Professional Documents
Culture Documents
Table of content
1. Introduction
5. References
1. Introduction
Smartphones are the next step of evolution in the human technology revolution, it brings
powerful tools for humans to work, communicate and entertain.There are currently 6.648
billion smartphone users worldwide, which equals 83.07% of the world's population
(Statista,2022). Data from Stastista in 2022 also show that in that lucrative market, Apple
market share reached 18% in the global smartphone industry as of Q1 2022 (Daniel,2022)
and 30,22% in VietNam. Nevertheless, other rivals such as Samsung with folding screen for
Z fold and Z flip series, 108 megapixels camera on Redmi note 10 had gone far ahead in
the hardware race compared to Dynamic island screen and 48 megapixels camera on
Iphone 14 pro. So how Apple is still successful in their business, our project will analyze
Apple’s strategies and suggest some solutions for them to gain more market share in the
Vietnam market .
According to Tuoi Tre, sources say that telecom giant FPT will be announced as the “sole
official distributor of the iPhone in Vietnam” at a press conference on November 14
(Saigoneer, 2014). Even as Vietnam's economy grew at an underwhelming 5.4 percent in
2013, some point to a “hunger” for higher social status, something that can be achieved
with iPhone ownership. Since the mobile phone market at the time predominantly consisted
of products from Nokia or HTC. The high-end market, which includes devices with prices
above $400, is experiencing strong growth, and Counterpoint Research attributes this rise
primarily to Apple products. Apple is able to reach more customers because of the growth
of its official distribution network. The quantity of iPhones sold in Vietnam during the second
quarter of 2022 more than doubled compared to the same time last year, according to a
recent revelation by Counterpoint Research. Sales of Apple phones specifically grew by
115% in the Vietnamese market. Apple has also experienced the fastest growth among
mobile companies during lulls in the industry. As of August 2022, Apple's phone sales in
Vietnam surged significantly as a result of the decision to lower pricing for authentic iPhone
lines by 1-3 million dong.
Apple Inc., formerly known as “Apple Computer Inc'' was founded on April 1, 1976 by Steve
Jobs, Steve Woniak and Ronald Wayne. They began their start-up together in Steve Jobs’
parents’ home in California, particularly the garage. Apple Computer Inc’s initial purpose
was to sell Woniak’s handmade computer kits – the Apple I. After 30 years of
establishment, in 2007, Apple Computer Inc has decided to change its name to Apple Inc.,
dropping the word “Computer” to indicate that the company has now enlarged its production
line, adding products such as phones, tablets, laptop. In 2011, after the passing of Steve
Jobs was announced, Tim Cook, who joined Apple Inc. in 1998, took over his position as a
managing director. Over 4 decades, Apple Inc. is now one of the biggest electronic
corporations in the world, not only well-known for their electronic devices such as iPhones,
iPad, MacBook, iMac etc., but also their software, including iOS, MacOS and iPadOS.
Apple’s success is also growing rapidly with 522 stores opened worldwide, 273 in the
United States and 249 overseas.
If Apple wants to maximize profit and expand their market in Vietnam, they will have to
overcome two obstacles. First of all, since Apple does not have an official Apple Store and
official factories for manufacturing products located in Vietnam, there would be a shortage
every time they launch a new line of products, iPhone, in particular. Therefore, according to
a survey by Tuoi Tre daily published on November 09th 2022 by Khang and Thien ,
CellphoneS, which mostly sells iPhone 14 Pro Max items, roughly 30% of orders have not
been delivered. Sales can only be guaranteed for the following three to five weeks with the
present inventory. Secondly, Apple prices mostly lie in the high-end segment whereas their
competitors’ prices range from low to high-end which leads to the fact that, in Vietnam,
Apple has a small market share and cannot compete on pricing with competitor businesses.
