Running head: APPLE TECHNOLOGY COMPANY MARKETING STRATEGY

Title: APPLE TECHNOLOGY COMPANY MARKETING STRATEGY

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Marketing strategy

Marketing strategy involves a long term and a forward looking approach on which a

business involves a careful strategic planning in order to establish a sustainable competitive

nature. This is a section that is involved in the business plan and it entails the plan on how the

organization or business is going to establish their strong bond with the clients and customers.

When coming up with market strategy, thorough research is required so as to learn what is

happening in the market place. This comprises of the external environment that the organization

is about to face so as to come up with the best methods that will let the organization strive

effectively.

Understanding the competitions enables the business prepare for the rules under which

the competitors are fairing as well as preparing on how to reach their target market. A market

strategy also enables an organization to fix its budget in time. Marketing strategy should always

aim at coming up with better methods, products and prices compared to those of the competitors.

(Menon, 2015)

Apple Technology Company has for long been the largest brand in the technology

industry. It has been able to maintain its position in presenting non comparable products as well

as being one of the biggest companies in terms of revenue generation. This is however not a

surprise as the company has managed to convince the whole world of its efficiency through

production of its outstanding products that have revolutionized the entire market.
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It is impossible to deny that the IT industry has become so competitive but the company

has managed to thrive through the same market. Apple produces products including Ipod,

Iphone, Ipad, Iwatch and Itunes. These products have won the hearts of many as they have

remained out standing as well as differentiating themselves from the rest.

Objective and constraints

An effective market strategy should always have clear stated objectives that direct the

company to what it intends to achieve. The company is however expected to keep an eye to the

market at competitors keep changing their channels depending on market shifts. The objectives

are supposed to have time limit and should always be measurable and achievable. However

meeting these objectives is not easy, the challenges the company faces while trying to achieve

them are referred to as the constraints.

Apple Technology has to far extend managed to beat most of the constraints through its

mission and objectives and this remains the most probable reason that many people have its

products close to their hearts. The mission of Apple’s market strategy is to design the best

personal computers in the world. The company has managed to reinvent mobile phone with its

revolutionary iphone and app store which defines the future of mobile media and computing

devices with ipad. Apple remains the leading digital revolution. This means that it has been able

to highly achieve its objectives by ensuring minimal constraints. It however faced a fight with

the law when it used inappropriate language that referred to sex; language that mocked religion

and language that used swear words. Mocking people’s beliefs offends the customers. The other
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constraint involves security of data for its customers which have not yet been fully achieved.

(Grant, 2016)

Analyses of sales, profits and market share

The brand of Apple Company as per the year 2016 was the top most ranked brand in the

whole world; 118.9 billion dollars. Total revenues for an industry are the ones that are used to

determine the market share through their percentage. Company’s market share is determined by

dividing its total sales or revenues by its total sales over fiscal period. However, investors use

market share to establish if an industry or company is growing or maintaining its position.

In 2018 Apple Technology Company lost market share but still made the most money at

the end of the day; meaning that the competition out there is getting stiff. Apple however

remains as an advantage as its profits are out of the middle and high parts in the market. This

leaves the other competitors fighting at the base and here profits do not come easy. In 2016 The

Company’s market capitalization was 520billion U.S dollars. By July, 2018 the quarterly

revenue was 53.3usd billion. By December 2018 the company’s market share was 21.98%. In the

same year, it announced its highest annual revenue with 265.6 billion U.S dollars. Out of this

revenue Iphone made the best sales that contributed to about 218 billion U.S dollars. This was

82% of the total. This meant the device worked efficiently for the customers. (Dhebar, 2016)

Analyses of the target market

Apple is one of the companies with the minimum overall competition from other

competitors due to its differentiation nature that comes from its differentiation nature in the

products it makes. However, it is evident that there is competition in the individual products. For
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instance, Macbook faces competition from Dell. Samsung tablets seem to challenge the Ipad.

However, Apple Technology Company targets the middle and high classes in the market which

helps it thrive in making maximum possible profits. This excludes it from unnecessary

competition from other companies that are left to straggle in getting profits from the bottom

market class of which the profits are very hard to obtain.

Apple offers unique services such as Itunes although they too face a lot of competition

from the other competitors due to advancing technology that is rising each day. Apple reaches its

target markets through its exclusive way of advertising. The adverts are clear and stick to a

strong grip of message in their content. There is no doubt that the brand itself got a good and

strong name that differentiates itself from the rest of the companies making its customers proud

of it. Apple’s marketing strategy has managed to stick to its targeted market that has however not

let them down.

