Marketing Strategies of Apple for iPhone
The marketing strategy behind the iPod and iPhone is ease of use. Through its excellent advertising, company has been able to create massive attention between people about iPhone which helps them to attract large number of customers to purchase from the first day of its launch and 1.4 million units within 90 days. In December 2007, 3.3 millions of iPhones were already sold out in the US, but only 2 millions of those iPhones sold came from an AT&T contract. Apple chose AT&T in the US, O2 in the UK, Turkcell in the Turkey, T-Mobile in the Germany and Orange in the France.
MARKETING MIX OF APPLE IPHONE
This amazing product a mobile phone, wide screen iPod, and a breakthrough internet device into one small, lightweight, hand held device with the best e-mail ever on a mobile phone, full screen with browsing, multi touch screen, and applications. It does look cool and is innovative. After many rumors and speculations which started as early as in 2006, the first generation iPhone was launched in the US on June 29, 2007. The second generation iPhone, the iPhone 3G, has been launched on July 11, 2008.
AT&T is the exclusive carrier for the iPhone. Phones are sold in AT&T stores, Apple retail stores, and Apple online store. Typically carriers make all the decisions on phone prices, how phones are marketed, and which services to offer. This time Apple defined the 16 services that the iPhone has and of course the sign up method on iTunes instead of through AT&T.
Typically Apple announces new products very close to the time when the product is available for sale. Not this time the iPhone hype has been buzzing for about 6 months when the iPhone announcement was made at Mac World. Apple had kept advertising to a minimum since the announcement in January. According to Apple Insider, TB WA is the new agency of record handling the.
Published: 23rd March, 2015 Last Edited: 23rd March, 2015
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Apple is engaged in design, development and marketing of personal computers (PCs), servers, communication devices, network solutions, portable digital music players, and related accessories, software and services. The company's portfolio of offerings comprises of Mac computing systems, iPods line of portable digital music and video players, iPhone handsets, iPad portable multimedia and computing devices and servers. The company's software applications include Mac OS, iLife, iWork and internet applications such as Safari and QuickTime among others. The company also offers a variety of related software, services, peripherals and networking solutions. The company provides third-party music, audio books, music videos, short films, and television shows. The company sells its products worldwide through its online stores, retail stores, direct sales force, and third party wholesalers and resellers.
The company manages its business primarily on the basis of geographic segments. It operates through five operating segments: the Americas, Europe, Japan, retail and other segments. Apple's retail segment includes activities of Apple-owned and operated retail stores in the US and in international markets. At the end of FY2009, the company operated 273 stores in the US and internationally. In each reportable geographic operating segment, Apple provides the same kind of hardware and software products and services. (<www.datamonitor.org>)
Apple's products can be grouped under different product lines which are as follows: iPhone and related products and services; portables; iPod; desktops; other music related products and services; software, service and others; and peripherals and other hardware. (<www.apple.com>) (O' Grady 2009, pp. 1-17)Question 1 - External Analysis Apple's external environment analysis by using Porter's Five Forces Model: NEW ENTRANTS
Threat of New Entrants
Bargaining power of suppliers
Existing rivalry in the industry
Bargaining power of buyers
Substitute products & servicesSUBSTITUTES
(Stahl & Grigsby 1997)Existing competition
Apple's existing rivalry includes Microsoft Windows OS and media player for playing music and video, Competition with Mac OS X (Linux), Alternative sources of computer hardware from companies like Dell, HP, and Lenovo. Latest MP3 players i.e. Creative, Samsung, Philips and so on, Online music stores parallel to iTunes stores - Napster (Prasad 2009, pp. 39-41)Potential entrants
