MARKETING MANAGEMENT PROJECT REPORT

ANALYSIS OF MARKETING MIX OF APPLE WATCH

SECTION - D

GROUP-10

Submitted To: Prof Nitin Gupta

Submitted By:

Parth Gupta 19A3HP656

Vishal Jain 19A2HP444
Aviral Sankhyadhar 19A1HP035
Aditya Fulzele 19A2HP464
Vishesh Rohra 19A1HP007
Deepanshu Agarwal 19A1HP030
Apple Watch is a line of smartwatches designed, developed, marketed, and sold by Apple Inc. It
incorporates fitness tracking and health-oriented capabilities with integration with iOS and other Apple
products and services.

Question 1: Critically evaluate the product strategy adopted by the firm. Carry out a detailed analysis of
the product mix, product line length, and develop a product map. Also, evaluate the packaging and suggest
modification, if any.

Answer: Apple is following the Pull system product strategy with the product capable of making
technology more relevant and personal.
Product differentiation for Apple Watch are:

 Form: Apple watch comes in 4 different sizes- 48mm, 44mm, 40mm, 38mm, and company use
dynamic type and relative sizing so that items can expand or contract naturally to fill the available
space. The company has used only one display image for all sizes.

 Features: Some unique features of Apple watch are- Messaging and calling, Siri (Apple's virtual
assistant), fitness tracking, Apple pay, and other iOS apps.

 Performance Quality: The Apple watch uses liquid crystal polymer material for the flexible circuit
boards, which offer fast performance improved water resistance and wireless transmissions that could
increase Wi-Fi and cellular speeds.

 Conformance Quality: The rating for the Apple watch is 4.5/5, according to TechRadar rating
website.

 Durability: Apple watch comes out very strong in the durability test. It has a scratch-proof sapphire
crystal, and an aluminium build on the watch which provides it 60% more strength than other stander
alloys.

 Reliability: In a recent survey, 21 males completed trade mile exercise wearing two Apple watches
and a polar monitor (criterion) in each hand to test the reliability. The difference in results was
insignificant. The Apple Watch heart rate sensor has excellent validity.

 Repairability: Apple provides the best replacement among all its competitors as they do not repair
damage watch; they replace the whole watch.

 Style: It comes in 18 different models and six different finishes with unique bands to give wearers a
special feeling.

 Customization: One can customize the watch by choosing different size, case, and bands. You can
also choose different designs, adjust the colors, and add complications to your watch face.

Product mix for Apple Watch.

Apple Watch comes in six different variants;
 Apple Watch Edition
 Apple Watch Series 3
 Apple Watch Series 4
  Apple Watch Series 5
 Apple Watch Nike
 Apple Watch Hermès

Product Line Length for Apple Watch: Apple has lengthened its product line over time, according to its
customer's purchasing power.
Line Stretching: Apple has stretched the product line of apple watch by introducing different variants of
Apple Watches.
 Up-Market Stretch: Apple Watch Hermès for the luxury segment, Apple Watch Nike, for
sports and fitness enthusiasts. Apple Watch Series 5 for professionals.
 Down-Market Stretch: Apple Watch Series 3 for lower budget customers.

Product Map

From the product map, we can infer that Apple has many competitors in the smartwatch category, such as
Samsung's Galaxy Watch and Galaxy Watch 2, competing against Apple's Apple Watch.
The map also shows the possible sectors and locations available for new items. There are very few
manufacturers of Hybrid watches, If Apple estimates a robust unmet demand and can produce it at low
cost and price it accordingly, Apple could consider adding to its product line.
Since Apple does not have any product solely categorized for Sports band, it can build a unique watch
only for the category of sports band and compete with Fitbit.
Packaging for Apple Watch
Apple is known as the master at creating an iconic tangible, sensory, and distinct experience that
communicates it's brand without any words and logo.
Each and every part of the packaging is designed to be simple, clean, and direct. The design is simple in a
world of clutter and constant sensory overstimulation, which is, White and sharp rectangular box re-
enforced by what is inside the box: something elegantly presented cleanly designed and straight forward
to use.
Color is an essential aspect of packaging as it defines the brand, and the use of eye-grabbing color and
images that are white provides an iconic sensory experience.
Apple has specially employed designers whose sole job is packaging, and they create and test endless
versions of box shape and angles and tapes and keep modifying as per need.

