Apple Company’s Marketing Operations in the UK

Introduction

Apple Inc. has emerged as a revolutionary company in the consumer electronic market, especially after the launch of its key gadgets in 2010 (Maha 2013). In the succeeding year, the global market tag for Tablet PC alone was rated at $35.3 billion; this is expected to grow exponentially in the years to come (UK – Tablet PC market forecast & opportunities – 2016 2012). The UK’s market anticipates a bigger market share with the growth of its major products locally. Apple’s products have received wide acceptance in the UK with an augmented demand from local enterprises (Computers and peripherals in the United Kingdom 2013). According to Maha (2013), Apple’s products have filled the UK domestic market gap by providing the local consumers with magnificent products that fits their changing needs perfectly.

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The Apple Company’s domestic market in the UK continues to grow at a much larger pace than was initially anticipated (Apple cedes market share in smartphone operating system market as android surges and windows phone Gains 2013). The lower market penetration in the UK has not dampened the prospects for the company’s growth (Lessard, Lucea & Vives 2012). Until the end of 2013, Apple Inc. has led the UK’s market with its durable products spanning a decade long radical inventiveness (Whitney 2013).

Apple’s home marketing operations in the UK compared with other countries

Apple Inc. and its full-fledged holdings in various parts of the world design, produce, and market several mobile communication gadgets, portable digital music players, media devices, and personal computers. While Android devices constitutes a greater chunk of UK market share, the company has maintained its lead in the UK going by the scales of provided by comScore (Su 2013). In the United States, Mac sales for example spiked 28.5% annually in the recent 2013 stock analysis (Hughes 2014). The Apple Company has also been striving to enhance its selling scope in China, which happens to be the largest smartphone market in the world. This is so because Apple’s think-tank is aware of the growing competition that the Chinese domestic smartphone companies have waged. Subsidiaries have assisted Apple Inc. in the distribution of the company’s finished products in most parts of the world (Lessard, Lucea & Vives 2012).

The reason why Apple manufacturers its products in China rather than in the United Kingdom is because the labour cost in China is relatively cheaper in China, while in the United Kingdom, the labour force is much expensive. In addition, most of the Apple Inc. products are exclusively manufactured in China and in the US, because in the United Kingdom, the production cost is relatively higher and the regulatory policy prevailing in the UK could be an encumbrance in some way (Shares in Apple rise after iPhone deal with China Mobile 2013). According to Su (2013), this explains why Apple has access to a big market in China.

With these marketing operations, Apple can cash in on the stable and strong economy which is a characteristic of Chinese market, while keeping sprouting domestic rivals in the UK such as Samsung and Asus at bay. Apple Company continues to look ahead to higher sales in the American market, especially after a decision to front the iPhone and iPads to counter the growing competition from other companies in America (Hughes 2014). In the UK, the company aims to make a debut after the successful launch of its iPhone 5s, iPhone 5c, iPad Mini, and iPad Air supplied with retina displays. These market operations are further expected to boost the Apple Company in the international markets such as in China and Japan (Shares in Apple rise after iPhone deal with China Mobile 2013). In addition to an effort to court an expansive market, Apple has established numerous outlets in an attempt to capture the market niches where statistics have consistently shown that product demand is not necessarily tied to a full-scale store such as in the case of South African and West African markets.

In exploring Apple’s strength, especially with regard to its international market structure, Congressional panel reports that Apple has consistently been able to avoid billions in taxes using transnational subsidiaries (Hamm 2011). The company operates with subsidiaries in many parts of the world. For instance, in Ireland, Apple managed to obtain a special tax reduction of 2% after negotiations. These kinds of schematisations have helped the company to outsource for manufacturers to assemble their products in various parts of the world. It has also assisted Apple in marketing and selling of its merchandise to other subsidiaries

Standardisation verses adaptation of the Apple Inc.

Standardisation consists of a process that is aimed to develop and implement the technical standards with the aim of maximising compatibility, safety, copying, and interoperability among others. Under these schemes, it is expected that standardisation will facilitate commoditisation (Vrontis & Thrassou 2007, p. 10). In essence, standardisation is the opium for solving coordination problems, which eventually offers a platform for parties to realise mutual gains, and this is usually achieved when the parties involved make mutually consistent decisions. According to Vrontis and Thrassou (2007, p. 11), standardisation offers the best technical application which guarantees the ratification of making informed choices.

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Apple’s approach to this scenario involves fastidious standardisation processes consistent with the de facto standards seen in its lease to promote multinational proprietary, commercial, and industrial standards. Standardisation for the Apple Inc. has enabled the company to be consistent with manufacture of quality products, which are relevant, consistent, reliable, and comparable in all regions that it operates.

