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8002MMGT | Marketing Management of Google Australia

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Consider the market for your organisation and evaluate the opportunities and threats that exist for your chosen organisation.

Incorporating theoretical concepts into your discussion from chapters 2, 4, 5 and 6 of the text, and with the use of other theoretical sources and secondary research, please discuss the following:

1. Briefly describe the industry market for your organisation and evaluate current trends in:

a. Growth
b. Profitability
c. Macro environment ( PESTLE factor)

2. Describe the nature of competition in your industry. Explain and analyse your organisation’s place in the market by comparing and contrasting its strengths and weaknesses to your main competitor.

3. Outline and examine the major market segments for your organisation and identify your primary and secondary target markets.

4. Discuss the level of involvement your primary segment is likely to have towards your organisation in terms of the decision making.

5. Taking into consideration the primary segment, their level of involvement and the competition, create a positioning map for the market place.

Answer:

Introduction

Company

The report aims at providing an insight into the marketing management of Google Australia in context of mobile phone industry. The company has its headquarters in Sydney. The Google office in Australia has a compact structure comprising of collaborative spaces, desks and the reception area, decorated with Google’s trademark colour that includes red, blue, green and yellow (Biggs, 2018). There is an auditorium built on stairs and back dropped by a lively moss wall that resembled square grid of the blocks that makes up the city.

Product: 

The product represents the Google Pixel phone. It has a display of 5 inch and has 1.6 Hz quad core processor. The resolution of Google Pixel stands at 1080 x 1920 pixels with a 4 GB random access memory (RAM) and storage of 32 GB. The rear camera of the phone is 12.3 megapixels and has a battery capacity of 2770 mAh (Sulleyman, 2017). It is however available in two models Pixel 2 and Pixel 2XL.

Consumers: 

Google Pixel is targeted towards the student and the youth consumers. Most people are of the view that the phone has best of camera that can even give the high-end smart phones a run for money (consumerreports.org, 2018). The consumers however rate the Smartphone based on handset capabilities, camera and the battery life. The handset capabilities of Google Pixel include versatility in term performance, WLAN tethering and performance. The Smartphone has an immense battery life up to 7 hours and is one of its kinds in terms of display, data and voice display. Google Pixel also ensures quality image via its camera in terms of the resolution, colour, accuracy and the dynamic range.

Industry Analysis and Market Trends

Smartphone has dominated the mobile industry of Australia in the recent years. The advancement of technology has donated advanced features to the Smartphone than before. There has also been an increasing consumption of Smartphone and it grew at an equal pace along with the advancements taking place in the industry. According to estimates, the users of Smartphone would reach 3 million globally by the year 2020 (Cecere, Corrocher & Battaglia, 2015).

Figure 1: Smartphone Users in Australia from 2015 to 2022 (in millions)

Source: (statista.com, 2018)

Australians do have an affinity for Smartphone and use them while watching other media. They also keep them in hand at all the times while they are in office. According to the Technology, Media and the Telecommunications Prediction Report put forward by Deloitte in the year 2018, it is observed that Australia will surpass global trend in the usage of Smartphone with statistics portraying 90 percent of Smartphone penetration by the end of the year 2018(deloitte.com, 2018). However, the predictions for such penetration are expected around 2023 for the rest of the world.

Australians also worry about too much usage of the Smart phones. According to forecast put forward by Deloitte, Australia will exceed global prediction that predicts only 45 percent of the adult Smart phone users’ worries about too much usage of the phone (deloitte.com, 2016). This is because the present figure stands at close to 41 percent. The present figures also comprises of the young who worries immensely about the usage of their Smartphone. Innovations such Artificial Intelligence (AI) chips and better connectivity and battery life have increased the usage of the Smartphone.

Figure 2: Percentage of Smart Phone Users Using Phones during Different Activities

Source: (Poushter, 2016)

According to the global study reports, close to two thirds of young consumers between the age group of 18 to 24 hours have a feeling that they undertake too much usage of their Smart phones while the adults seems happy with the phones even when they have to constantly check their devices (smh.com.au, 2017). It was found that the percentage of the adults addicted to their phones accounted for only 3 percent.

