APPLE INC.

STUDENT NUMBER: MODULE:

Introduction This essay aims to critically evaluate the use of marketing currently employed by Apple. Apple is a multinational corporation that works in the telecommunication and electronics industry. Apple designs, manufactures and markets consumer electronics and computer software with a variety of styles and models to suit the changing needs of consumers; this can be seen by the more recent release of the iPhone which offers entertainment, the basic and advance uses of a mobile phone, internet access and thousands of application. Apple has been established sine 1976. Since, Apple has introduced a number of innovative products that cover the majority of the electronic media scope. Due to the size and nature of this organisation, Apples iPhone will be selected to allow a concentrated evaluation of the marketing practice currently deployed. Apple Following the success experienced by Apple through the initial iPod range, Apple introduced iTunes, a means of purchasing music legitimately with the added benefit of original sound quality. The iPod range quickly broadened to meet the needs of more consumers; initially the range made available was the iPod Classic but not long after the iPod Shuffle, a small, pocket size mp3 player available in a variety of colours, was on the market. Soon after, the iPod Nano was introduced, a slim, sleek version of the iPod Classic which unlike the iPod Shuffle displayed a screen to view and skim through the files. The next range to follow was the iPod Touch range offering the added benefit of minimal buttons with a touch-response facility to make this a more favourable product in the 21st Century. The success of the iPod Touch caused Apple to develop the first multi-touch interface Mobile (iPhone 2G); although other products on the market offered a part-touch facility (LG Chocolate), iPhone was the first to offer complete touch facility. The iPhone and iPod Touch was introduced globally in March 2010 following the success, leading to the release of the iPhone 3G and 3Gs, a smaller version of the iPhone 3G (BBC News, 2010). The iPhone 4G was released mid-July 2010 which offered added feautres and benefits. The iPhone that will be discussed is the fourth generation (4G) which was released on the 17th July 2010. The largely anticipated iPhone was made available directlty from iPhone which offered the advantage of purchasing this sim-free. This was advantageous considering public may have a preference for one service provider over another, so this minimises limiting the target market. Coincidently, the iPhone was also available on pay monthly plans from service providers including O2, Three, Orange, Vodafone and so on.

Was rumoured to have been leaked by individuals who work for apple, as a means of a marketing campaign to promote the new prototype and allow the public to be aware of its appearance, the campaign was called the lost Iphone. http://gizmodo.com/5520438/howapple-lost-the-next-iphone The iPhone 4G, illustrated has many competitors due to the nature and feature of the products designed and sold. Blackberry is arguably the main competitor in regards to the iPhone 4G having produced models such as Blackberry Storm. Although the technicality and functionality of both the iPhone and Blackberry can be seen as complex, the nature of the products is different despite the common uses of mobile phones (calls and texts) and internet access. For instance, the Blackberry Storm is a Smartphone making it ideal for the common business user with Word, Excel and PowerPoint applications, whereas the iPhone has multimedia features such as gaming applications, and the uses of an iPod due to its mass memory (available in either 16gb or 32gb). The iPhone 4G as to its predecessors the 3G and 3Gs, was not restricted to any single network; it allowed the mobile phone to brand itself independently rather than sharing the spotlight and being attached to a network provider. This accompanied by the large anticipation of the iPhone helped as network providers marketed themselves using the iPhone due to the demand which can be seen by T-Mobile, Vodafone, Orange, Three and O2. The major advertising method used to promote the iPhone was television; this featured pen profiles through its new feature Face Time portraying two individuals in different continents video talking with one another. This promotes the clarity of the camera, the easy to use functions, and the internet (which on some network pay monthly deals such as Tesco Mobile and Three featured unlimited usage). http://www.apple.com/iphone/features/facetime.html. The advert featured an American soldier in Iraq, a real situation rather than a futuristic and unreal situation featured by some advertisements, conversing with his partner in America through a sonogram enabling the soldier to share the moment using Face Time. Particularly nowadays when life is busy this feature will be desired by many. Apple successfully generated demand through this advertisement medium. In addition, the internet was used throughout the internet with different advertisements to target the different segments of customers depending on the site. Blackberry Storm coincidentally used similar advertisement mediums promoting their product as powerful; this was cleverly done considering business is associated with power and bearing in mind phone battery is a common problem amongst some. Simultaneously, the Blackberry challenged Apple by also mentioning it is a touch-screen. Apple advertised the iPhone as coming soon to initiate demand and awareness of the iPhone. The iPhone has been aired since late 2007; this helped as brand loyalty to Apple will have worked as a means of advertising in itself. In addition to Face Time, the advertisement displayed the touch facility and easy-to-use features encouraging the sale of this. Despite the iPhone release in July 2010, the adverts continue to be aired due to the variety of Blackberry models available and intense competition in the mobile industry. The television timing ranges

