MARKETING PLAN - APPLE

Executive Summary

Apple Inc. designs, manufactures, and markets, personal computers, Mac book, iPod,
iPhone, iPad, and related accessories. In addition Apple also has range of products and
services like iTune stores for music, Xserve server and Xserve Raid storage products, Mac
operating system and a portfolio of professional software application. The marketing
strategies and marketing mix are related to the Apple products' and services' quality value.
The products of Apple Sold via its retail stores, online stores, direct sales force and third
party wholesaler and retailers. It is apparent that Apple's products have become a mainstay
of modern life (Reuters, 2012).

However, Apple is now dealing with a public relation disaster and threat of calls for boycott
of its iPhone and iPads. The public image of Apple has taken a jump after the shocks of
working conditions in some of Apple's network of Chinese suppliers' factories. Now the
dreaded word "boycott" began to appear in media coverage of its activities (Guardian,
2011). Hence, this report emphasizes a significant marketing plan that will assist Apple in
order for solving most of its marketing and management issues.

Situational Analysis

Marketing Environment

The business strategy of Apple leverages their potential, through designing, developing its
own operating system, hardware and technologies in order for bringing its potential
customers throughout the globe inducing new products and solutions with great usage and
innovative design. Apple encounters intensive competition from its rivals. Apple is broadly
recognized as an innovator in personal computer as well as consumer electronic markets.
Apple makes use numbers of indirect and direct distribution channels and they have 125
stores in USA, UK, Canada, Japan and Australia. In spite of the dramatic success, Apple now
deal with public relations disaster and threat of calls for boycott its products. The
reputation of Apple in the market has drastically fallen down due to the working conditions
in the factories of some of its network of Chinese suppliers. (Guardian, 2011). In order for
remaining competitive it is imperative for apple to solve issues, and to increase R&D and
marketing as well as advertising for maintaining its position in the markets.

SWOT Analysis

Strength

 Innovative - All of apple products are very innovative and have innovative design and
technology which is patented and not matched by any other products in the market
today. Further, Apple products have several functions compared to the products of
competitors.

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  Compatibility: Apple products will work with iTunes and compatible with Mac OS
tools that mean the products have unlimited potential for upgradeability.
 Ease of Use: Apple products and made to ease of use. The new touch screen
interface of iPhone, IPad, and Mac book make operations totally spontaneous. It
identifies multi finger gesture just as how the hand of human is behaved.
 Brand awareness: Apple products are known as 'Cool' as it comes great
technological advancements.
 Price: All Apples' products are very innovative, products are sold at reasonable price
for its vlaue.
 Quality: Apple's products come with great quality. The touch screen Apple devices
has the brightest and scratch resistant screen in the market. In addition, virus cannot
attack in any of Apple's products as the software suite comprised resistance to virus
threat.

Weakness

 Image: The brand image of Apple has not been targeted towards business people as
most of the rivals of Apple targeted. Moreover, Apple doesn't possess any reputation
as not being compatible with corporate world. In addition, Apples' brand image fell
down due to the working conditions in the some factories in China.
 User Interface: There is an issue with the touch screen interfaces that known as
"gorilla arm" where long term use of solid surface for input becomes not
comfortable.

Opportunities

 Increasing demand and expansion to new target segment: Apple target the customer
who require all in one computing solutions. However, as the technology advances,
Apple also have the opportunity for targeting the people who need the
entertainment.
 Upgradable: Apple lets new exciting features to be brought in as the software on the
Apple's devices can be updated.
 Partnership: Apple is able to make strategic alliance or partnership with many
powerful global consumer electronics companies, and hence costs in marketing can
be reduced and revenue can be increased by making long term agreement.

Threats

 Increased competition: It is seen that many companies are increasingly entering the
to the market of tablets, smart phones etc. and there is low barriers to entry.
Competitors may attempt around copyright for making similar products.
 Difficulties to expand to Asian market: As the tablets, smart phones are popular and
widely used, it is difficult to expand to ASIA

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  Pricing pressure: The products of Apple are marketed as high end products, however
as the competitors undercut the prices of products like tablets and Smartphone's,
apple products are definitely going to fall.

