Marketing Strategy of Apple Inc.

Markets across the globe are increasingly becoming competitive that each brand needs to focus on developing its image and Image. The brand considered for the research is Apple Inc. Apple Inc. manufactures and designs a wide range of products in the electronics industry including hardware devices, software, third-party contents, and online services since its establishment in 1976 (Johnson, Li, Phan, Singer & Trinh, 2012, p.1). Since its inception, the company has focused on achieving its reputation by providing quality products and services. The company was started by Steve Jobs, a revolutionary leader, who has a vision of creating quality brands, designing, and innovating new products according to the needs of the consumers (Bellis, 2018). Through the years, the company has released a series of products including iMac, iPhones, iPod, and iPad, which are considered game changers in their market niches (Zhang, 2018, p.40). In the market, Apple products are identified with their simple and minimalistic designs of the hardware and software which create a unique user interface. As a brand, the company enjoys market dominance despite experiencing stiff competition from the other established market players such as Samsung, Google, and Microsoft. With such competition, Apple Inc. needs to find a way of sustaining its competitive advantage to remain relevant in the market.

The Marketing Strategy Based on the 5Cs

            To satisfy the needs of the customers profitably, businesses need first to understand various internal and external factors that affect consumer tastes and preferences such as the market environments and capabilities of the company. A useful framework for analyzing such factors is the 5Cs, which scans business environment applicable to various marketing decisions. The concept covers internal, macro-and micro-environmental elements. The 5C is an extension of the 3C, which include company, customer, and competitors (Waheed, Yang, Ahmed, Rafique & Ashfaq, 2017, p.63). The inclusion of the macro-environment factors such as collaboration and context enhance its effectiveness.

Customers

            Businesses cannot survive without the customers (Waheed, Yang, Ahmed, Rafique & Ashfaq, 2017, p.64). Apple understands the needs of its customers; as a result, it continues to dominate the electronics industry. Apple products appeal to the needs of the customers segmented based on their demographics. Overall, the products from the company are developed to cater for the needs of customers in the middle and upper class, who in most cases are youths, tech-savvy, and those willing to pay for the premium products. Apple products are diversified to match the ever-changing needs of the potential customers and to attract more from the untapped market segments. Products such as iPad are unique since they have both computer and phone capabilities.

Competitors

            The market is increasingly becoming attractive to new entrants producing cheaper products to the customers. The electronics industry has many players including Samsung, Microsoft, Google, Nokia, and Blackberry with each competing for a given percentage of the market share. Dell manufactures hardware; Google is famous for its technology, Microsoft for operating systems, and Samsung for mobile phones. In the industry, competition is based on high price-high quality and low price-low quality. The current threat in the market is the emerging number of Chinese companies producing mobile clones, which makes it difficult for customers to separate the originals and fake. However, since Apple products are standard and classy for the customers, most of them are increasingly purchasing the clone to associate with the company. Quality innovation remains the key to effective competition.

Collaborators

            No business exists in isolation. Therefore, there is a need for external distributors, suppliers, and stakeholders to ensure efficient management of the company. Apple collaborated with Microsoft and Samsung, despite being its main competitors to make Microsoft Office application that is compatible with Apple products and chips in the phones respectively (Johnson, Li, Phan, Singer & Trinh, 2012, p.18). Also, LG is among the suppliers of LCD panels used in iPhones. Foxconn company is China provides the needed low production cost to the company (Karam, 2016, p.112). Apple has partnered with music label businesses and artist to sell their products through iTunes. The key to sustainability lies in partnership, as it enables the company to understand the practices.

Context

            The market under which the business operates continues to experience political and legal regulation, economic challenges, socio-cultural and technology changes that would, in the long run, affect its performance (Zhang, 2018, p.42). Previously, Apple had to deal with competition through product differentiation to maintain and attract loyal customers. Apple thrives in the market due to massive investment in R&D that ensures that its technology is up-to-date. Continued legal actions against the company are recipes for customer reduction and losses due to huge costs involved in fighting legal battles. Tariffs across the markets make Apple products expensive and less viable to the customers in the developing countries. Currently, Apple products are nearing the plateau in the advanced market. Thus, it needs to rely continuously on innovation, new products, and expansion.

