Discuss about the Integrated Marketing Communication Program.
Over the past few decades, Apple has been dominating the world through its effective innovation in technology. Steve Jobs, Wozniak and Ronald Wayne established the particular organizations on 1st April 1976 (Apple.com. 2016). By analyzing the integrated marketing process of Apple, it can be assessed that the company focuses on delivering high quality product to the customers for enhancing their brand value in the market. One of the major products of the company is I-phone, which indeed facilitates the organization to retain their brand position across the global market (Parente and Strausbaugh-Hutchinson 2014). The CEO of the company has discussed that they are focusing on satisfying the personal consumer demand. However, they are less interested in fulfilling the demographic requirements. On the other hand, the management of the organization has already discussed that they have been trying to improve the performance and stability of the existing product rather than introducing new features of the products.
In this context, the integrated marketing plan for I-phone has been provided. The current market situation of the organization has been provided along with the integrated marketing communication objectives. On the other hand, the establishment of the promotional budget has been highlighted in the particular research assignment. The organization needs to implement the effective monitoring process after including the integrated communication program in the business. Hence, the monitoring system of the business has also been highlighted in the assignment.
By analyzing the current market situation, it can be assessed that the organizations have been focusing on different aspects of the business including political situation, economic situation, and socio-culture situation, technological situation, competition situation, environmental situation and sales situation (Cornelissen 2014). The company has introduced a new line of successfully marketed i-phone. I-phone has several features including mobile phone, music player, portable computing, small and personal organizer.
By analyzing the current market share of Apple, it can be assessed that the organizations had faced challenges in earlier years for retaining their market share. The competitors of i-phone are blackberry, windows, and android. During 2006 to 2008, Blackberry had high market share, and it was dominating over i-phone (Blakeman 2014). However, the organization had focused on their marketing planning for enhancing the business opportunities in an effective manner. Although the organization has several competitors in the market, it only focuses on targeting in enhancing their product quality rather introducing new products within a short timeframe.
Figure 1: Current market share of Blackberry, Palm and Apple
(Source: Newman 2014)
By analyzing the below diagram, it can be assessed that the particular product has been successfully retaining its market share. The latest I-phone 6 model continues to be the most popular handset among the apple users. The I-Phone 6 has captured the market share of 30% (Kim and Ko 2012). However, I-phone users have been facing issues in using some of the popular mobile application.
Figure 2: Current I-Phone device Market share
(Source: Burgess 2012)
In recent years, Android is the biggest competitor of Apple operating system. The prime focus of Google Android is to capture highest market share within a short span of time. By analyzing the both market share, it can be assessed that the Android has successfully increased its market share to 50%, whereas apple’s market share is below 30% after the completion of third quarter (De Mooij 2013). Although the management has discussed that they are trying to focus on their pricing policy so that they could engage more customers in the business, they are rather busy in delivering the enhanced quality products to the customers. Consequently, their product cost increases.
Figure 3: Market shares of Android and iOS
(Source: Dobyns 2012)
The prime marketing objective of the company is to deliver the excellent quality products to the customers across the globe. They are less interested in fulfilling demographic needs. According to the management of the organization, the target customers of the organization are teenagers, entrepreneurs, corporate executives, etc (Kotler et al. 2015). Apple focuses on satisfying the existing customer’s demands by providing high-class products and services. The i-Phone targets the customers, who need flawless services and have adequate interest to spend high investment for obtaining that particular service. Most of the corporate clients have been utilizing the particular products due to its flawless performance. Currently, the market segment for a smartphone is very small compared to the general phone market. The smartphone market has been dominated by few companies including Samsung, Apple, Sony, etc (Strauss 2016). There is a huge competition in the budget range devices. Samsung often acquires higher market share than the Apple due to using the world’s most popular operating system named as Android. However, the organization has been trying to improve their pricing strategy, as they are aware of the fact that the smartphone market will robustly increase within few years due to lower prices and higher power (Alon and Eugene 2012).
The marketing communication is based on different promotional activities including digital media, printing media, social media and other online platforms. Without involving the promotional activity, marketing communication would not be completed in an effective manner. Over the past few years, the organization has been focusing on targeting the corporate clients for enhancing the sales activities within a short timeframe. By analyzing the promotional activity of the organization, it can be assessed that the organization has been standing by their decision to produce groundbreaking products for its premium customers (Romero 2012). The organization has set a proper brand image in both domestic and international market. The management has clearly discussed that the organization will be producing premium products at premium prices. However, this business attitude has also facilitated them in upholding large market share and high-profit margins. Besides, another communication objective of the organization is to highlight the fact that the particular organization will be focusing on their future innovative technology (Kilambi, Laroche and Richard 2013). The marketing team of the organization has agreed with the fact that they are unable to enhance the sales margin in the Asian market due to low promotional activities. Hence, Apple has been trying to implement several strategic approaches for improving the business opportunities in the Asian market.
