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Marketing Management

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Tunis Business School
Paper 1
Principles of Marketing
Topic
Apple Brand: iPhones
Prepared by:
Abderahman Rejeb
Supervised by Ms.:
Izzudin Busnaina
Instructor of Principles of Marketing
Academic year: 2014 - 2015

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Acknowledgment
This paper has benefited greatly from the
input of the Marketing Management
course.
We greatly appreciate the constructive
suggestions and innovative ideas of our
instructors Izzudin Busnaina and Mohamed
Ennouri.
We appreciate the exemplary support and
commitment given to us.
Acknowledgment

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Table of content
I. Introduction :........................................................................................................... 5
II. The review of literature :.............................................................................. 7
The brand knowledge :....................................................................................................................... 7
The brand awareness :........................................................................................................................ 7
Statistics and data :............................................................................................................................. 8
Target customers by Apple :............................................................................................................... 9
Advertising and brand enforcement :................................................................................................ 9
Apple image and corporate environment :........................................................................................ 8
III. Conclusion:............................................................................................................... 12
Reference:............................................................................................................................... 13
List of Tables:
FIGURE 1: THE STRUCTURE OF BRAND KNOWLEDGE............................................................................................................ 7
I. Introduction :
owadays, to be successful and to ensure its going concern, the brand awareness and image
are primordial for any company operating around the world. As consumers, we don't
actually pay a great attention to the significance of branding. We just seem to go with the
tide of the mainstream brand names that have become so familiar with our daily life. But the impact
N

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of a name reinforces the importance of branding when we promote our business. Think about one of
the world's most popular athletic shoe companies, Nike. The importance of branding is demonstrated
by the fact that when the word “Nike” rings into our ears, we think athletics and "Just Do It." A great
brand name and association has propelled Nike to the top of its industry. Along with above
illustration, we could say that, to large extent, the creation of brand contributes a lot to a positive
prospect of a company, especially for those operating in the technology industry, like Apple. Apple
being one of the most valuable brands in the technology field, its brand reputation pervaded the
world and tapped several markets to be at globally recognizable level. Although most Apple’s
products are still recently developed and they are dated from a close period of time like the
introduction of iPhone in June 2007 (Apple Inc, 2007), still many people and consumers considered
its products notably the iPhone and its accompanying Operating System (iOS) as a breakthrough.
Based on the importance of brand awareness and brand image to the company’s survival and
carrying with the curiosity to the success ingredients of Apple business as a dominant global player
in several product categories and among them are the iPhones , we manage to investigate to what
extent the consumers know about the brand of Apple (brand awareness) and what kinds of
perceptions people have about the brand as reflected by the brand association held in target
customers’ memory (brand image). The paper intends to answer those fundamental marketing
questions:
 How does the company create and capture customer value?
 How does the company understand and respond to its marketing environment?
 How does the company manage its marketing information to gain customer insights?
 How does the company understand its customer and design offerings for them?
Regarding the choice of the company, after a long evaluation of alternative smartphones brands in
the world we decided to pick the well-known international company Apple. Despite of being the
international brand, the value embedded into the Apple iPhones contributes hugely to the company’s
prosperity. Therefore, we think Apple brand fits our research perfectly. The company has built a
strong brand on a quality product and unique features. Its brand has allowed it to transcend its core
business and spread through more profitable licensing deals and innovations, which have made the
competitive advantage so strong in high-tech industry. Apple makes great strides in building a
worldwide brand. It has so much to offer, importantly its locations, consumers, brand image and a
distribution network. Apple is no longer satisfying the need of getting a smartphone, but it is selling
a lifestyle and allowing consumers to trade up and feel their aspirations for a better life. Apple is not
merely a high-tech manufacturer but rather a media property with an intrinsic value to brand

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partners. It has developed an emotional attachment and strong ties with its customers and restored the
connections with its customers who have its products generally and its iPhones particularly.
Talking about the audience we are aiming to, we consider that Apple has great deal with its brand
awareness and image. The results of our research can be used by this specific audience in order to
have a frame of reference on which they can hinge on their future decisions about buying one of
Apple’s products. Moreover, an academic audience such as marketing students and followers could
be also interested in improving their knowledge about the chosen topic. This target group might find
our work useful to deepen their knowledge with this topic, and use the paper as a starting point for
further related studies. Lastly, we wish our research paper to be informative and to reach the interest
of our readers.
II. The review of literature :
The brand knowledge:
brand can be referred as "a name, term, sign, symbol, or design, or combination of them which
is intended to identify the goods and services of one seller or group of sellers and to differentiate
A

