Apple

Apple Pricing Strategy Apple is a premium brand of computer. Apple doesn't try to compete with PCs directly on price for several reasons that are well known. Cut throat pricing leads to diminished profits and loss of shareholder value. It diminishes the hard won reputation of the Apple brand. Finally, it's too early for Apple to jump on price decreases before it fully understands the the impact of the Jan-Mar quarter sales. Another reason is that dropping prices for a premium brand has to take into account Apple's experience with the price elasticity of its products. Price elasticity is defined as the response in demand for a product as the price decreases. For example, if Apple were to drop the price of the low end Mac mini from US$599 to, say, $399, would the demand increase so much that the new production rate would lower costs and make more money for Apple? Or would the price reduction simply reduce Apple's earnings? Based on what we've seen from Apple lately, the answer has to be the latter. I suspect that Apple has some fairly sound computer models that suggest what the impact would be of various price reductions. To put it euphemistically. Tim Cook, Apple's COO, has a sharp pencil and a sharp mind. He knows, to the penny, the bill of materials for each Apple product, what the new cost would be based on an increased order, and how his gross margins would be affected. Recession Realities It's a fact of life that people who are concerned about getting laid off tend to avoid premium products. That said, Apple still has to ask itself some hard questions about what the impact of lowering prices would be on the company. Eventually, the U.S. and the rest of the world will climb out of this economic mess. How would customers react in the future to Apple raising prices back to original levels? (I remember the outcry when Apple actually raised memory prices a few years ago. One would think Apple ran over a grandma, on crutches, in the parking lot.) Does Apple have enough cash assets to weather a 10 percent drop in sales in order to preserve its premium brand for the future? (The answer is yes.) History has shown that Apple appeals to prosperous customers, so will a 9 or 10 percent unemployment rate affect a company that only has 10 percent of the total market share of computers in the U.S.? And 3.5 percent worldwide? Will the current mental state of of American consumers drive sales down dramatically or just a bit. Apple is watching and evaluating. When observers of the Apple scene suggest that Apple sell a $500 netbook or lower the prices of their notebooks drastically, it seems more like a knee-jerk reaction and wish fulfillment for a \"
cheaper\"
Mac than a considered judgment about all the factors I've mentioned above. Contrasting Apple to Car Companies A lot of people like to contrast Apple to the American car companies. They wonder what GM or Chrysler would be like if Steve Jobs were the CEO. The reason we're titillated by that prospect is because we intuitively know that the American car companies have operated like Apple under Messrs. Spindler and, to a lesser extent Amelio. Before Steve Jobs came back to Apple, it was a needy company. It gave away money and computers. It spent lavishly on the Apple Masters program, essentially a bribe to famous people to encourage them to love their Macs and show it. Apple execs stuffed the reseller channel in the vain (and criminal) hope that lots of Macs shipped would substitute for lots of Macs purchased by customers. Many of its products were mediocre and the selection was confusing. (But not my beloved Power Mac 8500!) If we look at the Detroit auto makers, we see similar things. Rebates essentially bribe customers into buying mediocre products. Also, there are lots of products being built but few great products that cause people to stand in line at oh-dark-thirty to buy them. While Toyota invested heavily in hybrid technology, because they knew that offering cutting edge and responsible products would some day pay off, GM was patting itself on the back over Hummer sales. No one really gets excited about Buicks, but show me someone who doesn't drool over a BMW. That isn't crass thinking, rather, it's just a common sense recognition of the spectrum of quality in products -- an enduring fact. Basic Human Psychology Part of the psychology here, by Apple, is that if something is just a little bit out of the buyer's price range, it's desirable. At some point, a dream will come true (or an income tax refund check arrives) and the dream can be fulfilled. I've handled a few netbooks at Microcenter in Denver, and, believe me, these computers are nothing to drool over. They're work horses for someone who needs a computer to take on travel for surfing, twitter, chat and e-mail. That's it. They do the job nicely. But when people use low end stuff for a living, its likely that their only available rationalization is how little they spent. Similarly, ask any IT manager about how proud he is about how little money he spent on the computers he bought for his staff. It's a comfortable conceit. Apple knows all about it. These people are not its customers. Should Apple gamble that they should be? Basically, Apple, as a business, has to make a considered judgment about its own best interests, both now and in the future. Pleas by customers for Apple to give them gifts aren't typically part of the equation. And yet... Recession Proof? Apple is definitely not recession proof. The collective consciousness of the country, even though about 91 percent of people are still working, is in the dumpers. Each day brings bad news, and Apple sales will be down this quarter. They may be down for a few quarters. Even so, Apple has the luxury, by virtue of its assets, to avoid a hasty, emotional decision. Peter Oppenheimer, Apple's CFO, has suggested this during the last few earnings reports. Also, analyst perceptions about how well positioned people are to actually buy Apple products affects their valuation of Apple stock. So despite great products, if fewer people can afford them, then Apple's viability as a company is affected. The question for Apple, however, is deeper. Does lowering prices increase revenues? Does it portend profits that encourage investment? Again, from what we've seen, Apple may not believe that right now. How far would Apple sales have to drop before Apple needed to take drastic action? What would that action be if Apple sales fell by 50 percent, like the U.S. car companies in February? Macs at 50 percent discounts? Not with gross margins of only 31 percent. On top of that, no business cause and effect is linear, so an X percent drop in sales doesn't instantly dictate an X percent drop in price. It's that elasticity issue again. Finally, can a company with US$28 billion in cash and short term investments weather a more probable 10 or even 20 percent slide in sales for a few quarters without damaging its brand? I think the answer is yes, and I think Apple is betting on just that based on the pricing of the latest iMac, Mac mini and Mac Pro updates. Pricing Strategy – Apple’s Case Pricing strategy is one of the most important business strategy. The wealth of your business in much will depend on that pricing strategy and customers perception about your prices. I am Apple’s iPhone user nearly one year, and now I am close to make a decision to buy an iPad. In the same time, my future considerations are firstly to buy a Mac and after that to transfer my operating system on all my equipment from Windows to Mac. I don’t know why, but I feel that I am starving for their products. It’s probably connected with their so successful product launch strategy for each of their products. I know that Apple is a very good at product launch strategy