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Apple Market Analysis - Case Study Example

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The study "Apple Market Analysis" focuses on the critical analysis of the major issues in the market performance of Apple. The products of the company being high in quality as well as innovative features are highly demanded by consumers of all ages and sexes…
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Apple Market Analysis
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? Apple Case Study Answer The products of the company being high on quality as well as innovative features are highly demanded by consumers of all age and sex. Most of the consumers in the developed markets like USA, Canada etc. highlight that the usage of Apple’s products provides them with a style quotient while, customers of the developing markets attach the usage of this product as a symbol of status among their peers. The consumers of Apple all over the world are highly gadget friendly in nature and they loves to explore the latest innovative features, that are provided by Apple products, even if that means availing the product at a high price. Answer 2 In the first case the company is required to develop or enhance its communication strategy with the consumers. Strategies to develop marketing communication happen to alter from company to company depending on differences in marketing and budget objectives. Different tools related to enhanced marketing communications related to advertising, conducting public relations campaigning, marketing through internet medium and also in rendering sales promotions in the form of discounts and rebates as displayed under would contribute in attracting and sustaining the consumers (Belch and Belch, 2003, p.16). Figure 1 (Belch and Belch, 2003, p.16) The second theoretical model relates to the mode of enhancement of relationships with the consumer force. Building of effective relationship with the consumers through addressing queries both before and after sales and rendering proper services happens to enhance the psychological and emotional involvement of the consumer to the brand. This sense of gratitude to the favour obtained reciprocates the consumer’s intention to repurchase and thereby develops a long term relationship as reflected below (Palmatier, 2008, p.27). Figure 2 (Palmatier, 2008, p.27) Answer 3 Product: The product offering of the company comprises of a highly diversified product portfolio comprising of Apple Mac, IPod, I phones, I pads etc. Talking in these lines, it can be said that the company also offers an array of services that are complementing in nature to the products of the company [Apple, 2012, p.2]. Place: The products of the company are highly distributed in multiple markets around the world because of the global customer base of Apple. Promotion: Since, Apple is a widely popular brand in the market, it can be said that the products of the company is sold on the demand created by its brand value. The promotion efforts of the company mainly comprises of the factors of providing online promotions through the company’s website as well as YouTube awareness videos. The company also uses the traditional marketing channels to communicate the values and features of its products to consumers around the globe. Price: The products of Apple are high on quality and innovative features. As a matter of fact, it can be said that the company products are labeled at a premium price, in an effort to cover up the high costs of innovations that are necessary in technology products for the purpose of gaining competitive advantage. Answer 4 The 2001 period was considered critical enough for Apple Inc owing to the emergence of global recession. The sales of the company had drastically fallen from $8 billion a year earlier to only $5.7 billion. Moreover the company had also incurred a huge loss of $344 million with sales and gross margins collapsing drastically in many regions. The company was required to revamp its product architecture through the mode of extensive product development and expansion activities along its different portfolios to return to the growth stage of the product cycle. Secondly the company was also required to enhance its market penetration activities through the use of discounts and promotions to attract the consumers. Answer 5 The risk of new entrants: It is not easy for the new entrants to gain market share. The consumers in this industry like to stick with the existing brands even if the prices of the products are a touched higher. Substitutes: The availability of substitutes in the market is a threat to Apple, as consumers can shift their preferences towards other devices. Apple is aware of this and tries to differentiate itself with Mac range of computers. Suppliers: Apple and the entire market are at some risk, as the suppliers enjoy moderate bargaining power. When companies wish to change to a different supplier, high transfer costs are involved. Buyers: The presence of many small buyers results in low bargaining power for the buyers. Apple has the power to control the market with its set prices. Answer 6 Strength: Apple tends to gain a Global recognition of its Brand relating to Samsung, Motorola and LG in the creation of digitalised mobile media products. Weakness Apple works on the gaining of components from other firms like Samsung to produce the required products. The competitors fail to synergise the different product portfolios as in Apple. Opportunity Apple tends to gain a huge market share in the digital mobile media market. The competitors however tend to work on product diversification to other electronic segments. Threat However the company faces legal problems relating to its marketing and promotional campaigns. Weakness in synergising the production operations in competitors works as a strength for Apple. Answer 7 The Pricing Strategy used by Apple to introduce the iPad in the global market is related to Premium Pricing Strategy. The use of the Premium Pricing would be used by the company to create a niche market for its brand. Apple’s strategy relates to selling the product launched at a premium price to gain potential volume and market revenue before segmenting the market before relaxing the pricing parameter. The current pricing strategy of Apple still reflects on Premium Pricing. Apple currently launched the iPad Mini through the use of Premium Pricing that generated a huge sales volume and market share relating to its competitors as reflected below (Travlos, 2012). Figure 3 Figure 4 (Travlos, 2012) Answer 8 Apple is recognized across the word for its innovation. Starting from Mackintosh, followed by Macbook, ipod, iphon, and the latest innovation