Apple Inc. Marketing - Case Study Example

Apple Inc. Marketing Analysis Apple Inc. Marketing Analysis Pricing a. Value-based Pricing versus Cost-based Pricing Firmsadopt diverse strategies for pricing their products and services. The major pricing mechanisms that businesses follow include value-based pricing and cost-based pricing. These two approaches have strengths and weaknesses, which companies should consider before deciding which one to implement. Value-based pricing refers to a strategy in which firms set prices when considering the amount that the client will be willing to pay to acquire products and services. This approach matches with marketing and business processes, as it is oriented to value, while combining product or service affordability and benefits. The strength affiliated with value-based pricing is that a firm is capable of setting prices that attract clients through comprehensive market research. On the other hand, value-based pricing is weak in that it places responsibility on marketing to reflect the image of a brand, product features, and anticipated benefits. This pricing model also fails to justify the profits and losses that a firm makes. For cost-based pricing, it lays emphasis on the creation of a cost foundation for the products and services that a firm offers. By considering the costs of acquisition, production, and fixed costs of marketing and operations, a firm is capable of determining a per-item basis for cost. This provides the company with an appropriate pricing markup. It explains why some products or industries reflect high profit margins, while others have high demand with low profit margins. The strength for cost-based pricing when comparing it to value-based pricing is that it puts into consideration the profit and cost margins. Here, a company is capable of setting goals for the amount it can make from certain sales. On the other hand, the weakness of this approach is that the costs, as well as the anticipated profit margins, result in prices, which go beyond the thresholds of clients. This poses challenges when a firm tries to generate sufficient volume or make appropriate investments in marketing to sell the brand’s benefits (Kokemuller, 2015). b. Apple Inc. Pricing Pricing is a key element that firms use to market their products, indicating that a firm should strive to set appropriate price in the market. Elements, such as needed profit margin, target market, firm’s growth strategy, and market share influence the pricing strategy that a firm uses. For Apple Inc. it follows a premium pricing approach. This strategy targets setting higher prices compared to those charged for similar products. Apple focuses on differentiation to increase the share of its market demand. It makes its products attractive and unique to its clients. Since the products that Apple makes are designed in an appealing manner compared to those of its rivals, the company has realized successes in increasing demand for the products it manufactures. The company has gained considerable power over prices through innovative advertising, product differentiation, guaranteed brand loyalty, and emphasis on introduction of new products. As a result, customers are willing to pay higher prices for Apple products, allowing the company to maintain premium prices. Even for the products that it charges cheap prices, they lie in the mid-range price category to ensure they provide users with high quality experience. The user interface and hardware are also designed to offer value for price, keeping the profit margins of the company high. 2. Distribution a. Vertical versus Horizontal Marketing When a firm decides to create a marketing campaign, it is vital for it to employ both vertical and horizontal marketing strategies to serve its needs better. These approaches play a key role in assisting a company to reach a broader client base and boost its profitability. In vertical marketing, a vendor supplies a service or a product to a client within a similar industry. On the other hand, horizontal marketing entails providing a broad range of products and services to various clients situated in diverse industries. Thus, before focusing on a single channel of distribution, it is vital to consider a certain model of distribution. In the case of Apple, for instance, it is popular for employing various distribution channels to reach its clients. The company has set up diverse production plants and distribution channels, such as Best Buy, AT&T, and Wal-Mart to address the requirements of its customers worldwide. b. Apple’s Marketing Channels: Strengths and Weaknesses An efficient distribution strategy plays a key role in marketing the products that a company makes. In the case of Apple, it has diverse distribution strategies, which allow it to market its products to different parts of the world efficiently. For instance, Apple has set up a website, which provides its clients with an opportunity to purchase products, such as iPhones, iPods, and laptops on the internet. The company has also established many stores in different cities around the world, where customers visit to purchase Apple products. Furthermore, Apple collaborates with large electronics stores and retailers, such as Best Buy, Wal-Mart, and AT&T to reach its clients, particularly in regions where the company lacks physical presence. By focusing on online and e-commerce trends, for instance, Apple has gained access to a larger client base, further boosting its sales and profitability. However, marketing channels, such as online purchases, challenge the company with regard to issues of shipment, import duties, taxation, and formalities. These have created problems with regard to enhancing the success of the Apple’s products and services in foreign markets. 