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Question:

Discuss about the Marketing Activities of Apple.
 
 

Answer:

Introduction

For the contemporary business organizations, marketing holds an important part in gaining competitive advantages and staying ahead in the competition. However, there are various considerations for the contemporary business organizations in implementing effective marketing strategies, which will have positive outcome. In the current business scenario, implementation of the effective marketing strategies creates differences in the competitive state of affairs (Perreault, Cannon & McCarthy, 2013). Majority of the renowned business organizations have gained their brand identity and competitive advantages with the help of their marketing activities. Moreover, effective marketing activities also help in determining the requirement of the customers and thus enhance the level of customer satisfaction.

Apple is one of the leading brands in the world providing mobiles and other electronic gadgets. They have their presence around the world. However, the market orientation or approach being initiated by them is unique and distinctive, which is helping them in staying ahead in the competition. They have effectively targeted their customer segments and accordingly designed their marketing activities. However, they are operating only among the niche segments.

This report will discuss about the marketing activities of Apple along with determining their existing market scenario. The external and internal environment of Apple will also be evaluated. Based on their existing market scenario, recommendations will be provided regarding the potential new market segments for them.

Company profile

Apple is one of the leading gadget manufacturers in the world is the topmost valued brand in the world. Apple is originated from Cupertino, California and it was founded in 1976 (Apple, 2017). From the initial stage, they have concentrated more on offering innovative and first of a kind product in the market. This innovative approach of them helped them in creating a distinctive image among the existing competitors. This approach of them is being reflected on their mission and vision statement (Kopaneva & Sias, 2015). According to their vision statement, innovation is the key organizational objective of them and they will continue to change the existing competitive scenario by offering unique and innovative products in the market. Thus, the vision statement of Apple is reflecting the direction for them to achieve in the future. Moreover, the business approach being followed by them is also been reflected in their vision statement.

According to the mission statement of Apple, they are the market leader when it comes to introducing innovative products in the market (Tishkovskaya & Lancaster, 2012). Their mission statement states their rich history of innovations ranging from introducing MAC computers to introduction of ipod in the market. Thus, the mission statement of Apple is effectively reflecting the business activities of defining the future trend of the market. Thus, having analyzed the mission and vision statement of Apple, it can be said that, their orientation towards the innovations is being reflected in their mission and vision statements.

 

Marketing orientation of Apple

The marketing orientation of Apple is towards both the product and the market. This is due to the reason that, Apple concentrates more on innovation and quality in gaining competitive advantages (Urde, Baumgarth & Merrilees, 2013). The products of them automatically attract customers due to their innovative features. Thus, the products of Apple get more preferences in their marketing activities. On the other hand, the market research being involved by them in determining the requirement in the market is proving their orientation towards their customers. It helps them in effectively determining the market requirement and accordingly initiates innovations to develop products (Chan, Kwong & Dillon, 2012). The key product that has taken the role of redefining the competitiveness of Apple in the market is the iphone. Introduction of iphone in the market changed the existing scenario in the Smartphone market. The innovative features being possessed by iphone helped to gain more market awareness for Apple. Thus, afterwards Apple has more concentrated on developing the newer versions of iphone.

Evaluation of 5c’s of Apple

Company

SWOT analysis will be involved in determining the strength, weakness, opportunity and threat of Apple. The strengths of Apple include the enormous and positive brand value, which will be helpful in operating in the existing market as well as entering in the new market. Moreover, the innovations being possessed by them are one of the key competitive advantages for Apple. The initiation of premium pricing is helping them in achieving higher profit margin from their sales (Heracleous, 2013). This in turn helps them in investing more in their research and development. The weaknesses of Apple include operation only in the niche market. Thus, mass generation of revenue of Apple is not possible. Moreover, the product diversification of Apple is less compared to its competitors.

Another key weakness is the non-compatibility of other software with the Apple products. Thus, customers will face issues in operating their products. Opportunities for Apple include the innovative approach being possessed by them, which will help them in tapping in newer markets in future. Moreover, due to their practice of creating new business sector, they can enter in any sector at any point of time (Kapferer & Bastien, 2012). Another opportunity for them is the growing demand for their products with the growth in the global economy. Moreover, they are entering in new sectors such as television and iwatch, which will increase their competitiveness.

 

Customers

As discussed earlier, Apple operates in the niche market of the higher end customers. Majority of the customers for Apple comprise of business people and corporate who can afford their products. However, the typical consumer behavior being possessed by them is also one of the key tactics for determining the marketing strategy of Apple. According to the Maslow’s need theory, the products of Apple will meet the esteem need of the customers (Lester, 2013). This is due to the fact that, the esteem need refers to the requirement for self esteem, recognition and social status. Thus, the typical customer behavior of Apple is to show their wealth and status to the society (East et al., 2016). Another section of customers also opt for Apple products. This section comprises of people from business and corporate and they use the Apple products for heavy use in business purpose.

