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Apple Inc Marketin And Distribution Strategy


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it includes the distribution and marketing strategy of techno giants apple inc. and some recommendations and suggestions..

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Apple Inc Marketin And Distribution Strategy

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  2. 2. THE ACKNOWLEDGEMENT<br /> <br /> <br />With profound sense of gratitude and regard, I convey my sincere thanks to my guide Mr.DipanjanDutta Marketing faculty, for his valuable guidance and the confidence he instilled in me, that helped me in successful completion of the project report.<br />This acknowledgement would not be complete without thanking all the faculties of P.C.M.T who inspired me to work hard and my deep sense of gratitude to Mr. ParthaSarathiSarkar, Mrs.Saswati Roy Chel and Mr.AbhijeetPakhira without whose support and guidance , this project would not be successful. <br />
  3. 3. ABSTRACT.<br /> <br /> <br /> The need for this project is to explore the strategies of world’s top companies like Apple Inc. and to discover the methods and ideologies of companies like this.<br />Project-based learning offers a wide range of benefits to both students and teachers. A growing body of academic research supports the use of project-based learning in school/college to engage students, cut absenteeism, boost cooperative learning skills, and improve academic performance.This project has helped me a lot to gather a lot of knowledge and growth in self-reliance, and improved attitudes toward learning . It has also provided me Opportunities to develop complex skills, such as higher-order thinking, problem-solving, collaborating, and communicating.<br />The main outcome of this project is to learn the Marketing skills and various strategies which are applied by the large companies for their success.It also helps in developing own skills and using the gathered knowledge in future projects and studies.<br /> <br />
  4. 4. PREFACE.<br />Apple Inc. is an American multinational corporation that designs and manufactures consumer electronics, computer software, and personal computers. The company's best-known hardware products include Macintosh computers, the iPod, the iPhone and the iPad. Apple software includes the Mac OS X operating system; the iTunes media browser; the iLife suite of multimedia and creativity software; the iWork suite of productivity software; Aperture, a professional photography package; Final Cut Studio, a suite of professional audio and film-industry software products; <br />
  5. 5. and Logic Studio, a suite of audio tools. As of January 2010 the company operates 284 retail storesin ten countries, and an online store where hardware and software products are sold.<br />Established in Cupertino, California on April 1, 1976 and incorporated January 3, 1977, the company was called Apple Computer, Inc. for its first 30 years, but dropped the word "Computer" on January 9, 2007 to reflect the company's ongoing expansion into the consumer electronics market in addition to its traditional focus on personal computers.Apple has about 35,000 employees worldwide and had worldwide annual sales of US$42.91 billion in its fiscal year ending September 26, 2009. For reasons as various as its philosophy of comprehensive aesthetic design to its distinctive advertising campaigns, Apple has established a unique reputation in the consumer electronics industry. This includes a customer base that is devoted to the company and its brand, particularly in the United States. Fortune magazine named Apple the most admired company in the United States in 2008 and in the world in 2008, 2009, and 2010.<br /> <br />
  6. 6. APPLE PRODUCTS.<br />
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  11. 11. APPLE’S MARKETING STRATEGY..<br />Apple has been so successful in these last year’s thanks to his fresh, imaginative way to think and do its business: a winning combination of exceptional products, great style and design, great strategy, innovative marketing, sleek and enticing communications.Apple owes its overwhelming success in the last years to the iPhone and to the smart iPod and iTunes product combination, a combination of a great hardware piece with great style, great software, great performance, user friendly interface, with a good e-business service. The iPod + iTunes halo effect and new great Mac computers and Mac OS software did the rest in increasing Apple revenue stream.<br />In the 5 years between 2003 to 2008 the Apple share value increased 25 times, from $7.5 to $180 per share. At july 2008 prices, before the US Financial Crisis, Apple stock market capitalization was $160 billion.In January 2010 Apple shares topped the $210 mark. <br />But even the best companies with the best products have bottleneck factors which often avoid full exploitation of the opportunities.<br />
  12. 12. MARKETING OBJECTIVES OF APPLE..<br />Marketing Objectives :The various marketing objectives that will assist in the achievement in the overall product goal are: • To be the leading supplier of MP3 players in all markets in which the company operates • Increase in sales by 20% • Increase in revenue by 20% • Progressively increase market share by at least 15% within the year. • Expanding distribution to department stores by 10% • Increasing brand awareness to 60% of potential customers • To expand existing markets by 10% in the next quarter. A promotion campaign will be introduced to encourage present buyer to increase the use of the product. <br />