3. Promotion a. Promotion Mix Elements With regard to marketing mix, personal selling entails direct interaction between buyer and potential buyer, including telemarketing, emails, personal meetings, and correspondence. This method is, however, expensive for the Apple to undertake while selling products globally. Advertising targets non-personal promotion, whereby a firm pays media companies, such as newspapers, magazines, television, and websites among others to promote products and services. Furthermore, direct marketing targets a specific group of prospect customers, such as direct email or printed mail, which generate leads that sales representatives should follow. In addition, sales promotion is applicable in the case of Apple, as it targets all marketing initiatives, including advertising, personal selling, and public relations. Here, the sales representatives of the company encourage purchasing and sales by offering information about products, increasing sales, and creating a positive image about the company. Lastly, public relation is applicable at Apple Inc. as it helps the company to influence its target audience, particularly through facilitation of favorable image of the company’s products and services. b. Brand’s Driving Business and Marketing To undertake its operations in an efficient manner, the vision for Apple is to produce high quality and affordable products, which consumers can use to incorporate high technology into their lives. For Apple’s brand personality, the branding of Apple targets emotions. It revolves around an individual’s imagination, lifestyle, hopes, passion, aspirations, and dreams while empowering individuals through technology. The company uses its brand to compete effectively across diverse markets. The company has evolved to an extent that it has expanded its range of products considerably. It lays emphasis on its core competencies, which allow it to provide unique user experience through the outstanding user interface. At the present, Apple is defining itself to become more than a company that makes devices. It has introduced various revolutionary digital services, including iBooks, iTunes, iCloud, and App Store. These services provide device owners with ways of accessing Apple services, regardless of the devices they use. Thus, to continue offering quality products to its clients, Apple positioned itself as an innovative and premier company in the marketplace. Therefore, Apple is considered to be a company that makes high-quality products, which address the needs of the clients efficiently. c. Public Relations (PR) Hence, for Apple to succeed in building its brand or introduce new markets, it should embark on public relation (PR) strategies. Public relation plays a key role in allowing a company to control the dialogue it has with its clients. It delivers distinctiveness and authenticity, which may elevate the brand and bridge the trust gap. In the case of Apple’s PR strategy, it considers communication to be the key factor in building its brand. Apple is focused and disciplined in terms of broadcasting a cool and stable premium image, which is governed by absolute secrecy when launching a new product. Furthermore, Apple lays emphasis on product reviews, which help the company to tailor its products in a manner that adheres to the needs of customers. Apple also embarks on culture marketing, by ensuring that high-profile businesses, individuals, and organizations use products manufactured by the company. This plays a key role in integrating products of the company to the popular culture. 4. Global Marketplace a. Levitt’s Assertions on Apple With regard to marketing its products, Apple Inc. is one of the companies that have witnessed notable success. The secret behind Apple Inc. marketing plan lies beyond the standards for its product line and design. It goes beyond the philosophy that clients are unaware of what they want in a product. Apple is a design firm, media platform, software powerhouse, publishing company, computer builder, and a movement. A combination of these components serves as a recipe for developing one of the most powerful firms globally. Apple ignores its critics and builds the products it believes in, regardless of the costs involved. It turns ordinary products to beautiful things. It does this by pioneering in features of computer systems, operating systems, and design standard inventions, such as MacBook Air and the iMac. Instead of focusing on a single aspect of a product, Apple emphasizes on the whole product. With regard to Levitt’s assertions, therefore, it is not true to say that the world’s needs and requirements are homogenized in an irreversible manner. Apple, as a multinational corporation is not obsolete because it keeps reinventing itself, allowing it to provide its audience with products and services, which are not yet available in the market. Furthermore, based on advancements being realized in technology, it is true that they drive clients towards similar goals to alleviate life’s burdens, including spending power and discretionary time. The products that Apple makes are rich in features, making it possible for people to meet their daily individual and business needs efficiently. Moreover, cultural preferences seem to intertwine to other groups, which reflect global trends brought forth by technology. b. Apple Globalization Challenges and Opportunities Since Apple Inc. is a global company, it continues to witness opportunities for growth as well as challenges that hinder progress in the marketplace. For instance, some of the products that Apple manufactures, such as the iPod are witnessing stagnating sales. To address these challenges, the company needs to embark on reinventing its products to ensure that clients remain enthusiastic about the products it manufactures. Additionally, the exposure of Apple to the Japanese market has allowed the company to witness notable growth. However, since the Japanese market is flooding, it is vital for the company to consider expanding its operations to emerging markets in the Asia-Pacific region, including, China, Taiwan Korea, and Hong Kong. These markets portray significant potential for growth, which will allow the company’s productivity and competitiveness to grow considerably worldwide. Reference Kokemuller, N. (2015). 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