Contemporary issues in marketing-Apple Inc - Essay Example

?Contemporary issues in marketing-Apple Inc When the launched products or services live up to the expectations of the marketing campaigns and becomessuccessful, it will create an optimal impact for the organization, bringing in more consumers. Apple Inc. is one organization, which has been able to achieve this perfectly with its effective marketing campaigns. So, this paper will focus on Apple Inc, and will discuss its background and importantly will discuss how its current marketing strategies are in tune with the changed marketing scenario of the 21st century, even while coming up with some recommendations for future implementations. Apple Inc, previously known as Apple Computer, Inc., is a multinational corporation based in United States of America. It designs, manufactures as well as markets wide range of electronics and computer products or hardware as well as various computer software. It was established in 1976 in Cupertino, California, by Steve Jobs, Steve Wozniak, and Ronald Wayne, although Wayne got dissociated from the company the next year itself. The first product they sold was Apple I personal computer kit, which was actually a motherboard of a computer, and included a CPU, RAM and some video related chips. It was hand-built by Steve Wozniak, and included only the basic components of the today’s computer. After functioning for 30 years as Apple Computer, Inc. it became Apple Inc in 2007, as the company focused on the consumer electronics sectors like Cellphones, in addition to its traditional area of computers. As mentioned above, Apple Inc. started off with computers particularly its Macintosh line of computers. From that start, Apple Inc. is now offering wide range of products and that includes Computers, the iPod (both audio and video features), the iPhone and iPad. Other than these hardware products, Apple Inc. also offers software applications like Mac OS X, an operating system for its line of computers, iOS, a operating system for the mobiles, iTunes online store as well as media browser; the iLife a multimedia tool, wide range of apps or applications for iPhones and iPads. Market segmentation The market segments of Apple Inc. does get restricted to particular territories, it sells its products through the world, thus catering to various geographical market categories. However, with the prices of its products mainly in the upper ranges, it does not sell its products maximally in low-cost markets. Although, it sells its products in low Cost markets like least developed and developing countries in Asia, Africa and South America, it does not cover all markets, and sells only minimally. When one views market demographically, as mentioned above, people from different age-groups, different sex, etc. buy its products. The customers of Apple Inc. include people from various sections of the population or various market segments, who want to buy electronics hardware as well as software for their day-to day living, entertainment and also for their professional work as well. As Apple Inc. offers range of day-to-day used products, particularly mobile phones, it is being used by customers of all ages, who want a Smart phone to fulfill their professional commitments as well as entertainment quotient. On the same lines, iPad is being bought by customers who want portable computing for the above mentioned purposes. iPod on the other hand are bought by the customers, particularly in the age segment of 15-35, mainly for entertainment. Along with these, Apple’s other products and softwares are also used by “professional content creators like authors, musicians, artists, filmmakers who want tools that free them to focus on their art, not the technology” (Chazin 2007). As Apple Inc. offers products constituting different product market categories, its competitors include various companies and products. When one focuses worldwide, the competitors of Apple Inc. in the Personal computer segment are Dell, HP, etc, in Operating systems, it is Microsoft Windows, in mobile phones, it is Nokia, Samsung, LG, HTC, etc. For its iPod, there are not worthwhile competitors, as it is a market leader in that product segment. Regarding iPad, competition comes from HP and Samsung’s PC tablets and other laptops. Apple Inc. by offering innovative and high quality products maintains top positions in various product categories. As mentioned above, Apple Inc. maintains top position in the iPods product category. It is also found among the top positions regarding other products like iPhone, iPad, Macintosh Computers, etc. (Sclimenti 2010). It also tops the category of offering apps for its mobile phone, iPhone as well as iPad. The main strengths of Apple Inc is its large size, innovative, diverse and highly adaptive products, strong financial performance and importantly high brand recognition. Large size in the sense, Apple Inc. is considered one of the largest information technology hardware manufacturers in the world (Sobel 2007). That is, it has extensive human, infrastructural, as well as logistic resources in the form of streamlined suppliers’ network, which enables it to design, manufacture, market as well as distribute its products in a wider scale, reaching various markets. Apart from its current success in both geographical market as well as product market, Apple Inc. has opportunities in many developing geographical markets as well as in product categories. The purchasing power of the customers in many developing countries like China and India are improving, providing Apple Inc. opportunities there. As the incomes of people as well as standards of living in these countries