Marketing Strategic Managemnet_apple Inc

8/9/2019 Marketing Strategic Managemnet_apple Inc

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1.0 Introduction


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Apple Computer Inc. was the brainchild of Steve Jobs and Steve Wozniak. In

19! the two men met while workin" for the Internet en"ineerin" or"anization

#ewlett$%ackard. &he' found the' both imparted an enthusiasm toward

computers. In 19( the' transformed their enthusiasm into a venture and

started chip awa' at their first %C) the Apple I. Joint b' *on Wa'ne in 19+)

the or"anization) in particular Apple Computer Inc. was at last established

,-o"erl' !11) p. !1/. &hrou"h decades0 improvement under the initiative of

Steve Jobs) in !11 Apple has surpassed oil bunch 22on to turn into the

world0s most si"nificant or"anization b' business promotion ,"uardian.co.uk

!11/. &oda') as the a standout amon"st the most respected or"anizations

Apple plans and makes i%od and i&unes) Apple portable computer and

desktop machines) the 3S 4 workin" framework) and the pro"ressive i%hone

and i%ad.

Apple Computers Inc. is thou"ht to be one of the pioneers in the machine

business. It achieved distinctive pro"ressions to the business5 these

pro"ressions are still noticeable in the present. &he or"anization0s items were

utilized as a premise b' other machine or"anizations in plannin" the

determinations and ph'sical 6ualities of their item. It likewise serves as a

meter of how items are planned. &he or"anization offers different items for the

distinctive business sector it tar"ets. &he items made b' the or"anization offer

somethin" else.

&he famous brands offered b' the compan' to the world have been 7ac

computers) i%od) i%ad) and now the hot sellin" i%hone. Apart from hardware)

MARKETING STRATEGIC MANAGEMENT | APPLE INC.


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&he market se"ment of the compan' is divided into ; classes. ach class

represents a certain economic standin" of people in the societ'. &he compan'

makes sure that the' cover all the se"ments in the "eneral public the' are

operatin" in. &he compan' has specialized prices for the different market

se"ment) this will ensure that the clients will have lesser doubts about takin" a

look at the compan'8s product and the products that the' can afford.

1.2 Apple Inc. Target Market

&he tar"et market of the compan' involves almost all sectors of the societ'.

&he' want to provide Apple Inc. to 'oun" or old) male or female. &his tar"et

market has a hi"her source of income. &he compan' has different marketin"

strate"ies that can cater to the taste and appeal of such markets. &he

compan' makes sure that its stores and branches are located in the most

profitable places where customers can easil' see the store and the' can be

encoura"ed to visit the store and make a purchase. &he compan' also

makes sure that competition within the tar"eted location the' want to put up

the branch will not be too heav'.

2.0 Targeting Strategy and Positioning Strategy



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&he tar"etin" strate"' of Apple Computers Inc is concentrated on

undifferentiated strate"' wherein the entire market is tar"eted and a simple

marketin" mi2 is used on such market. &he needs of the market are nearl'

similar thus this tar"etin" strate"' is used. &he positionin" strate"' of Apple

computers Inc. is concentrated on comparin" what the' can do to what their

competitors can do. &he information that the' will ac6uire from the

comparison of their capabilities assist them in determinin" the actions the' will

take in competin" with their rivals and knowin" their place in the market.

3.0 Apple Inc. Marketing Mix

7arketin" 7i2 is the mi2ture of four components) called the ;p0s ,%roduct)

%rice) %romotion and %lace/) that all or"anization has the decision of whether

to include) e2clude or to "enerate desire marketin" strate"'. ,%hilip


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mana"ers device a "ood marketin" strate"' where the benefits can be

e2chan"ed between the pillars of marketin") this was later modified b' @ooms

and @itner in 19! ,he added Bmore %8s/ to cater the re6uirements of the

service industr'. i"ure 1.

