Company History and Overview of the Company Apple - Research Paper Example

Marketing Plan for Apple Inc. Data: Table of Contents Introduction 4 Company History and Overview 4 Situational Analysis 5 Micro Environment Analysis 5 Company 5 Market Intermediaries 8 Customer 8 Competitors 9 Macro Environment Analysis 10 Climate 10 SWOT Analysis 11 Objective and Issues 13 Target Markets 13 Segmentation 13 Targeting 14 Positioning 14 Marketing Strategies 15 Market Targeting and Expansion Strategy 15 Differentiation and Positioning Strategy 16 Marketing Mix Strategies 16 Product 17 Pricing 17 Promotion 18 Distribution 19 Market plan Implementation and Budgeting 19 Monitoring and Controlling 22 Conclusion 23 References 24 Introduction The study is based on designing a marketing plan for Apple Inc. by analyzing the current market situation. The main motive of the study is to analyze the marketing strategies of the organization in comparison to its competitors worldwide. The organization has been chosen for this marketing plan to understand the growing market competition for the organization and to detail essential marketing plan as per the present scenario. The marketing plan of Apple Inc. will elaborate the current market situation through the evaluation of micro environment and macro environmental analysis. This discussion will also involve market objective setting, target market analysis, such as segmentation, targeting and positioning, marketing strategies and illustration of marketing mix elements. Finally, the study will properly evaluate the process of marketing plan implementation, budgeting and controlling. Company History and Overview Apple Inc. is one of the leading global technology companies which is specialized in developing, designing and marketing of consumer electronics. Their product line includes iPhone, iPod, iPad, Macbook etc. Apart from the hardware the organization is also specialized in developing and designing various software products and online services. The business was established in 1976. Headquarter of the organization is situated in Cupertino, California (Apple Inc. 2015a). The organization has secured the second largest position across the world as an Information Technology company in terms of their revenue while the top position is secured by Samsung Electronics. Alternatively, Apple Inc. has been entitled as the third largest company as a Smartphone maker. The value of the organization is approximately $500 billion. By the end of 2014, the organization has recorded annual revenue of $182 billion (Kraemer, et al., 2011). Situational Analysis The analysis of the current situation of the organization will illustrate the micro environment as well as macro environment of the business. The analysis of 5 C’s of marketing such as company, collaborators, customers, competitors and climate, provides detailed understanding regarding the micro as well as macro environment of the business (Wilson and Gilligan, 2012). Micro Environment Analysis Company Product ranges: The organization provides a wide range of technology products that includes hardware software and online services. The products and services of the organization mainly include iPhone, iPad, iPod, Macbook, iTune, Mac App Store, iCloud and application software (Marketline, 2014). Product range Product details iPhone This is the Smartphone range of Apple Inc. which includes the features of mobile phone, iPod and internet communication device. The iPhone ranges of the organization include multi-touch user interface along with e-mail and web browsing facilities. iPad This product is also a multi-purpose device that can be used for web browsing, e-mailing, music and game playing, e-book reading etc. iPad is designed as per the multi-touch technology of the organization. iPod This product is a digital and portable media and music player that includes iPod suffle, iPod nano, iPod classic etc. Macbook This is the range of personal computer of Apple Inc. that include portable computers, desktop, peripherals and third party hardware products. The desktop computers offered by the organization include Mac Mini, iMac and Mac Pro. iTune iTune is the software application of the organization that supports the download, playback, organization and purchasing of different video and audio files. Mac App Store This is also a software application store of the organization that allows consumers to purchase, arrange and select different Mac applications. This store offers different applications in games, lifestyle, graphics, education etc. iCloud This is a cloud service provided by the organization that stores applications, photos, music, calendar and documents as well as wirelessly push these data through various IOS devices and window-based computers. (Source: Moorman, 2012; Fogliasso & Williams, 2014) Finances: Apple Inc. has demonstrated significant growth in their annual sales revenue from 2010 to 2014. The overall profit margin of the organization has also displayed significant growth from 2010 to 2012. During this period their profit margin has grown from 39.3% to 43.6%. Due to the economic slowdown the organization has faced downfall in their profit margin in 2013. Hence, the have properly managed their profit growth from 2013 to 2014 which displays a growth of 38.6% approximately. Alternatively, the growth rate of the organization has displayed a decreasing figure throughout the last five years. The major reason for this situation is the increase of competition in the global market as well as the enhanced market saturation (Paczkowski, 2012). Financial data 2010 2011 2012 2013 2014 Sales revenue (Billion Dollars) 65.07 108.6 155.97 170.87 182.35 Profit Margin 32.3% 40.9% 43.6% 37.2% 38.6% Market growth rate 66.15% 43.52% 9.7% 7% 5.3% (Source: Paczkowski, 2012) Marketing process: The marketing strategy of Apple Inc. is focused on innovating new and modern hardware and software for the consumers. The organization spends handsomely for the research and development process of their product line as well as the needs and demand of the consumers. The organization has developed a process of contacting consumers to gather ideas and opinion regarding current and estimated product performances and features. Hence, the