Marketing Plan: Apple Inc - Assignment Example

Marketing Plan: Apple Inc Contents Introduction 3 Company Profile and Product 3 Marketing Mix Model 4 Product Strategy 4 Pricing Strategy 6 Supply Chain Strategy 7 Advertising Strategy 8 Personal Selling Strategy 9 Organizations Objectives 9 Marketing Objectives 10 Best Strategy for Apple iPhone 11 Implementation Plan 13 Conclusion 15 16 Reference List 17 Introduction Since, the enactment of the Free Trade Agreement and the materialization of trade liberalization, the degree of commercial complexity have significantly increased for most industrial segments. Development of technology and innovation related activities in the business world have facilitated progress of the computer hardware and software industry. With rise in the national income level of different countries, the per capita income thresholds of the households are augmenting with time. At this juncture, competitive edge cannot be achieved by an organization without efficient implementation of prospective marketing strategies. This assignment aims to analyze the marketing and strategic management initiatives undertaken by Apple Inc. The context of the assignment will analyze the effectiveness of the existing product, place, promotional and pricing strategies of the company for one of its popular product. Finally, the assignment will recommend some new strategic moves that can be undertaken by organization in the long run (Berglof, 2011). Company Profile and Product Apple Inc. is a multinational organization based from America. The headquarters of the company are located in Cupertino, California but it conducts business in all the economies around the world (Apple Inc., 2014b). Apple Inc. engages in providing services related to computer hardware, electronics and software. The organization is also popular digital product distributer in the electronics industry. The assignment will focus on the best marketing strategy for the Smartphone of Apple Inc, iPhone. Apple Inc. also manufactures and sells other digital products like MAC, iPad, iPod, television and software (Apple Inc., 2014b). However, the researcher aims to analyze the appropriate marketing strategy of iPhone because among all other electronic gadgets, the demand for Smartphone’s are found to be the highest in the market. Figure 1: Growing Popularity of Smartphone (Source: Shilov, 2011) The above diagram shows the report results of Energy Information, Software and Solutions in 2014 (Shilov, 2011). It clearly shows that the demand for Smartphone’s are increasing with time, relative to other digital products in the market. Thus, appropriate marketing activities for iPhone can provide more assured returns to Apple Inc. in the long run. Thus, it is highly rational to analyze that iPhone can spearhead growth of Apple Inc. in the long run (Shilov, 2011). Marketing Mix Model Product Strategy Apple Inc. experiences a high brand value in the market because it suppliers products that are non imitable and rare in the market of electronics. The general desktop computer manufactured by the company is Mac. The company provides variety of technical accessories along with MAC. Some of these products are apple’s magic mouse, magic track pad, wireless keyboard and Time Capsule. The company also provides special networking products with Airport wireless facility. MacBook Air, Mac Mini, Mac Book Pro, iMac and Mac Pro are the different models of Mac manufactured by Apple (Apple Inc., 2014b). Thus, it can be claimed that the company implements the product diversification strategy in business. The company also manufactures special tablets named iPad. Apple’s iPad comprises of a unique modified operating system within it. iPod is the digital audio player of the company. Following diversification strategy in business iPod is manufactured in form of different models like iPod Shuffle, iPod Touch and iPod Classic. iPhone and Apple TV are the is the Smartphone and television sold by Apple (Nair, 2014). Apart from selling digital products of various types, the company also engages in trading its own software. Operating system of Apple is run in OS X, OS X Mavericks and Macros (Apple Inc., 2014b). Recently Apple has launched its own authorized music software in the market, iTunes. In the world of piracy, music procured by iTunes is of good quality and exists in inimitable authentic versions. It is also found that the company uses iPod ecosystem for leveraging its iPhone and hence supports online music system. Optimization and flexibility are the two major aspects Apple Inc. seeks in each of its product (Etherington, 2013). It can launch a wide variety of new products in the market because it allocates its existing manufacturing resources in the best possible manner. Previously, the company used to launch different models (with different features) of the same product within a very short span of time. However, this disappointed the existing consumers of the company, as after a buyer purchases a product of Apple, he dislike seeing a new product of the same line being launched in the market within a very short span of time (Nair, 2014). Thus, considering this factor, Apple Inc. has decided to make each of its products more flexible in nature. It launches new variations of a particular produce but with fewer modifications to its previous version (Etherington, 2013). However, product differentiation is the primary product strategy of Apple Inc., through which it tries to make its products unique in the market. Pricing Strategy Apple Inc. establishes its pricing strategy on the basis of cost, discounts, competition and geographical area. The CEO of the company, Tim Cook claimed that, Apple Inc. does not desire to sell products at low cost (Apple Inc., 2014b). The company implements differentiation strategy for its products in order to make them rare and pricy in the market. The previous and current CEO of Apple Inc, Steve Jobs and Tim Cook respectively, aimed to follow four primary pillars in business (Nair, 2014). Offering limited products in the market Focussing on high end buyers Providing greater importance to profit maximizing strategy Creating halo effect in the market, through which the company makes individual’s starve for new Apple products (Nair, 2014). Since, Apple