Marketing Strategy and Analysis for Apple, Inc - Essay Example

? Marketing Strategy and Analysis for Apple, Inc. BY YOU YOUR SCHOOL INFO HERE HERE Word Count 984 EXECUTIVE SUMMARY Apple maintains considerable brand loyalty with existing markets. However, there is research evidence that even loyal customers are growing dissatisfied with the innovative products being launched by the firm. This suggests that there is no an absolute guarantee of long-term sustainability for Apple. As such, it is recommended that Apple select a diversification strategy that is supported with a marketing strategy that involves concentrated promotional development, staying true to interactivity and relationship development through transparency and social media, and linking the new business structure to its existing reputation for competence and trust that has been long-standing with customer markets and non-customer markets. Apple may have to invest a great deal of financial and human capital effort into performing market research to gain new market interest, something the firm is not experienced with as, historically, Apple has chosen to focus on developing existing markets through product development strategies. Marketing Strategy and Analysis for Apple, Inc. 1.0 Introduction Apple, Inc. has long been considered a pioneering company; an innovative organisation that develops unique products with features and benefits unavailable by competition that gives the business a positive market position. Marketing has been one of the fundamental success factors for Apple, especially in relation to launch of the iPod, iPhone and iPad, methods of differentiating the business from other competition. Marketing is defined as being all-inclusive of all activities related to commercial exchanges that involve advertising, branding, distribution, establishment of pricing structures, and responding to consumer behaviour patterns (McCall 2003). Apple successfully utilises marketing in order to build relationships with consumers that lead to brand loyalty, attachments that have consumers favouring Apple branded products over other competitive products offered by such competitors as Samsung and Blackberry. Apple focuses on building a brand, a holistic representation of the business that is reflective of quality and internal corporate values. Branding is a strategy that creates the ability to build connectivity between internal market-centric assets and important target markets that allow a business to nurture its resources effectively (Abimbola 2001). Apple maintains a brand strategy that reflects emotional appeals, building a brand personality that emphasises such consumer-centric concepts as “inspiring passion and hope, power-to-the-people through facilitating technology, imagination and liberty regained” (Robinson 2012, p.2). This is how loyal markets view Apple as a leader in the technology industry. 2.0 Responses to competitor activities Apple uses marketing as a tool to create perceptions in desired target markets that Apple products and services as superior to competitor brands. Apple is adept in creating pioneering products that have relatively long product life cycles as competitors are not able to quickly replicate the features and benefits of Apple branded products. Apple, in the early 2000s, was able to gain favourable market attention and brand preference with diverse markets by being the first-to-market. According to marketing theory, the publicity associated with pre-launch activities set up the foundation for brand loyalty. When a first-mover achieves positive gains with an innovative product, they actually define the product category and are seen as a model by which consumers evaluate late movers (Agarwal and Gort 2001; Liberman and Montgomery 1988). Apple is not generally taken to creating marketing strategies as a response to competitive efforts, but to build proactive methodologies of promotion that enhance its public brand reputation through media coverage. The former CEO, Steve Jobs, used to serve as a relevant and trusted celebrity endorser that engaged many diverse consumer markets with interactive social media presence and descriptive product seminars that were supported by intensive media coverage. Jobs and his contemporaries utilise these strategies as a means of expressing internal corporate values on cultural cohesion, creating the perception with markets that Apple, Inc. is competent, trustworthy, and able to ensure that all brand-related promises are followed through. Stover (2004) indicates that for effective knowledge production to occur, business professionals cannot work in isolation, but instead must be engaged through interactions with others. This is how Apple proactively sustains its long-standing brand loyalty with markets, by aligning internal function and cultural values with supporting media promotion that are aligned with the aforementioned concepts such as liberty regained and power-to-the-people ideologies. Gounaris and Vlasis (2004) indicate that brand loyalty establishment is critical as it provides better word-of-mouth advertising, allows for premium pricing structures, and greater opportunities for brand extensions in the future. Apple is, through marketing, therefore sheltered from competitive marketing tactics by markets that support Apple and will even defend the brand in a variety of brand communities. Apple, therefore, does not have to respond in a crisis situation with threats of lost market share, simply stay true to the foundational internal and customer-centric value systems that continue to bring Apple products high market favourability. As such, Apple has built a culture between the internal environment and external markets that is unique in this dynamic competitive market. Fairholm (2009) reinforces that development of this culture requires establishing and promoting a vision and opening inspirational lines of communication. This is the foundation of what drives brand loyalty in many of Apple’s target markets. 