Apple Social and Ethical Responsibility, and Marketing Strategies - Assignment Example

Apple Social and Ethical Responsibility, and Marketing Strategies Apple’s current position on the company’s ethical and social responsibilities For long, Apple has been criticized for not having clearly defined ethical and social responsibilities (Forbes). The situation made the company embark on a detailed social and ethical code of conduct that would salvage the reputation of the world’s most valuable company (Woellner 2013). Apple’s ignorance of its social responsibilities was manifested in several incidences. Among them are; cases of suicide in its suppliers plants in china, low wages for its workers and also poisoning of workers at work. The overwhelming need for more action made Apple redefine its social and ethical responsibilities. First, the company drafted the supplier code of conduct. This code of conduct was meant to safeguard Apple from a bad reputation that emanates from its suppliers. The elements of the code of conduct are; non-discrimination of workers, fair treatment, juvenile protection, freedom of association, working hours and remunerations. Apple constantly audits the financials of its suppliers to acquire information about operations. This is aimed at reducing the bribery claims that have marred Apple’s suppliers. The compliance monitoring program helps the firm in identifying the shortcomings in its ethical responsibilities. Consequently, auditing suppliers give information about employee remuneration that has been a contentious issue. In China, Apple has been accused of allowing underage workers at its facilities. The company has acted on this by ensuring strict age verification methods. As a show of goodwill and reconciliation, Apple has ordered the affected suppliers to take the underage workers to school, and be liable of all expenses incurred in education of the children. Working conditions have been improved at Apple’s facilities following incidences of employee poisoning from chemicals used in the production of iPhone and iPad screens. This is a continuous process that is done through education on how to handle such chemicals, protection gear and detoxification of hazardous compounds that may be released during production. In addition, Apple has also created mechanisms to identify conflict minerals and subsequently barred their use. Despite the enforcement of social and ethical code of conduct, the conditions have not been adequately fulfilled due to technical inefficiencies. Also, though the compliance rate of suppliers is above 70%, there are still vivid violations. There are incidences of falsified records meant to influence audits, bribery of independent auditors. Moreover, workers safety has not been covered efficiently, For example, workers continue working without safety harness at Foxconn, and thus poisoning from n-hexane is a regular occurrence. Another shortcoming is that underage workers are still being recruited. Impact of the publication of ethics and social responsibilities violations on Apples reputation Apple has outsourced nearly all its production to Asia, especially China. The availability of labor at low cost is the motivating factor. However, Apple through its primary supplier, Foxconn, has been accused of violating of its own social and ethical code. For example, Apple has set working hours at 60 hours per week, however, employees at Foxconn work more, at least 70 hours a week. This has raised concerns about the credibility of Apple, thus injuring its reputation. Publications have been made on Apples culture of reducing costs and maximizing revenues. Most consumers believe that firms must have the interest of both consumers and employee at hand when designing policies. Apples ‘don’t care’ approach means that people lose trust in it and opt for alternative brands, thus hurting Apples sales. Publications on how Apple suppliers minimize cost while hurting employees have not been taken lightly by people. The actions have been boycotting people products, due to the injured reputation. The power of the media to influence public perceptions is not limited. People are responsive to issues relating to social responsibilities of many. In this regard, people support firms that have a good CSR record. Publications on Apple’s supplier actions indirectly impact on the sales of Apple. Methods that Apple can utilize to ensure that its suppliers adhere to wage and benefits standards going forward Adherence to Apple’s code of ethics and social responsibility should be mandatory as it hurts its reputation. The company can employ various methods to ensure adherence. First, the company can maintain strict evaluation rules to ensure that all its suppliers are not in violation with any of its terms. Regular and random evaluation of the conduct can capture the situation when the suppliers are least expecting, thus the actual image can be obtained. This can be done by deploying agents to supplier’s plants to gather real time information about the adherence to the minimum wages set by the company. Second, independent audits should be done to assess the financial position of the suppliers. This would identify the wages paid to workers. An independent audit is free from manipulation and should be done by audit firms, not individuals. This is because the firms would not compromise their credibility by soliciting bribes to manipulate the financials. Thus, this is arguable the best way Apple can ensure its policy on minimum wages is adhered to by its suppliers. Whether customers would pay a higher price if Apple increases wages to its employees Apple is a ‘premium’ gadget maker and thus customers are willing to pay more for a premium product. The demand for Apple products is less responsive to price changes. This implies that users of Apple products will continue buying them regardless of price increase. Consumers, are also employees, thus, raising prices for a justified cause do not impact heavily on sales. Apple’s products do not depend on the market forces to determine the price. A premium price can thus be attached to the gadgets to cover for increased wages. The important thing to note is that a firm strives to maintain its position or advance, thus, it is not expected that Apple would incur the cost of increased wages. The cost would have to be passed on to consumers through premium price (Yahoo! Finance). Apple’s marketing strategy Apple’s marketing strategy mainly concentrates on maintaining existing customers rather than making aggressive efforts to seek new markets. This has made the company prone to customer loyalty in every product it releases. According to the company, a successful venture is sustained by existing and repeat clients who should be maintained at any cost. In this regard, Apple maintains a very narrow brand width that is continually enhanced according to the customer requirements (Schneiders 2011). This strategy has reduced costs that are associated with aggressive entrance into new markets. In addition, Apple’s employs a premium pricing method and assets priority to profitability rather than the market share. The philosophy of Apple marketing has put their employees in the center of promotions. This implies that Apple improves its products by assuming their employees are tired of using their current brand. The information interests their clients who also see the need to upgrade to newer models. In disguise, this is a very important and working strategy that has enhanced the maintenance of a small market that has a very high purchasing power. Steve Jobs created the greatest strategy of Apple that was largely based on empathy. This was aimed at understanding the innermost feelings and desires of a person or a particular group them make a product that is suitable for them. Sophistication of its products makes them the best of their kind in the market thus reducing possible competition (Paley 2007). Despite its superb marketing strategy, Apple can increase its revenues by venturing in markets where its presence is limited. This means that its focus should not be based on countries with high purchasing power but also less developed nations. Another recommendation is that Apple can maximize revenues if it diversifies its product line to suit low income consumers, who apparently form the percentage of consumers. References Paley, N. (2007). The managers guide to competitive marketing strategies. Princeton, N.J: Recording for the Blind & Dyslexic. Apple - Supplier Responsibility. (n.d.). Retrieved from http://www.apple.com/supplier-responsibility/ Schneiders, S. (2011). Apples secret of success: Traditional marketing vs. cult marketing. Hamburg: Diplomica Verlag. Where Is Apples Social Purpose? - Forbes. (n.d.). Retrieved from http://www.forbes.com/sites/csr/2011/08/12/where-is-apples-social-purpose/ Apple Inc. (2014). Supplier Responsibility 2014. Progress Report, 04-33. Retrieved from http://images.apple.com/supplier-responsibility/pdf/Apple_SR_2014_Progress_Report.pdf Woellner, J. (2013). Business Analysis of Apple Inc. GRIN Verlag. Apple’s premium pricing strategy and product differentiation - Yahoo Finance. (n.d.). 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