Home » The Case Of The iPhone – How Sustained Growth Comes From A Broad Spectrum Of Category Buyers

12 December, 2022

The Case Of The iPhone – How Sustained Growth Comes From A Broad Spectrum Of Category Buyers

Professor John Dawes (lead image) is an associate director at Adelaide’s Ehrenberg-Bass Institute for Marketing Science. In this guest post, the goodly Professor takes a look at the phenomenal sales of Apple’s iPhone and says that sales growth can come from across the spectrum of demographics…

Marketers have traditionally been told that brand success comes from identifying a carefully selected market segment, then crafting a strategy to appeal to that segment. Then along came the book How Brands Grow, with evidence that challenged that theory. It showed that competing brands share their buyers with other brands – which makes it difficult to imagine they can appeal to different segments. Moreover, How Brands Grow showed that brand growth comes from attracting more buyers ‘across the board,’ rather than from a narrow segment. This article shows how sustained growth occurs in just the way How Brands Grow outlined.

Our growth example is the iPhone – a brand that grew strongly in the UK over a decade. Using YouGov data, we split out its growth over time across different demographic groups. We created groups based on age (young, medium, older), gender (female, male) and income (low, medium, high) to make 18 distinct population groups ranging from young, female, low income to old, male, high income and every combination in between. We then extracted the proportion of each group that said they owned an iPhone, over the years 2013 to 2022. The results are shown in the graph below. Overall, we see that the iPhone increased its ownership among almost every group, in fact to 17 of the 18. On one group, namely young, male, high income, ownership declined for the iPhone by a couple of points from 2013 to 2015 then stayed stable.

Another useful point that we noted is that the iPhone in 2013 had quite low ownership among two particular groups: older males on low incomes, and older females on low incomes. One might think, well, that makes sense – these are hardly the right target for the iPhone, since it is expensive. But marketing isn’t just about going after easy targets! The iPhone grew in both these groups by a tremendous amount, going from seven per cent ownership in each group in 2013, to 19 per cent among older low-income males and 26 per cent among older low-income females by 2022. This is an amazing growth story, defying the conventional strictures of tight segmentation and targeting.

The moral of the story is that marketers would do well to consider their ‘target market’ more broadly than might be the case presently. Growth can come from across the spectrum of demographics – if people buy the category, they can buy our brand – if we make it easy to think of, and easily available. In turn this makes the rationale clear for mass-reach advertising, coupled with broad physical availability.

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Ehrenberg-Bass Institute for Marketing Science Professor John Dawes