Apple's Loyal Customer Base - Assignment Example

?Apple: Company Analysis Introduction Apple Inc is an American multinational conglomerate that has business interests in various sectors like computer software, personal computers, and consumer electronics. The company was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976. Although the company had been focusing on personal computers traditionally, it has recently shifted its focus towards consumer electronics. Currently, Apple is operating under four industrial sectors including computer hardware, computer software, consumer electronics, and digital distribution. Apple’s product lines mainly include iPod and iTunes, desktop and laptop computers, the revolutionary iPad and iPhone, and the OS X operating system (Nosowitz 2010). The company’s main competitors are Microsoft, Sony, Dell, Acer, Samsung, Toshiba, Nokia, and HTC. As of 2011, the organisation has 364 retail stores across 13 countries. As scholars point out, a well developed business model, competitive products, an innovative marketing strategy, and a potential operational model constitute the key elements affecting Apple’s overall corporate strategy. The company organises workshop programmes and promotes other personal customer relationship practices like e-mails and surveys as part of building a long term relationship with its customers. This paper will discuss various strategies used by Apple to enhance its customer communication practices and drive customer relationship management effectively. Target marketing to build customer relations As of 2011 data, Apple operates in 13 countries including United States, United Kingdom, Australia, Canada, China, France, Germany, Japan, Netherlands, Italy, Switzerland, Spain, and Sweden. Majority of these countries are economically developed, and the remaining are rapidly emerging economies. In terms of geographic targeting, Apple focuses on market segments like cities where the density of people is very high. In addition, the organisation gives specific attention to geographic market segments that have well developed infrastructure. By following such a geographic targeting approach, the firm tries to enhance the easy flow of raw materials and labour. In terms of demographic segmentation, Apple mainly focuses on young people and business executives, because most of the Apple products offer extensive and innovative features that may not be appealing to a middle-aged or senior person. In addition, Apple particularly targets high income groups while dividing its market segments on the basis of demography. To illustrate, Nokia and Samsung are major competitors of Apple in the smartphones market. Relative to Nokia or Samsung products, Apple’s smartphones are very costly as the company does not consider the needs of low income people much (Eha, CNN Money, n. d.). The company also practices psychological or behavioural segmentation approaches effectively. Referring to a report by Jaques (n. d.), many of the people consider Apple as a luxury brand and hence they are willing to buy Apple products regardless of the prices in order to increase their social status. With intent to take advantages of this favourable condition, Apple’s management designs and sets prices for products particularly for high class social groups. In addition, the company identifies potential market for a planned product in advance by exploring the psychological needs and requirements of customers effectively. For instance, Apple’s management identified music sector as the broad market for its iPod before even the company began the product research or development process (Adjorlolo et al 2010). Customer communications Apple gives great significance to customer communications as the company extremely values customer suggestions and feedbacks. Company uses various traditional and modern communication channels to be in line with changing customer tastes and preferences. Apple uses many ways to collect their customer information. When people create Apple IDs, register for workshops conducting at any of the Apple’s retail stores, and fill an application for commercial credit the company collects and stores the information in its database. In addition, the company collects customer information through online surveys too. The company considers online survey as an effective way to explore customer interests at minimum expense and time. The organisation extensively uses these data to research the market, to identify new market segments, and to direct its advertising campaigns to the right market segments. As Deutsch (2010) points out, Apple employs e-mail as a major communication channel to interact with its customers. The firm send e-mails to its customers to communicate information regarding new product developments, events, software updates, and paperless receipts (ibid). As the company has a separate department for handling customer’s e-mails, people get fast response to their queries and suggestions through e-mails (ibid). Since the time of Steve Jobs, the company had been paying prime attention to personal customer communication, and the new CEO Tim Cook is also following this approach. Hence, the Apple’s management is in constant touch with its customers. In addition, the firm organises personalised and custom workshops to keeps its customers educated about Apple’s product features. Through such workshop programmes, company officials get an extensive exposure to interact with their existing customers and prospective buyers. Apple makes use of internet options such as cookies and other technological innovations like pixel tags and web beacons to improve its customer interaction process. The company has also developed technology to identify the frequency of people visits in different pages of its website. This data would assist the company to improve its website contents so that the website pages would be more appealing to visitors. On the basis of the frequency of people visits, the company also observes individual people preferences. Based on this data, the website gives specific ads suggestions to individual customers in their future visits. The effective customer communication is a major factor influencing Apple’s market success because this elements assists the company to develop new products that can meet customer needs on a deeper level. Such techniques greatly aid the company management to learn more about its customer preferences. Customer relationship management Although