Analyses of market mix variables

Marketing mix comprises of the four components that involve the product, place,

promotions and the price. These four variables have to be mixed in the right way to ensure that

the needs of the targeted markets are well met. The aim of any organization is to make more

profits from satisfying their clients. While developing the market strategy, the market mix should

be met successfully. The four variables are controllable but they also have to work within other

uncontrollable that may include competition, the social cultural factors, political legalities and

ethical variables. (Sinapuelas, 2015)

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Apple does not compete on its prices. It uses skimming and premium pricing strategies.

The company has notably been able to reduce some of its prices after some product launches.

The IT industry has become competitive and more companies seem to produce quality products

at fair prices to ensure that they are able to fit in the market. In 2009 the Itunes download went

down and the company had to reduce the prices to around 69 cents. Apple has over 200 retail

stores around the globe to ensure the supply is ok. It uses promotions that include discounts to

ensure that it entices the customers to buy more. There also gift cards that it uses in Online Apple

store. Back to school offers are also used to favor the college students. The company has

managed to stand reliable as it also gives a 90days complimentary telephone technical support

after the purchase.

Summary of marketing strategy’s strengths and weaknesses

Apple has several competitive advantages that result from its market strategy compare to

the other competitors. First, involves the brand equity that has managed to take the first place in

the whole world. The company does not only make to top but also create a cult following since it

began to shine. The customers take pride in that. The second advantage is maintaining superior

technology products that remain at the top of the market for ages. Macbook and Iwatch have

remained outstanding products that have made their strategy work perfectly. Third is that Apple

had remained to its middle and high class target which has deep pockets and it has earned them

good revenue over time. Lastly its R&D nature has managed to give the company the highest

level of competitive advantage as it lives in the future and not the present.
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There is however a few challenges that face the company’s marketing strategy. First is

the leadership challenge as Steve Job’s absence would pose a cloud of uncertainty as he is the

stem founder of the company. He has managed to influence most of the followers of the

company. The second weakness involves the competition as the industry is currently facing a lot

of growth and each firm is trying to challenge Apple. Innovations have become order of the day.

Apple is facing head winds and its future is predictable.

Implications for strategy development

The implication for a strategy development is to establish a long lasting sustainability as

well as creating a clear pathway towards attaining their goals; either medium or long term. The

direction of the company depends on the competition, ability to maintain its customers, offering

unique services as well operating on the future rather that remaining on the present and past.

Once the marketing strategy is obtained then the company is able to come up with the action

plan. Apple Company has managed to keep a good track of the market strategy by ensuring its

mission and objectives are attained.

Through its outstanding products it has managed to conquer the competition percentage

significantly. Sticking to the marketing strategy enables the company to remain in the right path

at all times. In consideration to competitiveness of Apple, there has been increased influence of

its products for instance; iphone reshaped the conventional cell phone industry. The company has

also managed to absorb target users by enhancing their user experience. Apple remains to work
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with small groups and this ensures that employees have higher chances of enhancing their

creativity and innovation effectively.

Problems found in situational analysis

Situational analysis is the collection of methods that managers of a company or

organization utilize to understand their both internal and external environments so as to be able

to cope effectively with the competitions, targeted markets as well as the customers and all the

forces that result from both environments. It defines nature and extent of the problem in the local

context.

Statement of the primary problem (s)

The main primary weaknesses shown by the company are high selling prices and limited

distribution network.

Evidence of the problem

The company depends on premium pricing strategy. This only attracts its customers from

the middle and high end market segments. It is also notably that the company is so selective in

choosing the retailers to handle its products. It is recently when China has obtained its retail shop

yet it is well known for its efforts in technology development. (Nagle, 2017)

Effects of the problem

The ability to target the middle and high end segments of the market means that the

bottom segment does not manage to afford these products yet it comprises of the highest
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percentage. Globally the bottom segment is well distributed and carries the greatest number. The

company through its selective nature of the authorized sellers limits the ability of its product to

reach all corners of the market. These problems in a way show the weakness that the company

possesses.

Statement of secondary problem(s)

The external threats that the company is facing first include competition and the rising

rate of imitation.

Evidence of the problem

So many companies are imitating the features that Apple is creating and making similar

devices. Furthermore Apple Company faces a lot of competition from companies like Samsung,

Effects of the problem

When the other firms imitate the designs and features that Apple has created, they sell the

devices at lower prices which reduces the market for Apple as some customers feel that they do

not have to pay a lot for the same features that they can obtain at lower charges. The competition

is real and IT is becoming one of the competitive industries. Due to this the company is forced to

hire their expenses on labor costs which in turn forces them to raise their prices even higher. This

is a major problem that the company faces and becomes stronger each day as more firms emerge.