from thirty seconds to a minute long; despite television being one of the most expensive mediums to advertise, it reaches maximum potential audiences. Adverts always involve the catch phrase 'apps for everything', demonstrating consumers the practicality of the phone and how the iPhone can be used for everyday tasks. Below, a father is communicating with his disabled daughter using iComm which is an app designed by himself. (See appendix) http://www.dailymail.co.uk/sciencetech/article1276195/Father-creates-iPhone-app-gives-voice-severely-disabled-daughter.html Apple has used the internet as a method to promote and market their products. The internet is home to over two billion customers allowing Apple to reach the widest audience possible and establish itself as one of the leading innovative technological providers.

Apple store online advertises the iPhone by detailing its technical specifications, features and design. Apples pre-release marketing campaign accumulated 1.7m sales in store, over the phone and online within three days of the release, outlining the success of the campaign. Apple have used their current customers as a target by directing mail to alert their valued customers informing them of the release, and product information offering upgrades. In

addition, potential customers and previous customers were contacted through the use of iAds, software designed to display mini-advertisements within their application and retain 60% of revenue generated. This positioned iPhone4 into direct competition with Googles adMob service taking advantage of the popularity of additional applications. Read more: http://www.financialpost.com/news-sectors/technology/story.html? id=3124255#ixzz1Bdk0pmOe iPhone4 has been featured in newspapers, both local and national, magazines (such as Heat targeting women and Mens Health targeting men), posters, banners and Billboards positioned nationally in busy locations. Also, the situation of the stores has helped as Apple has a store located in London, capital and the busiest location in UK and also in Birmingham, the second largest city in the UK. C Market Segmentation is the process of dividing a market into specific segments of consumers on the basis of their needs, behaviours, or characteristics, outlining what groups of consumers needs and requirements are, identifying target markets to businesses (Business Dictionary Online: http://www.businessdictionary.com/definition/psychological-segmentation.html). Customers can be segmented by demographics, incomes, preferences, socio-cultural aspects and psychographically. Behaviour segmentation focuses on consumer needs based on the responsiveness and reaction in response to products such as iPhone4. Other variables come into context that will affect the response such as previous encounters, current brand loyalty, cost-against-benefits analysis, current condition of mobile phone and competitor offers. Apple have a very strong brand image built up over the last 34years helping the organisation to obtain a large customer base that have stayed loyal to the brand. The strong business image encourages repeat sales. The iPhone can be personalised by the user through downloading applications and also a variety of covers available making the phone unique to the user. Apple has further distinguished oneself from competitors by using iTunes which is a free application exclusive to apple consumers, allowing the purchase of movies and songs. This is a key feature, as it is used on previous apple products such as the iPod, having generated a lot of attention consequently causing the introduction of iTunes gift-card. http://news.cnet.com/iTunes-outsells-traditional-music-stores/2100-1027_3-5965314.html Another example of behavioural segmentation is the production of the iPod-Shuffle which is designed for users on the go, featuring exceptional features such as a voice over which tells the consumer the name of the song currently playing. Apple have designed this for the younger generation, exercising customers (such as joggers) and those who fancy something small hence portable. It features a clip so it can be attached to clothing, displaying its practicality. http://www.apple.com/uk/ipodshuffle/ Usage rate is another key aspect of segmentation, as the increasing number of applications