when they encourage starving, but I didn’t even think about their pricing strategy at all. Last week I read really good post from Ben Kunz about Apple’s pricing strategy on Bloomberg Businessweek on msnbc.com. Look at these two points about Apple’s product prices that the author mention in the post: The popular iPod Touch media player has been revamped at three price points – $229, $299, and $399 – all costing more than the iPhone, which does everything the Touch can plus make phone calls. The current iPad costs $499 in its lowest-powered configuration vs. the Archos 7 Home Tablet ($189) or the Dell Streak ($299 with a two-year AT&T contract). And competitors are rushing to offer more functionality for hundreds of dollars less; the Streak tablet throws in a videocam and phone, which iPads don’t yet match. To succeed in this pricing strategy the business must have much more than a product or the technology. This need combination of different business strategies that can be used to increase overall business potential. First I must think that all products are brilliant. After that I will look at prices of iPod Touch and compare it with the iPhone and probably will choose to buy iPhone because it is reasonable thinking. The iPad features and all that buzz around it will make me to starve about a device like that and probably will buy after some period of time. My mind is prepared that for such a product, I will pay $500. Meanwhile if it became cheaper with launching of next generation of the product I will be more satisfied. And at the end with all of that Apple’s products in my hands I will purchase some songs, buy some applications and rent some video. That’s the whole cycle in that pricing strategy. And at the end the author advise is: Watch Apple, and you can learn pricing tricks for your own business. How Apple plays the pricing game Next time you're sitting at an airport bar and hear two businesspeople debate whether Apple is a technology or design company, chime in: \"
Nope. What Steve Jobs sells is pricing.\"
 Pricing? You bet. Jobs is a master of using pricing decoys, reference prices, bundling and obscurity to make you think his shiny aluminum toys are a good deal. Apple's Sept. 1 announcement of new products was a classic example. The popular iPod Touch media player has been revamped at three price points - $229, $299, and $399 - all costing more than the iPhone, which does everything the Touch can plus make phone calls. What gives? Watch Apple, and you can learn pricing tricks for your own business. First, understand that pricing games are vital for Apple, because competition is fierce in the tech world and product hits just don't last. The current iPad costs $499 in its lowest-powered configuration vs. the Archos 7 Home Tablet ($189) or the Dell Streak ($299 with a two-year AT&T contract). And competitors are rushing to offer more functionality for hundreds of dollars less; the Streak tablet throws in a videocam and phone, which iPads don't yet match. Apple's touchscreen buzz window is closing fast, and even though it will inevitably add features - I predict the iPad will sport a camera, videocam, and phone within two years - today's tech wonders, like the much-copied iPhone, become tomorrow's commodity. So let's count the ways Apple defends itself with pricing: Price decoys The Economic Daily News of Taiwan reported in August that Apple has started to build smaller, 7-inch versions of its iPad tablet, timed to hit U.S. shelves before Christmas. If you wonder why in the world Apple would add yet another potentially cannibalizing product to its lineup of iPods, iPod Touches, iPads, laptops and computers, realize that this gadget is likely a decoy. Decoys, in marketing, are products, services, or price points that a business doesn't really want you to take, but rather use as a reference to make another product look better. Economist Dan Ariely, author of Predictably Irrational, gives the classic example of a Realtor who shows you a home that needs a new roof, right before taking you to a higher-priced house she really wants to sell. It's hard to tell if a $400,000 colonial is a good deal - but compared with a $380,000 home that needs work, it looks quite good. Now consider, $499 for an iPad? Well, compared with a smaller one with fewer features, it suddenly looks great. Decoys explain why Apple often sells each gadget in a pricing series, such as the new iPod Touch's $229, $299, and $399 price points for different storage capacities. You may gladly spend $229 to get a hot media player, thinking it's a deal compared with the highest-priced version and not blink that you could instead buy an iPhone 4 at the lower price of $199 with more features. The $399 \"
decoy\"
has clouded your judgment. Apple wins the best of both worlds - stoking demand for products that look like bargains and for all the decoys it sells at much higher prices. Yes, some people will spend $399 for a music player with slightly better technology - and Apple makes even fatter margins. Establish a high reference price Behaviorial economist Richard Thaler has noted that consumers are really bad at making decisions about value and constantly need \"
reference prices\"
for comparison. A dress costs $80. Is that too much? Not if it's marked down 50 percent from $160. The trick is, that artificial $160 reference price may not really exist. Apple has played this game with itself by launching products such as the iPhone at artificially high reference prices - the iPhone cost $599 when it first hit the streets - and then rapidly lowering that price. Today, a $199 iPhone seems like a steal; Apple in essence is using its first-iteration pricing as a reference to make its current products feel affordable. You may be on the fence for a $499 iPad, but if it drops to $399 by Christmas, won't you feel better? Obscure the reference price This is a more clever Apple marketing trick; instead of giving consumers a reference price, hide the pricing altogether. Mail order business Omaha Steaks does this by selling complex bundles of meat and side dishes for about $100; the assortment of items obscures any comparison with prices at your grocery store. Candy in movie theaters is another classic example of price obscurity, because it comes in unusual, large boxes that are shaped nothing like what you see at other stores. Apple also obscures references by making its products look like nothing else, from the first iPod with a unique scroll wheel to the current iterations wrapped in gleaming aluminum. Apple seems wondrously unique, until you consider aluminum is the same material you wrap leftover fish in and then it hits you: Apple is disguising itself so you can't compare prices. Is the new $99 Apple TV box a good deal? Who knows? It looks like nothing else on the planet. Bundle price components to hide what you can Buy an Apple product and you'll spend more downstream. For every iPad or iPhone sold, Apple likely counts on your future song purchases, video rentals, and soon iAd clicks on app advertising. That sexy new Apple TV thing doesn't store anything, so you'll pay to play. Apple is not unusual here; almost every mobile handset, for instance, has some of its costs buried in future monthly data fees over a two-year phone contract. All of this \"
bundling\"
means the price over time is much more than what you think picking up the Apple gadget. The pricing strategy is brilliant. By staging a series of perceived technology innovations and then adding price decoys, reference prices, obscurity and bundling, Apple makes us willing to pay more to do the same stuff we did 30 years ago: read magazines, type messages, watch shows or make phone calls. The communication breakthroughs are mostly an illusion, but with shiny aluminum in our hands, who cares what it costs? Apple Pricing Strategies: The new MacBooks not as cheap as some had hoped Apple launched a completely refreshed line of MacBooks and MacBook Pros last week, to the by now predictable fanfare and guessing-game imbroglio in the blogosphere. I have written previously how this is a deliberate, well-designedArchetype Branding strategy on Apple’s part, using aspects of \"
