MARKETING PLAN - APPLE. Executive Summary

Transcription

1 MARKETING PLAN - APPLE Executive Summary Apple Inc. designs, manufactures, and markets, personal computers, Mac book, ipod, iphone, ipad, and related accessories. In addition Apple also has range of products and services like itune stores for music, Xserve server and Xserve Raid storage products, Mac operating system and a portfolio of professional software application. The marketing strategies and marketing mix are related to the Apple products' and services' quality value. The products of Apple Sold via its retail stores, online stores, direct sales force and third party wholesaler and retailers. It is apparent that Apple's products have become a mainstay of modern life (Reuters, 2012). However, Apple is now dealing with a public relation disaster and threat of calls for boycott of its iphone and ipads. The public image of Apple has taken a jump after the shocks of working conditions in some of Apple's network of Chinese suppliers' factories. Now the dreaded word "boycott" began to appear in media coverage of its activities (Guardian, 2011). Hence, this report emphasizes a significant marketing plan that will assist Apple in order for solving most of its marketing and management issues. Situational Analysis Marketing Environment The business strategy of Apple leverages their potential, through designing, developing its own operating system, hardware and technologies in order for bringing its potential customers throughout the globe inducing new products and solutions with great usage and innovative design. Apple encounters intensive competition from its rivals. Apple is broadly recognized as an innovator in personal computer as well as consumer electronic markets. Apple makes use numbers of indirect and direct distribution channels and they have 125 stores in USA, UK, Canada, Japan and Australia. In spite of the dramatic success, Apple now deal with public relations disaster and threat of calls for boycott its products. The reputation of Apple in the market has drastically fallen down due to the working conditions in the factories of some of its network of Chinese suppliers. (Guardian, 2011). In order for remaining competitive it is imperative for apple to solve issues, and to increase R&D and marketing as well as advertising for maintaining its position in the markets. SWOT Analysis Strength Innovative - All of apple products are very innovative and have innovative design and technology which is patented and not matched by any other products in the market today. Further, Apple products have several functions compared to the products of competitors. 1

2 Compatibility: Apple products will work with itunes and compatible with Mac OS tools that mean the products have unlimited potential for upgradeability. Ease of Use: Apple products and made to ease of use. The new touch screen interface of iphone, IPad, and Mac book make operations totally spontaneous. It identifies multi finger gesture just as how the hand of human is behaved. Brand awareness: Apple products are known as 'Cool' as it comes great technological advancements. Weakness Price: All Apples' products are very innovative, products are sold at reasonable price for its vlaue. Quality: Apple's products come with great quality. The touch screen Apple devices has the brightest and scratch resistant screen in the market. In addition, virus cannot attack in any of Apple's products as the software suite comprised resistance to virus threat. Image: The brand image of Apple has not been targeted towards business people as most of the rivals of Apple targeted. Moreover, Apple doesn't possess any reputation as not being compatible with corporate world. In addition, Apples' brand image fell down due to the working conditions in the some factories in China. User Interface: There is an issue with the touch screen interfaces that known as "gorilla arm" where long term use of solid surface for input becomes not comfortable. Opportunities Increasing demand and expansion to new target segment: Apple target the customer who require all in one computing solutions. However, as the technology advances, Apple also have the opportunity for targeting the people who need the entertainment. Upgradable: Apple lets new exciting features to be brought in as the software on the Apple's devices can be updated. Partnership: Apple is able to make strategic alliance or partnership with many powerful global consumer electronics companies, and hence costs in marketing can be reduced and revenue can be increased by making long term agreement. Threats Increased competition: It is seen that many companies are increasingly entering the to the market of tablets, smart phones etc. and there is low barriers to entry. Competitors may attempt around copyright for making similar products. Difficulties to expand to Asian market: As the tablets, smart phones are popular and widely used, it is difficult to expand to ASIA 2