Question 2: Critically evaluate the pricing strategy adopted by the firm.

Answer: Price-setting is always tricky due to the pressure in demand, cost interrelationships. In the
different degrees of competition, Apple pursues a clear promoting strategy based on separation, which
focuses on the item's worth, capacities, and points of interest and enables the company to sell the item with
edges outstandingly higher than those of its rivals.

Market-skimming: Apple isn't the cost leader. The organization has never utilized infiltration estimating
to pick up a piece of the overall industry quickly, as Apple has figured out how to immediately turn into
the pioneer in numerous item portions short after its passage in spite of its relatively higher valuing. What
Apple does is starting its price high and slowly drop over time. Apple is making extravagance substantially
more open with the possibility that low-priced devices can make an encounter similarly as luxurious as
that of premium devices.

The watch market has given apple the ideal chance to execute a brilliant pricing strategy, which enables
the company to successfully ensure that the average selling price will be well above the entry-level of
$199 and probably some above $600. Apple is the primary technological organization offering a
smartwatch that went for the watch luxury market and is, simultaneously, the leading organization with
an item in the watch luxury portion with a solid, innovative background. In the two cases, these distinctions
will keep on enabling Apple to value its things without having to tie them to competitors' prices
necessarily.

Apple has spent much time studying the Swiss watch industry. This picture is more distorted when we
look at the top end of the Swiss watch market, which defined as watches that retail for over $10000: this
rarefied segment accounted for just 0.1% of global production volume in 2019 but 48.5% of retail
expenditure.
Apple divided Apple's watch market into three broad price segments:
 Entry : $199 to $399
 Mid : $799 to $ 1499
 Luxury: $5000 to $17000

Maximum Market Share: Smartwatches ordinarily start in the $300 or higher range, except for Fitbit
($169), the second most prevalent wearable brand behind Apple. Apple want to maximize their market
share as initially appealed to the luxury consumers, but the $199 price tag makes it more accessible to a
broader audience.

Apple also price their product such that the consumer perceives price what they consider the current actual
cost and not what Apple stated price. Price Endings of any of the apple watch ends with nine as consumers
see an item priced at $199 to be in the $100 rather than the $200 range, so the watches are priced
accordingly. With the Apple Watch Edition priced at $899 Apple Hermes priced at $1499 and 18 karat
Apple Gold Edition priced at $9999 to $16999, the company brings differentiation to an unheard-of level
by attempting to enter another section ruled as of not long ago by organizations with no – or not many
innovative foundation.

Perceived Value Pricing Method: Apple uses the Perceived Value Pricing Method as they believe their
expensive watch deliver enough value to justify their price tag and customer understand their importance
and has successfully positioned the product so that it makes Apple Watch unique. Most of the customer
of Apple are not concerned about the cost of the product but pay for the brand as it is associated with many
celebrities, the experience and how it will impact the social status of a person and Apple has maximized
their position in the market by building a trustworthy brand, product performance, and warranty quality.

Question 3: Evaluate the promotion-mix followed by the firm and suggest modification.

Answer: Promotion Mix for Apple Watch

Apple uses a blend of promotion variables to reach its goals.

 Advertising: Apple aims to reach large target audiences and increase brand awareness by advertising
on television, banners, E-mail, and webpages. The brand has invested $38 million in advertisings for
Apple Watch. It has debuted the new promotion for the Apple Watch Series. The film, titled 'Better
You,' depicts a man who is challenged to up his game by fitter, healthier and altogether better versions
of himself, which tell what is this watch all about, and this motivates the customer to trust the brand
and communicate with it.

