Marketing Principles of Apple - Essay Example

?Marketing principles-Apple Task The core marketing concepts and various elements of marketing process adopted by Apple The success or failure of acompany highly depends on its marketing concepts and processes. This is particularly so in the current business environment marked by stiff competition. Brassington and Pettitt (2006, 8) argue that a good marketing concept must take into consideration the needs and wants of customers targeted. In this regard, marketing concepts are usually created as creative strategies to the problems pertaining to how to get the goods needed and desired by a given segment of consumers and bought by the group. Apple is one of the most successful companies of the current world in the electronic industry (O'Grady 2009, p.5). In fact, the company has witnessed tremendous growth since 1984 becoming a household name. All these are attributed to the marketing concepts and processes it adopted in order to reach its targeted customers. Gill Amello, the former CEO of the company pointed out that Apple’s marketing concepts are based on the scarcity and social proof powers (O'Grady 2009, p.5). In this regard, in order for the company to reach its intended customers, it adopted the ‘Golden Circle” marketing strategy, which entailed the why, how, and what. The “why” implies that everything that Apple do is aimed at changing the status quo and thinking differently from the rest of the competitors. The “how” pertains to the products manufactured by the company. In this regard, Apple has been at the forefront in making quality and beautifully designed products, which are user friendly to the customers. This has seen the company outcompete many of its rivals in the industry. The “what” has to do with the computers, in which the company has ensured that all its computers are of high quality and affordable to its customers according to O'Grady (2009, p.6). Apple has also used technology as its main marketing tool targeted at reaching the early adopters who then markets the products to the rest of the people (O'Grady 2009, p.7). This concept is termed the Law of Diffusion of Innovation. To achieve this, Apple has a team of experts that analyzes the needs, wants of customers, and adopts innovative technology in accordance with their needs. This has been witnessed in the popular iPhone and iPads, which have indeed changed the world. With these technologies, Apple has made it clear to its customers that no other competitor can match it in terms of quality and value for money (O'Grady 2009, p.7). However, once the products have reached the early adopters, these customers do the rest by spreading the good news about Apple’s products to the rest of the world. Source: O'Grady, J.D. (2009), Apple Inc. West Port, CT: ABC-CLIO. Thirdly, Apple believes that the key to success lies on being different from other players in the market while at the same time understating the needs and wants of customers. Apple is one of the companies that have faced many challenges over the past decade as was witnessed in the failure of Macs to catch in an industry dominated by PC. The failure was attributed to the fact that the engineers and developers of Macs assumed that they knew the needs of customers, which was not the case. Apple changed the situation towards the end of 1990s with the introduction of iMac, which came in several beautiful colors. This resonated well with the needs of customers, thereby seeing its sales go up. In addition, iMacs was also well received by customers because getting into the internet with it was quite easy and faster as opposed to the Mac. This is because iMac only needs a plug in to the line of the phone, a feature, which did entice internet users (O'Grady 2009, p.9). Apple also considered tapping into a new market by introducing new inventions that are more efficient and cost effective to customers. It is noted that by the time apple was introducing the iPod in the market, there was already the mp3 player. This gave iPod a lot of competition for customers. Therefore, in order for Apple to persuade customers to purchase the iPod instead of the mp3 player, Apple reinvented the music industry particularly the music files. In this case, it ensured that the IPod had a greater capacity to hold files up to 5 GB, which was far above what an mp3 player could hold. Apple later went a step further by introducing the iTune, which allow people to download songs they want at low cost that buying the original CD. The high demand for an iPod was, however, to the fact that it could be connected to a PC. As such, this enabled millions of PC users to be able to listen without necessarily having to have a Mac. Since many people liked the iPod, they spread the message to the rest of potential customers all over the world. The concept here is that Apple was able to identify the needs of the people and adopt advanced technologies to meet the needs of customers (O'Grady 2009, p.9). Apple has also optimized its distribution systems by changing from smaller to big chains. In fact, the company has commissioned more than 280 retail