organization prefers to continuously develop their product feature and specifications as per the latest technologies and market preferences (Chan, et al., 2013). The marketing strategy of Apple Inc. is focused on delivering high technological and high value product to the consumers rather than average featured and competitive prices products. The organization provides less importance towards their digital promotional procedure. They only promote the newly arrived product ranges. On the other hand, they provide adequate importance towards the customer relationship through their after sales services and free gifts. These practices enable them to generate a strong relationship with consumers (Moorman, 2012). Suppliers: The organization possesses near about 150 suppliers across the world. The management of Apple Inc. maintains the raw material and production supply standards across all the supplier locations. The suppliers are responsible for raw materials, labor supply and product manufacturing and assembling. The organization has developed high regulations for the suppliers in terms of their social responsibility such as healthy and safe work condition, labor as well as human rights. Despite of this measures few supply locations of the organization has displayed violation of social responsibilities such as the Foxconn location has demonstrated poor practices in terms of excessive work pressure, poor work condition and labor law right violations (Chan, et al., 2013). Market Intermediaries The organization possesses various product distributors and marketing service agencies. The organization mainly distributes their product through the authorized premium resellers and online stores. Apart from authorized premium resellers the organization also distributes its product through other selected retail facilities such as Best Buy. They also utilize the online selling facilities of Amazon and EBay. For their product distribution the organization generally initiate long-term relationship with different air freight services. Their national distributor centre is situated in Elk Grove, California that ensures proper product delivery to company owned and other retail outlets. They also maintain their regional distribution process through FedEx and UPS for their online clients (Apple Inc. 2015b). The organization has contract with multiple marketing service agencies that take care of their marketing campaigns. For instance, TBA Worldwide is responsible for the marketing campaign of different Apple products such as “Get a Mac” and “Think different” campaign (Apple Inc. 2015b). Customer The customers of the organization include both personal users and business clients. The organization provides technological hardware and software solutions to consumers from every age background. Apple follows stores registration, support and feedback policies for the consumers. Alternatively, with the initiation of the leadership of Tim Cook the organization has also provides immense importance towards their marketing and sales process to business customers. Hence, they are modifying the features as per the professional demand. On the other hand, the reasonable price with minimum features policy of leading competitors, such as Samsung, has also provided higher bargaining power to the consumers (Moorman, 2012). Competitors The globalization of the market has increased the intensity of competition of Apple Inc. within the international market. The major competitors of the organization include Samsung, Nokia, HTC, Google etc. Apple Inc. is leading in terms of their rapid technological advancement. The abundance of resources, innovative approaches and brand reputation are the major reasons for their leading competitive position. Alternatively, strong product integration, patent portfolio and cultural innovation have assisted the competitor brand, Google, to capture huge market share in comparison to Apple. Though the market share of Apple Inc. is higher than Samsung, the competitor brand has demonstrated increased revenue in comparison to Apple. The major reasons for the increased rivalry of Samsung are their hardware integration facility with different Operating Systems, excellent engineering, low production cost and competitive pricing (Reisinger, 2014). Attributes Apple Inc. Samsung Nokia HTC Google Revenue (2014) $182 billion $305 billion $15.8 billion $6.7 billion $66.01 billion Market Share (in the US) 41.6% 26.7% 3.1% 5.4% 67% (Approx) (Source: Reisinger, 2014). Macro Environment Analysis Climate Political environment: Taxation, trade policies and trade barriers are the major political factors that can affect the marketing plan of Apple Inc. The organization needs to properly analyze these governmental policies of different countries to anticipate their pricing strategy and profitability. Almost 52% sales of the organization generates from multiple countries outside of America. The manufacturing facilities of the organization is scattered in Ireland, Korea, China, Czech Republic etc. The globalization of business has minimized trade barriers and influenced the organization to build their relationship with a number of countries and regions. Hence, they need to gather proper knowledge regarding wage policies, tax policies and other governmental regulations to increase and maintain their global market position (Kraemer, et al., 2011). Economical environment: Recession, inflation and currency fluctuation are the three main economical factors that Apple Inc. must study properly before designing their business and marketing plan. Most of the Apple products are of premium prices and they are viewed as luxury items. Hence, economical depression can significantly impact the sales of the products. Various countries and geographical regions with low per capita income and high unemployment rates can prefer affordable and less featured products over the technologically advanced and high priced Apple products. Though the UD dollar is fluctuating over a period of time, the strategy of Apple Inc to purchase foreign currency has assisted them to reduce the effect of economic breakdown (Reisinger, 2014). Socio-cultural environment: The modernization and globalization of the world market has rapidly increased