By analyzing the annual report of the organization, it can be assessed that the company has increased its advertisement or the promotional budget since 2009. In the fiscal year 2012, the promotional budget hitting $1 billion. Over the past few years, the organization has been trying to improve its promotional activity for enhancing the sales revenues in the business. In the recent years, the organization has been facing tough competition from its rival, Samsung. Since 2009, the organization has been trying to enhance its promotion through engaging different marketing platforms. By analyzing the annual report, it can be identified that the company spent approximately $501 million in 2009, whereas the organization had spent $1 billion dollars in 2012 (Shimp and Andrews 2012). Hence, it clearly indicates the fact that the organization has been eagerly trying to improve its sales through making effective promotional activities. It has been reported that the prime reason for enhancing the promotional budget is the advertisement cost of I-Phone. During 2007 to 2010, Apple’s promotional budget had risen to $467 million due to the advertisement of I-Phone and I-Pad (Mackert 2012). The advertisements of the product are created by the ad agency TBWA or Media Arts Lab. The proportion of expenses including general and admin costs have declined to 6% of revenue in 2012, from 7% in 2011, as the sales of I-Phone has been exorbitant (Jankovic 2012).
The advertising budget indicates the subset of the larger sales budget. In the fiscal year 2010, Apple increased the promotional activities in an effective manner. However, the company’s revenues growth was dropped from its overall ratio of its earning which spends on the advertising purposes. The company had reported that they spent nearly $691 million dollars on advertising in the year when both iPad and iPhone 4 were launched (Persuit 2013). The management has discussed that they have been trying to improve their business effectiveness through their promotional activities. If we analysis the below diagram, it can be assessed that the company has been increasing their promotional budget since 2007. It clearly indicates that the sales revenues of the company have been increasing every year. In 2012, the advertisement budget of the company went to the highest margin. Through the engagement of the effective promotional budget, the organization has been trying to spread their product information across the globe. However, the organization has been focusing on advertising its products to the Asian countries where the sales margin has decreased. For enhancing the sales margin on that particular area, the particular organization has included several strategic approaches in the business.
Figure 4: Apple Ad Budget by Year
(Source: Schivinski and Dabrowski 2016)
Although the organization has increased its sales promotion in recent years, it is unable to compete with other competitors in advertising budget. By analyzing the below chart, it can be assessed that Microsoft and Dell have spent more financial resources on the advertising. For instance, in the financial year 2009, Microsoft spent $1.4 billion, whereas Dell spent $811 million on advertising purpose (Strauss 2016). Hence, it can be assessed that Apple should have been focused on their promotional activities to improve their sales revenue.
|
Ad expenses |
% of revenue |
|
|
Microsoft |
$1.4 billion |
2.1% |
|
Dell |
$811 million |
1.30% |
|
Apple |
$501 million |
1.37% |
|
RIM (BlackBerry) |
$337 million |
3.60% |
Figure 5: Revenue analysis
(Source: Dobyns 2012)
Advertising:
The particular organization promotes their products through engaging a particular series promotional activity. The advertisement of the organization includes several marketing tools including SEO, PPC, offline promotion, online promotion, social media promotion, digital marketing, printing media and direct promotion, etc. Apple has shown their tremendous promotional planning, as the mobile operators mostly conduct the advertisements of I-Phone product. Different network operators do some I-phone ads for enhancing their product selling. The prime competitor of the organization is Samsung, who is indeed dominating the mobile market. Although Apple does not use the Android OS, they have been trying to beat the selling performance of Samsung. As discussed earlier that the advertising of the I-Phone depends on some factors including demographics, target marketing, etc. Apple mainly targets a group of people in the society such as a corporate person, students, teenagers, business owners, etc. according to a market survey, 25% of all i-phone users belong to the under 25 age group, whereas 46% are under the age of 35 (Cornelissen 2014). Hence, it clearly indicates that most of the I-phone users belong to the young age group. Although the organization has been focusing on advertising tools including social media, printing media, digital media, it also has included the direct promotional activities. For instance, Apple employs the iAds program for placing the advertisement directly in I-Phone application. With the involvement of this particular service, the organization could conduct the mobile advertising. Besides iAds, the business has also included additional options for conducting the advertisement on the mobile device.
Digital marketing:
The digital marketing is one of the important business tools that facilitate the organization in enhancing the business opportunities in an effective manner. Without involving the digital marketing tools, Apple would not be able to improve the sales revenues of the business. Digital marketing activities include several tools such as search engine optimization (SEO), content marketing, search engine marketing (SEM), content automation, e-commerce marketing, social media optimization, display marketing, etc (Blakeman 2014). However, the particular organizations involve some selected marketing tools for improving the business opportunities in an effective manner.