In current market environment Apple facing threat from potential market entrants in segment of Audio & Video streaming with v-cast (Verizon), online services provider on demand similar to iTunes, New players with advanced technology for example The "next google"Suppliers and bargaining power
Apple's operations mostly affected by suppliers and their bargaining power, for example Suppliers of computers and memory i.e. Motorola, IBM, and Intel, strategic partner/supplier of Mac (Microsoft), suppliers of TV and Movies like Disney, ABX, Fox, Sony etc. different Sources of music like BMG, Sony, Warner, Universal.(<www.apple.com>)Buyers and bargaining power
This most crucial part of Apple's external environment where buyers are king and they are not paying for music as they share music using peer-to-peer networks (Ares, LimeWire), force from retailers for low prices or good conditions (Distributors) and buyers/business/consumers may decrease expenses on computers if they fear economic slowdown.Substitute products and services
In highly competitive and imitate market Apple always affected by substitutes available in market likes satellite radio for music (XM, Sirius), music and media, entertainment media (XBOX, PS2), different ways to get music (Music CDs, DVDs), alternative video sources like Cable, Broadcast, Theatres. (<www.scribd.com>) (<www.slideshare.net>)
So from above analysis we can say that Apple is working in high risk industry where chances of imitation and substitutes are very high to compete with and that is why computer equipment and distribution of entertainment is a high threat industry. Apple should carry on applying product differentiation (i.e. the look and simplicity of iPod) and economies of scope (i.e. offering ABC television shows on iTunes) to maintain their Sustainable Competitive Advantage in this business. (Platt 2010, p. 49-55)Question 2 - Internal Analysis Apple's core resources and competencies: 2.1 Core resources and competencies:
Resources acquired as real options can be especially for firms competing in highly uncertain environment. Commonly, capabilities are part of organizational functions such as marketing, manufacturing, finance, and so forth. Apple Inc. is thought to have capability in research and development function. People, work teams, equipment and financial resources are some of the resources that Apple integrates to complete various research and development task. (Ireland, Hoskisson & Hitt 2009, pp. 68-72)
Product innovation is a core competence and appears to be distinctive competence for Apple. It has been the leader of the Consumer Electronics industry and has retained different image in PC manufacturing and Music too. The Core competencies accountable behind the achievement are mostly the "Distinctive resources" and "Differentiation strategy". (Ireland, Hoskisson & Hitt 2009, pp. 70-75) Apple has earned a strong reputation for beauty, simplicity and quality over the years, all part of its mission. From award-winning design to meticulously crafted hardware, Apple focuses on entire user experience and is rewarded with strong sales and fierce loyalty as a result. (O'Grady 2009, p. 42)
Apples underlying philosophy is to design products that are easy-to-use and beautifully designed. Simplicity is a mantra. Most of Apple's products are intuitively designed so that you don't need to read a user manual to figure them out. Apple has a punch line of "Think Different" inspiration and it believes in "Value Creation". Apple's core resources and competences are: (Afuah 2009, pp. 78-99)
Apple has been able to rule a top in market and gain beyond average returns due to its innovation and differentiation of technically advanced products. (<http://www.nzherald.co.nz/apple-inc/news/>)2.2 Value Chain Analysis
The value chain is a basic tool for diagnosing competitive advantage and finding ways to create and sustain it. (Ireland, Hoskisson & Hitt 2009)Technology development
Technological development is the real foundation of Apple's competence. The information and novelty in technology in Apple's products made them to influence its expertise in iPod, iPhone, iTunes and iWorks suite of products.
Providing Products to Co.