The Enigma\"
archetype among other things. The MacBooks’ launch did contain the familiar elements of Steve Jobs’ magician stagecraft, though there was a clear attempt to build up several other high-ranking Apple managers in the process, due to recent concerns and rumors regarding Jobs’ health. But the biggest overall focus in this difficult economic environment seemed to be expected price-cuts and the overall pricing strategy. Specifically, whether the lowest-end MacBook would go below $1,000, or even down to $899. While the latter hope didn’t materialize, the most entry level \"
old\"
MacBook (in white) was indeed lowered to $999, but not the new line of anodized aluminum housing, all-around-upgraded MacBooks. However, you shouldn’t underestimate what Apple has done here: 1) They have now \"
Air-ized\"
(after the aluminum housing of the ground-breaking MacBook Air) the entire MacBook/MacBook Pro line except for the close-out model \"
MacBook White\"
. As Steve Jobs said, they should see some cost reductions from ramping up the novel unibody aluminum frame production in the next few quarters. So taking the entry-level Alu MacBook to $999 might happen sooner than some think. 2) While the cost for the new entry-level MacBooks for now has been kept at $1299, there is a lot of new technology that got pumped into it: iPod Touch multi-touch glass touchpad, led-backlit screen and longer battery life from the MacBook Air, a high-end graphics accelerator, etc. etc. So they’re establishing it as the \"
must-have-this-thing\"
item FIRST, in line with their branding as \"
The Creator/Innovator\"
archetype among other things, plus their high-end image. 3) The new MacBook line thereby becomes \"
aspirational\"
, so that even if you can’t afford one right now, you still know you want one (if you were ever open to it at all). Then, when the prices get dropped further (see the iPhone price point development), everyone will think it’s a bargain by comparison. But to do this you have to first credibly build it up at the higher price levels. I would NEVER expect Apple to forgo their brand equity and introduce brand new technology PLUS lower prices for that new technology at the same time. With a consumer recession already going on or imminent, the 60+% of people who are truly affected by affordability aren’t Apple’s primary target market. AND they would be likely to delay purchase of ANYTHING right now regardless of price point (ask yourself if they all would buy the new aluminum MacBooks at $999 this instant – I doubt it). Apple doesn’t need to be in the $400-700 notebook market for now, and if they want to be down the road, it is still advantageous for them to have established the higher price point value proposition. The price \"
anchor\"
this creates in the consumer’s mind is worth the somewhat reduced volume now. Then when you \"
drop in\"
the price cut at the point of maximum desirability (again, as was done with the iPhone), you are likely to create a feeding frenzy. Apple iPod's Promotional and Positioning Strategies Promotion Apple's promotion strategy which was widely appreciated was the surprise element that it attached just before it rolled out its iPod. There was a heavy speculation and curiosity regarding the product and everyone was watching out for it. Apple did this with every other model of iPod which it launched subsequently... Advertising Apple advertised extensively for iPod. Just when iPod was launched, an introductory campaign which would explain an unfamiliar product was needed. For this, Jobs thought a traditional campaign was preferable. Hence, the first iPod's commercial showed a man listening to the songs on his iPod and dancing.The commercial illustrated iPod's portability and ability to easily play songs downloaded from one's computer. All media channels including television, print, hoardings, posters and wrap advertising were used to advertise iPod (Refer Exhibit III A, III B and III C for some visuals of iPod's advertisements and Exhibit IV for wrap advertising used for iPod)... Positioning The advertisements and commercials of iPod focused on the 'coolness' aspect as it made the viewers believe that having one would make them accepted among their peers. Analysts commented that the hype surrounding iPod was created due to its unique advertising, word of mouth publicity by the users and the look and design of the product... The Road Ahead Apple sold 9.8 million units of iPod in the third quarter ending June 2007, 21 percent higher than the 8.1 million iPods it sold during the same period, the previous year. The first quarter (October -December 2006) saw record sales of 21 million iPods. The previous year sales for the same quarter was 14 million units.The third quarter profits were a record US$ 818 million, up 73 percent from the third quarter profits of the previous year, driven mainly due to the high sales of the iPod. For the fourth quarter of 2007, Apple forcasted revenues of US$5.7 billion... Apple Marketing Strategy Apple has been so successful in these last years 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.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. But even the best companies with the best products have bottleneck factors which often avoid full exploitation of the opportunities.The iPod. Few people are aware - and few market analysts too - that for the first 3 years the iPod was an absolute flop. The iPod was launched in october 2001, and between 2001 and 2004 iPod sales were between 100-200 thousand units per quarter, very far from today's 10-20 million units per quarter, and the iPod sales were not even covering the product research & development costs.Then, in June-Aug 2004 something happened, and iPod sales began to grow strongly, quarter after quarter. Today, we all know where the iPod stands, and what a remarkable success it is.The iPod made the fortune of Apple, and it stands out as the major turning point in the company growth. Few people know that the iPod + iTunes business idea was not conceived inside Apple, but was proposed to Apple by an outside source, a music lover and Engineer named Tony Fadell.More on Tony Fadell and on the iPod marketing on iPod Marketing StrategyThe iPod marks another outstanding result in marketing: the annihilation of competitors. To know more see the analysis onThe iPod competitors It should be noted that, since the second generation of iPods in 2002, the iPods were made compatible not only with the Mac operating systems but with Microsoft Windows operating systems as well.We should ask ourselves (and to Steve Jobs): how many iPods would have been sold if the iPods would had been compatible only with Mac operating systems? Where the iPod is manufactured and assembled The iPhone.The pipeline of new products which came out from Apple in the last years is impressive, and overwhelming. In 2007, with the successful launch of the iPhone, Apple has marked another milestone in its development and growth. And moreover, the iPhone enters a market - the market of mobile phones - a market which is mature, and saturated. Nonetheless, Apple has been able to develop a revolutionary product, and to change the paradigm in the mobile phone market. The iPhone is 5 years ahead of all its competitors. A wonderful product, amazing user interface, great design. It is not only a mobile phone, it is a product between a mobile phone and a laptop computer. Even calling it a smartphone is not enough.In July 2008 Apple launched the second generation iPhone, the iPhone 3G. The iPhone 3GS. In June 2009 Apple launched its third generation iPhone: the HYPERLINK \"