Australia also stands high on data usage. According to the reports put forward by the Australian Communications and Media Authority (ACMA), the data consumption in Australia stood at 43 percent in the year June 2017(acma.gov.au, 2016). Studies put forward by Deloitte however portrayed that the Australians exceed the monthly limits of the mobile data on a regular basis. The short expectation included reduction of the broadband prices by the renowned firms. In long term, there however exists a possibility of a population powered by the mobile data due to presence of the unlimited data plans that enters and competes within the market. In addition, the introduction of 5G and presence of newer technologies like mobile wave will make fixed wireless a viable option against broadband connections and operate in areas having lack of fiber connectivity.

The increasing demand for Smartphone led to a warm greeting of Google Pixel since its debut with glowing reviews. The brand also earned huge acclaim that led to the sales of 1.5 million units that doubled in the year 2017 with figures going up from 1.8 percent to 2.8 percent (Poushter, 2016).

PEST Analysis 


Political

· Liberal capitalist democracy

· Government influence on the tax policies and the trading agreements in Australia

Economic

· Largest capitalist economy dominated by service sector

· Economic growth determined by agricultural and mining sector.

Social

· Diverse people residing in a young society

· Higher level of education 

Technological

· They include technological aspects like automation, R&D activity, technology incentives and rate of the technological change.

· Technological shifts influences quality and cost and leads to innovation.

Figure 3: Table Representing the PEST Analysis

Source: (Gamble, Thompson & Peteraf, 2013)

Australia received the highest ranks in terms of the political stability. The country has a federal parliamentary democracy based on democratic values like religious tolerance and the freedom of association and speech (James et al., 2013). Thus, the strength and stability of the open government with an ideal tax system and competitive cost of the business provides an ideal platform for the mobile industry to flourish. The Australian economy is the largest mixed market economy across the world a GDP close to AUD$1.69 trillion. It ranks second in term of the wealth per person and total wealth of Australia stood at AUD$8.9 million in 2016 (Plumb, Kent & Bishop, 2013).

The mobile industry therefore has the scope for constant economic growth under a stable and strong financial system. Moreover, the country also offers an open market with minimum amount of restrictions. In terms of the social factors, Australia represents a multi faith and multicultural society of mutual respect and inclusion. It is found that there are 26.1 percent Anglicon, 26 percent Roman Catholic and 24.3 percent other Christian, 11 percent non-Christian and 12.6 percent representing others (Bhatia, 2014). English acts as the key language of Australia. These factors act as a boost for the growth of the mobile industry in Australia. The country contributes immensely towards technological innovations with over $30 billion gross expenditure.  Australia also has funding programs and innumerable number of government grants that enables businesses within the mobile industry in commercializing and developing their Internet Protocol (IP). Some of these include Innovation Investment Fund (IIF), grant for the development of export market and tax incentive for the research and development.

Competitor Analysis 

The prime directive of Google Pixel lay in shifting the focus of the people from an iPhone to an Android. Google phones were available in two models, Pixel and Pixel XL. Both the iPhone and Google Pixel had great looks with special features that drew the attention of the people thereby forcing them to take notice. Therefore, a comparative analysis between the iPhone and the Google Pixel is drawn based on certain criterion that includes price, color, screen, resolution, camera, Bluetooth, finger sensor, water resistance and Random Access Memory (RAM).  

Characteristics

Google Pixel

Apple iPhone

Price

$650

$650

Color

Silver, Black and Blue

Black, Jet Black, Silver, Rose Gold and Gold  

Screen

5 Inch Active-matrix Organic Light-emitting Diode (AMOLED)

4.7 Inch backlit screen with Retina HD display

Resolution

1080 x 1920 pixels (441 ppi)

1334 x 750 pixels (326 ppi)

Camera

8 Mega pixel (MP) front and 12.3 MP rear

7 Megan Pixel (MP) front and  12 MP rear

Bluetooth

Version 4.2

Version 4.2

Battery

2770 mAh

1960 mAh

Finger Sensor

 Available

Available

Water Resistance

IP53 rated

IP67 rated

RAM

4 GB

2 GB

Figure 4:  Competitive Analysis of Google Pixel and Apple iPhone

Source: (Gibbs, 2016)

