A study on the marketing strategies of Apple Inc (Dissertation)

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Bachelors degree dissertation

A study on the marketing strategies of Apple Inc

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A study on the marketing strategies of Apple Inc (Dissertation)

  1. 1. ''A study on marketing strategy of Apple'' December 2012 I ''Critical Analysis of using marketing strategies of branding Apple Inc'' Maha H
  2. 2. ''A study on marketing strategy of Apple'' December 2012 II Declaration I hereby declare that this dissertation is my own original work and is the result of my own investigations. This dissertation research was conducted to fulfill the requirements of BA (Hons) in Business Administration (Marketing) associated with University of Wales. XYZ December, 2012
  3. 3. ''A study on marketing strategy of Apple'' December 2012 III Acknowledgement I would like to thank a bunch of people who helped me in completion of my dissertation like: My facilitator for guidance and support throughout the dissertation. All respondents and friends for filling in the questionnaires. My family for constant support and motivation.
  4. 4. ''A study on marketing strategy of Apple'' December 2012 IV Abstract , computernicsconsumer electroApple Incorporation is a multinational company that creates and sells The.billionabout US$16363 stores worldwide, with global sales of, insoftware, and personal computers are mainlyiPadand theiPhone,iPodline of computers,Macintoshlikeknown products-company's well e due to high brand awareness related to these products. Applerecognized as a source of competitive edg ,Final Cut Studio,Aperture,iWork,iLife,iTunes,Mac OS Xalso sells other branded products like, .iOSbrowser andSafari,Logic Studio The main objective of this study is to analyze the importance of using marketing strategies of branding in Apple Inc. The study will help to find out about the related benefits of branding mainly. The details of the study will help us to learn about the consumer's awareness about the brand and how their loyalty can be increased in order to gain a competitive edge. Also, analyzing the importance of branding can help us to find out about the Apple brand's strengths, weaknesses, opportunities and threats, by using SWOT analysis tool and by using STP process, we can know how to segment the market, target the customers and position the products/services. Whereas, by using 4 Ps of marketing mix, we can find out about the branded product, its price, promotion and placement. Therefore, since the competition in the technology industry is increasing, 'A study on using marketing strategy of branding in Apple' will help the company in staying at the top of consumer's mind, to cope up with the changes, to gain competitive edge, to attain goals set by the company, to make improvements for the future related to products, its pricing strategy, communications used to promote and the placement of the product. Therefore, it will help us to evaluate whether branding will affect Apple Inc's success rate or not.
  5. 5. ''A study on marketing strategy of Apple'' December 2012 V Table of Contents: Chapter no Topic Page no Declaration……………………………………………….. II Acknowledgment…………………………………………. III Abstract………………………………………………….... IV Table of Contents………………………………………… V List of tables and figures………………………………… VI Chapter 1 Introduction 1.1 Technology Industry…………………………………... …………………...1.2 Introduction to Apple Incorporation 1.3 Motivations of research……………………………….. 1.4 Research Objectives…………………………………… 1.5 Research question……………………………………... 1.6 Organization of Study…………………………………. 1 1 2 2 2 3 Chapter 2 Literature Review 2.1Introduction…………………………………………….. 2.2 What is branding?........................................................... 2.3 Benefits of branding a company (Apple)……………… 2.4 STP Process…………………………………………… 2.5 4 Ps (marketing mix) of Apple………………………... 2.6 SWOT Analysis of Apple……………………………... 2.7 Apple's competitive edge……………………………… 4 4 6 8 11 13 15 Chapter 3 Methodology 3.1 Purpose of the study…………………………………… 3.2 Type of research……………………………………….. 3.3 Research Method……………………………………… 3.4 Types of data………………………………………….. 3.5 Target population……………………………………… 3.6 Sample size……………………………………………. 3.7 Sampling Method……………………………………… 3.8 Data Collection methods………………………………. 3.9 Questionnaire design…………………………………... 3.10 Hypothesis…………………………………………. 3.11 Pilot Survey………………………………………... 3.12 Limitations and Remedies to overcome them……... 17 17 17 18 18 18 18 19 19 21 21 21 Chapter 4 Data presentation, findings and analysis 4.1 Response rate graph…………………………………… 4.2 Data presentation , Findings and Analysis……………. 4.3 Hypothesis…………………………………………….. 4.4 Summary of the findings 23 23 35 38 Chapter 5 Conclusion and Recommendations 5.1 Conclusion…………………………………………….. 5.2 Recommendations…………………………………….. 39 39 Bibliography………………………………………………. 41
  6. 6. ''A study on marketing strategy of Apple'' December 2012 VI Appendices Appendix A – Cover letter………………………………. Appendix B – Questionnaire…………………………….. Appendix C – Plagiarism Report………………………... 44 45 46 FiguresList of Tables and Page noFigure noPage noTable no 81231 92242 103243 104254 105255 136266 237267 238278 249289 25102810 25112911 26122912 26133013 27143114 27153115 28163216 28173217 29183318 30193419 30203520 31213621 31223722 3223 3324 3325 3426 3527 3628 3729
  7. 7. ''A study on marketing strategy of Apple'' December 2012 1 SECTION II CHAPTER 1: Introduction 1.1 Technology Industry Wiki invest (2012) Technology states, the technology industry provides foundation for activities such as, chip production, information and communication systems, and computer systems. The companies belonging to this industry serves as developers and manufacturers of the products which increase efficiency and production of cell phones, computers, televisions, and other communication and information systems. It is a huge industry with a high growth potential, but it is sometimes go through volatile cycles, like the semiconductor industry. As chips are getting smaller and globalization is increasing, demand for faster and efficient technology, demand for technological industry in increasing. 1.2 Introduction to Apple Incorporation Apple Incorporation is a multinational company that createst,tha,statesApple store(2012)Wikipedia 363 stores, computer software, and personal computers, selling inconsumer electronicsand sells oncompany was first foundedThe.billion in merchandiseabout US$16ide, with global sales ofworldw and thenRonald Wayne, andSteve Wozniak,Steve Jobsby, CaliforniaCupertinoApril 1, 1976 in he company was named as Apple Computer, Inc before for the first 30Ted on January 3, 1977.incorporat The company'syears. The word "Computer" was then removed from its name on January 9, 2007. Now the company's.consumer electronicson personal computers shifted towardswastraditional focus , along with theiriPadand theiPhone,iPodline of computers,Macintoshknown products are the-best suite ofiLifemedia browser,iTunes,)operating system(Mac OS Xother line of products including, (professionalAperture(suite of productivity software),iWorkmultimedia/creativity software, , aLogic Studioindustry),-(suite of professional audio and filmFinal Cut Studiophotography package), (mobile operating system).iOSweb browser andSafarisuite of music production tools; 1.2.1 Mission statement of Apple Inc According to Apple Inc (2012), ''Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.'' Another mission statement is:"Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and internet offerings."
