Ch. 4 - The Marketing Environment

Prices of goods can affect our overall economy. With inflation driving prices up, people buy less, and with hyperinflation things gets a lot worse, especially when their salary does not follow inflation, and in rare situations, deflation may drive the prices down and then every business in the country weakens. The recession is one of the main factors that can bend the economy and change consumers’ purchasing mindset.  Apple’s target market is a unique example for every company in the world. Apple, knowing that their products are pricey, just recently announced the iPhone 5C, a plastic-cased, cheaper version of its flagship smartphone.

The iPhone 5C will help Apple target customers in emerging economies, something analysts say the company needs to do in order to stay ahead in an increasingly saturated smartphone market. Apple is more popular in North America and Europe but lags in developing regions like China, India, South America, the Middle East and Africa. Apple hopes that a cheaper iPhone will change that trend in these countries. At the same time, Apple is trying to comply with the slowly growing number of buyers in the USA who are moving away from the two-year contracts that subsidize the cost of a phone and buying their phones outright. Cell phone carriers like Virgin Mobile are asking customers to pay for more of the cost of their phones, and customers are also starting to choose more flexible contracts for unsubsidized phones. In addition, Apple is trying to engage the untapped US smartphone market that is mostly among the poorer and the elderly, neither of whom are likely to splurge as much on their first smartphone.