the demand of consumer electronic goods. This change in the world market has encouraged Apple Inc. to modify their product innovation, manufacturing and assembly strategies on a regular basis. The advancement of technologies along with the global communication facilities has influenced the usage of technological products, mobile communication and Smartphone across the world. The gradual increase in the disposable income of the population in developing countries as well as adaption of global lifestyle has increased the demand of people towards the high technological products (Lazonick, et al., 2013). Technological environment: The rapid development has decreased the lifetime of different technological advancements. This situation has directed the organization to frequently upgrade their products as per the development of new technological factors. The technology advancement has allowed the marketers to increase their investment and indulgence in the research and development processes. New technology adaptation has also influenced the competitors to improve their product portfolio. Hence, Apple needs to move cautiously to maintain their leading position (Lazonick, et al., 2013). SWOT Analysis Strengths: Strong brand reputation across the world along with the superior design and quality. Highly refined and well-structured supply chain which is capable of catering high demand across the world. High investment in terms of research and development process. Latest innovation in terms of technological development along with highly functioning interfaces. Increased customer loyalty as well as closed ecosystem. Weaknesses: High pricing structure of the Apple products provokes a number of customers to switch to affordable alternatives. Incompatibility of the products with different operating systems. Decreasing market share due to increased global competition. Dissatisfaction and strikes of workers within different manufacturing locations. Opportunities: Increasing demand for tablets and Smartphone has provided immense opportunity to the organization to grow in the global market. Raising demands of cloud services within business locations can improve the market and sales of iCloud facility of the organization. IPhone and iPad has become very common within a number of workplaces. The integration with the Macbook can make them more appealing for workplaces. Threats: Market saturation within the developed countries. The emergence of a number of new competitors within different market places has increased the intensity of competition and rivalry. Rapid development and changes in technologies and their adaptation have generated threat for the organization in terms of maintains the market position. Increase in the market share of the Android OS is hugely affecting the market share of Apple Inc. Little opportunity to customize product features in comparison to the other major players. (Source: Apple Inc. 2015a; Marketline, 2014) Objective and Issues The major objectives of the marketing plan of Apple Inc. include- Differentiating the marketing strategies and product specification as per the variations in the different target market characteristics to enhance the consumer database. Increasing the awareness of global consumers regarding the quality, value and innovative approach of the specification of multiple Apple products. Extending the brand name of Apple Inc. through meaningful positioning procedure. Measuring the responses and awareness of global consumers to evaluate and adjust the marketing mix strategies of the organization. Target Markets Segmentation Apple Inc. generally segment their market based on the demand of their leading products such as Macbook and iPhone. Their market segmentation process needs to majorly focus on the demographic, socio-economic and psychographic classifications. Their demographic segmentation should target consumers as per their age and life stages while the socio-economic classification will focus on segregating the market as per education, income and occupation. As per age classification the organization needs to divide the consumers within the age category of 14 to 55. Their market segmentation must focus on population from middle to upper middle class along with the premium customers. Their psychographic classification needs to focus on consumer’s lifestyle and technological adaptation. Targeting The high value and high priced products of Apple Inc. assist consumers to create as well as maintain status symbol. Their highly technological and professional features are also best suitable for the busy professionals (Moorman, 2012). Hence, their target market group should be designed as per the income, social status and occupation. The management must focus on targeting consumers from middle class to upper middle class segments with moderately high disposable income. They can also target high profile professionals and business personnel. Finally, they should concentrate on targeting young population who are more curious about the latest technological developments. Positioning Apple Inc. follows a number of promotional strategies to position their products, mainly the new launches, within their targeted consumers. Online stores of Apple provide free shipping facilities to the consumers whose purchase order exceeds the limit of $50. Their back-to-school offers provide special discounts to the students and teenage customers. All their products come with one year warranty which assists them to gain consumer trust (Paczkowski, 2012). Their positioning process needs to be focused on highlighting the values and quality of products rather than its features and prices. They must position their brands as a highly featured and user friendly products with competitive pricing. Marketing Strategies The marketing plan of Apple Inc. needs to concentrate on evaluating and modifying the market target, differentiation and positioning strategies to eliminate the threat of market saturation as well as intense rivalry. Proper targeting, differentiation and positioning strategies will allow them to increase their market share and competitive advantages. Market Targeting and Expansion Strategy The organization needs to shift their focus towards targeting the potential