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them from those of competitors" (Kotler ,1991, p. 442). In addition, brand knowledge can be defined
as consisting of a brand node in memory to which a variety of associations are linked. Based on the
Keller’s model of brand knowledge, there are many important dimensions that distinguish brand
knowledge and affect consumer response and they consist of the awareness of the brand (in terms of
brand recall and recognition), the favorability, the strength and the uniqueness of the brand
associations in customer memory. These dimensions are affected by other characteristics and
relationships within the brand associations. For instance, factors related to the type of brand
association such as its level of perception and qualitative nature affect considerably the favorability,
strength, and uniqueness of brand associations. The structure of brand knowledge model is
depicted by the schema underneath:
Figure 1: The structure of brand knowledge
The brand awareness:
Brand awareness consists of brand recognition and brand recall performance. Brand recall relates to
consumers ability to retrieve the brand when given the product category, the needs satisfied by the
product, or some other type of probe as a cue. In other words, brand recall requires that consumers
correctly recover the brand from memory (Keller, 1993). Brand recognition refers to consumers'
ability to regain the prior exposure to the brand when going through the brand as a cue. In other
words, brand recognition requires that consumers correctly distinguish the brand as having been seen
or heard previously (Keller, 1993).
Brand awareness impacts and shapes in an outstanding way the consumer decision making for three
major reasons. First, it is important that consumers think of the brand when they think about the

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product category. Raising brand awareness increases the likelihood that the brand will be a
member of the consideration set (Baker et al., 1986; Nedungadi, 1990). Second, brand awareness
influences decisions about brands in the consideration set, even if there are essentially no other brand
associations. For instance, consumers have been deemed to adopt a decision rule to buy only
familiar, common and well-established brands (Jacoby, Syzabillo, and Busato-Schach 1977;
Roselius, 1971). Third, brand awareness affects consumer decision making by influencing the
formation and strength of brand associations in the brand image. A necessary condition for the
creation of a brand image is that a brand node has been established in memory, and the nature of
that brand node should affect how easily different kinds of information can become attached to the
brand in memory (Keller, 1993).
The Statistics and data:
Figure 2: Net Sales by operating segment and units sales by product during 2016, 2015 and 2014 (Dollars in millions
and Units in thousands)1
According to the abovementioned annual report and statistics, Apple sold approximately 212 million
iPhones valuing a net sale of $ 136700M. Furthermore, the observation of the Fortune Global 500
Ranking System (www.fortune.com, 2017) revealed that Apple is considered as the world’s biggest
technology company in function of its revenues and market share.
Target Customers by Apple:
1
https://www.statista.com/statistics/276306/global-apple-iphone-sales-since-fiscal-year-2007/

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A firm cannot achieve a strong competitive advantage if there is not a good targeted market for its
products. Apple takes into consideration the marketing to a variety of people with different
characteristics. Thus, there is this classification of classes and Apple marketing strategy is hinged on
focusing specifically on the upper and the middle class due to their willingness to pay slightly high
prices for its products. Besides, statistics and data have shown that Apple’s products and precisely
the iPhones are not constrained to the 18 to 34 year old demography but also other consumer from
different age range are enthralled and seduced by its products (Patentlyapple.com, 2010).
Advertising and Brand enforcement:
Apple follows a marketing strategy that aims to enforce its foothold. Its strong brand tends to be the
result of products that meet high quality standards. It also deploys intensive and innovative
marketing activities by investing heavily into the creation of its brand. In fact, Apple allocated an
important advertising budget and spent huge sums of money for advertising over the past several
years. In 2009, the company spent over than $501million in advertising (Nudd, 2011).
Brand awareness consists of brand recall and brand recognition. Considering the brand recall’s
definition, that is the consumers’ ability to retrieve the brand when given the product category, the
needs fulfilled by the category or some other type of probe as a cue (Keller, 1998). Apple’s products
in general and iPhones in particular have been always conceived as a synonym of innovation in the
public mind (Cohan, 2012). Consumers are deeply satisfied and interested in the impeccable,
prestigious and technologically fashionable products and this contributes largely to the expansion of
the brand recall into depth of recall (the percentage of people who know the brand) and the width of
recall (the cues that lead to brand recall).
{} (Our own illustration)2
Figure 3: The Apple and its competitors market share in the world
Apple image and corporate environment:
2
Based on the results found in gs.statcounter.com/vendor-market-share/mobile