Competitor Analysis

Apple faces intensive competition in all of its business areas. It has been observed that the
markets of consumer electronics, PCs, and software extremely competitive. These markets
are featured by technological innovations in hardware as well as software which did
enhance the potentials and use of PC and other gadgets. The significant competitors of
Apple who sell PC on the basis of operating system have drastically reduced prices and
brought down the margin of the products in order to obtain the market share. The major
competitive factors comprised of performance, price, quality of the products, innovation,
features, availability, software, service and support, marketing and distribution potential
etc. In addition , since the PC industry and its consumers mostly depend on the internet and
increasing numbers of gadgets which are simpler, smaller, inexpensive than PC, may be
having competition with the Apple's current products. In the PC industry Apple faces severe
competition from Dell, Sonly Vaio, IBM ect. Moreover, a few of the potential competitors of
Apple have considerable resources and are capable of giving the products and services at
very cheap prices in order to compete with Apple. In the market smart phones and tablets
Apple faces intensive competition from Samsung, HTC, Sony etc. These players provide
products comparatively low price than Apple with similar features (Market Watch, 2012).

The future of Apple and economic conditions are merely relied upon the potential of Apple
to develop improvements to the Platform of Mac and the software and hardware of
company. PC industry and consumer electronic encounter extreme competition and
featured by aggressive strategy of pricing, launching of new products, pressure of cutting
gross margin, life cycle of the products, and rivals. Indeed the Apple's operation in the
future may be continued to affected by these pricing practices (Market Watch, 2012).

Core competencies of Apple

Think different: The core competencies of Apple is nothing but the innovative design and
technology. That is the motive as well as the spirit behind of well known 'Think different'
campaign. Indeed the products are introduced by Apple that extremely won the market.
From the first affordable computer Macintosh in 1984 to the latest iPhone and iPad which
combines portable digital media player, WiFi, GPS, camera, etc. Apple not only astonishes
the customers but it changes the whole concept consumer electronic industry.

Buy different: Apple wants the customers to redefine the buying experience rather that just
thinking differently about the its products. The Apple stores have been designed to create a
clubhouse for the enthusiasts of Apple that selling their products.

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Marketing Objectives

Apple sets two significant marketing objectives which are ;

 To make necessary change the supply chain process and produce and sell directly to
customers.
 To assemble computers on the basis of the specification of the customers.
 To expand the brand name of Apple and link to the established significant
positioning.

Apple can reduce the cost of manufacturing by not depending on other companies to
manufacture the products and removing resellers to sell the products. In addition, Apple
can rebuild the reputation and enhance public relation by treating the employees
effectively. Moreover Apple can gain competitive advantage in terms of price. Apple has
developed strategic management mechanism in order to meet these vital objectives. Apple
plan to manufacture their own products from own factory rather than relying on the
particular company. Apple is committed to bring the best personal computing and gadgets
to students, professionals, businesses, and consumers. It is apparent that the continuous
R&D is critical for facilitating innovation of new and improved products and technologies.

Marketing strategy

The significant marketing strategy Apple comprises, giving emphasis on particular area of
expertise in which Apple is strong as in any company anywhere in the world as expertise in
the introduction of technology products, particularly via distribution channels. Apple is
focusing on geographical markets, such as USA, Europe, Australia. In addition Apple also
focus on limited segments of products such as PC, telecommunications, software, networks,
and the products of technology integration. The significant value proposition of Apple is
strong expertise for boosting major league market entrance to new markets all through the
globe, at a price premium proportionate with great value and faces competition on quality
as well price.

Target Market

Apple target market comprises environments where graphic design, video and audio editing
are in demand. In addition Apple also targets the consumers with higher disposable income.
In fact Apple focus on vertical markets. Apple major target market segments include North
and South America, Europe, Australia and Japan.

The target market of Apple of has following features:

 Middle and upper income customers who are ready to pay more for user experience
 Customers who love to have fun with technology. These customers comprised of
ones who love to shoot digital photos and videos. It is simply nothing but the
concept of digital hub.

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  Students: High school, graduate, and post graduate students
 Professionals in media and designs.

Positioning

Apple positions themselves to particular type of consumers, innovators, middle income/

higher income people, people who have good jobs and life styles etc. The trendy people will
stop purchasing Apple if Apple positions itself to poor people, as all the people can and this
will damage the brand of Apple rather than just increasing the sales owing to the lower
prices.

Market segmentation

Market segmentation is the most significant strategy of Apple. Apple gains the position in
the industry of smart phones due to its segmentation strategy. Apple segments its products
vertically and sell the products at the right price for the utmost profitable segments.
Moreover Apple identifies segments which are willing to pay more for the unique products
that Apple offers: the experience, and quality. Apple ignores prospects who are not ready to
pay their price.