Inc. does not implement revenue maximizing strategies in business; it tries to maximize its profit by executing premium pricing strategy for its products and services. It is found that the cheapest products of Apple Inc., are comparable with the mid ranged products of its competitors in the market. The company tries to create higher demand in the market through Veblen and Conspicuous consumption effect (Nair, 2014). The consumers buy pricy products of Apple because they feel its high prices worthy of its superior non imitable product features. Moreover, Apple products enhance the social status of many buyers and they prefer paying premium prices for it because of such reasons (Hutt and Speh, 2013). Supply Chain Strategy The place strategy of Apple Inc. is its supply chain strategy. The company manufactures most of its hardware products in Asian countries through the process of outsourcing. The currency values of Asian countries are lower than the western nations and hence such production activities of Apple Inc. can be incurred at lower costs from these markets. Some raw materials of the company are produced from its OEM partners and prominent supplies of China (Apple Inc., 2014b). Superior inventory management system is experienced by Apple because of its automated receiving systems. The company tries to implement eco-friendly means of production by lowering the usage or generation of toxins from its manufacturing process. Most of its production by-products are recyclable in nature. Its manufacturing plants aim to provide zero landfill facilities (Hutt and Speh, 2013). The company outsources most of its products for experiencing economies of scale in production. 3M Co., AKM Semiconductor Inc., AAC Technologies Holding Inc, Delta Group, Intel Corp, Panasonic Corp., Alps Electric Co. Ltd. and Sony Corp are some popular suppliers of Apple Inc.’s products (Apple Inc., 2014a). It is reported that almost 97% of its raw materials and semi finished products are sourced from suppliers. Within the outbound logistics process, the company uses both indirect and direct distribution channels. Special services of wholesale and value added retailers are also used by Apple Inc (Apple Inc., 2014a). The skilled engineering and designing experts of the organization tries to lower the wastages generated by its product packaging process. The final products of the company are sold out through its own retailing stores or from the shops of its franchises. The company is expanding its business through the strategy of acquisition. Recently, it has enhanced its marketing activities in the emerging markets of Turkey, Poland, Russia, China and India, to tap the growing market demand of middle income consumers in these economies (Apple Inc., 2014b). Advertising Strategy The company invests large amount of money for making innovative advertisements for its products. Apple’s own official logo is one of its crucial commercializing tools. The firm uses specific catchphrases for making its commercials popular in the market. “Think Different” and “Byte into an Apple” are some popular slogans of the company that has successfully enhanced its brand value and sales in the market (Apple Inc., 2014b). Apple Inc. promotes its products and services through various communication modes like internet, television and newspapers. However, it should be noted that the company implements short term marketing strategies for small target segments of potential customers (Hutt and Speh, 2013). Personal Selling Strategy Figure 2: Well Decorated Apple Store (Source: Apple Inc., 2014b) Apple invests large amount of money for making its designing its showrooms with unique architecture and interiors. The above diagram shows an underground Apple store. Such unique designs of the company’s stores attract wealthy rich potential buyers. The sales executives of the stores are highly skilled and professional. These officials acquire detailed information about the customers and products of the company. Personal selling of Apple Inc is made effective by such experienced and skilled workforce (Hutt and Speh, 2013). Organizations Objectives The primary organizational objectives that Apple Inc. desires to suffice with the help of 4 P’s strategies are: To park new customers in business To enhance the utilities of customers by supplying unique and usable products To become the leading company in the mobile industry Enhance the extent of online advertising To augment the extent of product and process innovation To improve the returns of equity Improve the existing credit rating strategy Built ethical suppliers Improve the skill set and knowledge of employees Maximize profit in business (Apple Inc., 2014b) Marketing Objectives The primary marketing objectives of Apple Inc are: Providing greatest focus on niche Introducing new competitive strategies Provide unique services and products Popularize brand value Focussing only on target consumers Emotionally linking up with customers Improve innovation Maximize profit in time bound and measurable manner (Apple Inc., 2014b) Best Strategy for Apple iPhone The best marketing strategy for Apple iPhone is pricing strategy. The current external economic environment has become highly volatile in nature. After the emergence of recession in 2008, real money income and job opportunities have declined across many economies. Rational buyers of the contemporary world seek to purchase less pricy high quality products. Popular retailing companies like WalMart and Target have become some of the most retailing companies in the world after implementation of cost plus pricing strategies in business (Blodget, 2014). Price is the most important factor to a buyer. Since inception, Apple has gained high reputation in market and consumers are aware about its superior product features and quality. Apple has already introduced significant product and process innovation strategies for iPhone. The latest iPhone model launched by the company, iPhone 5 comprises of unique features. For instance, the phone contains special A6 chip that makes internet and gaming operations fast (Bradshaw, 2013). The chip facilitates in sustaining the phone’s battery for a longer period of time. After every session of complete charging, Apple’s iPhone sustains 10 hours of browsing, talk