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Apple 1 1
Apple 1 1
CERTIFICATE
“A STUDY OF BRAND
This is to certify that the project work titled
PREFERENCES OF APPLE PRODUCTS WITH SPECIAL REFERENCE TO
THIRUVALLA MUNICIPALITY” Submitted by AJAY THOMAS CHERIYAN (Reg
No:180021059721), ALEN THOMAS VARGHESE (Reg No:180021059724), ANTONY
FERNANDEZ (Reg No:180021059738), JAIKE JACOB BINOY (Reg No:180021059767)
and JITHEV JAYAKUMAR (Reg No:180021059771) in the partial fulfillment of the
requirements for the award of the Bachelors Degree of Commerce from Mahatma Gandhi
University, Kottayam, Kerala is a record of the bonafide work carried out by us during the period
of 2018- 2021.
Place: Changanacherry
Date: 30/04/2021
POST GRADUATE DEPARTMENT OF COMMERCE
CERTIFICATE
This is to certify that the project work titled “A STUDY OF BRAND
PREFERENCES OF APPLE PRODUCTS WITH SPECIAL REFERENCE TO
THIRUVALLA MUNICIPALITY" Submitted to Mahatma Gandhi University Kottayam in
partial fulfillment of the requirements for the award of the Bachelors Degree in Commerce is a
record of the original work done by AJAY THOMAS CHERIYAN (Reg no:180021059721),
ALEN THOMAS VARGHESE (Reg No:180021059724), ANTONY FERNANDEZ (Reg
No:180021059738), JAIKE JACOB BINOY (Reg No:180021059767) and JITHEV
JAYAKUMAR (Reg No:180021059771 under my supervision and guidance and that this
project work has not formed the basis for the award of any Degree/ Diploma/ Fellowship or
similar title to any candidate of this or any other University.
We also declare that this is a bonafide record of research work done by us during the
course of our study and no part of it has been submitted for any other degree, fellowship or other
similar title of recognition.
ANTONY FERNANDEZ
JITHEV JAYAKUMAR
ACKNOWLEDGEMENT
We would like to place on record our sincere thanks to all those who contributed to the
successful completion of our project work.
We express our gratitude to our guide, Ms. Sruthymol Joseph for helping us in each and
every stage of this project.
We would also like to thank Rev. Fr. Joshy Cheeramkuzhy CMI, the Principal, Kristu
Jyoti College of Management & Technology for providing all the facilities for the completion of
this project.
We would like to express our deep sense of gratitude to Dr. Varghese Antony, Vice
Principal, Kristu Jyoti College of Management & Technology for his valuable support for the
completion of this work.
We would like to express our deep sense of gratitude to Dr. Mathew Emmanuel, HOD
Post Graduate Department of Commerce, Kristu Jyoti College of Management & Technology for
his valuable guidance throughout the completion of this work.
We thank all our respondents who cooperated with us in the successful completion of the
questionnaire on time.
We also appreciate the encouragement and constructive criticism that we received from
our friends and family which went a long way to make this project a satisfying experience to us.
Above all we thank God Almighty for providing us the right atmosphere and mental
strength to work and showering all blessings for the successful completion of this project.
LIST OF TABLES
LIST OF FIGURES
1 INTRODUCTION 1-4
3 THEORETICAL FRAMEWORK 8 – 18
BIBLIOGRAPHY
APPENDIX
LIST OF TABLES
INTRODUCTION
CHAPTER 1
INTRODUCTION
1.0 INTRODUCTION
The company's hardware products include the iPhone smartphone, the iPad tablet
computer, the Mac personal computer, the iPod portable media player, the Apple Watch smart
watch, the Apple TV digital media player, the AirPods wireless ear buds and the HomePod smart
speaker. Apple's software includes macOS, iOS, iPadOS, watchOS, and tvOS operating systems,
the iTunes media player, the Safari web browser, the Shazam music identifier and the iLife and
iWork creativity and productivity suites, as well as professional applications like Final Cut Pro,
Logic Pro, and Xcode. Its online services include the iTunes Store, the iOS App Store, Mac App
Store, Apple Arcade, Apple Music, Apple TV+, iMessage, and iCloud. Other services include
Apple Store, Genius Bar, AppleCare, Apple Pay, Apple Pay Cash, and Apple Card.
Apple‟s understanding of its core customer base is light-years ahead of its competitors
like Samsung, Huawei, or even Google. We all know that while others compete with Apple on
technology like processor speed, memory capacity, screen resolution, and battery, Apple brushes
those aside and continues on an upgrade path unique to itself and its customers. To understand
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Apple and its philosophy, one doesn‟t need to venture much farther than its retail stores. From
the immaculate layout of store designs to its layout of product lineups and from its uniform dress
code to exemplary customer service, one can really see and feel how much of a people-company
Apple really is. The same can‟t be said about Samsung, Huawei, or Google.
The locality we selected for the study is Thiruvalla. Thiruvalla is the largest town in
Pathanamthitta district. It is known as a centre of NRIs because of the large number of Non-
Resident Indians who have set up their base here. The town has a quaint and friendly charm and
a rich and vibrant cultural scene.