store in 10 countries accosting for 16% of the company’s total revenue. Optimization of the distribution systems was aimed at giving customers the opportunity to learn, experiment and test the products, which has led to great success (O'Grady 2009, p.9). B) Evaluate the benefits and costs of marketing orientation for the chosen company Learning the known and unknown needs of customers in the market through market orientation has many benefits and costs as having been witnessed with Apple (Exforsys Inc. 2009). The benefits that have accrued to Apple because of market orientation include the fact that it has driven the company to improve its processes and systems in terms of service and product offerings that is adaptable to both current and future needs of customers. For instance, market orientation has seen Apple introduce an iMac in the industry that has helped solve customer problems, which Mac could not. An iMac in this case was an improvement to the Mac. In addition, market orientation has helped Apple introduce the iPods and iTunes, which has helped satisfy the needs of internet users on the PC. In fact, the company is still in the process of improving some of its products in order to satisfy the needs of its customers. Market orientation has helped Apple meet the needs of its customers by developing appropriate products (Exforsys Inc. 2009). This certainly has enable Apple to have competitive advantage over other firms in the industry, which is likely to enable it survive longer. The satisfaction of customer needs has led to high demand for Apple products, which in turn, has led to increased sales turnover, and profit thereby leading to growth as indicated in the chart below. Source: Seeking Alpha (2011), Understanding Apple's Rates of Growth. http://seekingalpha.com/article/309100-understanding-apple-s-rates-of-growth. Market orientation has enhanced constant feedback from Apple customers thereby promoting research to be conducted on various products and the best way of marketing the products in a manner, that adapts to the changing tastes, and preferences of customers before Apple competitors can get there. This in turn increases its competitive advantage in the marketplace (Groucutt, Leadley and Forsyth 2004, p.56). Apart from the benefits that have accrued out of strong market orientation adopted by Apple, the company has also incurred high costs. For example, Apple has incurred high costs out of investment marketing research because the Apple has been in need of strong market intelligence capable of analyzing the market accurately. Apple has also incurred high costs in a bid to introduce technological infrastructure in the company such as those that has enabled it develop the iPhones and iPads. In addition, since modification to work processes has been critical for the company, this forced the company to invest heavily on training, thus increasing the costs. Further, the Apple has had to incur costs because of investment in product iterations and new equipment enable it modify its products to meet customer needs (Groucutt, Leadley and Forsyth 2004, p.56). Task 2 (A) Explain how macro and micro environmental factors can influence your marketing decisions. Micro and macro environmental factors play a big role in influencing the marketing decision of a company. To start with, micro environmental factors include all aspects of a market affecting the relationship between a company and its customers, as well as competition patterns. They include: Customers Customers are one of the most important people in an organization. This is because the success of a company is pegged on meeting their needs and wants, as well as giving benefits to them. However, failure to meet their wants and needs only results in a failure of a company’s business decisions (Groucutt, Leadley and Forsyth 2004, p.28). Strategic decisions made by the management of Apple, for instance, take into consideration the needs, of its customers, which translate to the success stories about the company since it has managed to meet most of their pressing needs, and wants. Competitors The environment in which Apple operates is marked by stiff competition from other firms such as Microsoft. This implies that many products exist apart from those manufactured by Apple that a customer can choose from. Some of the products from the rival companies are cheaper compared to those of Apple. Therefore, in order to gain competitive advantage, Apple has to improve the quality of its products, as well as engaging in intense advertising campaign so as to outcompete its rivals (Groucutt, Leadley and Forsyth 2004, p.28). Suppliers Suppliers are very important in any company since they provide the needed materials to carry out the business operations. However, the behavior of a supplier does influence the business it supplies with the materials. For instance, in case a supplier provides materials of poor quality, this will likely translate to low quality of product (Groucutt, Leadley and Forsyth 2004, p.29). In addition, an increase in the prices of materials supplied impacts on the marketing mix decisions of a