Strategic Marketing

Experience sharing from practitioners

Albert Iskandar
1853013
 The History of Apple, Inc.
• Apple Computer was founded in 1976
• Founded by Steve Jobs and Steve Wozniak, first product was Apple I
• A few years later, Apple had more than $1 million in sales
• Yet, Apple’s initial success did not last. Its downturn started during the 1980s with a series of product flops and CEO
changes. Steve Jobs was ousted in 1985 due to internal conflicts within the company. By the mid-1990s, the company was
approaching bankruptcy.
• The return of Steve Jobs in 1997 instituted major changes for Apple. The company successfully adopted a market
orientation in which it was able to gather intelligence about customers’ current and future needs for certain features- even
before the customers themselves knew they needed them.
• In 2007, Jobs announced that Apple Computer, Inc. would be re-named Apple, Inc. Some perceived this renaming to be a
shift away from computers toward consumer electronics. However, a more appropriate viewpoint would be to say that
Apple was reinventing its stance toward computers. With the introduction of the iPad in 2010. Apple began to take market
share away from top competitors in the computer industry.
• Although the Apple products of today are high in demand, this was not always the case. Apple went through its share of
product failures in its past. Several of these failures can be attributed to a failure to accurately predict consumer behavior.
• Thanks to its innovative products and marketing strategies, Apple has grown intro one of the most admired and
successful brands in the world. To millions of consumers, the Apple brand embodies quality, prestige, and innovation
 Apple’s Products

• Mac Computers
• iPod and iTunes
• iPhone
• iPad
• The App Store
 Apple’s Marketing Program
• Pricing
• Traditionally priced high compared to competitors
• Rather than dissuading consumers from adopting the products, the high price point provides Apple
with a prestige image
• Apple stresses the convenience of its products as well as the revolutionary new capabilities they have
to offer
• Promotion
• Apple encourages demand for its products through several types of promotion, including word-of-
mouth marketing.
• Relies on hit products and high-impact rollouts to stimulate emotional buying
• The company positions itself as the technology provider for creative people
• Advertisements are often simple, artistic, and instantly recognizable
• Apple’s promotion strategy has led to a perception that Apple products are part of a consumer’s
identity
 Apple’s Marketing Program

• Distribution
• Apple distributes its products to consumers via retailers, the company’s online store,
and Apple Stores
• Apple Stores have enhanced the brand and changed Apple’s distribution strategies
• Apple Stores differentiate themselves significantly from other retailers, customers can
both shop and play. Everything in the store is carefully planned to align with the
company’s image, from the glass-and-steel design reminiscent of the company’s
technology to the stations where customers can try out Apple products.
 Apple’s Marketing Challenges
• Competition
• Apple faces competition on variety of fronts, although a diverse product mix mitigates
the risk of any one product failing, it also increases Apple’s number of competitors.
Such as Dell, Acer etc for computers; Samsung, HTC for smartphones. Despite Apple’s
lead in many of these areas, rivals are striving to catch up.
• Amazon with Kindle Fire Vs iPad
• Samsung, Asus at prices lower than the iPad, Microsoft Surface with a Windows 8-
based tablet very competitive with the iPad
• Google is also a strong competitor to Apple’s offerings in terms of operating systems,
music, books, and cloud services.
• With Open System allow manufacturers like Samsung and HTC to release new devices
at a much faster pace than Apple’s yearly refreshes
 Apple’s Marketing Challenges (2)
• Customer Privacy
• Privacy is another major concern for Apple
• Apple and Google disclosed that certain features of their smartphones collect data
about the phone’s location. Many consumers and government officials saw this as an
infringement of user privacy.
• Both Google and Apple defend their data collection practices, but many government
officials disagree
• The government is considering passing legislation on mobile privacy, actions which
could have profound effects on Apple and other mobile devicemanufacturers
 Apple’s Marketing Challenges (3)
• Product Quality
• Apple’s image hinges upon product quality, so mistakes can create serious marketing
problems
• Because several new products are introduced every year, mistakes can become hard to
detect before product introduction
• After Apple introduced the iPhone 4, consumers complained of reception problems
caused by antenna interference that occurred when users held the phone a certain way
• Public relations experts criticized Apple for appearing to minimize the problem rather
than reaction quickly to remedy it
 Apple’s Marketing Challenges (4)
• Intellectual Property
• With many products Apple releases each year, it makes sense for it to protect its
technology from theft. Apple is serious about keeping its proprietary information a
secret to prevent other companies from stealing its ideas
• The confidentiality has led to many patent and copyright lawsuits from Apple to other
technology firms, including Franklin Computer Corporation, Microsoft, Cisco Systems,
Samsung, and HTC
• Apple Vs Samsung
• Apple Vs HTC
 Apple’s Marketing Challenges (5)
• Supply Chain Management
• Many of Apple’s product components are manufactured in countries with low labour costs.
This means that the potential for issues to arise is high due to varying labour standards and
less direct oversight. As a result, Apple makes each of its suppliers sign a supplier code of
conduct and performs factory audits to ensure compliance.
• Apple has faced scrutiny for its manufacturing processes. Over 50 percent of the suppliers
audited by Apple have violated at least one part of its supplier code of conduct every year
since 2007
• Suppliers claim that Apple’s manufacturing standards are hard to achieve because suppliers
are allowed slim profit margins. In contrast, competitors like Hewlett-Packard allow
suppliers to keep more profits if they improve worker conditions. Apple’s focus on the
bottom line can cause suppliers to find other ways to cut costs, usually by requiring
employees to work longer hours and using less expensive but more dangerous chemicals.
• In this environment, mistakes and safety issues become more common
 Apple’s Marketing Challenges (6)
• Sustainability
• Apple has taken steps to become a greener company, such as reducing its
environmental impact at its facilities. However, the company admits that the majority
of its emissions (97 percent) come from the life cycle of its products.
• Apple’s success hinges on constantly developing and launching new products, which
leads to planned obsolescence – pushing people to replace or upgrade their technology
whenever Apple comes out with an updated version
• Apple takes different approaches to this environmental problem. The company builds
its products with materials that are suitable for recycling, it builds its products to last,
and it recycle responsibly. To encourage its customers to recycle, Apple created an in
store recycling program where customers can trade in old products and receive various
discounts.
 Apple’s Impact on the Practice of Marketing
• No company has mastered the concept of product differentiation better than Apple. While products such as
the iPod and iPhone provided functions and benefits similar to competing products, Apple’s technology and
user-friendly interface provided a consumer perception of a completely new product.
• Apple retail stores and service help create a total product that was unlike any available in the marketplace.
• The Apple brand name became a cultural icon with loyal followers that were devoted to Apple’s products.
Once the product becomes so important to an individual, they are less sensitive to price and quickly adopt
new products that are brought to the market. Few companies have been able to develop cultural branding
and a cult-like following like Apple
• Apple’s advances in mobile marketing have not only changed the way that customers interact with mobile
devices but also enhanced customer relationships between business and consumers.
• Additionally, many companies are seizing upon the opportunity to learn from Apple. Due to the immense
success of Apple stores, other companies are attempting to imitate its retail model. Microsoft and Sony
opened some of their own stores. Other companies now use Apple products to enhance their businesses.
For instance, some pharmaceutical and car salespeople have adopted the iPad to aid in business
transactions, and some restaurants even use the iPad to show menu items