In terms of performance, Google Pixel is smooth and fast due to the optimization of its impressive software that is also the strength of iPhone. This puts both the brands on an even playing ground in terms of the usability, feel and performance. Google Pixel comes with an internal storage of 32 GB or 128 GB with a slot for MicroSD. On this note, iPhone 7 adds 256 GB. For consumers with a requirement of mass storage, the Apple phone acts as an advantage. As far as design its concerned, Google Pixel cannot match the class of iPhone that not only has a premium build and in hand comfort but also has a lighter body and is available in a wide range of colors. However, in terms of battery and audio capacity, Google Pixel stands out as a winner with 1960mAh battery capacity, faster charging and a socket for headphone. Google Pixel is also a winner in terms of display as it has 5-inch AMOLED panel, 1920 x 1080-pixel resolution and 2.5 D protective gorilla glass that provides exceptional view angle without any decrease in brightness. When compared in terms of external camera, camera testers provided a rating of 89 to Google and 86 to Apple phones thereby resulting in draw. Nevertheless, Apple stands apart in terms of durability since iPhone meets IP67 standards that makes it resistant to dust, water and splash compared to Pixel that follows the basic IP 53 standards. The choice of software brings both the brands at the level playing field with Pixel using the latest version of operating system (OS), Android 7.1 and iPhone using the latest iOS 10. The feature of price and availability makes iPhone stand out as a brand compared to Pixel due to wider carrier options and availability. Therefore, it is claimed that Google Pixel competes against a market leader.

Segmentation Analysis

Major Market Segment 

Google represented a brand that aimed at attracting a larger audience towards its products. The primary brand that led to the creation of hype has been the Smartphone series. The company launched Google Pixel in October 2017. This Smartphone series had various functions along with the enhanced features like better performance, design, storage, camera quality and durability. Google segmented the target market based on the demography and the behaviour of the consumers.

Customer Market Segment based on Demography 

Demographic segmentation refers to the market segmentation based on the audience characteristics that includes age, ethnicity, gender, race, religion, income, education, occupations and the marital status (Hamka et al., 2014). This type of segmentation has easier implementation and is quite useful. Google classifies the customers into two different segments. The first segment represents the customers who belongs to higher income groups and will remain loyal to the brand. This segment of the customers prefers the company and will therefore prefer the brand offered by the company. Moreover, they remain aware of the features of the product offered and are always ready for paying a higher price. The other segment of the classification targets consumers with middle and the higher-class income since they remain in a position of purchasing the new product as soon as they are launched in the market. The number of such customers is higher and they prefer in purchasing products that gives higher quality. Thus, this type of segmentation is effective when companies like Google aims at targeting the multiple segments at a single go.

Customer Market Segment based on Behaviour

Behavioural segmentation refers to the division of the consumers in groups based on the attributes of loyalty, usage, knowledge, awareness, purchase patterns and locations (Ailawadi et al., 2014). This type of segmentation allows marketers like Google in delivering relevant messages that resonates with the target market. Thus, this segment of customers depends on the orientation of the social acceptance. The customers belonging to this group are mostly status and style conscious. It is obvious that the products offered by Google with apparently be expensive that cannot be afforded by the people belonging to the lower income groups. Therefore, people with a higher disposable income can purchase Google Pixel thereby highlighting it as a status symbol. These consumers also believe that their purchasing attitudes will segregate them amongst the others and enhance their confidence.

Primary and Secondary Market 

Google divided its market into primary and secondary sections for targeting the customers. The primary market represented people having affinity for the latest techniques and always mostly prefers branded products (Berry & Schleser, 2014). They are even termed as the premium target market. The secondary target market represents the youth who prefers purchasing and using the latest gadgets as a mark of fashion and style. Nevertheless, both the segments can include customers with middle or higher income who possess an interest in the latest techniques.

Level of Involvement and its Relation to Decision Making Process and Implications 

According to market segmentation, the primary target market of Google represents those remaining loyal to the brand or prefers purchasing branded products. In addition, the customer belonging to this segment prefers high-end features in their purchased products. This affects the decision of the company. Here, there is also an enhanced involvement of the consumers. In these situations, an organization needs to have more focus towards implementing better features compared to its competitive counterparts (Bloomberg, 2014). At the same time, it is also vital for the organization to be not only creative but also innovative thereby resulting in thereby resulting in newer products. This objective will enable the research and development team of Google in conducting a market study for collecting more information based on the needs and demands of the customer. This is a necessary for the company as it helps it in developing a base for the company for making a decision about the launching of newer series of phones according to the client needs.  However, by focusing on the customer demand and need Google can focus more on the attainment of larger customer base. Further, it also results helps in providing better outcomes by enhancing the number of loyal customers.

