Apple's iTunes Player Climbs Streaming Media Charts - Assignment Example

Marketing Management Case Study Apple Computers Inc. Submitted by: XXXXX XXXXXX Number: XXXXXXXX of XXXXXXXXXX XXXXXXXXXX Subject: XXXXXXXX Subject Code: XXXXX Date of submission: XX – XX – 2009 Number of Words: 2002 words Stakeholders Analysis Target Customers: The Target Customers for iTunes is very vast with a vast range of ages of customers. The major target market of the company can be classified as anyone who is an internet user. Also, the other major focus can be on people who look for downloading music from the internet. In simple terms, the Generation Y can be classified as the target market of the company as these groups of people have a knowledge of using the computers as well as the internet and also are likely to use the internet as a mode of downloading the latest tunes and music not only to the computers but also to the phones. The target market can be considered to be very vast as the users of the internet are very high. Also another part of the target market would be PC users and Mac users. The figure below provides a clear picture of the average number of internet users. Figure 1: Number of Internet Users (Engadgeteer, 2008) Figure 2: Number of Internet Users (in a graph format) (Engadgeteer, 2008) Thus some of the major segments for Apple iTunes are: Internet User of all age groups Pc and Mac users iPod users Music lovers (Kahney, 2002) The internet users are the most valuable as the reach is quite vast and the possibilities to reach out to these audience is higher and easier than any other target group, due to high use of the internet (Hennessy, 2009). Company and Brand: Apple Company has always provided the customers with a variety of products. It has been able to stand up as competition to Microsoft and has been able to gain a part of the market for Microsoft as well. iTunes fits the profile that has been created and the brand that Apple has created as it is a new and more stylish way of downloading the latest music. The class and style that Apple has created as a brand image is the major base of iTunes also fitting into the product profile of the company. It is essential to understand that the company is not very famous and popular for the products and the market it caters to is a very limited market (Kahney, 2002). Competitors: Competition faced by iTunes is quite vast. There are a number of different companies that cause competition both in terms of direct as well as indirect for the company. The major indirect competitors for the company include the famous Amazon.com, Brick and Mortar stores, Online Radio, CD Now and many others. These form a threat to the company as some of these provide free music to the users and are compatible with Mac, pc and even Microsoft users, whereas iTunes is only focused on Mac and PC users. Some of the major direct competitors are also, Buymusic.com, Roxio’s Pressplay, Listen.com, lime wire, Puretunes, MusicNet, and many other Peer to Peer Networks. Biggest Direct Competitions Biggest Indirect Competitions Buymusic.com Amazon.com Listen.com’s Rhapsody Online Radio Limewire Brick and Mortar Shops Figure: Total Awareness of the various competitors of iTunes (Seeking Alpha, 2008) Figure 3: iTunes market share & Competition (Yoskowitz, 2008) The above figure shows a clear comparison of the various competitors in the industry. It is important to understand that the industry is vast with a number of opportunities as well (Yoskowitz, 2008). Community: The external organization and the various stakeholders that can affect the iTunes is if the customers find a provider which provides the music at cheaper prices. This will lead to the customers making a change in the use of the provider. The customers form one of the biggest factors that might affect the success of the company. Also, the music producers and artist can also affect the success of iTunes, if the producers and artist plan to provide limited and restricted rights to the companies for distribution and rights to sell on the websites. Positioning iTunes as has been discussed has vast customer segment of the market and the company is faced with a high competition as well. The company’s positioning refers to the perception of the consumer’s for a product. Although Apple is a computer company, the company has faced a number of difficulties in positing itself in the markets. This is because the customers perceive the company to be only related to Mac computers and operating systems. Apple has also been able to build a perception in the minds of the customers in the music industry (Jobber, 2004). The Qualitative study of the online music stores show that customers evaluate the markets with two dimensions, i.e. the segments that are focused on and the various competitors. The perpetual mapping or the positioning maps can prove to be very beneficial to the companies in identifying the strengths, weaknesses of the brands as they are perceived by the customers. This can prove to be an eye opener for managers who specially have different view of the markets when compared to the customers. This map will also provide iTunes to gain an insight upon the key competition based on the customer segments and the products as well. Also it will provide the top management with an understanding of the customer perception of the brand as well (Jobber, 2004). Marketing Mix Having the right marketing mix is very important aspect of every business. In the case of iTunes, the company has been able to create a very balanced marketing mix for the company. The four elements of the marketing mix are product, price, place and promotion (Jobber, 2004). Product: The product that the company provides is one which is of interest to a number of different people across the world. The product cannot be defected or even of low quality as the company provides for original music to the customers. This makes the product a strong feature