market within the emerging markets such as Vietnam, China, and Korea. The demand of high technological products is increasing in the emerging markets along with their purchasing power. The management of the organization can focus on niche marketing strategy which will influence them to target a specific market by limiting their core consumers from other market segments. This process will assist the organization to concentrate on the potential consumers who have positively expressed interest on their product range. This process will enable the marketers to increase their consumer loyalty by fulfilling the minute demands of the targeted customers. They also need to target the students within those emerging economies to fulfill their needs for multi-functioning portable devices. This process will enable them to increase their market share while efficiently eliminating market saturation. As per the analysis Ansoff’s matrix the organization can gather benefits by following and implementing the market development strategy. According this strategy the organization requires to introduce their existing product ranges to the new market segments (Hussain et al., 2014). This process will enable the marketers to introduce their existing product in a revised price structure to encourage the potential consumers of new emerging market. Therefore, it will provide competitive advantage to the organization over the existing competitors. In terms of their current market, the organization needs to shift their focus to the middle class population with moderate to high income pattern as well as the business medium sized corporations. They can redesign the pricing policies of their existing product series to match the requirements and purchasing power of these segments of consumers. Differentiation and Positioning Strategy The competitors in global market are increasing gradually. Hence, the organization needs to focus on improving their differentiation strategy to increase market competitiveness and improve their positioning. Though the market is flooding with a number of similar products, Apple still possesses various unique selling points. Hence, the organization must indulge in improve those selling points continuously to maintain their market leadership position. These unique selling points include innovative applications (for instance, Siri application), high performing sliding features and improved quality of sensor. The marketing strategy of the organization needs to focus on highlighting these features of the products to attract more consumers. The positioning strategy of the organization needs to emphasize on the value for money of their products. The marketers must position the brand as a superior and high quality alternative of all the available competitive products. They need to highlight on their value pricing strategy that will ensure consumers to get best features in exchange of their money and loyalty. Marketing Mix Strategies The marketing mix strategies will enable the management to evaluate and modify the four major elements of their marketing mix such as pricing strategies, product development, promotional activities and distribution processes (Mintz and Currim, 2013). Product The product development strategy of the organization needs to concentrate on increasing the superiority of the product lines in comparison to the competitive products. The organization must highlight on the 1 year general warranty as well as three years extended Apple Care warranty to provide increased product assurance to the consumers. Apple Inc. also needs to introduce new batch of products with competitive pricing policies. These products will mainly target the medium sized corporate houses as well as the middle class population. These products will comprise of minimum advanced features to provide the first experience to the untapped consumer market. On the other hand, they should push new and special edition products to the niche market of the emerging economies. This products will comprises of the advanced features such as larger storage capacity, high quality camera and sensor, wireless 4G, longer battery life and high functioning GPS. Pricing Currently, the organization provides significant focus on the premium pricing process. According to the strategies of the marketing plan the organization should also consider three different pricing strategies such as price skimming, value-based pricing and competitive pricing strategies (Jobber & Shipley, 2012). The price skimming strategy will be applicable for their product ranges for the medium sized corporate sectors. This strategy will enable the organization to penetrate the medium sized corporate sectors with comparatively high price. Hence, the organization will reduce their pricing as per the consumer loyalty and product contract with different business houses. The requirement of advanced technologies and features will encourage the businesses to pay moderately high amount in the initial phase while the reduced price in long run will increase the brand loyalty. The value-based pricing will be designed for the new consumers in the emerging markets. This pricing system will encourage the marketers to offer price as per the features and quality of the products. Therefore, it will encourage the potential consumers of the niche market of the emerging economies to pay higher amounts for high quality and advanced products. This pricing strategy will increase the brand value within the new segment of market. The market segment with students and middle class population should be offered the competitive pricing. The organization needs to analyze the pricing policies of the immediate competitors within those markets. Hence, they need to design their product pricing accordingly to capture the market. This policy will influence the management to increase their competitiveness within the current market while reducing the market saturation. Promotion The promotional method of the organization must consider all the available leading media such as television, print media hoarding and social media. Sponsorship to various events can also be considered as the beneficial promotional procedure for the organization. Before launching their special edition product