Company

            Apple, as a company, enjoys an excellent competitive advantage in the market against its rivals. However, to remain relevant and productive in the market, it needs to focus on eliminating its weaknesses. To understand the company’s market performance, SWOT analysis is considered:

Strengths

Weaknesses

Apple is the leading innovator in the market; it has strong brand awareness, reputation, and reputation and heavily invests in R&D; positioned to accelerate growth; strong market base; and excellent market strategies (Johnson, Li, Phan, Singer & Trinh, 2012, p.19)

Apple products are expensive compared to its competitors; the products do not work with the non-Apple additional application; frequent change in management that result in cultural challenges; highly dependent on the external suppliers

Opportunities

Threats

The current growth and market interest in the tablets and iPhone appliances are opportunities to grow; there are no restrictions in market innovation; it can achieve the needs of the customers for innovation; strong customer base and operation in many states

Economic instabilities in most countries forcing people to buy cheap products; improve technology and innovation among the competitors; new market entrants with cheap products; reduced product differentiation as competitors release new products; and increased government restrictions (Johnson, Li, Phan, Singer & Trinh, 2012, p.19)

Pricing Strategy and Recommendations

            Apple’s vision has been to create premier products in the market and charge premium prices (Johnson, Li, Phan, Singer & Trinh, 2012, p.6). The cheapest products from the company are priced in the mid-range, it ensures high-quality user experience with features. The hardware and user interface are developed for provision of value for the price, which keeps the profits high. Apple uses a premium pricing strategy since it has an excellent competitive advantage in the market. However, with increased competition from Android and low-cost products with high quality, Apple could lose its market share and risk becoming a high-end niche name. The multi-pronged strategy involves offering few products but focusing on high-end, prioritizing profits over market share, and creating an effect in which customers starve for innovations (Research Gate, 2018). The primary competitor is Samsung that has a market share of 32%, which could be between 12-15% of Apple’s (Research Gate, 2018). Even though Apple products remain good in quality, in most countries, they are more expensive than the other alternatives. Competitors are trying to develop features that Apple products have though at a lower price to attract customers (Zhang, 2018, p.39).

            The skimming or premium pricing strategy is a high price approach that provides a healthy margin but risks depressed sales volume (Johnson, Li, Phan, Singer & Trinh, 2012, p.14). The electronics industry is price sensitive. Each business aims to make profits without exploiting customers (Kenton, 2011). The premium pricing strategy for Apple products is standard regardless of the location and economic status of the customers. As a result, the brand has less market share in the developing states. The penetration pricing strategy is recommended for the company. The approach involves the need to increase market share and building customer loyalty. In recent years, the emergence of clones and cheap products have reduced the brand’s customer loyalty. Penetration pricing strategy involves charging customers lower than the competitors to lure and entice them to try the new products (Kenton, 2011). Even though the approach is the same as the loss leader pricing, it can be useful when applied correctly. The method can increase both the market share and sales volume, which in turn leads to reduced cost of production and quick inventory turnover. However, the approach should be focused on the areas where Apple has few customers or experiences stiff competition to encourage consumers to switch due to low prices.

Branding Strategy and Recommendations

            Apple is among the globally recognized brands due to the quality of its products. Apple uses its brand to compete in highly competitive markets (Marketing Minds, 2016). Despite the evolution of the brand, the focus remains to deliver exceptional customer experience using quality user interfaces. The branding strategies used by the company are based on personality, customer experience, architecture, and halo effect. The huge promise of the Apple brand is to provide an enormous challenge to the customers: innovative, beautifully-designed, ergonomic, and technology-leading products that match the needs and expectations of the customers. The company understands fully the aspects of consumer experience, which each product reinforces. Through the years, the company has grown and enhanced its distribution capabilities by opening many stores to reach many customers. Successful Apple retail stores offer customers the direct experience of the brand’s value. Also, the retails offer no-pressure and stimulating experience which allow customers to discover more about the Apple family, try new products, and get practical training on how to explore features of various products.

