Topic Apple Marketing Mix
Introduction
Apple is an American based technology company which operates globally. The organization was founded back in 1976 and has operated in the technology sector since its founding. The organization designs create consumer electronics and offer technological solutions to its customers. The organization is one of the largest technology -based company in the world regarding the revenue’s generation. The organizations rank third regarding the products manufactured behind Samsung and Huawei which are its main competitors in the information technology sector (Tayeh, Mohammad, Idries. Al-Jarrah, and Tarhini 129). Due to this, the brand has enjoyed a large market share not only in the united states but globally. The organization products are highly differentiated and thus premium priced. Despite the reputation earned by the brand, the organization faces criticism due to some of its operational practices which have been unethical. These practices include unfair competition practices. The report below discusses the marketing mix of the firm and how the organization has been able to handle stiff competition witnessed in the information technology sector.
Products
The organization offers both software and hardware solutions to its clients. The organization was founded back in 1976 and has operated in the technology sector since then. The organization serves the market with a range of products which have been designed to serve different market needs. The products sold under the brand include; iPhone smartphone, iPod, iPad, Macintosh computers, iCloud, smartwatches, Apple TVs among others. These markets offerings have enabled the brand to have a competitive edge over its competitors enabling the organization to enjoy a large market share within the united states. Mac laptops, for instance, has enabled the brand to compete better with other laptop dealers in the market. These laptops are designed with advanced features and capabilities making them be the best offers in the marketplace. The Macintosh is a brand extension under Apple offering a range of different products under the category of computers. These products include; iMac- the product was introduced in the market in 1998. MacBook- which an ultra-thin laptop was introduced into the market in 2006 and relaunching of the same product happened in 2015. The relaunched product was highly diversified and innovatively designed which has enabled it to be a market leader in the marketplace. The Machinic desktop was designed and introduced to the market in 2005.
These different products under Macintosh enable the brand to serve different target customers at the same time which positively impacts the organization’s revenue. The organization also deals with complementary products used with their main products. These products include; the operating systems- the organization creates operating system software’s which are not only compatible with their designed computers but also with computers from other dealers. Due to this, the organization earns extra revenue from these complementary products.
The organization has also ventured into the smartphone business producing part of the best current smartphones in the market. The organization introduced smartphones in the market in 2007, when it introduced the iPhone into the market. The organization has engaged in continuous product development since the introduction of the iPhone. iPhone product development has gone through different phases based on market needs from the original iPhone to the current iPhone XS, iPhone XR, and iPhone Max. These smartphones have highly advanced operational features as compared to the 0ther competitors. Due to this, the organization has continued to be the market leaders and to dominate the market with better market offers. The organization has improved its smartphones to serve the needs of different market demographics.
Other software products offered by the organization include, iCloud- this is used by organizations as a secure storage means for their data. iCloud allows organizations to create backup platforms for their data which can be retrieved later in case of damage of other data storage platforms. iTunes has dominated the music sector by offering the best online music playing platform. The organization also operates Apple music app which together with iTunes improves the brands’ dominance in the entertainment sector. These products are used for promotional purposes with the customers who own iPhone being allowed free access to the store for three months. Due to this these products act as promotional tools which enable foster brand loyalty among the organization’s customers.
Pricing
Due to high diversification and product development, the organization engages in premium pricing mainly targeting the consumers seeking a luxurious lifestyle. The organizations premium pricing is mainly guided by the high technology and innovation aspect of the firm’s products. The skimming pricing strategy enables the organization to maintain its brand value and status among its customers (Nicolás, Ximénez, and Sanz 1591).
During the introduction stage of their products lifecycle, the firm ensures that its products are highly priced (Mangold 357). Due to this, the brands are perceived as a superior brand in the marketplace. The organizations high pricing approach is associated with high product quality enabling the organization to be used as the standard setters in the information technology sector. As a result of this, therefore, the organization enjoys high-profit margins.
