Apple Inc. was launched in the year 1976 (Grady, 2009). Its headquarters is situated at in Cupertino, California in the United States of America. In the beginning, the company was dedicated to designing and selling personal comp,uters. However, the company has extended into developing, designing, and selling consumer electronics, PCs, and software. Currently, Apple is one of the biggest companies in the world in terms of market value. Its electronic products are considered among the best available, especially in the telecommunication and entertainment industries. The company has succeeded in offering high-quality electronic products at low prices. Its iPod and iPhone are some of the most competitive electronic products in their category. Recently, Apple has been enjoying the financial success that has not been experienced by any of its competitors before.
The company is rated among the world’s top largest information technology companies (Seba, 2013). As such, the company is ranked third largest in telecommunication industry after Samsung Inc and Nokia Inc. In, the year 2012, the company was voted as the world’s best valu.able brand. Early this year, the company owned and operated more than 500 retail stores around the world. Equally, during the same time, the company runs two lucrative online stores. The stores are Apple Store and iTunes Store. iTunes Store is ranked as ta he world’s leading music seller. By early 2013, the company had over 73,000 permanent full-time workers and over 3,500 short-term workers around the world (Seba, 2013). During the end of the year 2013, the company’s annual revenue was summed to $169.9 billion. During the same year, the company was ranked among the best ten corporations in the Fortune 500 listing of companies (Seba, 2013). The above success was realized after the company spent a huge amount of money on building its brand. Along its growth path, the company has encountered numerous challenges.
Among US citizens, Apple phones are still the most desired consumer electronics. Thus, the company has not lost its ground in the market. In the past year, the corporation gained in the market share. In the same year, over 60% of the company’s sales were made outside the US. The company has production units in Ireland, China, the Czech Republic, and Korea (Gregory, 2013).
Despite its success, Apple has come under accusations of ethical malpractices in its marketing strategy. The company’s use of labor in China has also raised concerns over the cause of its wealth. Apple has repeatedly defended itself, claiming that it is trying to prevent its rivals from taking advantage of its unique innovations. The company also claims that it has formulated regulations for its suppliers to curb malpractices in the manufacture of some of its products. On the other hand, it is accused of negligence of its obligations in ensuring that manufacturers of its products follow standard ethical guidelines. Rivals have also accused it of using monopoly power to sideline and unfairly defeat efforts to establish any significant competition (Seba, 2013). Although Apple is offering some of the best products and services in the world, there is considerable evidence that its lead inthe the market has been obtained through unfair competition and unethical practices.
Current Marketing Situation
5-year financial overview
|At the end of the year||2009||2010||2011||2012||2013|
|Payout Ratio %||–||–||–||6.0||28.7|
From the year 2007, Apple’s has tremendously increased its revenues. Its growth has been enhanced by the increased sales of its innovative products (Seba, 2013). The company achieved widespread accomplishment owing to its iPhone, iPod Touch and iPad. The above products introduced innovation in the field of consumer electronics. However, the company’s market is facing a threat from large phone manufacturing companies like Samsung, Nokia, and other emerging companies in Asia. Among the US citizens, Apple phones are still the most desired consumer electronics.
Apple designs and sells a number of Macs. They include MacBook Pro, Mac Mini, iMac, and Mac Pro. Equally, the company is engaged in designing a number of Mac’s accessories. In the year 2010, the company launched iPad tablet to the market. The device comes with the multi -touch interface. Similarly, the device supports numerous multimedia set-ups such as enewspapers, emagazines, ebooks, etextbooks, and other iPhone applications (Seba, 2013). Since the introduction of the first iPad1, the company has been working hard to come up with more products that are more user-friendly and cheap to meet the ever-changing customers’ needs. In the year 2012, the company launched the iPad 2. Unlike iPad1, this device had an efficient microprocessor and a camera on its both sides. Similarly, the device was 3G enabled. From the time the iPad was launched, it is estimated that iPad users have downloaded over 3 billion applications. Similarly, it is estimated that over twenty five billion store-downloads have been recorded.
Other than iPad, the company also specializes in the design and sell of iPod products. During the year 2001, the company launched the iPod. From then on, a number of improved models have been introduced in the market. At the present, the iPod is the top biggest brand in the portable music industry. In the year 2012, the company sold over three hundred and fifty million iPods. At the present, the company sells a number of iPods variants. The variants include iPod Shuffle, iPod Nano, iPod Touch, and iPod Classic (Seba, 2013).
The iPhone was first launched in the year 2007 (Schneiders, 2011). Ever since then several variants of iPhone have been introduced. The phone first generation was released in the year 2007. Its 3G enabled version was released in the year 2008. Two years later, the iPhone 4 was launched. IPhone5 was launched in the year 2012. The company sold over three million units within the first few days of launching the product. Other products that the company designs and sells include Apple TV, and software.