3.0 Strategic options available to Apple Referencing the Ansoff Matrix, a model by which companies choose to improve business position. Figure 1: Ansoff Matrix Source: Ward, A. (2009). Expanding your business the Ansoff way, Contar Media. [online] Available at: http://contarmedia.com/expanding-your-business-the-ansoff-way/ (Accessed: 2 April 2013). Apple has selected a product development strategy, which is an effort to develop new products that are provided to existing markets (ICMBA 2010; Thompson, Gamble and Strickland 2005). Since Apple understands the needs and cultural characteristics of important target markets, the business is able to develop innovative products and sell to loyal markets without pursuing new market development. This gives them significant cost advantages over competition that must use costly and integrated promotional concepts in order to gain market attention. A careful audit of Apple, Inc. has indicated that there are opportunities for improving market position by selecting a new strategy. Apple does not have to focus only on consumer electronics, but can select a diversification strategy which is expansion into new business units to develop new products available for new markets not currently sought after by the firm (ICMBA 2010). It was established by Gounaris and Vlasis (2004) that brand loyalty builds long-term equity for expanding the product line offered by the firm. Apple is in a position to enter a variety of new industries, ranging from business consulting services to telecommunications under the Apple brand but with a different operating identity to distinguish the diversified strategy to gain new market recognition and brand preference. 3.1 Why select diversification? Recent survey data identified through quantitative research efforts have indicated that positive sentiment for the Apple brand has diminished recently. With the release of Apple’s fourth version of the iPhone, 47 percent of random smartphone respondents indicated dissatisfaction with the iPhone 4 (Epstein 2011). Concurrently to these pressures for sustaining perceptions of quality and reliability, major competition such as Blackberry and Samsung are becoming more adept in gaining subscribership and consumer following for these rival brands with very similar capabilities and features as that of Apple’s electronics products. Apple is not the only major conglomerate with the resources and human capital talent in the market to develop innovative products with unique benefits and features. There is always the risk that new entrants or existing competition could develop disruptive innovations, which is defined as any value-adding innovation introduced that has the ability to displace a market that is already established (Christensen and Raynor 2003). Apple, therefore, should not be complacent in existing marketing strategies related to its product development strategy. Instead, the business should be considering contingency activities in the event of disruptive innovations injected into the market or changes to consumer sentiment about Apple’s brand personality and credibility. 4.0 Recommendations Apple has many advantages in adopting a diversification strategy to gain new market attention. In the current environment, there is always the competitive risk of new entrants and substitute products on the market, which Michael Porter identifies as legitimate risks to new strategy development. With growth in capital availability with key competitors and the ability of new entrants to gain venture capitalists investments or other grants for business development, plus the addition of supporting production and R&D technologies, Apple may not be able to sustain its current position as a market leader with established brand loyalty. Under the new diversification strategy, Apple should be first determining its new product that will be serving new markets. For the purpose of this analysis, the business unit will be a brand extension that includes professional consulting. In this case, it is the trust, respect and consumer-perceived competency of the Apple culture and its talent experts that will be the focus of product in the marketing mix. Apple will be first segmenting customers by their professional business categories, geographic segmentation and demographic segmentation to identify which business leaders would be receptive to Apple branded consulting services. Upon identifying markets, targeting will occur through psychographics, linking social or professional needs and lifestyles with the ability of Apple to provide better business outcomes. Preliminary market research must be conducted, in the form of surveys and interviews with professionals in a wide range of industries, to determine their level of need for consulting services and their sentiment about Apple’s reliability and competency to perform the services; as well as cost concerns. Place marketing is important