  8. 8. ''A study on marketing strategy of Apple'' December 2012 2 1.2.2 Vision Statement of Apple Inc “We believe that we are on the face of the earth to make great productsAccording to Apple Inc (2012), and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the t we need to own and control the primary technologies behind the products thatcomplex. We believe tha we make, and participate only in markets where we can make a significant contribution. We believe in hat are truly important andsaying no to thousands of projects, so that we can really focus on the few t pollination of our groups, which allow us to-meaningful to us. We believe in deep collaboration and cross innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in honesty to admit when we’re wrong and the courage to-company, and we have the selfevery group in the change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.” 1.2.3 Objectives of Apple Inc As stated on the website Apple Inc (2012) are:  To obtain products and services within tight timeframe, at a cost providing the best value to the customers and shareholders.  Tokeepcreatingandreleasingcomputersandconsumerelectronics those are user-friendly.  Toopenmorestoresevenoninternationallocationsto increase sales and dominate world market.  Toinnovateonaregularbasis. 1.2.4 Major competitors of Apple Inc Samsung, Microsoft, Dell, HP, Blackberry, Nokia 1.3 Motivations of research: As the competition in the technology industry has increased, it has become mandatory to make a study on the importance of using a marketing strategies of branding for Apple, to stay at the top of consumer's mind, to cope up with the changing environment, to gain competitive edge, to make improvements in future and to attain goals set by the company. 1.4 Research Objectives:  To analyze the importance of using a marketing strategies of branding for Apple Inc and to find out how STP strategies helps Apple's brand.  To find out about the benefits of branding for the company and to find out how branding helps to gain a competitive edge by differentiating themselves and how it increases customer loyalty and increases brand awareness.  To find out about the branded product and its related price, promotion and placement and to find out the strengths, weaknesses, opportunities and threats the company may be facing.
  9. 9. ''A study on marketing strategy of Apple'' December 2012 3 1.5 Research question: 1.5.1 Leading question: What benefits will Apple and its customers benefit from after using branding marketing strategy? 1.5.2 Subsidiary questions:  Does branding allow Apple Inc to communicate company's objectives, mission and vision clearly to their customers?  Does branding helps Apple to differentiate its products from its competitors, by gaining competitive edge?  Does branding allow Apple's customer to easily recognize and recall the company and its products?  Does branding allow Apple Inc to charge premium for its products and yet maintain customer loyalty?  How will using STP strategies, 4 Ps of marketing mix and SWOT Analysis help to enhance Apple's brand?  Does branding really contribute in making a difference in Apple Inc's success? 1.6 Organization of Study: Chapter 1: Introduction Chapter 2: Literature Review Chapter 3: Methodology Chapter 4: Research findings, data presentation and data analysis Chapter 5: Conclusion and Recommendations
  10. 10. ''A study on marketing strategy of Apple'' December 2012 4 CHAPTER 2: Literature Review 2.1 Introduction This section will provide the details about the qualitative data, providing a foundation for all the details to follow. 2.2 What is branding? According to Kotler (1999), branding is a ''name, term, sign, symbol or design, or a combination of all these that identifies the goods and services of one seller or group of sellers and to differentiate them from those of competitors.'' Branding does not only allow your target market to choose your company over the competitor's, but it helps in getting your prospects to see you as the only company that provides a solution to the consumer's problems. It provides a company’s with a recognizable and trustworthy badge of originality, an intangible guarantee, i.e. a promise of performance that the product will meet with desired consumers' expectations. 2.2.1 Apple's Branding Strategy According to Marketing minds (2012), Apple Inc. uses the Apple brand to compete across several highly competitive markets, including the personal computer industry with its Macintosh line of computers/laptops and related software, the consumer electronics industry with products such as the iPod, digital music distribution through iTunes Music Store, the smart phone market with the Apple iPhone, magazine, book, games and applications publishing via the AppsStore for iPhone and the iPad tablet computing device, and movie and TV content distribution with Apple TV. The company is also establishing a very strong marketing presence relative to the rival (Google) in the advertising market, via its business Apps and iAd network. Steve Jobs, the co-Founder of Apple, described the company as being a "mobile devices company", largest in the world as their revenues are bigger than Nokia, Samsung, or Sony's mobile devices business. 2.2.2 Brand Awareness It is when the consumers are familiar about the life or availability of the product. It is the degree to which consumers associate your brand with a specific product/service. As indicated by Management study guide (2012) in their article '' What is brand awareness?'', Brand awareness may include of:  Brand recognition- is when the consumers have good knowledge of brand when they are asked questions related to a specific brand and they are able to differentiate a brand on the basis of having noticed or heard about earlier. E.g. Is I-phone related to Apple or Samsung?
  11. 11. ''A study on marketing strategy of Apple'' December 2012 5  Brand recall- It allows a customer to recover a brand from his memory when given the product class/category, needs satisfied by that category or buying scenario as a signal, i.e. if they are able to recall the brand from their memory. E.g. Showing a logo of Apple's brand, and asking which brand does this logo belongs to. 2.2.3 Apple's brand personality As stated by About.com (2012), ''What is branding and how important is it to your marketing strategy?'', a good brand helps a company to achieve these objectives:  Helps to deliver the message clearly  It confirms your company's credibility  It connects your target prospects emotionally  It motivates the buyer  It strengthens user loyalty Apple has a branding strategy that focuses on the emotions. Apple brand's 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, making life easier for people as they have people-driven product design, and is a humanistic company with a heartfelt connection with its customers. 2.2.4 Apple's Brand equity According to Investopedia, it is the premium value that the company realizes from a product with a recognizable name as compared to its generic equivalent firm. Companies can create brand equity for their products by making them memorable, easily recognizable and superior in quality and reliability. Also, mass marketing campaigns may help to create brand equity. Brand equity is said to be positive if the consumers are willing to pay more for a branded product than for a generic one. Brand awareness plays a key role in building brand equity. Create reliable brand image, slogans and taglines, helps to strengthen brand awareness which therefore improves brand equity. Marketing minds (2012) also states, Since Apple has strong brand awareness, it has high sales and high market share, and the consumers are well acquainted and familiar with the brand and its products. They are also willing to pay premium price for their products, relative to the competitor's brand due to Apple's positive brand equity. Apple is not just intimate with their consumers but there is a real sense of community among users of its main product lines. Therefore, this also helps to create consumer's brand loyalty (where brand loyalty is when the consumers become committed to your brand, choosing it over competitors and making repeat purchases over time.)
  12. 12. ''A study on marketing strategy of Apple'' December 2012 6 2.3 Benefits of branding a company (Apple) 2.3.1 Emotional Appeal – As stated by Clarity marketing LTD (2005), emotional appeal helps a great deal in targeting customer's emotions with product names. A strong, recognizable brand will acts like a ‘short cut’ in decision making process, as the customers don't dither over alternatives or compare options where there is no clear point of difference, and instantly chooses your brand as they know what it stands for. For instance, as Apple manufactures technological items, the name of each product clearly reflects technological aspects like iPod touch, which indicates that it is a product that allows you to play and choose music through touch properties. It therefore, helps in creating an integrated appeal to specific emotions promoting the product recognition and sales. 2.3.2 Memorability and Familiarity – According to Marcia Yudkin (2012), brand helps to create a reputation and good will for a company. It is very hard for customers to refer to a company as "that whatsitsname store" or to refer business as "the shop from the Yellow Pages." In addition to the company name, it gives people to give constant reminders reinforcing the identity of companies they will want to buy from. Memorability can come from the logo, its design, color, style etc which helps to nail your company's name in the minds of the public. Similarly, after your brand is nailed in the minds of your customers, that’s when your customers have become familiar and aware of your company’s existence in the market. Branding allows having huge effects on non-customers too. Psychologists' studies have proved that familiarity develops liking for it. Also, the customers who have never bought from your company, may many tomes be willing to recommend your company to others even without having any personal knowledge of your products or services. Therefore, the half bitten Apple logo and the brand name 'Apple' help a great deal to help customers remember, be familiar and recommend the brand to others. 2.3.3 Premium image and Premium price - Branding allows a company to differentiate themselves from competitors existing in the market, because of which instead of dealing with price-shoppers the customers become eager to pay a higher price for your company's goods and services. A strong brand let the customers associate themselves as being a company that offers premium quality, trendy products and is offering unique products that other companies are not offering. 2.3.4 Extensions - When your company's brand is well-established, you can spread the respect you've earned to a related new product, service or location and win acceptance easily of the newcomer. For instance, when Apple introduced a new product extension line of Ipad, the customers trusted the brand so they didn't feel reluctant and bought Ipads anyway, making these tablets quite popular of its kind in the market. 2.3.5 Loyalty - When customers have a positive experience with your company's brand, they are more likely to buy your products and services again in future rather than the competitors. Customers that are closely bonded with your brand's identity may not only repurchase what they bought earlier, but may also buy related items of the same brand, and recommend your brand to others and resist the lure of a competitor's price cut. The brand identity helps to create and anchor such loyalty.