company as it may force a company to increase the prices. Indeed, Apples marketing decisions have been hugely influenced by supplier behavior in that the company has always maintained close relationship with its suppliers thereby enabling the company to remain competitive in the market. Macro environmental factors also play a big role in influencing the marketing decisions of a company. It’s main components include legal and political factors, economic, socio-cultural, and technological factors. Political Political environment under which a company operates affects greatly the marketing decisions of a company. The political environment is composed of laws governing business operations, lobby groups, and government agencies. This factors influence marketing decisions in that they restrict what the company can do and what it cannot do. The marketing decisions adopted by Apple, for example has been confined within the peripheries of political environment (Groucutt, Leadley and Forsyth 2004, p.28). Economic Economic factors that influence the marketing decisions of a company include credit trends, salary levels, and pricing patterns. The economic environment influences the marketing decisions of a company in that it influences the consumer’s purchasing power and buying habits (Groucutt, Leadley and Forsyth 2004, p.28). Socio-cultural The socio-cultural environment is composed of the factors that influence the consumer’s behaviors, values, tastes, and preferences (Groucutt, Leadley and Forsyth 2004, p.29). For instance, some cultures forbid the sale of certain products thereby affecting the marketing decision of a company. As with apple, the products have been well received across diverse cultures in the world. However, the company has been hugely affected when it comes to determining the preferences and values of consumers of its products in order to satisfy their needs. Technological The technological environment includes the forces affecting the technology to be adopted in order to produce a new product, market and establish more marketing opportunities (Groucutt, Leadley and Forsyth 2004, p.29). Apple’s marketing decisions have been hugely influenced by the advancement in technology being experienced in the world over. This has seen the company look at new innovative means of developing products using the latest technologies as has been seen in its launching of the iPod and iPads in recent times. Legal The legal environment is another factor that also influences the marketing decisions of a company to the extent that the strategy adopted by the company must in compliance with the laws and regulations of the industry (Groucutt, Leadley and Forsyth 2004, p.30). In fact, the Apple’s marketing decisions have been influenced considerably by the legal requirements, which the company has being complying with to avoid falling on the wrong side of the law. B). Explain how you would segment consumer markets and organizational markets for any two products sold by your chosen company and select a target market. Justify your selection with reasons. Market segmentation is very important for any company that wants to remain competitive through provision of quality products to its customers. Market segmentation by definition refers to the division of a bread market targeted into subset of consumers with similar needs and common use for the goods and services provided (McDonald 2012, P.16). There are a number ways by which a consumer market can be segmented. These include geographically, demographically, behaviorally and psychographic among others. Two of Apple’s products that can be considered for segmentation include the iPhones and iPad. In order to realize high turnover, the market for iPhone and iPads will be segmented behaviorally in which consumers will be divided in accordance with their attitudes towards, knowledge of, response to and use of this products. This type of segmentation will ensure that all the needs of all consumers are catered for with respect to their behaviors towards the products (McDonald 2012, P.16). However, computer market will form the main target market for both iPhones and iPads. This is because these products tend to attract people with extra income, as they are expensive. The other market targets for the Apple’s iPhones and iPads include professionals, students, corporate users, entrepreneurs, and medical users. C). Explain how buyer behavior can effect marketing of the two products mentioned in (B) above. The consumer’s behavior has a lot of impact on the marketing strategies adopted for a given product. For the marketing strategy adopted to be successful, marketers must take into consideration the buying behaviors of consumers be it in product development, pricing plan, and advertising strategy (Vogt 2013). With regard to Apple, the company’s sales department adopts its sales strategies based on behavior of customers in response to its iPhone and iPad products. In this case, it has been established that some consumers prefer being taken through the purchase decisions while other like being left free to decide on their own on what product to