  13. 13. APPLE’S DISTRIBUTION POLICY..<br />If you build it, will they come? When they come, will it be in stock?<br />Apple (AAPL) resellers have said that the computer maker's distribution system improved during its fiscal first quarter, helping them meet strong demand for the company's new PowerPC 750 series and boosting Apple's sales into the channel and profitability.<br />In a move that surprised Wall Street, Apple yesterday announced that it expected to post a profit of $45 million for the fiscal first quarter that ended in December. Analysts expected the troubled computer maker to post a loss for the quarter, and the latest news marks the first time the company has posted a profit since its 1996 fiscal fourth quarter.<br />Apple pointed to its cost-cutting initiatives and to demand for its new 750, or G3 series, as major contributors to its anticipated profitability. Unlike the last time Apple posted a profit--in part due to stuffing the channel with computers, a move that the company paid for in the following quarter--resellers say the G3s are flying off the shelves.<br />
  14. 14. "Historically, Apple would come out with a computer and you would order 50, but only get five," said Ken McNeill, chief executive of reseller ClubMac. "But the this time they had clear lines of distribution. When you wanted more, they had more."<br />Under Apple's recent changes to its distribution system, MacCenter last month began buying its computers directly from Apple, rather than from a distributor.<br />"Now that we deal with Apple, we get our products much faster," said MacCenter's Carol Frame.<br />Mac resellers, along with Creative Computers, the company that operates MacMall, all report strong sales of the G3 products.<br />"Demand for the G3s is brisk," said Dan DeVries, executive vice president of marketing and purchasing for Creative.<br />ClubMac generated $5.5 million in Apple sales in December, of which 40 percent came from the G3 computers, McNeill said. Frame noted that MacCenter sold about 75 percent more G3 computers than expected during the last 45 days.<br />Apple declined to discuss its distribution into the channel pending the formal release of its first-quarter results on January 14.<br />Although the latest events bode well for the Apple, analysts are taking a wait-and-see approach.<br />Eight analysts today reconfirmed their "hold" ratings on the company, and one upped the rating to a "weak buy" from "hold," said Chuck Hill, a spokesman for First Call.<br />Earnings estimates, which stood at a loss of 6 cents for the quarter before Apple's preliminary announcement yesterday, were upped to an average of 35 cents based on seven analysts who changed their estimates today.Apple's rosy profitability picture is being helped by the fact that the G3, like any new product, carries a higher price tag and fatter profit margin than older products.<br />
  15. 15. PRODUCT MIX..<br />One of the main reasons that I have chosen Apple computers as my topic is that in my opinion, Steve Jobs (founder of Apple Computer Inc.) is undoubtedly a genius in the marketing sector. Apple Computers Inc started with the production of 2 computers in the garage at the side of Steve’s house. With very limited education Job’s has managed to build his empire to be what it is today. His marketing strategies are well thought out and always up to date,Job’s has expanded his marketing techniques to reach a wide market (something some companies would consider insane, having to take a risk that no one has took before). He has used his persuasiveness and clever marketing techniques to build an ideal world of white, abstract, shiny , arty and most importantly expensive surroundings that everyone wants. Luckily for the consumer, Steve Job’s loves to sell you his premium priced electronics, which, are of course “superior” to that of the competitor. Job’s ability to sell products, market them successfully and always come up with something new and unique is reflected in the company logo<br />To cut a long story short Apple is a huge success story from the point of marketing. Now, on to the product.THE PRODUCT I will be focusing on a selection of Apple’s products. I have chosen the most successful from a marketing point of view. <br />
  16. 16. Here they are:THE POWERMACThe Powermac is Apple’s flagship desktop “Power PC”. The Powermac is aimed at professional users and is used worldwide as industry standard in web design, graphic design, movie production, music production, print and art (the list goes on). Apple’s marketing technique places strong emphasis on the importance of design, packaging and atmosphere. I could list the specifications of the computer, how big the hard drive is, how fast it is…. But wouldn’t this be pointless? These computers have been designed to sell on looks alone. The consumer wants the computer once they see it, before they even know anything about it. For a long time Apple have looked at what the competition is doing and then thinking…. How could we improve this? A fine example of this is the Powermac. Other computers boast up to a “jaw-dropping 20inch monitor” as an extra bonus. Apple have taken this idea and included a slightly bigger 40inch widescreen monitor as standard. Apple ask why should the consumer use any product that doesn’t have the Apple logo on it? Let’s make it work as a TV and a DVD player and copier at the same time, why should you need a TV? And, seeing as this is an unbelievable, out of this world product we’ll charge the consumer eight times what it costs to make, that’s right 8,000euro. <br />