New Product idea
It is really the great benefit for an organization to be independently producing from zero to complete product with application and peripherals. Apple develops all its product with innovative ideas and delivered best product to the end-user via suppliers. (<www.docstoc.com>)Manufacturing
The different combinations of Apple-made hardware and software became the root for its own invention process. Apple achieved unmatched results with stylish design, and redefined instinctive operation with most of the products. (<www.apple.com>)Distribution
Apple was using small outlets to deal with its customers. In 1997, Steve Job redesigns the distribution system by removing thousand of small outlets and doing National level expansion. By 2001, the online store contributed nearly 40% of Apple's total sales. In 2001, Apple opened its first retail store in Virginia, and now company owns more than 273 stores worldwide. (<www.datamonitor.org>)Marketing and Advertising
Unique marketing campaigns have been a strategy of Apple to get customers and to increase the knowledge among them. Television commercials, Print advertisement, Publicity, Road posters have been thriving ways of making products available to market.Customer Service
Providing excellent customer services is Apple's philosophy; the customer faithfulness is a huge achievement for any organization. Such a great relationship with its customers goes to Apple's customer service and the types of product portfolio which satisfies the need of today's classy people.Legal Service
Market climate is changing continuously due to innovation and it is anticipated that the drive to develop product and service offerings will subject Apple to patent and copyright infringement claims.2.3 Internal analysis: Strengths & Weaknesses Question 3 - Strategic Choices Apple's Strategic Choices & its implications 3.1 Product Differentiation - Generic Choice
Innovation is Apple's pride. When reviewing the history of Apple, it is clear that this attitude permeated the company during its peaks of success. Apple had an amazing impact on technology, society, and the world and it continues to innovate to this day. Using the personal computers as foundation, Apple has turned technology into as essential tool of our daily lives. Apple is an innovative specialist. From the Apple | and || to the mouse, GUI and LaserWriter, Apple has a pedigree of developing new technologies and adapting existing technologies for the masses. In late 1985 Apple released the Macintosh Office, featuring and the AppleTalk networking technology in an attempt to make the Mac more attractive to small business. (O'Grady 2009, p. 45) (<http://www.macintoshos.com>) (Prasad 2009, pp. 39-41)
In 1991 Apple released its first serious notebook computer, the Power Book 100. Two other PowerBooks were launched simultaneously with the PB100. The PowerBook 140 and the 170 and both were entirely designed by Apple. In 1991 QuickTime was the beginning of video playback on computers and has become a standard feature on computers, Personal Digital Assistants (PDAs), and smart phones. Apple released QuickTime 1.0 in December 1991 for System Software 6. After that, The Newton MessagePad, announced in August 1993, was a completely new product for Apple and represented a brave step into the unfamiliar territory of PDAs. (O'Grady 2009, pp. 46-47) (<www.apple.com>)
Apple is revolutionary company in many ways, throughout the history; it always comes up with innovative ideas and product differentiation. The iMac and iBook allowed customers to get online within 15 minutes of opening the box and set a new standard for Internet access that is still the envy of the industry (<http://www.everymac.com>). Introducing digital media management like iTunes, iPhoto and iMovie spearheaded the digital media revolution and made it easy to manage all of our digital content. Introduction of digital media playback like iPod, iTunes and iPhone set the standard for listening to music, watching television and movies, and making phone calls too. Apple single handedly rescued the music industry from the perils of peer-to-peer file sharing networks. Apple popularized technology, like FireWire for high-speed data access and Wi-Fi for wireless Internet access, making data move faster and without the clutter of wires. IPhone revolutionized mobile phones and iChat AV made it easy to videoconference with family and colleagues across the globe. (O'Grady 2009, pp. xii-xiii) (<www.apple-history.com>) (Linzmayer 2004, pp. 289-295)3.2 Strategic Alliances - Specific Choice
There are many reasons for Apple's success. First, Apple's premium price or product differentiation and innovation strategy as well as their retail strategy i.e. online stores and retail stores have demonstrated to be vital to Apple's past and will continue to play a significant role in Apple's future success. Most of the consumer electronics and entertainment companies in the market find Apple very innovative and has attracted the attention for successful strategic alliances with them. After Steve Jobs returned to Apple, an agreement was made with Microsoft, and was subsequently followed the appearance of MS Office on Mac PCs. In 2002 Apple, Ericsson and Sun Microsystems formed an alliance to create a standard format for delivering multimedia content to wireless devices, such as smart phones and PDAs. The alliance combined Apple's QuickTime video creation software, Sun's content distribution software and hardware, and Ericsson's mobile infrastructure and services expertise. Apple has successfully worked with HP in 2004, to deliver digital music player and iTunes to HP customers, (<www.apple.com>). Later 2005 the company collaborated with Acura, Audi, Honda and Volkswagen to deliver iPod with their car stereos for 2006 model lines. In the same year, Ford, General Motors, and Mazda teamed up with Apple to integrate iPod across their brand and models. In 2006 Apple teamed up with Air France, Continental, Delta, Emirates, KLM and United Airlines to integrate iPod with in-flight entertainment systems. Apple also introduced mobile phone with iTunes in collaboration with Motorola and Cingular Wireless. Apart from this Apple also worked with AT & T, which gave an opportunity to Apple to improve their iPhone's technology. Apple also has strategic ties up with You Tube and Google to provide their iPhone users' latest technology "search, mapping and video features". These strategic alliances allow Apple to further differentiate their products and add values to their users. (Ireland, Hoskisson & Hitt 2009, pp. 173-177) (<www.datamonitor.org>) (Thakur, Burton & Srivastava 2007, p. 95)3.3 Implications for organization's existing choices
Still there have been several implications as result of Apple's choosing to use a product differentiation strategy. First, Apple's confine market share because of Apple's selection of premium price or product differentiation strategy. Some customer do not realize or understand the value that Apples' attempts for create their clientele. Price conscious customers are uncertain to buy Apple's products. Likewise, customers looking for highly customized computers may not prefer Apple.
