Introduction: Apple’s 7Ps
Over the past decade, Apple has diversified its product range noticeably, including a number of innovative features and services into an already impressive list of options. While Apple’s starting point included mostly computers and its famous operating system, the organization has expanded to include iPhones, iPads, Apple TV, Apple Watch, and innovative software, such as the updated MacOS system, Keynote, Logic Pro, Final Cut Pro, and a range of other products and services (Apple, Inc., 2020). Specifically, Apple has been offering accessories, digital content, and cloud devices in addition to its traditional brands (Apple, Inc., 2020). The observed trend toward product diversification aligns with Apple’s focus on expansion and willingness to stay innovative and relevant.
Although Apple has multiple physical stores, a range of its products is currently purchased online. The organization sells its products on its official website, online stores, and physical Apple stores, thus avoiding the threat of clients being tricked by copycats and cheap substitutes (Payne, 2017). In addition, authorized sellers and telecommunication companies are allowed to sell licensed Apple products (Matsui, 2018). The use of physical outlets in the form of Apple stores, as well as the inclusion of digital selling options, allows Apple to embrace the full range of opportunities for capturing the target audiences. Therefore, Apple’s approach toward product placement can be considered reasonable and effective.
Apple has become notorious for its comparatively high prices, which, admittedly, are quite justified given the innovativeness of the company’s production, the effort and resources invested in it, and the quality of the end product. However, to attract a broader range of customers to its services and products, Apple has been introducing flexibility into its pricing approach by developing the principles of Premium and Freemium products. Whereas the latter includes luxurious items available for extra prices to the company’s most valued customers, the Freemium option implies free products with improved features available for premium prices (Bostoen, 2019).
According to the existing accounts, Premium serves best for selling items that include innovative solutions and luxurious design, whereas Freemium allows Apple to gain traction among customers with lesser financial opportunities (Bostoen, 2019). Therefore, by using both frameworks in tandem, Apple has been achieving stupendous success in attracting not only its core customers but also broader audiences.
In conjunction with its impressive innovativeness and incredible technological advances, Apple has been using a rather advanced promotion technique to ensure that its brand remains not only visible but endlessly developing and, therefore, continually improving its services and products. Presently, Apple is using a combination of traditional advertising, a personal selling strategy, a sales promotion technique, and the approach based on public relations. The use of the latter deserves particular appreciation and attention since it allows creating a buzz around Apple’s innovative products, thus convincing people to purchase them. Specifically, the media releases issued with every new product delivered by the company sets the scene for the successful creation of the brand image. Events and product reviews also add to the efficacy of Apple’s promotion strategy, helping customers to get a better taste of the company’s services and products.
Apple has been known for years for its effective employee training programs geared toward motivating staff members and encouraging their professional development. The reason to give priority to employee education and development at Apple stems from the fact that the organization has always viewed education as a massive equalizing force that leads an organization to prolific and trust-based relationships with its employees. As a result, Apple has been investing in its staff development by providing them with options for training digital skills, encouraging them to build the required skill set quickly and gain the ability to acquire new skills whenever the opportunity arises (Lockamy III, 2017).
The supply chain developed by Apple is also a noteworthy accomplishment that allows the organization to boast a particularly strong competitive advantage in the global IT and Communication market. Apple has been placing especially noticeable and strong emphasis on the design stage of its process. As a result, the organization isolates its designers from the rest of the departments so that they could create a truly outstanding and unprecedented concept, which will, later on, be integrated into Apple’s context and shaped to be adjusted to the company’s brand standards and quality requirements (Payne, 2017). Therefore, the manufacturing process, which ends with packaging the product and sending it down the SCM line to retailers, necessarily involves the steps aimed at ensuring that every employee is aware not only of their tasks but also of the result.
Finally, the physical environment of Apple, namely, its outlets and shops, are typically characterized by exquisite minimalism and the presence of multiple innovative products along with the brands that have become the face of the company. As a result, Apple’s physical environment incorporates both the traditional elements of a retail outlet and the innovative principles of Apple’s operations.
Five Marketing Concepts as Applied to Apple
To fully appreciate the approach that Apple has developed throughout its performance in the global market, one will need to view it through the lens of five marketing concepts typically seen as the cornerstone of an effective marketing strategy. Namely, the production concept, the product, the marketing concept, the selling concept, and the societal marketing concept are reviewed below. As seen from the assessment, the fact that Apple has initially been geared toward an active interaction with its stakeholders, including its customers, has facilitated its immediate immersion into the digital marketing environment (Payne, 2017). As a result, Apple has been leading in its approach to using social networks as a vital communication channel.
In the Five Marketing Concepts framework, the production concept implies that the goods offered by a company should be both affordable and accessible. Consequently, the proposed idea means that decreased costs open an opportunity for an increase in supply (Singh and Gupta, 2020). Although Apple has been striving to make its products as accessible as possible to its potential buyers, the company’s quality policies do not allow cutting costs, which results in rather high prices. Therefore, Apple does not score high enough on the specified scale, yet the inability to meet the described standard does not signal the absence of a competitive edge in the company. Instead, it points to the fact that Apple has built its brand name around the idea of quality and reliability, which has led to an increase in its popularity.