&he elements of marketin" mi2 are interrelated to each other. &he purpose of

effective implementation and Dud"ment of these marketin" elements is to

achieve marketin" obDectives as set out b' the senior mana"ement. In the

case of Apple) it is "iven in the case stud' that the' use several mediums of

advertisements such as ma"azines) various online medias) posters) in order

to communicate with their identified tar"et market.

i"ure 1. %8s of i%hone ,Adapted b' researcher/.

3.1 Product



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Armstron" and


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i"ure !. i%hone SW3& Anal'sis.

&he compan' should develop core competencies on the basis of its stren"th

and should focus on the opportunities which mi"ht arise in due time) which the

anal'sis of threats help to safe "uard the product development and develop

contin"enc' plans. -radual innovative methods can be adopted b' the firm to

convert the weakness into stren"th apart from best use of financial resources

,@rassin"ton : %ettitt) !/. &he consumers do not appreciate the locked

i%hone with one network Cin"ular in HS and b' other network in urope. Also

the cost of unlocked i%hone is 6uite hi"h in compared to HS market) which

mi"ht have caused reduced of sale.



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techno savv') professionals/ for future "rowth. &he' tried skimmin" and

versionin" strate"' ,Apple Annual *eports) !1/.

With the introduction of technolo"' toda') the price Apple Inc. "oods are been

displa'ed and chan"e b' the compan' throu"h Internet. &he da's of

unchan"in" prices for all customers are "ivin" wa' to active pricin") where

customers are char"ed Edifferent prices dependin" on individual customers

and situationsF ,Armstron" :


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"eneration product after i%od. &he compan' made successful relations with

media firms and Steve ,C3/ shares new ideas with public durin" occasions

as su""ested in fi"ure B ,Williams) 7ullin.) !/.

i"ure B. Strate"' of promotions ,


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i"ure ;. Apple online marketin" ,


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Cross %romotions= the channel partners like Sprint) 3ran"e) Modafone etc.

promote i%hone packa"es on their websites and from printed booklets.

Search n"ine promotions5 the compan' spends mone' on Adwords ,-oo"le

marketin"/) %a' %er Click campai"ns. &he compan' purchases the ke'words

like i%hones) mpBphones etc. @anners and promotions on other sites is a

re"ular from Apple ,Sliwinska et al) !/.

&he compan' sends email to i%od users) carrier consumers) and uses *SS

feed of their promotions and events and blo"s are done re"ularl'. ,Williams

and 7ullins) !/

3.4 Place

Apple Inc. emulated the crossover circulation s'stem and captivated the

telecommunication service provider0s stores alon"side with their online store

and own stores. With this method) customers are compelled to enter into an

a"reement for 1!; months. &he or"anization is utilizin" two level channel

for circulation of their item ,Jobber : ah') !9/.

&he compan' has done tieups with Cin"ular as the' have a consumer base

of (million and out of which around1million are as of now with i%od. So its

"reat methodolo"' to profit both or"anizations of e2clusivel' in HSA. In spite

of the fact that A& : & never needed to have hi"h bud"ets on advertisin") 'et

the' wind up usin" L1 billion in !9. &he products are assembled in China

,due to cheap labor/ and afterward supplied to distribution centers and local



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stores. Apple Inc. is indeed wise to levera"e the touch points of established

networks.

3. People

&he compan' wants to be in direct touch with the consumers and Ewhen the'

feel it) the' will bu' itF strate"'. With onl' L99) 1hourNweek for 1'r help the

users to meet the e2perts at -enius bars for technical support and

information) conductin" over ( sessions N week. &he sales assistant is

available on appointments to find the ri"ht product for ri"ht needs at the Enew

"ather placeF. &his helps the compan' "enerate word of mouth marketin" and

product awareness and brand buildin". &he sales team is trained to "ive

awareness) rather than "ivin" a sales pitch. Also the C3 has impressive

presence in front of media to market the brand ,Ireland et al) !9/.

3.! Process

Alain ,!/ has "iven some insi"ht about the process of Apple. #e sa's

C3) Steve Jobs is workin" closel' with the desi"n and development team

durin" the whole development process. &he meetin" of board mana"ement is

done ever' month) where the marketin" proposal and other problems are

discussed.

