Apple, Inc: Marketing Strategy with the Customer in Mind By: Rosa Somerville BUS 330 – Principles of Marketing (BAD 1216A) Instructor: Vicki Long May 21, 2012 Introduction My friend just recently purchased the Apple I-phone 4. She made the decision after she found out that she can use the smartphone to communicate with her son face to face while he is in training out of state. Her previous phone, a Samsung LG did not have nearly as much capabilities as her new smart phone. Apple has proven to market very innovative products that will allow consumers to do just about anything with a touch of a button.
Apple thinks outside the box when it comes to strategic marketing and product building. The company has been profiting from a strong marketing segmentation for years. My friend has had an awesome experience with her I-Phone and is looking to purchase the I-Pad. I can believe that many people like her will be dropping their simple products and picking up a more smart and innovative Apple device. In this paper I will discuss how Apple has utilized successful marketing segmentation to become the leader in technology. Through market segmentation, Appls has proven to value its customer’s needs.
Apple has positioned itself in the market environment, by introducing products that suits everyone. Competition can be tight especially in the world of technology. But Apple may have set a very high standard that is too far for the competition to reach. From the youngest to the youngest at heart, Apple has a great deal to offer. This generation of children will probably take Apple to the next level. Apples product life cycle, has already outlived its visionary, Steve Jobs. The company itself has proven to have built a lasting brand for lifetimes to come. Apple’s Market Segmentation
How else can a company identify its customers and aspire to lift their spirits with an awesome product? Market segmentation can help a company achieve this goal. Market segmentation can allow a company to drive products customers and target their needs and aspirations within their demographics, psychological needs and budget controls. Marketing segmentation permits companies to focus on strategies for selling products to customers. According to Schramm (1976) Apple’s strategy is simple. It concentrates on what the customer want to experience and build a product based on that. Let use my friends new I-Phone 4 for example.
Apple used its vertical integration with the IPod touch, the iTunes marketplace and phone hardware to create a harmonious segmentation approach and market to those who desire an upgrade from the iPod media player. This is an ideal way for the company to merge strategy and consumer needs to build more products and keep the product lifecycle flowing. Apple is successful because it segments products for reading, listening and communicating. Apple has strategized carefully how to sell products to the right people at the right prices, at the right time and has become the largest company in tis various industries.
Apple’s Market Environment. I’m sure Apple has had some challenges while taking its place in the market. Analyzing the market environment is a basic way for a firm to research and meet challenges effectively. Internal and external forces can influence how a company carries out their goals. Existing rules and regulations can also impact challenges within a firm. Considering Apple’s current position in the market, the external and internal factors have help immensely. Managing internal factors in a marketing environment has help Apple perform at its peak.
It has worked hard to improve its efficiency by continuing to introduce new products to the market. According to Digital Strategist Baker ( 2011) expanding Apples product line is the strategy that Apple will need to stay ahead in the market. Apple targets a specific market and overtaking it with quality keeping them effective in the market environment. Apple’s Competition Apple has become the leader in digital management by creating user friendly contents. The company has position itself to become unstoppable by providing a variety of solutions for its customers.
While competition can benefit an organization, Apple has made it impossible for other companies to compete against the leader in the smartphone, media player and PC markets. However, Apple does have some competitors that are watching the company closely to figure ways to respond to the operating systems, user interface, application environment and other digital assets. One of my favorite Apple devices that I own is an I-Pod Nano. I had simple MP3 player that I thought did everything that I needed it to do.
When I saw the Nano in the store, I was fascinated by its components and also the fact that it did so much more than my little MP3. Of course it cost a little more but getting all the features was worth the investment. The feature is what makes Apple the ruler of digital devices. Since features and content are the core elements in order to compete with Apple, I would say that the Real Networks is becoming a key driver of competition for my I-Pod Nano but not close enough. Real Networks good products but not have stepped up to the challenge to compete with Apple.
Baker (2011) suggest that other competitors such as Sony and Amazon have only dabbled in the user environment with products such as E-readers, music players, music and mobile games. Such products have not held their own across an entire ecosystem as Apple has. Apples Life Cycle Block ( 2012) reports that in one of Steve Job’s presentation, he introduces a new Apple product that is sleek, innovative and has more useful features. After he announces that the product is available immediately online, 50,000 orders were filled in less that 24 hours. Apple’s stock surges and the company’s shares increase in the global electronic market.