3 Pricing pressure: The products of Apple are marketed as high end products, however as the competitors undercut the prices of products like tablets and Smartphone's, apple products are definitely going to fall. Competitor Analysis Apple faces intensive competition in all of its business areas. It has been observed that the markets of consumer electronics, PCs, and software extremely competitive. These markets are featured by technological innovations in hardware as well as software which did enhance the potentials and use of PC and other gadgets. The significant competitors of Apple who sell PC on the basis of operating system have drastically reduced prices and brought down the margin of the products in order to obtain the market share. The major competitive factors comprised of performance, price, quality of the products, innovation, features, availability, software, service and support, marketing and distribution potential etc. In addition, since the PC industry and its consumers mostly depend on the internet and increasing numbers of gadgets which are simpler, smaller, inexpensive than PC, may be having competition with the Apple's current products. In the PC industry Apple faces severe competition from Dell, Sonly Vaio, IBM ect. Moreover, a few of the potential competitors of Apple have considerable resources and are capable of giving the products and services at very cheap prices in order to compete with Apple. In the market smart phones and tablets Apple faces intensive competition from Samsung, HTC, Sony etc. These players provide products comparatively low price than Apple with similar features (Market Watch, 2012). The future of Apple and economic conditions are merely relied upon the potential of Apple to develop improvements to the Platform of Mac and the software and hardware of company. PC industry and consumer electronic encounter extreme competition and featured by aggressive strategy of pricing, launching of new products, pressure of cutting gross margin, life cycle of the products, and rivals. Indeed the Apple's operation in the future may be continued to affected by these pricing practices (Market Watch, 2012). Core competencies of Apple Think different: The core competencies of Apple is nothing but the innovative design and technology. That is the motive as well as the spirit behind of well known 'Think different' campaign. Indeed the products are introduced by Apple that extremely won the market. From the first affordable computer Macintosh in 1984 to the latest iphone and ipad which combines portable digital media player, WiFi, GPS, camera, etc. Apple not only astonishes the customers but it changes the whole concept consumer electronic industry. Buy different: Apple wants the customers to redefine the buying experience rather that just thinking differently about the its products. The Apple stores have been designed to create a clubhouse for the enthusiasts of Apple that selling their products. 3

4 Marketing Objectives Apple sets two significant marketing objectives which are ; To make necessary change the supply chain process and produce and sell directly to customers. To assemble computers on the basis of the specification of the customers. To expand the brand name of Apple and link to the established significant positioning. Apple can reduce the cost of manufacturing by not depending on other companies to manufacture the products and removing resellers to sell the products. In addition, Apple can rebuild the reputation and enhance public relation by treating the employees effectively. Moreover Apple can gain competitive advantage in terms of price. Apple has developed strategic management mechanism in order to meet these vital objectives. Apple plan to manufacture their own products from own factory rather than relying on the particular company. Apple is committed to bring the best personal computing and gadgets to students, professionals, businesses, and consumers. It is apparent that the continuous R&D is critical for facilitating innovation of new and improved products and technologies. Marketing strategy The significant marketing strategy Apple comprises, giving emphasis on particular area of expertise in which Apple is strong as in any company anywhere in the world as expertise in the introduction of technology products, particularly via distribution channels. Apple is focusing on geographical markets, such as USA, Europe, Australia. In addition Apple also focus on limited segments of products such as PC, telecommunications, software, networks, and the products of technology integration. The significant value proposition of Apple is strong expertise for boosting major league market entrance to new markets all through the globe, at a price premium proportionate with great value and faces competition on quality as well price. Target Market Apple target market comprises environments where graphic design, video and audio editing are in demand. In addition Apple also targets the consumers with higher disposable income. In fact Apple focus on vertical markets. Apple major target market segments include North and South America, Europe, Australia and Japan. The target market of Apple of has following features: Middle and upper income customers who are ready to pay more for user experience Customers who love to have fun with technology. These customers comprised of ones who love to shoot digital photos and videos. It is simply nothing but the concept of digital hub. 4

