Apple Function and Form

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Table of Contents

Introduction
The Apple business level strategy
The Competitive advantage
The Model used at Apple Inc
Recommendation
Conclusion
References

Introduction

Apple Inc. is a publicly listed American company specializing in the production of high technological electronic products, computer hardware, and software. The company sells software, Smartphone, e-Book readers, Electronic music, Computers, and other consumer electronics. An entrepreneur named Steve Jobs started up the corporation in the fiscal 1977 (Rich, 2012).

Even though many products urbanized under his watch including PowerBook G3 and iMac online store, the company continues to rely on electronics and box computer to prevail in the market and make sales. The company has been bringing out cut-price versions of its Smartphone.

Looking even further, the company is staking its future on new products that could take electronics and computing power even deeper into everyday lives of consumers (Antràs & Helpman, 2004).

The marketing aim of Apple Inc is to achieve a 20 percent market share in the next five years while the financial aim is to increase profitability by 15 percent through increased sales. This is anticipated to occur through a marketing plan as well as opportunities and problems that the company has researched on and identified.

The marketing model involves five forces analysis that an organization uses in positioning the product. The functions of Apple are steered by specific organizational structure comprising of experienced marketing and sales officers.

The success is measured through measurement controls and close monitoring of the implementation process. Nevertheless, Apple Inc anticipates changes in the market trends to come up with effective contingency plans (Mallin & Finkle, 2011).

The Apple business level strategy

Marketing strategy is referred to as the process that allows firms to focus on limited resources and greatest opportunities to reach a sustainable competitive advantage that would augment sales or profitability. Apple marketing strategy is based on the positioning of Smartphone through differentiation.

The major consumer targets are professionals and students who need a state-of-art, convenient, secure, and internet-enabled Smartphone. The secondary consumer target entails the rural population who need quality but state-of-art Smartphone (Schonfeld, 2010).

The Competitive advantage

The growing technology in manufacturing and price threats has made Apple Inc to add new features and lower prices of Smartphone. The earlier establishment of strong brands and cheap cell phones by competitors such as Chinese Mobile is a factor to consider.

Major competitors include Nokia, Samsung, HTC Corporation, LG, Motorola, and Sony Erickson. Though the market is highly competitive with new models entering the market, Apple Company is venturing into newly exploited market and innovative products that increase its competitive advantage (Apple Inc, 2010).

The Model used at Apple Inc

The Five force analysis

The buyers’ power

When the company opened its doors into the Smartphone industry, it offered the consumers innovative technology that disrupted the electronic industry. The products changed the platform requiring competitors to change their marketing strategies in order to remain relevant in the industry. The Smartphone industry presents the company with competitive forces (Debajani, 2012).

Threat from new entrants

The entrants present a threat to the existing market. It requires Apple to invest huge amounts of money to gain economies of scale that would enable it to make the entry of new firms almost impossible. This helps the company to maintain its domination of the market through new Smartphone. Any new company has to integrate technological advancements in the software markets (Ashcroft, 2011).

Threat of Substitution

The threat of substitute products is a challenge that Apple faces. All the competitors have a huge range of computing designs developed for different types of users. This requires the company to be continually innovative and be conscious of the prices. The users have the choice to decide whether their Smartphone are handheld computers or not (Barrios, Görg & Strobl, 2005).

The purchasers’ power

The company focuses on developing differentiated products. This makes the products to be outstanding and customers are offered products that suit individual tastes (Biswas, Fraser & Mahajan, 2007). This makes customers to be less price-sensitive when buying products such as iPod, iPhone, and Macintosh as it is difficult to find a product with same features and style.

Apple uses a variety of suppliers in the manufacturing of Smartphone and portable music players. This translates to less bargaining power by suppliers since it is not limited to a single supply of computer components.

Competitive rivalry

Regardless of the intense competition, Apple Inc has won substantial market share and strengthens its brand image among the targeted market segments. The 3-G network system and touch interface are the important point of differentiation in the competition.

Offering a variety of Smartphone models is also a strong competitive edge to win a wide customer base. Besides, the entire world recognizes Apple brands thus it can exploit this position to compete (Linzmayer, 2006).

The Marketing Strategies at Apple

The only business target Apple Inc has is the entrepreneur or small business owners. These persons need to convey and store information frequently through cost effective means. Their taste for phones is Smartphone that can allow internet access and other small functions akin to calculations.