Apple is one of the major multinational technological companies. Apple provides high
standard for their products and services for their market. Therefore when brands are more
relevant, customers are willing to accept a higher price for the brand named product or to be
more loyal to their preferred brand. Apple's ecosystem is the main reason behind the customer
preference of their products. Increasing customer base for their products have raised the bar up
for their competitors. It leads Apple Inc to become the first 1 trillion dollar company in August 2,
2018. However due to high price some people reluctant to buy apple products, but at the same
time many people ready to buy it because of its features, technology etc. In this context a study
about the brand preferences of Apple products is necessary.
Being a topic of relevance, we have taken the topic „A study of Brand Preferences of
Apple products with Special Reference to Thiruvalla Municipality‟ as our project study. Through
this project, we seek to know whether the people in Thiruvalla locality prefer Apple products
than any other brand and how much is the demand of Apple products in Thiruvalla Municipality.
Brand loyalty results increase in the company‟s customer growth. Customer preference of
Apple products is the major reason for the revenue of the firm. Even though Apple's products are
expensive they still have a large customer base. As our project study is based on Thiruvalla
municipality there's a chance in difference on customer brand loyalty for apple products in this
region.
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1.3 OBJECTIVES OF THE STUDY
The study is based on random sampling. The sample design consists of non-probability
sampling i.e., convenience sampling.
Primary data
This study is based on primary data. The primary data were collected by using structured
questionnaire.
Secondary data
The data collected are analyzed with the help of both mathematical and statistical tools.
The major techniques used in the study include graphs, diagrams, tables, charts and the analysis
and interpretations were done by using Pie charts.
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Tools for analysis
The data collected through questionnaire were analyzed using percentage analysis.
Percentages were obtained when ratios are multiplied by 100. In the calculation of percentages
on figure is taken as base and is represented by 100.
The data collected through questionnaire were presented using pie chart and is represented
in percentage values.
1. Due to paucity of time, money and resources, the sample size is limited to 50 participants
which may bring bias in the result.
2. The biases on the part of the respondents may affect the findings and conclusions.
3. Lack of knowledge of the concept on the part of the respondents may also affect the findings
and results of the study.
CHAPTER 1- INTRODUCTION
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CHAPTER 2
REVIEW OF LITERATURE
CHAPTER 2
REVIEW OF LITERATURE
Reviewing an already done research work will give an easy understanding of research
done previously. While doing a review of literature about our topic we make a scan of various
sources of information related to the Brand Preferences of Apple products. Fourteen different
literatures were reviewed for this study. The reviews given below gives a detailed familiarization
on the concept of Brand Preferences of Apple products.
Mac Anthony Nzube Ezeh, mahaal-Azzawi (2020) Their study showed that brand with high
value of brand equity and identity would result in having high brand preference among students.
The findings reveal that Apple has stronger brand preference more than Samsung among
students.
Indriany M Wijaya (2019) Smartphone is a new technology device of mobile phone that has
become a part of people lifestyle today and has full functionally or more than just a usual mobile
phone. The level of consumption trends of smartphone was held by segment of its brand. The
consumers are likely to purchase products with the positive brand image or well-known brands
of products. This study was examining the influence of brand image, brand personality and brand
awareness on consumer purchase intention of Apple Smartphone.
Bahram Ranjbarin, Ali Kazemi, Farnz Borandegi (2019) Today it become crucial for
companies to attract and maintain loyal customers to their brands. Therefore due to the
importance of brand love in attaining this goal the aim of this study was to analyze the
antecedents and consequences of brand love from the viewpoint of Apple cellphone users in
Isfahan. To achieve this goal an innovative model was developed and the impact of product
involvement and self-brand congruity as the antecedents of brand love were investigated and
then the influence of brand love on continuance and affective commitment as its consequences
were examined.
Ronan Martin (2018) In this paper the author mentions the brand value of Apple company, the
customer's loyalty towards Apple company. Here the author comes to a conclusion that Apple is
a global technology giant it is not feasible for them to provide specialized customer service,
customized product offerings and personal interactions to all of their customers. However they
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offer Apple Stores and Genius Bars that provide for a certain degree of personal interaction and
customer service. This is further enhanced by the announcement of 'town squares' - a sign that
they are taking personal interaction very seriously.
Smithson (2016) In his study on SWOT Analysis of Apple, he noticed that Apple has created a
strong brand image and brand equity. As a company they have been able to create a strong brand
image through their effective innovation process. They have revolutionized their industry by
creating products that are very user friendly and that can easily connect with each other through
the use of the cloud. Due to this fact Apple has been able to gain a huge customer base that
comes with strong customer loyalty.
Booton (2016) In his study on Market Capture of Apple, observed that Apple is the world largest
publicly traded company by market capitalization with current estimated value of US$530 billion
and the second largest mobile phone manufacturer in the world.
Apple Inc (2015) On their study on Markets and Distribution of Apple Products opened that
Apple has many retail and online stores where they sell their products, and third-party products,
directly to the customers. They also employ third party, indirect distribution channels to sell their
products such as cellular network carriers, wholesalers and retailers. Apple Inc. Believes that by
employing knowledgeable salespersons they can enhance the sale of their products.
