Apple Fina

8/12/2019 Apple Fina

1/52

1

Abstract

Apple inc. is largest Electronics Company and producing better quality

Cellphones, Computers, Software,Hardware, Music devices, IPad And fewother

Products. I have learned many more things to complete this analysisabout the

apple like as what is company do how they do that how theyworking for the

environment, culture, buyers and suppliers, SWOT, andsome other things. I have

seen some financial terms like Annual reports and B/S of the company and the

most important which kinds of StrategyCompany are adopting for their

competitors. I would like to thanks SmitaMam for giving this opportunity to do

diagnosis about the company.


2/52

2

OBJECTIVE

To study the Marketing Strategy & Plan of Apple inc

To Analyse the Apples industry attractiveness on the basis of potter fiveforces

To Analyse the Apples industry attractiveness on the basis of SWOTanalysis

To determine Marketing Mix of Apple inc.


3/52

3

REASERCH METHODOLOGY

In everyday life human being has to face many problems viz. social,

economical, financial problems. These problems in life call for acceptable

and effective solutions and for this purpose, research is required and a

methodology applied for the solutions can be found out.

Research was carried out on Apple inc. to analyse its performance on the

basis of marketing tools.


4/52

4

DATA COLLECTION

Secondary Data:

Data was collected from books, magazines, web sites, going through the

records of the organisation, etc. It is the data which has been collected by

individual or someone else for the purpose of other than thos previously

for the analysis and the results are undertaken for the next process.

Company profile


5/52

5

Apple Inc. Formerly Apple Computer, Inc. is an American multinational

corporation that designs and sells electronics, computer, and personalcom

puters. The company's best-known hardware products

arethe Macintosh line of computers, the iPod, the iphone and the iPod. Its

software includes the Mac OS X operating system; the iTunes mediabrow

ser; the life suite of multimedia and creativity software; the iWork suite

of productivity software; Aperture, a professional photographypackage;

Final Cut Studio, a suite of professional audio and film-

industrysoftware products; Logic Studio, a suite of music

production tools;the Safari web browser; and iOS, a mobile operating

system. As of July 2011, Apple has 357 retail stores in ten countries, and

an onlinestore. It is the largest publicly traded company in the world by

market capitalization, overtopping ExxonMobil by some $60 billion, as

well as thelargest technology company in the world by revenue and

profit, worthmore than Google and Microsoft combined As of September

24, 2011, thecompany had 60,400 permanent full-time employees and

2,900 temporaryfull-time employees worldwide; its worldwide annual

sales totaled $65.23billion, growing to $108.249 billion in 2011.Fortune

magazine named Apple the most admired company in the UnitedStates

in 2008, and in the world from 2008 to 2011.


6/52

6

However, thecompany has received widespread criticism for its

contractors' labor, andfor its environmental and business

practices.Established on April 1, 1976 in Cupertino, California,

and incorporatedJanuary 3, 1977, the company was named Apple

Computer, Inc. for its first 30 years. The word "Computer" was

removedfromitsnameonJanuary9,2007, as its traditional focus on personal

computers shiftedtowards consumer electronics

Mission, Vision, & Strategy


7/52

7

Apples mission statement emphasizes that the company made

majorinnovations in the personal computer industry in the past and

linksstrength to its present strategy. Apple ignited the personal computer

revolution in the 1970s with the appleIInd and reinvented the personal

computer in the 1980s with theMacintosh. Apple is committed to

bringing the best personal computingexperience to students, educators,

creative professionals and consumersaround the world through its

innovative hardware, software and internet offerings.The digital hub that

is what Steve jobs (founder) identified as objective for Apples strategy

in the future.

Herewith, all three sectors Apple is currentlyoperating in will get closer

and closer together and showing a highinterdependence. Where seamless

integration of all components is vital towin customers. Apple is the only

company providing a bundle of solutionswhich are perfectly adjusted

and fine tuned to complement each other to,for other companies,

unattainable degree.

By designing such high endproducts Apple is corresponding to external

and internal environment,which in the high technology sector are

changing more rapidly thananywhere else. Though out its diversification


8/52

8

efforts, Apple keeps its designand innovation focused line by the equally

adapting performance and pricepositions to changes in the external

environment.

Industry analysis

The computer industry includes a wide variety of products, frommp3

Players and printers to personal computers and powerful

servers.Companies have trouble operating within the computer industry,

namely due to the dynamic nature

of technology. Moore's law, formulated byGordon Moore in 1965, states

that the numbers of transistors per squareinch on integrated circuits will

double every 18 months, and prices will bereduced. This means even the

largest firms must stay on their toes, as theindustry is constantly

changing and redefining its Parameters. AppleComputer Inc. has recently

made headlines by breaking into the portablemusic market with its

introduction of the Apple iPod and iTunes software. Apple also carries a

long line of computer products including personalComputers, computer

accessories, servers, networking solutions, andsoftware

packages. Currently capturing a market share of 65% among theportable

music market, and holding a profitable 2% of the personalcomputer

market, Apple has consistently kept his name in the industry. Apple has


9/52

9

stayed afloat in the industry by keeping an eye for aestheticsand

creativity, coupled with user friendly and innovative products.

