The Analysis of Apple's Products - Term Paper Example

Analyze the promotional mix activities of Apple – iPhone, iPod and iPad products Introduction Apple Incorporation is a US based organisation, which specializes in producing mobile phones, computers and accessories, peripheral devices, hardware and software technology, music devices etc. Indeed, it was inaugurated by Steve Jobs in April 1976 and was formerly known as Apple Computers. For instance, the Apple Incorporation has constantly focused on production development, innovation, segmentation, branding, differentiation and positioning. For instance, Apple’s all newly launched products such as iphone (3G, 4 and Wi-Fi supportive), ipad, IPod, and other mobile, music and computer devices received greater consumer acceptance and popularity. Consumers in every geographical region (Asia, Europe, Australia, American, Europe and Africa) have inclination to acquire Apple’s products because of premium quality, durability, reliability and authenticity. In other words, all distribution channel members (either direct or indirect) associated with Apple also reap financial benefits as they directly contribute in sales to end-users. This paper will throw light over promotional mix followed by Apple Incorporation for efficient distribution and supply of its computer, mobile and entertainment products. Apple has inclination to distribute its products in an efficient and effective manner so that it could maximize its sales and strengthen relationships with its satisfied and loyal customers. 2. Promotional Mix Activities It is worthwhile to mention that Apple first launches its products in its core markets across developed European (France, Germany, Italy and Sweden etc.), American (US and Canada) and Asian (Japan, South Korea and Malaysia) economies because these nations have higher per capita incomes and they host a large number of electronics brand crazy customers. The advertising budget of company in 2009 and 2010 fiscal years was estimated to be over $500 and $550 million respectively, which is actually used to enhance brand recognition and awareness of new arrivals. Also, the advertising budget is used to create commercials that would persuade customers and trigger purchase responses for existing products. 2.1 - Direct / Indirect Distribution Channels As far as the supply chain networks of Apple Incorporation are concerned, it should be pointed out that company uses both direct and indirect distribution channels to ensure its products are available at all selected commercial stores, outlets, retail points and online sellers. Without any doubt, this strategy is developed to ensure Utility of Place and Utility of Time among customers. For instance, the company’s brands have already received consumer acceptance and applause; therefore, it is justified to argue that Apple has successfully developed Utility of Form / Shape. One of the main distributors of Apple is Tech Data, which not only covers U.S segment but also the international segment. In addition, Tech Data distributes Apple’s products in European (France, Germany, Italy and Sweden etc.), American (US and Canada) and Asian (Japan, South Korea and Malaysia) markets and contributed sales of over $24 million during 2009 – 2010 (Apple Insider Staff, 2010). In addition, Apple has also been distributing its products through “cellular network carriers’ distribution channels and certain third-party resellers”, which is a new marketing and promotional initiative. The company management is hopeful the above mentioned will work and contribute significantly in total sales volume. For instance, Apple has also recently established relationship with Best Buy US store chain and signed an agreement according to which new Ipad and Iphone models will be sold at over 1090 commercial stores of Best Buy Corporation in 2010. In fact, this move will directly benefit global producer and marketer (of cellular phones, computers and accessories) in targeting mass audience. Nonetheless, Apple will gain competitive advantage over rivals because its products will attract a large pool of Best Buy regular shoppers. Above all, the news reports by Apple Insider (2010) and Dignan (2010) have cited that Apple has also been in contact with Target and Wal-Mart superstore chains in order to expand its indirect distribution channel network. If the deal remains successful, it would surely a big accomplishment for Apple (IRoo, 2010). As far as the direct channels are concerned, it is worthwhile to mention that the company has reinforced the idea of opening its self-owned retail stores and commercial selling points in lucrative US and international markets to effectively distribute its products. For instance, Apple had successfully expanded its store network to over 270 sales points till third quarter (September) of 2009 (Annual Report, 2010). This will enable not only enhance revenue streams but also enable the company to accept warranty claims and entertain any complaints from customers at various outlets. In this way, interaction with customers may increase that trigger improvement in satisfaction level. Apple is aware of the fact that over 80% US population lives in urban areas where life is fast, thus consumers demand advance mobile devices for communication and business connectivity. 2.2 – Traditional Media This should be recalled that Apple allocate significant budget for advertising and promotion of its products. The company uses print media (newspapers, magazines, brochures and pamphlets.), radio, and television / electronic media for publicity of store location and promotion of Apple Iphones. The company benefits financially from its well-established brand name and its strong informative and persuasive advertising through television. The TV and print media commercials / ads provide customers the basic information about product features, available models, prices selected dealers, selling points, contact numbers, store location etc. 2.3 - Internet and Social Media Apple largely uses internet media for publicity and promotion of products. Websites such as www.apple.com are used for providing public information about promotional deals, location of company stores, contact numbers etc. In addition, customers may also choose and reserve models at offical website because of online Reservation System. In addition, various third-party resellers and online stores offer Apple’s brands across USA and global markets. Apple has also been effectively using Social Media that allows participation between a brand and consumers. It is not a push of information rather a conversation because the company listens, analyzes and responds to consumer reviews and suggestions. The international player has created a new layer of influencers, mainstream media, bloggers, digital influencers, and consumers that promote Apple’s brands. Indeed, the company opts to use Social media press release (Embedded video, photos, logos, URLs etc.) and Social media newsroom for publicity. In addition, the company has been using online digital communities such as Face book, Twitter and You Tube. Apple has designed official fan pages each at Face book and Twitter that post news, promotion, events, commercials and related videos. Similarly, the company uses YouTube for commercials and other related contents such as viral videos, event coverage and interviews with CEO / key executives. 