According to TopZone, one of Apple’s biggest authorized resellers in Vietnam, the price of
the new iPhone 14 line ranges from 21,900,000 VND to 49,900,000 VND (from $927 to
$2114). However, the average monthly salary of Vietnamese is about 3.45 million VND
($150). (“Wage and salary in Vietnam,”n.d.) Hence, the price of the standard version of the
newest iPhone is almost 7 times higher than the income of Vietnamese. Nonetheless, one
of Apple’s competitors, Samsung, offers a wide range of prices from affordable to luxury,
according to the customers’ willingness to pay. For example, the Samsung Galaxy A13, a
low-end product, priced 4,390,000 VND ($385), or the Samsung Galaxy Z Fold 4, a high-
end product, from 37,990,000 VND ($1609) (Thegioididong, n.d.). Apple’s prices of
products explain why Apple has a smaller market share than Samsung and other rivals in
Vietnam. In 2021, Samsung ranked first in the total market share in Vietnam for
smartphones, their share of the market accounted for 28 percent (Vietnam Investment
Review, 2022). Followed by Samsung, Vivo and Oppo ranked second and third,
respectively. Apple remained in the fourth position, with a total of 11 percent market share
(Vietnam Investment Review, 2022).
1.4.Research objective
This project's primary goal is to shed light on Apple's lack of products at the debut of iPhone
sales in the Vietnamese market due to the fact that it has not built production lines and
exclusive brand retail chains. The second purpose of this project is to analyze Apple's lack
of price diversity, focusing only on producing iPhones for the high-end market segment,
leading to Apple having little market share and not competing on price compared to rival
companies in Vietnam.
Like other monopolies, Apple has a negative slope. However, since there are many
products from many brands like it, its demand curve is elastic. Apple products have gained
a mass following ever since it began to be sold to the public back in 2013. Back then,
smartphone shipments reached 7.6 million units. Now, among the top 10 smartphones with
the highest revenue in the first half of the year sold at electronics retail giant Mobile World,
there are four iPhone models, with the top three positions being iPhone 13 Pro Max 128GB,
13 Pro Max 256 GB and iPhone 11 64GB, according to an article on vnexpress.net. For
now, Apple has managed to stay ahead of its rivals with the exception of Samsung. Both
share a 2.37% difference in the market share (2022). Nevertheless, Apple had made an
impact on the Vietnamese market by its strong branding. Its products can be seen from any
corner in Vietnam. Apple's ability to engage customers with its iSeries has been bolstered
by the reputation that continues to emanate from customers' perceptions of the company.
By separating itself from the other companies, Apple can manage its pricing. And thus, the
higher the demand, the lower the price and vice-versa: the higher the price, the lower the
demand. Any price reduction must be applied uniformly to all similar items and Apple must
conform to price cuts for its products according to the demands.
Samsung first entered the Vietnam market in 1996, through the establishment of SAVINA, a
collaboration company of TIE Joint Stock Company (Vietnam) and Samsung Electronics
Korea. The first factory of Samsung Vietnam went into production in January 1996. Ever
since Samsung’s debut in Vietnam, it has always considered Vietnam as a potential market
for development, with a total of 6 active factories, 6 authorized SamCenters, and a wide
range of authorized resellers. Samsung has secured its top position among smartphone
manufacturers in Vietnam for a long period of time.
b. Competitor analysis
● Product
Samsung has a strong diversity of products, from industrial electronics to consumer
electronics. In Vietnam, Samsung is well-known for its home appliances such as
televisions, refrigerators, air conditioners, etc., and electronic devices such as Samsung
Galaxy phones, Samsung Galaxy Tab tablets, smartwatches, computers, and many more.
Samsung offers a broad range of smartphones for the Samsung Galaxy smartphone line,
from affordable to luxury. Samsung phones have a high distinction, especially the S-Pen
which comes with its luxury phones, the Galaxy Note (now discontinued), the Galaxy Z
Fold, and the new Galaxy S phones. The S-Pen makes taking notes on Samsung phones
more convenient and is one of the reasons why consumers are willing to pay more for its
smartphones. Aside from high-end phones, Samsung also has smartphones like Galaxy A
and Galaxy M, one of its affordable smartphone lines, which makes it easier for Samsung to
reach consumers with lower incomes.
