RESEARCH PAPER 09/10/2018

Literature Review

Marketing New Products. Apple Inc

Oday Alnabhan

Doctor of Business Administration (DBA), Management

(Candidate)

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Literature Review: Marketing New Products. Apple Inc

Description of Apple Inc. Company

Apple Inc. is an international technology company found in the United States with its

head office at Cupertino (Khan, Alam & Alam, 2015). It is a designer, developer, and

distributor of electronics, online services as well as consumer electronics. Apple Inc. has

different hardware products, which are inclusive of iPad tablet computer; Apple watches

smartwatch, iPhone smartphone, Apple TV digital and the Mac personal computer. The

company also produces software’s which includes iTunes, macOS as well as iOS operating

systems, iLife and work suites and other apps like the Logic pro, Xcode and Final Cut Pro

(Khan et al. 2015). Ronald Wayne, Steve Jobs, and Steve Wozniak formed the company in

April 1976. Apple ranks as the most significant information and Technology Company

regarding its revenue and ranks second regarding mobile phone manufacturing. It was named

as the first United States Company to be valued at US$700 billion in 2015.

Apple Inc. Industry of Operation

Apple Inc. operates in information and technology industry (Khan et al. 2015). It is an

industry that uses computing through software, services, infrastructure as well as hardware’s

in different forms to achieve different objectives. The sector involves the development,

implementation, maintenance, and utilization of information technology (Khan et al. 2015). It

is an industry that employs close to 5.73 million workers in technical as well as non-technical

positions within the firms. Companies, government agencies as well as nonprofit

organizations have information technology department with 85% of the workers in this unit

being technical workers. Information and technology is an industry that requires strong

analytical skills and creativity to keep up with the latest technology.

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Characteristics of the New Product

Apple Inc. is launching a new product to the market. It is a phone called iPhone X and

comes with attractive features. It has an appealing display that makes it easy to read messages

and makes the video play thrilling. Its screen is sensitive and moves from one edge to the

other and hence making its usage exciting. It can register the face of the user and thus

unlocking immediately the user looks at it. The unlock uses 3-D imagery which makes it

more secure than the fingerprints. The phone support wireless charging which makes it very

convenient for the users. It has a 12-megapixel camera, which can take both front and back

images simultaneously and produces images of high quality. Additionally, the phone can

inform the caller the location of the recipient at the time of a call.

Critical features related to development of a new product and their relation to marketing

strategy

Introducing a successful product in the market involves a team effort (Kleinschmidt,

1995). Designers take responsibility for the usability of a product, and its utility and user

experience is dependent on different factors that lead to success or failure of the new product.

One of the critical features associated with the development of a new product is support from

the top management. Top managers decide on the product to support and the one not to

(Bullinger, Fähnrich & Meiren 2003). Support from senior organizational management is

essential to the success of a new product. Lack of management support implies that the

product will lack resources as well as the budget needed and thus making it development to

fail. Top management influences the marketing strategy as it looks for the appropriate plan

that will ensure that the product reaches as many customers as possible. Development of the

product features is another factor related to new product development. A new product should

have features that distinguish it from the others, as this is what attracts customers. This helps

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in the establishment of the product brand as a marketing strategy. Promotion is another

critical feature associated with the development of a new product (Kleinschmidt, 1995).

Companies should look for ways to promote their customers. This will enable a company to

use the marketing strategy of getting the prevailing customers to purchase more while

bringing in more customers (Bullinger et al. 2003). Distribution is another feature associated

with the development of new products. Companies should ensure that they make a new

product available to the potential customers. This makes the customer make use of increased

market share marketing strategy, as it will be in a position to reach many customers through

vigorous distribution. Increased distribution will also enable the company to expand its sales

due to the availability of the product to many buyers. Evolution of a new product needs a

firm to be sensitive to its pricing. The price should not be too high as compared to the

prevailing market rates and should not be too low as well (Kleinschmidt, 1995). Having a

reasonable price will enable the company to make use of improving customer loyalty

marketing strategy since the customers will have confidence in the company and the product.

Importance of each factor

Different features have different impacts on the development of a new product. Top

management support ensures that the introduction of the new product receives support and

thus making its debut smooth. It ensures that the new product receives support and hence

making its implementation fast. Development of a product features provides that the product

becomes competitive in the market by outdoing other products. It means that customers get

satisfaction from the product features and hence winning their loyalty (Kleinschmidt, 1995).

Distribution ensures that customers can gain access to the product at any time thus making it

easy for them to access the product. The promotion makes the customers feel motivated to

buy the product, which makes them feel motivated to use the product. It also increases their

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purchasing power through cutting down on the product price making them purchase more.

Pricing makes the customers decide on the product to buy. Setting too high prices scares

away potential customers while having too low prices makes the customers doubt the quality

of the product.

Factors that could have the most significant impacts on the development of the new

iPhone X are the development of the product features, pricing, and promotion. The

information and technology is an industry characterized by high levels of innovation and

technology. It means that for the product to win in the market, it must have well-developed

features. There are many competitors in the market and iPhone X needs to have well

developed and distinct features that make it stand in the market. Additionally, the product

should not have prices on the extreme sides. The prices should be reasonable bearing in mind

the costs of the top computers like Samsung. Setting reasonable prices will attract customers

and hence the product will become successful (Bullinger et al. 2003). Apple Inc. needs to

promote its new product to ensure that it creates customer awareness about the product. It

must ensure that all the distinguishing features of iPhone X are made known to the customers,

and this will encourage them to look for it. It can also give promotion to those who buy in

bulk or even provide a discount to maybe five buyers per day, and this will attract more

clients.

