Strategic Analysis Of Apple Inc. – Target Market, Competitors, Positioning, And Communication Theme

Strategic Situation Analysis

Who is your target market? You need to explain why? Explain the chosen segmentation criteria with justification. Who are the
competitors? What is your organization’s current positioning in relation to the competitors? Is it unique enough to give you competitive
advantage? If not, what are you suggesting? Why? You need to show current and future positioning using perceptual maps. What is the
communication theme?

Apple Inc. has innovated and differentiated similar products by making it of a high quality and providing excellent customer service. The actual outsourcing is from third parties like Samsung. The company has set high standards that have been a challenge to maintain.

It is the second most popular information technology company, who designs, develops and sells gadgets, software’s, online services and computers. The apple range of products varies from Mac computers to iphone, iPod, ipad, and the latest is the Apple Watch, which is a smart watch. Apple’s product has been promoted as something, which is for the future. The first advertisement featured a dystopian future model. It is bound to simplify the complexities of the future. (Blythe, 2006)

The Apple products were initially provided as low cost consumer product but this lead to some loss. However, the company returned to profitability with its innovations in mobile and then mobile software’s and the online services. The costs of the products are high and are facing stiff competition from low priced products.

The situation analysis is a study of the environmental forces both external and internal, which influences the running of the business. The business thrives under the condition. The external forces are beyond control of the firm and must be adapted to. The internal forces are the philosophy, policy, management and employee forces, which affect the business from inside. These forces are less aggressive and can be manipulated and handled (Connolly and Cosgrave, n.d.).

The external forces are further divided into macro environmental forces and micro environmental forces. The macro environmental forces are beyond the reach of the firms and are analyzed under the PESTLE. The micro environmental forces are related to the company and are listed under Porter’s five sources (What 7 Key Strategies Must We Learn From Apple Marketing?, 2015).

Political Analysis- An analysis in the recent year’s reports that 52% sales for Apple is generated in other countries. It is suggested to create international relations with other countries and cut down on declining factors such as war and terrorism. If there happens to be any political conflict of the States with countries like Czech Republic, China, Ireland and Korea, it would turn out as a devastating factor since Apple outsources its parts to these countries (Forbes, 2014).

PESTLE Analysis

Economic Analysis- Three important factors that economically affect the environment are currency, recession and inflation. During inflation, the value of currency increases while purchasing power goes down. Recession period contributes in unemployment and decreasing incomes. Apple has purchased itself foreign currencies that have increased revenue in turn (Kan, 2015).

Socio-Cultural Analysis- Two factors mainly affect social factors, namely, the design and quality. Apple products are luxurious in the market and acts as an indicator of lifestyle followed by its customers.

Technological Analysis- Apple is the leading company because of its huge expenditure on technology. It has been the topmost company investing in Research and Development to make innovations and high technology products (Gustin and Gustin, 2015).

Legal Analysis- the Legal environment means that the company must operate its business in such a manner, that it abides by the special regulations, safety and health as well as employment and laws of competition. The Intellectual Property Law and patents on company products are also rules and norms.

Environmental Analysis- Apple has to follow the legislative restrictions imposed on product development and promotion, which are common to every country’s laws on environmental issues. A company must operate in the standards prescribed by the government. As long as there is no adverse effect on the environment, there are no issues. Some governments also have legislations on the product life cycle and product recycling, which the Company in this case Apple must follow so that the environment is not harmed. A sustainable company gathers more support from the government and publics it rather creates a Halo effect on the brand. Thus, reduced usage of natural resources, conservation of energy and sustainable business plays a well significant role (Luther, 2001).

Threat of new entrants to a market- Apple is a reputed company. The value, brand loyalty and customer loyalty it has perceived in the last years makes it difficult for new entrants to give that level of competition in the market.

Bargaining power of suppliers- Because of the growth over years, Apple is looking for new suppliers. They reduce the bargaining power by registering its suppliers on the website.

Bargaining power of customers- Apple maintains a strong hold in the market owning 75% of the profit in market. Apple has loyal customers, though the competition is rising with Android and Nokia (Yahoo Small Business, 2015).

Threat of substitute products- Price and performance are the two factors that affect substitute products. By gaining more loyalty from customers, this threat can be removed which will enhance stability in the market.

Porter’s Five Forces Model

Competition- Apple does not worry about this particular force given by Michael Porter. The reason being Apple believe in innovation and maintains its productivity. They do not put their products on sale or at a marked down price to increase market share (Kotler, 2000).

The strengths and weaknesses of the IT giant are studied under this segment to understand the Company in a better way, judge the opportunities perceive the threats and thus make a marketing strategy based on these findings.

Apple was chosen as the most pioneering company in 2012 for the third time.

It owns 75 percent of the market share and customer worthiness.