One of the important tools of the digital marketing is social media. Nowadays, the social media facilitates the organizations in enhancing the sales advertisement in an effective manner. Although Apple has been spending a huge amount of financial resources on advertising, social media engagement indeed facilitates them in promoting their products to the large demographic areas as well as in the foreign market. The advertising strategy of i-phone depends on different factors including demographics, devices, iAds, and advertising with Apps. Nowadays, the social media applications like FaceBook, Twitter, Instagram have been facilitating the particular organization in expanding the business promotion in an effectual manner (Kim and Ko 2012). On the other hand, Apple has been focusing on advertising their products to those regions where the sales revenue had decreased. With the involvement of the FaceBook promotional activity, the organization would be able to provide products related information to the customers. Besides, the organization could obtain feedbacks about their existing products through their Facebook promotional page. On the other hand, the Twitter also facilitates the organization to provide the adequate information about the launching date of the products. Moreover, the customer could submit their query on the social media. Hence, it would facilitate them in enhancing the business promotion in an effectual manner.
For monitoring the sales performance of the business, the particular organization has applied different strategies. Without monitoring the business process, the organization would not be able to identify the key development areas in the commerce. For measuring the sales performance, the organization needs to consider some factors including the establishment of achieving goals, measure retention business, review up selling figures, and survey customer experiences. The prime objective of the organization is to deliver premium quality device at a premium price.
The organization has been focusing on accumulating the feedbacks from the customer so that they could understand the key issues facing the existing consumers. On the other hand, the feedback accumulation process not only facilitates the organization in identifying the key development areas but also contributes in obtaining suggestion from their loyal customers (Burgess 2012). Apple sales their I-phone device through several platforms, including e-commerce sites, offline sales, store sales, etc. Hence, the organization accumulates the sales information from each platform quarterly. It would facilitate them in understanding the progress of the business, and it highlights the current market situation.
The control program centralized on their product quality. The particular organization ensures that they would not compromise with the product quality for enhancing the sales revenues across the globe. According to the management, the highest priority of the organization is to control the product quality and enhance the stability of the existing device rather than introducing new devices frequently. The particular organization involves those suppliers into their control program, who meet the highest standards for all goods and services (Dobyns 2012). By providing rigorous quality assurance, Apple has been successfully upholding the brand reputation on the global platform.
Conclusion:
It can be concluded that the integrated market communication program has been facilitating Apple to enhance their sales performance gradually. Over the past few years, the organization has been improving their advertising activities in an effective manner. In this context, it has been discussed that how the particular organization has increased their advertisement budget in recent years for obtaining high sales revenues from the domestic and international market. Besides, the current market situation of the I-Phone devices has been discussed in this assignment. Moreover, the allocation of the promotional budget has been discussed which would facilitate in understanding the marketing communication objectives of Apple. Hence, the particular assignment would facilitate in identifying the current marketing position of the organization in an effectual manner.
References
Alon, I. and Eugene, J., 2012. Global marketing. Mcgraw Hill Higher Educat.
Apple.com. (2016). Apple Info – Apple. [online] Available at: https://www.apple.com/about/ [Accessed 14 Sep. 2016].
Blakeman, R., 2014. Integrated marketing communication: creative strategy from idea to implementation. Rowman & Littlefield.
Burgess, J., 2012. The iPhone moment, the Apple brand and the creative consumer: From “hackability and usability” to cultural generativity (pp. 28-42). Routledge.
Cornelissen, J., 2014. Corporate communication: A guide to theory and practice. Sage.
De Mooij, M., 2013. Global marketing and advertising: Understanding cultural paradoxes. Sage Publications.
Dobyns, D.H., 2012. Techniques For Wireless Communication Of Proximity Based Marketing. U.S. Patent Application 13/198,550.
Jankovic, M., 2012. Integrated Marketing Communications and Brand Identity Development. Management (1820-0222), (63).
Kilambi, A., Laroche, M. and Richard, M.O., 2013. Constitutive marketing: Towards understanding brand community formation. International Journal of Advertising, 32(1), pp.45-64.
Kim, A.J. and Ko, E., 2012. Do social media marketing activities enhance customer equity? An empirical study of luxury fashion brand. Journal of Business Research, 65(10), pp.1480-1486.
Kotler, P., Burton, S., Deans, K., Brown, L. and Armstrong, G., 2015.Marketing. Pearson Higher Education AU.
Mackert, M., 2012. Account planning: applying an advertising discipline to health communication and social marketing. Health marketing quarterly,29(3), pp.270-282.
Newman, N., 2014. Apple iBeacon technology briefing. Journal of Direct, Data and Digital Marketing Practice, 15(3), pp.222-225.
Parente, D. and Strausbaugh-Hutchinson, K., 2014. Advertising campaign strategy: A guide to marketing communication plans. Cengage Learning.
Persuit, J.M., 2013. Social Media and Integrated Marketing Communication: A Rhetorical Approach. Lexington Books.
Romero, N., 2012. Social reading and the creation of customer loyalty clubs or communities to improve communication with our users and reduce costs in marketing and advertising. The Bottom Line, 25(2), pp.63-67.
Schivinski, B. and Dabrowski, D., 2016. The effect of social media communication on consumer perceptions of brands. Journal of Marketing Communications, 22(2), pp.189-214.
Shimp, T.A. and Andrews, J.C., 2012. Advertising promotion and other aspects of integrated marketing communications. Cengage Learning.
Strauss, J., 2016. E-marketing. Routledge.
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