This process continues with each new product that Apple introduces. Even after the passing of the Steve Jobs, the great visionary, the product life cycle continues to flow. When a product or a service is introduced into the market, this is considered the introduction stage of the product life cycle. This is the intense stage that identifies what customers will like. Beginning in 1976 with Apple I, this product marketed to everyone as the easiest PC to maintain and to use. Once Apple I was introduced to the market, more and more people became interested in it.
Apple then flowed into its growth stage of the product life cycle. In 1976, Apple II was introduced and became a successful mass market PC. Computer sales began to increase and competitors such as IBM began to emerge. However, Apple was still the undisputed leader of the PC market, and proved to be very profitable with an income of about $300 million. Apple has gone through its maturity and decline stage as IBM and Compaq begin to dominate the market. Apple had to come up with a strategy to differentiate its products while still remaining loyal to its customers.
Economic conditions make the competition more favorable as the economy changes and customers are watching their budgets. By the 1990’s, Apple was falling to the competition but it still held on and continue to produce new products. One product that has been the saving grace for Apple is the I-Pod introduced in 2001. People all over the world have open their minds and wallets and embraced this captivating electronic device. For the past ten years, this product has lasted and seems to be the conclusive device for the whole generation. Marketing to Children
Apple’s marketing department has made their commercials engaging and entertaining. They show that any one can use their devices; even children. “Case-in-point, the recently released iPad ad showed a toddler using an iOS device to learn her letters, followed by an adult learning how to play chess on the device. Apple created a tablet that can be marketed to children, teens, adults and even seniors, and be able to appeal to all of them. ” (Block 2012) There’s no doubt that kids love Apple Products. I recently attended my daughter’s sports banquet and half of the parents had their I-Pads, taking pictures and videos of the event.
Then they would hand it to the younger children to play games to keep them entertained and occupied. I’m certain that this generation of children will become I-Kids. Recent research from Block (2012) shows that kids as early as 6 years old are addicted to iPhones. It is obvious as you see the famous white ear-buds attached to I-pods and other Apple hand held devices. It never fails that my daughter usually ends up with my friend’s new I-Phone, showing her how to download apps. The main point is that children love technology.
Even the schools are catching on they constantly send home notices reminding parents that children can bring their I-Pods and I-Pad to school to utilize during library and classroom times. I’m pretty sure that my nine year old will ditch her Nintendo 3DS that she can leave home without for an I-Pad. Future retailing: Apple Stores Move over Best Buy and Fry’s and make room for the specialized, technology store of the future better known as the Apple store. Apple is hoping to change the entire face of retail setting the goal about making a connection to their customers.
Block (2012) reports that Apple operates about 222 stores in the United States, Sony about 40. Besides company stores, Apple and Sony also sell their products through other retailers. The major difference in Apple stores is the consumer buying experience that differentiates Apple from other retailers. “The big guys are becoming more transaction oriented,” Baker said. He described smaller company stores as more “organized” and “ecosystem focused, not transaction focused. ” He emphasized: “I think as content — and services — become more important to technology… t is less about pure transactional hardware sales and more about usability and connectedness. ” (Baker 2011) Stores such as Best Buy, Fry’s or Wal-Mart may sale the products, offer service and provide customer support, the experience isn’t specialized and the customers walks away without incentives. Apple stores are focused on content, ecosystem and excellent customer service. Apple is also focused on building brand — through in-store marketing initiatives — and making sure customers feel good about the companies, their products and sub-brands.
Hence, while profitability is important, the customer relationship takes precedence over the transaction. Conclusion Most executives realize the importance of marketing. Segmentation strategy is key when it comes to increasing sales, profits, revenues and product positioning. Apple had played it smart in properly segmenting its market while becoming the leading force in technology. Apple has proven to market very innovative products that will allow consumers to do just about anything with a touch of a button.
Apple thinks outside the box when it comes to strategic marketing and product building. Apple has taken the entire PC and smart-phone industry by storm. Apple makes quality products for customers who are willing to pay more. My I-Pod was a bit pricy but the cheaper MP3 did not last long and I ended up buying several, ending up with an unsatisfied result until I purchased the Apple device. My friends I-phone has also proven to me a worthy investment. Apple looks carefully at its customers and keeps in mind the outcomes they wish to achieve.
The company defines its strengths, weaknesses, threats and opportunities to execute a more powerful place in the market environment and keep the product life cycle in continuous motion. Apple has successfully used marketing as a tool to serve its customers better than its competition and create a product brand that will last a lifetime.
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