to the new strategy, as consultants can illustrate convenience by bringing consultants directly to the organisation requiring assistance, thus ensuring a comfortable environment for service delivery. By emphasising this convenience related to place, Apple need only inject a perception of consulting competence utilising promotions. Promotional strategy should consist of publications constructed by executives of the firm and other talent experts that will be providing a wide range of advice to improve business. Ducoffe (1996) indicates that the medium in which advertising is distributed will significantly impact how the brand is perceived. Television is not considered to be a credible medium (Ducoffe). Apple should be exploring relevant professional publications, such as the Wall Street Journal or industry-specific publications in which to express its new value proposition related to consulting services. Using pre-existing interactive strategies that have worked with the consumer electronics market, Apple should remain focused on relationship development through personalisation and social media to reinforce cultural competency and professional prowess as credible and trustworthy business advisors. Apple’s mission statement does not focus on what it performs, but on what the firm believes in (Goodson, 2011). Since consulting represents a partnership between client and the service provider, quality and depth of relationship is critical to this new diversification strategy. Promotion should occur primarily through interactive mediums to express core beliefs of the service providers linked with the recognisable Apple logo. 5.0 Conclusion and limitations There is no guarantee that changing to a diversification strategy for consulting services is going to meet with the same market response as existing markets in the electronics industry. Apple has advantages over other rival firms when attempting to diversify as the brand loyalty that gives Apple a better business reputation can be transferred to new markets that are already, at least, aware of Apple’s reputation for innovative product development and competency. Whilst other rivals attempting diversification would be forced to establish brand recognition in new markets simply to gain revenues long-term, Apple is renowned across the world and easily recognised by customers and non-customers alike. The most notable limitation to the marketing strategy and diversification effort is that Apple is most familiar with, a target audience with many different lifestyles and emotional characteristics including older professional markets with demand for certain services. Apple may have to enhance its training to describe these characteristics to service providers and develop market-specific advertisements to gain attention from diverse markets with radically different values and beliefs. The capital and labour investments in market research, prior to launching the new consulting business, could be substantial for a business not accustomed to seeking new markets. References Abimbola, T. (2001). Branding as a competitive strategy for demand management in SMEs, Journal of Research in Marketing & Entrepreneurship, 3(2). Agarwal, R. and Gort, M. (2001). First mover advantage and the speed of competitive entry, Journal of Law and Economics, 44, pp.161-177. Christensen, C.M. and Raynor, M.E. (2003). The Innovator’s Solution: Creating and sustaining successful growth. MA: Harvard Business School Press. Ducoffe, R.H. (1996). Advertising value and advertising on the web, Journal of Advertising Research, 36(5), pp.21-35. Epstein, Z. (2011). Survey: 29% of smartphone owners, 47% of iPhone 4 owners disappointed in iPhone 4S, Boy Genius Report. [online] Available at: http://bgr.com/2011/10/13/survey-29-of-smartphone-owners-47-of-iphone-4-owners-disappointed-in-iphone-4s/ (Accessed: 2 April 2013). Fairholm, M. (2009). Leadership and organisational strategy, The Public Sector Innovation Journal, 14(1), pp.26-27. Goodson, S. (2011). Is brand loyalty the core to Apple’s success?, Forbes Magazine. [online] Available at: http://www.forbes.com/sites/marketshare/2011/11/27/is-brand-loyalty-the-core-to-apples-success-2/ (Accessed: 2 April 2013). Gounaris, S. and Vlasis, S. (2004). Antecedents and consequences of brand loyalty: an empirical study, Journal of Brand Management, 11(4), pp.283-306. ICMBA. (2010). Ansoff Matrix, Internet Center for Management and Business Administration. [online] Available at: http://www.quickmba.com/strategy/matrix/ansoff/ (Accessed: 2 April 2013). Lieberman, M.B. and Montgomery, D. (1988). First mover advantages, Strategic Management Journal, 9(3), pp.41-58. McCall, K.L. (2003). What’s the big dif? Differences between marketing and advertising. [online] Available at: http://www.marketingprofs.com/print.asp?source=%2F2%2Fmccall5%2Easp (Accessed: 1 April 2013). Robinson, P. (2012). Apple’s Marketing Strategy, Marketing Minds. [online] Available at: http://www.marketingminds.com.au/branding/apple_branding_strategy.html (Accessed: 2 April 2013). Stover, M. (2004). Making tacit knowledge explicit, Reference Services Review, 32(2), pp.164-172. Thompson, A., Gamble, J. and Strickland, A.J. (2005). Strategy: Winning in the marketplace, 2nd edn. New York: McGraw-Hill. Ward, A. (2009). Expanding your business the Ansoff way, Contar Media. [online] Available at: http://contarmedia.com/expanding-your-business-the-ansoff-way/ (Accessed: 2 April 2013). Read More