Gaille (2015) In his study on Target Market of Apple noticed that Apple‟s target market focuses
on marketing to people with a few different characteristics. Apple‟s main target market is middle
to upper class people because usually this demographic has the means necessary to pay the
higher premium price for Apple products. These people are willing to pay a little extra for
quality and have the income to do so. 94% of Apple users are more affluent than those who
purchase other brands of mobile devices.
Johnna Montgom samuelrosco (2013) This paper uses a business model framework to analyze
the main limitations of Apple Inc. a significant turning point in the company's history. As such,
they move beyond an exclusive focus on what makes Apple unique or different by evaluating the
mundane and out-dated elements of its business model.
Glen Lehmana, Colin Haslamb (2013) In this study the authors argue that there are a number
of reasons why the Apple business model may not be sustainable and more broadly explore the
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dysfunctional social and economic aspects of corporate behavior that seeks to fragment and
elongate global value chains to capture value within the firm‟s financial reporting boundary
whilst displacing cost and risk.
Todd A. Finkle Gonzaga University, Michael l Mallin university of Toledo (2012) In this
paper the authors illustrating the rise, fall, and current state of the Apple Computer Company. It
is appropriate for small business, entrepreneurship, or management classes. The purpose of this
case is to illustrate to students how individual passion, determination and innovation is a critical
element in business startup success and also to stimulate critical thinking in terms of future
direction for a company in a struggling economy.
Rob Siltanen (2011) In this paper the researchers discloses the Real Story behind Apple's 'Think
different' campaign. 'Think different' campaign launched, Apple immediately felt the boost
despite having no significant new products. Within 12 months, Apple‟s stock price tripled. A
year after the “Think Different” launch, Apple introduced their multi-colored iMacs. The
computers represented revolutionary design, and they became some of the best-selling computers
in history.
P. Carton (2008) In his study he conducted a survey to ascertain which features iPhone users
wanted to be added. The top 5 responses were 3G capability (19%), 3rd party software (18%),
GPS (15%), e-mail integration (10%) and voice recognition (8%). All of these capabilities were
added when the iPhone 3G launched in July 2008, either by Apple (3G, applications, GPS, e-
mail) or 3rd party software developers (applications, voice recognition). Clearly, Apple is
responding to user preferences and needs with successive generations of the iPhone.
J. West and M. Mace (2007) In their study they observed that when the Apple iPhone was
announced in January 2007, the response was overwhelming. Within two months of the
announcement, the search term „iPhone‟ yielded over 60 million web page references in Google.
When iPhone finally launched in June 2007, consumers lined up for days for the chance to
purchase one and over 500,000 units sold on the first weekend. Since that time, millions of
iPhones have been sold, arguably making it one of the most successful mobile phone products
ever launched.
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CHAPTER 3
THEORITICAL FRAMEWORK
CHAPTER 3
THEORITICAL FRAMEWORK
Apple Computers, Inc. was founded on April 1, 1976, by college dropouts Steve Jobs and
Steve Wozniak, who brought to the new company a vision of changing the way people viewed
computers. Jobs and Wozniak wanted to make computers small enough for people to have them
in their homes or offices. Simply put, they wanted a computer that was user-friendly. Jobs and
Wozniak started out building the Apple I in Jobs' garage and sold them without a monitor,
keyboard, or casing (which they decided to add on in 1977). The Apple II revolutionized the
computer industry with the introduction of the first-ever color graphics.1 Sales jumped from $7.8
million in 1978 to $117 million in 1980, the year Apple went public.
Wozniak left Apple in 1983 due to a diminishing interest in the day-to-day running of
Apple Computers. Jobs then hired PepsiCo's John Sculley to be president. However, this move
backfired and after much controversy with Sculley, Jobs left in 1985 and went on to new and
bigger things. He founded his own company NeXT Software and he also bought Pixar from
George Lucas, which would later become a huge success in computer animation of such movies
as Toy Story, A Bug's Life, Monsters, Inc., and Finding Nemo.
3.1.1 IPhone
The iPhone is a line of smartphones designed and marketed by Apple Inc. that use
Apple's iOS mobile operating system. The first-generation iPhone was announced by former
Apple CEO Steve Jobs on January 9, 2007. Since then Apple has annually released new iPhone
models and iOS updates. As of November 1, 2018, more than 2.2 billion iPhones had been sold.
The iPhone has a user interface built around a multi-touch screen.
It connects to cellular networks or Wi-Fi, and can make calls, browse the web, take
pictures, play music and send and receive emails and text messages. Since the iPhone's launch
further features have been added, including larger screen sizes, shooting video, waterproofing,
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the ability to install third-party mobile apps through an app store, and many accessibility
features. Up to 2017, iPhones used a layout with a single button on the front panel that returns
the user to the home screen. Since 2017, more expensive iPhone models have switched to a
nearly bezel-less front screen design with app switching activated by gesture recognition.
3.1.2 iPad
iPad is a line of tablet computers designed, developed and marketed by Apple Inc., which
run the iOS and iPadOS mobile operating systems. The first iPad was released on April 3, 2010;
the most recent iPad models are the eighth-generation iPad, released on September 18, 2020; the
fifth-generation iPad mini, released on March 18, 2019; the fourth-generation iPad Air, released
on October 23, 2020; and the second-generation 11-inch (280 mm) and fourth-generation 12.9-
inch (330 mm) iPad Pro, released on March 25, 2020 (different models and generations listed in
the sidebar).