            The company has used the strategy to strengthen its brand across the markets for markets for many years (Marketing Minds, 2016). However, with the changing needs and expectations of the customers, changing the branding strategy is inevitable. Branding strategies are essential to strengthen the position of the business in the market. The recommended approach for Apple is a personality approach that uses emotional connections. When purchasing products, customers are emotional in their buying choices. The emotional messages are effective than logical marketing in the industry. The starting point should be how Apple products’ experience makes customers feel. The Apple brand personality should involve lifestyle, innovation, hopes, liberty regained, dreams and aspirations, and passion through innovation. There is a need to focus on simplicity and eliminating complexities from the lives of the customers (Marketing Minds, 2016). The market needs customer-driven product designs and being humanistic with the heartfelt link with the consumers. With such qualities, Apple would position its brand as being helpful to the people as they aim to achieve their goals. Connecting emotionally with the customers enhances engagement and assists to develop a sustainable relationship.

Social Media Marketing Strategy and Recommendations

            The well-established brands are increasingly using social media platforms such as Facebook, Instagram, and Twitter to engage customers, achieve marketing, and business objectives (Pratap, 2018). Social media has become a solution to most problems associated with marketing and branding. Brand recognition is vital for Apple, especially when creating a competitive advantage in the market. Thus, Apple uses social media to engage the global audience. However, as a company, it uses the platforms indirectly to promote its brands. For examples, it has several social media accounts dedicated to different products that it offers such as iTunes and Apple Music. The platforms are essential to handle technical issues and ensuring that the customers contact the appropriate support department. YouTube is also vital to display videos. For example, the primary account has about 6.8 million followers and while the support account has 93,000 followers (Pratap, 2018). The current strategy used by the company is diversification of the products offered to enable them to have separate accounts for engaging the customers.

            Huge companies such as Apple have many customers and using single social media account could overwhelm the support, thus reducing organizational responsiveness (Solomon, Marshall & Stuart, 2008, p.115). Based on the analysis of the approach, the company lacks a centrally managed brand presence. Even with such method, the company still have followers across the social media platforms, which means that each brand can reach its customers effectively. The current strategy used by the company is effective, although it needs to treat each channel as an individual entity to ensure the relevance of the information communicated to the customers. Important contents should be passed across the social media platforms to ensure that all customers receive the information. However, there is a need to note that some social media platforms are ineffective for marking. For example, LinkedIn is focused more on business-related contents and customers looking for in-depth educational materials.

References

Bellis, M. (2018, August 5). A Brief History of Apple Computers. Retrieved December 14, 2018, from https://www.thoughtco.com/the-history-of-apple-computers-1991454

Johnson, K., Li, Y., Phan, H., Singer, J., & Trinh, H. (2012). The Innovative Success that is Apple, Inc. Retrieved December 14, 2018, from https://mds.marshall.edu/cgi/viewcontent.cgi?article=1420&context=etd

Karam, A. (2016). The China factor: Leveraging emerging business strategies to compete, grow, and win in the new global economy. Hoboken, NJ: John Wiley & Sons, Inc.

Kenton, W. (2011, July 19). Penetration Pricing. Retrieved December 14, 2018, from https://www.investopedia.com/terms/p/penetration-pricing.asp

Marketing Minds. (2016). Apple Branding Strategy. Retrieved December 14, 2018, from http://www.marketingminds.com.au/apple_branding_strategy.html

Pratap, A. (2018, September 10). Apple Social Media Marketing Strategy - cheshnotes. Retrieved December 14, 2018, from https://www.cheshnotes.com/2018/09/apple-social-media-marketing-strategy/

Research Gate. (2018). What are Apple’s pricing strategies? Retrieved December 14, 2018, from https://www.researchgate.net/post/What_are_Apples_pricing_strategies

Solomon, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real choices. Upper Saddle River, NJ: Pearson Prentice Hall.

Waheed, A., Yang, J., Ahmed, Z., Rafique, K., & Ashfaq, M. (2017). Is Marketing Limited to Promotional Activities? The Concept of Marketing: A Concise Review of the Literatur. Asian Development Policy Review, 5(1), 56-69.

Zhang, Q. (2018). Research on Apple Inc’s Current Developing Conditions. Open Journal of Business and Management, 06(01), 39-46.