  13. 13. ''A study on marketing strategy of Apple'' December 2012 7 Apple's loyal customers wait every year to buy a new version of iphone every year, regarding the high price and numerous other phones existing of competitors brand in the market. 2.3.6 Lower marketing expenses – Branding helps a company to invest less in marketing (promotion) expenses, though you need to invest money in order to create a brand, but it's more like a one off investment as once it's created you can maintain it and do not need to tell the whole story about the brand every time you market it. For instance, Apple promoting for iphone by Apple, everyone knows that iphone is a touch phone produced by the brand Apple. 2.3.7 Greater company equity- Branding your company allows you to get more money when you decide to sell it. Also, it allows the company to borrow loan even if the company's facilities and inventory vanished, just because of their brand name. Similarly if Apple Inc founder ever decides to sell the company he will get more money. 2.3.8 Less Risk and Quality Assurance –Lynne Haley Rose (2012) states, when you market a product/service with a strong, positive brand association, you communicate an assurance of quality to the potential customers, which makes the consumers more likely to buy from your branded company rather than a no name company. Often, superior sales are due to the trust and expectation of quality that the recognized brand has established through an integrated marketing program. This is the reason that customers prefer to buy Apple's products rather than those that are unbranded.
  14. 14. ''A study on marketing strategy of Apple'' December 2012 8 2.4 STP Process It consists of a set of three strategies namely (Segmentation, Targeting and Positioning) that is created after branding, and further helps in developing marketing strategies for Apple's brand. Figure 1: STP process 2.4.1 Segmentation- As stated by University of Southern California (2012), when the market is divided into sub groups, known as market segments, in order to create product differentiation strategies and to exploit these segments to the firm's own use. There are several segmentation techniques that can be used, like:  Demographic segmentation: It is when the market is segmented on the basis of age, gender, education, income, occupation, etc.  Geographic segmentation: It is when the market is segmented on the basis of city, state, region or country.  Psychographic segmentation: It is when the market is segmented on tha basis of life style, Social class (Upper class, middle class, lower class, blue collar, and white collar), behavior, opinions (liberal/conservative), values or ethics. Apple Inc segments their market by:
  15. 15. ''A study on marketing strategy of Apple'' December 2012 9 Figure 2: Apple's segmentation As we are in an age of mobile computing, it helps to see the continuum of connected devices from the perspective of their means of mobility; namely, whether they are wear-able, pocket-able, bag-able or portable. According to Mark Sigal (2010), Such diverse set of device Apple offers from physical buttons, keyboards and moue to multi-touch and tilt, providing a window into the types of use cases and workflows that they are used for optimizing. Apple has used their vertical integration of the iPod media player and the iTunes marketplace, to their advantage as it creates a billing relationship with 160 million consumers via simplified discovery, purchase and distribution, providing a window into how their market segmentation approach is simultaneously harmonious and discrete. The iOS-based Apps and their corresponding “ecosystem surround” directly overlay on top of iTunes and the iPod media player. This approach is like business school study of how companies can apply strategies and tactics across product lines and product lifecycles. Therefore, Apple has the ability to be judicious in its implementation of differentiating hardware components at the display, phone, camera and video capture level.
  16. 16. ''A study on marketing strategy of Apple'' December 2012 11 2.4.2 Targeting- It is the second stage of the STP process. After the market has been separated into its segments, the marketer will select a segment or series of segments to target at, and then resources and efforts will be targeted at the segment. Different targeting methods can be used by the firm, like: 1. One supplier targeting a single segment with a single product. Figure 3: Targeting 1 2. One supplier with one product, targeting all segments. Figure 4: Targeting 2 3. One supplier, with several brands and targeting different segments for each brand. Figure 5: Targeting 3
  17. 17. ''A study on marketing strategy of Apple'' December 2012 11 Apple Inc has been using the second approach of being one supplier that is targeting many segments. According to the Matt Asay, (2010), Apple mainly targets people, as it focuses on users and lets them decide how and where they’ll use their products. 2.4.2 Positioning- According to Switchtomac, 2009 'Understanding Apple's positioning', positioning is the third and final part of the STP process. Positioning is one of the simplest and one of the most useful tools for marketers. After segmenting a market and then targeting a consumer, you would proceed to position a product within that market. Positioning is all about the 'perception', and it may differ from one person to another. E.g. What you perceive as quality, value for money, etc, maybe different to another person's perception about it. Apple is positioned as a premium brand in the mind of the customers that demands and earns a price premium. This price premium spans the entire Apple product lineup encompassing the Macintosh, iPod, iPhone, software, and accessories. Therefore, Apple's has positioned them to target a less price sensitive customer, thus which has created a culture and a set of activities through which Apple differentiates itself from competitors to meet the needs of their targeted customers. 2.5 4 Ps (marketing mix) of Apple 2.5.1 Product: According to Boseng (2011), Products are the goods and services that a business provides for sale to target the market. Apple like any other company began with the products. At first Apple computers (MAC) were considered as an overpriced niche product with a low market share. Only communications segment considered it as a great took for design and AV applications, but the rest of the people remained loyal to the traditional PCs; but Apple continued to build their base of brand advocating through design, combining unprecedented features and innovative styling. In the recent years, Apple diversified it product mix by introducing new line of products, keeping up with the competitive consumer electronics market. Some of their well known products such as the iPod, a portable music player was the first product range that was launched to compete in the portable media player market and not after long came the iPhone (the most innovative device that has several features like mobile phone capabilities, music player, small personal organizer and portable computing, all put in a one tiny handheld which dominated the mobile phone market). What makes iphone unique is that it allows customization to be done suiting the individual needs accordingly, making it relevant to its target market. Other famous products of Apple comprises of ipad, another handheld touch form of mini-computer and Apple TV. 2.5.2 Price: According to CJ (2011), Price concerns with the amount of money that customers should pay in order to purchase the company's products. Apple has never considered pricing as one of the competitive advantages. They only use their best resources to make a great final product first, and then only worry about the costs. The only buck to this trend we have seen now is with iPad. Apple’s competitors release their own tablet devices, but none of them are coming any closer to iPad’s entry price of $499 even when everything is equal in regards of the hardware and
  18. 18. ''A study on marketing strategy of Apple'' December 2012 12 component quality. It is clearly seen that Apple is leveraging some of the supply chain advantages earned from the iPhone and iPod with regards to materials like touch screens and flash memory in order to keep iPad’s pricing down, which will prove very difficult for the major competitors to approach in the near term. Rival firms such as Samsung operate in many different business segments that ties together the multiple component suppliers, would probably come close over time, but it assuredly is an uphill battle for even the best of them to compete in the short-term. Therefore, the high price charged for its products also portrays the high quality of its products, for which customers are willing to pay for. 2.5.3 Promotion: According to Villing and Company (2011), promotion refers to the act of communicating the benefits and value of your company's product to their consumers. Apple’s commercial spots are instantly recognizable by everyone whether you are a fan of their products or not. It is easy to identify their commercials immediately because of the use of the simplistic approach of the layout of their product featured on a white background, with catchy music playing in the background, using the approach ''Less-is-more products, meets less-is-more advertising''. Everything in their advertisements are visual, and visually plentiful, but not overpowering as some ads can be. When a new product gets launched, along with the press conference, several major tech blogs and websites also take part in covering the event. Apple spends half billion dollars annually on paid media, which is actually lesser than rival brands Microsoft and Dell. However, given the memorability of Apple’s advertisements, it seems to be more pervasive than it actually is. In addition, if there was a poster child for the powers of word-of-mouth marketing and brand loyalty, it would be Apple. 