Discuss about the Marketing Mix of Apple.
Apple Inc. is a multinational technological giant headquartered in California, USA. The company sells consumer electronics, software and online services. The most popular products of the organization are iPhones, iPad, iPod and Mac personal computers. Apple was founded by Steve Jobs, Steve Wozniak and Ronald Wayne and initiated its operations in 1976 with the sales of the personal computers (Rawlinson, 2016). It is one of the largest technological company and second largest mobile phone manufacturer (Dent, 2015). It has a strong brand loyalty and considered as the most popular brand by the world. One of the most popular products of the company, iPhone was launched in 2007 by Steve Jobs as a combination of Smartphone and iPod. It has become immensely popular and each new model of the company is awaited by the loyal customers in anticipation.
The marketing strategies adopted by the company also contribute to the popularity of the device. It promotes the devices with several methods which creates eagerness in the mind of the customers. The marketing mix is the basic concept of marketing and refers to the operational part of the marketing plan. It contains controllable marketing tools which a business organization can manipulate to create response from the target market (Richter, 2012). In this regard, in this report, the marketing mix of Apple Inc. in the Australian market is discussed. The report focuses on the marketing mix of the company for the iPhone 6, a popular product. Along with it, the report discusses the contemporary issues in the business environment that can affect the firms’ marketing strategies. Subsequently, several recommendations are made so that the company can improve its marketing mix.
The marketing mix of a company indicates how the firm adapts itself to the changing marketing conditions and the competition. A business organization addresses the market conditions and the competition by manipulating the variables of marketing mix. Traditionally, the marketing mix encompasses four variables (product, price, place and promotion) which are now extended to eight variables, namely, product, price, promotion, distribution, partnerships, people, processes and physical evidence (Crane, 2012). In the below section, the marketing mix of the iPhone is examined.
Product:
Apple Inc. offers an exclusive product with distinguished qualities in the form of iPhone 6. The most enchanting feature of the product is its Apple ios operating system. The competing operating systems such as Windows and android were launched after ios operating system; therefore, the customers were attracted towards it due to its capabilities and fast processing speed (V3, 2014). Durng the launch of iPhone 6, the company never tries to copy other brands but compete with itself and launch other features. Itunes and the Apple store are other attractive features of the product. It creates premium products and follows the product development intensive growth strategy. In this strategy, the company constantly strives to create innovative and technologically-advanced products (Cornell, 2014).
Price:
The Company follows the skimming pricing strategy. It focuses on the premium customers who are willing to pay high prices for the products. In comparison to the competitors, the prices of the Apple iPhone 6 are high (Kidman, 2016). It does not believe in competition with other companies in terms of pricing and use price as an aspiration for the customers and do not determine it according to the utility of the products. This pricing strategy assists the company in maintaining the luxurious brand image for itself. Moreover, as per this marketing strategy, the market share of the company encompasses a specific target customer base composed of middle and upper class. However, it does not impact on the profitability of the company as higher prices increases the relative profitability (Neilson, 2014).
Promotion:
Apple Inc. follows a detailed and focused promotional strategy. With the launch of new products, it launches mega annual events wherein the media and the management are invited. It creates a big promotion for the products (Farfan, 2016). They also focus on establishing good relations with the media so that the news regarding the new product launches are published in the leading newspapers and the magazines. In the above the line promotional strategies, the company uses mass media such as television, radio, and newspapers. The iPhones are also promoted with below the line marketing with hoardings and point of sale advertising in the retail outlets of the company (Eadicicco, 2014).
Distribution:
Apple Inc. has presence in major cities in Australia. As it targets only the premium customers, the store of the company are opened only in the large cities of the country. Moreover, these stores are found at the busiest locations and prime shopping malls in alignment with the brand image of the company. It has also implemented corporate tie-ups wherein the top management and the CEOs of the company are given the smartphones of Apple Inc. It also channels its product through a number of e-commerce websites such as Flipkart, Snapdeal and Amazon (Farfan, 2016).
Partnerships:
The partnership refers to the major partners or the government agencies, their collaboration and management. The corporate resellers are the major partner of Apple Inc. They implement the advanced technical solutions offered by Apple Inc. in their company’s operations. It includes the use of iPhone 6 (Apple, 2017). In addition to it, the company has also collaborated with Deloitte to increase the enterprise sales of the product (Reuters, 2016).
People:
One of the core strengths of the company is its talented workforce. The company recruits the best talent in the industry which is responsible for the constant innovation and technically advanced products. In order to attract the best people, the company selects the people with excellent education, academic performance and work experience. It also provides attractive remuneration packages to retain the talent within the organization (Lev-ram, 2014).
Processes:
Apple has a systematic method for all of its operational processes. It has numerous factories in the world and a robust supply chain. It outsources manufacturing process and the raw materials from the low-labor cost countries and sells them all across the world. It increases the efficiency and the productivity of the system (Supply Chain, 2013).
Physical evidence:
The physical evidence refers to the service of the company and where it is delivered. There are several factors that affect the physical evidence, such as ambience, service personnel or the corporate brand. It can be evaluate that Apple Inc. extends qualitative experience to its customers. The stores of the company are designed to provide a unique experience to the customers, inspired by the simplicity theme of the organization.
In the present business scenario, several contemporary issues have emerged. A business organization has to address these issues to become successful. At present, the government has become stricter regarding the environment degradation and the role of the corporates in it. As a result, the companies are adopting practices to reduce the environmental impact of their operations.