&he desi"ners follow the pi2el perfect approach where there are no fillers and

B desi"ns are selected out of 1 and perfected until the' arrive at 1 out of total

1.



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&he compan' conducts different t'pe of meetin"s=

1. %aired desi"n= this is done ! times a week to discuss the features and

technical specs of the product.!. @rainstormin"= &his involves discussion on an' and ever' idea that

comesB. %roduction= &his involves "ivin" a proper structure to the innovative

ideas and arran"in" deadlines for the same. ,Alain) !/

&he C3 doesn8t frown to discard a product at the last minute. and there are

%on' 7eetin"s ever' ! weeks) where the client discuss the re6uirements with

desi"ners) so the' can work accordin" to the needs of the consumers. &he

sales are handled in stores ,Apple and partners/ b' the professional team and

trainin" sessions also help with sales promotion activities ,Alain) !/.

3." P#ysical $%idence

&he Compan' has a "ood packa"in" strate"') which makes the product look

attractive and st'lish on the shelf. &he compan' has Apple Care service to

resolve the problems and services offered b' the compan') "eniuses8 bars to

meet the direct customers and teachin" them to make better users ,William)

7ullin) !/.

4.0 P$ST$& Analysis



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With the help of %S& anal'sis) we are able to "ain an understandin" of

Apple8s business potential) future market situation and the direction of its

operation. &he political) economic) social) technolo"ical) environmental and

le"al factors are four components within the %S& anal'sis. @' identif'in"

the factor in %S& anal'sis) we are then able to identif' the SW3& factors.

4.1 Political 'actors

War) terrorism) "eopolitical uncertainties) public health issues) and other

business interruptions have caused and could cause dama"e or disruption to

international trade and the "lobal econom') and thus could have a material

adverse impact to the Compan') its suppliers) lo"istics providers)

manufacturin" vendors and customers) includin" channel partners.

Such companies spread in different parts of world like Cork) Ireland)


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sa') this "lobal recession is havin" a "reat impact on Apple8s retail

performance.

urthermore) currenc' e2chan"e rate is seen ver' volatile durin" recession)

especiall' dollar8s rate a"ainst pound sterlin" and euro.

@ut now world8s economic ocnditions are "ettin" better and compan' has

purchased itself forei"n currencies) so Apple revenue has increased in the

"lobal market. ,Apple Inc. !1!/.

4.3 Social 'actors

&wo factors alwa's have been on the forefront of Apple product re6uirement

throu"hout Apple8s histor') the desi"n and the 6ualit'. &he purchasin" of

lu2ur' products have "one up because the purchasin" power of consumers

has risen in different market across the world and people prefer to bu' i%od)

i%hones and i%ads. As music industr' "rowth has increased which is the

bi""est social influence on Apple because the main essential music store is

i&unes) &herefore) Apple has "ained so much from social factors because it8s

definin" an individual8s modern lifest'le.

4.4 Tec#nology 'actors

Hndoubtl' Apple has the advanta"e within the technolo"' industr' because of

its innovative and hi"h technolo"ies products. It is also a "reat advanta"e for

Apple to its competitors that compan' has full control over the entire

production procedures of personal computer and the continual innovation on



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i%od and i%hone. ?ow there are man' products introduced in the market to

compete Apple8s products. So it becomes a necessar' to spend more on *:K

which causes a hu"e spendin" of its capital reserve compared with its

competitors i.e. Kell uses 7icrosoft0s operatin" s'stem in all of its products

while Apple installs its own brand operatin" s'stem which increase its

production cost. ,Apple Inc. !1!/.

4. $n%iromental 'actors

&he Compan' likewise offers its e6uipment and pro"rammin" items to

enterprise and "overnment clients in each of its "eo"raphic se"ments. &he

Compan'0s products are deplo'ed in these businesses of their performance)

productivit') ease of use and seamless inte"ration into information technolo"'

environments ,Apple Inc. !1!/.