are in the increase, Apple products are becoming more accessible to them. However, at the same time, its traditional markets in the European and American mainland are still recovering from the economic downturn. Although, these territories are shown signs of recovery, if the slump persists, Apple’s sales may be affected considerably. Then, the booming market for digital products such as online or streaming music (instead of digital downloads only) and eBooks can also be tapped by Apple Inc. individually or in association with other digital product producers. Apple can increase its reach and thereby popularity among more sections of the population by making its devices compatible with various popular applications, offered by other companies including its competitors. Branding and Brand Development Apple Inc. started building a strong brand in the 1980s and 1990s, with campaigns like the Super Bowl commercial titled “1984”, the “Think Different campaign” in 1990s, etc. With high spending and effective marketing campaigns, Apple Inc. was able to create a strong brand image, which greatly appealed to the client base, and importantly made them to support Apple Inc. even during its worst times. That is, when Apple’s products did not do well and when the company faced tough financial crisis, its brand image and the resultant consumers’ affinity towards it, only helped it to survive. As stated by marketer Marc Globe (2004), “Apple is about imagination, design and innovation. It goes beyond commerce. This business should have been dead 10 years ago, but people said we've got to support it.” Apple Inc. is able to positively influence consumers’ mind irrespective of particular markets by coming up with products with maximum human ‘touch’, and thereby becoming a key and visible component of people’s lifestyle. That is, Thompson, Rindfleisch and Arsel (2006) points out that one of the branding aspects in which Apple Inc. has differed from its competitors is that, it is able to evoke a personal identity among its customers. They further add that each organization including Apple Inc. will have a strong relationship with particular or a prospective consumer segment, who view the company’s products as an extension and a key part of their life style. Extension in the sense, those products are viewed as a key part of their daily day to day living, and also as part of special occasions. In a way, Apple’s products have become cultural identity of sort, due to their effective brand marketing campaigns, that customers view the products as high-end information and communications products, which can be trusted over other products of other brands. As pointed above, Apple Inc. launches wide range of products in various product categories. Apart from launching traditional marketing campaigns for these products through various mediums, Apple Inc., also launches specialized marketing strategies or branding campaigns for these products. For example, as part of its brand extension strategy and to provide many value added benefits to the customer base, Apple launched iTunes Music Store in 2003. It was launched as an online service, which offers many songs for download at nominal prices, so all the iPod users can download it to their product and listen to it. (Sclimenti 2010). With Apple Inc. having a quality music player in the form of iPod, this avenue to download and listen worked great, thereby making its’ brand marketing campaign a successful one. On the same lines, Apple Inc. has developed product strategies for each product, so there are many value added features surrounding that product in the online environment. Although, Apple Computers, Inc. got changed its name to Apple, Inc. in 2007, it wisely kept its basic logo. Even now, Apple Inc. continues to use the one basic logo of Apple, but with different colours and appearances, to identify with its brand image with the entire range of products. As further stated by Simmons, Thomas and Truong (2010), Apple Inc. while diversifying from computers to other technological products, made sure that it builds on its existing image, logo and branding strategies, so that it do not need to reinvent their entire corporate identity, and avoid confusing the customers with a deluge of images.. Any new product from Apple Inc., are eagerly anticipated by the media and importantly by the intended consumers, with a lot of buzz surrounding the launch because of its promotion campaigns. One of the best examples is the hype and hoopla surrounding the launch of Apple’s iPhone. When it’s CEO, Steve Jobs launched the product to the media in 2007 at Macworld, it captured the imagination of the various people. (Lantos, Brady and McCaskey 2009). Pricing When it comes to pricing strategies of Apple Inc. it has raised some scepticism. That is, Apple’s products were maximally on the higher side, when compared to its competitors. In addition, the price also varies from region to region. For example, the price of iPhone 4 starts at $199 in USA, but in India, it starts around $800. Although, it is subsidized in USA under agreement with service providers like AT&T and Verizon, the huge price difference shows that Apple Inc. has to rethink on its pricing strategies. However, on the positive side, as Apple Inc. has high brand value, the price appears to be apt and people are willing to shell out such price. Chernatony & McDonald (2003) further adds up by stating, when a product or a service has a strong brand image, “customers perceive them as having value over and above that of the ‘equivalent’ commodity, or in excess of the sum of the price of the product’s or service’s constituent parts”. However, on the negative side, this