Whenever a business seeks to exploit new market niches, it is expected that it might face difficulties in copying with dissimilar cultural and geographical expanses. As such, Apple Company has always stepped up its marketing strategies to tailor its emergent needs with that of the various regions it exploits (Pisano and Shih 2009, p. 115). The Apple Inc. has always chosen standardisation model as business approach, instead of product adaptation. In this way, the Apple Inc. business structure has often been made to appeal to the universality of needs, goals, as well as wants in its marketing strategy. Alternatively, there is also adaptation-marketing strategy, which is a road less ‘travelled’ by the Apple Company. This, according to Vrontis and Thrassou (2007, p. 11), is due to its propensity to forgo the universality in product presentation in favour of tailoring its marketing venture to appeal to the socio-economic and demographic particulars of consumers in new market niches (Vrontis & Thrassou 2007, p. 12).

Adaptation marketing strategies entails the need to change the price, packaging, and promotion of a product, and this is usually done to fit the needs of consumers, as well as the preferences within a particular region or country. For the Apple Inc. this has always occurred whenever there has been a need to achieve a competitive advantage, especially when venturing on new markets.

From the foregoing analysis, it stands out conspicuously that adaptation is ultimate opposite of standardisation. Companies that adopt standardisation strategies normally enter new markets with the same advertisements, presentations, and promotions that are generally used in their domestic markets (Vrontis & Thrassou 2007, p. 13). Given that adaptation requires a full circle revolution of a company’s marketing strategies, standardisation, has always been much preferred to adaptation because it is cost effective in nature. For Apple Inc. the company has always preferred standardisation approach, and the company’s think-tank argues that the approach allows the company to present a consistent image across all regions that it operates.

Apple’s Marketing Mix

Marketing mix is an all-purpose phrase, used extensively to designate the diverse choices organisations have in making the whole process of conveying a product or service for consumption (Maha 2013). The 7Ps definitely is the best-known approach of defining the marketing mix. The marketing mix is a strong market scheme that was originally presented for use in 1981 by business strategists Booms and Bitter. This was an expansion of the 4Ps to include substantial factors related to service organisations. These 7Ps consist of product (or service), people, place, price, physical appearance, promotion, and process. All of which, the pioneer proposed have to be explored in their fullest to realise the wholesome market score.

The Apple Company specifically deals in domestic and office electronic appliances, ranging from portable computers, which entails the Mac merchandises such as iMac, Mac Book Pro, MacBook Air, the Xserve, and Mac Mini. The iPhone accessories consists of iPad, iPhone 3GS, and iPhone 3GS. In addition to this mixture, the iTunes, which includes TV shows, movies, games, and audio books, have been impressive in redirecting consumers’ appetite for Apple’s products and services. Other fitments in the product marketing mix include storage devices, electronic accessories, software, and servers (Dedrick, Kraemer & Linden 2009, p. 141).

To crown it all, Apple’s products are not merely electronic products; this has been demonstrated by the massive content and services that the company offers across the globe. The company’s products and services are impressive in nature. Taking iPhone 5 as an example, which has just hit the market, the new arrival is unique in its own way, a flat-out, both lovely to hold and to look at, and it is difficult to find a single bit that has not been nipped from the iPhone 4 series. The iPhone 5 is entirely restructured and overwhelmingly familiar with both the domestic and foreign users in other parts of the world. Apple’s iPhone 5 has gained widespread applause for its charming operating system (OS) right out of the box, with an advanced Android OS, which allows users to have a thrilling experience (Dedrick, Kraemer & Linden 2009, p. 142).

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Apple Inc. officially opened up its App Store in July 2008, making a foothold in most parts of the world after most rival companies such as Samsung and Asus had kicked the market. At the time, Apple sold roughly $1 million in applications daily during its first month of promotions. The Apple iPhone 5 with 16 GB version costs $196 to manufacture (for the least-priced model), including the materials. The cost of the 32 GB variety is estimated at $217, while the 64 GB type runs at $238. These charges apply in the UK as well as other market niches that the Apple Inc. has since exploited (Maha 2013).

At the end of July, the Apple Inc. kicked off a new promotional strategy that would permit customers to obtain the iPhone 5 or iPhone 4S for no down payment. However, for a period of about two years, the customers were required to pay $27 per month for the iPhone 5. Even though the promotion has currently ended, interestingly, the offer is still available for the iPhone 4 as well as other Smartphones. Consequently, the T-Mobile consumers who need an iPhone 5 will probably have to conform to the older price down to $145.99 and monthly subscription of $21 (Dedrick, Kraemer & Linden 2009, p. 143).

Perhaps user preferences adequately factor in the facilitation of market setting since consumers in most parts of the world have the gadgets in their homes. In practice, UK consumers, as well as those in other parts of Europe, America, and Asia, are sufficiently convinced that they require mobile device services, which they think, are somewhat decent, as they present the needs of the moment with the modern experience. There exists one main regulatory concern that has affected and may continue to affect the success of the iPhone. Dedrick, Kraemer and Linden (2011, p. 86) observe that, at present, the iPhone 5 is sold as ‘locked’ in America, that is, it can only be used with one provider, for example, the AT&T network.

