Background
The iPod was introduced by Apple, Inc. to fulfill the music lovers desire to control what they listen to and when. Analysis showed that a significant number of consumers did not want to carry bulky CDs and have to switch back and forth when selecting artists and songs; rather, they would be willing to spend in excess of 0 plus for the convenience that the iPod provides storage, cataloging and retrieval all in one simple, easy-to-use device. The iPod and related products have been pegged by industry analysts as reaping over 55 percent of money spent on digital music players (Cited from, 2004). In looking to expand the usability of the iPod, several accessories have been introduced such as arm bands to attach the iPod, ear-buds to improve the sound, docking cradles and a car conversion unit, to name a few. These devices encourage the acceptance of the product, which in turn, leads to word-of-mouth advertising and increased sales of both music and additional units. (Cited from, 2003) These accessories add to the mobility of the iPod but fail to improve on the usability of the product in the hands-free, eyes free and ears free environment of driving a car. Apple will expand the usability of the iPod to the automobile through iTrip/V, an accessory to the iPod that integrates speech recognition and playback through the existing automobile sound systems. The iTrip/V will provide the customer with the ability to select music by artist, song, album genre or user definable play list simply by speaking. (Cited from, , 2003) Apple has diversified its product lines with mixed success in the past, but the iPod is Apple’s rising star it has now surpassed computer sales while sales of computers has been flat with limited inroads into the marketplace, sales of the iPod products have captured close to 50 percent of the market share. (Cited from, 1994) To maintain this leadership position, Apple must continue to innovate and differentiate itself from other players. Apple has the resources to develop the necessary products or to partner with like minded companies to provide the best product on the market (Cited from, , 1994; , 2004).
The Apple situation (Business to business and business to consumer markets)
The Apple situation, marketing strategies and mix relate to the quality value of Apple products and services such as the Macintosh line of desktop and notebook computers, the iPod line of portable digital music players, the Xserve server and Xserve RAID storage products, a portfolio of consumer and professional software applications, the Mac operating system, the iTunes Store, portfolio of peripherals that support and enhance the Macintosh and iPod product lines, and a variety of other service and support offerings and sells its products worldwide through its online stores, its retail stores, its direct sales force and third party wholesalers, resellers and value-added resellers and sells products for the purpose of education, consumer, creative professional, business as well as government customers.
Apple’s business to business markets, there influences such ability, through the design and development of its own operating system, hardware, and many software applications and technologies, to bring to its customers around the world compelling new products and solutions with superior ease-of-use, seamless integration and innovative industrial design. There participates in several highly competitive markets, including personal computers with its Macintosh line of computers, consumer electronics with its iPod line of portable digital music players, and distribution of third-party digital content through its online iTunes Store. While the Company is widely recognized as an innovator in the personal computer and consumer electronic markets as well as a leader in the emerging market for distribution of digital content, these are all highly competitive markets that are subject to aggressive pricing and increased competition. To remain competitive, the Company believes increased investment in research and development and marketing and advertising is necessary to maintain and extend its position in the markets where it competes. In case of business to consumer markets, Apple sells to customers directly through its online stores around the world and to improve access to the iPod product line, the Company has significantly expanded the number of distribution points where iPods are sold. Apple believes that for both professionals and consumers the personal computer has become the center of an evolving digital lifestyle by integrating and enhancing the utility of advanced digital devices such as the Company’s iPods, digital video and still cameras, televisions, CD and DVD players, cellular phones, personal digital assistants, and other consumer electronic devices. The attributes of the personal computer that enable this functionality include a high-quality user interface, easy access to relatively inexpensive data storage, the ability to run complex applications, and the ability to connect easily to a wide variety of other digital devices and to the Internet.
Thus, one goal initiative is to bring new customers to the Company and expand its installed base through sales to computer users who currently do not own a Macintosh computer and first time personal computer buyers. By operating its own stores and building them in desirable high-traffic locations, Apple is able to better control the customer retail experience and attracts new customers. Apple acquires components through a combination of formal purchase orders, supplier contracts, and open orders based on projected demand information. The personal computer industry is highly competitive and is characterized by aggressive pricing practices, downward pressure on gross margins, frequent introduction of new products, short product life cycles, evolving industry standards, continual improvement in product price/performance characteristics, rapid adoption of technological and product advancements by competitors, price sensitivity on the part of consumers and number of competitors.