Secondly, Apple is highly dependent on his CEO, Steve Jobs. Jobs have been a guiding force and excellent leader at Apple, acting as Apple's rescuer when the company saw their worst financial figures in 2002. Steve Jobs were accountable for Apple's expansion, growth, development and the launch of one of Apple's most stylish and revenue generated products, the iPod. There is a doubt as if Apple could maintain to run as they do currently in the absence of Steve Jobs. (Thore 1995, pp. 20-22)Question 4 Recommendations for Apple's future strategy
Apple must continue a constant commitment to licensing, drive for economies of scope between media and computers, and become a learning group.
Apple should go for innovative way of strategic alliances. An equity strategic alliance may provide an opportunity to Apple to acquire extra competencies. The most effective way for a company like Apple to realize this would be in the form of a joint venture.
Apple should continue adding the new media-centric product lines. Same time Apple should concentrate on its computers too. In the future, Apple will require continuing innovation to raise the boundaries of both media and computers.
Steve Jobs is continual aspect of both competitive advantage and risk. He is pioneer behind Apple's success and has a large equity interest in Apple and Disney. If he were to divest his leadership position, the response of both the market and consumers would be vague. Apple must find a way to learn as an organization.
Apple has having low market share at the moment and should consider expanding it in future. Though, with current Microsoft user base, it is going to be difficult. Apple should concentrate on its core competencies to be successful and try to find new emerging markets like India, China etc.
Steve Jobs will not be there always with Apple. He has done great stuff for the company; he has left Apple in uncertain situation. What will be Apple's future when he leaves company? Apple should not dependable on Steve Jobs and should distribute the responsibilities among the individuals within the company.
Apple's future strategies should be innovation, lower price and strategic alliance. The reasons behind these are:Innovation (Product differentiation)
Apple leverages its brand image to differentiate its product offering and drive sales. Apple has a strong focus on research and development and continual investment in R&D is critical for the development and enhancement of innovative products and technologies. Apple leverages its unique ability to design and develop its own operating system, hardware, application software, and services to provide its customers new products and solutions with superior ease-of-use, seamless integration, and innovative industrial design. As Apple known for its innovation and stylish products in market they should continue with this strategy of product differentiation and innovation to compete in this industry.Lower Price
Consumer electronics and entertainment industry is nearly reaching a maturity stage in the market with strong rivalry but it is still growing. The reason for this extreme competition is that there are companies in market which are coming up with low cost strategies and low pricing to compete with the existing manufacturers. Companies like Acer and HP acquired Compaq are already competing with notebooks on the basis of cost. Also there are many websites which gives access to downloading and listening to music online, which becomes a high threat for product like iTunes. So Apple must do something to lower their pricing to beat their competitor.Strategic Alliances
Apple is enjoying their strategic alliances with AT&T, You Tube, and Google, these partnerships allows Apple to differentiate their products and add value to their users. Apple must be proactive in their future strategic alliance and must get right companies to work together to be successful in changing world and time. (Thore 1995, pp. 20-22)Retail Strategy
Apple is penetrating in different market via online store and retail stores. They must aggressively promote this to the potential customers, as it will save the cost of supply chain management, ultimately results in low cost products that will help Apple to reduce their prices further to compete in the market more efficiently. (http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10694905)
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This paper seeks to develop a marketing plan for Apple Inc. new product, iPad2 that will address the needs of a new strategic business unit. Strategic business unit in this case, is defined as a business unit within the overall corporate identity, which is distinguishable from other businesses because it serves a defined external market, where management can conduct strategic planning in relation to products and markets (London South East 2011). It incorporates the whole company or it may be a smaller part of the company that has been established to carry out a certain task. In relation to that, this paper will look at Apple Inc.; provide an internal and external analysis of the company, its marketing objectives, marketing plan and the marketing budget for its newly introduced product, iPad2. The paper seeks to assess whether the following learning outcomes have been attained:
Previously referred to as Apple Computer, Inc. Apple Inc. is a multinational corporation based in America that designs and sells computer software, personal computers and consumer electronics. Some of its famous hardware products include the iPod, the iPhone, the Macintosh line of computers and the iPad. The company software includes the iWork suite of productive software, Mac OS X operating system, Logic studio and Aperture. Apple Inc. was established in 1976, and has grown to be a global leader in the technology and telecommunications industry. Its annual revenues are estimated at $60 billion, which is attributed to the company’s distinctive marketing and advertising campaigns and its well-established brand name (Erick 2009). The company’s recent innovation is the iPad2.