As of September 2020, Apple has sold more than 500 million iPads, though sales peaked
in 2013. It is the most popular tablet computer by sales as of the second quarter of 2020. The
user interface is built around the device's multi-touch screen, including a virtual keyboard. All
iPads can connect using Wi-Fi; some models also have cellular connectivity. iPads can shoot
video, take photos, play music, and perform Internet functions such as web-browsing and
emailing. Other functions – games, reference, GPS navigation, social networking, etc. – can be
enabled by downloading and installing apps. As of March 2016, the App Store has more than 1
million apps for the iPad by Apple and third parties.
3.1.3 MacBook
On November 10, 2020, Apple announced models of the MacBook Air and MacBook Pro
incorporating the new Apple M1 system on a chip. Apple will continue to sell versions of the
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MacBook Pro with Intel processors. The MacBook was discontinued from February 2012 until
March 2015, when a new model featuring an ultraportable design and an all-metal enclosure was
introduced. It was again discontinued in July 2019 following a price reduction of the 3rd
generation MacBook Air and discontinuation of the 2nd generation model.
Apple Watch is a line of smart watches produced by Apple Inc. It incorporates fitness
tracking, health-oriented capabilities, and wireless telecommunication, and integrates with iOS
and other Apple products and services. The Apple Watch was released in April 2015 and quickly
became the best-selling wearable device: 4.2 million were sold in the second quarter of fiscal
2015, and more than 100 million people were estimated to use an Apple Watch as of December
2020. Apple has introduced new generations of the Apple Watch with improved internal
components each September each labeled by Apple a 'Series', with certain exceptions.
3.1.5 IMac
The MacBook was discontinued from February 2012 until March 2015, when a new
model featuring an ultraportable design and an all-metal enclosure was introduced. It was again
discontinued in July 2019 following a price reduction of the 3rd generation MacBook Air and
discontinuation of the 2nd generation model. In its original form, the iMac G3 had a gumdrop or
egg-shaped look, with a CRT monitor, mainly enclosed by a colored, translucent plastic case,
which was refreshed early on with a sleeker design notable for its slot-loaded optical drive. The
second major revision, the iMac G4, moved the design to a hemispherical base containing all the
main components and an LCD monitor on a freely moving arm attached to it. The third and
fourth major revisions, the iMac G5 and the Intel iMac respectively, placed all the components
immediately behind the display, creating a slim unified design that tilts only up and down on a
simple metal base.
Air Pods are wireless Bluetooth ear buds created by Apple. They were first released on
December 13, 2016, with a 2nd generation released in March 2019. They are Apple's entry-level
wireless headphones, sold alongside Air Pods Pro, higher-end wireless ear buds, and Air Pods
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Max, wireless over-ear headphones. Within two years, they became Apple's most popular
accessory, turning into a critical success and viral sensation. In addition to playing audio, Air
Pods feature a built-in microphone that filters out background noise, which allows phone calls
and talking to Apple's digital assistant, Siri. Additionally, built-in accelerometers and optical
sensors can detect taps (e.g. double-tap to pause audio) and in-ear placement, which enables
automatic pausing when they are taken out of the ears.
Home Pod is a smart speaker developed by Apple Inc. The Home Pod was designed to
work with the Apple Music subscription service. It was sold until it was discontinued on March
12, 2021, in favor of the smaller Home Pod Mini. The Home Pod was announced on June 5,
2017, at the Apple Worldwide Developers Conference, its launch was later delayed from
December 2017 to early 2018. Apple began taking orders on January 26, 2018, and formally
released it on February 9 that year. It incorporates beam forming and eight speakers and was sold
in two colors: white and space gray.
One of Apple's most significant accomplishments has been a dedication to design that
borders on the line of obsessiveness. As people decipher the driving factors behind what makes a
product like the iPod, iPhone, and iPad so successful, it is crucial to recognize how a product's
design has the potential not just to alter industries, but go so far as to marginalize them. The
iPhone relegated the mobile phone to a single app. Apple Watch is being positioned to turn the
modern Watch industry on its head. Apple's ambitions with the automobile will be nothing short
of a transformational shift in how we think and use automobiles. When a company places only a
few big design bets every few years, the resulting bets need to be huge and Apple positions good
design as the guiding light with all of its bets.
Apple has thrust the topic of design into today's society. There is more cultural awareness
of design than ever before. While this may sound like a good thing, the definition of design has
seemingly expanded along with its growing popularity. The end result is growing confusion as to
what design even means. Apple has always positioned design as a guiding principle even though
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consumer demand for such design is still a recent phenomenon. The world needed to see what
the lack of design in the PC market looked like before craving Apple products born from the
rebirth of the design-led process in the late 1990s.With good design, a product is able to tell the
world something about the person who created it. Good design is born during the product
development stage when a fragile idea is allowed to advance and mature without compromises.