 Sales promotion: Apple Watch sales promotion includes special discounts for a target audience to
compete with other smartwatch and fitness band's brands like Fitbit, Samsung, and Hawaii. To engage
and attract existing consumers and bring in a larger audience, Apple offers promotional deals like
Black Friday sale, Diwali sale, and Thanksgiving sale. After this, they create a demand for purchasing
more products, turning the new customers into loyal and regular clients.

 Public relations: Apple doesn't need sophisticated marketing campaigns that overload their
customers with information, and they understood this concept very early and made sure that their
marketing can be as simple as possible. In their marketing campaigns, there is not typically any
information on where and how to buy their products; instead, their marketing messages are very
straight forward, usually showing the product and letting it speak for itself. They display simple
graphics to translate their word, strip down the content to the bare minimum, and leave out the flashy
noise to portray their audience what they are offering.

 Direct marketing: Apple uses direct marketing to promote Apple Products among organizations,
universities, and colleges by giving a specific bank's card holder's discount, employee's premium,
student discount so that people.
Question 4: Evaluate the distribution strategy adopted by the firm and suggest modification, if any.

Answer: Apple has taken a unique channel design and distribution decision to make Apple Watch a
success. They have adopted these strategies –

 Analysing customer needs and wants: Many consumers choose the channel according to budget,
product, convenience as well as shopping desires. Apple has adopted its distribution strategy according
to the consumer's needs and wants. They have taken care of product variety, service backup, and the
spatial convenience of the customers of Apple Watch.

 Establishing objectives and constraints: Distribution strategy varies with product characteristics.
Apple Watch is a product that is designed, keeping in mind the customer base, which is tech-savvy
youth, upper-middle-class professionals, and executives. Apple's channel objective is "to create a
dynamic experience of retail experience for the consumer." This objective is also adopted for the
distribution of Apple Watches.

 Identifying major channel alternatives: Apple has successfully identified and used the marketing
channels alternatives for the distribution of Apple watch.
 Apple maintains a stable price for resellers. They also manage to keep remarkably stable retail
prices. Apple made the dealer's margins small, providing no volume discounts and ensuring fair
terms between the same product's resellers.
 The retail and online stores of Apple are unique. It has more to do with education and support than
with sales. With minimal signage and crystal-clear messaging, the messages are simple, even
austere. The overwhelming feeling is that many people are there to help you, and no one is there
to give you something. Apple Watch on display is preloaded with demo music and photos
 Products from Apple are marked as different categories. To the extent that it is possible, Apple
allows resellers to sell their products as one-of-a-kind groups, as opposed to side-by-side rivals on
the shelf or online. Apple watch will be displayed uniquely in a store rather than with the
competition.

 Terms and responsibilities of channel members: Apple treats each channel member of distribution
fairly and allows them to be profitable. Apple employs a "trade relations mix" with the distributers that
are as followed:
 Price Policy - Apple's exclusive network rarely discounts. It does lower prices for refurbished
goods, and there are price changes, of course, but there is no special "sale," say on holiday.
 Condition for sale – Apple has strict payment terms and product guarantees on apple watch. The
Apple Watch is a unique product, so the distributors are granted discounts on early payments.
 Distributor's territorial rights – when Apple watch was launched in Apple stores, it initially
bothered the existing retailers. But through the attention to detail, the company worked hard to
improve the relationship.
 Mutual Service and responsibilities – In every apple store, specialists are appointed, who provide
excellent technical support often free of charge. This helps in targeting potential consumers.
 APPLE WATCH DISTRIBUTION STRUCTURE:

APPLE WATCH

DIRECT SALES THIRD PARTY

FORCE WHOLESALER

ONLINE RETAIL STORE

STORES
RETAILERS
RETAILERS

FINAL CONSUMERS