buy. Secondly, the buyer behavior affects the adverting strategy adopted by a company, as has been the case in marketing Apple’s iPhone and iPads. In this case, the company’s marketing department establishes an ad based on the proven reaction of their customers towards the products in order to induce them to react in a similar way(Groucutt, Leadley and Forsyth 2004, p.61). For instance, Apple did establish that some of its customers are influenced a clot by celebrity endorsements while other are not. The company also studies behavior of its customers to understand the kind of advert that enables them market the company’s products. Groucutt, Leadley and Forsyth (2004, p.61) also note that promotion of products is hugely influenced by consumer behavior. For instance, Apple’s marketer’s takes into consideration the price discounts offered to customers because most consumers of its products have been proven to take advantage of large discounts compared to small discounts. C). Select one of the two products mentioned in (B) above and explain how its positioning will influence the company's marketing mix factors. The marketing mix is composed of the 4’S namely product, price, place, and promotion (Tehrani 2008, P.6). The positioning of the iPad will certainly influenced the Apple’s marketing mix factors in a number of ways. Firstly, the positioning of the iPad will influence greatly the quality of products offered by the company. This is because the iPad is created on high technology that has never been witnessed before. For instance, unlike other products such as the iPhone and iPod, an iphone is bigger and has an interface of led touch screen. The garget also enables one to surf internet, read e-books, e-mails, view photos, and listen to music among others. In addition, an iPad operates on a wireless-n and has wi-fi features. An iPad will also impact on the price changed by the company in that it is sold in multiple price points with the cheapest selling at $499 while the most expensive will be selling at $699. This will influence the pricing factor in that consumers will have a wide choice as to the type price they are willing to pay. With regard to place, an iPad is sold mainly in the outlets where other apple products are being sold (Tehrani 2008, P.6). In addition, customers can also order for an iPad online without necessarily having to travel to the stores. Finally, with regard to promotion, since apple is known for extensive advertisement, it follows that an iPad can also be given similar treatment. Task 3 Explain how the extended marketing mix elements - product development, pricing, promotion, distribution, people, process and physical evidences - are used by your chosen company to achieve its marketing objectives. Apple uses the marketing mix elements in a number of ways to achieve its marketing objectives. For instance, with regard to product, Apple produces a variety of quality products such as iphones, iPads, iPods, and iMac among others. However, in order for the products to receive high demand, Apple has endeavored at ensuring that quality is given priority over the rest (Tehrani 2008, P.6). This has seen the company compete favorably against its rivals in the industry. Secondly, the company has ensured that its products are affordable to different consumers by charging fair prices for its products. It is notable that despite the fact that most products are still expensive, apple has ensured that cheaper products are also made available to the market. Thirdly, Apple is highly recognized for its intense promotion campaign for its products. This has enabled the company increase its sales to the rest of the world. For instance, Apple’s products are featured right on the front page of its website. The company also promotes its products on television shows all of which have enabled the company meet its marketing objectives. The optimization of the company’s distribution system to different parts of the world has also helped the company meet its marketing objectives. For instance, the company currently has outlets in more than 10 countries in the world in addition to the several outlets it has in the U.S (Groucutt, Leadley and Forsyth 2004, p.63). Finally, Apple the fact that Apple has at all times ensured that all the processes are efficient has enabled it produce quality products such as the iPads and iPhones, which have changed the world (Groucutt, Leadley and Forsyth 2004, p.63). In addition, the company has also ensured that the needs of the people are satisfied, a factor, which has enabled the company to achieve its marketing objectives through increased sales and profits. Task 4 A) Select any two products from your chosen company for two different segments of the market and explain how marketing mix varies to different markets segments. As earlier stated, some of the two common products manufactured by apple are the iPhones and the iPads. The two market segments targeted by the products are the professionals and students. However, the marketing mix consisting of the 4 P’S (product, price, place and promotion) appear to vary in these two market segments (Ireland, Hoskisson and Hitt 2008, p.17). For instance, with regard to product element of the marketing mix, an iPhone is slightly bigger than an iPhone. This makes is suitable for use by both professionals and students as the size makes it easier to use compared to an iPhone. In addition, an iPhone can be used for a variety of purposes without having to carry several gargets compared to an iPhone. With regard to price, an iPhone is priced higher than an iPhone. This makes an iPod more suitable to be targeted at professionals with the ability to buy the product compared to students. An iPhone, on the other hand is suitable for both segments since it is not so expensive as an iPad. Pertaining to place, an iPhone is currently in sale to both professionals and student segment drawn from all over the world. Nevertheless, since an iPhone was released into the market late, the company is still grappling with ensuring that it is sold to both segments in distribution outlets where other products of Apple are already in sale. Finally, with regard to promotion, marketing of an iPhone can be promoted through road shows or promoting the product directly in schools and offices. An iPad, on the other hand can be promoted by merely placing it on the website, as has been the case (Ireland, Hoskisson andHitt 2008, p.17). B) Explain how marketing activities differ between consumer markets and organizational markets. There are several differences in the marketing activities between consumer markets and organizational markets. Firstly, in a consumer market, a buyer can be influenced to buy things they really do not need through advertising campaigns whereas in an organizational market, buys because it wants to buy particularly those that those that help it become competitive, profitable and successful. Secondly, an organization buyer is always on the look and seeking information that may help it do its job better and improve profits. This implies that organization buyers are hungry for information and respond quickly to any piece of information unlike in consumer market where most buyers tend to be complacent of what is going on (Kotler and Armstrong 2013, p.44). Thirdly, in consumer market, the buyer is mainly concerned with the information that may help him or her meet the immediate needs. Organizational marketing, on the other hand, aimed at achieving the long-terms objectives of an organization (Kotler and Armstrong 2013, p.44). Finally, organizational products are more complex compared to consumer products. Here clarity is very important and there is no room for fooling or hiding information pertaining to the product in question, whereas in consumer marketing, it is possible to deceive the prospective consumer by hiding the identity of a product (Kotler and Armstrong 2013, p.44). C) Discuss the factors that differentiate international marketing from domestic marketing. There are a number of factors that differentiates international marketing from a domestic marketing, which must be taken into consideration. Language is one of the factors that differentiate global and domestic marketing. In this regard, domestic marketing can be done using a single language understood by a variety of audiences while in international marketing, the language to be used must be carefully analyzed and translated in home language to enable the audience understand (Doole and Lowe 2008, p.7). Cultural differences exhibited by different countries are also another factor differentiating the two. This is because when marketing a particular product in the international market, it is imperative for the culture of the people before any move can be made. This involves choosing an appropriate ad that suits the culture of the people of that country (Doole and Lowe 2008, p.7). References Brassington, F., & Pettitt, S. (2006), Principles of Marketing. Oxford: Prentice Hall. Doole, I., & Lowe, R. (2008), International Marketing Strategy: Analysis, Development and Implementation. London: Cengage Learning EMEA. Exforsys Inc. (2009), Marketing Orientation. http://www.exforsys.com/career-center/marketing-management/marketing-orientation.html (Accessed 8 Jan. 2013). Groucutt, J., Leadley, P.J., & Forsyth, P. (2004), Marketing: Essential Principles, New Realities. London: Kogan Page Publishers. Kotler, P., & Armstrong, G. (2013), Principles of Marketing. London: Pearson College Division. Ireland, R.D., Hoskisson, R.E., Hitt, M.A. (2008), Understanding Business Strategy: Concepts and Cases. Belmont, CA: Cengage Learning. McDonald, M. (2012), Market Segmentation: How to Do It and How to Profit from It. Hoboken, NJ: John Wiley & Sons. O'Grady, J.D. (2009), Apple Inc. West Port, CT: ABC-CLIO. Seeking Alpha (2011), Understanding Apple's Rates of Growth. http://seekingalpha.com/article/309100-understanding-apple-s-rates-of-growth (Accessed 8 Jan. 2013). Tehrani, N. (2008), Contemporary Marketing Mix for the Digital Era. Bloomington: AuthorHouse. Vogt, C. (2013), How the Buyer's Behavior Affects Marketing Activities. http://www.ehow.com/info_8749189_buyers-behavior-affects-marketing-activities.html (Accessed 8 Jan. 2013). Read More