2.5.4 Place Villing and Company (2011) states, Place is related to the distribution, location and methods of getting the product to the customers. Apple has adopted a hybrid distribution channel involving an online store, physical outlets and the retail points of the exclusive mobile service provider and its online store. Apple recognized that by getting their products used by students, could influence brand preferences more in the development years of a new generation of computer users. The most dramatic 'Jobs-led' initiative involved the 4th element of marketing mix “place”, which was the opening of its now iconic Apple retail stores. Apple expanded its consumer reach by building numerous new retail outlets, owing and operating around the world in the last ten years. It has also placed their products from iPods, iPads, and iPhones in about every store that sells electronics these days. Also, from numerous retail outlets to a great e-commerce website, like Amazon, Apple's website, making their products as easy to buy for consumers as anything out there today.
  19. 19. ''A study on marketing strategy of Apple'' December 2012 13 2.6 SWOT Analysis of Apple It is a method of is a method of analyzing a business, its resources, and its environment. Figure 6: SWOT Analysis Model To evaluate the progress, success, and faults of Apple Inc, SWOT analysis is being used. SWOT analysis is a strategic planning tool which helps to evaluate the strengths, weaknesses, opportunities, and threats of an organization. It helps in identifying the internal and external areas that needs improvement and internal and external areas that can be proved successful. 2.6.1 Strengths According to Slideshare (2012) 'SWOT Analysis for Apple', Strengths relates to the resources and capabilities that can be used in developing a competitive advantage.  Apple has positioned itself to be a pioneer of producing high tech and innovative products in the computer (MAC), mobile (iphone) and electronics (ipad, ipod) industry.  It is one of the original hardware producers in the market that controls both the manufacturing of its products as well as they create their own internal components for the core of its computers.  Apple has a set of standards for high quality products in order to meet customer satisfaction.  It has a strong and dedicated Research and Development department which helps in creating of new efficient, innovative, compact, user friendly and feasible to use products.  A company known for having the most brand loyal customers who buy their products for quality, regardless of the high price. Such powerful loyalty of customers means that Apple has a strong positioning of their brand and that they not only creates new customers but retains them, as they keep coming back to avail the company's products and services, which also motivates the company to extend their product line like with the recent introduction of the tablet (ipad).
  20. 20. ''A study on marketing strategy of Apple'' December 2012 14  They have a strong presence in the corporate and education segment, with a strong brand name known globally.  They do smart marketing, that is clever and which takes advantage of customer's frustrations with other brands products.  Eye catching retail stores with high tech products and providing experiences of Apple's software. 2.6.2 Weaknesses: According to Knowledge Wharton high school (2012), Weakness relates to the absence of the strength.  Increasing competition in the market, many similar producers of tablets, smart phones and computers, therefore it may be a difficult task of ensuring consistency and quality for its products.  Failure of notability and lack of promotion of two of their products Apple TV and Mac mini.  Decision to restrict iphone to a single mobile operator (non jail break phones) was an issue in many countries.  Pressure on Apple to increase the price of their music download files on itunes as many of the music industry artists make more money from iTunes (i.e. downloadable music files) than from the CD sales. The company is resolute, and if they start giving it in to for the music producers, it may be perceived as a commercial weakness.  Premium pricing for all products lose a potential customer base that are price conscious.  Very proprietary and controlling as they have their own operating system (MAC and ios), this keeps design control inside and up to standards, but it does not have a wide adaptation of its hardware, especially computers, where it has a relatively small market share. Apple has veto power over Apps sold. 2.6.3 Opportunities: According to Muller (2010), Opportunities are the external factors that help in achieving the objectives of the firm.  Constant growth of the computer, mobile and technology market, allows room for Apple's products demand in the future.  Growing market of green and energy saving products  Joint venture, to maintain good relationships with companies and to eliminate competition.  More international expansion into the Asian countries.  Market gap, filling it in by introducing new features and technology. E.g. iphone being used by business professionals more often now due to its new features and functions.  To introduce new line of products related to the same mobile, computers and electronic market but aimed at the price conscious customers.  The use of Intel chip will allow new machines of Apple to be compatible with Windows Operation System which can be used to develop iTunes and music player technology to be applied to a mobile phone. Apple should continue to create such opportunities through new and innovative software markets in order to strive to introduce its groundbreaking hardware into these markets.
  21. 21. ''A study on marketing strategy of Apple'' December 2012 15 2.6.4 Threats According to Slideshare (2012), Threats are the external factors that do not support in achieving the objectives of the company.  High completion in the market with mass existence of technology giants like Microsoft, Dell, Samsung, HP, HTC, Nokia, Toshiba, etc, making the market highly saturated.  Shifts in consumers tastes from Apples products to other firm's products.  Emergence of substitute products like Samsung Tablet, which has a potential to kill the need of having a phone along as it allows making calls along with the tablet features.  Increasing trade barriers and introduction of new regulations.  Premium pricing for its products, may not be affordable by all therefore losing vast number of potential customers.  Global recession as it may reduce wants of the customers. 2.7 Apple's competitive edge According to Trellian (2012), Competitive advantage is defined as strategic advantage; it is when a business entity has a benefit over its rival entities within its competitive industry. Achieving a competitive advantage helps to strengthen and position a business better within the business environment. 2.7.1 Apple Marketing According to Rob Enderele (2004), Apple really stands out in its marketing. The company simply seems to understand what will get people excited about its products and services, then only it executes on its vision. They don’t talk about features or technology, but about how the computers will make your life better. Apple has also not been afraid of in-your-face campaigns. The company has run campaigns that have shown Intel-based laptops catching fire and getting flattened by steamrollers. Also, the place where Apple puts its logo on its products is unique; on laptops the logo is right side up when the screen is open. As Apple believes that the logo is not for the person who bought the computer but for the person who is in the market for one. It is good advertising placement which should not be a throw-away design element. Apple also does the best placement in the TV shows which really showcases a logo. Even when the other vendors get a spot, their logos are quite hard to see, as their logos on laptops do not light. 2.7.2 Apple's hardware and Software According to Ben Benjarin (2011), the rest of the PC industry is struggling with differentiation, Apple has had it since day one. Apple is as good of a software company than a hardware company. Apple makes extremely good hardware as they are the only ones who can make hardware worthy to run their software. Steve Jobs once stated that, “People who are serious about great software need to also be serious about great hardware.” This is why Apple makes software that allows to makes hardware decisions in order to maximize the value of their software. Not only do they make a great Operating system which sets them apart but also they create extremely good “core” software named as iLife. Apple’s iLife software is far better than most of the third party softwares used for creating movies, music, DVDs, etc. Therefore, most of electronics companies are either hardware or software companies only, they are not both like Apple which makes Apple to stand out among competitors.