To increase the market coverage, Apple deals with different products which are served in different market segments. Under this approach, the organization designs almost similar products and serves them to different target markets. The approach was employed especially in Macintosh extension where almost similar computer products were developed and served to different target markets at different prices based on the markets purchasing power. Through this approach, the organization can reach many customers and thus increase the market share and the overall revenue generation. The products prices are later reduced to entice the late adopters to purchase the products.
The approach enables the consumers who couldn’t afford the earlier premium prices to purchase these products. Due to this, the sales volume from these products is highly improved. The price slashing approach, however, is used by the organization especially when they are about to introduce a newly developed product (Dissanayake, Ravindra, and Amarasuriya 2015). The pricing approach enables the organization to maximize the sales of their current product before the introduction of a new product.
The organization also employs minimum advertised price approach, under this approach the organization ensures that their retailers’ prices are almost close to the producer’s price. The organization ensures that they set a minimum price below which the retailers are not allowed to sell the brands products. Under this approach, the retailer doesn’t necessarily have to sell the product at the advertised product but can sell it at a slightly lower price. Under this approach, Apple provides subsidies to its retailers to enable them to operate them feasibly under the set advertising policies. The firm, however, does not provide higher subsidies to the retailers, this enables the organization to ensure that the retailer prices are not far much lower than the manufacturer’s prices. For the retailers to realize their desirable profits, therefore they ought to operate within the price ranges which are almost the same as the producer’s price. The approach is meant to protect the manufacturer; this is because if the retailer advertises lower prices than the manufacturer the consumers will tend to buy more from the retailer than the manufacturer (Tamaki, Kin’ya, Park, and Satoshi 451). Through this pricing approach, therefore, Apple ensures that they don’t suffer direct competition from their retailers. Through reducing the competition, the organization ensures that it continues to enjoy sales in the same way as their retailer. The retailers in this case, therefore, offers distribution services operating in areas where the firm cannot reach.
Apple pricing approaches, therefore, makes the organizations enjoy market superiority and realize a better return on investment.
Placement
The organization distributes its products mainly through an online platform and also through the use of authorized retailers. The organization operates a large e-commerce platform through which it sells its products and services to both the local customers as well as the global customers (Fetscherin 22). The e-commerce platform allows Apple customers to make purchases from all over the world without necessarily having to visit the firm’s stores. Under this approach, the user visits the website from where they identify their desired product and add it to the cart for purchase (Jackson, Graham, and Vandana 170). The site then offers the client an opportunity to pay for the identified product with their preferred means of payment. Under this approach, therefore, the organization can make millions of purchases at a go without involving the organization employees.
The organization then offers better shipment avenue through which the customers receive the purchased products to their desired addresses. The organization is advancing its e-commerce platforms and improving its user-friendliness and improving its ease of use. The firm has recently introduced Apple pay, through this approach the customers can be able to use their smartphones as well as their smartwatches to make purchases for goods and services. Through this innovation, the organization’s online platform has improved in gradually and also has given the organization a competitive edge over its local as well as the global customers. Apple pay has become the largest mobile payment platform worldwide thus highly boosting the organization’s e-commerce platform.
The organization also operates physical stores in the different part of the world through which it sells its goods and services to the customers. The prices offered by the stores are almost the same as the prices offered by their retailers, due to this. Therefore, the firm doesn’t suffer competition from their retailers, but instead, some customers prefer dealing with the firm directly. Apple stores are characterized by having skilled and friendly staff. Due to the brands’ highly advanced products the customers require guidance on how to use information. To ensure that their customers are well sorted therefore the organization employs equipped personnel to guide the customers and offer the necessary guidance (Weinstein, Art, and William 2016).
The information provided to the customers enables them to make informed decisions before they purchase Apple products. Through this, therefore, the product performance expectations are formed in the mind of the prior the consumer and if the product meets the consumer expectations, therefore, the customers end up purchasing the product.