are creating more uses for the iPhone, usage rate will increase, allowing Apple to be more involved with its consumers as they can gather more data such as what apps are most popular and marketers can think of new apps to launch. Benefits of this type of segmentation are that marketers gain a better understanding of the consumers knowledge and their responses to Apple products such as the i-Phone The iPhone is marketed as a very practical phone, allowing users to apply the phone in everyday tasks such as travelling, by using the satellite navigation within the phone or iStudiez Pro which is an app targeted at students, allowing them to schedule their days and organize work. This helps form a stronger relationship between the consumer and product, as the consumer becomes a frequent user, as the ever growing market of applications is expanding, more ways are being created for consumers to use their iPhone. DEMOGRAPHIC segmentation is when marketers divide into groups based on variables such as age, gender, income, occupation, ethnicity etc. This form of segmentation categorises the requirements of consumers and is the variables are easily obtained and measured in comparison to other methods such as psychographic segmentation. Income is a key factor as the iPhone is 499 for the 16gb model and 599 for the 32gb model when purchased directly from Apple. This is more expensive than its competitor the Blackberry Torch, which is priced at 454.99. This price difference may signal a competitive edge and to users that the iPhone is superior to that of the Blackberry, or that the iPhone is overpriced, and lose customers to competitors. http://www.guardian.co.uk/money/2010/jun/24/price-check-apple-iphone4-deals http://reviews.cnet.co.uk/mobile-phones/blackberry-torch-9800-review-50000206/ Age is another factor taken into consideration as the practicality of the i-Phone keeps on growing, the various applications which target different age groups e.g. Square is an app which allows the user to accept credit card payments through their phone which is free to use. BumbleBee Touchbook which allows users to read kids stories, or at a click of a button get the story narrated. This shows how the iPhone is targeting a diverse age group as the phones technology is becoming more and more sophisticated, its features are very appealing to the younger audiences as marketers promote the iPhones countless capabilities. A problem that the iPhone will face is the vast range of Smartphones already on the market such as the HTC and the Blackberry which are now using android technology creating a new interactive interface which is owned by Google. http://www.android.com/

REFERENCES: BBC World News extends iPhone and iPod Touch applications globally; Christopher H. Wright; March 17, 2010 Apple has done this by launching the iPhone in 2007, generating a revenue of $6.22 billion http://www.slideshare.net/bkiprin/apples-iphone-launch-marketing-strategy-analysis-2858373 http://library.marketlineinfo.com/library/DisplayContent.aspx?R=5B0A0C20-9BB6-4284A575-AC0F2261F45C&N=4294839864 BBC World News extends iPhone and iPod Touch applications globally; Christopher H. Wright; March 17, 2010 http://www.filmindustrynetwork.biz/bbc-world-news-extends-iphone-ipod-touch-app-toaustralia-and-new-zealand/2604 http://gizmodo.com/5520438/how-apple-lost-the-next-iphone http://www.apple.com/iphone/features/facetime.html http://www.guardian.co.uk/money/2010/jun/24/price-check-apple-iphone4-deals http://reviews.cnet.co.uk/mobile-phones/blackberry-torch-9800-review-50000206/ http://www.android.com/ http://www.apple.com/uk/ipodshuffle/

http://news.cnet.com/iTunes-outsells-traditional-music-stores/2100-1027_3-5965314.html http://www.businessdictionary.com/definition/psychological-segmentation.html). http://www.financialpost.com/news-sectors/technology/story.html? id=3124255#ixzz1Bdk0pmOe

Appendix

www.youtube.com/watch?v=liX55mNLDiA&feature=related

http://www.iphonematters.com/C43/P30/ Above Apple have marketed their iPhone using a giant glass cube, and using graphics to promote the product by displaying it New York, for a very short period, before removing it, gaining itself more publicity and creating curiosity in its consumers as what to expect.

http://www.bbc.co.uk/blogs/technology/2008/04/iphone_price_cut_weakness_or_s.html Above the iPhone has been advertised using billboards showing the product at various angles, making use of the large face of the phone, they are able to focus consumers on the iPhone alone which is displaying its features on each screen e.g. the iconic itunes music player and satellite navigation. Using these signs help Apple to use word-of-mouth to spread news about the iPhone as it is seen by many people and the message delivered is done visually via images of the phone.

http://news.cnet.com/8301-30686_3-20009116-266.html Pictured above is the long que of people who have eagerly anticipated the launch of the

iPhone showing the immense demand for this product and related accessories, which generated $10.47 billion in revenue.

http://www.youtube.com/watch?v=J-Q6NBp8bCA&feature=player_embedded Above Blackberry have targeted apple in one of their advertisements, which show a blackberry travelling in the air as a bullet, and pierces straight through an apple, symbolising Apple inc. In response to this, Apple immediately retaliated using the same features of the film, except this time, the blackberry falls apart once it comes into contact with the apple, delivering a message that Apple is stronger.

http://www.youtube.com/watch?v=ow7SBaQTjlo&feature=related Unlike Apple, Blackberry who are in direct competition with them, aim most of their range at business men and women. In the above advert Blackberry are attempting to rival the iPhone by promoting their phone as fun and not just for business. This was done by making fun changes to the work atmosphere by installing rides to get around the business, e.g. lifts which are made into rides, which shows an attempt to expand their target market, and become a stronger competitor.

http://www.youtube.com/watch?v=xMn5iC9gHI4&feature=related Blackberry have attempted to rival Apple, in the advert above, showing many features of the phone, combining together making the Blackberry, this will go against the apps of the iPhone, as consumers are shown a visual display of all the characteristics of the phone.