  22. 22. ''A study on marketing strategy of Apple'' December 2012 16 2.7.3 Apple is organized differently from all other competitors As indicated by Andrea Regnette (2011), All the consumer electronics companies are organized as Business Units, which tend to be fully integrated with their own R&D and P&L. Usually these Business Units are in competition with each other and may carry a high risk of weakening the brand equity and lowering loyalty to any company. Apple on the other hand is organized as being a company that manages products, not categories. Apple has one R&D base that is common across most products, and looks at one P&L, despite its huge turnover. As a result, Apple's products are all fully compatible with one another, accessories can be used on multiple products and in short, and consumers enjoy a great brand experience. This approach allows customers to have great trust in the brand. 2.7.4 Apple's retail strategy Apple has their own retail stores, though many of the companies failed miserably at having their own stores. However, for Apple this has been one of the most brilliant moves they made. The reasons that why some other companies tried owning their own stores and failed was due to location or a lack of priority, but Apple got both of those correct. Apple had been very careful about how people buy their products, they authorized retailers with small shops that carried Apple’s products and accessories, also they provided an outlet for support and repair. They later decided to control the retail experience themselves instead if investing heavily in external retail experience. Ben Benjarin (2011), also adds that location plays a significant role; they have their stores located in malls, as the consumers are already in shopping mode. The location plays well into supporting Apple's strategy. The fact that consumers can go in and get support or repairs for their products and then get some shopping done while they wait is a bonus. Primarily it is a priority that Apple places focus on their retail strategy which has set them apart from those who have tried retail and other outlets in the past. Apple spends top dollar on the look and the in-store experience and it shows. However, there is always room for improvement in Apple stores, they have assembled a strong team, experiment heavily, and listen to customers. Since, Apple owns their own retail experiences they get a chance to have direct conversations with their customers and potential customers. This helps Apple to think about future needs of their customers and how their products can help them to solve current and future problems.
  23. 23. ''A study on marketing strategy of Apple'' December 2012 17 CHAPTER 3: Methodology 3.1 Purpose of the study: The main purpose of the study is to attain these research objectives:  To analyze the importance of using a marketing strategies of branding for Apple Inc and to find out how STP strategies helps Apple's brand.  To find out about the benefits of branding for the company and to find out how branding helps to gain a competitive edge by differentiating themselves and how it increases customer loyalty and increases brand awareness.  To find out about the branded product and its related price, promotion and placement and to find out the strengths, weaknesses, opportunities and threats the company may be facing.. 3.2 Type of research Descriptive Research - According to Ghauri and Gronhaug (2005), descriptive research is conducted for the purpose of finding answers to the structured questions like, who, what, where, when, why and how. It helps in clearing the distinctiveness of a population or an observed fact. As stated by Zinkmund (2000), “descriptive research studies are based on the previous understating of the nature of the research problem”. It mainly involves the use of methods like: surveys, observation, secondary data, panels, etc. E.g. of application: Who are our existing competitors? How strong is our brand image? Therefore, descriptive research has been used since dissertation requires to answer structured questions like who, what, where, when, why and how, allowing answers to be distinctive of the observed facts. Surveys and secondary data is used is mainly used to conduct the research. 3.3 Research Method The research method used for the research is: Survey Method According to Kotler, Armstrong, Ang, Leong, Tan, Tse, (2005, page 119), Survey research is the most widely used method to collect primary data; this approach is best suited for gathering detailed information. Survey research is very flexible; it can help to obtain many different kinds of information in many different situations. Researchers can select target groups for asking questions about their knowledge, attitudes, preferences and behavior In order to gather information regarding the marketing strategy of branding in Apple, a survey questionnaire will be used to collect data due to its flexible property of providing different kinds of data i.e. both qualitative and quantitative.
  24. 24. ''A study on marketing strategy of Apple'' December 2012 18 3.4 Types of data 3.4.1 Primary data – It is the first hand obtained data for any issues or specific information collected directly through thorough observation and research. (Kotler, Armstrong, Ang, Leong, Tan, Tse, (2005), Page 118) Researchers here are using survey (questionnaire) method to obtain the primary data regarding the respondent's views about using branding strategies and related marketing strategies related to Apple. 3.4.2 Secondary data – It is the second hand data obtained by the use of secondary sources such as articles, books, journals, internet, etc. (Kotler, Armstrong, Ang, Leong, Tan, Tse, (2005), Page 117) For the research related to the marketing strategy of branding Apple, the secondary data was collected via the use of internet (websites, articles and journals) and books mainly. The secondary data collected was presented in the dissertation in the form of a literature review. The citations and referencing states clearly from which online websites, published articles or journals the data was collected from. Few of the reasons that the secondary data was also collected along with primary data were because of its readily available nature, and it helps to support primary data, making it more specific as it helps to uncover the gaps, deficiencies and other information that needs to be collected. Also, since it is economical, and saves time, efforts and expenses, it provides a quicker solution to the problem. The secondary data collected answered a few questions about what benefits did branding bring Apple, who the competitors are, and Also, it helped a great deal to get a clearer view of Apple's segmentation, targeting , positioning and marketing strategies, along with SWOT analysis model that was used to analyze the data. The secondary data helped a great part in achieving most of the objectives of the research like how primary data did, and it supported the primary data research thoroughly. 3.5 Target population The target population that this dissertation is aimed at consists of working people and students belonging of both sex (female and male). 3.6 Sample size The sample size chosen for this research consist of 50 people. 3.7 Sampling Method According to Statpac (2012), there are mainly two types of sampling methods like: 3.7.1 Probability sampling- it is when each sample has an equal chance of getting selected. 3.7.2 Non-probability sampling- It is the exact opposite of probability sampling as the chance of getting selected is unknown. Simple random probability sampling (It is the basic method of probability sampling, where each member of the population has an equal chance of getting selected) along with Non-probability Convenience (when the most conveniently available sample is selected) and judgment sampling (when the samples are selected by experts based on their judgment) is used to conduct the survey research.