These consumers also use the phone for other purposes other than for business. The phone is also the family phone and ease of use is particularly important to this market segment. The authors have a good say on several strategies put in place by the corporation (Ruckman, 2004).

Positioning

Through Smartphone differentiation, the iPhone Xi is placed as the most suitable, cost efficient, value-increased, and technological phone for proficient and personal use. The marketing strategy underlines the ease of use, integrating touch interface, internet enabling, Linux operating system, and GPRS differentiating the Apple Smartphone.

Product strategy

The Smartphone models include all the characteristics described in the product review part and differentiated according to the differing needs of the target markets. The Smartphone iPhone Xi is offered with a one-year warranty.

All the models are produced with an emphasis on Apple quality mark. An important part in the product strategy is to strengthen Apple brand image. The brand and logo are displayed in all Smartphone models and reinforced in the marketing campaign.

Pricing strategy

The Smartphone iPhone Xi ranges between 200 and 800 dollars as the estimated price per unit phone depending on the model. This price is lowered from the earlier price of 1,000 dollars since the product introduction in 2010.

As Apple expands the product line, it is expected to reduce the price per unit phone. The pricing strategy aims at attracting emerging consumers due to economic boom and increased market share from major competitors. The combinations of pricing strategy and mark of quality have a contribution in winning customer loyalty (Dziri, 2011).

Place strategy

The distribution strategy is to open various distribution subsidiaries in the market and vend products directly to consumers. The new channel of distribution is enhanced through continued mini-campaigns across the market.

The firm continues to uses agents when the implementation process rises. Subramanian observes how the world population is becoming more sensitive to IT. The company has opened an online store to exploit the opportunity created by online shoppers (Blonigen, 2001).

Promotion strategy

For Smartphone promotion, the corporation implements two different strategies. The Company appointed DDB Mudra Group and used print media aggressively to advertise new Smartphone models.

This has helped in building brand awareness by focusing on the greatest and latest advertising campaigns meant for Smartphone, iPhone Xi, and implementing a communication adaptation strategy.Through the integrated marketing strategy, Apple expects to create much anticipation about the iPhone Xi and increase brand awareness in the marketplace.

Marketing Research

Through extensive market research, Apple identifies the needs, specific features, and expectations that market segments value. The primary research is through surveys, market tests, and focus groups that are carried out in all the potential market areas. The company also determines and analyzes customers’ perception towards other competing brands.

The secondary market research involves brand awareness research and customer satisfaction studies. Feedback from the primary research helps Apple in developing Smartphone models (Arregle, Hebert & Beamish, 2006). Through brand awareness research, it is possible to determine the efficiency and effectiveness of the organization marketing campaign.

The strategy strengths

Apple Inc has grounded its strategies based on three important strengths as discussed below.

Strong brand portfolio

Apple Inc has a wide range of cell phones that are recognized and respected across the world. The iPhone Xi in particular comprises of a variety of models designed according to the varying needs of the customer (Apple Inc, 2012).

Robust production capabilities

Being the largest manufacturer of Smartphone in the world, the firm suggests its powerful production capabilities. This is important in ensuring the balance of demand and supply of the company product (Gormley, 2010).

Strong focus on R&D

The active involvement in research and development ensures that Apple Inc. differentiates its product through innovation. This strength is also imperative for enhanced quality as the Unique Selling Propositions.

The advantages

Apple Inc draws several advantages from the applied marketing strategies. However, the firm faces a number of disadvantages.

Hasten demand for Smartphone

Apple economic explosion has resulted in increased changes in consumer behavior. The low-income earners who could not have afforded to buy a Smartphone have enough to do it presently (Marco, 2013).

Mounting use of the internet

Apple can exploit these strategies to combine the production capabilities with research and development. Thus, demand is increasing with very few manufacturers responding to it (Chen & Mujtaba, 2007).

Continued economic growth

Apple economy keeps growing hence increased incomes and job opportunities. This enables new consumers to enter the Smartphone market and expand prospects (Henry, 2008).

The disadvantages

Listless performance

Apple Inc suffers from slow performance in some marketplaces compared to other competitors. The focus of Apple has been on large cities, which denies the firm the opportunity of exploiting the upcoming rural populace.

Frail brand image

The latest brand image of Apple is extremely weak among consumers like Indians. The weakness is highly effective since the brand image is decisive in a competitive milieu (Blomstermo, Sharma & Sallis, 2006).