Apple neutralizes this anxiety through its customer service, letting clients know that for
any product they buy, they‟ll receive the support they need to its fullest. Any product review is
worthless without an understanding of the company‟s customer service. Customers are making
the purchase based not just on the quality of a product, but on the quality of the service that
accompanies it. For one, the company offers a 1-year warranty on all its products, and also offers
to repair the products at no extra charge, or replace them with a free product if they malfunction
during the warranty period.
On top of that, buying from Apple also doesn‟t feel like a risky experience to people
simply because of the huge network of retail stores Apple operates. If there are any issues with
their product, people know they can easily make a reservation at their local Genius Bar, and take
the product in for support. Besides that, Apple customers also know they can rely on Apple-
authorized service providers and Apple Repair Centers if the Genius Bar just isn‟t an option.
Apple‟s Support Page helps with this too. It contains tons of straightforward self-help
content. For some people, reading an article is a much easier task than connecting with customer
service reps. Apple doesn‟t just stick to offering quality and reliable products. The company goes
the extra mile and pays a ton of attention to the smallest details. And consumers notice that. In
fact, if you Google “Apple attention to details,” you‟ll come across tons of articles talking
about the brand‟s “fanatical” and “insane” obsession with details.
The Apple Pencil‟s weight is distributed in such a way as to ensure that no matter which
way it‟s placed, it always rolls over to display the word “pencil.” Its weight distribution also
reduces its momentum when rolling, thus reducing the risk of it rolling off the table.
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Pretty much all Apple notebooks have a slight indentation in the area right below the
track pad to make it easier for Apple users to open the laptop with just one hand. Newer Mac
laptops feature a “smart” fan. Basically, when a user engages the voice dictation feature, the
internal fan‟s speed is automatically slowed down a bit so that the laptop can better hear the user
speaking.
MacBook Air and newer MacBook Pro devices have a “smart Caps Lock” feature. Apple
essentially prevents accidental Caps Lock keystrokes by requiring users to hold the Caps Lock
key a bit longer for it to turn on. Apple‟s attention to detail goes beyond the products, into the
packaging and the experience that‟s attached to it. The company doesn‟t just deliver the
purchased items in standard cardboard packaging – it goes above and beyond and puts just as
much attention to detail into its packaging as it does into every product.
How much attention, you ask? Consider this – the company has a dedicated packaging
designer who spends months opening prototype boxes made by Apple‟s designers. A lot of
testing goes into making the packaging a joyful experience for the customer. The result of this is
that buying and opening an Apple product is a sensory experience. From the first interaction with
an Apple product – in this case, opening the box – customers have a sense of Apple‟s attention to
detail and design philosophy.
This relatively small factor can have a big effect on purchases, as it might help the
company stand out from its competitors by delivering a unique experience to its customers. This
experience is closely linked to the product itself. The sensory response of opening up the box and
first using the product is an event that customers subconsciously remember each time they use an
Apple product. One of the Apple‟s strengths is best expressed through a simple rule: “Sell an
experience, not a product.”
Buying, opening, and using an Apple product is a memorable experience for people, not
just a consumerist tendency. If you‟re not familiar with eNPS, it stands for Employee Net
Promoter Score, and it‟s a derivative of the NPS methodology. The surveys work pretty much
the same way, but instead of focusing on customer satisfaction, they focus on employee
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satisfaction. Basically, eNPS helps you find out how happy your employees are working at your
company, and how likely they are to recommend your business as a working place to others.
Why is that relevant? Because happy, satisfied employees are productive employees!
According to some research, happy employees are 20% more productive than their unhappy
counterparts. And that boost was achieved by just spending $2/person on snacks and drinks!
Plus, companies with engaged employees outperform businesses without engaged employees by
a whopping 202%. What‟s more, companies with highly engaged employees can see a revenue
growth of around 2.5 times that of their competitors – not to mention high employee engagement
can also reduce expensive staff turnover by approximately 40%.
And if your employees are happy and productive, your customers will be satisfied too. If
employees are unhappy, eNPS lets you know about that so you can take action. Now, Apple was
actually one of the first companies to adopt eNPS. Apple began surveying their own employees
every four months to find out how likely they would be to recommend the store as a place to
work. The company recognized the importance of employees being Promoters themselves. After
all, only an employee who truly believes the service they are selling is the best in the market can
turn a customer into a Promoter.
The eNPS score is calculated the same way as the NPS score, with the total ranging
between -100 and 100. Apple‟s eNPS score seems to be 25. That might not seem impressive, but
it‟s actually a pretty good score, given that eNPS is usually lower than NPS since employees are
stricter critics than customers. The Apple Store relies on a very effective communication
technique it adapted from The Ritz-Carlton: Steps of Service. Every employee is trained to walk
a customer through five steps that spell out the acronym A-P-P-L-E (The Ritz-Carlton has three
steps). I‟ve described the steps of service in previous columns so I won‟t go into detail here, but
briefly the steps are:
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E: End with a fond farewell and an invitation to return
If Apple‟s main focus was on making more money, they probably wouldn‟t have been so
successful now. Instead, they focused on their customers and it has paid off. Today, Apple is one
of the world‟s most successful and profitable technology company. It holds over 40% of the US
smartphone market and has a fantastical 87% brand loyalty across the US and Europe. So think
less about profit and more about customer value. How your company and your product or service
can create more value for your customers. Apple‟s pricing strategy is not based on the idea of
forcing users to pay an “Apple Tax.” Instead, Apple follows a revenue and gross profit
optimization strategy. Here is Apple‟s CFO Luca Maestri talking about the strategy on various
Apple earnings conference calls:
2017: “We tend to think about maximizing gross margin dollars because we think that's the most
important thing for investors at the end of the day. When we look at our track record over years,
I think we've found a good balance between unit sales growth and gross margins and revenue,
and we will continue to do that as we go forward.”