Apple has a vision to become a global leader in the consumer electronics industry. It is the CEO’s dream that, before 2020, every desk will have Apple computer.
The company has a mission to continue producing revolutionary and innovative products to its consumers such as iPhone, iPads and iPod. The company also seeks to take part in Corporate Social Responsibility (CSR) activities such as enhancing environmental conservation.
External Analysis: PESTLE Analysis
A PESTLE analysis is simply a framework that classifies environmental influences as political, economical, social, technological, legal and environmental. The analysis scrutinizes the effects of these factors and their relationship with each other on an industry. The application of PESTLE analysis is useful for business and marketing planning, strategic planning, research reports and product development (David 2010). PESTLE analysis also makes certain that the performance of a company is associated positively with the forces of modifications that are influencing the business environment. Besides, PESTLE is also efficient when an organization chooses to penetrate its business operations into new states and new markets.
Apple is a company that designs, develops and sells various products and services lines. The company markets its products to businesses, education, consumer innovative professionals and government customers (Barnett 2008). Apple has diversified in selling numerous products and the way it conducts business. This diversity is what led to its crush during John Scully time. Nations have diverse legislations, which in some way may influence the way businesses are carried out. These legislations may restrict or give an opportunity to such companies (David 2010). The company is faced with various political/legal factors including:
Since 2005, the company has opened approximately 100 retail stores. These stores, though are potentially beneficial, have negative impacts on the resellers of business, and some may be terminated. Taking into account that Apple’s resellers still account for over 50 percent of company’s domestic sales, it is facing the risk of cannibalization and may suffer deeply. Other economic factor affecting Apple include that the government has ensured a stable macroeconomic environment for the industry; this general stability, stable currencies, low interest rates, and international competitiveness form a basis for the growth of the company. However, the company can be affected adequately by a depressed economy, making it change its marketing strategies which may at times be unfavourable to its success.
This encapsulates tastes, demands, and varies in fashion and disposable income. Social cultural trends begin and end with the youth or the teenagers (Kotler & Kevin 2006). Currently, the purchasing power of the teenagers has increased at a high pace. These people are also seen to be brand conscious as they believe that certain brands will enable them to fit in a certain social grouping. The target generation of the Company is, however, a serious threat, as we know the youth changes their tastes and preferences most often. Additionally, this group of people depends on their little savings, so as to buy these brands. As a result, the company needs to change its promotional and pricing strategies frequently. Additionally, educational has resulted to be a primordial matter for the new generation, and this is a significant factor for Apples business. The increased computer literacy and its application in almost all fields, globally, is also a potent source of opportunity for the company.
Technological innovation is seen as one of the key factors leading to the growth and success of the Apple company. Currently, technology is developing at a high pace, and individual appreciate new advances in their systems. Increased demand for more and new technologies in various professions and schools has increased the company’s opportunities. The constant change in technology in the twenty first century has affected almost all industries and has resulted in a shortened product life cycle. Companies like Apple should take into account and keep up to date with the emerging new technological advances. This will ensure that Apple remains competitive in the market and, at the same, time increase the market share. A company should combine new and existing technologies in order to respond to the increasing technological development.