Collaborators

Apple has multiple suppliers and effective distribution network, which is helping them in catering to the market. The key motive of supply chain management of Apple is to offer the products to the customers timely and with more convenience (Stadtler, 2015). Their suppliers include Analog Devices, Inc, which supplies touch screen controllers for Apple iphone. Glu Mobile, Inc provides applications for the Apple mobile store. Micron Technology, Inc supplies DRAM and LPDDR2 for the products of Apple. Qualcomm, Inc is one of the leading providers of semiconductor around the world. They also provides processor and power tracker for Apple devices.

Apple is managing their distribution network by their own. Majority of the distribution network is being taken care by their direct sales force. Apple maintains their own exclusive retail stores around the world (Montgomerie & Roscoe, 2013). Thus, it helps them in managing the retailing more effectively and according to their organizational policies and cultures. Apple products are also being available in various online stores (Verhoef, Kannan & Inman, 2015). In this case, the online vendors are the sole responsible for the retailing of the Apple products. The absence of any third party distributors is helping them in reducing the cost of distributions. Thus, the profit margin is more for them. In addition, Apple caters to similar kind of products and that too for the niche market. Thus, they not have the requirement of covering the entire market with having aggressive distribution network.

Competitors

Samsung, LG, and Google are the prime competitors for Apple. However, there are no close competitors due to the fact that all of its competitors are having different operating systems. Apple use their own operating system which sis exclusive to their products only. Thus, the user experience will be different for Apple compared to its competitors (Ahmad et al., 2013). However, threats are there for Apple from the existing competitors. This is due to the reason that, majority of the market share in the Smartphone business is being controlled by Android, which is being used by all the competitors of Apple (Ruiz et al., 2012). Compared to this, the market share of Apple IOS is less. Moreover, the entry of new competitors with updated technologies will pose threat for them.

Context

The external environment of Apple is diverse due to the operation and market presence around the world. However, few issues may pose challenges in their business activities. The legal environment around the world is diverse and varied in different countries. Thus, it will be a challenge for them to adhere with varied legal formalities around the world (Bagley, 2015). The political environment is also favorable for Apple due to the reason that, major countries in the world are providing various incentives in attracting investments. Moreover, the government regulations are more business friendly in the current scenario, which will have favorable impact on the business of Apple.

Social environment for Apple is also favorable due to the reason that more number of people is getting attracted towards Smartphone and technologies. Moreover, there is always a craze and motivation works for the customers in having the access of Apple due to its aesthetic and esteem appeal (Phillips-Melancon & Dalakas, 2014). However, with having operating only in the niche market, Apple does not have the access to the mass market. The technological environment for Apple is more challenging for them due to the reason that in the present business scenario, technologies are being changed rapidly and it is difficult for them to cope up with the rapid change in technology.

 

Market intelligence of Apple

One of the key tools being involved by Apple is the initiation of social media marketing. This is due to the reason that, social media marketing helps in determining the market trend more effectively by engaging directly with the customers (Tuten & Solomon, 2014). Moreover, it is also helping them in determining the customer preference towards their competitors. This in turn helps them in identifying the areas, where they are trailing behind their competitors. They also involve market research for their existing customers (Chen, Chiang & Storey, 2012). According to Apple, only the existing customers of them will be able to tell what they need more in future. Thus, the customer taste and preference pattern is being effectively determined.

Social media marketing also reflects the change in the taste and preference pattern of the customers, which will help them in modifying their activities accordingly. As earlier discussed, Apple involves less amount of collaborators in their supply chain and distribution network. Thus, the role played by them is minimal and negligible in the business activities of Apple. However, the suppliers of Apple also play an important role in providing competitor trend (Upson et al., 2012). This is due to the reason that, the suppliers of Apple provides materials to other technology organizations also. Thus, the trend can be generated from them regarding the competitors’ activities.

Recommended market segment

As already discussed, Apple operates in the niche market, which is having very limited potential. Thus, to expand their business portfolio and market presence, Apple should also target the mass market to a certain extent. This will help them to enhance the market area along with catering to more number of customers. The target market should be the middle class customers around the world. STP model will be involved in determining the viability of the proposed market segment (Hollensen, 2015).

According to the STP model, the first step is the segmentation of the target market. The segment should be classified according to the geography and demography. In the initial stage, middle class segments from the developed countries should be targeted due to the reason that, the purchasing power of this segment in these countries will be more. Moreover, according to the demographic classification, the target segment should be the age group of 20 to 40. This is due to the reason that, majority of this age group will represent the college goers and corporate people. Majority of the popularity of Apple is being generated from this age group.

The next step is the targeting. Apple should introduce products with having more affordability and convenience to target the mass market. This strategy will be beneficial due to the reason that the exclusivity of Apple has an unique appeal among the mass market. Thus, effective initiation of the pricing strategies will help to target this segment. The last step is the positioning. Apple should position their products in such way that it will attract the targeted audience effectively. The brand name is there for Apple which will help them to effectively penetrate in the targeted market. Their positioning statement should be offering the brand value of Apple in affordable price. Thus, the targeted segment will have the impression of having the access of exclusivity of Apple in more affordable cost. This will be effective due to the reason that all the competitors will provide features but cannot provide the brand value being possessed by Apple.