Has a brand value of $ 76.5 million and the second valuable brand.

Gross profit is higher than other competitors have and by the end of 2012, it held a cash of approximately $ 10,000,000,000 (Macrumors.com, 2015).

Apple products are expensive and with increasing competition, same features are available at lower price.

It is forecasted that Apple’s current margin will not remain as high as it is now because of increasing competition.

Closed ecosystem of the company leads to decreasing market share.

After the death of Steve Jobs in 2012, Tim Cook became a new CEO. Scott Forestall and John Browett left the company some time later that lead to questions like patent infringement (Npd.com, 2015).

iTV will release soon to increase sales of Apple TV.

High demand of iPod and iPad will increase market share due to rising competition.

iCloud is increasing the use of cloud-based services in the market.

iAd is the advertising platform which will be used to advertise on iPod, iPad and iPhones (Phillips-Melancon and Dalakas, 2014).

Increment in tax will affect prices.

Only Samsung provides application processors to Apple and they have asked a higher price for it.

Android OS is the main competitor in the market.

The customers make high technological demands, which are creating pressure for the company (Slideshare.net, 2015).

Offer few number of new product ranges

Focus should be on the high end gadgets

Profit should be given more priority than the market share

A Halo effect should be given to the product, so that people feel that to buy it is must .

The marketing strategies are the plans formed by referring to the marketing mix elements of product, price, place and promotion. The objectives should be base on SMART approach (iPhone and apps (the brand management and marketing aspects of Apple’s iPhone and associated applications software (“apps”)), 2011).

The strategies are thus specific, measurable, achievable, and relevant and time bound.

The product to be focused on are to be developed and marketed simultaneously

The price should be set 2 % higher on world competitive rate so as to cross the high cost barrier

The place of the new marketing tactics should be first marketed in the developed world of America, Europe and Australia. The later part should focus on the uprising third world countries. The Chinese and Japanese market should be given less preference.

The promotional activities of advertising on media like broadcast, websites and on magazines. Even before indulging into advertising and public relation activities should be taken up on a massive scale to inform the world about the arrival of new technology. The ad should generate sales by 20% in three months (Marketing Apple: Secrets of the World’s Best Marketing Machine, 2015).

The people involved are the developers, designers, and the marketers who will describe and demonstrate the product and introduce it to the customers. Expert comment on the product is provided by the first users of the product (Ries and Trout, 1986).

SWOT Analysis

The process involves the development and final distribution of the product. And physical evidence is the Apple stores, the brochures and the catalogue featuring the products which will be provided.

Evaluation of the marketing activities will be done at the end of three months to ensure brand recognition and awareness of the product (Keyes, 2010).

The Target Market segmentation determines the target consumers of the brand. The market segmentation is done on the basis of:

Demographic- the people would be mostly young urban professionals with high income background. Also aged people and teenagers with a taste for gadgets would be interested in the product.

Psychographic- the people would be interested in buying a product which would ease any particular job or would be introducing something new. They would be spend and would believe in thrift buying (Ismail, 2012).

Behavioral- the customers would be brand loyal, and brand switchers.

The chosen segment will satisfy the firms need to introduce something new and trendy that will immediately be accepted by the world and boost the sales growth and bring in new money (Kotler and Keller, 2009).

The competitors of the brand are Samsung, Nokia, Android and Dell; they are providing substitute products and services at same or lowered price rates. But the goodwill of an Apple product, its constant innovation in the product line and new technologies in the corner makes people bend towards an Apple product. The rest of its contemporaries are sometimes termed as copycats, its simplified format and a unique pricing strategy has positioned the brand in different region altogether thus ensuring that people tends to acquire a status in possessing it (Marketingminds.com.au, 2015).

The term positioning means the way or in the position the brand is placed in the market and how people perceive it. The positioning depends on what position the brand lies in respect to the other brands in the market. The optimum positioning is when a brand is perceived as high quality but moderately priced product.

The current positioning of the brand is that it is the most constantly growing technological gateway but is under a heavy price range and thus linked with an up gradation of a status quo (Holloway, 1998).

The new product will maintain the current positioning but will mark it as an essential item to be in the wish list of people and the sale would be immediate thus growing the market.

Perceptual map before latest Marketing activity-

The new Perceptual map-

Product- At first Apple had only a niche market with low market share. But Apple struggled its way through design and technologies and became successful by gaining brand loyalty, customer loyalty and innovations in styling and technology. Apple Inc provides a wide range of electronic devices like computers, mobile phones, accessories and peripheral products (Apple.com, 2015). The list is categorized as follows:

Portable Computers such as Mac Book Air ,Mac Book Pro, Xserve iMac and Mac Mini.