2018: “Our primary consideration is always around maximizing gross margin dollars, and that is
the approach that we take around pricing decisions.”
2018: “We make our decisions from a financial standpoint to try and optimize our revenue and
our gross margin dollars.”
2019: “It is important for us to grow gross margin dollars. And if at times we grow services that
are at a level of gross margins, which is below average, as long as this is good for the customer
and as long as we generate gross margin dollars we're going to be very pleased.”
2019: “What really matters to us and what we look at -- when we look at the elasticity of these
[iPhone upgrade] programs is to see the impact on our gross margin dollars.”
While “revenue and gross margin optimization” may sound like loaded terminology, the
idea underlying the strategy is straightforward. Instead of Apple including a certain amount of
“tax” or premium in a product‟s price to maintain a specific gross margin percentage, Apple
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prices its products in a way that maximizes gross margin and revenue on an absolute basis. Gross
margin is cost of goods subtracted from revenue.
The strategy requires Apple to come up with forecasts for how a product‟s price will
impact customer demand for that product. Price a product too high, and the lower unit sales (as a
result of weaker demand) may more than offset the higher amount of revenue and gross margin
found with each device. Price a product too low, and the higher unit sales (as a result of stronger
demand) may not offset the lower amount of revenue and gross margin found with each device.
A closer look at Apple‟s gross margins demonstrates this “revenue and gross margin
optimization” strategy in action. Exhibit 1 highlights Apple‟s gross margin percentage going
back to 2000.
As shown in Exhibit 1, Apple‟s gross margin as a percent of revenue has been steady
since 2013. On the surface, such stability would seem to validate Business Insider‟s claim of
there being some kind of price premium automatically added to Apple products - as if
management determines a product‟s price by adding a certain premium on top of the cost of
goods sold.
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In just the past two years, Apple products gross margin percentage has declined by 10%
(350 basis points). That is noteworthy. This means that Apple hardware has become less
profitable when looking at gross margin as a percent of revenue. The decline is due to two
factors: Apple is lowering product pricing which is eating into the delta between revenue and
cost of goods sold. Most of these price cuts are designed to roll back the impact from foreign
exchange. However, another factor is that Apple is willing to run with lower gross margin
profiles for certain products with the goal of selling more products.
Apple is including more technology in its products while not increasing prices enough to
maintain gross margin percentages. As with the first factor, Apple is becoming more aggressive
on price in an effort to sell more products and generate more revenue and gross margin dollars.
While Apple‟s products gross margin percentage has declined by 10% over the past two years,
products gross margin dollars declined by only 2%. This tells us that Apple is willing to let
products gross margin percentage decline (less profit found with each device) if it means
stronger customer demand results in more units being sold. This is the epitome of Apple‟s
revenue and gross margin optimization strategy.
17
to come close to AirPods pricing. A similar dynamic is found with wrist wearables as Apple
Watch pricing remains highly competitive.
Apple has embraced a bifurcation strategy in which product lines have been expanded to
include a broader range of models and corresponding prices. This dynamic applies to most of
Apple‟s products including the iPhone, iPad, Mac, Apple Watch, and AirPods. The primary
benefit of Apple becoming aggressive both at the low end and high end of the pricing spectrum
is more choice for consumers. Products like the 10.2-inch iPad represent the gateway into the
iOS ecosystem for millions of people each year. The MacBook Air remains the most popular
Mac. The end result is that products with various margin profiles may end up offsetting each
other.
3.7 Accessories
When it comes to how Apple prices various accessories like dongles, Watch bands, and
iPad keyboards, the company isn‟t relying on an Apple Tax. Instead, accessories by their very
nature have high gross margins given that the items are sold to customers looking to personalize
their experience. A similar philosophy applies to Mac memory and storage upgrades. While
those upgrades are indeed profitable for Apple, the fact that Apple charges the prices they do is
not a sign of Apple users being held hostage and forced to pay an Apple Tax. Instead,
positioning certain items as accessories or upgrades plays a role in Apple keeping entry-level
product pricing low for the mass market.
A new school of thought positions Apple as a monopoly not because it has significant
market share, but because it has loyal and engaged users. The idea is that since these users would
apparently face such a dreadful experience by moving outside the Apple platform, it‟s as if they
have no alternatives. Apple is said to be taking unfair advantage of this situation and its position
as the only provider of a premium experience. A byproduct of this stance is that certain Apple
actions, such as the way the App Store is managed, are viewed as uncompetitive. There is no
question that Apple has loyal, satisfied users. However, the premise that these users are in some
way held captive or hostage by Apple, and therefore forced to pay high Apple prices, just doesn‟t
hold up to scrutiny.