  17. 17. The idea of the high “Premium pricing strategy” leads the consumer to believe that it is better. But is it really?As a result the Powermac has played a huge role in helping Apple up the ladder to success<br />THE iBOOK and the iMAC.<br />The iBook is a laptop designed by Apple. Again, a lot of time and consideration have gone in to the design and the eye-pleasing factor of the iBook. Why should we make a laptop like all others ? Why not create something new and unusual, drop the price, sell more and make another fortune?Here is an extract from Apple’s website about the iBook:“Surf the Web, chat with friends, do homework, play games, even burn DVDs and CDs to create your own video or musical masterpiece. In your favorite café. At 2 a.m. With built-in wireless capability and 512MB of memory standard, the iBook G4 delivers today’s digital lifestyle to your backpack, starting at $999.”<br />On the website apple boasts “Rave-worthy performance”, “Durable space age construction” and conclude by saying “Its your life” and then “Live wirelessly, spend wisely”. They also mention that it is the smallest consumer laptop available on today’s market.<br />
  18. 18. The iBook is aimed at College students, Apple’s marketing strategy takes advantage of travel and college life. “The iBook is small enough to bring to your lectures to take notes”, “Store all of your photos in one place”, “Ultimate portability for students”The iMac is basically the desktop equivalent of the iBook and is based on the same slim-line, abstract design. Of course this only comes in white (Something Apple is well known for). For simplicity, the iMac incorporates all parts of the computer into the 20inch monitor. This would encourage to consumer to buy it – As Apple put it a powerful, inexpensive computer, which saves desk-space and will do anything a PC will do only better.<br />
  19. 19. APPLE’S MARKET SHARE..<br />
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  23. 23. APPLE’S SALE’S FORECAST FOR 2001-2009.<br />
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  25. 25. SCOPE OF STUDY..<br />The diversity and innovation of new products in the world of technology play an important role in the growth and success of the Gizmo Giants in the world of advanced technology.The scope of this study is to know how the techy master minds like Steve Jobs continue to provide us with lot of their beautiful innovations and help us to know their marketing strategies in this competitive scenario. The objective of the study is to draw out lessons for current and future leaders from the analysis of Steve Jobs’ leadership approach. The most clear lessons that leaders can learn from Steve Jobs is his deep passion for his work, his extreme focus and unwavering resolve in his decision making.<br />As one observes Steve Jobs’ marketing approach, it is easy to see his passion for the work of his company. He admits, himself, in a speech to a group of graduating students from Stanford University, that he found what he loves to do early in life (Jobs, 2005). He continues to capitalize on this passion even to this day.<br />
  26. 26. ANALYSIS OF DATA..<br />
  27. 27. Customer Satisfaction<br />
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  29. 29. SURVEY REPORT.<br />1. Have you ever purchased a product or service from Apple Inc.?<br />a. Yes-70% b. No-30%<br />
  30. 30. 2.Which product of Apple Inc. are you using currently? <br />a. MAC – 10% b. I POD – 60% <br />c. I PHONE – 25% d. I PAD – 5%<br />
  31. 31. 3. No. of People satisfied with the product they are currently using.<br />a. Yes – 80% b. No – 20%<br />
  32. 32. 4. What attracted you to buy the product you are currently using?<br />a. Design-20% b. Reliability-50%<br />c. Performance-20% d. Price-10%<br />
  33. 33. 5. How would you refer your level of satisfaction with Company Apple in regards to price?<br />a. Very Good. b. Good.<br />c. Fair. d. Poor<br />
  34. 34. 6. Would a high price point prevent you from buying an Apple Product?<br />a. Yes. b. No. c. Don’t know.<br />
  35. 35. 7. Are you planning to buy any products of Apple in the next few months?<br />a. Yes. b. No.<br />
  36. 36. 8. How would you mark your level of satisfaction with your Apple product in regards to reliability?<br />a. Excellent. b. Very good.<br />c. Fair. d. Poor. e. Don’t know/No answer.<br />
  37. 37. CONCLUSIONS AND RECOMMENDATIONS..<br /> <br />1>. Driving Apple’s growth strategy has been the desire for the company to increase its distribution and availability through the introduction of clones.   Unfortunately, this strategy has not provided the company with a strategic fit with its major strength which is the company’s innovation.   Apple’s reputation is that of reliability and quality and should look to exploit these characteristics.   Its pure performance is partly attributed to this failing of not matching its strength with its strategy.<br />2>. First and foremost, Apple is faced with the continuing challenge of growing user base, and analysts say they will be looking for an update on whether the company's ad campaign featuring Windows computer-users has had any effect on gaining new customers.<br />3>. Due to the pricing strategy of Apple’s products and due to its low compatibility with products other than Apple’s, it suffered low market share constantly.<br /> RECOMMENDATIONS.<br />1>. "Before they introduce any improved products, they need to make sure that they have no excess inventory in their channels. They don't want to have something that's obsolete holding up something new that's coming along."<br />2> One of the most innovative moves Apple could make would be to, finally, release an iPod digital music player that is compatible with Windows-based PCs. The consensus is that with the overwhelming majority of PC owners using Windows-based computers, Apple could mine a rich vein of consumers that have never before used an Apple product.<br />3>."The only things to focus on are going to be new products and software," "I want to know if they are doing enough to get their professional products going.<br />
  38. 38. Thank you<br />Thank you..<br />