An increasing number of public interest groups have since pressed for the iPhone ‘unlocking’ chatter. Consequently, Apple acknowledges that content and applications are best left for the third parties to develop while maintaining their grip on control over the access and distribution as well as security- key components of the value chain and for competitive advantage. Currently, 17 million out of the 58 million people have iPod products; the company design people-driven products (UK – Tablet PC market forecast & opportunities – 2016 2012). The basis of which has proved that one does not necessarily need to perform the tasks in all parts of the value chain, but rather control and coordinate the value chain to guarantee success to all the players.

Global Marketing and the Internet

The device centred commercial model of the iPhone 5 has been the resilience factor in its marketing strategy. The iPhone 5 launch went against the traditional wireless through enabled business models of the moment (Dedrick, Kraemer & Linden 2010, p. 506). This showed that mobile device manufacturers could successfully and easily control the necessary portions of the value chain and allow all players to be successful. For the iPhone 5, Apple markets the internet services offered, rather than the hardware alone; it focuses primarily on what services and products can bring to achieve consumer satisfaction. The key to success is not merely to focus on products or services, but rather the satisfaction of consumer needs. The business model for RIM technology has been largely device-centric; it would be extremely amusing, for example, to compare and contrast the Apple’s iPhone 5 versus the RIM technology and its Blackberry mobile devices (Linden, Kraemer & Dedrick 2009, p. 143).

This fete can relatively be compared to other mobile device marketplaces that merely scored between 30 and 70% (Dedrick, Kraemer & Linden 2010, p. 507). Analysts have since recognised the Apple App Store as the leading mobile applications outlet. By December, it was estimated that about 300 million in software applications were downloaded, granting Apple revenues totaling to $45 million. By January 2010, Apple stated that nearly 4 billion applications were downloaded from the App Store in other parts of the world including the USA, United Arab Emirates, and Asia.

Conclusion

Finally, this analysis specifically examined Apple’s marketing strategies for most of its products and services. While some of the recommendations may be generalisable across the board, factors such as advertising, demographics, patent rights, user preferences, government policy and regulatory factors differ by regions. Therefore, it is highly likely that prospective market research focusing on the intercontinental implications of Apple’s products and services, a research study that would be of robust value to Apple Inc. and potentially succeeding in developing their marketing structure as they endeavor to expand their market outreach.

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From a pricing viewpoint, the iPhone 5 has followed the classic Apple strategy of versioning and skimming, where prices are initially set high to gain rapid proceeds from early consumers (skimming) and later pricing is reduced (in this case, largely owing to the AT&T subsidies) and escalating outreach to the vast public (versioning). Concisely, the resultant partnership between AT&T and subsidies has contributed to the Apple’s skill of version pricing, which at present is as low as $99, compared to its luncheon price at $599 for the original iPhone, each of these show that standardisation is the preserve for the success of the Apple Company.

References

Apple cedes market share in smartphone operating system market as android surges and windows phone Gains 2013. Web.

Computers and peripherals in the United Kingdom 2013. Web.

Dedrick, J. Kraemer, K. L., & Linden, G 2009, ‘Who captures value in a global innovation network? The case of Apple’s iPod’, Communications of the ACM, vol. 52. no. 3, pp. 140-144. Web.

Dedrick, J., Kraemer, K. L. & Linden, G 2010, ‘Who profits from innovation in global value chains? A study of the iPod and notebook PCs’, Industrial and Corporate Change, vol. 19. no. 1, pp. 81-116. Web.

Dedrick, J., Kraemer, K. L. & Linden, G 2011, ‘The distribution of value in the mobile phone Supply Chain’, Telecommunications Policy, vol. 35. no. 6, pp. 505-521. Web.

Hamm, H 2011, Apple loses European market share, cash strapped buyers pass on iPhones. Web.

Hughes, N 2014, Apple’s domestic Mac sales surge 28.5% as overall PC market shrinks 7.5%. Web.

Lessard, D., Lucea, R. & Vives, L 2012, Building your company’s capabilities through global expansion. Web.

Maha, H 2013, A study on the marketing strategies of Apple Inc. (Dissertation). Web.

Pisano, G. P. & Shih, W. C 2009, ‘Restoring American competitiveness’ Harvard Business Review, vol. 87. no. 7, pp. 114-125. Web.

Shares in Apple rise after iPhone deal with China Mobile 2013. Web.

Su, R 2013, Apple Inc. Remains No. 1 in U.S. Smart Phone Market, Continues Race to $700 in 2014. Web.

UK – Tablet PC market forecast & opportunities – 2016. 2012. Web.

Vrontis, D. and Thrassou A 2007, ‘Adaptation vs. standardisation in international marketing – the country-of-origin effect’, Innovative Marketing, vol. 3, no. 4, pp. 7-21. Web.

Whitney, L 2013, Apple to buck the trend in sour computer market. Web.

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