high pricing strategy could be a major disadvantage. That is, the main threat for Apple Inc. comes from the competitive price offered by its competitors, particularly ones who could make ‘clones’ of its products. Thus, if Apple is unable to produce devices that can meet the budget of future markets, it would be unable to compete, as these Clone producers could offer at very nominal price. In addition, competitors are coming up with newer models incorporating new technologies very often. So, if Apple Inc. may find its products obsolete if it does not keep up its R&D. Thus, the key threat is growing expectations of the consumers, and if it is not able to meet it, Apple Inc. may lose its industry standing. When Apple Inc. launches its products there will be great hype among the people, and so Apple Inc has come up with the distribution strategy of making its products available through wide range of options, including Apple’s exclusive stores, retail stores, stores of service providers, online retail websites like e-bay, etc. The other issue that contributes to high price is the heightened budgetary allocation to its marketing campaign. Apple Inc. has been doing that, as it spends millions of dollars before the launch of any new product. According to Kahney (2002), John Sculley, the former CEO at Apple Inc., increased Apple advertising budget from $15 million to $100 million in early 90s, and the current CEO, Steve Jobs spent close to $100 million in the marketing campaigns of iMac alone. That is, as they invest sizable budgets for their promotion, they have to reap it to through high prices. Having more expensive products naturally means having less consumers being able to afford such products. Thus, the key is standardization products’ price in all markets or even in sizable number of markets. The issue of price standardization can be carried after studying the various markets aptly. Recommendations and Conclusion After successfully crossing over the tough times in mid-90s’ because of its brand image, Apple Inc. with its iPod and iPhone has been able to become a strong brand and a strong organization. However, there are still scopes for further improvement regarding certain marketing aspects. Although, Apple Inc. have tie ups with various media companies and thereby offer its products as well as its services like podcast producers, it can ‘ink’ more tie-ups with other content providers. That is, it can join hands with media content providers, which can provide more content and applications to its iPhones and iPads. Apple’s products have to be made more integrated with other consumer electronic products. With globalization and the resulted entry of many foreign companies and its products to these countries, Apple Inc. can expand its market to more developing countries. The key recommendation is to standardize its prices across all market segments. Price should be equalized or the price differences need to be reduced as much as possible. To develop a particular brand with a strong image and standing, organizations should have long term investment strategies, inbuilt with thorough planning. To build that kind of brand image, organizations will come up with marketing campaigns before and after the launch of the new products or services, which will entice and impress upon the eyes, ears and thereby the minds of the intended consumers. Apple Inc can do that by continuing with the current marketing strategies, even when they add new products and services. Instead of reinventing exercises, which could sometimes cause confusions and lack of brand recall in customers’ mind, Apple Inc can carry on with current strategies, but in a more expansive and optimum manner. (Potter 2006). There are many more electronics and computer products, manufactured by other makers. If Apple Inc. products can be integrated with these products optimally and can give fullest satisfaction to its customers, Apple Inc. can provide features for that integration. Importantly to set apt prices in all market segments, Apple Inc. should study its competitors’ pricing in each particular market, and set prices accordingly, without trying maintain its high price exclusivity. Although, Apple’ high brand value demands such high prices, it should not be the criteria all the time, instead competitors’ pricing has to be taken into account. Consumers will always go for companies, which have a strong brand image, and as Apple is able to fulfill that, it is emerging successful References Chazin, S 2007, What market is Apple in? viewed on December 2, 2011 http://www.marketingapple.com/marketing_apple/2007/09/what-market-is-.html Chernatony, L and McDonald, M 2003, Creating Powerful Brands, Butterworth-Heinemann, New York. Globe, M 2004, Distribution of the Brand, HWM. SPH Magazines Kahney, L 2002, The cult of Mac, No Starch Press. Lantos, GP, Brady, DL and McCaskey, PH 2009, “New product development: an overlooked but critical course.” Journal of Product & Brand Management, vol. 18, no. 6, pp. 425 – 436. Potter, B. 2006, “New threat of Apple Mac OS X.” Network Security, vol. 26, no. 2, pp. 4-5. Sclimenti, C 2010, “PodWars: Too Big of a Bite or Free-Riders' Red Herring?” Journal of contemporary Legal Issues, vol. 19, no. 1, pp. 315-323. Simmons, G, Thomas, B and Truong, Y 2010, “Managing i-branding to create brand equity.” European Journal of Marketing, vol. 44, no. 9/10, pp.1260-1285 Sobel, D 2007, “A bite out of Apple?” Berkeley Technology Law Journal, vol. 22, no. 1, pp. 267-291. Thompson, C. J., Rindfleisch, A and Arsel, Z 2006, “Emotional Branding and the Strategic Value of the Doppelganger Brand Image.” Journal of Marketing, vol. 70, no. 1, pp. 50, 64. Read More