Channels and logistics review
Currently the company’s market is facing a threat from large phone manufacturing companies like Samsung, Nokia, and other emerging companies in Asia. Among the US citizens, Apple phones are still the most desired consumer electronics. The company is doing well in the US because of the appropriate channels and logistics in place. Thus, the company has not lost its ground in the market. In the past year, the corporation gained in the market share. In the same year, over 60% of the company’s sales were made outside the US (Seba, 2013).
On the other hand, Samsung is the largest emerging threat to Apple’s market. Samsung is an emerging company in the industry. The company’s major rival is Apple. Although apple is the most preferred phone in the developed world, Samsung is the most preferred phone in the developing world. The company has production units in South Korea, Vietnam, and China. As of mid last year, the company had over 270,000 employees. With respect to the number of total phone sales, the company has defeated its rivals. In the past one year, the company sold a record of 80 million mobile phones. This was an improvement from the previous year’s sales of 55 million mobile phones (Seba, 2013). Therefore, the company should enhance its logistics and marketing channels to outweigh its competitors in the developing world.
The company’s consumer loyalty merged with growing closed ecosystem is a major strength exhibited by the company. Initially, Apple’s closed ecosystem was a challenge for most clients. By then, the system was considered as a weakness. However, at the present the system has integrated a number of applications, software and other features. Through this, the company has enhanced the usability of their products. All these features combined with the company’s robust customer loyalty, the company has gained competitive advantage over its rivals.
Ever since its establishment, innovation has aided the growth of the company. In the year 2013, the company won an award for being the most innovative company in the industry (Seba, 2013). The company’s ability to come up with innovative products has enhanced its competitive advantage among its rivals. Another strength exhibited by the company is strong financial performance. The company’s gross profit margin makes the company very stable, unlike its competitors. In the year 2012, Apple had about $ 10 billion in cash. The cash could be used in the acquisition of other companies or in other investments that would increase the company’s revenues in the future.
Other strengths exhibited by the company are brand reputation, retail stores, and robust marketing groups. Unlike its competitors, Apple brand among the clients is enhanced. As such, the company’s products meet the customers’ expectations because they are appropriately designed, pleasing, and function as expected. In the year ending 2012, the company’s brand was valued at $76.4 billion. With the above value, the brand was rated among the best global brands. With a number of retail stores around the world, the company has been able to deliver customer services to millions of customers. Similarly, through this the company can also enhance its brand awareness among its clients. Similarly, the Apple’s efficient marketing team has played a great role in the success of the company (Dess, 2012). The team has been able to sell the company’s products to millions of global customers.
As compared to competitors’ prices, Apple’s products are more costly. A number of consumers have pointed that the company’s prices are unjustified. Considered that there is huge competition in the phone industry, Apple’s high prices can be a weakness. Therefore, the consumers can go for the competitors’ products as alternatives. Another weakness portrayed by the company’s products is incompatibility with diverse operating systems. Usually, the company’s products use iOS and OSX. The above systems are different from android and windows operating systems, which a number of customers have become accustomed. Owing to such dissimilarities, a number of customers unfamiliar with Apples operating systems may go for competitors’ products with user-friendly OSs. Another weakness experienced by the company has reduced market share.
Of late, emerging Asian companies such as Samsung have reduced the company’s market share. With fewer market shares, the company’s influence among the customers will be compromised. Equally, patent infringements are another weakness portrayed by the company (Scott, 2008). Over the last few years, the firm has been blamed for infringing other corporations’ exclusive rights. Through this, the company’s reputation might be affected in the future. Similarly, the company might lose substantial finances if found guilty by the law courts because they will be asked to compensate the affected companies.
Other weaknesses include changes in management, malfunctions of new products, and long-term gross margin decline. The management of the company has changed after the demise of its founder in the year 2012 (Segall, 2012). Therefore, the change in management might affect the operations of the company in one way or another. With respect to malfunctions in new products, the company might lose a number of its customers. In the past, some iPods and iPhone have been reported with faults.
In the future, the increasing demand in Apple’s products will enhance the company’s market share. Through this, the company will gain a competitive advantage over its rivals. New services and application such as iTV will increase the company’s sale and enhance their ecosystem.
Currently, the company relies on Samsung for the supply of applications’ microprocessors. However, since Samsung is their major rival in the industry the company will be forced to look for another supply if they want to outweigh them. Thanks to the emergence of other application manufacturers, the company can opt for another manufacturer with better applications than Samsung. Therefore, the above illustration affirms that the emergence of number application manufacturers with better engineering capabilities is an opportunity for Apple. Another opportunity that Apple should exploit is the expansion of tablet and Smartphone markets. Unlike in some few years ago, revenues from the sale of tablets and smart-phones have surpassed the revenues from the sale of other consumer electronics.