customer relationship management (CRM) is a newly developed trend, Apple has significantly advanced in practicing this management concept. The organisation uses a number of potential tools and techniques to identify its customer needs and wants more accurately and thereby add value to customer loyalty. Apple greatly uses customer feedbacks and suggestions to improve their products and services. While analysing Apple’s CRM policies, it is evident that loyal customers form the major source of Apple’s success. As Howe (2007) points out, Apple has been successful in building insane customer loyalty using various CRM strategies. Surveys indicate that most of the Apple customers are absolutely loyal to the company and some of them even depromote competing products. Apple fans love their trendy brand providing with smart solutions, innovative features, and high quality. Evidently, many customers live in an ‘Apple world’ containing products such as iPod, iPad, and MacBook. These Apple fans frequently download music, software, applications, and e-books from Apple Stores. Marketing experts predict that such customers are likely to continue their commitment to the Apple brand despite strong promotional efforts and technological innovations of Apple’s competitors. Unlike many other competing companies, Apple send personal e-mails to its existing customer groups on the eve of a new product launch. It seems that this personal customer relationship policy greatly benefits the Apple to employ its ‘fans’ to defend different types of attacks against the company. The organisation’s stores maintain play areas where children can closely interact with different types of computer products. Apple’s extraordinary customer experience has been assisting the company to turn good products into great products. It seems that customer feedbacks not only aid the organisation to improve its product quality but also increase sales people’s efficiency. Apple’s managers can use the information obtained through customer relationship programmes to educate their subordinates about improved sales practices. Undoubtedly, sales people-customer interactions would increase the firm’s sales volume. Apple sends a survey after every purchase and asks the customer a question: “how likely are you to recommend Apple products to a friend?” (Gallo 2012). The survey will be on a scale of 1-10. If the company obtains a score rating below 8, it is considered that there is room for improvement (ibid). In its privacy policy, Apple has described in detail how the company would use personal customer information to serve its customers better. The company has obtained TRUSTe seal for its “transparency, accountability, and choice regarding the collection and use of your personal information” (Safari's Privacy Policy, n.d.). As per the Apple’s privacy policy, they categorise customer information as personal and non-personal; and the company never uses personal customer information for marketing purposes. Hence, the company’s strong brand reputation encourages people to share their personal information with the company. By establishing Apple store only for Apple products, the company offered more customer convenience, which in turn added value to customer loyalty. The Apple stores provide Mac and PC users with a friendly place to enjoy various improved technological features that the company offers. It is identified that Apple offers complete solutions to its customers so that the company has complete control over user processes ranging from hardware to software (Apple computers, n. d.). To illustrate, if a customer buys an Apple iPod, he can easily download songs through iTunes. Evidently, Apple’s interactive ads campaigns played a notable role in building strong customer relations. Since the company possesses diverse product lines, it can attract different customer groups with different needs. Once an individual purchases an Apple product, the friendly shopping experience would persuade him/her to continue his/her business relation with the firm. Similarly, the company increasingly seeks the help of media, especially online networking sites like facebook, to maintain better customer loyalty. Usually, the organisation publicises rumours about its own product developments so as to keep customers excited about the firm’s coming products. Apple’s education sales program is another good initiative launched to make school, university students comfortable and familiar with the firm’s user interfaces (Hughes, n. d.). By such early exposure programs, the company captures customer attention effectively even before people know that they are customers. Conclusion From the above discussion, it is clear that Apple has its own well developed practices to build effective and long term customer relationship. The company greatly focuses on personal customer communication using e-mails and website options with intent to stay in close touch with customers. As result, currently the organisation has a huge group of insanely loyal customers who are ready to fight for the company in times of the firm’s market downturns. The company collects and stores customer information to divide its market segments effectively and to predict future market trend changes. The organisation is very interested in collecting customer feedbacks and suggestions as the company believes that this practice would assist it very much to make new product developments in line with changing customer interests. Finally, the provision of complete solutions, education sales, and separate stores for apple products also benefit the company to build good customer relations in the long term. References Apple computers. (n. d.) [Online] Available at http://www.ligaturesoft.com/cheap-computers/apple-computers.html [Accessed 13 Sept 2012]. Adjorlolo, W., Terrero, R. P & Ganung, S. 2010. market segmentation [Online] Available at http://ganungs.files.wordpress.com/2011/03/marketing-project-paper-final.pdf [Accessed 13 Sept 2012]. Deutsch, R. 2010. Email marketing to your best customers: An Apple story. [Online] Available at http://www.strongmail.com/resources/blogs/email-marketing-insights/2010/11/marketing-to-your-best-custome [Accessed 13 Sept 2012]. Eha, B. P., (n. d.) IPhone struggles to gain ground in China. CNN Money [Online] Available at http://money.cnn.com/2012/08/28/technology/iphone-china/index.html?hpt=hp_t3 [Accessed 13 Sep 2012]. Gallo, C. 2012. 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