Marketing Plan for Apple Inc
Apple Inc. formerly Apple Computer Inc. is a multinational corporation that creates consumer electronics, personal computers, servers, computer software and is also a digital distributor of media content. It also has a chain of retail stores known as Apple Stores. Founders of Apple Inc. are Steve Jobs and Steve Wozniak who created Apple computer on April 1, 1976 and incorporated the company on January 3, 1977 in Cupertino, California. For more than 30 years ago, Apple computer dominated as the manufacturer of personal computers including the Apple II. Macintosh and power mac lines but it faced low sales and low market share during the 1990s. With the introduction of the successful iPod music player in 2001, iTunes Music Store in 2003 and the release of a video iPod the fifth generation of the device, Apple established itself as a leader in the consumer electronics and media sales industries, forcing it to drop the name Computer from the company’s name in 2007. The company is now known for the manufacture of the IOS range of smartphones. As at 30 June 2015, Apple was the largest publicly traded corporation in the world by the market capitalization. Apple is not all about the computer brand it goes way beyond that by creating brands that target a wider audience by innovating interactive brands that make life easier, fun and much more cool. Apple Inc. uses the Apple brand to compete across all the other platforms in the competitive market. Apple’s products;
These Apple products are available in the market and shows the firms variety in the marketing mix. However, as part of its product development intensive growth strategy, the company continues to develop new products such as the Apple electric vehicle, which is under development through collaboration with firms like Tesla Motors. This product mix shows that Apple’s marketing mix is widespread in terms of product variety to address customer’s needs in different areas of their lives. Apple’s marketing mix involves a favorable approach to distribution, maximizing on the different distribution channels. The company uses selective distribution ensuring control over its brands in the marketing mix. Such are the places included in the Apple’s distribution strategy;
Apple store, online apple store and app store are the most widely used and preferred stations that sell Apple’s products, however they have also partnered with companies like the telecom companies and fulfillment stores through which third parties sell these products online thus making it thorough in the use of online and non-online platforms.
Strategic focus and plan
It states that “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 has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad”.
Apple’s current vision statement was introduced by CEO Tim Cook, who stated;
“We believe that we are the face of the earth to make great products and that is 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 to saying no to the 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.”
Apple’s senior vice president of industrial design Jonathan Ive believes that Apple’s goal is not to make money but to make good products. Ive said, “We are really pleased with our revenues but our goal isn’t to make money. It sounds a little flippant, but it’s the truth. Our goal and what makes us excited is to make great products. If we are successful people will like them and if we are operationally competent, we will make money. Really great design is hard. Good is the enemy of great. Competent design is not too much of a stretch. But if you are trying to do something new, you have challenges on so many axes.”
According to (Basu and Wright, 2008) the production of music, video, movie and electronic records helped Apple to gain valuable brand recognition as in 2008 it was recognized as 24th most valuable brand. Its core competencies are its innovative designs and technology based on software. Apple’s core competencies are sturdy and very hard to duplicate and therefore giving it a competitive edge over its competitors. The company has a closed registered trademark ensuring that there is no evasion of its skills and its secret recipe. Apple is also very consistent in its product portfolio development.
Apple Inc. current success is linked to the ability of the company to use its strengths to overcome weaknesses and to maximize opportunities. According to (www.panmore.com) webpage SWOT Analysis also shows the most significant matters that Apple must address. It also highlights the company’s strengths to enable it improve its position and financial performance and weaknesses and threats that need to be addresses through innovative strategies.
This plan recognizes the greatest strengths that help the company tolerate threats in its business environment. These threats reduce business performance and the most striking Apple’s Inc. strengths are;
- Strong brand image
- High profit margins
- Effective innovative process
Apple is one of the most important and strongest brands in the world.
This part of SWOT analysis shows that a company can introduce new products that can profit the company simply because of its strong image brand. It has a steady premium pricing strategy which shows good profit margins and this is a very important strength for it makes it easy for the firm to adjust prices while ensuring significant profits. It is also known for its fast innovations based on the company’s intensive growth strategies. Fast innovation enables the firm to be knowledgeable with the latest technologies to keep a competitive edge. In line with this SWOT analysis it is almost impossible to challenge the firm’s continued leadership in the industry.