Product Strategies
Apple Company has designed a range of products and services to meet the needs of education customers. These products and services include the iMac and the MacBook, video creation and editing solutions, wireless networking, professional development solutions, and one-to-one learning solutions. The iPod remains a mostly closed and vertically-integrated platform. Although Apple provides documented interfaces for hardware accessories, developers have no supported way to add features to the software and although the iPod supports the mainstream MP3 and AAC formats, the iPod does not support other proprietary formats like Windows Media and Real Audio, and Apple refuses to license its FairPlay DRM to other online music vendors. Apple did add Windows PC support with their second generation iPod series. The service itself is a key component to marketing mix as the service should be the best advertisement as there is specialization on product valuation intended for international product marketing means and develop contacts with people who can be loyal buyers and recommenders. The taking of the products across national boundaries into fresh markets, explore channels, guide customers and establish better relationships. The service itself is a key to the markets.
Pricing Strategies
Price competition in the market for personal computers and related peripherals has been particularly intense as competitors who sell Windows and based personal computers have aggressively cut prices and lowered their product margins for personal computing products. Apple focusing on business to business as well as business to consumer markets, but relatively broadly defined as the knowledge and expertise is most valuable when applied to the market entrance phase of high-tech products to be marketed through channels in new markets usually across international borders so they need to establish new channel relationships. The strategy is to focus on Apple computers main area of expertise as the company has plenty of competition in international marketing and in product introduction expertise, but nobody can down the company as it stay focused on introducing high-tech product into better services for the global markets.
The tactic is to keep those realistic in terms of the quality of products offered as well as stable based marketing and the use of innovative technologies in global communications like for instance the web technologies. Apple’s ability to compete successfully and maintain attractive gross margins and revenue growth is heavily dependent upon its ability to ensure a continuing and timely flow of innovative and competitive products and technologies to the marketplace. As a result, the Company generally incurs higher research and development costs as a percentage of revenue than its competitors who sell personal computers based on other operating systems. Many of these competitors seek to compete aggressively on price and maintain very low cost structures. Apple pricing needs to match with their positioning and not to be very economical and must be at moderate end of the pricing scale that reflects best quality products. Effective marketing and sales initiatives require a thorough understanding of your target markets and channels. Seizing a potential window of opportunity can be critical to establishing a competitive advantage. While Apple is an industry leader in many ways, it falls far short of its peers in recycling and e-waste. This situation creates unnecessary risks, both for Apple and for the environment that we would like to see the company address. The company has not offered innovative free supplemental take back programs.
Distribution Strategies
The Company distributes its products through wholesalers, resellers, national and regional retailers, and cataloguers, many of whom distribute products from competing manufacturers. In addition, the Company sells many of its products and resells certain third-party products in most of its major markets directly to end-users, certain education customers, and certain resellers through its online stores around the world and its retail stores. Many of the Company’s resellers operate on narrow product margins and have been negatively impacted in the past by weak economic conditions. Considerable trade receivables that are not covered by collateral or credit insurance are outstanding with the Company’s distribution and retail channel partners. Apple believes providing direct contact with its targeted customers is an efficient way to demonstrate the advantages of its Macintosh computer and other products over those of its competitors. The Company has significantly increased the points of distribution for the iPod product family in order to make its products available at locations where its customers shop. By the end of fiscal 2006, the Company had opened a total of 165 retail stores, including 147 stores in the U.S. and a total of 18 stores in Canada, Japan and U.K. Apple distributes its products through wholesalers, resellers, national and regional retailers and cataloguers and Apple sells many of its products and resells certain third-party products in most of its major markets directly to consumers, education customers, and businesses through its own sales force and retail and online stores.