time and playback time. Thus, long battery life, ultrafast wireless coverage’s, unique iSight camera, high definition video recording capacity and digital sound software are the special features of the company’s latest iPhone. The phone uses iOS 7 operating system (Bradshaw, 2013). However, despite of all such specified features, Apple’s iPhone failed to capture estimated market share, according to the Global Smartphone’s Sales Report 2013 (Blodget, 2014). In the third quarter of 2013, it was found that total market share of Samsungs Smartphone’s was 32% but the same for Apple’s iPhone’s was 12%. The report also stated that Apple iPhone’s sales has only increased by 23% while that of its rival Samsungs Smartphone’s demand increased by 46% (Blodget, 2014). The report results claimed that Apple should modify its pricing strategy in business. Many consumers deny paying premium prices for Apple’s Smartphone’s when similar phones of other brands are available in the market. Figure 3: Increasing Competition of Apple Inc (Source: Zhang, 2013) The above position map shows the extent of market rivalry faced by Apple Inc. In order to gain higher demand and profit from sales of iPhone’s, Apple must introduce competitive pricing strategies for its products. It should be noted that profit generated from iPhone spearheads growth of Apple actual gross profit. Thus, in order to make iPhone attractive in the competitive market, Apple must lower its price. By doing so, the target segment of potential buyers of iPhone faced by the company would enhance. This is because; the lower price would be available to a wider base of customers. According to the law of demand, lower price would enhance quantity demanded for Apple iPhone’s and hence the company would be able to experience lower cost in manufacturing arising from economies of scale in production (BBC News Business, 2011). Apple can optimally lower its prices by personally producing semi-finished products of iPhone by itself, instead of outsoaring the majority. iPhone production defects and waste generation can be lowered by the company with use of superior technical tools as lean and Six Sigma (Baker, 2010). By leveraging its suppliers and eliminating less required product features the cost price of iPhone can be lowered by Apple Inc. Thus, from the above context it can be stated that iPhone sales and market popularity can be enhanced by altering Apple Inc.’s existing premium pricing strategy. Implementation Plan Aim: Apple Inc. should revise the existing pricing strategy of iPhone, from premium to competitive strategy. Purpose: The new pricing strategy can be effectively introduced by the organization with the help of an implementation plan. Activity Objective International and external situation analysis This would help to analyze the requirement of introducing the new pricing strategy and facilitate estimating the international capability of the organization to adopt the change (Heracleous, 2013) Appointing coordinators The appointed officials would help in introducing and implementing the new pricing strategy Identifying the objectives The tasks required to introduce the new strategy, are the objectives of the plan. These objectives should be specific, measurable, realistic, achievable and time bound in nature Analyzing the requirements for the implementation The actual requirements of the plan should be clearly analyzed before implementation Introducing a proper communication plan A good communication plan would help in effectively introducing the new pricing strategy Establishing new pricing standards Finally the new prices of Apple Inc. can be settled. Promoting the new established pricing standards in the market The established pricing standards of iPhone should be properly promoted to enhance consumers awareness Forecasting the future response to the new strategy The officials should forecast the future response to the new strategy for analyzing its actual benefit to the organization (Bidgoli, 2010). Conclusion Individuals of the current epoch have increased the magnitude of their discretionary spending, as their disposable income levels have enhanced. However, such factors have demanded for greater production and innovation of consumer use goods and services in the market. Higher demand has productively stimulated the number rate of new entrants in each industry and increased the level of rivalry within it. From the above context of the assignment it would be correct to claim that iPhone is a popular product Apple Inc (Apple Inc., 2012). However, the product is losing popularity in the market because of excessive competition within the industry and its premium prices. Thus, the researcher has claimed that such problems faced by the company can be rectified, only with effective alterations in its pricing strategy. After evaluation, the researcher believes that the existing product, place and promotional strategies of the company correct for iPhone. Although, if Apple Inc. desires to increase market demand share and growth rate of iPhone, then it needs to make it affordable to a wider base of potential customers (Apple, 2013). 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[online] Available at: [Accessed 30 May 2014]. Bradshaw, T., 2013. Apple looks to build market share with the cheaper iPhone 5C. Financial Times. [online] Available at: [Accessed 30 May 2014] Etherington, D., 2013. Apple’s new product strategy. [online ] Available at: [Accessed 30 May 2014]. Heracleous, L., 2013. Quantum strategy at Apple Inc. Organizational Dynamics, 42(2), pp. 92-99. Hutt, M. D. and Speh, T. W., 2013. Business marketing management b2b. [pdf] Cengage Learning. Available at: [Accessed 30 May 2014]. Nair, S., 2014. Apple’s premium pricing strategy and product differentiation. [online] Available at: [Accessed 30 May 2014]. Shilov, A., 2011. Growing popularity of smartphones and tablets leave special-purpose devices out of picture. [online] Available at: http://www.xbitlabs.com/news/multimedia/display/20110726220951_Growing_Popularity_of_Smartphones_and_Tablets_Leave_Special_Purpose_Devices_Out_of_Picture.html> [Accessed 30 May 2014]. Zhang, C., 2013. Brand positioning strategies of the rising Chinese smartphone brands. [online] Available at: [Accessed 30 May 2014]. Read More