Another approach through which Apple distributes its products is through the use of partnerships with other suppliers in the information technology sector. The major distribution partner for the brand is the Ingram Micro; the organization distributes information technology products to the different part of the world. Ingram Micro offers Apple distribution services to different countries around the world enabling the firm to reach many customers globally. However, Apple has a reduced number of trade partners which enables it to retain its’ brand identity and reputation.
Competitors
The main organization competitors are Samsung and Huawei. These two organizations have a strong financial muscle which makes them offer stiff competition to Apple (Chen, Chun and Bao 227). These organizations produce more than the firm which ensures that they have more products for sale than apple. These organizations have an operational capacity of producing products which compete with Apple offering. Samsung, for instance, provides stiff competition to the iPhone through its Samsung Galaxy S4 device which operational capability is almost the same with those of iPhone. The diversification in the market by Apple makes the firm to have different competitors in every product offering it operates. Other major competitors for the firm are Windows which offers heavy competition for the firms Mac OS.
Within the personal computer line, the firm suffers stiff competition from other players such as; Hp, Dell, Lenovo, Asus among other big players in the PCs industry. Other Apple products suffering stiff competitions are the online services such as; iTunes, App store and iBooks. These products suffer competition from players such as Google Inc through the Google play store and Windows Corporations through Windows phone Apps. Apple pay as a payment platform also suffers stiff competition from other online payment platform in the industry and also those that are not set up within the organizations’ industry. The major competitors to Apple Pay platform include; PayPal, Samsung pay, Walmart pay and Android pay. All these payment platforms are owned by strong brands which enable them to offer competition to Apple pay (Rawal, Priyanka, Awasthi, and Upadhayay 2017).
Based on that analysis, therefore, its clear that the organization suffers heavy competitions from many players both large and small within the information technology industry. The organization, therefore, ought to strategize to survive the stiff industrial competition.
Marketing strategies The organization marketing strategies are based on the environment under which they operate. The local market is different from the global market since the two-market set up are built on different operational premises. The local market is easily reached through the physical stores operating within the united states. Distribution is also undertaken through authorized dealers, to be able to maintain the operational policies. Due to this, therefore, many local customers enjoy face-face interaction with the employees and the dealers who offer information about the products.
The global market is characterized by much competition as compared to the local market. Apples strong competitors are based on these markets which makes it hard for the firm to operate and realize better returns from these markets. Samsung, for instance, is a South Korean company and controls the largest market share in the country, due to this, therefore, its difficult for the organization to penetrate and conquer the market. The online platform through which Apple mainly serves their global market is saturated by many players making the organizations suffer high competition.
Conclusion and Recommendation
In conclusion, the firm has enjoyed a successful run due to its innovativeness and trendiness approach in the information technology sector. The organization strength has mainly been based on its uniqueness and availability to diversify products to meet the customer’s expectations with their offers. However, their segmentation has acted as a challenge affecting their penetration to the global market. Premium pricing has worked effectively within the local market, but the approach acts as a hindrance to the firms’ ability to penetrate the market especially in the developing countries.
Recommendation
The organization ought to review their marketing strategy to be able to expand their market shares globally. The pricing approach needs to be reviewed; this is because the prices through which the firm offer their products are higher than their competitors’ prices. Due to this, the consumer prefers the lowly priced products to the premium-priced Apple products. Its major competitor such as Samsung, for instance, provide almost similar products at a lower price. The organization, therefore, should engage in competitive pricing if they have to increase their market share.
Another approach is ensuring that the firm’s products reach the target market effectively. To ensure this, therefore, the organization should ensure that they establish physical stores into their global target market. Through this, the organization will ensure that their customers are well informed about their product offering. The innovation aspect of the Apple products makes the product complex for the consumers to use, due to this. Therefore, the organization should ensure that the information is readily available to the customers.
Work cited
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