Competitors

Apple has become a major digital asset management company. It

hascreated an OS and UI that makes it very easy for users to

manage,aggregate, distribute and even share personal content throughout

an Apple-designed digital ecosystem.

Because of that, I asserted that Apple isunstoppable: When it comes to

providing a complete solution for theconsumer, Apple has created a

position for itself that makes it nearlyimpossible for other companies to

compete head on. Apple is first company who introduce digital media

library the name wasITunes.There are some competitor came in the

market.1.

Blackberry2.

Google (Android)3.

Nokia4.

Samsung5.

Sony6.

IBM7.


10/52

10

Microsoft Some player also exists in the E-market like

HTC

Out comes

The final outcomes came in after these processes.IMacIPodIphoneITunesI cloud

IPhones IPads IPods Mac ITv


11/52

11

I Phone


12/52

12

Literature Review

The Five Competitive Forces

The Five Competitive Forces are typically described as follows:

Bargaining Power of Suppliers

The term 'suppliers' comprises all sources for inputs that are needed in order to

provide goods or services.

Supplier bargaining power is likely to be high when:

The market is dominated by a few large suppliers rather than a

fragmented source of supply,


13/52

13

There are no substitutes for the particular input,

The suppliers customers are fragmented, so their bargaining power

is low,

The switching costs from one supplier to another are high,

There is the possibility of the supplier integrating forwards in order

to obtain higher prices and margins. This threat is especially high

when

The buying industry has a higher profitability than the supplying

industry,

Forward integration provides economies of scale for the supplier,

The buying industry hinders the supplying industry in their

development (e.g. reluctance to accept new releases of products),

The buying industry has low barriers to entry.

In such situations, the buying industry often faces a high pressure on margins

from their suppliers. The relationship to powerful suppliers can potentially reduce

strategic options for the organization.


14/52

14

Bargaining Power of Customers

Similarly, the bargaining power of customers determines how much customers can

impose pressure on margins and volumes.

Customers bargaining power is likely to be high when

They buy large volumes, there is a concentration of buyers,

The supplying industry comprises a large number of small operators

The supplying industry operates with high fixed costs,

The product is undifferentiated and can be replaces by substitutes,

Switching to an alternative product is relatively simple and is not

related to high costs,

Customers have low margins and are price-sensitive,

Customers could produce the product themselves,

The product is not of strategical importance for the customer,

The customer knows about the production costs of the product

There is the possibility for the customer integrating backwards.

Threat of New Entrants

The competition in an industry will be the higher, the easier it is for other

companies to enter this industry. In such a situation, new entrants could change

major determinants of the market environment (e.g. market shares, prices,


15/52

15

customer loyalty) at any time. There is always a latent pressure for reaction and

adjustment for existing players in this industry.

The threat of new entries will depend on the extent to which there are barriers to

entry. These are typically

Economies of scale (minimum size requirements for profitable

operations),

High initial investments and fixed costs,

Cost advantages of existing players due to experience curve effects of

operation with fully depreciated assets,

Brand loyalty of customers

Protected intellectual property like patents, licenses etc,

Scarcity of important resources, e.g. qualified expert staff

Access to raw materials is controlled by existing players,

Distribution channels are controlled by existing players,

Existing players have close customer relations, e.g. from long-term

service contracts,

High switching costs for customers

Legislation and government action


16/52

16

Threat of Substitutes

A threat from substitutes exists if there are alternative products with lower prices

of better performance parameters for the same purpose. They could potentially

attract a significant proportion of market volume and hence reduce the potential

sales volume for existing players. This category also relates to complementary

products.

Similarly to the threat of new entrants, the treat of substitutes is determined by

factors like

Brand loyalty of customers,

Close customer relationships,

Switching costs for customers,

The relative price for performance of substitutes,

Current trends.

Competitive Rivalry between Existing Players

This force describes the intensity of competition between existing players

(companies) in an industry. High competitive pressure results in pressure on

prices, margins, and hence, on profitability for every single company in the

industry.

Competition between existing players is likely to be high when


17/52

17

There are many players of about the same size,

Players have similar strategies

There is not much differentiation between players and their

products, hence, there is much price competition

Low market growth rates (growth of a particular company is possible

only at the expense of a competitor),

Barriers for exit are high (e.g. expensive and highly specialized

equipment).


18/52

18

SWOT Analysis

SWOT Analysis is the most renowned tool for audit and analysis of the overall

strategic position of the business and its environment. Its key purpose is to

identify the strategies that will create a firm specific business model that will best

align an organizations resources and capabilities to the requirements of the

environment in which the firm operates. In other words, it is the foundation for

evaluating the internal potential and limitations and the probable/likely

opportunities and threats from the external environment. It views all positive and

negative factors inside and outside the firm that affect the success. A consistent

study of the environment in which the firm operates helps in


19/52

19

forecasting/predicting the changing trends and also helps in including them in the

decision-making process of the organization.