  25. 25. ''A study on marketing strategy of Apple'' December 2012 19 3.8 Data Collection methods: According to University of Wisconsin (2012), The data collection method used for gathering data for the research of marketing strategy of branding in Apple is a questionnaire (It is a survey method in which a set of questions are given to the respondents to fill in, in order to collect data)form. A questionnaire in a web based form is being used, containing of all close ended –questions with set responses is being used. (Source:, Accessed: 24th October 2012) Perks of using a questionnaire in a web based form are that it is relatively cheap, covers a large geographical area and takes comparatively less time than other data collection methods. 3.9 Questionnaire design Like to the web based survey questionnaire: http://obsurvey.com/S2.aspx?id=B7A39096-9CFD-4BE2- 9FFF-B3B2AD11EFF6 The questionnaire mainly consisted of all close ended questions to find the responses suiting the respondents from the given choices in order to find the exact information required and to minimize the time required to fill in the survey, with one rating scale question with rating ranging from (1 to 5), in order to collect quantitative data associated with the research along with qualitative, also rating scales helps to find the respondents perceptions related to the questions asked. The purpose of each question added to the questionnaire is described below: Q1. Name – to identify each respondent Q2. Email Address – for authenticity of respondents answering the survey Q3. Gender – to find out the ratio of gender interested in Apple Inc Q4. Age – to know the age group of respondents interested in Apple Inc Q5. Monthly Income - to know the income group of respondents buying or interested in Apple, further indicating their social class Q6. Are you brand conscious? – to find out about respondents perceptions about branded businesses to regular businesses. Q7. Do you think branded products are better than the regular products in the market? – to find out if using branding strategy helps to differentiate a company's products/services from others. Q8. What differentiates branded products from regular products? – to find out about the factors considered important by the respondents when using a branding strategy Q9. Have you ever heard about the brand Apple? - to discover about the respondents ability of brand recall, recognition and brand awareness and to find out if branding helps in communication the firm's mission, vision and objectives to the respondents Q10. How did you first hear about Apple Inc? - to find out about the success rate of using promotional marketing strategy
  26. 26. ''A study on marketing strategy of Apple'' December 2012 21 Q11. a) Have you ever owned one of Apple's products or used one of their services? – to know about the purchasing power of respondents and success rate of implementing a branding strategy b) Which products of Apple have you owned? - to find out about the most successful product line Q12. When thinking about Apple, which of the following do you mainly associate Apple with? - To find out about the market positioning of Apple over competitors Q13. What makes Apple's products different from other brand's products? – to find out the success factor of Apple's products in comparison to competitors Q14. How would you rate Apple's products and services on a scale (1 to 5), where 5 being Excellent and 1 being Poor. - To find out about the satisfaction level of the respondents about the overall products and services of Apple Q15. What do you think about Apple's products pricing? – To find out if the respondents are receiving value for money. Q16. Where do you usually shop for Apple's products? – To find out about the successful distribution marketing mix strategy Q17. When buying a smart phone, which brand would you prefer to buy? – to find out about the positioning of Apple's products in comparison to competitors in the mobile market Q18. When buying a Pc or a laptop, which brand would you prefer to buy? - to find out about the positioning of Apple's products in comparison to competitors in the computer market Q19. Do you think Apple's products should be charged premium for? – to find out respondents views about the high set price for their products Q20. Would you have still considered purchasing Apple's products, if Apple wasn't a branded company? – to find out if branding made a huge difference to Apple's success All in all, these questions helps Apple Inc to attain the objectives of the research and solve the issues related to branding and marketing strategies.
  27. 27. ''A study on marketing strategy of Apple'' December 2012 21 3.10 Hypothesis 3.10.1 : = 50 % as many respondents prefer branded products to regular products : > 50% (significantly higher) numbers of respondents prefer branded products to regular products 3.10.2. : = 80 % of the respondents perceive high quality as being an important factor of branded products than other factors : ≠ 80 % (significant change) in the number of respondents who perceive quality as being an important factor of branded products than other factors 3.10.3 : = 50 % as many respondents think Apple's products deserve to be charged premium for to those who don’t : < 50% (significantly lesser) numbers of respondents think that Apple's products deserve to be charged premium for 3.11 Pilot Survey It is a preliminary study done before a completing a survey and it helps in testing the effectiveness of the proposed method. For this research, 2 survey questionnaires were used as pilot survey, filled up by 1 male and 1 female. Later, due to their feedback and recommendations, few questions were deleted and few were changed and inserted. Therefore, the result of pilot survey helped a lot in determining the understanding level of the respondents. 3.12 Limitations and Remedies to overcome them 1. Language barrier as some respondents were not able to fill in the questionnaire due to their limited knowledge of English. A translated version of questionnaire can be prepared in few of the commonly spoken languages. 2. A sample of 50 respondents was used due to cost and time restrictions. A large sample should have been taken in order to minimize response errors. 3. In the web based form of questionnaire, there may be a chance that due to lack of understanding of few respondents, few guessed answers may have resulted due to lack of personal contact with the respondents. Try to supervise the person filling the questionnaire. 4. Time elapse rate was high when receiving back the answered questionnaire, especially since the questionnaires were mailed to the respondents. Try to send constant reminders to the respondents to fill in the questionnaire faster.
  28. 28. ''A study on marketing strategy of Apple'' December 2012 22 5. Some respondents may not have used Apple's products/services but may have filled up the survey, just to look smart or well informed. Try to use quota sampling method. 6. Due to time constraints as a simple random, convenience and judgment sampling methods were used for the survey. Try to use more appropriate methods next time in order to reduce randomness and to reach target audience. 7. Uneven gender distribution due to more convenience of women available and willing to answer the questionnaire. Try to distribute questionnaires equally among both men n women.
  29. 29. ''A study on marketing strategy of Apple'' December 2012 23 CHAPTER 4: Data Presentation, Findings and Analysis 4.1 Response Rate Graph The total time it took for 50 responses to get collected for this research was almost 1 month (October 5 – November 8). Figure 7: Response graph 4.2 Data presentation, Findings and Analysis Q1. Gender? Table 1: Gender Figure 8: Gender Figure 7, shows the gender (demographic factor) of 50 respondents who participated in the survey. 64% female respondents and 36% male respondents, i.e. majority consisted of female respondents. Frequency Percentage Male 18 36% Female 32 64% Total responses 50
  30. 30. ''A study on marketing strategy of Apple'' December 2012 24 Q2. Age? Table 2: Age Figure 9: Age Figure 8, shows that majority 68 % of the respondents belonged to the age group (21-25), along with 22% belonging to (16-20) and rest minority between 4 %(26-30),6%(31-40) and 2%(Above 40).This proves that Apples customers mainly consisted of young people. Q3. Monthly Income Table 3: Monthly Income Table 3: Monthly Income (SR) Frequency Percentage Below 15 0 0% 16-20 11 22% 21-25 34 68% 26-30 2 4% 31-40 3 6% Above 40 1 2% Total Responses 50 Frequency Percentage Below 1000 17 34% 1000-5000 23 46% 5001-10,000 6 12% 10,000-20,000 3 6% Above 20,000 1 2% Total Responses 50