http://www.vertygoteam.com/iphone_3GS.php\"
iPhone 3GS. The iPhone 3GS has a 3 megapixel autofocus camera, video recording and editing capabilities, voice control, longer battery life, 7.2 Mbps HSDPA internet connection. iPhone 3GS is twice faster than the iPhone 3G. The iPhone 3GS prices: $199 for the 16GB model, $299 for the 32GB model. more on the new iPhone 3GS on the HYPERLINK \"
http://www.vertygoteam.com/iphone_3GS.php\"
iPhone 3GS page. More on iPhone Marketing on the HYPERLINK \"
http://www.vertygoteam.com/iphone_marketing_strategy.php\"
iPhone Marketing Strategy page.Apple did great. no doubt. However Apple has done some serious mistakes.The most serious mistakes Apple has done concern marketing and distribution strategies in Europe.Apple has overlooked the European markets, and missing big numbers in unexploited sales. With better marketing strategy, better communication and distribution, Apple could have made 300% more revenues in Europe in the last 4 years. Apple Marketing in Europe We met with with Erik Stannow, Apple Vice President of Marketing for Europe & EMEA. We have been talking with Erik Stannow about the marketing and distribution issues of Apple in the European markets and we gave some valuable suggestions to improve the Apple marketing strategy and distribution in Europe. Well, it seems that in Cupertino they don't care so much about Europe.Steve JobsIf we talk about Apple success, about Apple great products, we need to talk about Steve Jobs. Steve Jobs has been and is the great mind behind all this. Steve Jobs is a genius, he is a magician, too. He is the most skilled guy in introducing new products - \"
... one more thing\"
- the most skilled in presenting the key features, and he is a great communicator.Even more important, Steve Jobs has Vision. Vision in the strategy, Vision in the product development, Vision in the alliances.Apple Communication Strategy. Apple communication is sober, intriguing, simple, clear, minimalist and clever. And it has a style of its own. Both in the tv ads, both in print ads, both in the online communications. A lesson to be learned by many companies in the world. Well, of course when you have great products it is much easier to entice the costumers, but nevertheless doing it with style and cleverness is a very good point. It boosts sales, but enhances the brand value too.The famous \"
I am a Mac, I am a PC\"
tv ads are a milestone in communications. Smart, simple, effective and humiliating (for Microsoft ...).More on Apple Communications and on the Apple Commercials \"
I am a Mac I am a PC\"
on the Apple Communication Strategy page. Marketing Strategy of Apple Computers Inc. Introduction Apple was founded by Steven Jobs and Stephen Wozniak in 1976; Apple Computer Company revolutionized the personal computer industry and epitomized the rise of clean industry in the New West. Located in the Santa Clara Valley, in California, the company's first product was the Apple I, a single-board computer with on-board read-only memory (ROM), which sold for about $650 without a monitor or keyboard. Orders instantly soared, and Jobs and Wozniak quickly brought out the Apple II, which included a keyboard, color monitor, and expansions for peripheral devices (Birzer & Schweikart 2003). In 1984, Apple introduced the Macintosh, which was aimed at the business and education markets, by which time the company had already not only changed American industry but had reshaped entire areas of the West around silicon. In 1996, after a series of CEOs failed to keep Apple profitable, Steve Jobs returned under the rubric interim CEO and soon launched a new marketing and licensing relationship with Microsoft. In 2000 his direct sales concept, the Apple Store brought the company back to profitability (Birzer & Schweikart 2003). Read more: http://ivythesis.typepad.com/term_paper_topics/2010/02/marketing-strategy-of-apple-computers-inc.html#ixzz1WCe3XtBJ In 1994 Apple computers launched a new line of computers based on the PowerPC processor chip. The creation of the new chip was a joint venture between Apple Computers, IBM, and Motorola, and because the new chip was capable of being compatible with the market leading Intel chip, it was marketed as a major breakthrough in computer technology. If emulation software was purchased by a consumer, the consumer could run both software made for Apple computers and software made for Intel PCs on the same Apple machine. The machine was even being called a PC with a free Mac inside. Apple computers had controlled about 8-10 percent of the personal computer market since 1984, and recently it had been struggling financially (Gottinger 2003). Those at Apple hoped that compatibility with the Intel-based PC and its 85 per cent market share would dramatically increase the market share of Apple computers. The results from the introduction of the new product were not everything Apple had predicted or had hoped for. The increased competition from the PowerPC chip forced Intel to slash the price of their Pentium chips by 40 per cent. Thus Apple did not live up to its promise of cheaper computers (Gottinger 2003). Apple Computers Inc is considered to be one of the innovators in the computer industry. It brought about different changes to the industry; these changes are still visible in the present. The company’s products were used as a basis by other computer company’s in designing the specifications and physical characteristics of their product. It also serves as a meter of how products are designed. The company offers various products for the different market it targets. The products made by the company offer something different. The paper will discuss about Apple Inc and its' products, and the markets it serves. The paper will analyze how forces in the marketing environment have resulted in changes in the last 5 to 10 years to the organization’s marketing mix. The paper will also evaluate what further environmental changes might arise in the next 5 to 10 years and consider their effect. A. The company’s market and market orientation Market orientation was evident in the idea to involve staff in making the kinds of internal changes to policies and procedures that could be linked to market place performance that external customers would value. This involves more than traditional marketing skills. The more orthodox marketing approach to try to change staff attitudes by formal communications alone was rejected as superficial and unidirectional. The shift to market orientation and customers first meant that the logic of existing organizational knowledge was reframed, seen from a different perspective. Thus, new knowledge was indeed ‘discovered’ in a new patterning of the verities (Lewis & Varey 2000). An organization’s strategic values are the rationale for the viability of a business and link the organization to its environment. These values are reflected in, and are a reflection of, the prevailing culture within the organization (Lewis & Varey 2000). The market of Apple Inc is students and professionals who need computers and other digital technologies. This market is the one that needs devices that can keep their records and other personal or business information. This market is the one that needs devices that can give them entertainment even if they are not in their own homes. This market is the one that would want devices that would not cause them to waste their time. The marketing orientation that the company tries to implement is deeper customer focus. This