● Price
Samsung’s prices vary from low-end to high-end in order to reach a broader range of
customers. Samsung’s phones are priced between 3,000,000 VND to approximately
40,000,000 VND. The price of products is one of the main reasons why Samsung
outperforms Apple in Vietnam.
Samsung Apple
What makes Apple so successful not only in Vietnam but also all over the world, there are
two main ideas.
a. The iOS
What is the common point between many big smartphone corporations such as Samsung,
Xiaomi, Huawei,...The answer is the Android operating system, an open source operating
system provided by Google. Android gives developers the option to customize the system
to fit with their product.
However, Apple makes themself unique by using their own operating system - the iOS.
What is IOS?. Apple (AAPL) iOS is the operating system for iPhone, iPad, and other Apple
mobile devices. Apple iOS was created to provide simple, seamless networking between a
variety of Apple products and is based on Mac OS, the
operating system that powers Apple's line of Mac desktop
and laptop computers (Kenton, 2022).
b. Branding
A. Product
Apple's product development strategy focuses mainly on quality. Therefore, Apple always
innovates and becomes a leading company in the production of technology devices thanks
to its ability to self-design from hardware to software. Take Apple iOS as an example, it is a
proprietary operating system used on Apple mobile devices such as iPhone and iPad. iOS
ranks as the second most used mobile operating platform in the world, after Android. Apple
and Samsung are direct competitors in the smartphone market. However, the orientation of
these two companies is very different. iPhone is part of a very broad ecosystem that Apple
is looking to develop more of its ecosystem to attract users in its ecosystem. However,
Samsung is currently trying to explore new markets such as: folding phones, which are
growing rapidly and are expected to reach 18.3 million units by the end of 2022 (“Samsung
Không Cần Phải Lo Lắng,” 2022). However, this is not an obstacle for Apple because every
year Apple launches new products based on improving existing products from design to
function. It is Apple's brand strategy that helps it dominate the market even though its
products are usually priced higher than its competitors.
Besides, it is an obvious fact that Apple continuously innovates product categories which is
one of the major competitive advantages in Apple's business strategy. For example, Apple
launches new services thanks to the improvement of technology, such as: Apple TV +,
Apple Music, iTunes to meet the entertainment needs of customers.
B. Service
Apple has created an online platform to connect with customers. Developing and
connecting the user community is one of the factors that helps Apple's brand positioning
strategy succeed. Apple creates a loyal community of users by allowing anyone with a Mac
or iOS operating system to easily share useful information with each other. Since then,
Apple has received more and more levels of brand loyalty. As a result, Apple is having a
high customer retention rate of 92% (“PHÂN TÍCH CHIẾN LƯỢC KINH DOANH,” 2022).
At Apple stores around the world, Apple employees are always trained in attentive
customer care skills in order to help Apple retain customers.
There are 5 methods that help Apple reach, attract and retain customers:
C. Marketing
a. Product
In Apple's strategies for the iPhone or any other product, the advertisement always
promotes creativity and focus on the interests of customers by using simple, direct-targeted
content that further on the benefits and necessity of the features that Apple’s products
have. For example, Apple's advertising campaign, "Privacy. That's iPhone," premiered and
reiterates the company's position on customer privacy and safeguards in hardware and
software (Wuerthele, 2019)
b. Price
The premium pricing strategy comprises raising the price of Apple products. Theoretically, a
premium is a sum of money or a value that is added on top of the regular or normal price.
Apple's marketing strategy employs the premium pricing strategy to establish high prices for
its products. For instance, profit margins are maximized since the price of iPhones is higher
than that of many competitors' cell phones. The company combines premium pricing with
premium branding, original thinking, and premium pricing. It's crucial to remember that
Apple's organizational culture and how it affects human resources contribute to its
competitiveness.
In order to make its technological products more appealing, Apple also employs the
freemium pricing approach, which combines "free" and "premium" pricing into a single plan.