In turn, the product concept of the outlined framework aligns with Apple’s current business strategy flawlessly. Demanding that the quality of the offered services and goods should be prioritized over the price and affordability of the product, the specified concept takes the correlation between quality and affordability to another extreme. Admittedly, in its pricing strategy and quality criteria, Apple appears to align with the described concept much more closely since the organization sets rather high prices for its products while emphasizing their exceptional performance (Tou et al., 2019). Although Apple could use other options to keep other audiences with fewer financial opportunities attracted to its brand as well, the present focus on quality seems to be quite lucrative for Apple (Payne, 2017). Therefore, Apple’s selection of the “Product” concept as its priority is justified.
Another important element of the Five Concepts Model, the marketing concept suggests that the importance of the consumer should outweigh any other factors in decision-making. The described idea could be technically seen as an important part of Apple’s business strategy. However, in addition to centering its customers’ needs, Apple also emphasizes the significance of all of its stakeholders, which include suppliers, retailers, shareholders, the global community at large, and even the environment.
Therefore, it could be argued that Apple has taken the marketing concept and expanded it to include an even larger range of possible stakeholders. The outcomes of this change echo in Apple’s current tremendous success in the global market despite the presence of constraints such as the pandemic, the presence of a large number of rivals and copycats, and other obstacles to effective performance.
In turn, the selling concept of the Five Marketing Concepts is quite straightforward since it implies aggressive selling as the main means of targeting customers. Since the specified method can be considered rather invasive by most customers, Apple has been using it quite carefully, primarily to bolster the sales of its latest products. For instance, Apple’s recent product, iPhone 12, was introduced with aggressive selling to ensure that it becomes a hit among the target audiences, allowing Apple to stay competitive (Payne, 2017).
Societal Marketing Concept
Finally, the social marketing concept implies that an organization should care for the well-being of the community, which can be seen in Apple’s consistent promotion of the well-being of society, at large, and the local community, in particular. Appel’s vision and policies fully align with the specified notion since the organization was initially set with the mission of making the global community a better place (Weinstein, 2018).
Namely, its current vision states that the company is aimed at “bringing the best user experience to its customers through its innovative hardware, software, and services” (Apple, Inc., 2021). Therefore, the social market concept is present in Apple’s philosophy and is reflected in its marketing approach accordingly since the company represents each of its innovations as the tools for improving the well-being of the community through communication and connectedness (Payne, 2017). Thus, the social marketing concept can be deemed as an undeniable part of Apple’s current marketing strategy, as well as its public image and corporate identity.
Remarkably, applying five marketing concepts to Apple will show that the organization has followed the outlined principles from its very conception. Although five marketing concepts listed above emerged before the creation of Apple, the company managed to incorporate them into its philosophy and follow them before they were made known to the global audience. Therefore, the inherent understanding of the importance of an ethical corporate philosophy, emphasis on meeting customers’ needs, and the focus on the global community as a whole have helped Apple to become a pioneer in the industry and blaze the trail for other organizations.
Thus, the company’s compliance with the five marketing concepts as the essential dimensions of a proper marketing framework indicates that Apple has been on the right track of its market performance. Namely, the company has managed to select the concepts that apply to its value system and framework of operations, causing a steep increase in its popularity and the further steady growth in revenue.
Existing Customer Segments
Apple has been using a rather intricate approach toward its segmentation, targeting, and positioning (STP) throughout its existence, which has resulted in the company finding its popularity with a wide range of audiences. Presently, Apple has been using a combination of the geographic, demographic, behavioral, and psychographic approaches. Specifically, Apple targets its customers based on their geographical location (urban/rural), demographic (age, gender, occupation, etc.), behavioral (loyalty, personality, user status, etc.), and psychographic (social class and lifestyle) characteristics. Based on the four segments above, one can single out the following segments within Apples’ current customers.
First, Generation Z belonging to the second class and located mostly in the rural area deserves a mentioning. While the specified customers are mostly white, they may also come from diverse backgrounds. Most of people in the specified customer segment share a sense of strong loyalty toward the brand. In turn, Generation X, which is also among Apples’ regular customers, shows lower rates of product engagement and is typically represented by business people. Remarkably, the observed trend occurs in buyers of both sexes. Finally, Apple has also managed to appeal to the youngest generation, which has also developed quite an appreciation for the company, yet is also highly socially conscious, which is why Appel will need to keep its brand sustainable and unblemished to keep their loyalty.
Based on the specified characteristics of its customers, Apple can make observations of the choices that they make when purchasing its products, thus linking the types of products to the specific customer segments that seem to prefer said products (Majava and Isoherranen, 2019). As a result, the company has succeeded in developing marketing strategies for appealing to the specific demographic that is likely to purchase a certain type of products (Tien, 2020).
As seen from the current sales rates, Apples’ approach toward STP has been working extraordinarily well, with its products being highly popular in the ICT market. To appeal to the identified customer segments, Apple will need to keep its brand sustainable and innovative, while also ensuring that Apple products remain the marker of a high social status. Therefore, the principles of disruptive and incremental innovation types as the basis for the company’s functioning must remain at the core of Appel’s promotion and production.