Trends

One of the trends related to the development of product features is continuous

innovation (Griffin, 1997). The leading companies are in the constant evolution of products

to meet the ever-changing customer demands. In the information and technology industry,

mobile phones have been evolving and becoming sleeker each day with the introduction of

new functionalities. Companies have resulted in the creation of many products to provide

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their clients with a variety of choices (Oliva & Kallenberg, 2003). Value-based pricing is a

trend associated with pricing. A trend involves the perception of customer value. It looks at

what a customer is willing to pay for an extra product feature compared to others. Companies

have moved away from cost-based pricing and are looking at what customers are willing to

pay which results in more profits to the firms. Another trend is the employment of dedicated

pricing managers. The pricing managers are given the responsibilities of managing pricing

performance and are tasked with critical pricing issues. They advise on the rate at which the

company is achieving an increase in price, the profitability of its promotion among other

matters. Growth in technology is one trend associated with the development of new products

(Griffin, 1997). Technology is one of the fastest growing areas globally, and people are into

things related to technology. Most companies are using the ever-increasing technology in

doing their promotion using social media, websites as well as another platform. Another trend

is that advertisements are focusing on the demand for retail products that are used as

promotional merchandise. The majority of the promotions are carried out by a young

generation with the majority of the advertisements shifting towards promoting a brand

alongside a product that is already established in the market.

Relevance of behavioral economics

Big data will enable the company to know the chances of iPhone X success in the

market. It will allow the company to understand the trend about the shopping habits of the

customers and will give the average demographic information about the loyal customers.

Additionally, it will help in highlighting areas of inefficiencies in the company workflow

(Wind & Mahajan, 1997). It will assist in accessing the possible impacts of the new features

included in iPhone X and the way in which customers are likely to react. It will help the

company to avoid poor promotion methods and hence avoid wasteful marketing strategies.

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Social media acts as the best place to connect and to learn from, and it is instrumental

in marketing the iPhone X. Different platforms like Twitter and Facebook generates interest

from followers who are responsive to the phone as opposed to the traditional marketing

approach. Social media will give the company a chance to advertise the iPhone without

making the client feel that the company is obsessed by marketing the phone. Placing

advertisement will enable the company to inform its potential customers about the iPhone X.

It will allow Apple Inc. create awareness about the product while reminding them about its

other products. Social media has become part of people lives, and people are engaged in

different discussions from these sites. Most people visit the site on a daily basis to maximize

their online presence (Oliva & Kallenberg, 2003). From research, how people use social

media affects their decision to make purchases, and most of the people do their shopping

online. This implies that use of social media has a lot of influence on the success of the

product.

Best Approaches for Successful Marketing Campaign

For the company to have a successful marketing campaign for the phone, it must:

Understand how its marketing campaign fits into its marketing plan. The company needs to

understand why it needs to market iPhones and look for strategies that will meet the target

market.

✓ Apple Inc. needs to set the parameters as well as the marketing campaign objectives.

The achievements from the marketing of the iPhone should be clear and very specific.

This will ensure that the marketing campaign does not lose its effectiveness with time

and hence ensuring that it achieves the set goals (Wind & Mahajan, 1997).

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✓ Apple needs to determine on how to measure success arising from the marketing of

iPhone X. It should know what to use in measuring the success and how to tell that

the marketing campaign was successful.

✓ Budgeting for the marketing campaign should be done since the amount to be spent

on the campaign affects the strategies used in marketing (Hoyer et al. Singh, 2010).

Apple need not depend on a free advertisement since this could not be enough due to

limitations associated with free publications.

✓ The company needs to choose the marketing channels to use. Some channels are

better than the others are, and it is up to the company to decide on the best that suits

the iPhone. It should consider its target audience, and this will enable it to make an

informed decision.

✓ Apple needs to measure the results arising from the marketing campaigns. After

marketing is over, the company needs to look at its objectives and determine the

success deliver from the campaign.

In conclusion, the introduction of a new product in the market is tricky and requires a lot

of consideration for it to be successful. Apple operates in information and technology

industry that needs a lot of innovations and creativity. The introduction of the new product

iPhone X by Apple Company will be successful if the company takes into consideration the

critical factors that influence the development of new products. Customers’ demands are

continuously evolving, and the company needs to take into account the trends in the critical

factors such as distribution, promotion, and development of new product features (Wind &

Mahajan, 1997). Companies need to consider behavioral economics as it plays a critical role

in marketing campaigns. Apple Inc. needs to ensure that it enforces the best approaches for it

to realize success in marketing campaigns.

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References

Bullinger, H. J., Fähnrich, K. P., & Meiren, T. (2003). Service engineering—methodical

development of new service products. International Journal of Production

Economics, 85(3), 275-287. Cooper, R. G., &

Griffin, A. (1997). PDMA research on new product development practices: Updating trends

and benchmarking best practices. Journal of product innovation management, 14(6),

429-458.

Hoyer, W. D., Chandy, R., Dorotic, M., Krafft, M., & Singh, S. S. (2010). Consumer

cocreation in new product development. Journal of service research, 13(3), 283-296.

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.

Kleinschmidt, E. J. (1995). Benchmarking the firm's critical success factors in new product

development. Journal of product innovation management, 12(5), 374-391.

Oliva, R., & Kallenberg, R. (2003). Managing the transition from products to

services. International journal of service industry management, 14(2), 160-172.

Wind, J., & Mahajan, V. (1997). Issues and opportunities in new product development: An

introduction to the special issue. Journal of Marketing Research, 34(1), 1-12.

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