18
CHAPTER 4
Table 4.1
Gender wise classification of respondents
Male 30 60
Female 20 40
Total 50 100
Interpretation
The above table shows that 60% of the respondents are male, 40% of the respondents are female.
Figure 4.1
Gender
Male
Female
19
Table 4.2
Current Apple products of the respondents
Phone 34 68
Watch 3 6
iPod 0 0
iPad 2 4
Laptop 11 22
Other 0 0
Total 50 100
Interpretation
The above table shows that 68% of the respondents own an iPhone, 22% of the respondents own
Laptop, 6% of the respondents own Apple Watch and 4% of the respondents own iPad.
Figure 4.2
Apple Products
Phone
Watch
iPod
iPad
Laptop
20
Table 4.3
Highly satisfied 27 54
satisfied 18 36
Uncertain 5 10
Dissatisfied 0 0
Highly dissatisfied 0 0
Total 50 100
Interpretation
The above table shows that 54% of the respondents are highly satisfied with Apple‟s services,
36% of the respondents are satisfied and 10% of the respondents have no opinion about it.
Figure 4.3
Satisfaction level
Highly satisfied
satisfied
Uncertain
Dissatisfied
Highly dissatisfied
21
Table 4.4
Highly satisfied 29 58
satisfied 19 38
Uncertain 2 4
Dissatisfied 0 0
Highly dissatisfied 0 0
Total 50 100
Interpretation
The above table shows that 58% of the respondents are highly satisfied with products quality,
38% of the respondents are satisfied, and 4% of the respondents have no opinion about it.
Figure 4.4
Satisfaction level
Highly satisfied
satisfied
Uncertain
Dissatisfied
22
Table 4.5
Highly satisfied 25 50
satisfied 20 40
Uncertain 3 6
Dissatisfied 2 4
Highly dissatisfied 0 0
Total 50 100
Interpretation
The above table shows that 50% of the respondents are highly satisfied with the after sale
service, 40% of the respondents are satisfied, 6% of the respondents have no opinion about it and
4% of the respondents are dissatisfied.
Figure 4.5
Satisfaction level
Highly satisfied
satisfied
Uncertain
Dissatisfied
23
Table 4.6
Strongly agree 21 42
Agree 17 34
Uncertain 8 16
Disagree 2 4
Strongly disagree 2 4
Total 50 100
Interpretation
The above table shows that 42% of the respondents strongly agreed that online advertisements
influence their buying habits, 34% of the respondents agreed it, 16% of the respondents have no
opinion about it, 4% of the respondents disagreed about the influence of online advertisement
and 4% of the respondents strongly disagreed about the influence of online advertisement.
Figure 4.6
24
Table 4.7
Strongly agree 21 42
Agree 20 40
Uncertain 4 8
Disagree 4 8
Strongly disagree 1 2
Total 50 100
Interpretation
The above table shows that 42% of the respondents strongly agreed that Apple products have the
price worthiness, 40% of the respondents agreed it, 8% of the respondents have no opinion about
it, 8% of the respondents disagreed about the price worthiness and 2% of the respondents
strongly disagreed about the price worthiness.
Figure 4.7
25
Table 4.8
Highly Recommended 31 62
Recommended 17 34
Not recommended 2 4
Total 50 100
Interpretation
The above table shows that 62% of the respondents are highly recommended the Apple products
to their friends or relatives, 34% recommend the product and 4% of the respondents aren‟t
recommend the product.
Figure 4.8
Highly Recommended
Recommendable
Not recommendable
26
Table 4.9
About software 10 20
About price 3 6
Other 3 6
Total 50 100
Interpretation
The above table shows that 68% of the respondents need to know about Apple‟s upcoming
features, 20% of the respondents need to know about software, 6% of the respondents need to
know about price and again 6% of the respondent need to know about other things related to
Apple.
Figure 4.9
27
Table 4.10
Cost 8 16
Quality 19 38
Brand 6 12
Performance 17 34
Other 0 0
Total 50 100
Interpretation
The above table shows that 38% considered the quality, 34% considered the performance, 16%
of the respondents considered the cost of the products and 12% of the respondents considered the
brand.
Figure 4.10
Features
Cost
Quality
Brand
Performance
Other
28
Table 4.11
High quality 19 38
Low quality 0 0
Total 50 100
Interpretation
The above table shows that 54% of the respondents believes that Apple products software is very
high quality, 38% of the respondents believes that Apple products software is high quality, 8% of
the respondents believes that Apple products software is Neither high nor low quality.
Figure 4.11
High quality
29
Table 4.12
Very positive 18 36
Positive 29 58
Uncertain 1 2
Negative 0 0
Very Negative 2 4
Total 50 100
Interpretation
The above table shows that 58% of the respondents have positive opinion about Apple‟s
marketing strategy, 36% of the respondents have Very positive opinion, 4% have very negative
opinion and 2% have no opinion about the marketing strategy.
Figure 4.12
Very positive
Positive
Uncertain
Negative
Very Negative
30
Table 4.13
Yes 20 40
No 30 60
Total 50 100
Interpretation
The above table shows that 60% of the respondents assume that Apple hasn‟t lost its competitive
edge and 40% of the respondents assume that Apple have lost its competitive edge.