type of orientation provides assistance for the company to achieve their goals and provide effective service compared to competitors. Macro environmental forces that shape the marketing environment When it comes to the law component of the macro environment Apple Computers Inc make sure they comply with what the law states in the country; they make sure that they comply with the regulated standards of the country. When it comes to the economy the company tries to adjust to the economic situation of their market. When it comes to the technology aspect of the macro environment, the company makes use of various technological innovations that help in increasing productivity and improving the quality of their products. The demography aspect of the macro environment is used as a method of determining their target market. The culture aspect of the macro environment provides Apple computers Inc the information it needs to create products that most people will like and purchase. The society aspect of the macro environment dictates how long the company will stay in the industry. Nature as an aspect of the macro environment is used as a way for the company to improve its image to its clients. Micro environmental forces The micro environmental forces of the company include potential entrants. The influence of potential entrants to the companies is weak. But to ensure that no other problem arise the company maintains low cost of unit production, this helps in making sure that the new entrant will not have advantage over them. Another micro environmental force is the competitive rivalry. Competitive rivalry affects the decisions made by the companies. Different things are done by both companies to ensure that they have advantage over their competitors. Moreover substitute which is a micro environmental force that gives high influence to the companies since substitutes can make a company lose the clients it has. Both companies make sure that the substitutes won’t give them much problem. Lastly the micro environmental force of bargaining power of buyers and sellers highly influences both companies. SWOT analysis Apple’s strength is the international popularity it has. The company is known throughout the world. Another strength of the company is the strong brand name they have. The strong brand name is what makes the company and its products popular. Furthermore a strength of the company is the effective advertising the company uses. Lastly a strength of environment Apple Computers Inc is its website that is easy to use, attractive, and informative. The main weakness of the company is the health issues when their product is partaken. The products they have can cause health problems when the user focus too much on using the product and forgets to do other important things. Lastly a weakness of the company is its inability to restrict certain age from using their product. Young children might use their product to see things they should really not see at their age. Opportunity for the company is to create products that can give not only satisfaction to clients but health benefits as well. The company can create a product that will not cause much harm to the user’s health. An opportunity for the company is to find out more ways to give a distinctive look and features to their product. By doing this the company will have competitive advantage over other firms. Lastly an opportunity for the company is to reach newer territories where it can offer its products and services. The company can reach more territories not yet reached by its competitors. The threat to the company includes the laws in the country they are operating in. Another threat to the company is the tariffs and taxes that the company has in different countries, each countries has its own rate of taxes and tariff. Lastly a threat to the company is complaints to the health problems that their product may cause. Its products may have some effect not liked by people. Market Segment The market segment of the company is divided into 4 classes. Each class represents a certain economic standing of people in the society. The company makes sure that they cover all the segments in the society they are operating in. The company has specialized prices for the different market segment, this will ensure that the clients will have lesser doubts about taking a look at the company’s product and the products that they can afford. Target market The target market of the company involves almost all sectors of the society. They want to provide Apple Computers Inc to young or old, boy or girl. This target market is a larger source of income. The company has different marketing strategies that can cater to the taste and appeal of such markets. The company makes sure that its stores and branches are located in the most profitable places where clients can easily see the store and they can be encouraged to visit the store and buy products. The company also makes sure that competition in the location they want to put up the branch will not be too heavy. Targeting strategy and -positioning strategy The targeting strategy of Apple Computers Inc is concentrated on undifferentiated strategy wherein the entire market is targeted and a simple marketing mix is used on such market. The needs of the market are nearly similar thus this targeting strategy is used. The positioning strategy of Apple computers Inc. is concentrated on comparing what they can do to what their competitors can do. The information that they will acquire from the comparison of their capabilities assist them in determining the actions they will take in competing with their rivals and knowing their place in the market. The environmental changes When there is increase in the changes in the environment there should be increase on learning for an organization. As changes happen new development and learning’s should be craved by a company so that it can be prepared for the possible effects of the change. The changes in the environment can give the company benefits but it may also give a company its problems. The changes in the environment include, introduction of newer technologies that has more capabilities and unique features. Another change in the environment is the increase of the prices of materials used in creating the product. The increase in prices of materials can be due to the changing world economy. The increase in prices of materials can mean increase in the market price of the product thus there would be drop of clients purchasing the product. B. The chosen product Product ranges offered by businesses have to be managed within the context of an ever-changing business environment. Consumers' product preferences change according to their life-stage, lifestyle and personal wealth. One business's product offer is subject to scrutiny by consumers alongside those offered by many other companies, which also are likely to change over time; therefore product management is part of an on-going strategic management process which ultimately bears on the ability of a business to meet its long term objectives. Product management is a strategic process, supported, in the case of a large retailer, by a complex array of operational practices and organizational structures (Gillooley & Varley 2001). Strategic product management shapes the direction of growth taken by a business in response to changing consumer requirements. Its strategic contribution is augmented by the role that product management takes in keeping operational costs as low as possible whilst generating sales volumes to maximize profitability (Gillooley & Varley 2001). Introducing new products is a very good way of achieving differentiation and enhancing a retail identity in an over-subscribed retail market, but without corporate