5 Students: High school, graduate, and post graduate students Professionals in media and designs. Positioning Apple positions themselves to particular type of consumers, innovators, middle income/ higher income people, people who have good jobs and life styles etc. The trendy people will stop purchasing Apple if Apple positions itself to poor people, as all the people can and this will damage the brand of Apple rather than just increasing the sales owing to the lower prices. Market segmentation Market segmentation is the most significant strategy of Apple. Apple gains the position in the industry of smart phones due to its segmentation strategy. Apple segments its products vertically and sell the products at the right price for the utmost profitable segments. Moreover Apple identifies segments which are willing to pay more for the unique products that Apple offers: the experience, and quality. Apple ignores prospects who are not ready to pay their price. Marketing Mix Product mix In any type of business, Product is the most attractive part of it and customers choose a company considering their products. The value and fate of company is decided by their products. If core product is not there, then there won t be anything to promote, place or price. It can be said that product is the most important thing copied by competitors and criticized by customers (Stanley, 2009). The product range of Apple varies from mobile phones (iphone) to portable computers to peripheral products. One-to-one learning solutions, wireless networking, editing and video creation solution, etc. are some among the products and services provided by the Apple. MacBook Air, Xserve, Mac Book Pro, Mac Mini, imac etc. are some of the portable computers offered by Apple Company. The versions of iphone are iphone 3GS, iphone 3, iphone4 and iphone4s. ipod is another product which helped Apple to gain widespread attention. Its upgraded versions are ipod Classic, ipod Shuffle, ipod Nano etc. Some of the servers offered by Apple are Xsan, MobleMe, Xserve etc. In addition to these, peripheral devices like printers, cameras etc. are also come from Apple company. Apple release products with multiple base choices and for diversifying their product range they offer some upgrades also. Operating systems created by Apple itself is used in Apple products. The integration and organizing are intrinsic in Apple, as the software required for their products are produced by them. This method enables them to attract people having interest in technology. 5

6 In Apple products, it is not possible to run or use many software exists in market. In Apple, only those software that are compatible with their products can be used which restrict users from using many business based programs. Promotion mix Another element of marketing mix is promotion. Boosting the demand for the product, differentiation and product awareness are the major objectives of promotion (Kurtz and Dave, 2010). Apple is very famous for their promotional strategies. Very consistent and unique style is followed by Apple while promoting their products. Electronic media is mainly utilized by Apple for their advertisements and marketing. They adopted a promotional strategy which allure all types of customers (new and existing) regardless of their age. Apple mainly concentrate on Public Relations, giving importance to product value. They make use of advertisement method and concentrate on satisfaction of customers and quality. Huge money is spent by Apple for their advertisements. Public relations is a vital aspect of marketing mix, since following appropriate PR method can give the idea that company is proficient in technologically advanced and innovative products. Ascertaining Apple s skill in product evolution as well as positive upgrading of principles and values of company and quality of product for maintaining existing customers is the major objective of PR method. TV advertisements, advertisements in magazines, internet ads, online sales etc. are some of the promotional tools adopted by the Apple Company. For attracting customers they include celebrities in their ads. Through electronic shops, supermarkets and Apple shops also they promote their products. Their unique and well known logo also act as a promotional tool for them. Apple majorly concentrates on relation with customers and as part of this the company try to update each and every new services and product offered by them. Personal selling is also preferred by them. In Apple stores, well mannered, energetic and highly informative sales representatives having thorough and up-to-date knowledge about technologies are appointed. This itself give Apple benefit of a promotional method since these representatives provide customer service which appeals people which result in word of mouth publicity. Price mix Price is an important factor in marketing mix strategy. It is the amount a person give in exchange for the product (Kotler and Armstrong, 2009). The survival of a company depends upon its pricing strategy since it determines profit as well as loss of the company. Even if the product is best, nobody will buy a product if its pricing is inappropriate. Putting very high price and very low price will make the company suffer. Customers won t purchase a product if it is overpriced and they won t consider a product seriously if price is too low. 6