Supplier Responsibility and Labor Rights
Although Apple has become an iconic brand in the field of mobile technology, it suffers from the human rights and the labor law issues in its supply chain. A large number of the company’s suppliers are from China wherein several challenges exist in terms of ethical and safe working conditions (Triple Pundit, 2015). The company is combating this issue by creating sustainable facilities and empowering workers. Another challenge for the company is usage of the raw materials which can cause potential harm to the environment and degrading it. In China, the enormous workplace pressure has resulted in employee suicides and degradation of health. Additionally, the supply chain materials have also lead to the incidents of workplace poisoning and metal contamination (Watts, 2011).
Globalization
Due to globalization, the competition among the smartphones manufacturers has increased. Several companies have emerged in the smartphone market which are proving good and at par features to the customers at a very cheap cost. Moreover, these companies are also entering the markets predominated by Apple Inc. and snatching away its market share. Moreover, there are several challenges and significant risks in the international operations of the company. While trading in different countries, the companies have to take into regard the laws and the taxation of that country. Without adequate knowledge of the laws, the companies may be subject to fine and penalties. Moreover, while operating in a different country, a company also has to take regard to the differences in the culture and values. Some differences are stark clear whereas few differences are subtle but can create a huge dent to the firm’s business (Thompson, 2017). The smartphone manufacturers also find difficulties in working in different countries. The privacy and the taxation laws in China are entirely different from other countries. Therefore, many companies struggle to create profitable business here (Jeschke, 2012).
Social Media Interactions
Today, social media is considered as a significant tool inn marketing and connecting with the customers due to its wide outreach and consumer engagement. However, there are significant challenges in the social media marketing strategy to increase its effectiveness. The foremost challenge is establishing an authentic connection with the consumers. Connecting with the consumers will result in building a humane and authentic brand. Another challenge for the companies is to engage the people through the communication. The companies also have to be prompt in responding the consumers and considerate of the feedback of the customers. It is important that the business organization should implement a strategy to enhance the customer satisfaction in the purchase process. In the present, the consumers provide feedback and their experience with the company on their social media websites. It is important that the companies provide a good consumer experience so that it increases the word of mouth publicity of the company rather than increasing criticism (Fekel, 2017).
Product:
Apple Inc. should focus on improving the operating software for all the current version of the iPhone 6. Along with it, the company should also increase the hardware rigidity and the glass screen (Crane, 2012).
Price
The company follows the premium pricing strategy to distinguish itself from other brands. It should follow the same strategy to maintain its brand image. However, Apple can also strategize to release a cheaper version of phone from its sister company Nokia to tap the price sensitive market share (Ferrell et al., 2014).
Promotion:
The company can enhance its promotional strategy by using social media and blogs to connect with the customers. In the above discussion, it has been identified that the social media is a crucial tool in the promotional strategy. The companies can use social media to connect with them. It is also beneficial in identifying the response of the consumer towards a specific product and the current social trends (Ferdinand & Kitchin, 2016).
Distribution:
The company follows an appropriate distribution strategy. However, it can enhance its distribution strategy by directly selling its products through online mediums. It will eliminate the middle man and the gross profit of the company will enhance. It also has appropriate distribution channels which transfers the raw material in the supply chain (Ferdinand & Kitchin, 2016).
Partnership
The company can focus on developing long-term partnerships with its suppliers and distributors. It will increase the operational performance of the organization and increases its profitability (Ferdinand & Kitchin, 2016).
People
At present, Apple Inc. tries to recruit the best talent in the industry through attractive remuneration packages. Since it is a technological company, it can also recruit the fresh graduates from the several world-class programming competitions (Ferdinand & Kitchin, 2016).
Process
In its supply chain, the company should implement supplier code of conduct for all of its suppliers so that the internationally recognized standards can be created. Moreover, the company should focus on increasing the transparency of the supply chain (Reic, 2016).
Physical Evidence
Apple has invested in creating a unique ambience and infrastructure for the company. It can enhance the humane experience by giving training to the front desk executives to increase the customer satisfaction in the dealings (Chaffey & Smith, 2013).
Conclusion
Apple Inc. is a leading business organization in the technological and smartphone industry. The iPhone manufactured by the organization have immense popularity and large fan following. It has developed a specific market share for itself by offering a distinguished product. The iTunes and the operating system of the smartphones are unique features of the product. The company follows a premium pricing strategy wherein the affluent and rich customers are targeted. It does not determine the price upon the product utility but to create a desire in the minds of the customers. It also follows a specific distribution strategy wherein it opens its stores in the shopping malls and busy locations. There are several contemporary issues in the marketing mix of the organization such as social media interaction, labor laws, globalization and the supply chain issues. A business organization has to create its marketing strategy by focusing on these contemporary issues. It is important that a firm determines and uplift the standard of all the workers and enhance the transparency in the supply chain. It will also augment the brand image of the organization and establish the culture of ethical practices. It can also focus on creating long-term relationships with its clients and suppliers to enhance trust and operational efficiency among them. In its distribution strategy, the company should also initiate to directly sell the products to the consumers through online mediums. It will increase the operational efficiency and profitability for the organization.
References
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Chaffey, D., & Smith, P.R. (2013). Emarketing Excellence: Planning and Optimizing Your Digital Marketing. London: Routledge.
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Crane, F.G. (2012). Marketing for Entrepreneurs. SAGE.
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