In this freemium pricing scenario, some items from Apple Inc. are offered without charge,
but users must pay to access more sophisticated or superior capabilities. For instance, the
business provides 5 GB of complimentary iCloud storage. Customers must, however, pay
an ongoing cost to upgrade their iCloud accounts' storage space. In this way, Apple's price
tactics promote premium branding and related product design and development initiatives.
c. Promotion
Print media like Vogue magazine as well as websites and online digital advertising
networks are all part of Apple Inc.'s marketing mix. The company has relationships with
well-known websites to market and promote Apple products. Additionally, the business
uses personal selling through employees at Apple Stores who tell consumers about certain
items in an effort to encourage them to buy. Sales promotion is another component of the
4Ps' promotional mix; this usually happens in Apple Store and authorized reseller locations.
For instance, several retailers offer older versions at reduced prices when coupled with
larger or more expensive things like brand-new MacBook models. Public relations are also
used into the company's marketing mix to strengthen the company's reputation as a leading
supplier. These programs are associated with Apple's corporate social responsibility and
stakeholder management practices.The technology corporation uses these communication
strategies to fulfill the requirements of this component of the marketing mix, solve
operational demands to reach more consumers globally, promote social responsibility, and
corporate citizenship initiatives.
d. Place
This business case considers facilities held by the corporation as well as third parties to
whom the business has granted authorization to advertise its technology goods and
services. The distribution strategy is a component of Apple's marketing mix and consists of
physical Apple Shops, company-owned websites and mobile and desktop online stores,
authorized resellers, and telecommunications firms.
Apple Store, a part of Apple, maintains physical stores where it sells its own products as
well as supplementary things created by other businesses. For instance, several stores sell
both MacBooks and accessories produced by other companies. These retail locations act
as some of Apple's most visible and recognizable brand ambassadors.
Along with these physical locations, the business also has a website and online stores (like
the App Store) for desktop and mobile devices. With the help of these online distribution
outlets, Apple might increase its presence in international markets. The distribution strategy
for this element of the marketing mix also includes authorized resellers. These wholesalers
operate stores that offer accessories and consumer electronics in well-known malls and
other strategic locations throughout several foreign markets. Such resellers include major
retail chains like Walmart and Best Buy, a prominent retailer of consumer electronics. Some
authorized resellers operate businesses using both their individual shops and Amazon.com
seller accounts. Thanks to authorized distributors, Apple's 4Ps are able to maintain a
sizable global network to interact with target customers. Additionally, this element of the
marketing mix uses agreements with various telecommunications companies, like Verizon,
AT&T, and T-Mobile, who include iPhone units in certain of their service plans for users in
local or regional target regions. Apple uses a wide range of online and physical distribution
channels as a consequence, making its marketing mix comprehensive.
Recommendation
Apple is not an exception to the fact that we are all experiencing the most severe
inflationary era ever. Inflation has caused Apple to be badly affected due to the high cost of
shipping goods leading to insufficient supply to the Vietnamese’s market. Therefore, we
highly recommend that Apple should build both an official Apple Store and official factories
for producing Apple products, particularly the iPhone in Vietnam. Furthermore, in today's
economy, product rivalry from other companies is unavoidable. If Apple prices always stay
in the high-end segment whereas their competitors’ prices range from low to high-end
segment, Apple will have a small market share and cannot compete on pricing with
competitor businesses. As a result, we suggest that Apple should have a wide range of
products from low to high prices in order to gain more market share.
Conclusion
In conclusion, if Apple wants to adapt and expand their business in Viet Nam, it is
necessary to start investing in factory and retail supply chains immediately. Furthermore, in
order to maximize their market share and profit, Apple should pay more attention to low
price products due to the fact that Viet Nam is still a developing country with low average
income. With Apple’s own ecosystem and user community, it can maintain its business and
keep on track for a few more years. However, Vietnam is a very potential market for Apple
to invest in the near future.
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