4.! &egal 'actors

&he Compan' is liable to laws and re"ulations affectin" its domestic and

"lobal operations in various area. &hese H.S. and forei"n laws and

re"ulations affect the Compan'8s activities includin") but not limited to) areas

of labor) advertisin") di"ital content) consumer protection) real estate) billin")

e$commerce) promotions) 6ualit' of services) telecommunications) mobile

communications and media) television) intellectual propert' ownership and

infrin"ement) ta2) import and e2port re6uirements) anti$corruption) forei"n

e2chan"e controls and cash repatriation restrictions) data privac'

re6uirements) anti$competition) environmental) health) and safet' ,Apple Inc.

!1!/.



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.0 Apple S()T Analysis

Source= Strate"ic 7ana"ement Insi"ht. Apple SW3& Anal'sis !1B.

.1 Strengt#

1. Customer lo'alt' oath combined with e2pandin" closed ecos'stem. While

at first Apple8s closed ecos'stem was a weakness point for the compan') it

has chan"ed since !1 when it has introduced its i%od mpB pla'er. 1st Apple

now has a full ran"e of applications) product and software that are interlinked

and support each other. !nd new products and supplements will be released



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ver' soon ,I&M/) hence e2pandin" the ecos'stem. Brd) Apple has a stron"

customer lo'alt' oath) which increases due to Apple8s closed ecos'stem) the

combination of Apple8s e2pandin" closed ecos'stem and customers8 lo'alt'

oath increases the competitive advanta"e.

!. Apple is a leadin" innovator in mobile device technolo"'. In !1! Apple has

been chosen third time as the most innovative product in the world. &he

stren"th of the compan' is producin" innovative products to the market.

B. Stron" financial performance ,L1))) cash) "ross profit mar"in

;B.9 and no debt/. &he financial performance of the Apple8s is one of the

best amon" man' companies. nd of !1! Apple Inc. #olds about

L1))) in cash) which can be used for solution of e6uations and

bu'in" back compan' shares etc. It also has hi"her "ross profit than its main

competitors) which is e6ual to ;;.. Compan' has no debt and its not

directl' affected b' credit markets or interest rates.

;. @rand reputation. Apple has a reputation of hi"hl' innovative) well

functionin") and well$desi"ned products and sound business performance.

Accordin" to !1! the value of Apple brand is L+.( billion and was the

second most successive valuable brand in the world.

(. *etail stores. Apple8s stores are the most profitable stores in terms of sales.

Apple8s retail stores ensure hi"h 6ualit' customer e2perience) "ive direct

contact with knowled"eable staff and increase the awareness of brands.



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+. Stron" marketin" and advertisin" teams. Stron" 7arketin" is one of the

main functions in success of Apple brands. It can sell e2pensive products)

build superior stores and advertise their products in a compellin" manner.

.2 (eaknesses

1. #i"hl' price. Apple8s products cost much more than its competitors devices.

&he price of the product is not Dustified. Apple products price becomes a

weakens point because consumers can easil' bu' a similar 6ualit' product

but in lower price.

!. Incompatibilit' with different 3S. &he 3S and i3S 4 are 6uite different from

each other 3S and uses software that is unlike the software used in 7icrosoft

3S. Kue to such differences) both in hardware and software) users often

choose to sta' with their accustomed software and hardware ,7icrosoft 3S

and Intel hardware/.

B. Kecreasin" market share. &he lower market share Apple has) the lower it

can influence its potential customers and persuade to Dump them into usin"

Apple8s closed ecos'stem products.

;. %atent infrin"ements. &he firm is often accused of infrin"in" other brands

patents and has even lost some trials. &his dama"es the Apple brand and its

financial situation.



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(. urther chan"es in mana"ement. &im Cook becomes the new C3 in !1!

after loss of Steve Dobs. Scott or stall and John @rowett ,chief of retail/ left

the compan' too and this will have a bad impact on compan'8s mana"ement.

+. Kefects of new products. &his is not recent Apple weakness but one that

Dumps out time to time. Some of Apple8s i%hone and i%od releases had clear

faults and which disturbed sales of the products.