Some businesses may engage in environmental unfriendly practices in order to maximize their profits without considering the welfare of the people. In this case, Apple Inc has managed to be environmentally friendly, and the company does not engage in unethical practices, to which consumers have huge offence. In addition, the company has established measures for recycling to ensure that it abides with environmental regulations thus remaining environmental friendly. The company has been extremely careful concerning this issue while making its brands exceedingly popular and successful, globally.
Apple is considered as one of the most successful companies around the globe. One of the success factors behind Apple Inc is its strong brand name. The company can make use of this advantage to market its iPad2. Apple also focuses on quality production, a fact that has made the company attain brand loyalty, and thus the company can acquire new customers and retain the existing ones. Apple can also benefit from the economies of scale since it has a well-established relationship with its supplies and retailers. Another point of strength is that the company’s iPad2 is simple and can be used with ease and, therefore, attract more customers to purchase it. Apple has also established continual investment in research and development, in order to facilitate further discovery of its potential markets and the innovation of improved products and technologies. There are also enough financial resources that can be directed to the operation of iPad2.
Apple’s products are highly priced and, therefore cannot suit the target market. There is also the management problem since there is no successor to take over the leadership of the company. For instance, the recent news about the health status of the current company CEO led to a 3 per cent fall in the company’s share prices. This may consequently affect the sale of iPad2. The simplicity and ease of Apples iPad2 may result in image problems since the one of the company’s earlier innovations, Macintosh, is regarded by some businesses as a toy. The company acknowledges that a significant proportion of its profits relies on the global economy. Therefore, economic recession can have a significant negative impact to the company. Another issue is that fluctuations in the foreign currencies make difficult for the company to predict iPad2 profits in the foreign markets.
Apple is expected to develop a new mobile platform for advertising its newly introduced product, the iPad2. This will enable the company increase its revenues by approximately 20 per cent. The company can also make use of its strong brand name, in order to target other markets and break into other markets that have never been reached. The company can also tighten its relationship with other companies with an aim of developing joint ventures that will enable the company to thrive. Considering the rate of online marketing increase, the company can use this opportunity to make online sale of some of its newly introduced products.
Apple Inc. faces stiff competition from other companies such as Dell, Sony and Toshiba. Microsoft, which is one of its competitors, has launched Vista, Windows 7 that is currently gaining a larger market share compared to Apple’s newly launched iPad2 (Helft 2011). In addition, when it comes to pricing, Apple’s iPad2 is considered to be highly priced compared to the prices for products offered by most of its competitors, such as Dell. Moreover, the world of technology is rapidly growing which, therefore, means that the company has to remain innovative in order to remain effective in the market. This is based on the fact that the global market today is highly driven by innovations, and customers prefer innovative products and latest designs.
The latest Apples’ innovation is the iPad2, which was recently launched. This is an improvement of the original iPad, with major additions such as front and rear cameras, and a dual core processor. The current model is thinner and lighter, compared to the previous model, and contains more storage and RAM.
To realize its vision, Apple Inc. established various marketing objectives that will help the company achieve its major product goal. These objectives include as follows:
Market segmentation is a method of subdividing the homogenous and aggregate market into addressable, aspirations and targeted needs buckets. These buckets are in turn analyzed in terms of psychological, demographic, behavioural and geographical constraints. Through the application of market segmentation strategy, a company can drive complete and unified product measures that are deemed harmonious with customer outreach, messaging and channel strategies for marketing and supporting clients (Kotler & Kevin 2006). Apple Inc. recognizes the diverse needs of their customers across the globe. Therefore, the company will avoid mass marketing strategies and employ target marketing to compete accordingly with other major players and competitors. Ultimately the company sales volume will go up due to increased levels of customers’ loyalty. The following segmentation methods will be used.
This involves subdividing the market in terms of region, metropolitan area, city size, and density. Apple Inc. will divide its customers according to their locations. It is vital to acknowledge that the buying power of customers varies according to their locations (David 2010). For instance, those customers in urban areas have a higher purchasing power than those in rural areas. As a result, product in the rural areas will be sold at cheaper prices in order to enable people in these areas enjoy the company’s high quality and new product iPad2.