2.4 - Miscellaneous Media Billboards and Sign Boards are also used as they have proven to be a very effective marketing strategy for a very long time, mostly on top of a high-rise building and/or in front of a public building with a lot of daily traffic passing by. Road Shows are also conducted to increase interaction among sales staff and potential customers. Indeed, customers are also engaged in recreational and entertainment (music, dance etc.) activities organized by Apple. For instance, sponsoring musical concerts, business and commercial events are among the miscellaneous promotional techniques used by Apple Incorporation. Another strategy that I could identify is company’s unique logo in which name of Apple Incorporation is not mentioned (unlike KFC, IBM, and HP etc.). The customers could easily recognize this ‘Apple with a cut’ eye-catching logo and remember when purchasing their desired brands. Evaluating the strengths of Apple’s promotional activities, it should be highlighted that Apple was successfully able to entice early adopters from these global markets and earned enormous profits from over 300,000 iPhone sales in first 2 days of launch in 2007. The international seller then launched its products in developing / emerging nations such as China, India, Indonesia, Hungry, Turkey and others to reap maximum monetary profits. The overall consumer response was medium because of higher prices, however, many customers in both developed and emerging countries had an inclination to acquire Apple’s products (Hall, 2008). . In around 18 months after the launch, the sales recorded to be over 13 million units across the globe. As a result, Apple became the third largest seller of cellular phones while first two positions were maintained by Nokia and Samsung respectively. In 2008, Apple’s net profits increased by 26% after sales of 2.6 million Macintosh and 6.8 million IPhones that is the evidence of an outstanding brand and promotional strategy developed by Apple marketers (Apple Insider Staff, 2008). 3. Conclusion In a nut shell, Apple has adopted an aggressive marketing and advertising strategy to tempt interested customers towards its iPods, iPhones, iPad, Apple TV, Macintosh and other brands. The company has global advertising budget of over $600 million so that it could spread awareness and knowledge about its existing offerings and new arrivals. According to Hesseldahl (2010), Apple expects to sell more than 33 million iPhone 3G brand in 2010. The increasingly large demand has skyrocketed downloading of iTunes and other application at Apple iStores from which Apple receives additional business in terms of subscription revenues. Picture 1 Picture 2 References: McLean, Prince (2007) “Apples channel sales and distribution chief to depart” Apple Insider [Online] Available at http://www.appleinsider.com/articles/07/03/23/apples_channel_sales_and_distribution_chief_to_depart.html [Accessed: December 12, 2010] Dignan, Larry (2010) “Apples Best Buy distribution changes iPad unit calculus” ZD Net [Online] Available at http://www.zdnet.com/blog/btl/apples-best-buy-distribution-changes-ipad-unit-calculus/32445 [Accessed: December 12, 2010] Apple Insider Staff (2010) “Apple expands iPad distribution to third-party US retail channel” Apple Insider [Online] Available at http://www.appleinsider.com/articles/10/09/23/availability_of_apples_ipad_expands_to_even_more_u_s_resellers.html [Accessed: December 12, 2010] IRoo (2010) “Apple makes iPad available to more consumers through additional distribution channels” Tipb Blog [Online] Available at http://forum.tipb.com/apple-news-rumors/198443-apple-makes-ipad-available-more-consumers-through-additional-distribution-channels.html [Accessed: December 12, 2010] Apple Company (2010) “Apple’s Annual report 2009 -2010” [Online] Available at http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mjc1Mzd8Q2hpbGRJRD0tMXxUeXBlPTM=HYPERLINK "http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mjc1Mzd8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1"&HYPERLINK "http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mjc1Mzd8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1"t=1 [Accessed: December 12, 2010] McCormack, Karyn (2009) “Apples Stock: How Big of a Jobs Premium?” Business Week [Online] Available at http://www.businessweek.com/technology/content/jan2009/tc20090114_766097.htm [Accessed: August 5, 2010] Berna Akin & Gulşah Yilmaz (2009) “Apple Supply Chain Performance Measurement & Factors” 1 MIS 517 Advanced Operations Management [Online] Available at http://www.mis.boun.edu.tr/erdem/mis517/cases-09/SC-evaluation.pdf [Accessed: August 5, 2010] Hesseldahl, Arik (2010) “Apples iPhone Causes Worldwide Memory Chip Shortage” Business Week [Online] Available at http://www.businessweek.com/technology/ByteOfTheApple/blog/archives/2010/02/apples_iphone_causes_worldwide_memory_chip_shortage.html [Accessed: August 5, 2010] Apple Insider Staff (2008) “Apple profits rise 26% on sales of 2.6M Macs, 6.8M iPhones” Apple Insider [Online] Available at http://www.appleinsider.com/articles/08/10/21/apple_profits_rise_26_on_sales_of_2_6m_macs_6_8m_iphones.html [Accessed: August 5, 2010] Hall, Kenji (2008) “Apples Japan iPhone Strategy” Business Week [Online] Available at http://www.businessweek.com/globalbiz/content/jun2008/gb2008065_996799.htm [Accessed: August 5, 2010] Hesseldahl, Arik (2010) “Apples iPhone Causes Worldwide Memory Chip Shortage” Business Week [Online] Available at http://www.businessweek.com/technology/ByteOfTheApple/blog/archives/2010/02/apples_iphone_causes_worldwide_memory_chip_shortage.html [Accessed: August 5, 2010] Read More