Distribution Channels of Apple Company - Case Study Example

MoD 4 SLP Distribution Channels of the of the Coarse No Contents Contents 2 Issue Analysis 3 Goals and Objectives 4 4 Marketing Strategies 6 Target Market 6 Value Statement 7 Proposition Statement 8 Accessibility Statement 9 Communication Statement 10 References 12 Issue Analysis The multinational company of Apple Inc. has high brand value in the market and enjoys massive turnover rates in every annual year, but still the business of the company faces certain issues that must be addressed. Over time, as the scope of internationalization of the company has increased, the requirement the complexity in the business transactions of the organization has also increased. The primary issues that the company is facing based on the previous SLP assignments are: Consumers in the contemporary market always demand for most modern and innovative technological gadgets. It is true that i Phone 5, the latest mobile gadget invested by Apple Inc am a sample of unique creativity and modernity. The product of the company comprises of all the special features that are highly beneficial to the users, but with its upgraded and unique features the price of the product in the market is also high. In order to make its product affordable to a wider base of customers, the company had lowered its iPhone 5’s to $ 225 for the 32 GB $ device and125 for the 16 GB (Hasan, 2013). However, the demand for the product seems to be inelastic in the market. Though the selling price has fallen, still then the quantity demanded has not significantly increased. The company is facing high competition in the market and without implementation of very effective marketing strategies the company would not be able to achieve adequate sales for its product (Gonzalez-Alvarez & Solis-Rodriguez, 2011). The company faces extensive number of infringement problems and lawsuits in the market with its potential rivals like Samsung and Nokia. Such legal problems are costly and it involves reserved fund of the company that could be utilized in development purposes in the company. The company faces a lot of problems associated with product recalls. High existence of manufactured product damages has significantly increased the production cost of the company. Google Android has turned out to be a potential rival of Apple Inc. It has been claimed that the entire Smart Phone industry is now dominated by Google. The application store of Google in the online industry is growing at a faster rate than that of Apple Store (Royston, 2009). It can be claimed that if the above problems and threats of the company are not effectively eradicated, then in the long run the company might face loss in market demand share and brand value. Goals and Objectives The goals and objectives of the firm must be settled in a way that it rectifies the issues faced by the organization. Goal 1 The company will expand the base of its Android and product customers Objective 1 The company will reduce the number of its product recalls Objective 2 The company will gain more cost competency in manufacturing and service delivery systems. Goal 2 The company will augment its brand value in the market and reduce the number of its business lawsuits Objective 1 The firm will introduce exclusive marketing and retail strategies in business Objective 2 The firm will try to enhance core competencies in business market However the above four objectives that the company would accomplish to validate the two primary goals will be implemented in its business through the principles of SMART objectives. Specific: the company will introduce specific targets to meet up its business goals. Like, according to the above discussion the company would lower its product recalls, reduce business cost, introduce marketing and retail strategies and would also enhance core competences in business. Measurable: the specific tasks that the company needs to accomplish should be measurable of they are quantitative factors. Like, the company would aim to reduce its product recalls by 50%, lower cost by 10% and invest at least 5% in research and development purposes to gain core competencies. Achievable: it is assumed that the above targets that are set by the company are achievable targets. Realistic: the above achievable targets set by the company are realistic and would surely help the company attain its desired business goals. Time Bound: the realistic, achievable, measurable and specific targets of the company are to be achieved within a span of 5 years. Marketing Strategies Target Market The base of consumers that the company enjoys is wide and the pool of prospective buyers, whose demand the company can still win over in the long run is also huge. Thus, the action plan of the organization must be introduced only to its most potential target customers. It is assumed that the company would adopt the Demographic mode of market segmentation. Under this regime the company would select specific demographic factors like income and age to focus on its target buyers. The target customers of the company would be the middle and high incomes buyers of developing as well as developed nations, as the products of the company would be affordable to only this income groups. Moreover, since the products and services of the company are extensively modern, it can be assumed that such modern products would be preferred by the young and middle aged customers between the age group 20 to 50 years. By selecting the target customers of the action plan the company would be able to allocate marketing and retail funds most cost efficiently in patterns that would be attracting only to the focused buyers. At the same time the SMART objectives of the company can be accomplished only with the benefits of such focused business actions. The number of customers in this segmented can be estimated to be at least 2 million. Value Statement The action plan of the company would have a unique value statement along with a special catchphrase that would easily attract the focused customers