of the company (Hennessy, 2009). Price: Also the pricing of the music that is sold on basis of individual prices, this provides the customers with a chance to be able to buy the song without having to pay any subscription fees or any other fees. The songs are as cheap as $0.69 (Hennessy, 2009). Place: The iTunes work of the iTunes Shops, thus the place is very vast with a wide reach to customers across the world. Since the internet is one of the best modes of selling anything. Also a product like music is one which is very famous and demanded over the internet (Hennessy, 2009). Hence this is a very strong point of the company and provides for the company to reach out to a wider range of people and also cater to the needs of the customers across the world. Promotion: In regards to the promotion, the company has used its brand image to promote the iTunes. It is has been noted that Apple has used the brand image that it has been able to create for the computers and iPods. This has been used by the company to promote the iTunes and aim at the target markets while doing so (Hennessy, 2009). If I were to be a strategic Director of iTunes, I would include a number of barriers to reduce or completely eliminate the competition for the company. To ensure that the competition is eliminated, the company can include a wide range of song for the customers that can include songs which cater to different countries and choices. Also, for iTunes to be able to meet up to the competition and beat the competition in a way that the other find it difficult to compete it is also a good idea for the company to provide the customers with a variety of file types, these can be copyrighted which would then act as a barrier for the other competitors to break access to the customers. It is also essential to understand that the music market is an open market, thus it is possible to use the iTunes and provide music which is compatible only with the iPods (Johnson, et.al., 2006). This will not only increase the sales of the iTunes but also provide a boost in sales for the iPods as well. Also provision of exclusive music to the iPod users is also a strong benefit that can be provided. The main aim as the strategic director of Apple will be to look forward in time and introduce as much new technology, products and services as possible to ensure that the competition is curbed at the early stages. This will allow for the company to face the competition that it might face from companies like the Amazon and others. 4. From a strategic perspective, why did Apple -- a computer company -- launch iTunes? Apple Inc. is a company that manufactures and designs consumer electronics and software products. This company was incorporated in 1977 and was first known as Apple Computer Inc. Apple is known for the best known hardware product which includes the Macintosh computers and iPhone and iPod. The company uses the Mac OS X operating system and has been able to meet up to become the only competitor for Microsoft (other competitors present in market, however are very negligible) (Sridhar, 2008). The company has set up a number of retail stores in over nine countries and also has set up very strong e – Commerce websites which deal with the Apple products. This company has been one of the most successful companies that have been incorporated in the 1970s. Apple however has not performed well based only on its products. There have been a number of experts in the field who believe that Apple is successful only because of the brand name and image that it has created for itself. This has allowed the company to grow to its current position (Sridhar, 2008). Apple has launched a medium which can be used for sharing and listening to music. iTunes that has been developed and launched by Apple is compatible with the iPods and the Mac computers and can be exclusive for these users. Looking at this in a strategic perspective it is seen that although Apple is a computer company has moved into the music and videos software successfully. With the launch of products like the iPod the company has gained a larger part of the market. Apple has used the technology available and has been able to create a very strong brand image for itself. The company has been known for the use of technology and excellent branding (Mitchell, 1996). The company has been able to create a strong image which forms a major reason for the success of the company. If the company is considered as itself, it is safe to say that the company has no worth of its own except for the brand image that has been created by the marketers within the company. Experts in the field feel strongly that the success of the company is in no way related to the iMac or iPac, but is majorly due to the branding of the company. There have been a number of arguments that the company would have died almost ten years ago if it was to be based on its products by itself and its products. Some marketers like Marc Gobe have also noted that the branding in some ways has grown to become very powerful and also has become as strong as religion "Peoples connections with brands transcend commerce" (Kahney, 2002). Thus the major strategic reason for the company to move into the music industry is to help increase the brand equity of the company and also brand awareness. Also the iPod and iTunes apart from the brand equity also provide for a revenue stream for the business. Thus the company although being a computer company has moved into the music industry as well (Kahney, 2002). 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V., 2008, Brands should be great story tellers, 20th June 2008, Accessed on 24th May 2009, Retrieved from http://www.livemint.com/2008/06/20234413/Brands-should-be-great-storyte.html Yoskowitz, A., 2008, ‘iTunes gains market share, as does Amazon, Rhapsody’, 11th October 2008, Accessed on 30th May 2009, Retrieved from http://www.afterdawn.com/news/archive/15644.cfm Read More