Critical analysis of apple’s marketing strategies

8 August 2016

Wiki invest (2012) Technology states, the technology industry provides foundation for activities such as, chip production, information and communication systems, and computer systems. The companies belonging to this industry serves as developers and manufacturers of the products which increase efficiency and production of cell phones, computers, televisions, and other communication and information systems. It is a huge industry with a high growth potential, but it is sometimes go through volatile cycles, like the semiconductor industry.

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As chips are getting smaller and globalization is increasing, demand for faster and efficient technology, demand for technological industry in increasing. 1. 2 Introduction to Apple Incorporation Wikipedia (2012) Apple store states, that, Apple Incorporation is a multinational company that creates and sells consumer electronics, computer software, and personal computers, selling in 363 stores worldwide, withnglobal sales of about US$16 billion in merchandise. The company was first founded on April 1, 1976 in Cupertino, California by Steve Jobs, Steve Wozniak, and Ronald Wayne and then incorporated on January 3, 1977. The company was named as Apple Computer, Inc before for the first 30 years. The word “Computer” was then removed from its name on January 9, 2007. The company’s traditional focus was on personal computers shifted towards consumer electronics.

Now the company’s best-known products are the Macintosh line of computers, iPod, iPhone and the iPad, along with their other line of products including, Mac OS X (operating system), iTunes media browser, iLife suite of multimedia/creativity software, iWork (suite of productivity software), Aperture (professional photography package), Final Cut Studio (suite of professional audio and film-industry), Logic Studio, a suite of music production tools; Safari web browser and iOS (mobile operating system).

1. 2. 1 Mission statement of Apple Inc According to Apple Inc (2012), ”Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices. ”

Another mission statement is:”Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and internet offerings. ” 1 . 1. 2. 2 Vision Statement of Apple Inc According to Apple Inc (2012), “We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex.

We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change.

And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well. ” 1. 2. 3 Objectives of Apple Inc As stated on the website Apple Inc (2012) are: ?To obtain products and services within tight timeframe, at a cost providing the best value to the customers and shareholders. ?To keep creating and releasing computers and consumer electronics those are user-friendly. ?To open more stores even on international locations to increase sales and dominate world market. ?To innovate on a regular basis. 1. 2. 4 Major competitors of Apple Inc

Samsung, Microsoft, Dell, HP, Blackberry, Nokia 1. 3 Motivations of research: As the competition in the technology industry has increased, it has become mandatory to make a study on the importance of using a marketing strategies of branding for Apple, to stay at the top of consumer’s mind, to cope up with the changing environment, to gain competitive edge, to make improvements in future and to attain goals set by the company. 1. 4 Research Objectives: ? To analyze the importance of using a marketing strategies of branding for Apple Inc and to find out how STP strategies helps Apple’s brand. ? To find out about the benefits of branding for the company and to find out how branding helps to gain a competitive edge by differentiating themselves and how it increases customer loyalty and increases brand awareness. ? To find out about the branded product and its related price, promotion and placement and to find out the strengths, weaknesses, opportunities and threats the company may be facing. 2 1. 5 Research question: 1. 5. 1 Leading question: What benefits will Apple and its customers benefit from after using branding marketing strategy? 1. 5. 2 Subsidiary questions:

Does branding allow Apple Inc to communicate company’s objectives, mission and vision clearly to their customers? ?Does branding helps Apple to differentiate its products from its competitors, by gaining competitive edge? ?Does branding allow Apple’s customer to easily recognize and recall the company and its products? ?Does branding allow Apple Inc to charge premium for its products and yet maintain customer loyalty? ?How will using STP strategies, 4 Ps of marketing mix and SWOT Analysis help to enhance Apple’s brand? ?Does branding really contribute in making a difference in Apple Inc’s success? 1. 6 Organization of Study:

Chapter 1: Introduction Chapter 2: Literature Review Chapter 3: Methodology Chapter 4: Research findings, data presentation and data analysis Chapter 5: Conclusion and Recommendations 3 . CHAPTER 2: Literature Review 2. 1 Introduction This section will provide the details about the qualitative data, providing a foundation for all the details to follow. 2. 2 What is branding? According to Kotler (1999), branding is a ”name, term, sign, symbol or design, or a combination of all these that identifies the goods and services of one seller or group of sellers and to differentiate them from those of competitors.

” Branding does not only allow your target market to choose your company over the competitor’s, but it helps in getting your prospects to see you as the only company that provides a solution to the consumer’s problems. It provides a company’s with a recognizable and trustworthy badge of originality, an intangible guarantee, i. e. a promise of performance that the product will meet with desired consumers’ expectations. 2. 2. 1 Apple’s Branding Strategy According to Marketing minds (2012), Apple Inc. uses the Apple brand to compete across several highly competitive markets, including the personal computer industry with its Macintosh line of computers/laptops and related software, the consumer electronics industry with products such as the iPod, digital music distribution through iTunes Music Store, the smart phone market with the Apple iPhone, magazine, book, games and applications publishing via the AppsStore for iPhone and the iPad tablet computing device, and movie and TV content distribution with Apple TV.

The company is also establishing a very strong marketing presence relative to the rival (Google) in the advertising market, via its business Apps and iAd network. Steve Jobs, the co-Founder of Apple, described the company as being a “mobile devices company”, largest in the world as their revenues are bigger than Nokia, Samsung, or Sony’s mobile devices business. 2. 2. 2 Brand Awareness It is when the consumers are familiar about the life or availability of the product.

It is the degree to which consumers associate your brand with a specific product/service. As indicated by Management study guide (2012) in their article ” What is brand awareness? ”, Brand awareness may include of: ?Brand recognition- is when the consumers have good knowledge of brand when they are asked questions related to a specific brand and they are able to differentiate a brand on the basis of having noticed or heard about earlier. E. g. Is I-phone related to Apple or Samsung? 4 .

