Assignment 7 & 8

Business Maths’s 2

Spring – 2020

BBA – B

18i-0164 Muhammad Adil

 Date: 10 June 2020

Apple Watch Case Study

1. What is Apple Watch? Describe in terms of product attributes, functions, and customer benefits.

Answer: Apple Watch is a smart watch introduced to the market by April 2015. It is a product primarily
made for being connected with iPhone which shows notifications of apps and allows access to use apps
on the watch.

Product Attributions:

The apple watch has attributes such as

It is touch screen operated having cellular chip facility as well as GPS with a dual core processor

It comes in different additions such as watch sport specific for outdoor recreation and others.

It has sizes of 38mm and 48mm available price varies according to it.

It is composed of materials such as glass, ceramic, aluminum, crystal, stainless steel, and/or gold are used
for the screen and case while for the wristband of the watch plastic, stainless steel or leather is used.

Functions and Customer Benefits:

The smart watch can be used and perform many functions that a phone can:

It can receive calls while your phone is in your pocket while you're out on a walk.

You can use GPS facilities on it.

It can monitor your health like your breathing or heart rate while you wear the watch which is very
beneficial for the consumer.
You can get audio directions while driving, access Facebook, and share your location through the watch.

It is a watch easy to carry looks good and light weight.

So, to sum it all up the smart watch is enabling the users to have an easy access to their applications on
their phone not only is the functionality of the watch it’s plus point is that it is used as a status symbol too
being one of the latest technology available.

2. At the time of launch, Apple Watch is a complementary product to Apple iPhones. Who among
iPhone owners would buy an Apple Watch, and for what reasons? Consider and describe potential
market segments.

Answer: The main group or class of people who were attracted to the Apple Watch were the innovators,
they wanted to try something novel in the accessories market and were brand loyal who wanted to buy
this product as it was related to Apple and be in the category of customers who bought these watches as
soon as they were introduced. Most importantly these people were technology driven and belonged to the
upper income class.

People bought Apple Watches for numerous reasons. Firstly, they thought it to be a status symbol and
would make them stand higher in the economic and social circles in society. Secondly, these people
wanted convenience in their lives by only wearing watches and easily performing all the functions of
iPhones through them. Lastly, this new product line of Apple actually pulled the technology driven people
towards it who valued innovation.

Market segmentation by Apple

Market segmentation is done by companies for numerous benefits such as matching the need or wants of
customers in a better way, attracting and retaining maximum people, boosting its profits etc. Just like
other companies Apple also segments its market and does it on demographic, geographic, behavioral
and psychographic bases.

Demographic segmentation: Apple targets the people of age brackets ranging from 20-48 years which
consists of both the males and females who are technophiles. These products are for moneyed and
innovative people who are working in corporate sectors as managers or owners of firms and time plays an
important role in their lives so they place a high value to these accessories
Geographic segmentation: Apple is a well-known brand and has spread almost everywhere in the world
i.e. in developed and developing countries both, having stores especially in countries like Australia,
Canada, China, France, Germany, Hong Kong, Japan, UK, and the US.

Behavioral segmentation: Apple focuses on consumers who are innovators they will buy the new
offerings of Apple as soon as they are launched. It targets the brand loyal having positive feelings and
repeating purchases of Apple’s products.

Psychographic segmentation: The Company values people of various interests like it has a sports
edition for people in the sports field, has a normal watch and a gold watch for luxury lovers and it has
further provided multiple options of materials for the buyers according to their preferences.

3. The adoption behavior of potential buyers of Apple Watch may be analyzed by applying the
diffusion of innovation model. What % of potential buyers might fall in the categories of
innovators, early adopters, early majority, late majority, and laggards?

Answer: The diffusion of innovation model is centered on the idea of innovations to succeed and be self-
sustainable achieving this by increasing the number of users. Apple is a brand that relies on creating
excitement in the media and using it to shift the diffusion curve primarily towards innovators and early
adopters which make up most of the market, the early majority, late majority, and the laggards.
Innovators are people who are fans of Apple products, these are the people who stand in line whenever a
new Apple product comes out just to be the first ones to have it. Hence, the percent of potential buyers of
Apple products in this stage is quite high (5%). Secondly, the percentage for early adopter, the people
who follow the innovators and are the people who write reviews and become opinion leaders and usually
the opinion leaders of a society will be around (15%). Then, people in the early majority will read the
reviews, and around (30%) will the buy apple watch since it is better for the users. Lastly, the people in
late majority and laggards each (25%) will not buy this product. The late majority, will not even buy
smart watch until it becomes a trend and becomes integrated into society. Additionally, laggards will not
buy smart watch may be until their old watch breaks.

4. Obviously, some will never adopt the Apple Watch. Putting aside non-adopters (normally
included in the laggard's category), how long would it take to complete the adoption of Apple
Watch (i.e. 100% of those who will eventually adopt) in your “guesstimation”?
Answer: Apple products have always been classified on the basis of their technology and the price factor.
For most of the people money is the key element and giving immense value to their money would make it
possible for the masses to go for the Apple watch despite of other smartwatches present in the market.
Most importantly Apple needs to integrate such software in their watches that it allows compatibility with
other Android phones so that instead of only iPhone users, other smartphone users can also go for the
Apple watch. This would not only increase the product sales but also give rise to the availability of the
product even among the common masses. Apple should consider to provide mid-price level watches just
like other competitors in the market so that people can enjoy the innovative features and tremendous
quality of the Apple watch within their budget. The timeframe for the complete and proper adoption of
the Apple Watch would be somewhere between 5 to 7 years, but that can be made possible only if Apple
considers to subsume the above-mentioned points.