in the emerging economy the organization should indulge in researching the market preference and specifications. The management must invest in massive television and print media advertising to grab the attention of the potential consumers. The digital as well as print media advertisements should emphasize on the benefits and quality of the products rather than simply explaining the features. These advertisement also need to be designed as per the responses and specifications provided by the potential consumers through market research. The promotional department must focus on the continuity of the advertisement to increase and maintain consumer awareness. The social media advertising also required to be utilized to attract the interests of the teenagers and students. This media can be utilized to communicate the deals and discounts in different product ranges along with various sales promotions. Personal selling and relationship building processes will be utilized to increase the market within the business clients. Finally, the organization needs to establish training centers in the new markets to educate the dealer, resellers and consumers about the features and benefits of the products. This process will increase the consumer awareness within new market segments. Distribution The distribution process of Apple’s products should mainly focus on the authorized reseller and company owned showrooms. This process will assist them to maintain their brand exclusiveness. This distribution strategy can assist the organization to properly design their product display. The management needs to concentrate on designing attractive stores along with consumer friendly store merchandizes. Apart from the physical stores the organization must maintain their product flow within their company owned as well as third- party online stores. The reverse logistic process need to be properly maintained and monitored. This process will ensure the prompt money back guarantee for product malfunctioning. The product distribution strategy of the organization should also include partnership with leading mobile phone service companies such as Verizon, Sprint, T-mobile, AT&T etc. They also need to consider partnership with leading mobile phone service providers of developing countries China Unicom, China Telecom etc. Telecom services of emerging economies can also be considered to expand their business within the targeted market place. This process will increase the market share of the organization. Market plan Implementation and Budgeting The successful implementation of this marketing plan will require a total span of 12 months. This time period needs to be fully utilized in a planned manner for the market research, product development, pricing, advertising and product placement procedure. The essential tasks of this marketing plan need to be properly scheduled as per the available months. A tentative budget for every task will be evaluated as per their importance and required duration. Tasks June 15 July 15 Aug 15 Sept 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Budget (in dollars) Research of new market areas and pricing as well as promotional strategies of competitors                         $650,500 Product development   Special edition product design                         $ 750 million Modification of existing products                         $ 300 million Design of corporate based products for medium sized businesses                         $ 500 million Pricing   Designing and reviewing pricing policies and performances                           Promotion   Television advertising                         $ 85 million Print media advertising                         $ 7 million Personal selling                         $450,500 Social media advertising                         $265,000 Sales promotion                         $350,500 Training centre                         $875,000 Distribution   Local reseller expansion and distribution through partnership                         $ 800 million Monitoring and Controlling The implementation procedure of the marketing plan should be monitored frequently by using different performance measurement tools. Market research, consumer responses and employee feedbacks will be collected to gauge the acceptability and improvement of the marketing plan. Throughout the implementation phase the top management needs to collect progress reports from each of the involved departments such as R&D, marketing, technology, sales and finances. These reports will denote the pace of program completion and their success rate. Therefore, it will assist the organization to timely and adequately handle any possible discrepancy. Conclusion The discussion has elaborated the market positioning and performances of Apple Inc. in a global platform. The evaluation of the current market situation has detailed a number of business threats as well as opportunities for the organization. The major threats faced by the organization are market saturation and increase of rivalry. The further discussion of the study has detailed the current segmentation, targeting and positioning policies of the organization. Hence, it has developed new target market, differentiation and position strategy for the organization to eliminate the possible threats. The discussion has developed various useful and essential marketing mix strategies. Finally, it has designed a tentative implementation and budgeting plan. References Apple Inc. (2015a). Apple products for promotions. Retrieved from https://www.apple.com/au/promotions. Apple Inc. (2015b). Supplier Responsibility 2015 Progress Report. Retrieved from https://www.apple.com/supplier-responsibility/pdf/Apple_Progress_Report_2015.pdf. Chan, J., Pun, N. & Selden, M. (2013). The politics of global production: Apple, Foxconn and Chinas new working class. New Technology, Work and Employment, 28(2), 100-115. Chapman, R., Hoskisson, R. E. & Christian, G. (2012). Apple Inc.: Keeping the “i” in Innovation. Retrieved from http://www.cengagebrain.com.mx/content/9781133516491.pdf. Fogliasso, C. E. & Williams, A. (2014). 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M. & Gilligan, C. (2012). Strategic marketing management. London: Routledge. Read More