External Forces Influencing Product Markets
Currently, several factors affect the demand for IT and ICT products in the global market, thus shaping Appels’ performance. Among the most notable ones, the requirement for cloud computing as the safest way of storing data should be mentioned. Given the fact that Apple has been offering massive opportunities in terms of cloud data storage, the company’s current popularity can be explained quite easily (Pathiranage, 2019).
Consumer Behavior Trends
Examining the main tendencies in the development of relationships between Apple and its buyers, one will notice several important trends that are likely to affect the future strategy and decision-making of the company. Specifically, several sources have reported rather troubling news concerning the loss of loyalty in several consumer segments (Botos et al., 2017). For example, the article published recently in Reuters mentions that Apple’s target customers in India have preferred a cheaper substitute produced by China recently (‘How Apple is losing its grip on India’, 2018). The report by Ballard (2021) outlines the struggle that Apple has been facing while trying to keep its competitive edge in the Indian market and maintain its appeal to Indian buyers. However, the target audience appears to prefer cheaper Chinese substitutes, instead.
On a global level, the situation that Apple has been facing cannot be described as positive, either. Namely, due to the global focus on reevaluating priorities and promoting a more sustainable approach, as well as the need to invest in the support of disadvantaged communities rather than one’s social status, iPhones and other Apple brand products have become significantly less popular (Jie and Hasan, 2017).
A substantial amount of reasoning behind customers’ decision-making owes its existence to the specifics of the branding approach that Apple has been using. Namely, since the company has been positioning its brands as the symbol of a social status, its value has diminished since the global community has placed charity over climbing the social hierarchy over the past year (Payne, 2017). Therefore, the current global trends are not quite bright for Apple.
To counteract the observed issues, Apple will have to embark on the trend of promoting the sparing use of resources and the reasonable approach to spending. For the company not to have its sales reduced as a result, Apple will need to position its products in a slightly different way. Specifically, the products and services offered by Apple will have to be rebranded as the tools that allow participating in the global movement toward joining forces in fighting the pandemic and supporting communities in need. Due to the increasing role of information management, the devices that allow transmitting, storing, and securing information must be marketed as such o that people could see them not only as status tokens but also essential devices for managing information.
In addition, among the essential consumer behavior trends, one must note a recent spark in online activism within social networks, which has proven to have a palpable effect on the performance within the industry. For instance, the recent GameStop controversy, which involved a rapid increase in the share prices of a comparatively unknown company due to the massive support of online fans, has shown that the role of social media activism in building the economic, financial, and, therefore, competitive potential of an organization is tremendous (‘Controversy over GameStop’s stock market saga explained’, 2021). For this reason, it is strongly suggested that Apple should monitor online trends in the perception of its brand within the digital community. Specifically, trending hashtags in social media and posts that garner an unreasonable number of likes need to be monitored by the organization.
Suggested Marketing Concepts Linked to Consumer Behavior Trends
Given the existing rise in concern for unreasonable spending among its target audiences, Apple will have to focus on the marketing concepts such as social marketing and marketing, in general. Specifically, Apple needs to monitor changes in its customers’ attitudes and especially their perception of the brand. As the recent case with the drop in Apple’s appeal to its target Indian audience, as well as its gradual loss of its global image, has shown, Apple requires an immediate adjustment of its marketing strategy. Namely, how the company approaches branding and develops the product image must be revisited to introduce a greater focus on the concepts of support, unity, and empathy. In addition, the organization must participate in charities and donate actively. Furthermore, creating a program aimed at raising money to support those suffering from Covid-19 should be considered as a possible course of actions for the company in the nearest future.
Overcoming Potential Challenges and Threats Linked to the Marketing Suggestions
In its pursuit of improving its brand image, Apple is likely to face several obstacles. Specifically, the challenges of improving its reputation should be addressed first. It will be necessary for Apple to launch a public program that will help shape people’s perception of the brand without affecting the company’s pricing strategy. For this reason, Apple will need to introduce better tools for monitoring its representation in social media and provide prompt responses to the claims that may potentially destroy the company’s reputation. In addition, Apple could apply a better framework for distributing its products, as well as reduce the company’s dependence on the sales in high-end segments of the target markets (Tien, 2020). Thus, the organization will be able to reduce the threat of its brand value being reduced and its public image being affected negatively.
Appel’s approach to marketing has shown excellent results over most of its performance in the global market. However, with the recent change in the IT and ICT market, specifically, the rise in the threat to people’s well-being due to the pandemic, the current pricing policies of the organization may spark some controversy. Therefore, it is recommended that Apple should restructure its approach toward branding, as well as its vision of stakeholders so that the organization could not be accused of making money at the time of a global crisis.
Thus, Apple will have to continue its R&D and innovation while engaging in the active support of the global community and showing its concern for public health as opposed to using aggressive marketing. Moreover, the organization will have to monitor the changes in its brand perception by considering the trends in online conversations about Apple and it products. Therefore, Apple will have to seek opportunities for better brand management and the enhancement of its ethical standards.
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