New Product Development and Apples Marketing Strategy - Case Study Example

New Product Development and Apple’s Marketing Strategy Introduction Apple is an American multinational corporation that deals with wide range of electronics and software products. It was established on the 1st of April at Cupertino, California. Earlier the company was known as “Apple Computers” but on the 9th of January 2007, the word computer was dropped from the name. Apple has secured a matchless status in the field of consumer electronics business. The company is working as a leading brand of electronics and computers related products and it is widely believe that this strong and stable position has been contributed by adequate marketing and new product development strategies employed by Apple (Schneiders, 2011, p10). Right from the beginning of its operations Apple has adopted the practice of developing and introducing new products in the market with small interval. During the 1970s Apple focused upon the development of Apple I and II computers whereas in 1980s it introduced Macintosh Computers. After that the company continued producing innovative features and products in the market. This strategy of Apple to remain engage in the designing of new products makes it leading name of the industry (Imbimbo, 2009, p65). New Product Development at Apple A business could never succeed in the highly competitive market place of today until and unless it gives crucial importance to the new product development strategies. The commercial success of Apple also lies in the fact that it uses to give importance to designing and introducing innovative product line in the marketplace. The team of professional developers works for Apple for creating wide range of advanced products and services. Apple has demonstrated complete awareness regarding the importance of new product development. The company strategically focuses upon the issue of new product development that is reflected through the launch of innovative and new product from the company from time to time. The engineers and designers at Apple know very well how the product should look like and what appearance it should have. Apple has universal view of the design s of product that helps it to raise it value in market. They pay less attention on their advertisement and promotion and more on product development. Apple has the opportunity of devastating popularity of suitable music players in consumer electronic market, it has a huge demand of software which can be easy to use to download and manage the music files in handy music players. Apples organizational capabilities are based upon the skills of its engineers to capitalize on its tangible and intangible resources to innovate its products successfully with unique designs. It was the skills and capabilities of Apple engineers which enable them to introduce the I-Pod Nano – a digital music player that is thinner than a pencil, but still holds 1000 songs. By constant innovation and new product development Apple remains forefront of the digital media with its I-Pod portable music and video players and its I-Tunes online stores. The business model of Apple is based upon offering innovative product in the market with short intervals to cater the attention of the people. Apple offers legitimate products and services that meet the demands of the people in the digital era. The vast product line of Apple affirms that new product development is the goal of the company that it meets by designing new products and services for the people. These products include Mac, iPod, iPhone, iPad, Apple TV, Mac OS X, iLife, iWork and iOS. The latest versions of these products are also frequently offered by Apple to keep the products updates with the new technology advancements. Apple’s Marketing Strategy The marketing strategy of Apple possesses key value for Apple success. It uses to give importance to all the factors including promotion, place, product and price. The people of Apple have also the leading role in designing the features of the marketing strategy of Apple. All of these areas enjoy concentrated attention of the management due to which together they form highly effective marketing strategy for the company. Product: Apple has introduced several innovative products in the market place that are unique in nature and were highly appreciated by the customers. Apple offered various servers like Xser, Mobile ME and Xsan; accessories including Magic Mouse, Led Camera Displace and key board; Wi Fi based stations like Airport Express, Time Capsule and Airport extreme and numerous developers like Mac Program, iPhone Program and developer connection etc. (Schneiders, 2011, p10) In addition to these, Apple has introduced wide range of advanced products like iPod ranging from iPod Shuffle, iPod classic and iPod Nano; iPhone including iPhone 3GS, 4GS, iPhone 3G and iPad; iTunes that offer different audio books, games and movies and numerous peripheral products like printers, cameras and storage devices etc. It shows that Apple offers such wide range of produce line to the customers that none of its competitors has succeeded to beat it. All of these products are continuously updated with new versions keeping them updated and align with the growing needs of the market place. Price: Apple has established itself as a premium brand of computers. It never strives to compete with the other brands on the price bases. However, the company do uses some skimming and premium pricing strategies. Whenever the latest version of a produce is introduced in the market, the initial price is lowered down after some time but it is never done to come up with a competitive market price. The other companies operating in the market use to offer same type of produce like as compared with Apple with relatively low price but the price of Apple are never reduced just to come at the same level of the competitors. Instead, Apple has its own pricing strategy that keeps its products premium in the market. Apple iPad has been offered with a flexible price strategy and the customers have been given certain benefits upon certain response actions. The prices for iPhone were also reduced after some time of the initial launch in the market. The cost price structure of iTunes was also revised in 2009 after which Apple offered comparatively low prices for the majority of the songs. This change in the price structure was made when the company realized slow pace of music download from the iTunes stores and in order to encourage people to shop more from the iTunes store, the company makes the songs available for reduced prices. Place: Place is an important component of the marketing strategy of Apple. The headquarter of Apple is situated in California whereas