support new products may fail or go unnoticed. Although most of the buying decisions are centered on the ability of a product to satisfy a customer need at a price the customer is willing to pay, a business has to ensure that it meets its legal obligations with regard to the products it sells. It also has to consider its long term image in the eyes of the public. It is therefore necessary to ensure that a product conforms to legal standards and provides value for money (Gillooley & Varley 2001). Selecting the right product requires an understanding of the complexity of the modern shopper and an ability to blend product detail in a way that satisfies both the physical and the psychological needs of that shopper .Product innovation is becoming increasingly necessary for businesses to keep customers interested in their product range. In a market that is saturated and competitive it is especially important to provide customers with the interest and excitement that newness engenders. It is therefore important for businesses to be able to use product development and innovation to their best ability (Gillooley & Varley 2001). The influences on the life-cycle of a product category are many and varied. If buyers are to use the life-cycle as a predictive tool, they must appreciate the underlying consumer trends that affect the rate of growth of the associated product market. Consumer trends include demographic trends, consumer economic trends, technological trends and societal trends, including lifestyle and fashion (Gillooley & Varley 2001). The MP3 player industry is one of the booming industries in the world. There were many records of success for the industry; each year the sales of organizations operating in this kind of industry go up. This can be attributed to the popularity of Mp3 players whatever brand they belong to and the intrinsic love of human beings for music. As years go by the capabilities and capacities of mp3 player improves in accordance with the needs of their clients. One company that has gained success in this market is Apple Inc. Apple Computers Inc is considered to be one of the innovators in the MP3 industry. The company’s products were used as a basis by other computer company’s in designing the specifications and physical characteristics of their product. It also serves as a meter of how products are designed. The company’s I-pod mp3 player is one of the most popular mp3 players available in the market. It has evolved from a simple mp3 player into a portable device wherein the user can watch movies or videos through it. Apple Computers Inc and its product showed that with the use of proper strategy and use of its varied opportunities the company can achieve fast growth and development in a short period of time. Service of Apple Inc The company provides support service for its entire product. In the company’s website, downloads and other support systems are available for clients who have purchased their product. The company’s website has a section where helpful information about the products can be found. This section contains what the client can do once a product is not functioning properly. The section also contains additional instructions on how the product can be used well. Within this section are the specifications and capacities of the product. The website also features a section where clients can contact designated personnel of the company to address certain issues with the product and other kinds of inquiries. The company has installed different service centers on different places in the world; they can assist anybody who has problems with their products. The company has also allowed resellers to provide repairs on products they may find defective. Moreover the company offers self repair courses for companies or individuals who want to learn about fixing their products that have some issues. Influences in the environment The influences in the marketing environment that have informed the marketing mix created by the supplier to manage the exchange includes the situation in the economy and the demands of the stakeholder .The situation in the economy and the demands of the stakeholder instituted the need to manage the exchange. This two created the desire to make sure that the exchange will be done with less worries and less concerns. How the marketing mix changed over the last 10 years Success in the market place depends not only on an ability to identify customer wants and needs but also upon an ability to be able to satisfy those wants and needs better than competitors are able to do. This implies that organizations need to look for ways of achieving a differential advantage in the eyes of the customer. The differential advantage is often achieved through the product or service itself but sometimes it may be achieved through other elements of the marketing mix. Marketers have to understand cultural values in all aspects of implementing the marketing concept and managing the marketing mix (Proctor 2000). The whole of the marketing mix is important in developing effective positioning, as attributes of the offering must be closely in line with the targeted customers’ expectations and needs, as must the associated price points and channels of distribution. However, promotional activity is one of the fundamental elements of creating an effective positioning, as it is through promotion that the positioning is communicated to the target audience (Proctor 2000). Elements of the marketing mix should not be seen as individual entities, but as a set of interrelated entities which have to be set in conjunction with one another and in the context of the strategic window presented (Proctor 2000). Getting the right blend of the product, promotion price and distribution is essential to put the carefully carried out analysis into operation. The aim is to portray an image for the product or service that will match with how one wants the product to be visualized in people’s minds. Image is not only reflected in the promotional messages which are directed towards the market target but also in the pricing strategy, the mode of distribution and in the appearance of the product or service itself (Proctor 2000). The marketing mix categorizes different aspects of the company and how the company can provide satisfaction of the needs of the customers. Through the marketing mix each aspect of the company can be checked and given consideration with regards to its ability to attract clients. The marketing mix has created many changes over the years. Newer components of marketing mix have been added. Some sectors have considered packaging and personnel as components of the marketing mix. The marketing mix is also continuously being improved to meet the needs of industrial product marketing rather than the consumer marketing. Changes in the next 5 to 10 years In the next 5 to 10 years the marketing mix will put its focus on providing more use other marketers. The focus of marketing mix will continue to increase and it will be able to reach more marketers. In the next 5 to 10 years the marketing mix will be able to provide a deeper analysis of marketing problems and it can provide more direct solutions to the marketing problems. The marketing mix can serve as an analytical tool that can sort out solutions for various marketing problems. Why buy from the particular supplier The supplier was chosen because they gave discounts on certain products. The supplier made sure that the products were priced well and certain discounts were added to some of the products. The supplier’s product also has the best quality and has minimal instances of defective features. This shows the dedication of the supplier in its chosen field. The supplier also provided a direct line of communication