Figure 4.13
Yes
No
31
Table 4.14
Excellent 21 42
Above average 22 44
Average 6 12
Poor 1 2
Total 50 100
Interpretation
The above table shows that 44% of the respondents believe that Apple products are above
average on value for money, 42% of the respondents believe that Apple products are excellent on
value for money, 12% of the respondents believes that Apple products are average on value for
money and 2% are not satisfied with the Apple product‟s value for money.
Figure 4.14
Excellent
Above average
Average
Poor
32
Table 4.15
Total 50 100
Interpretation
The above table shows that 74% of the respondents say that Apple have high premium price,
20% say that Apple have moderate premium price, and 6% say that Apple have low premium
price.
Figure 4.15
33
Table 4.16
Product feature 26 52
Customer service 7 14
High quality 13 26
Total 50 100
Interpretation
The above table shows that 52% of the respondents are ready to pay premium price for its
features, 26% of the respondents for its High quality 14% of the respondents paying premium
price for its Customer service and 8% for its Availability of software and components.
Figure 4.16
Product feature
High Quality
Customer service
Availability of software
and components
34
Table 4.17
Very likely 21 42
Somewhat likely 22 44
Not so likely 4 8
Total 50 100
Interpretation
The above table shows that 44% are like to purchase the product, 42% of the respondents are
Very likely to purchase apple products, 8% of the respondents not like to purchase and 6% are
Not at all like to purchase the apple products.
Figure 4.17
Very likely
Somewhat likely
Not so likely
Not at all likely
35
Table 4.18
Internet 30 60
Magazine or newspaper 3 6
TV 4 8
Apple store 4 8
Relatives or friends 9 18
Total 50 100
Interpretation
The above table shows that 60% of the respondents heard about the product through internet,
18% of the respondents heard from their Relatives or friends, 8% of the respondents through
Apple store, 8% of the respondents through TV and 6% of the respondents through Magazine or
newspaper.
Figure 4.18
Source of information
Internet
Magazine or
newspaper
TV
36
Table 4.19
Low price 14 28
Global design 24 48
High performance 10 20
Total 50 100
Interpretation
The above table shows that 48% of the respondents considered Global design, 28% of the
respondents considered old apple products due to their low pricing, 20% of the respondents
considered its High performance and 4% for its Good battery condition.
Figure 4.19
Low price
Global design
Good battery condition
High performance
37
CHAPTER 5
5.0 FINDINGS
38
16. Major percentage of the respondents purchases Apple products in high premium price,
because of the features provided by the company.
17. 44% of the respondents are sometimes interested to purchase the Apple products again.
18. From the internet, large number of people heard about Apple Company.
19. 48% of the respondents considered global design for purchasing old model Apple
products.
5.1 SUGGESTIONS
1. They should get the feedback report from the customer in order to fulfill customer‟s
needs and wants.
2. They should reduce the price in order to gain more customers and to beat their
competitors.
3. They should provide lot of new models to beat their competitors.
5.2 CONCLUSION
In the study about Apple Inc. we figured out that loyalty of the customers made the
company reach at the top. Customers choose apple products more than other competitive
companies. Apple started as a computer industry and later get on to the other industries. The
company has become the first one billion dollar company. Up to date Innovation of the products
helps the company to make the changes in the market moreover not to follow the changes. This
makes the company to grow throughout the years.
Better build quality, better software interfaces, well designed and compatibility,
Innovations in the products and after sale services made satisfaction in customers and build
customer loyalty to the brand, These build a huge loyal customers. Apple eco-system also makes
the customers to stay close to them. Apple started their business as a computer industry and later
by step by step they evolved in computer industry and also introduced new products in different
industries. They launch their products with perfection in them, they also convey their thoughts
and new features in product launch.
39
BIBLIOGRAPHY
BIBLIOGRAPHY
WEBSITES
https://www.investopedia.com/search?q=apple
https://appleinsider.com/
https://www.sciencedirect.com/
https://timesofindia.indiatimes.com/defaultinterstitial.cms
https://en.wikipedia.org/wiki/Apple
https://www.tomsguide.com/
https://www.statista.com/
https://www.businessinsider.in/?r=US&IR=T
APPENDIX
A STUDY OF BRAND PREFERENCES OF APPLE PRODUCTS WITH
SPECIAL REFERENCE TO THIRUVALLA MUNCIPALITY
QUESTIONNAIRE
1. Name of the respondent:
Male Female
7. Do you agree internet advertisement of apple products attract you to buy a product even
if it is unnecessary for you?
10. If you were offered a free 30-minutes lesson with an Apple store, what would you most
like to learn or discuss?
11. When purchasing a new apple product what are important to you?
Very high quality High quality Neither high nor low quality Low quality
14. Do you feel that Apple had lost their competitive edge?
Yes No
15. How would you rate the value for money of the product?
16. How does the price of Apple products compare with others in the industry?
18. How likely are you to purchase any of Apple products again?
Very likely Somewhat likely Not so likely Not at all likely
20. How do you feel old model Apple products in your choice factor?