Marketing Mix

Product mix

In any type of business, Product is the most attractive part of it and customers choose a
company considering their products. The value and fate of company is decided by their
products. If core product is not there, then there won’t be anything to promote, place or
price. It can be said that product is the most important thing copied by competitors and
criticized by customers (Stanley, 2009).

The product range of Apple varies from mobile phones (iPhone) to portable computers to
peripheral products. One-to-one learning solutions, wireless networking, editing and video
creation solution, etc. are some among the products and services provided by the Apple.
MacBook Air, Xserve, Mac Book Pro, Mac Mini, iMac etc. are some of the portable
computers offered by Apple Company. The versions of iPhone are iPhone 3GS, iPhone 3,
iPhone4 and iPhone4S. iPod is another product which helped Apple to gain widespread
attention. Its upgraded versions are iPod Classic, iPod Shuffle, iPod Nano etc. Some of the
servers offered by Apple are Xsan, MobleMe, Xserve etc. In addition to these, peripheral
devices like printers, cameras etc. are also come from Apple company.

Apple release products with multiple base choices and for diversifying their product range
they offer some upgrades also. Operating systems created by Apple itself is used in Apple
products. The integration and organizing are intrinsic in Apple, as the software required for
their products are produced by them. This method enables them to attract people having
interest in technology.

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In Apple products, it is not possible to run or use many software exists in market. In Apple,
only those software that are compatible with their products can be used which restrict users
from using many business based programs.

Promotion mix

Another element of marketing mix is promotion. Boosting the demand for the product,
differentiation and product awareness are the major objectives of promotion (Kurtz and
Dave, 2010). Apple is very famous for their promotional strategies. Very consistent and
unique style is followed by Apple while promoting their products. Electronic media is mainly
utilized by Apple for their advertisements and marketing. They adopted a promotional
strategy which allure all types of customers (new and existing) regardless of their age.

Apple mainly concentrate on Public Relations, giving importance to product value. They
make use of advertisement method and concentrate on satisfaction of customers and
quality. Huge money is spent by Apple for their advertisements. Public relations is a vital
aspect of marketing mix, since following appropriate PR method can give the idea that
company is proficient in technologically advanced and innovative products. Ascertaining
Apple’s skill in product evolution as well as positive upgrading of principles and values of
company and quality of product for maintaining existing customers is the major objective of
PR method.

TV advertisements, advertisements in magazines, internet ads, online sales etc. are some of
the promotional tools adopted by the Apple Company. For attracting customers they
include celebrities in their ads. Through electronic shops, supermarkets and Apple shops
also they promote their products. Their unique and well known logo also act as a
promotional tool for them.

Apple majorly concentrates on relation with customers and as part of this the company try
to update each and every new services and product offered by them. Personal selling is also
preferred by them. In Apple stores, well mannered, energetic and highly informative sales
representatives having thorough and up-to-date knowledge about technologies are
appointed. This itself give Apple benefit of a promotional method since these
representatives provide customer service which appeals people which result in word of
mouth publicity.

Price mix

Price is an important factor in marketing mix strategy. It is the amount a person give in
exchange for the product (Kotler and Armstrong, 2009). The survival of a company depends
upon its pricing strategy since it determines profit as well as loss of the company. Even if the
product is best, nobody will buy a product if its pricing is inappropriate. Putting very high
price and very low price will make the company suffer. Customers won’t purchase a product
if it is overpriced and they won’t consider a product seriously if price is too low.

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Apple enjoys a prestigious position in the market now and its demand is increasing rapidly.
This allows them to put high price for their products. How much ever is the price, customers
loyal to Apple is ready to buy it at any cost.

Because of their marketing policy Apple could charge high rate for their products. In Apple’s
product, various programs are there and they use up new innovative technologies in their
product. This enables them to put high price on their product as they have got customers
that are very much loyal towards them.

By providing discounts as well as rebates Apple try to retain their existing customers and
attract new people. Moreover, contract pricing method is also adopted by Apple which
make it easier for customers to purchase Apple’s product. Considering lower downloading
rate of songs, the charge for songs from iTunes were minimized by Apple.