7 Apple enjoys a prestigious position in the market now and its demand is increasing rapidly. This allows them to put high price for their products. How much ever is the price, customers loyal to Apple is ready to buy it at any cost. Because of their marketing policy Apple could charge high rate for their products. In Apple s product, various programs are there and they use up new innovative technologies in their product. This enables them to put high price on their product as they have got customers that are very much loyal towards them. By providing discounts as well as rebates Apple try to retain their existing customers and attract new people. Moreover, contract pricing method is also adopted by Apple which make it easier for customers to purchase Apple s product. Considering lower downloading rate of songs, the charge for songs from itunes were minimized by Apple. Place mix The place in marketing mix represents the distribution (Solis, 2011). Apple places their products in a such a way that they provide their products whole through the world. With the help of direct sales, retail stores, third parties as well as online stores Apple s products are made available throughout the world. Apple divided their market into four geographical sections. They are Americas, Europe, Japan and retail. They have got various retail stores (more than 200) all across the world. The design, development, marketing etc. of Apple s products are done by the company only. So they have got high responsibility on their head. Only very limited number of software are compatible with Apple s products which is a restriction. Apple try to overcome these challenges by making an agreement between them and Intel (processor manufacturers). This enabled them to overcome the challenge of increasing processor costs. The network of Apple is vast and technology consulting organizations and independent professional service providers are only some among them. The service providers of Apple are well trained technicians and they provide repairing services along with providing Apple parts. The service providers also offer support to businesses as well as home users and they offer onsite technology services. Through their retail stores and online stores spread all over the world, Apple sell and resell their products to resellers, end users, education customers etc. directly and without the interference of any third party since Apple believe that directly contacting customers is the most effective method of demonstrating the standard, values and benefits of their products. Considering the demand for the product, Apple increase distribution points so that customers can easily reach them. High traffic places like shopping malls are selected for stores by Apple. This enables them to catch attention of more people. 7

8 Implementation Compensation system : Employees will be given 6 incentive for every non reject products they manufacture and will offer 10 per product for six sigma quality programme. Will utilize control measures for monitoring the issues related employees, quality as well as customer service satisfaction. Customers will enabled to contact main head office of any possible technical issues by using Apple customer service bar. Therefore Apple will be enabled to react promptly in order to rectify the issues. Evaluation, Monitoring and Control At present Apple give significant focus on market opportunities in relation to consumer electronics, including ipad, iphone, Mac book and digital music distribution including ipod, and itunes stores. Apple encounter intensive competition from various rivals promoting their own products comprising 4th generation smart phones, Mp3 players and streaming of digital content through internet. Since rivals try to imitate the approach of Apple to incorporate these elements within their individual offerings or working more collaborate each other as part of offering solutions, Apple anticipates fierce competition in this space to intensify. It also has been observed that some competitors of Apple have adequate resources and are capable of providing similar products and services at reduced prices for competing with the offerings of Apple. There is no guarantee that Apple will be capable to provide products and services that can efficiently fight in these markets. Apple will respond to the price competition by reducing prices and enhancing features that can adversely have an effect on the overall product margins of the company. So, Apple executes the marketing mix strategy effectively in order compete with the rivals and gain competitive advantage. In addition, Apple will create a integrated communication plan as most of the time as communication plan will enable to mobilize support, build acceptance and remove any uncertainty. Apple will successfully manage frequent introduction of products and transitions in order to remain competitive in the market place and for stimulating the demand of customers. Apple will utilize the control measures for monitoring the issues related employees, quality as well as customer service satisfaction. Apple will maintain quality assurance by making sure the demand of different consumers are met in spite of mass production. All of the productions in China will be done under the direction and control of Apple in order to avoid any kind of allegation that they have faced before regarding the employees. order to plan the strategy, there will be a monthly meeting of board of apple for presenting the information, and for making proposal for continued marketing efforts. 8

9 REFERENCE Guardian (2012) Technology of Apple accessed on 28th August 2012 Guardian (2011) Apple Chinese workers treated inhumnaly accessed on 29th August 2012 Joshi M, Mohan R (2005) International marketing, Oxford Univeristy press, New Delhi and New York Kurtz, Dave. (2010). Contemporary Marketing Mason, OH: South-Western Cengage Learning. Kotler P, Armstrong (2008) Principles of marketing fifth edition. John Wiley publishing Market Watch (2012) accessed on 28th August 2012 Reuters (2012) Accessed on 25th August 2012 Solis, B (2011) Engage!: The Complete Guide for Brands and Businesses to Build, Cultivate, and Measure Success in the New Web, John Wiley & Sons, Inc. Stanley J, Ryans (2009) International marketing: modern and classic papers, sage publishing 9