Apple's International Strategies - Essay Example

Apple’s International Strategies Apple, by stock market capitalization, is the largest technology manufacturer and marketer in the world. Many of the products offered by Apple include the MAC personal computer, iPhone, iPad and iPod which continue to contribute very high sales volumes and brand loyalty both international and domestic. Apple’s positioning in the international market is one of premium quality, which justifies a broad differentiation strategy that allows for premium pricing on its products based on long-standing positive brand reputation. The business sells in Europe, South America, North America, Asia and Australia. Apple has considerable brand loyalty established in China, The United Kingdom, and Australia. This loyalty occurs as part of a broad international marketing communications strategy that includes social media, press releases, transparent market research targeting consumers (i.e., attitude surveys), and strong emphasis on customer relationship management. In all international locations, the majority of target customers that maintain strong loyalty are professional businesspersons, those in arts and entertainment, and are generally between the ages of 18 and 34 (Rubicon Consulting, 2008). Apple conducts considerable volumes of marketing research to determine attitudes, preferences and lifestyles of consumers to ensure it is producing relevant products internationally and creating effective advertising that meets with these lifestyles and demands. In China, Apple entered this market with a licensing strategy, due to the high volume of technology competition with pre-established brands (Ramadugu & Samad, 2009). Apple desired to link its brand name with China Unicom, one of the largest telecommunications companies that had considerable growth in consumer satisfaction in China. This licensing agreement was also the chosen strategy for entering this market as there is an unpredictable distribution of mobile technology in China and by having China Unicom control distribution, it would improve the costs associated with setting up an Apple-specific distribution system in this new market. In Nigeria, as another example, Apple chose a turnkey market strategy, which is when technical processes and technology is exported to the market. Once a turnkey contractor is identified, the contractor establishes the operational model, construction and implementation of Apple production and sales strategies in the new market (Evans, 2005). This is a country with limited competition and where the costs of new market entry are high to competitors. By establishing an operational foothold in Nigeria, this would potentially open new opportunities for local distribution from the newly constructed manufacturing facility. Apple maintains a different market entry strategy based on consumer characteristics, the level of competition in these markets, and identified brand recognition and loyalty for Apple premium products. In the UK, the target market consists of 18-34 year olds in which branding occurs related to their lifestyle and the linkage between their perceptions of Apple products. Robinson (2010, p. 2) identifies that gaining market attention in the UK includes focusing on emotions, hopes, aspirations and lifestyle passions in a market saturated with competition and where there is high brand recognition and preference. Market entry in this country included licensing agreements and exporting, since there was already a well-developed mobile and consumer technology distribution system established in this country. The level of price sensitivity in customers, the distribution networks available in the country, the level of competition, and the ability to provide relevant promotion to meet consumer lifestyles determine the market entry strategies selected by Apple. In the UK, Apple is able to use viral publicity effectively, which is low cost, thus exporting from the U.S. and licensing is the most viable solution without having to invest in high cost operations increases by establishing a UK-based production facility. The market research data returned from consumers in real-time also indicate that customers have a favorable brand attitude toward Apple products and would be willing to pay premium pricing (Rubicon Consulting, 2008). By understanding the pre-existing brand attitudes in certain countries, Apple is able to determine where costs can be reduced and choose more low-cost market entry strategies. The high availability of technology, such as in the UK, allows the customer to simply transfer existing promotional strategies from the U.S. to the UK since consumer profiles and characteristics in this country are similar to that of the United States. The major strategy of Apple’s international marketing is to create relationships with customers and thus build brand loyalty through CRM. Steve Jobs, during his tenure, and other executives currently in charge of Apple are highly visible as spokespersons for products and rely on press releases to continue to promote its expertise and quality (Hood, 2009). Countries that already have brand loyalty or understand the premium quality of this well-positioned company require less tangible capital investment in market entry strategy development. In countries where customers are less-familiar, market entry depends on the ability to gain their attention or whether a total, ground-up branding strategy needs to be developed in the country. Countries such as Nigeria have limited brand preference for Apple and thus the logic behind establishing a base of manufacturing and marketing operations for long-term market growth and expansion. Apple does not seem to have a preferred entry strategy, except for gaining lifestyle connection with customers and the ability to use pre-existing marketing strategies and promotion that find success with American consumers. Apple is always very concerned with protecting its intellectual property since quality and expertise in technology makes up the majority of its ability to provide premium pricing models. Thus, the company favors licensing to some degree as it ensures adequate protections are established and that the business will be able to maintain some control over distribution and overseas operations. Apple is very long-term oriented about strategy and thus chooses market entry strategies that can provide the best recognition of cost controls and will also bring more market attention and loyalty over the long-run. Building relationships with customers is critical to Apple’s success, thus the most viable markets where quality HRM can be accomplished without high capital investment in training dictates export market entry rather than a ground-up turnkey market strategy. References Evans, R. E. (2005). Report on a Turnkey Project for Apple’s iPod in Nigeria. University of Maryland University College. Retrieved on August 27, 2012, from http://globalitek.homestead.com/Rachael_-_Turnkey_projects_Nigeria_and_iPod.pdf Hood, J. (2009). iPhone: Are You in the Know? West Virginia University. Retrieved on August 27, 2012, from http://www.scribd.com/doc/29516988/iPhone-IMC-Campaign Ramadugu, N., & Samad, S. (2009). Apple’s iPhone in China: Can Apple Cash in on the World’s Biggest Mobile Market? IBS Case Development Centre. Retrieved on August 27, 2012, from http://www.ibscdc.org/competitive_strategies_case_studies.asp Robinson, P. (2008). Apple’s Marketing Strategy. Marketing Minds. Retrieved on August 26, 2012, from http://www.marketingminds.com.au/branding/apple_branding_strategy.html Rubicon Consulting. (2008). The Apple iPhone: Successes and Challenges for the Mobile Industry: A study of iPhone Users. Retrieved on August 27, 2012, from http://rubiconconsulting.com/downloads/whitepapers/Rubiconphone_User_Survey.pdf Read More