Currently, smart-phones and tablets are becoming more user-friendly enabling more consumers to acquire them. Through this, Apple will be having a better opportunity in the future to increase their share in the market unlike their rivals. Similarly, the company can still tap into the emerging mobile advertising market. As more people acquire smart-phones, the company has created a number of advertising platforms to make advertising possible through phones. Therefore, the company has chances to come up with more innovative platforms that will enable them venture into the emerging market. Similarly, the company should increase their share in the cloud service market. Through this, they would enhance their revenues.
Currently, the company relies on other companies’ patents to maintain their operations and enhance their expansion. If the company comes up with its own patents or acquire the patents’ firms, they will be able to increase their operations without any restrictions. Similarly, this will enable the company enhance its skills and competence.
A major threat faced by the company is speedy technological transformations. The threat puts pressure on the company’s future success. Every year, the company must come up with new innovative products to be ahead of its rivals. If they fail to do so, its rivals will fill the gap and gain an advantage over the company. Of late, the company has not introduced any new feature in their products except iTV. Therefore, the company may not introduce an innovative feature allowing competitors’ products to enter the market. Another threat that affects the company is tax increases. Increase in tax will increase the operating cost of the company. For instance, the 2013 tax increases affected Foxconn employees (Seba, 2013). Foxconn is a company that produces much of the accessories used in the manufacture of Apple’s products. Therefore, the above tax increases are likely to increase the products of the company making them uncompetitive in the market. Another threat that may affect the company’s future is breached IP rights.
Similarly, another of the major threat faced by Apple is stiff competition in the online music market. During its earlier years of operation, there were a few online music retailers unlike it is today. Over time, several players have entered into the market eating into the company’s customers. Currently, there is enormous pressure being put on the company from the rivals. The above companies might merge in the future with the view of competing against Apple.
- Customer loyalty pooled with expanding closed ecosystem
- Apple is a top innovator in mobile industry
- Strong financial performance
- Brand reputation
- Retail stores
- Effective marketing and advertising groups
- High price
- Inappropriateness with different OS
- Decreasing market share
- Patent infringements
- Changes in management
- Defects of new products
- Long-term gross margin decline
- Increased demand of iPad mini and iPhone 5
- iTV launch
- Appearance of the new provider of application processors
- Growth of tablet and Smartphone markets
- Patents through acquisitions
- Damages from patent infringements
- Robust growth of mobile advertising market
- Rising demand for cloud based services
- Rapid technological transformation
- Tax increases
- Rising pay levels
- Breached IP rights
- Strong dollar
- Android OS growth
- Rivals’ moves in online music market
Objectives and issues
First year objectives
- To understand the customer desires
- To understand the customer behaviors
- To come up with appropriate targeting and positioning techniques
Second year objectives
- To implement all the measures put in place to outweigh its competitors
- To determine the success of the changes
During the marketing research period, the researchers be required to interview a number of individuals. When carrying out these interviews, participants’ privacy should be upheld to ensure that the research does not harm them. Therefore, the major issues that will be encountered will be related to participants’ privacy. In this regard, before the data collection process is undertaken in our research, permission for the study will be requested from the organization and the Institute of Research Board. Equally, the research will follow the directives of the established code of ethics. As such, the research will cause no harm to the participants, safeguard the participants’ privacy, and be voluntary. During the research, participants should be informed of what is required of them before the start of the project, the length of the project, benefits accrued from the project, possible risk associated with the research, and who to consult.
The company targets wealthy customers, innovators, and well-informed individuals with well paying jobs and enjoy high standards of living. The main reason for positioning itself in this segment is that if the company targets lower income-earning segment, the rich customers who trend with new products will stop buying Apples’ products. The low prices reduce the sales of the Apple products, hence the need for positioning itself with wealthy customers.
Apple CEO, Tim Cook, has adopted his predecessor’s product strategy. The company offers a small variety of products while at the same time focusing on high products. Apple also employs product differentiation in order to increase the demand for its products. Their goods are designed with unique and attractive features, and these places the products at a competitive advantage compared to its competitors such as Google and Samsung.
Apple Inc has adopted the high pricing strategy, especially when it comes to new products. For instance, the new 9.7-inch tablet known as iPad Air that is to be launched in more than 50 countries worldwide will cost between $ 500 to $ 629. Apple’s executive Phil Schiller will launch the new tablet with the aim of gaining higher profits by trading off the market share. The disadvantage of higher pricing strategy is that it will open opportunities for competitors such as Google, Amazon, and Samsung, which sell the same products at relatively low prices. The company has also embraced a low pricing strategy for the older iPad. The company has dropped the price of iPad Mini to $ 299.