ipad are main drivers behind its success in the technology industry. Apart from these product differentiations, the company always highly focused on renovation of the existing products so that to keep the product in before maturity stage in product life cycle in consumer minds. Apple is the only brand which knows position of the product more efficiently than any other technology company. This is one of the major strengths of the company which contributed it for what it is now. Again, there is no other company in this world which is expertise in branding like Apple. Apple always gives priority to the existing customers by offering them new technology innovations. It always makes promise to its existing priority customers only who have been using apple since long past. This strategic approach helps the company to retain its customer base along with getting new potential customers after every innovation. The company offers a unique retail experience to its potential customers. It typically sells folks in retail outlets as people walk into a Apple store, feel the world’s leading innovation and buy a iphone but walk away with a iMack along with the iphone. This drives the sales growth of Apple. Hallo effect is another important factor behind Apple’s success. Tim Cook said that iPhone is the growth driver of sales of iPad. Lastly the endless passion on technology innovation of co-founder of the company Steve Jobs is one of the main reasons for its success in the technology industry. Except Steve, the world would not have access to Smartphone. All these factors collaboratively made the success of this largest technology company in the world. Answer 9 Steve Job was the founder of Apple II and incorporated in 1977. He associated with the company since its birth and developed the empire of Apple leaded by him. Steve had high passion for technology innovation and that is why he focused on new product differentiation with unique technology. On the other side Apple’s current CEO Tim Cook is lightweight in technology. A CEO of world’s largest technology company should not be lightweight. There is a difference between loving technology and being enumerated with technology. Steve jobs used to love innovating technology but Tim Cook is enamored with technology. The major difference in strategic approach between Steve and Tim is that Steve never acknowledge mistakes in innovation and also he used to blame the users at first and then reviewed back to technology but Cook accept any mistake in terms of technology innovation and assures the customers for faster improvement. This has made the current growth of Apple’s new product development rather than up gradation of old innovation only. One important branding strategy is to focus on new product development or product differentiation inside a brand if existing products reach at maturity stage of product life cycle. This strategy was highly followed by Steve Jobs as he was able to forecast the life of a product and started thinking on new product development after launching product. But, Cook is quite slower than Steve in terms of technology innovation. Therefore, he has been focusing on only the up-gradation of the existing products of Apple after the post Jobs area of Apple. Answer 10 Thomas Friedman’s statement ‘the world is flat’ relates to the fact that the entire world is sprouting up to become a global village or knowledge centre where real time ideas and innovations are being shared by people dwelling in different global regions. Creation of a ‘flat world’ in turn also generates resources for collaboration of terrorist groups around the world (Friedman, n.d.). Information Technology companies to require growth in the African market would require betterment of communication and development of infrastructural parameters pertaining to electrical supply and telecommunication resources. Moreover social and educational development of the people is highly needed to effectively govern the mindset of the potential consumers (Odedra, et al., n.d.). In terms of Product, Apple needs to effectively develop its product portfolio through the integration of video-conferencing facilities in the different cellular phones so that the same can gain enhanced demand relating to the rural or isolated markets in the African region. Owing to pricing standards the company needs to break apart from its normal Premium Pricing strategy to Skimming Pricing strategies through which different prices can be set for normal cell phones and those enabling enhanced features to gain larger market acceptability. Pertaining to distribution the company not only needs the setting of exclusive stores for the selling of Apple products but also needs to use the wholesale and retail chain to gain larger market penetration. Similarly in developed African regions the company can also experiment the sale of its Apple phones through the use of the internet gateway. Finally the company to promote its products needs to use both traditional and other online promotional mix models. Traditional promotional mix can be used in the form of rendering discounts and other rebates relating to the sales of its products through physical stores. Operating online the company also needs to exhibit the different promotions in its own website and other associated websites to gain larger consumer attention. Use of print and visual promotional tools like magazines, newspapers, television and radio also need to be used largely to enhance its market (Norris, 2010). Reference Apple.com. (2012) Apple Inc. Retrieved from: http://files.shareholder.com/downloads/AAPL/2206606042x0x610219/112dd7d2-e33a-44ad-b4ea-8870c5dd9281/AAPL_10K_FY12_10.31.12.pdf. Belch, G., and Belch, M. (2003). Advertising and Promotion: An Integrated Marketing Communications Perspective. The McGraw-Hill Companies. Retrieved from: http://hfs1.duytan.edu.vn/upload/ebooks/5183.pdf Friedman, T. (No date). The World is Flat. Retrieved from: http://www.urosario.edu.co/urosario_files/b3/b3a2825b-ba73-4993-ba2b-980b2cfc152e.pdf Norris, M. (2010). Apple Seeks A Way Into Africa. Retrived from: http://www.npr.org/templates/story/story.php?storyId=128321469 Odedra, M., et al. (No date). Information Technology in Sub-Saharan Africa. Retrieved from: http://www.africa.upenn.edu/Comp_Articles/Information_Technology_117.html Palamatier, R. (2008). Relationship Marketing. Marketing Science Institute. Retrieved from: http://faculty.washington.edu/palmatrw/docs/MSI.RM.Book.pdf Travlos, D. (2012). Apple: iPad Mini Pricing Takes Down Stock...But Should It? Forbes. Retrieved from: http://www.forbes.com/sites/darcytravlos/2012/10/23/apple-ipad-mini-pricing-takes-down-stock-but-should-it/ Read More
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