Demographic segmentation considers age, gender, life stage, race, marital status, and residence tenure in subdividing the market. It is certain that, in up and coming nations, many young citizens are tending to be wealthier than the older generation. This is due to high levels of literacy in these groups of individuals and availability of employment opportunities (Kotler & Kevin 2006). In addition, the Apple’s product is very favourable, and it is mostly preferred by the young generation. As a result, the company can subdivide its market in terms of age targeting the young adults. For instance, in 2010, youths composed the larger percentage of Apple’s customers globally, as indicated on the table as follows.
As shown above, it is certain that, Apple will target the youths who have technological know-how thus easily use the company’s new product.
The general behaviours of consumers change from one place to another. It is clear that Apple enjoys great levels of brand loyalty, especially in European and American countries, where 3G network is highly used. The company has smart products such as iPhones4 having high levels of internet connection. In due course, many consumers have a preference for the new product as it is very fast, smaller and lighter compared to its predecessor. With the ipad2, one can choose which network to use depending on the model, thus preferring high speed internet networks which will, as a result, lower the costs of internet.
This segmentation method is very significant in the Apple Company. The general habits and life styles of the customers are of importance as far as psychological segmentation is concerned. Like all other markets, products from Apple Inc. will increase during holidays when the disposable income is high. During this time, the company will embark on vigorous advertisement campaigns, as well as employ more sales persons to cater for the increased demand of their products. Further, Apple will give discounts to its customers as one way of boosting sales volumes during these times.
It is certain that many young people are tending to be wealthier than the older generation. This is due to increased literacy levels in these groups of individuals and availability of employment opportunities. In addition, the Apples products are favoured and preferred mostly by the young generation. In 2010, youths composed the larger percentage of apples customers globally. Therefore, it is certain that Apple will target the youths who have technological knowledge thus easily use the company’s products such as iPhone mobile devices, iPod, Macintosh Computers, and the new company’s product, Ipad2, among other major products.
Positioning and Differentiation
Product positioning and product differentiation are essential processes in every company. With the increased international competition in businesses, potential consumers need a good reason to buy a certain product. Such a reason comes from the company’s positioning and differentiation as they explain what sets the company’s products apart. Without this, customers have no reason to buying a certain product, as opposed to that of the competitors (Sharp & Dawes 2001).
Product differentiation is the process of differentiating a company’s products from others, to make products more attractive to a certain target market. The process involves differentiating the product from that of competitors, as well as the company’s own product offerings (Sharp & Dawes 2001). Product positioning, on the other hand, concerns how a company differentiates a certain product. Apple Inc. has positioned itself to the wealthy customers and innovators. This is based on the fact that Apples products are expensive, thus, not affordable by the poor man. Though lowering prices will increase the company’s sales, it is deemed to hurt the brand as the company would not be able to increase such prices in good times (Keller 2009).
Apple Inc has adopted various product positioning and product differentiation strategies for its new product, Ipad2, in order to make it unique, thus attracting the target customers. The product has been differentiated in terms of following categories:
In terms of design and functional features, Ipad2 is smaller, faster, and lighter compared to its predecessor. It weighs 1.33 pounds and measures 7.31 by 9.5 by 0.34 inches. The iPad2 is also 0.16 inch narrower, 0.16 inch thinner and 0.06 inch shorter as compared to the original iPad (Chad 2011). As a result, it is simple to carry with one hand only, and the reduced weight makes the product simpler to hold for a long time. Other product feature includes two cameras on its mobile iOS device, its advanced support for HD and HDTVs video, and customers may choose which network to use as separate models are sold for every network. These features make the product attractive for the young generation, and they are the target market of Apple.
Ipad2 is the latest Apple product to land on the market, and it reinforces the company’s position in the minds of potential customers. Its advertising campaigns emphasizes that the company is improving people’s life, with the highest newest technology, and leads the world. Through the ads, the company is unique from other high-tech firms, for instance, Microsoft. The company retains $499 as entry price, and this makes difficult for its competitors to match. We can thus say that the company is positioning itself as the number one in the business and emphasizes on the brand's repute of constantly being the best.
iPad2 appears like a bigger iPhone with a bigger display. It has a smaller display as compared to its actual physical dimensions and has a thick black border around each case. It also contains fewer features compared to a net book or laptop. iPad can be used to read electronic books, write and receive emails, browse the web, and view photos and movies on a screen that is 30 per cent smaller than the size of a laptop screen. The device is touch screen operated and has a virtual keyboard (Helft 2011).