Place mix

The place in marketing mix represents the distribution (Solis, 2011). Apple places their
products in a such a way that they provide their products whole through the world. With
the help of direct sales, retail stores, third parties as well as online stores Apple’s products
are made available throughout the world. Apple divided their market into four geographical
sections. They are Americas, Europe, Japan and retail. They have got various retail stores
(more than 200) all across the world.

The design, development, marketing etc. of Apple’s products are done by the company only.
So they have got high responsibility on their head. Only very limited number of software are
compatible with Apple’s products which is a restriction. Apple try to overcome these
challenges by making an agreement between them and Intel (processor manufacturers).
This enabled them to overcome the challenge of increasing processor costs.

The network of Apple is vast and technology consulting organizations and independent
professional service providers are only some among them. The service providers of Apple
are well trained technicians and they provide repairing services along with providing Apple
parts. The service providers also offer support to businesses as well as home users and they
offer onsite technology services.

Through their retail stores and online stores spread all over the world, Apple sell and resell
their products to resellers, end users , education customers etc. directly and without the
interference of any third party since Apple believe that directly contacting customers is the
most effective method of demonstrating the standard, values and benefits of their
products. Considering the demand for the product, Apple increase distribution points so
that customers can easily reach them. High traffic places like shopping malls are selected for
stores by Apple. This enables them to catch attention of more people.

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Implementation

 Compensation system : Employees will be given £6 incentive for every non reject
products they manufacture and will offer £10 per product for six sigma quality
programme.
 Will utilize control measures for monitoring the issues related employees, quality as
well as customer service satisfaction.
 Customers will enabled to contact main head office of any possible technical issues
by using Apple customer service bar. Therefore Apple will be enabled to react
promptly in order to rectify the issues.

Evaluation, Monitoring and Control

At present Apple give significant focus on market opportunities in relation to consumer

electronics, including iPad, iPhone, Mac book and digital music distribution including iPod,
and iTunes stores. Apple encounter intensive competition from various rivals promoting
their own products comprising 4th generation smart phones, Mp3 players and streaming of
digital content through internet. Since rivals try to imitate the approach of Apple to
incorporate these elements within their individual offerings or working more collaborate
each other as part of offering solutions, Apple anticipates fierce competition in this space to
intensify. It also has been observed that some competitors of Apple have adequate
resources and are capable of providing similar products and services at reduced prices for
competing with the offerings of Apple. There is no guarantee that Apple will be capable to
provide products and services that can efficiently fight in these markets. Apple will respond
to the price competition by reducing prices and enhancing features that can adversely have
an effect on the overall product margins of the company. So, Apple executes the marketing
mix strategy effectively in order compete with the rivals and gain competitive advantage. In
addition, Apple will create a integrated communication plan as most of the time as
communication plan will enable to mobilize support, build acceptance and remove any
uncertainty. Apple will successfully manage frequent introduction of products and
transitions in order to remain competitive in the market place and for stimulating the
demand of customers.

Apple will utilize the control measures for monitoring the issues related employees, quality
as well as customer service satisfaction. Apple will maintain quality assurance by making
sure the demand of different consumers are met in spite of mass production. All of the
productions in China will be done under the direction and control of Apple in order to avoid
any kind of allegation that they have faced before regarding the employees. order to plan
the strategy, there will be a monthly meeting of board of apple for presenting the
information, and for making proposal for continued marketing efforts.

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REFERENCE

 Guardian (2012) Technology of Apple http://www.guardian.co.uk/technology/apple

accessed on 28th August 2012
 Guardian (2011) Apple Chinese workers treated inhumnaly
http://www.guardian.co.uk/technology/2011/apr/30/apple-chinese-workers-
treated-inhumanely accessed on 29th August 2012
 Joshi M, Mohan R (2005) International marketing, Oxford Univeristy press, New
Delhi and New York
 Kurtz, Dave. (2010). Contemporary Marketing Mason, OH: South-Western Cengage
Learning.
 Kotler P, Armstrong (2008) Principles of marketing fifth edition. John Wiley
publishing
 Market Watch (2012) http://www.marketwatch.com/investing/stock/aapl/profile
accessed on 28th August 2012
 Reuters (2012)
http://www.reuters.com/finance/stocks/companyProfile?symbol=AAPL.O Accessed
on 25th August 2012
 Solis, B (2011) Engage!: The Complete Guide for Brands and Businesses to Build,
Cultivate, and Measure Success in the New Web, John Wiley & Sons, Inc.
 Stanley J, Ryans (2009) International marketing: modern and classic papers, sage
publishing