People Strategy
The primary target people for the Apple iPod as indicated is college students and young adults. Analysis shows that these consumers have the financial ability and willingness to invest in electronic gadgets. (Cited from, , 2004) There is stronger purchase trend by males over females 22 percent for MP3 players. Therefore, Apple’s main focus will be young male adults but this is not homogeneous market. Rather, the market is then segregated by music preferences rock, pop, hip-hop, country, as it is their intent to target both male and female consumers through their music preference whenever feasible. (Cited from, 2004) Aside, customer behavior holds the key to understanding what it is that moves specific groups of prospects closer to a decision to commit and buy and that customer perceptions and behavior are crucial to crystallizing that all important key to successful marketing plan; identifying the individual customer within such targeted niche markets (Cited from, , 1994). With over two million iPod’s sold, Apple has garnered acceptance from many different people from baby boomers to young teenagers, with the majority of its customers being college students and young adults in the United States. (Cited from, 1997) These consumers, who have financial ability and willingness to invest in electronic gadgets, will be the primary target for the iTrip/V and speech-enabled MP3 files which will sell for premium. People in this bracket are computer-savvy consumers who demand and are willing to pay for the products and features they want. Understanding how these consumers make buying decisions is crucial to the success of the product. (Cited from, 1997)
Process Strategy
Strategy is focus – Apple strategy involves focusing on specific area of expertise in which the company is strong a group as in any company anywhere in the world as experts in the introduction of technology products, especially through channels of distribution. The company will then focus on geographical markets; the United States, Europe and Latin America and in limited product segments, telecommunication and technology integration products. The target customer is usually end-users in professional and student grand occasionally an owner or president of a medium corporation in a high-growth period. Apple’s value proposition is high-powered extremely valuable expertise to boost major league market entrance to new markets across international borders, at a price premium commensurate with the high value as well as compete on price, on quality that makes the price more than worth it. Apple continues to develop new products and technologies and to enhance existing products in the areas of hardware and peripherals, consumer electronic products, system software, applications software, networking and communications software and solutions and the Internet. The business marketplace is for the most part made up of mature markets and with maturity comes sophistication. It is by necessity that marketing communication is an evolutionary process and must satisfy the ever-increasing demands and emphasis placed on it as the single surviving, sustainable, competitive edge in the marketing environment. (Cited from, , 1991)
Marketing Communication Strategies
Since the introduction of the Macintosh in 1984 with the 1984 Super Bowl commercial, Apple has been recognized for its efforts towards effective advertising and marketing for its products. The promotion strategy focuses heavily on Public Relations, with emphasis on strong product value in advertising and sales market. Advertising is crucial part of Apple’s marketing mix and thus, depend on quality delivery and customer satisfaction. Public relations is imperative part of the marketing mix as the right PR can get the company quoted as experts in innovative products that has a great touch of technology advancement and continuous updates as supported by the target market and can possibly launch retainer relationship and a detailed plan for public releases and events as well as company reports and interviews. The underlying objective of the PR program is to establish Apple computers expertise in product evolution and positive updating and upgrading of product services standards and principles and be able to keep potential customers to patronize the services offered. The most effective means of communicating will be through advertisements through radio and television services and popular shows geared toward the target audience. Thus, advertising on the iTunes website will be the major communication strategy for reaching existing owners of iPod (Cited from, 1994).
Physical Evidence
Apple has invested and will continue to invest in various programs to enhance reseller sales, including staffing selected resellers’ stores with Company employees and contractors. The program requires substantial investment from the Company, while providing no assurance of return or incremental revenue to offset this investment. The Company believes in high-quality buying experience with knowledgeable salespersons that can convey the value of the Company’s products and services greatly enhances its ability to attract and retain customers. The Company sells many of its products and resells certain third-party products in most of its major markets directly to consumers, education customers, and businesses through its retail and online stores. The Company has also invested in programs to enhance reseller sales, including the Apple Sales Consultant Program, which places Apple employees and contractors at selected third-party reseller locations. Apple has always been concerned with customer satisfaction as the company offered an on-site service the next day for any customer complaints as solution to the inconvenience experienced by customers in having to send their computers back to Houston for repairs. The recognition of bundling as a selling point for customers prompted Apple to provide spare parts including training to service providers so that technical support integrates hardware, software and service-provider repair needs of customers. Innovations and product development were made through constant research on new technological advancements in computer gadgets and hardware, choosing which hardware offers the greatest potential in sales in terms of utility and price and developing these gadgets in a less costly manner.
Therefore, technology will enhance the emergence and sharing of knowledge among participants via such venues thought leader access, learning advances, mentoring and business simulations. While technology is useful for some aspects of leadership development, it cannot replace the importance of bringing leaders together to deepen their relationships and their learning experience. There will help ensure that communications reach the intended audiences and that the audiences notice and act upon the messages they receive of marketing communications planning that will harness the power of an effective communications plan to advance organizational objectives. There needs to employ a variety of ways and means to communicate and convey information in multiple formats to accommodate diverse needs. Successful innovative products should attempt to be problem-solving as successful innovative products should attempt to be problem-solving as far as the customer is concerned as awareness can come about as a result of the marketing effort of Apple computers communication. If the product has potential interest and appeal, then potential purchasers will seek further information. Consumers then evaluate the new product against existing products and then make an initial adoption by obtaining a trial sample, which might be a free sample or a ‘trial’ purchase. Consumer behavior can also be characterized through the use of psychological factors which include motivation, perception, learning and attitudes and beliefs. Apple continues to develop new products and technologies and to enhance existing products in the areas of communication software and solutions and the Internet. The business marketplace is for the most part made up of mature markets and with maturity comes sophistication. It is by necessity that marketing communication is an evolutionary process and must satisfy the ever-increasing demands and emphasis placed on it as the single surviving, sustainable, competitive edge in the marketing environment. (Cited from, , 1991; , 2001).
REFERENCES
Credit:ivythesis.typepad.com
0 comments:
Post a Comment