?Brand recall- It allows a customer to recover a brand from his memory when given the product class/category, needs satisfied by that category or buying scenario as a signal, i. e. if they are able to recall the brand from their memory. E. g. Showing a logo of Apple’s brand, and asking which brand does this logo belongs to. 2. 2. 3 Apple’s brand personality As stated by About. com (2012), ”What is branding and how important is it to your marketing strategy? ”, a good brand helps a company to achieve these objectives: ?Helps to deliver the message clearly

?It confirms your company’s credibility ?It connects your target prospects emotionally ?It motivates the buyer ?It strengthens user loyalty Apple has a branding strategy that focuses on the emotions. Apple brand’s personality is about lifestyle, imagination, liberty regained, innovation, passion, hopes, dreams and aspirations, and power-to-the-people through technology. The Apple brand personality is also about simplicity, making life easier for people as they have people-driven product design, and is a humanistic company with a heartfelt connection with its customers.

2. 2. 4 Apple’s Brand equity According to Investopedia, it is the premium value that the company realizes from a product with a recognizable name as compared to its generic equivalent firm. Companies can create brand equity for their products by making them memorable, easily recognizable and superior in quality and reliability. Also, mass marketing campaigns may help to create brand equity. Brand equity is said to be positive if the consumers are willing to pay more for a branded product than for a generic one.

Brand awareness plays a key role in building brand equity. Create reliable brand image, slogans and taglines, helps to strengthen brand awareness which therefore improves brand equity. Marketing minds (2012) also states, Since Apple has strong brand awareness, it has high sales and high market share, and the consumers are well acquainted and familiar with the brand and its products. They are also willing to pay premium price for their products, relative to the competitor’s brand due to Apple’s positive brand equity.

Apple is not just intimate with their consumers but there is a real sense of community among users of its main product lines. Therefore, this also helps to create consumer’s brand loyalty (where brand loyalty is when the consumers become committed to your brand, choosing it over competitors and making repeat purchases over time. ) 5 . 2. 3 Benefits of branding a company (Apple) 2. 3. 1 Emotional Appeal – As stated by Clarity marketing LTD (2005), emotional appeal helps a great deal in targeting customer’s emotions with product names.

A strong, recognizable brand will acts like a ‘short cut’ in decision making process, as the customers don’t dither over alternatives or compare options where there is no clear point of difference, and instantly chooses your brand as they know what it stands for. For instance, as Apple manufactures technological items, the name of each product clearly reflects technological aspects like iPod touch, which indicates that it is a product that allows you to play and choose music through touch properties. It therefore, helps in creating an integrated appeal to specific emotions promoting the product recognition and sales.

2. 3. 2 Memorability and Familiarity – According to Marcia Yudkin (2012), brand helps to create a reputation and good will for a company. It is very hard for customers to refer to a company as “that whatsitsname store” or to refer business as “the shop from the Yellow Pages. ” In addition to the company name, it gives people to give constant reminders reinforcing the identity of companies they will want to buy from. Memorability can come from the logo, its design, color, style etc which helps to nail your company’s name in the minds of the public.

Similarly, after your brand is nailed in the minds of your customers, that’s when your customers have become familiar and aware of your company’s existence in the market. Branding allows having huge effects on non-customers too. Psychologists’ studies have proved that familiarity develops liking for it. Also, the customers who have never bought from your company, may many tomes be willing to recommend your company to others even without having any personal knowledge of your products or services.

Therefore, the half bitten Apple logo and the brand name ‘Apple’ help a great deal to help customers remember, be familiar and recommend the brand to others. 2. 3. 3 Premium image and Premium price – Branding allows a company to differentiate themselves from competitors existing in the market, because of which instead of dealing with price-shoppers the customers become eager to pay a higher price for your company’s goods and services. A strong brand let the customers associate themselves as being a company that offers premium quality, trendy products and is offering unique products that other companies are not offering.

2. 3. 4 Extensions – When your company’s brand is well-established, you can spread the respect you’ve earned to a related new product, service or location and win acceptance easily of the newcomer. For instance, when Apple introduced a new product extension line of Ipad, the customers trusted the brand so they didn’t feel reluctant and bought Ipads anyway, making these tablets quite popular of its kind in the market. 2. 3. 5 Loyalty – When customers have a positive experience with your company’s brand, they are more likely to buy your products and services again in future rather than the competitors.

Customers that are closely bonded with your brand’s identity may not only repurchase what they bought earlier, but may also buy related items of the same brand, and recommend your brand to others and resist the lure of a competitor’s price cut. The brand identity helps to create and anchor such loyalty. 6 . Apple’s loyal customers wait every year to buy a new version of iphone every year, regarding the high price and numerous other phones existing of competitors brand in the market. 2. 3.

6 Lower marketing expenses – Branding helps a company to invest less in marketing (promotion) expenses, though you need to invest money in order to create a brand, but it’s more like a one off investment as once it’s created you can maintain it and do not need to tell the whole story about the brand every time you market it. For instance, Apple promoting for iphone by Apple, everyone knows that iphone is a touch phone produced by the brand Apple. 2. 3. 7 Greater company equity- Branding your company allows you to get more money when you decide to sell it.

Also, it allows the company to borrow loan even if the company’s facilities and inventory vanished, just because of their brand name. Similarly if Apple Inc founder ever decides to sell the company he will get more money. 2. 3. 8 Less Risk and Quality Assurance -Lynne Haley Rose (2012) states, when you market a product/service with a strong, positive brand association, you communicate an assurance of quality to the potential customers, which makes the consumers more likely to buy from your branded company rather than a no name company.

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