  31. 31. ''A study on marketing strategy of Apple'' December 2012 25 Figure 10: Monthly Income (SR) Figure 9, shows that majority of the respondents income fell into the range of 46% (1000-5000) and 34% (Below 1000) Saudi Riyals, along with minority 12 %, 6% and 2% falling between the range of (50001- Above 20,000).Therefore, results also help to possess the social class of majority of the respondents, which belongs to a lower income group as the research mainly consisted of young people consisting of students and fresh career starters mainly. Q4. Brand Conscious? Table 4: Brand Consciousness Figure 11: Brand Consciousness Figure 10, shows that majority (68%) of the respondents happen to be brand conscious, who consider branding an important factor whereas, minority (16%) were found to be not brand conscious. Q5. Do you think branded products are better than regular products in the market? Table 5: Branded products VS Regular products Frequency Percentage Yes 34 68% No 16 16% Total responses 50 Frequency Percentage Yes 38 76% No 12 24% Total responses 50
  32. 32. ''A study on marketing strategy of Apple'' December 2012 26 Figure 12: Branded products VS Regular products Figure 11, shows that majority 76% perceives branded products as being better than the regular (un branded) products, and minority 24% thought vice versa. Q6. What differentiates branded products from regular products? Table 6: Differentiation between branded VS regular products Figure 13: Differentiation between branded VS regular products Figure 12, shows that the factor Quality with majority 86% of the respondents votes was considered to be the most perceived factor linked with branded products from regular products. The other factors such as Brand name itself (44%) and Price (38%) were also linked as being important factors, along with minority of the votes for factors such as, Appearance (26%) and Other (8%). Q7. Have you ever heard of the brand Apple? Table 7: Brand Awareness Frequency Percentage Brand name 22 44% Price 19 38% Appearance 13 26% Quality 43 86% Other 4 8% Total Responses 50 Frequency Percentage Yes 38 76% No 12 24% Total responses 50
  33. 33. ''A study on marketing strategy of Apple'' December 2012 27 Figure 14: Brand Awareness Figure 13, shows that all respondents (100%) have heard about the brand Apple, which shows that the brand Apple has effective and successful brand awareness. Q8. How did you first hear about Apple Inc? Table 8: First heard about Apple Figure 15: First heard about Apple Figure 14, shows that the most effective marketing strategy of Promotion, through which the respondents heard about the brand Apple was Word of mouth (54%) and Internet/Social media (52%) along with other ways of advertisements like TV advertisements (22%), Newspaper/Magazine (20%), Outdoor advertisements (14%) , Flyers (4%) and Sponsored events (2%). Frequency Percentage Word of mouth 27 54% Internet/Social Media 26 52% TV Advertisement 11 22% Flyers 2 4% Outdoor Advertisements (boards/buses) 7 14% Newspaper/Magazines 10 20% Sponsored Events 1 2% Total Responses 50
  34. 34. ''A study on marketing strategy of Apple'' December 2012 28 Q9. Have you ever owned any of the Apple's products or used one of their services? Table 9: Used Apple's products or services Figure 16: Used Apple's products or services Figure 15, shows that majority (80%) of the respondents have used and owned Apple's products/services, with only minority (20%) of the respondents who haven't. Therefore, this proves that Apple's marketing and branding strategies are quite effective. Q10. Which products of Apple have you ever owned? (Answer this question) Table 10: Apple's products/Services owned Figure 17: Apple's products/Services owned Figure 16, shows the products/services owned/used by the 80% of the respondents, Majority (62.5%) of the respondents owned Iphone, (57.5%) owned Ipod and minority (37.5%) owned Ipad and used Itunes with only (12.5%) used Mac Pc/Laptop. Frequency Percentage Yes 38 76% No 12 24% Total responses 50 Frequency Percentage I-pod 23 57.5% I-phone 25 62.5% I-pad 15 37.5% Mac PC/Laptop 5 12.5% I-tunes 15 37.5% Total Responses 40
  35. 35. ''A study on marketing strategy of Apple'' December 2012 29 Q.11 When thinking of Apple, which of the following do you associate Apple with? Table 11: Apple's positioning Figure 18: Apple's positioning Figure 17, shows how well Apple's positioning strategy implemented, it was noticed that majority of the respondents associate Apple with All of the above (40%), Smart phone (30%), and minority associations are made with Music (16%), PC/Laptop (10%) and Other (4%). Q12. What makes Apple's products different from other products? Table 12: Differentiation factor of Apple's products from competitors Frequency Percentage Smartphone 23 30% PC/Laptop 25 10% Music 15 16% Other 5 4% All of the above 15 40% Total Responses 50 Frequency Percentage Brand name 19 38% Design/Style 24 48% Features 21 42% Technology 22 44% Price 11 22% Quality 19 38% Innovations 15 30% Total responses 50
  36. 36. ''A study on marketing strategy of Apple'' December 2012 31 Figure 19: Differentiation factor of Apple's products from competitors Figure 18, shows the results of differentiation factors that make Apple unique from competitor brands, it was noticed that majority of the respondents answered Design/Style (48%), Technology (44%), Features (42%) as being the top differentiating factors along with other factors like Brand name and Quality (38%), Innovations (30%) and Price (22%). Q13. Rating of Apple's products and services [(1 to 5) where, 5 is Excellent and 1 is Poor] Excellent Good Average Fair Poor Total responses Frequency 17 26 4 2 1 50 Percentage 34% 52% 8% 4% 2% 1.9% (Average) Table 13: Rating of Apple's products/services Figure 20: Rating of Apple's products/services Figure 19, shows the satisfaction level of the Apple's customers by their products and services, it shows that majority (52%) of the respondents rated the service as being good with an average rating of 1.9.
  37. 37. ''A study on marketing strategy of Apple'' December 2012 31 Q14. What do you think about Apple's pricing? Table 14: Pricing perception about Apple's products Figure 21: Pricing perception about Apple's products Figure 20, shows that majority of the respondents find Apple's pricing as being Expensive (72%), and rest (28%) find it Affordable with (0%) finding it cheap, which indicates that majority find the pricing to be high Q15. Where do you usually shop for Apple's products? Table 15: Apple customers shopping place Figure 22: Apple customers shopping place Figure 21, shows the results of the successful placement marketing strategy, it was noticed that majority of the respondents shop at Retail outlets (48%) and rest shop at Apple outlets (32%) and Online website (20%). Frequency Percentage Expensive 36 72% Affordable 14 28% Cheap 0 0% Total responses 50 Frequency Percentage Online (Apple's website, e-bay, other) 10 20% Apple outlets 16 32% Retail outlets 24 48% Total responses 50
  38. 38. ''A study on marketing strategy of Apple'' December 2012 32 Q16.When buying a cell phone, which brand would you prefer to buy? Table 16: Preferred cell phone brand Figure 23: Preferred cell phone brand Figure 22, shows a competitive brand analysis between the most preferred cell phone brand, it was noticed that Apple Iphone received majority (42%) of respondents votes, Samsung Galaxy phones (34%) and minority votes for Blackberry (16%) , Nokia (6%), Other (2%), and )% votes for HTC and LG. Q17.When buying a PC/Laptop, which brand would you prefer to buy? Table 17: Preferred PC/Laptop brand Frequency Percentage Apple (I-phone) 21 42% Samsung (Galaxy phones) 17 34% Blackberry 8 16% Nokia 3 6% HTC 0 0% LG 0 0% Other 1 2% Total responses 50 Frequency Percentage Apple (Macintosh) 19 38% Dell 15 30% HP 5 10% Sony 4 8% Toshiba 2 4% Compaq 0 0% Acer 1 2% Packard bell 0 0% Asus 4 8% Other 0 0% Total responses 50
  39. 39. ''A study on marketing strategy of Apple'' December 2012 33 Figure 24: Preferred PC/Laptop brand Figure 23, shows a competitive brand analysis between the most preferred PC/Laptop brand, it was noticed that Apple (Macintosh) received majority (38%) of respondents votes, Dell (30%) and minority votes for HP (10%) ,Song and Asus (8%), Acer (2%) and Packard bell and Other with (0%). Q18.Do you think Apple's products deserve to be charged premium for? Table 18: Premium pricing Figure 25: Premium pricing Figure 24, shows respondents views about whether Apple should charge premium for their products, it was noticed that majority 64% of the respondents think it don't deserve to and the rest 38% thought it should, which indicates that the respondents may not be getting value for money as there are many similar competitive brands in the market. Frequency Percentage Yes 19 38% No 32 64% Total responses 50