The company sells its products directly to customers and the medium sized businesses (SMBs) in most of their markets. Similarly, Apple resells the products of their third parties. The company does this via retail, direct sales personnel, and the online service stores. In addition, the company works with indirect channels of distribution. They include wholesalers, retailers, value-adding resellers and the third-party network carriers of cell phones.
Marketing communication strategy
The company has one of the most recognizable logo symbols worldwide. It has adopted two promotional strategies. Advertising and personal selling form the marketing strategy of the company. In fact, in 2008 the company created a large series of television, internet, and technology advertisement platforms. The company employs extensive personnel. The personnel comprises of many sales representatives knowledgeable in product information as well as customer service. Most of the Apple stores have young personnel who are familiar with the new technologies. The personnel assist the customers in transition from old to new technology, thus retaining market share.
Any large company has its own department of research, which analyze its problems at a given point in time. Apple Company does not rely much on market research. They seem to have embraced the strategy of Apple’s co-founder Steve Jobs who shunned marketing research on the concept that it was not the work of the consumer to know what they want. The Marketing chief Phil Schiller confirmed this in court proceedings of Apple Vs its competitor Samsung (Lashinsky, 2012). He stated that Apple Company does not rely on typical market research to create its products. However, the company has started a market research group known as Customer pulse. The group focuses on conducting market survey with respect to customer satisfaction. To achieve this research, the company launched the website for Customer Pulse, which will aid in collecting direct customers’ opinions about issues relating to the company’s products.
In the first months, Apple should focus on the understanding of thoughts, desires, and behaviors of their clients. Through this, the company can come up with the appropriate targeting and positioning techniques. Equally, the company will get to know the potential users of their products, what the company should communicate with their clients their products, and the marketing channels to be utilized.
After identifying the appropriate targeting and positioning techniques, the company should implement its marketing plan in the second month. During this time, all the measures put in place by the company to outweigh its competitors should be implemented.
Apple Inc will fund all the necessary research required to collect the relevant information required in the marketing plan. It is assumed the major expenses will be towards personnel, equipment, and office supplies. In general, the total marketing plan would cost $ 3 million.
Action standard would be used as a control measure in this plan (Howell, 2006). Action standard refers to the option that can be taken in each situation. Action standard aids the researchers augment the methodologies to be used in evaluating each condition. In the article, action standard has been provided because the proposal has detailed how the scenarios described in the research’s problem are going to be tackled through the introduction of their innovative products. The action standard used in the proposal is a quantitative monitor. The standard is created and executed after the end of engagement to track feelings, values, and protection behaviors (Champniss, 2011).
In conclusion, it should be noted that Apple is among the largest global companies. At the beginning, the company was dedicated to designing and selling personal computers. However, since then the company has extended into developing, designing, and selling consumer electronics, PCs, and software. Currently, Apple is one of the biggest companies in the world in terms of market value. Its electronic products are considered among the best available, especially in the telecommunication and entertainment industries. The company has succeeded in offering high quality electronic products at low prices. Its iPod and iPhone are some of the most competitive electronic products in their category. Recently, Apple has been enjoying financial success that has not been experienced
Apple is undeniably a favorite company for consumers in the electronics industry. It is known for the high quality of its products. For the stockholders in the company, there are good returns. Therefore, in developed countries, where consumers and stockholders reside, Apple is a popular company. Consumers are ignorant of apples actions, and if it were not so, Apple would not be a popular company. The reality of its practices in developing countries where its workers and suppliers are situated is unpopular. However, the workers are not considered as valuable as the consumers are. Machines or other workers can always replace disgruntled workers. It is also evident that Apple is determined to keep its competitors uninformed about its intentions or marketing techniques. While a moderate level of confidentiality is required in business operations, it is fraudulent to offer consumer goods that are going to be rendered obsolete in a short while. Restriction of customers from using products offered by other companies is also tyrannical. The other fraudulent action by Apple is its pricing policy. The company galvanizes itself from price competition by offering secretive products whose technology is not well explained.
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Howell, M. T. (2006). Actionable performance measurement: a key to success. Milwaukee, Wis.: ASQ Quality Press.
Lashinsky, A. (2012). Inside Apple: how America’s most admired-and secretive company really works. New York: Business Plus.
Schneiders, S. (2011). Apple’s secret of success traditional marketing vs. cult marketing. Hamburg: Diplomica Verlag.
Scott, M. (2008). Apple, inc. Westport: Greenwood.
Seba, J. (2013). Steve Jobs: from Apples to apps. Broomall, Pa.: Mason Crest Publishers.
Segall, K. (2012). Insanely simple: the obsession that drives Apple’s success. New York, NY: Portfolio.