In this aspect of Apple’s SWOT analysis, the emphasis is on the inadequacies of the company. Weaknesses can serve as obstacles to business growth. In Apple’s case, the following organizational weaknesses are the most notable:
1. Limited distribution network
2. High selling prices
3. Sales limited mainly to high-end market
Apple has a limited distribution network because of the company’s policy of exclusivity. For example, the company carefully selects authorized sellers of its products. This part of Apple’s SWOT analysis shows that such an exclusive strategy supports control over the distribution of products, but limits the company’s market reach. In addition, because of the premium pricing strategy, Apple has the weakness of having most of its sales revenues from the high-end market Yoo et al., (2010). This market is composed of customers from the middle and upper classes. Customers from the lower class, which represents the majority of buyers in the global market, are unable to purchase Apple products because of the relatively high prices. Thus, based on this dimension of Apple’s SWOT analysis, the company’s pricing and distribution strategies impose limitations in the business.
This aspect of Apple’s SWOT analysis clearly shows the most significant opportunities that the company can exploit. Opportunities influence the strategic direction of business organizations. In Apple’s case, the following are the most significant opportunities in its business environment:
- Distribution network expansion
- Rising demand for tablets and smartphones
- Creation of new product lines
- Introduction of antivirus
Apple has the opportunity to expand its distribution network. In regards to (research-methodology.net) such opportunity directly relates to the weakness of the restricted distribution network of the company. This part of Apple’s SWOT analysis emphasizes the need for the company to change its distribution strategy. By expanding distribution network this will help the firm reach more customers in the global market. Also, Apple has the opportunity to explore new product lines. Apple’s current product lines are highly successful. Through further innovation, Apple can introduce new product lines, like what the firm has already done with the Apple Watch. Developing new product lines can support the company’s growth. Introduction of antivirus will reduce virus on the computers which affects the position of the company, therefore this dimension of Apple’s SWOT analysis indicates that the company has major opportunities for further growth despite aggressive competition.
In this aspect of Apple’s SWOT analysis, the focus is on the threats from various competitors. Threats can reduce the financial performance of companies Leigh, D., & Pershing, A. J. (2006). In Apple’s case, the following threats are the most significant:
1. Aggressive competition
3. Rising labor cost in countries where Apple plants are located
Tough competition in the industry is partly because of the threatening of firms. Apple competes with firms like Samsung, Toshiba and Sony which also uses rapid innovation. This part of Apple’s SWOT analysis highlights the limiting effect of aggressive competition. In addition, Apple faces the threat of imitation or copying. Additionally, rising labor costs in Apple plants, for example in China, can reduce profit margins or push selling prices even higher. Thus, Apple must take appropriate action to overcome these threats.
Apple’s SWOT analysis indicates that the company possesses major strengths Annual report, (2014). The company can use their strong brand image and rapid innovation processes to successfully develop and launch new product lines. However, the firm faces significant threats of high competition and imitation, which highly affect the industry.
When a company has established its marketing mix and began to understand its plan for the 4 P’s: product, place, price, and promotion. It must then incorporate objectives and strategies for what the company aims to do and how it will reach its goals.
Apple offers premium products at premium prices while still maintaining large market share and high profit margins.
Objective 1– Continue creating groundbreaking products
Strategy– Apple will need to have a great team building culture along with a strong research and development team and have to operate with no satisfaction and avoid success limitations.
Objective 2– Innovate and dictate the movement for future technology
Strategy– To continue success of having the best products and listening to customer feedback
You can find an Apple product in most areas of the world and that is certainly the overall goal for global business.
Objective 1– Expand chain of Apple stores globally
Strategy– Begin placing stores in all large markets and expand outward based on population and demand of products
Objective 2– Make products available in every other possible retail outlet example online retailer
Strategy– Place products in every retail store that carries electronic devices, all e-commerce web sites, and make sure mobile devices are featured on every large mobile carrier.
With every Premium Branded product there will come a premium price. According to Yoo et el. (2010): it is expected that ‘big name brands’ that present superior quality bring the highest price.
Objective 1– Enter and sustain premium pricing while attempting to gain market share.
Strategy-Strategically price all products at the top of the market base price relying on brand and quality to offset the price differential.
Objective 2– Increase profit margins.
Strategy– Continue pushing to lower cost of production while sustaining the same retail price in the market
According to Building a brand and making it successful is the toughest challenge in a business. Success like this is not built without excellent marketing and promotion strategies.
Objective 1– Build hype and anticipation for new upcoming products.
Strategy– Use annual conference and events to announce release of new product for this allows the consumer to build a demand for the product before it ever hits the shelf.
Objective 2– Sustain and expand on strongly branded name.
Strategy– Be a trend setter and let the others follow.
If they continue to set trends, enter new product lines and take their share of the market they will dominate the competition.
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