. on"term "ross mar"in decline. Apple8s current "ross mar"in is one of the

hi"hest in the electronic industr' but anal'sts fear that due to increasin" other

component prices and competition current mar"ins will not be retained.

.3 )pportunities

1. #i"h demand of i%ad mini and i%hone (. i%ad mini and i%hone sales will

increase Apple8s market share in the tablet market and) will stren"then firm8s

competitive advanta"e.

!. i&M launch. i&M launch will support Apple &.M sales and the products8

ecos'stem. It will increase sales in &M market.

B. mer"ence of the new provider of application processors. Samsun") is the

main Apple8s competitor) is also the onl' provider brand of application

processors for Apple8s products. Apple has to find a new wa' for the

component but could not find 'et. ?onetheless) new manufacturers with



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superior en"ineerin" capabilities are shinin" and it8s Dust a matter of time)

when Apple will "rab hold upon the opportunit' of bein" less dependent on its

competitors.

;. -rowth of tablet and Smartphone markets. -rowth of tablet and

Smartphone markets is provide a "ood opportunit' to e2pand firm8s share in

these markets.

(. 3btainin" patents throu"h ac6uisitions. Apple brand lacks of some patents

to retain its "rowth and the best wa' to ac6uire those patents is to ac6uire or

mer"e with the firms holdin" them. In addition) Apple could also develop new

skills and competencies in comin" 'ears.

+. Kama"es from patent infrin"ements. Its competitors often infrin"e Apple

patents. &hus) collectin" the dama"es from the competitors that are viable

opportunities to not onl' increase the mone' reserves but to dama"e the

competitor8s reputation and market "rowth as well.

. Stron" "rowth of mobile advertisin" market. Apple has developed i%ad

advertisin" platform) which allows advertisin" on Apple) i%od) i%ad and

i%hone touch. &he "rowth of mobile advertisin" market is an opportunit')

which could be further seized upon.

. Increasin" demand for cloud based services. Apple could e2pand its ran"e

of software and iCloud services as the demand for cloudbased services is



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e2pandin".

.4 T#reats

1. *apid technolo"ical chan"e. 3ne of the most severe threats Apple and its

competitors are facin" is rapidl' chan"in" technolo"ical. Companies are

under pressure to release new products 6uickl'. &his is especiall' hard when

a business wants to introduce somethin" fresh) innovative and successful.

Apple was able to launch ver' innovative products to the market but at the

moment) even Apple hasn0t launched an' new products ,e2cept i&M/.

!. !1B ta2 increases. In !1B &a2 increase ne"ativel' effect on Apple Inc.

B. *isin" pa' levels for o2conn workers. o2en is the manufacturer of Apple

brands. %a' levels for o2conn8s workers alread' "row B times from !1 to

!1!.

;. @reached I% ri"hts. &he companies that breach Apple patents not be

discovered soon and ma' benefit from it) while weakenin" Apple product at

the same time.

(. %rice pressure from Samsun" and some other over ke' components.

Samsun" has alread' asked Apple to pa' hi"her pa'ment for its application

processors5 this is Dust because of intense competition and no viable

substitutes.



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+. Stron" dollar. Apple earned more than half of its revenues from outside the

HS. Kollar appreciation a"ainst other currencies reduces potential profits from

other countries.

. Android 3S "rowth. Android 3S is the ke' competitor for i3S in mobile

device market. &he dominance of Android decreases the power i3S over

influencin" consumers to Doin Apple.

. Competitors move in online music market. 3nline music stores) such as

Wal7art)

Amazon and online music companies or also faces threat for Apple.

!.0 Strategic 'ailure

Kespite the stron" marketin" : strate"' success of Apple Inc. most of its

re"ion) in some other parts of the world tells a different stor' of the compan'.

Apple has been called Ethe most admirable compan' in the worldF. Indeed)

the' are ver' innovative) cool) personalit'$oriented and alwa's new. @ut while

Apple has achieved landmarks success in the Hnited States and redefined the

smart phone cate"or') it has so far stru""led in two of the world8s lar"est

population market5 China and India.