in cases of problems with a product. The supplier wanted to make sure that they can maintain good relations with the company. References Birzer, BJ & Schweikart, L 2003, The American west, Wiley, Hoboken, N De Pelsmacker, P & Kitchen, PJ 2004, Integrated marketing communications: a primer, Routledge, New York. Gelernter, D 1997, Machine beauty: elegance and the heart of technology, Basic Books, New York. Gillooley, D & Varley, R 2001, Retail product management, buying and merchandising, Routledge, London. Gottinger, HW 2003, Economies of network industries, Routledge, New York. Hills, G 1994, Marketing and entrepreneurship: research ideas and opportunities, Quorum Books, Westport, CT. Lewis, BR & Varey, RJ 2000, Internal marketing: directions of management, Routledge, London. Mills, JH 2003, Making sense of organizational change, Routledge, New York. Mccall, JB & Stone, MA 2004, International strategic marketing: A European perspective, Routledge, New York. Proctor, T 2000, Strategic marketing: an introduction, Routledge, London. Reddy, AC (ed.) 1997, The emerging high-tech consumer: a market profile and marketing strategy implications, Quorum Books, Westport, CT. Ruskin-Brown, I 1999, Mastering marketing: a comprehensive introduction to the skills of developing and defending your company's revenue, Thorogood, London. Read more: http://ivythesis.typepad.com/term_paper_topics/2010/02/marketing-strategy-of-apple-computers-inc.html#ixzz1WCeI4OVK Apple's Branding Strategy Apple's Branding Strategy Apple Inc. uses the Apple brand to compete across several highly competitive markets, including the personal computer industry with its Macintosh line of computers and related software, the consumer electronics industry with products such as the iPod, digital music distribution through its iTunes Music Store, the smart phone market with the Apple iPhone, and more recently magazine, book, games and applications publishing via the AppsStore for iPhone and the iPad tablet computing device. For marketers, the company is also establishing a very strong presence to rival Google in the advertising market, via its Apps business and HYPERLINK \"
http://advertising.apple.com/\"
\t \"
_blank\"
iAd network. Steve Jobs, Apple's Founder and Chairman, has described Apple as a \"
mobile devices company\"
- the largest one in the world (Apple's revenues are bigger than Nokia, Samsung, or Sony's mobility business). For several years Apple's product strategy involved creating innovative products and services aligned with a \"
digital hub\"
strategy, whereby Apple Macintosh computer products function as the digital hub for digital devices, including the Apple iPod, personal digital assistants, cellular phones, digital video and still cameras, and other electronic devices. More recently, the full impact of a very well throught out brand strategy has come into focus - and one in which customer experience is central Apple's core competence is delivering exceptional experience through superb user interfaces. The company's product strategy is based around this, with iTunes, the iPhone with it's touch screen \"
gestures\"
that are re-used on the iPad, and the Apple Apps store all playing key roles. The Apple Brand Personality Apple has a branding strategy that focuses on the emotions. The Apple brand personality is about lifestyle; imagination; liberty regained; innovation; passion; hopes, dreams and aspirations; and power-to-the-people through technology. The Apple brand personality is also about simplicity and the removal of complexity from people's lives; people-driven product design; and about being a really humanistic company with a heartfelt connection with its customers. Apple Brand Equity and Apple's Customer Franchise The Apple brand is not just intimate with its customers, it's loved, and there is a real sense of community among users of its main product lines. The brand equity and customer franchise which Apple embodies is extremely strong. The preference for Apple products amongst the \"
Mac community\"
, for instance, not only kept the company alive for much of the 90's (when from a rational economic perspective it looked like a dead duck) but it even enables the company to sustain pricing that is at a premium to its competitors. It is arguable that without the price-premium which the Apple brand sustains in many product areas, the company would have exited the personal computer business several years ago. Small market share PC vendors with weaker brand equity have struggled to compete with the supply chain and manufacturing economics of Dell. However, Apple has made big advances in becoming more efficient with its manufacturing supply chain, logistics and operations, and it can be assumed that as far as like-for-like hardware manufacturing comparisons are comcerned, Apple's product costs are very similar to those of Dell. In terms of price to the consumer, Apple's computer products have an additional cost advantage: the company does not have to pay another company for operating system licences.. The Apple Customer Experience The huge promise of the Apple brand, of course presents Apple with an enormous challenge to live up to. The innovative, beautifully-designed, highly ergonomic, and technology-leading products which Apple delivers are not only designed to match the brand promise, but are fundamental to keeping it. Apple fully understands that all aspects of the customer experienceare important and that all brand touch-points must reinforce the Apple brand. Apple has expanded and improved its distribution capabilities by opening its own retail stores in key cities around the world in up-market, quality shopping venues. Apple provides Apple Mac-expert retail floor staff staff to selected resellers' stores (such as Australian department store David Jones); it has entered into strategic alliances with other companies to co-brand or distribute Apple's products and services (for example, HP who was selling a co-branded form of iPod and pre-loading iTunes onto consumer PCs and laptops though in retrospect this may now just have been a stepping-stone). Apple has also increased the accessibility of iPods through various resellers that do not currently carry Apple Macintosh systems (such as Harvey Norman), and has increased the reach of its online stores. The very successful Apple retail stores give prospective customers direct experience of Apple's brand values. Apple Store visitors experience a stimulating, no-pressure environment where they can discover more about the Apple family, try out the company's products, and get practical help on Apple products at the shops' Guru Bars. Apple retail staff are helpful, informative, and let their enthusiasm show without being brash or pushy. The overall feeling is one of inclusiveness by a community that really understands what good technology should look and feel like - and how it should fit into people's lives. Apple Brand Architecture From a brand architecture viewpoint, the company maintains a \"
monolithic\"
brand identity - everything being associated with the Apple name, even when investing strongly in the Apple iPod and Apple iTunes products. Apple's current line-up of product families includes not just the iPod and iTunes, but iMac, iBook, iLife, iWork, iPhone, iPad, and now HYPERLINK \"
http://www.marketingminds.com.au/branding/apple_branding_strategy.html\"
\l \"
iCloud\"
\t \"
_self\"
iCloud. However, even though marketing investments around iPod are substantial, Apple has not established an \"
i\"
brand. While the \"
i\"