of the company. The catchphrase of value statement would represent the nature of the product offered by the company, like ‘smarter choice’ (Stephen & Toubia, 2010). The company would claim to offer the rarest technical gadget in the market with the least out-of-pocket cost price. The company would also claim that the use of its product would make the consumers life simpler and luxurious (Kuran, 2013). Though the value statement of the organization would be intangible but the company would make it tangible to the customers through the usage of special promotional activities and offerings. The company might offer special discounts on its products to customers who would make purchases on their special occasions like their birthdays and anniversaries The company can also increase the number of investments made in corporate social responsibility purposes. Such activities would augment the brand value of the company in the market and would enhance its sales in the industry (Guo, Zhao & Tang, 2013). Proposition Statement The company would adopt the 4 P marketing strategy in its business. Product The company would claim to service rare innovative technological gadgets to its customers at relatively low prices in the market. The customers would believe that the products of the company serve status as well as economy on their purchases. It would also claim to sell less defective products (Glover, 2013). Product Position Map High Quality Low Price High Price Low Quality (Source: Authors Creation) Price The company would apply Premium Pricing strategy to sell its product. Under this regime, while launching new products in existing markets or launching existing products in new markets, the company would initially charge high prices and after establishing the product or settling in the new market, the company would lower its price. By doing so the organization would be able to reap the benefits of Veblen effect and economies of scale in the market (Aulakh, 2009). Place The company would aim to primarily expand its product sales in the BRICS developing nations (Brazil, Russia, India, China and South Africa). This is because, the level of per person disposable income for luxury and comfort good consumption of these economies are significantly increasing in the recent years (Williamson, 2008). Promotion Apart from providing special offers and discounts, to prove its value proposition, the company would also introduce the system of celebrity endorsement to promote its product. If the commercials of the company are given by famous personalities, then it would surely expand the brand value of the organization in the market (Ferri, Deakins & Whittam, 2009). Accessibility Statement The company must have all the required information and support materials to apply the propositions in marketing stated above. These are: Product The company would need to invent special technologies by virtue of which it can produce its products at relatively lower cost. Moreover it should also expand its customer base to experience economies of scale in production. The prices introduced for similar products by its competitors must also be acknowledged by the company (Trainor, James, Rapp & Agnihotri, 2013). Price The company needs to have clear idea about the prices of premium products of its competitors in industry. Moreover without the essence of high brand awareness programs such pricing strategies would not become successful. Place The company must have an efficient outbound logistics team in business and efficient networks across different markets to easily access the customers in the developing and developed economies (Casson & Wadeson, 2012). Promotion The company needs to have adequate knowledge about the cost required for promotional activities. Communication Statement For the purpose of adequately marketing its products, the company would primarily advertise its products in newspaper and television mediums. However, the company would substantially use internet media to market its product. Like social networking sites would help the company promotes its products for business-to-business as well as business-to-consumer trading deals. Such communication approaches would help the company market its product to a wide base of customers across the global economy and would hence help the organization in accomplishing its desired goals and objectives. References Aulakh, P. S. (2009). Emerging multinationals from developing economies: Motivations, paths and performance. Journal of International Management, 13, 235-240. Casson, M. & Wadeson, N. (2012). The economic theory of international business: a supply chain perspective. Multinational Business Review, 20(2), 114-134. Ferri, P. J., Deakins, D. & Whittam, G. (2009). The measurement of social capital in the entrepreneurial context. Journal of Enterprising Communities: People and Places in the Global Economy, 3(2), 138 – 151. Glover, J. L. (2013). Capital usage in family farm businesses. Journal of Family Business Management, 3(2), 136 – 162. Gonzalez-Alvarez, N. & Solis-Rodriguez, V. (2011). Discovery of entrepreneurial opportunities: a gender perspective. Industrial Management & Data Systems, 111(5), 755 – 775. Guo, H., Zhao, J. & Tang, J. (2013). The role of top managers human and social capital in business model innovation. Chinese Management Studies, 7(3), 447 – 469. Hasan, R. (2013). Apple Inc. - An Analysis. Berlin: GRIN Verlag. Kuran, E. (2013). Leader as storyteller. Industrial and Commercial Training, 45(2), 119 – 122. Royston, A. (2009). Apple. Melbourne: Heinemann Lib. Stephen, A. T. & Toubia, O. (2010). Driving Value from Social Commerce Networks. Journal of Marketing Research, 47(2), 215-228. Trainor, K. J. James, M. A., Rapp, A. & Agnihotri, R. (2013). Social media technology usage and customer relationship performance: A capabilities-based examination of social CRM. Journal of Business Research, 30, 1-8. Williamson, O. E. (2008). Transaction-cost economics: the governance of contractual relations. Journal of Law and Economics, 22, p. 233-61. Read More