Apple Inc. has not been success in these markets that the compan' has

e2pected in various reasons. &he launch of i%hone in ! has been

considerin" the bi""est failure of this top$notch brand. &wo months after its



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official launch in India) a subse6uent wave of disappointment has been hittin"

the compan'. What actuall' went wron" wit i%hone in India when the rest of

the world is "rowin" fast with itO

1. &echnolo"' Issue

In India market) i%hone has compatibilit' issues. &he compan' was reportedl'

communicatin" with carriers in China and India to overcome its compabilit'

issue. Whether as to Apple shall develop another i%hone that comes with

CK7A technolo"' which compatible to both India and China telecom

standards. Apart from this) the internet penetration in India is 1;.! as of

7arch !1B which was 1.9 last 'ear ,Considerin" ever' form of internet

!- Kial$up etc/. #owever) considerin" the time when acebook and -oo"le

were bein" built in HSA) in India people were havin" power$cut because of

ener"' shorta"e.

!. %ricin" Issue

At its introduction price of i%hone at HSKL) Apple did the same in Indian

market. #owever) man' potential customers reasoned with the price of B

i%hone) the' could probabl' "et a ?ano car in India. Also with the consumer

purchasin" power in the countr') Apple ma' have "otten the price wron" and

ma' have i"nore how these people in this countr' spend. With the provert'

level within the countr' and education level of the Indians) how can the' afford

to "et this innovated "ad"etO



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B. ocked i%hone

With the first introduction of locked i%hones indeed put a disappointment on

the consumer market.

!.1 *usti+ication o+ t#e Issue

Apple8s market share in India in the doldrums) mainl' due to the distribution

model and the price point. Accordin" to research firm IKC Inc.) in the April$

June 6uarter of !1!) Apple8s share of handset sales in India was onl' 1.!.

Kurin" the same period) South


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bu'ers to assume that e2pensive items enDo' an e2ceptional reputation or

represent e2ceptional 6ualit' and distinction. A premium pricin" strate"'

involves settin" the price of a product hi"her than similar products. &his

strate"' is sometimes also called skim pricin" because it is an attempt to

Eskim the creamF off the top of the market. It is used to ma2imize profit in

areas where customers are happ' to pa' more) where there are no

substitutes for Bthe product) where there are barriers to enterin" the market or

when the seller cannot save on costs b' producin" at a hi"h volume.

u2ur' has a ps'cholo"ical association with premium pricin". &he implication

for marketin" is that consumers are willin" to pa' more for certain "oods and

not for others. &o the marketer) it means creatin" a brand e6uit' or value for

which the consumer is willin" to pa' e2tra. 7arketers view lu2ur' as the main

factor differentiatin" a brand in a product cate"or'. Some brands can continue

to char"e a premium price because their entire brand ima"e is based around

lu2ur'. Accordin" to John uelch) of #arvard @usiness School) it is ver'

challen"in" for companies to maintain a premium$priced brand while tradin"

as a public compan'. u2ur' brands) such as %rada) often chose to remain

private businesses) so the' can sta' small and e2clusive) and continue to use

premium pricin".

Hni6ue products usuall' have the best chance of commandin" premium

prices. &his is one reason wh' Apple has alwa's priced the i%hone hi"h. It

has followed the price skimmin" strate"' with i%hone.

@ut price skimmin" comes with its own flaws. While the profits are ver' hi"h)

the revenue is low. As in 2hibit 1) Apple is behind the market leader b' a



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"ood ; and doesn8t even makes it to the top ( smart phone manufacturers

list in terms of 7arket share.

onclusion

It has been observed that the compan' has maintained stron" sales and

developin" new markets and also addin" the value of the brand with more

features and third part' software8s available for the users. Althou"h with lot of

technical limitations the compan' has e2perienced "ood sales with the help of

strate"ic partners and intensive advertisin". &he compan' is spendin" lot of

mone' on all the channels of promotional mi2) however the compan' should

"ive more emphasis on website advertisin" to reduce the costs.



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