prefix is used only for consumer products, it is not used for a large number of Apple's consumer products (eg Mac mini, MacBook, Apple TV, Airport Extreme, Safari, QuickTime, and Mighty Mouse). The list of Apple's Trademarks reflects something of a jumbled past. The predominant sub-brand since the introduction of the Apple Macintosh in January 1984 has always been the Apple Mac. Products whose market includes Microsoft computer users (for example MobileMe, QuickTime, Bonjour, and Safari) have been named so they are somewhat neutral, and therefore more acceptable to Windows users. Yet other product have been developed more for a professional market (eg Aperture, the Final Cut family, and Xserve). The iPod Halo Effect Though Apple's iPhone and iTunes music business is profitable in its own right, Apple's venture into these product areas was based on a strategy of using the music business to help boost the appeal of Apple's computing business. Apple is using iPod, iTunes, iPhone, and now iPad to reinforce and re-invigorate the Apple brand personality. At the same time, these product initiatives are growing a highly relevant, appealing brand image in the minds of consumer segments that Apple has not previously reached. In a so-called iPod halo effect, Apple hoped that the popularity of iPod and iTunes among these new groups of customers would cause these segments to be interested in Apple's computer products. This does seem to have happened. Since the take-off of the iPod there has been a dramatic rise in Apple's computer sales and market share. A couple of years ago, Apple's aspirations for the iPod halo effect was was highlighted most strongly when it used the slogan \"
from the creators of iPod\"
in its promotion of iMac G5 computers. In this instance, the Apple brand came full-circle - having been built into a branding system that originates in the personal computer market, then leveraged into the consumer electronics market, and then back into the consumer personal computer market. This halo effect is extended with the hugely successful Apple iPad tablet computer. Great customer experience with iPhone (and familiarity with Apple's touch screen gesture controls), combined with a great product in its own right, has made iPod a huge success that in turn is drawing even more people to Apple's Mac computer products. In a move which also brings matters full circle, the Lion version of Mac OSX will bring to the Mac the same touch screen gesture controls which iPad and iPod users have learned. Apple Brand Strength Now Creating Financial Success So far, Apples' branding strategy is bearing fruit. For example, Apple reports that half of all computer sales through its retail channel are to people new to Macintosh, the company's sales and margins have been growing strongly since 2006, and Apple has achieved several \"
best ever\"
quarterly financial results during the past couple of years. Leveraging the success of the iPod, Apple launched the iPhone (released in July 07) to extend the brand even further. Apple's buzz marketing efforts in the first half of 2007 were truly superb, culminating in the release of one of the most highly anticipated products for many years - and launching apple into a completely new market: mobile handsets. By July 2008 the buzz about the 3G iPhone resulted in over 1 million units being sold in the first 3 days of its release in over 20 countries around the world. This success was repeated in 2010 with the introduction of the iPad tablet computer, and in March 2011 with the launch of the iPad 2 which sold 1 million units within 24 hours. Apple Re-entering the Corporate Market via the iPhone and iPad Halo Effect Though no-one at Apple would say so today, the next phase of Apple's strategy seems focused on the Corporate marketplace. A long time ago, Apple had a fairly strong market share in large companies. A long, long time ago (at the end of the 1970's) the first spreadsheet program (VisiCalc) was launched on the Apple II. The first PC (the IBM PC) to run a Microsoft operating system (PC DOS) did not appear until 1981. When Microsoft launched its Excel spreadsheet in 1984 it appeared first on the just-released Apple Mac, such was Apple's presence among accounting and finance departments. Even though Apple effectively stopped competing for corporate business during the 1990s, the Apple Mac is still used in corporate environments. Microsoft still has a vigorous applications development team totally dedicated to writing business software for the Apple Mac. New versions of Microsoft Office for Apple Mac still come out approximately 2 years before similar functionality is placed in the next version of Microsoft Office for the Windows operating system. Over the next few years it seems likely that Apple will re-focus on the Corporate marketplace: In 2009, when Apple announced \"
Snow Leopard\"
(the current version of the Apple Mac operating system) it included features allowing Mac computers to fully support Microsoft Exchange. This enables corporate IT departments to support business users who wish to use Apple Macs for their main email clients. Apple has said the next version, Mac OSX Lion (due in Summer 2011) includes all the functionality needed to use a Mac as a business server. Also, Microsoft continues to bring out advanced versions of Microsoft Office for Apple Mac, and - very significantly - in mid-2008 Apple announced a software upgrade for the iPhone which allows iPhones to be fully supported by Microsoft Exchange email servers. Corporate IT departments can now include iPhones as email clients. One aspect of Apple's strategy seems clear: to use the popularity of the iPhone and iPad to break back into large corporations, sell lots of those devices, and have Apple Mac back on the desks of large businesses (or more probably - in the laptop bags of middle and senior managers in most large businesses). The Macbook Air and iPad are clearly designed for business markets as well as for consumers, and Apple continues to display its mastery in smoothly morphing customer experience and brand preference from one product category to another. As we say; no one in Apple will currently admit to such ambitions, but Apple's branding strategy is clearly expanding to include business and corporate markets once again. After Halos - Clouds The next step in Apple's marketing strategy is the Apple HYPERLINK \"
http://www.apple.com/icloud/\"
\t \"
_blank\"
iCloud, which delivers a seamless experience for using and sharing content across all your Apple devices (iPhone, iPod, iPad, or Mac). iCloud enables a common \"
it just works\"
experience for using content across all of Apple's mainstream products. iCloud positions the company for a future where customers experiences and their digtal lives transcend the hardware devices which they use, and enables Apple to extend the brand experience well beyond individual products. Apple has invested in a 500,000 (soon to be one million) square footApple data center in rural North Carolina. This data centre this will be used as the core of a data repository for Apple's iCloud services, which will enable Apple to leverage it's customer franchise into an even broader market space. Apple iCloud is one of many ways in which Apple and Google are fast becoming arch rivals. Apple's Original Apple Macintosh Marketing Strategy Stanford University has published contemporary records and original documents of the marketing strategy for the Apple Macintosh launch in 1984, including the original Apple marketing strategy and the Apple Macintosh product introduction plan written by Regis McKenna. It is now 25 years since the launch of the Apple Macintosh (on January 24, 1984). Having proven itself and already gained considerable popularity with the Apple II, Apple chose to announce the Apple Mac in one of the most famous-ever commercials, aired during the third quarter of Super Bowl XVIII on 22 January 1984.

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