 

Recommended marketing mix: Product

The product should be feature rich according to the targeted segment’s requirement. It may not have the high end features of Apple but should meet the criterions of the target audience. Moreover, the aesthetic appeal should be considered due to the fact that Apple is known for their aesthetic value. It will help to enhance the value created for the customers.

Price

The pricing strategy should be initiated according to the economy status of the targeted audience. The price should not be much lower due to the fact that it may dilute the brand image of Apple. The pricing should be done in such a way that it will be affordable yet will have premium feel for the targeted customers.

Place

Products should be made available in third party premium retailers due to the fact that the exclusive retail outlets of Apple have limited market presence. Thus, availability in the leading retail stores will help to enhance the exposure as well as the brand awareness. The online presence will also help to reach out to the target audience.

Promotion

The promotional channel should be selected according to their effectiveness among the target segment. Mass media channels such as TVC and print media will help to effectively reach out to the targeted segment. Moreover, social media marketing will also be beneficial to promote the products to the mass market.

Conclusion  

Apple is having favorable market scenario in the niche market. However, in order to increase their market presence and to survive the growing challenge from its competitors, they need to penetrate in the mass market. This will help them to leverage their brand value and increase their market share in the mass market along with enhancing the brand exposure. In this report, the marketing orientation of Apple along with their marketing strategy in the niche market is being evaluated. It is being seen that they have implemented an effective mechanism of operating in the market. Thus, it is being concluded that, the marketing expertise will help Apple in penetrating in the mass market as well. It will not only increase their revenue generation, but will also help to gain competitive advantages from the market.

 

References

Ahmad, M. S., Musa, N. E., Nadarajah, R., Hassan, R., & Othman, N. E. (2013, July). Comparison between android and iOS Operating System in terms of security. In Information Technology in Asia (CITA), 2013 8th International Conference on (pp. 1-4). IEEE.

Apple. (2017). Apple. Retrieved 15 September 2017, from https://www.apple.com/

Bagley, C. E. (2015). Managers and the legal environment: Strategies for the 21st century. Cengage Learning.

Chan, K. Y., Kwong, C. K., & Dillon, T. S. (2012). An enhanced fuzzy AHP method with extent analysis for determining importance of customer requirements. In Computational Intelligence Techniques for New Product Design (pp. 79-93). Springer, Berlin, Heidelberg.

Chen, H., Chiang, R. H., & Storey, V. C. (2012). Business intelligence and analytics: From big data to big impact. MIS quarterly, 36(4).

East, R., Singh, J., Wright, M., & Vanhuele, M. (2016). Consumer behaviour: applications in marketing. Sage.

Heracleous, L. (2013). Quantum strategy at Apple Inc. Organizational Dynamics, 42(2), 92-99.

Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.

Kapferer, J. N., & Bastien, V. (2012). The luxury strategy: break the rules of marketing to build luxury brands. Kogan page publishers.

Kopaneva, I., & Sias, P. M. (2015). Lost in translation: Employee and organizational constructions of mission and vision. Management Communication Quarterly, 29(3), 358-384.

Lester, D. (2013). Measuring Maslow's hierarchy of needs. Psychological Reports, 113(1), 15-17.

Montgomerie, J., & Roscoe, S. (2013, December). Owning the consumer—Getting to the core of the Apple business model. In Accounting Forum (Vol. 37, No. 4, pp. 290-299). Elsevier.

Perreault Jr, W. D., Cannon, J. P., & McCarthy, E. J. (2013). BASIC MARKETING: A Marketing Strategy Planning Approach,-19/E.

Phillips-Melancon, J., & Dalakas, V. (2014). Brand rivalry and consumers’ Schadenfreude: the case of Apple. Services Marketing Quarterly, 35(2), 173-186.

Ruiz, I. J. M., Nagappan, M., Adams, B., & Hassan, A. E. (2012, June). Understanding reuse in the android market. In Program Comprehension (ICPC), 2012 IEEE 20th International Conference on (pp. 113-122). IEEE.

Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.

Tuten, T. L., & Solomon, M. R. (2014). Social media marketing. Sage.

Upson, J. W., Ketchen, D. J., Connelly, B. L., & Ranft, A. L. (2012). Competitor analysis and foothold moves. Academy of Management Journal, 55(1), 93-110.

Urde, M., Baumgarth, C., & Merrilees, B. (2013). Brand orientation and market orientation—From alternatives to synergy. Journal of Business Research, 66(1), 13-20.

Verhoef, P. C., Kannan, P. K., & Inman, J. J. (2015). From multi-channel retailing to omni-channel retailing: introduction to the special issue on multi-channel retailing. Journal of retailing, 91(2), 174-181.

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