Meager cash flows

All through the growth stage of the product lifecycle, Apple Inc invests in an enormous awareness campaign. The funding therefore causes imbalance between the expenses and returns achieved from rummage sales (Bernard & Jensen, 2007).

Recommendation

The changing consumer trends and market shifts require corporate strategies that will respond to these dynamics and ensure that the firm achieves competitive advantages. Among the trickiest industry is the electronic industry that is characterized by big firms that are swift in responding to the marketing changes.

In this industry, Apple Inc. can only adopt the best-cost strategy to increase its competitive advantages since consumers are increasingly becoming price sensitive and many competitors are pursuing low-cost strategies. The firm should also integrate the developmental and marketing plans in order to focus on the best value while reducing the prices of products.

Within this strategy, the firm should retool its products to attract a wider range of consumer segments as it maintains low prices for the majority low-income earners. Avoidance of the unexpected risks from natural calamities is also important. Therefore, Apple ought to include stakeholders like OEM partners to distribute the impacts caused by such calamities (Mallin & Finkle, 2011).

Conclusion

Apple Inc. has been competing with the other marketing players for dominant shares. In order to increase its market shares, Apple uses diverse marketing strategies including advertising, public relations, and sales promotions. The company is using innovative advertising to attract and inform the customers about products both in mass and digital media.

The firm uses corporate social responsibility to appeal to many people as a method of maintaining public reputation. The success of Apple Inc. in marketing improves its goodwill and attracts public attention. Apple Inc thus provides special offers as a good way to stimulate and retain customers’ loyalty.

References

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Apple Inc 2012, The new, faster MacBook air, <https://www.apple.com/>.

Apple Inc. 2010, 2010 annual report, United States Securities and Exchange Commission, Washington, DC.

Arregle, J., Hebert, L. & Beamish, P. 2006, “Mode of international entry: the advantages of multilevel methods,” Management International Review, vol.46 no.5, pp.597-611.

Ashcroft, J. 2011, Apple Inc. the case study 2000-2010. Web.

Barrios, S., Görg, H. & Strobl, E. 2005, “Foreign direct investment, competition and industrial development in the host country,” European Economic Review, vol.49 no.1, pp.1761-1784.

Bernard, A. & Jensen, B. 2007, “Firm structure, multinationals, and manufacturing plant deaths,” Review of Economic and Statistics, vol.89 no.1, pp.103-204.

Biswas, R., Fraser, D. & Mahajan, A. 2007, “The international market for corporate control: evidence from acquisitions of financial firms,” Global Finance Journal, vol.8 no.1, pp.33-54.

Blomstermo, A., Sharma, D. & Sallis, J. 2006, “Choice of foreign market entry mode in service firms,” International Marketing Review, vol.23 no.2, pp.211-213.

Blonigen, B. 2001, “In search of substitution between foreign production and exports,” Journal of International Economics, vol.53 no.2, pp.81-104.

Chen, L. & Mujtaba, B. 2007, “The choice of entry mode strategies and decisions for international market expansion,” Journal of American Academy of Business, vol.10 no.2, pp.322-344.

Debajani, S. 2012, “Strategic change of campaign at Apple Inc,” The Indian Journal of Management, vol.5 no.2.), pp.38-48.

Dziri, R. 2011, Avoiding strategic drifts in a hypercompetitive market: analysis of apple’s position in the mobile phone industry and suggestions, GRIN Verlag, Munich.

Gormley, T. 2010, “The impact of foreign bank entry in emerging markets: evidence from India,” Journal of Financial Intermediation, vol.19 no.1, pp.26-51.

Henry, A. 2008, Understanding strategic management, Oxford University Press, Oxford, UKt.

Linzmayer, O. 2006, Legend of Apple, Qinghua University Press, Beijing, China.

Mallin, M. & Finkle, T. 2011, “Apple Inc: product portfolio analysis,” Journal of the International Academy for Case Studies, vol.17 no.7, pp.63-74.

Marco, T. 2013, How Apple stretched its wings with the iPhone 5s, Macworld, vol.30 no.12, pp.24-25.

Rich, K. 2012, “Apple without jobs first trillion-dollar company,” Forbes, vol.190 no.8, pp. 34-34.

Ruckman, K. 2004, “Mode of entry mode into a foreign market: the case of U.S. mutual funds in Canada,” Journal of International Economics, vol.62 no.2, pp.417-432.

Schonfeld, E. (2010). SmartPhone sales up 24 percent, iPhone’s share nearly doubled last year. Web.

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