Accessories such as Led Cinema Display, MagicMouse and Keyboard,

Servers such as MobleMe, Xsan, Xserve, and MacOS X Ser.

Developers such as Developer Connection, iPhone Program and Mac Program.

Wi-fi Based Stations such as Time Capsule, Airport Express and Airport Extreme.

iTunes that includes music, movies, games, audio books and TV shows.

iPod such as iPod Classic, iPod Shuffle and iPod Nano.

Tablets such as iPad, iPad mini and iPad Air.

iPhone such as iPhone 6, Iphone 6S are the latest models.

Peripheral products such as including Storage devices, digital videos, Printers and cameras (O’Grady, 2009).

Price- Apple follows skimming as well as premium pricing strategies. It does not lessen the price just to increase the market share. Apple usually withdraws the oldest product from the market when there is a new launch and turns the prices down for the existing products. Apple started leveraging several supply chain advantages like flash memory and touch screen to bring iPad pricing down. High price is charged by customers portraying the quality of products they offer for the customers who can afford luxurious lifestyle (Goldfayn, 2011).

• The minimum price for Apple iPad is $499.
• The Apple iPhone starts it prices with $ 199.
• The iPod Nano is priced at $ 149.
• The MacBook is priced at $ 999.
• The iPod Classic beings at $ 249.
• Apple MacBook pro costs $ 1199.
• Apple QuickTime Pro for Windows is priced at $29.99.
• A reduced cost pricing structure was announced by Apple for iTunes 2009. The songs were estimated to be priced at sixty-nine cents, ninety-nine cents or $ 1.29. These changes were made because of the diminishing downloads from their store.
• There is flexibility in pricing for iPad with regard to consumer’s reaction. Like in 2007, a similar cut will be made keeping in mind the consumer’s requirement (In.finance.yahoo.com, 2015).

Place- Place of Apple Company is related to its distribution and methods of selling them to the consumers. It adopts a distribution channel that is hybrid in nature and involving physical outlets, retail stores and online stores. They also expanded their consumer reach by constructing retail outlets and growing its operations worldwide. Various e-commerce portals should also increase sales by promoting online sales because it is preferable by people these days. Apple has its headquarters in California. The consultant network includes consulting firms and independent professional service providers. They are confined to provide services and support to business. It has established over 200 retail stores all over US (Richter, 2002).

Promotion is the act of communicating value and benefits to the consumers. The products of Apple are recognized instantly even if you have not used its product. The logo and brand image of Apple is sufficient to reflect on its quality and features. Several tech-blogs along with press conference and websites take part in managing an event in case of a new product launch for Apple. They spend half billion dollars on an annual basis to paid media, which is comparatively lesser than other rival brands like Dell and Microsoft. The versions of iPods that have signatures of Tony hawk and Madonna are available by paying a few extra bucks. The “Think Different” campaign promoted in different media such as Radio and TV were a great success. iPods were given away to the Grammy performers with Madonna’s signature on it. Music lovers were lured by special advertisements on iPod (Hall and Hall, 2015).

Apple Inc. specializes in digital technologies and excels in the virtual world. This is the domain that should be most extensively used in order to reach the primary targets of the company. A major out and out promotion in the media and digital market is much needed to create a niche for the product (Lashinsky, 2012).

The brand must avail the feature of promoting its products through digital media options like web sites and social media web pages

Online promotions and ordering/booking services are essential for making the process as user friendly as the products itself

In store promotions like showcasing the products in Apple stores and events will pull customers directly to on the spot purchasing.

Frequent press releases’ informing the world about the new technologies and innovations will create the right amount of hype (Webber, 2012).

As soon as a product is launched in the market, it must be promoted through a celebrity who will create a Halo effect on the product efficiency

All the media options available, broadcast media, print media and new media should be extensively used to cover the most space

Apps should be available on each new installment that will project it directly to the customers (Ryan, n.d.).

Principal Activities	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7
Research on the product and the market
Cost- $10,000
Identification and development of the product
Cost-$50,000
Review
Cost- $ 10,000
Survey and collection of data
Cost- $10,000
Data analysis
Cost-$5000
Advertising
Cost- $ 40,000
Public Relation
Cost- $20,000
Evaluation
Cost- $ 15,000

 Conclusion

The Apple Inc. is the largest most information technology company which targets only the upper class of the social segment. Its products are one of a kind and contain the latest technology molded into a basic product. There designs, innovations and developments are constantly upgraded foraying into unconquered lands (Schneiders, 2011).

The target is to make something which simplifies the future. But somewhere the company has lost its view and are developing products which are not only hi-tech but not as user friendly as their competitors. Also the price range is higher making it unaffordable for a large sector of the market.

Hence a new product line is being developed which will not only change the perception as much but will flood the market and grow the buying cost limit of the consumers (Adage.com, 2015)..

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