( McLaughlin, 2018)
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Classification and definition of an industry

An industry refers to a business activity that is related to the raising of products,

producing, processing and product manufacturing. industries can be classified into different

categories which include the primary industry, the generic industry, the extractive industry,

service industry, construction industry and many others. The manufacturing industry is

concerned with the transformation of raw materials into finished products with the aid of

manpower and machinery. The end products can be either producer or consumer goods.

The apple industry is used in the designing, manufacturing, and marketing of mobile

communications gadgets, personalized computers, and music digital players that are portable and

this make it to be classified as a manufacturing company. It can be also classified as a service

industry since it has contributed to the entertainment industry in such a way that people can be

able to download entertainment content from the applications that they have developed. Apple

TV’s have the capacity of entertaining people.

Analysis of the existing competitors

Business competition is expected to be found in every industry, in every product, and I n

every geographic market in the whole world. Apple compete for very many competitive products

which include smartphones, mobile payments, laptops, enterprise software’s and many other

applications and that is the reason as to why competition acts as a threat to the profitability of the
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company. Some of the rival companies include Samsung, Huawei, LG electronics among many

more.

Analysis of potential new entrants

The threat of having new entrants in the market place that can seriously affect the market

share of the company is very low and this is due to two reasons. The cost of establishing a

company is very high and there are additional costs of establishing the recognition of a brand

name.

Analysis of substitute goods

Substitute goods that are within the porter’s framework cannot be referred to as products

that are in direct completion with the company’s products but they have the possibility of

substituting them for the case of the apple industry, an example of a good tat can act as a

substitute is the landline telephone which can act as a substitute of owning iPhones. The market

force is considered to be very low for the apple company because majority of substitutes that are

potential an their capabilities are limited compared to the products from apple.

Analysis of suppliers

Suppliers in the market have a very low bargaining power for the apple products. This is

due to the high number of people supplier that have the ability to supply apple products and

therefore apple has the freedom to choose from the very many suppliers .the switching cost from
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one supplier to another for the apple company is very low an therefore this does not act as an

obstacle.

Analysis of buyers

The power that buyers have acts as a key force that apple considers and in this force,

there are two things to consider and that is the bargaining power which can be classified as either

individual or a collective act (Lenox, 2017). Apple considers bargaining power individually is a

weak force because the moment they lose one customer then that is a very dismal loss to the

company in terms of revenue. it prefers the collective approach.

Summary of the industries opportunities and threats

There are various opportunities and threats that may affect the apple company. The

opportunities include a customer base that is very loyal and one that has expanded to the iPhones

and iPod (Khan, 2015). Apple also has a reputation of having very high quality products that

work without any problems and therefore any new product from the company is received very

well in the market. The new Apple TV version can be so advantageous to the today’s web that is

highly developed.

The threats that the company faces include the ability of copying big ideas very easily.

For example, Microsoft was able to copy the graphical user interface and it is being used in other

phones. Apps are also being developed for other devices and smartphones. Another threat is that

their products are highly priced and this is a very big challenge because there are other products

that act the same way as smartphones and they are very cheap.

Implication of the strategy development

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The implications of the strategy by apple are that the apple company is able to develop

new markets because of the development of new technology. The company has been able to lock

out its competitors from the market. Its strategy has also helped it to raise its revenue to an

increased customer base. The use of the generic strategy indicates that the company has been

successful.
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Reference

Menon, A., Bharadwaj, S. G., Adidam, P. T., & Edison, S. W. (2015). Effective Marketing

Strategy-Making: Antecedents and Consequences. In Proceedings of the 1997 Academy

of Marketing Science (AMS) Annual Conference (pp. 224-224). Springer, Cham.

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley &

Sons.

Dhebar, A. (2016). Bringing new high-technology products to market: Six perils awaiting

marketers. Business Horizons, 59(6), 713-722.

Sinapuelas, I. C. S., Wang, H. M. D., & Bohlmann, J. D. (2015). The interplay of innovation,

brand, and marketing mix variables in line extensions. Journal of the Academy of

Marketing Science, 43(5), 558-573.

Nagle, T. T., & Müller, G. (2017). The strategy and tactics of pricing: A guide to growing more

profitably. Routledge.

McLaughlin, C., & Bridgman, T. (2018). Apple and the true costs of production. In The Dark

Side 3 (Vol. 66, No. 71, pp. 66-71). ROUTLEDGE in association with GSE Research.
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Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of internal and external

environment of Apple Inc. International Journal of Economics, Commerce and

Management, 3(6), 955-961.

Lenox, M., Harris, J. D., Goldberg, R., Lenox, M., & Goldberg, R. (2017). Apple (Computer)

Inc.: Whither the Mac?. Darden Business Publishing Cases, 1-15.