Perpetual Map 

Figure 5: Positioning Map of Google Pixel

Source: (Porter & Heppelmann, 2015)

The positioning map of Google Pixel shows the company’s presence in the higher price and the higher quality market. The figure also shows the Samsung Galaxy, Windows phone and Apple iPhone as the competitors of Google Pixel. This portrays that the firm operates within a competitive environment since the rival firms remain positioned at similar position. Google Pixel focused on the primary segment that represents consumers who prefers branded items with high-end features regardless of the price that made the company lay enhanced focus on quality and innovation. This resulted in positioning the firm a higher level compared the rival firms.

Conclusion:

The report ends by throwing a light on the market segmentation of Google Pixel and the strategy of decision making of the company. The report also provides an insight into how Google focused on the customers who are not only brand conscious but at the same time quality conscious. One can also find, how based on the cited venture, Google launches its products based on the customer demands. The report also portrays how the company focused on quality maintenance and delivery of the enhanced features. This strategy helped the company in driving higher number of customers.

References: 

acma.gov.au. (2016). Retrieved from https://www.acma.gov.au/theACMA/demand-for-digital-connectivity-at-all-time-high

Ailawadi, K. L., Neslin, S. A., Luan, Y. J., & Taylor, G. A. (2014). Does retailer CSR enhance behavioral loyalty? A case for benefit segmentation. International Journal of Research in Marketing, 31(2), 156-167.

Berry, M., & Schleser, M. (Eds.). (2014). Mobile media making in an age of smartphones. Springer.

Bhatia, V.K., 2014. Analysing genre: Language use in professional settings. Routledge.

Biggs, T. (2018). Google opens doors of new Melbourne office, but Sydney to remain HQ. [online] Available at: https://www.smh.com.au/business/companies/google-opens-doors-of-new-melbourne-office-but-sydney-to-remain-hq-20180705-p4zpoq.html [Accessed 17 Aug. 2018].

Bloomberg, J. (2014). Google's Three-Pronged Enterprise Strategy. Retrieved from https://www.forbes.com/sites/jasonbloomberg/2014/12/31/googles-three-pronged-enterprise-strategy/#41c8ad52487c

Cecere, G., Corrocher, N., & Battaglia, R. D. (2015). Innovation and competition in the smartphone industry: Is there a dominant design?. Telecommunications Policy, 39(3-4), 162-175.

consumerreports.org. (2018). Retrieved from https://www.consumerreports.org/products/smart-phone/google-pixel-387772/overview/

deloitte.com. (2016). Mobile Consumer Survey 2016 Snapshot – The Australian Cut. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/au/Documents/technology-media-telecommunications/deloitte-au-tmt-mobile-consumer-survey-2016-smartphone-091116.pdf

deloitte.com. (2018). Retrieved from https://www2.deloitte.com/au/mobile-consumer-survey

Gamble, J. E., Thompson, A. A., & Peteraf, M. A. (2013). Essentials of strategic management: The quest for competitive advantage. McGraw-Hill/Irwin.

Gibbs, S. (2016). Pixel is a direct challenge to Apple – and a referendum on Google. Retrieved from https://www.theguardian.com/technology/2016/oct/05/google-pixel-phone-market-apple-iphone

Hamka, F., Bouwman, H., De Reuver, M. & Kroesen, M. (2014). Mobile customer segmentation based on smartphone measurement. Telematics and Informatics, 31(2), pp.220-227.

James, J. J., Sheley, R. L., Erickson, T., Rollins, K. S., Taylor, M. H., & Dixon, K. W. (2013). A systems approach to restoring degraded drylands. Journal of Applied Ecology, 50(3), 730-739.

Plumb, M., Kent, C & Bishop, J., (2013). Implications for the Australian economy of strong growth in Asia. Sydney: Reserve Bank of Australia.

Porter, M. E., & Heppelmann, J. E. (2015). How smart, connected products are transforming companies. Harvard Business Review, 93(10), 96-114.

Poushter, J. (2016). Smartphone ownership and internet usage continues to climb in emerging economies. Pew Research Center, 22, 1-44.

smh.com.au. (2017). Kids' smartphone usage rampant, says study. Retrieved from https://www.smh.com.au/technology/kids-smartphone-usage-rampant-says-study-20150316-1m0nti.html

statista.com. (2018). Retrieved from https://www.statista.com/statistics/467753/forecast-of-smartphone-users-in-australia/

Sulleyman, A. (2017). Everything you need to know before parting with your money. [online] Available at: https://www.independent.co.uk/life-style/gadgets-and-tech/features/pixel-2-xl-should-i-buy-problems-best-features-worst-camera-google-headphone-jack-adapter-a8004936.html [Accessed 17 Aug. 2018]

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