would associate with each other and seek advice from each other. The opinion leaders can influence the decision of the consumer before the purchase, and depending on the views and loyalty of the opinion leader, he will advise the consumer. In addition, in the household decision-making, it is always the young ones who make the decision first for buying the iPod as they are more techno-savvy, and then later the other family members follow the decision. Furthermore, peer pressure can also influence the decision as iPod is considered a trend setter and if an individual does not own it, he is alienated.
Conclusion
The marketing strategies used by Apple Inc. to promote iPod are not sufficient as the competitors are rising. There are many aspects of iPod which are yet to be explained to the remaining market. These aspects can be shown by applying different marketing strategies explained below.
1) iPod has created a niche of its own, and formed a community which includes all iPod owners sharing music files, podcasts, videos, etc. This aspect must be highlighted in the marketing strategies, as the people today are in search of belonging to a group and want to get rid of the isolated world they are in. Therefore, more events, competitions, group meetings, fun fairs should be organized by Apple where people of similar interest can meet up and share their interests.
2) The advertisements for iPod mostly consist of teenagers and people who are stressed and want to comfort them by listening to music. This target market is very limited as travelers, people exercising and playing sports, working, walking, doing any form of outdoor activity, and also people indoors can be users of iPods. If advertisements targeting these groups are shown on television and newspapers, it can increase the sales of the iPod.
3) Apple is well known for not keeping discount offers or bundles. This can be positive and negative. The positive is the brand image is not hurt and therefore, it shows high price=high quality. But there are a lot of people who buy products only when there is a discount offer or a sale going on. To attract such customers, Apple should provide seasonal sales.
4) Apple should concentrate more on emotional appeal of the consumers. The iPod accessories are introduced by 3rd party and not by Apple itself. This way, apple is losing on a big chunk of market which can generate heavy revenues for the company as many consumers like accessorizing their iPod according to their likings.
5) There are many versions of iPods and each iPod has its own specialty. iPod should provide proper product differentiation in its catalogues, internet, and television ads, so that the consumers can make a rational decision and associate the iPod with their lifestyle.
6) iPod is considered to be a trend setter and one of the most wanted items for the teenagers. This image must be enhanced to even adults owning an iPod and associating with it. It is also meant for people who like to be simple, and that is why the design of the iPod is simple. But this aspect is forgotten by the consumers and should be revived.

References
Cnet News, 2007 “Who’s buying iPods?” accessed: 30/09/2008, http://news.cnet.com/Whos-buying-iPods/2100-1041_3-5577396.html?tag=st.rc.targ_mb
Costello, S, 2008 “The Onion’s Celebrity iPod Interviews”, accessed: 12/10/2008, http://ipod.about.com/od/ipodculture/qt/av_club_ipod.htm
D’Souza S, 2005 “An Old Lesson on Target Audience… the iPod Way”, accessed date: 20/10/2008, http://www.marketingprofs.com/5/dsouza40.asp
Forbes, AAPL – Apple, Inc. At A Glance, accessed date: 20/10/2008, http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=AAPl

Macworld, 2005 “iPod owner demographic data, accessed date: 30/09/2008, http://www.macworld.co.uk/news/index.cfm?home&NewsID=12177
PCMag, 2008 “Definition of podcast”, accessed: 28/10/2008, http://www.pcmag.com/encyclopedia_term/0,2542,t=podcast&i=49433,00.asp
Varian, Hal R, 2007 “An iPod Has Global Value. Ask the (Many) Countries That Make It.”, accessed: 8/10/2008, http://www.nytimes.com/2007/06/28/business/worldbusiness/28scene.html

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