Effective marketing and sales program calls for a thorough understanding of the target market and the channels used to sell products. In addition, the price of the product should match with the quality of the product. The strategy Apple applies is that not all consumers can be regarded as business professionals, but all those who are regarded as business professionals are consumers. Therefore, a product that targets business professionals has a more limited audience than the one targeting consumers. Apple’s new product, iPad2, is prised at $499, and customers will be charged for the storage and connectivity costs (Helft 2011).
Apple Inc distributes its products through wholesalers, resellers, both national and regional retailers and cataloguers, who distribute products from Apple’s competitors. Furthermore, the company sells its products and even resells some of its used products directly to its customers in most of the major markets. The company also distributes its products through online stores. In order to achieve the outlined marketing objectives, Apple has to ensure availability of its product to the targeted customers. The company has, therefore, invested in certain programs so as to boost reseller sales. For instance, the company has staffed selected reseller stores with the company’s contractors and employees since the company believes in high quality buying service from knowledgeable marketers who can convey the value and quality of company’s product to customers in order to attract and retain the existing customers. The company seeks to attain exclusive direct contacts with its customers, because it believes this is the only efficient approach that can be applied to demonstrate the advantages of the new product to its target customers. Therefore, the company has increased its distribution centres for iPad 2 so that its products are made available at locations where its customers shop.
Launching promotional strategies for the company’s new product will meet the needs of the customers. The consumers will also be able to gain a deeper understanding about this product and the values it comes with it. This will in turn help the company boost its market share, sales and revenues. Ample sensitization of products being offered to the customers will be done through marketing campaigns and advertisements. Print press, such as newspapers, as well as media such as TV and radios, can be used. The company can place large adverts on the newspapers or radio, so as to create more awareness about its new product and how the interested customers can purchase it. This way, additional 15 per cent of the potential customers will be reached. Billboards will also be erected on major roads and road junction, in order to create awareness of the new product further.
Global and e-business
Electronic business (e-business) refers to businesses that are conducted through the internet, or with the use of internet technologies to enhance the profitability and the productivity of a business. In simple terms, such a business can be described as one that is done through a computer. Most thriving companies employ numerous related but diverse models concomitantly.
One of the best strategies Apple can employ to market its iPad 2 products is the online surveying service. This offers a survey design expertise that translates customers’ issues and interests into a well-structured survey instrument (Marc 2009). People are incorporated in the service provision, though the process can be managed through electronic means such as exchange of emails. The survey subjects are then electronically contacted and their answers collected electronically. The survey results are then analyzed and delivered back to the clients over the internet. This will improve customer satisfaction. Apple Inc can also employ other e-business models and strategies such as advertising banner and direct marketing, customer’s services, product sales, content providers and subscription sites among others. Banner and direct marketing are becoming the leading e-business model nowadays (Jim & Rick 1999). Banner advertising is the process of creating visibility on the web. Direct marketing models involve sending complex emails to highly targeted clients. The company can create a database of email addresses by persuading customers to register on a site in exchange for access or information on a certain offer.
Marketing budget will use promotional plans as a basis in calculating the marketing costs of launching the new product. In promoting Ipad2, Apple will use such promotional mediums as print press for instance, newspapers; television; radios; campaigns and advertisements; and networking. Networking involves attending networking functions or events where the company products are introduced. The table below shows various costs that Apple will incur in promotions.
As shown above, it is evident that advertisement and campaigns comprises of the highest costs while networking has the least with total approximate costs of $ten million. In order to realize its goals, the company needs to use efficient marketing strategies which will increase its market shares thus countering the promotion costs.
It is clear that Apple Inc. is a globally respected company in the electronic consumers’ goods. This is due to its strong brand image resulting from high quality and innovative products such as iPod, iPhone, iPad and its new product; Ipad2, among others. Thanks to its success in the international markets in continents like Europe, Asia and Latin America, the company is expected to grow rapidly in other markets, as a result of adequate marketing strategies and the favourable internal and external environments. Apple hopes not only to be the market leader in consumer electronic products, but also the leading company in environmental conservation, in order to improve the living conditions.Buy Marketing Apple Company essay paper online
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