it has established vast network of Apple consultants comprising of independent professional service providers as well as some high tech consulting firms that have specialized in the Apple’s produce line and third party solutions. These providers and consultants are certified by Apple to deliver on site technology services and support to the Apple customers at home as well as to the businesses of all the sizes. These consultants and providers are authorized and approved by Apple only after completing regular training and assessment from Apple. These providers also offer repair services and provide genuine Apple parts to the customers. The providers and consultants of Apple are present worldwide. Apple has created a wide network of certified professionals that work to assure quality provision of Apple services and products around the globe. These are mainly located in several countries of Asia, Pacific, Africa, Middle East, Europe and Latin America. Altogether there are over 357 retail stores of Apple established in different countries of the world like Canada, UK, US and Australia, whereas the online Apple store sells products to people around the globe. Recently, Apple has also opened some of its store in Shanghai China. It implies that Apple has made worldwide presence and people from different countries of the world could easily access the authorized Apple professionals for getting the produces from the company. Promotion: Promotion is very critical element of the marketing strategy and Apple also gives special emphasis upon the promotion of its products through different strategies and plans. From time to time, it offers the products with different promotional offers, For instance, special discounts have been offered on the purchase of Macintosh computers, iPod Nano and iPod Touch. These products are offered at low price with one year warranty. Apple also offers certification exams and courses to the professionals that allow them gaining innovating learning opportunities with Apple. These offers are meant for educators, professionals and technicians in order to broaden the network of certified Apple professionals and to spread the working culture of Apple in the society through these professional courses and training programs (Schneiders, 2011, p10). There are some gift schemes also initiated by Apple to encourage people towards purchasing its products. The online store of Apple offers the services of free shipping for the orders of certain amounts whereas the iTunes gift cards are also offered at the Apple online stores. In addition, the consultant network website of Apple facilitates the visitors through the search tools that allow them locating the nearby certified professional at international locations. Moreover, the school and college students are attracted towards the Apple products through offers like back to school etc. People: Apple has proved itself as a corporation with traditional corporate culture. Apple was established by Steve Jobs, Steve Wozniak, and Ronald Wayne. Steve Jobs have played vital role in formulating the vision for the company. He worked to keep the employees motivated and directed towards the goals of the firms. Apple operated with work force of over 60 thousand people all around the world. The employees of Apple are highly qualified and trained professionals that are made part of Apple after going through the training and assessment process (Imbimbo, 2009, p65). Competitors In recent years several companies have expanded their operations across the globe to establish them as international computer brands. This expansion has added to the competitor list for Apple. The traditional rivals of Apple are Dell, Gateway and Aleinware etc. however not Microsoft has also evolved as its competitor in Operations System (OS/X/XP). In the music download its products iTunes, Mobile Me etc. faces competition with other legal music downloading sites like Gmail, Nokia and blackberry etc. whereas in the server market its rivals are HP, Sun, IBM and SGI. Netgear and Cisco are competing Apple in the Airport line and networking system. Customers Apple has a very unique approach towards catering its customers. It is often said that Apple does not conduct the market research related with the customers. THE CEO Steve Jobs also clarified this approach that the customer don’t have to know what they want but it is the job of the company to present them products to meet their requirements. However, it does not means that Apple remain indifferent with the customers. It used to conduct campaigns and surveys to remain aware of the people response towards the products and their growing demands. The customers are sent emails requesting to join online community Apple Customer Pulse Group through which Apple gets insight to its customers. At present Apple has launched products for the people of all the age groups and each walk of life. Different products of Apple offer different utilities for businesses, students, households and teenagers. BCG Matrix Analysis for Apple Product Portfolio The analysis of Apple product portfolio according to the BCG Matrix allows identifying the Apple products that act as star, cash cows, question mark and dog for Apple. IPhone, iPod and iPad are the shooting star for Apple as these products have captured considerable share in the slowly growing market. iTunes are Apples cash cow products enabling Apple to expand its market share in the expanding market. It has allowed Apple to get more share in the growing market place. Mac is the question mark for Apple because the software market is dominated by Microsoft and it is expected that Mac would be further degraded as Dog. Mac shows low market share of Apple despite the high growth of the software market and the category of Dog at Apple BCG Matrix would be filled by Mac OS X’s product line and the Mac software. Conclusion The marketing and new product development strategy adopted by Apple affirms that the company has realized the vital role of new product development for gaining stable position in the market place. The product line of Apple is expanding very fast and at the same time, its market share has also increased in the computer and operating system market. The company used to pay attention towards all the elements having the potential to affect the marketing of the products like price, place, people, promotion, competitors and customers. The new product development strategies and marketing plans are made keeping in view the progression in all of these sectors. References Imbimbo, A. (2009). Steve Jobs: The Brilliant Mind Behind Apple, US: Gareth Stevens Schneiders, S. (2011). Apples Secret of Success - Traditional Marketing vs. Cult Marketing. New York: Diplomica Verlag Read More