  40. 40. ''A study on marketing strategy of Apple'' December 2012 34 Q19.Would you have still considered to purchase from Apple if it wasn't a branded company? Table 19: Branded Apple VS unbranded Apple Figure 26: Branded Apple VS Unbranded Apple Figure 25, shows that majority (52%) of the respondents would have still chosen Apple if it was not a branded company, and rest (48%) would not have chosen Apple if it wasn't branded. The results are quite controversial as they are quite close to each other and the majority of the respondents, who may have still bought from Apple, are the respondents who are loyal to Apple's products, which in a way are brand loyal. Frequency Percentage Yes 26 52% No 24 48% Total responses 50
  41. 41. ''A study on marketing strategy of Apple'' December 2012 35 4.3 Hypothesis: 4.3.1 : = 50 % as many respondents prefer branded products to regular products : > 50% (significantly higher) numbers of respondents prefer branded products to regular products Rejection region: Reject , Accept Acceptance region: Reject , Accept Figure 27: One tailed (significant increase) test Test level= 5% Critical z-value >1.65 Table 20: Branded products VS Regular products Ps = = 0.76 Test statistics z = = = = 3.66 Location of test statistics: Rejection region Therefore, Reject , Accept as there is sufficient evidence to indicate that there is a significant increase in the number of respondents who prefer branded products to regular products. Frequency Percentage Yes 38 76% No 12 24% Total responses 50
  42. 42. ''A study on marketing strategy of Apple'' December 2012 36 4.3.2 : = 80 % of the respondents perceive high quality as being an important factor of branded products than other factors : ≠ 80 % (significant change) in the number of respondents who perceive quality as being an important factor of branded products than other factors Rejection region: Reject , Accept Acceptance region: Reject , Accept Figure 28: Two tailed test Test level= 5% Critical value: Zc < -1.96 or Zc > 1.96 Table 21: Quality VS other features Ps = = 0.86 Test statistics z = = = = 1.05 Location of test statistics: Acceptance region (z=0) Therefore, Reject , Accept as there is sufficient evidence to indicate that there is a significant change in the number of respondents who perceive Quality as being an important factor of branded products. Therefore, more than 80% perceive quality as an important factor of branded products. Frequency Percentage Brand name 22 44% Price 19 38% Appearance 13 26% Quality 43 86% Other 4 8% Total Responses 50
  43. 43. ''A study on marketing strategy of Apple'' December 2012 37 4.3.3 : = 50 % as many respondents think Apple's products deserve to be charged premium for to those who don’t : < 50% (significantly lesser) numbers of respondents think that Apple's products deserve to be charged premium for Rejection region: Reject , Accept Acceptance region: Reject , Accept Figure 29: One tailed (significant decrease) test Test level= 5% Critical z-value < -1.65 Table 22: Premium pricing Ps = = 0.38 Test statistics z = = = Location of test statistics: Rejection region Therefore, Reject , Accept as there is sufficient evidence to indicate that there is a significant decrease in the number of respondents who think that Apple's products deserve to be charged premium at. Frequency Percentage Yes 19 38% No 32 64% Total responses 50
  44. 44. ''A study on marketing strategy of Apple'' December 2012 38 4.4 Summary of the survey findings After analyzing the survey findings, it was found out that more women than men bought from Apple. Most of the respondents were young, belonging to a low income group as most of them were students or fresh career starters. Most of them were brand conscious who perceived that branded products are better than regular products, as they offer better quality products. They mainly liked to shop for Apple’s products at retail outlets. Majority of them first came across Apple through word of mouth, which may be due to a recommendation received from a friend or family. They associated the brand Apple with almost everything like smart phones, PC/Laptops, music and other technological items. The findings also highlighted few problems that Apple maybe facing, like: 1. High prices and High competition: Most of the respondents find Apple’s pricing to be high and they do not prefer to pay premium for their products due to the availability of similar kind of competitor’s products existing in the market. 2. Fewer store outlets – as Apple stores are located mainly in public places like malls, technology streets, etc., for many customers they are not easily accessible. 3. Lack of promotion – for some products like Apple TV very less promotion is being done. 4. Existence of similar products in the market produced by competitive brands, which can easily be substituted by the customer. 5. Other problems and threats have been mentioned in the literature review through secondary data information in the form of Weaknesses and Threats, while doing SWOT Analysis.
  45. 45. ''A study on marketing strategy of Apple'' December 2012 39 CHAPTER 5: Conclusion and Recommendations 5.1 Conclusion The main aim of the dissertation was to conduct a study on the marketing strategy of branding in Apple. The study helped apple to find out more about the segmentation, targeting, positioning, branding strategies and marketing mix strategies. Furthermore, a SWOT analysis was done to recognize the strengths and weaknesses of Apple along with the opportunities and threats that the company may be facing. The analysis helped Apple in identifying the success factors that will help in gaining a competitive edge; allowing it to increase profit, brand power and customer loyalty proving it to be a well-known, leading and a successful company in the saturated technology industry. Survey findings were made to find if the marketing strategies of branding are proving to be effective or if any changes are needed to be made in the future. The literature review consisting of the secondary data and the descriptive survey research consisting of primary data, they both helped in fulfilling the objectives of the dissertation, which helped in conducting a study on the marketing strategy of branding, by recognizing the problems that Apple maybe facing in order to improve or eliminate them. 5.2 Recommendations 5.2.1 Provide value for the products offered If a perception is created that Apple is offering its customers with fine products with premium quality in the industry, which is not being offered by others; than Apple should be able to differentiate themselves from their competitors in order to still keep premium pricing for their products. 5.2.2 Conduct more aggressive promotion Increasing promotional programs never proves to be damaging for any firm, but only proves to be beneficial, it not only helps to attract potential customers, but also new customers boosting customer traffic and sales. Apple should also start creating 'TV commercials', in such a way that educate the customers about the latest technological product, making it seem more appealing. Also, they should start focusing on advertising all products not only new products in order to meet the sales target for all products. 5.2.3 Make maximum innovations Technology market is a highly competitive market, it’s very easy for competitors to clone your products and sell as new products by making small innovations. Therefore, it has become very important to keep making constant innovations in design, features and specifications in order to differentiate your product from competitive brands and to be able to dominate the market. 5.2.4 Offer price reduction offers from time to time Instead of not charging premium, price reductions, free gifts, vouchers, VIP cards, etc. can be made for a limited period of time, to allow customers to buy from Apple more often. Thus, this may help Apple to attract new target group customers increasing its fan base, along with sky rocketing its brand loyalty and sales. 5.2.5 Open more Apple outlets in different areas Since Apple relies on online, direct and retail distribution methods, it’s important for Apple to expand its direct reach through its own stores and retail stores by locating stores in a more reachable district, like residential areas so that people can have an easy access to the stores.
  46. 46. ''A study on marketing strategy of Apple'' December 2012 41 5.2.6 For further recommendations refer to 'opportunities for Apple’, which were identified on page 16 of chapter 2 (Literature review)
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