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Operating in high-tech industry is plenty of challenges and threats. Although Apple gained a
competitive advantage, the company is facing many deeply rooted and entrenched innovative
competitors. According to the figure 3, we can observe that Samsung is a strong competitor of Apple
along with Huawei. Apple maintained strong foothold in the US market by realizing 54% of the
market share and this is an advantage over the other brands. The country of origin represents in this
case the brand identity and Apple has counted strongly on this competitive advantage to reinforce
more its brand, market positioning and increase its sales volume. However, the company maintains a
lower market share in smartphones compared to the Samsung and Huawei brand in other markets
notably the Tunisian and the Egyptian market (approximately half of the Samsung market share in
the previous stated countries). This is explained by the growing nature of the technology industry
that paves more chances to companies to join the high-tech industry and produce to markets from all
parts of the world.
Brand image is as shown in the Keller’s model is detailed to a greater extent within the model
because of its more complex nature. During the design, we basically refer to Keller model that
involves type of brand association, favorability of brand association, uniqueness of brand
association, and strength of brand association. The column of type of brand association is categorized
into product-relate attributes and non-product-relate attributes which possess of two sub-column,
user imagery and usage imager. The other two branches under the type of brand association are
attitude and benefit which are detailed to a deeper extent, like functional, experimental, and
symbolic. Then excluding the strength of brand association, the rest two categories, uniqueness of
brand association and favorability of brand association, are under consideration as well. Based on the
original model, we consider the deletion of the strength of brand association. Because this issue is
mainly about the channels through which the information is printed into consumer memory, and then
make these information transferred into the brand image and stored into customers’ mind (storage).
Otherwise, it’s more about the process of brand communication which is beyond our main purpose.
In the context of Apple brand image, the iPhone is immediately recognizable and no one is unable to
distinguish it from some other smartphones. The brand image is well considered amongst most
consumers. Furthermore, the company maintains a product with strong brand image and culture
shifting effects and consequently this increases the potential consumer confidence and convinces
them to purchase (Ahmed, 1991, p.25).
In summary, Apple maintains strong ties with its customers and in return they are so loyal (Goldmen
Saches, 2012, 88). The aim of the company is to retain loyal customers, to focus on after-sale
services and to improve customer’s experience. The company market share is expanding under the

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leadership of Tim Cook and also its products continue to spread and to create a new demand with
iCloud and Siri (Meyer, 2012).
III. Conclusion:
Someone once observed: " There are three kinds of companies who make thing happen ,those who
watch things happen ,and those wonder what's happened " . Many companies consider the marketing
environment as uncontrollable and turbulent elements to which they must react and adapt. They
passively accept the marketing environment and don't try to change it. They analyze the

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environmental forces and design strategies that will help them to avoid the threat and take advantage
of the opportunities the corporate environment provides them with.
This is may not always be true for Apple. In fact, the company reacts proactively in a turbulent
environment. Though there are many entrenched competitors in the mobile phone industry, the
company has succeeded to create customer values by attributing its products to specific segments and
ensure high quality of mobiles with competitive prices that is by combining the cost leadership and
the differentiation strategies.
Information is the lifeblood of any company. As for Apple, to manage its marketing information is
one of the most important aspects of its business operations. To ensure the flexible flow of marketing
information, the company focuses on its customer preferences, behaviors and attitudes as a primary
concern.
Frequently, the customers do not know exactly what they want and what they look for. Thus, Apple
is usually available to shape their insights and provides them with products that highly satisfy their
desires and needs. The company merely tried to understand what will get people excited about its
products and then it executes its vision (Enderle, 2004).
A company’s ability to manage flexible market offerings successfully rests on its understanding of
the value each component of an offering creates as well as its associated cost. The mentioned
statistics prove that Apple takes into consideration many aspects such as prices, post-purchase
reactions, and brand loyalty to tailor its products to customer delight. Overall, an understanding of
how customers value those components—and what they cost the company to deliver—enables Apple
to identify and eliminate what we call value drains and retain more and more their customers.
References
Aaker, D.A. (1996). Building Strong Brands. New York: The Free Press, A Division of Simon &
Schuster Inc. Aaker & Jacobson (2001).

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Ahmed, Z. (1991). The Influence of the Components of a State’s Tourist Image on Product
Positioning Strategy. Tourism Management 12: 331-340.
Baker, William, J. Wesley Hutchinson, Danny Moore, and Prakash Nedungadi (1986), "Brand
Familiarity and Advertising: Effects on the Evoked Set and Brand Preferences," in Advances in
Consumer Research, Vol. 13, Richard J. Lutz, ed. Provo, UT: Association for Consumer
Research,637-42.
Enderle, Rob. (2004). HP’s iPod will Outsell Apple. The Mac Observer.
Goldmen Saches (2012). Annual report, p 88.
Keller L.K (1998). Strategic Brand management; Building, Measuring, and Managing brand Equity,
New Jersey.
Jacoby, Syzabillo, & Busato-Schach (1977). Branding and Brand Equity, 130-161.
Meyer, Christopher. (2012). Strategic Innovation: Apple’s Business Strategy.
PatentlyApple. (2012). www.patentlyapple.com.
https://www.statista.com/statistics/276306/global-apple-iphone-sales-since-fiscal-year-2007/
http://beta.fortune.com/global500/list/filtered?sector=Technology
gs.statcounter.com/vendor-market-share/mobile