An overview of the four factors (Strengths, Weaknesses, Opportunities and

Threats) is given below-

Strengths

Strengths are the qualities that enable us to accomplish the organizations

mission. These are the basis on which continued success can be made and

continued/sustained. Strengths can be either tangible or intangible. These are

what you are well-versed in or what you have expertise in, the traits and qualities

your employees possess (individually and as a team) and the distinct features that

give your organization its consistency. Strengths are the beneficial aspects of the

organization or the capabilities of an organization, which includes human

competencies, process capabilities, financial resources, products and services,

customer goodwill and brand loyalty. Examples of organizational strengths are

huge financial resources, broad product line, no debt, committed employees, etc.

Weakness

Weaknesses are the qualities that prevent us from accomplishing our mission and

achieving our full potential. These weaknesses deteriorate influences on the

organizational success and growth. Weaknesses are the factors which do not meet

the standards we feel they should meet. Weaknesses in an organization may be

depreciating machinery, insufficient research and development facilities, narrow


20/52

20

product range, poor decision-making, etc. Weaknesses are controllable. They must

be minimized and eliminated. For instance - to overcome obsolete machinery, new

machinery can be purchased. Other examples of organizational weaknesses are

huge debts, high employee turnover, complex decision making process, narrow

product range, large wastage of raw materials, etc.

Opportunities

Opportunities are presented by the environment within which our organization

operates. These arise when an organization can take benefit of conditions in its

environment to plan and execute strategies that enable it to become more

profitable. Organizations can gain competitive advantage by making use of

opportunities. Organization should be careful and recognize the opportunities and

grasp them whenever they arise. Selecting the targets that will best serve the

clients while getting desired results is a difficult task. Opportunities may arise

from market, competition, industry/government and technology. Increasing

demand for telecommunications accompanied by deregulation is a great

opportunity for new firms to enter telecom sector and compete with existing firms

for revenue.

Threats


21/52

21

Threats arise when conditions in external environment jeopardize the reliability

and profitability of the organizations business. They compound the vulnerability

when they relate to the weaknesses. Threats are uncontrollable. When a threat

comes, the stability and survival can be at stake. Examples of threats are - unrest

among employees; ever changing technology; increasing competition leading to

excess capacity, price wars and reducing industry profits; etc

Advantages of SWOT Analysis

SWOT Analysis is instrumental in strategy formulation and selection. It is a strong

tool, but it involves a great subjective element. It is best when used as a guide, and

not as a prescription. Successful businesses build on their strengths, correct their

weakness and protect against internal weaknesses and external threats. They also

keep a watch on their overall business environment and recognize and exploit new

opportunities faster than its competitors.

SWOT Analysis helps in strategic planning in following manner-

a. It is a source of information for strategic planning.

b.

Builds organizations strengths.

c. Reverse its weaknesses.d. Maximize its response to opportunities.e. Overcome organizations threats.f. It helps in identifying core competencies of the firm.g. It helps in setting of objectives for strategic planning.


22/52

22

h. It helps in knowing past, present and future so that by using past andcurrent data, future plans can be chalked out.

SWOT Analysis provide information that helps in synchronizing the firms

resources and capabilities with the competitive environment in which the firm

operates.

Limitations of SWOT Analysis

SWOT Analysis is not free from its limitations. It may cause organizations to view

circumstances as very simple because of which the organizations might overlook

certain key strategic contact which may occur. Moreover, categorizing aspects as

strengths, weaknesses, opportunities and threats might be very subjective as there

is great degree of uncertainty in market. SWOT Analysis does stress upon the

significance of these four aspects, but it does not tell how an organization can

identify these aspects for itself.

There are certain limitations of SWOT Analysis which are not in control of

management. These include-

a.

Price increase;

b. Inputs/raw materials;c. Government legislation;d. Economic environment;e. Searching a new market for the product which is not having overseas

market due to import restrictions; etc.


23/52

23

Marketing mix


24/52

24

The marketing mix is one of the most famous marketing terms. The

marketing mix is the tactical or operational part of a marketing plan. The

marketing mix is also called the 4Ps and the 7Ps. The 4Ps

areprice,place,product andpromotion. Theservices marketing mix is

also called the 7Ps and includes the addition

ofprocess,people andphysical evidence.

The concept is simple. Think about another common mix - a cake mix. All

cakes contain eggs, milk, flour, and sugar. However, you can alter the

final cake by altering the amounts of mix elements contained in it. So for

a sweet cake add more sugar!

It is the same with the marketing mix. The offer you make to your

customer can be altered by varying the mix elements. So for a high

profilebrand, increase the focus on promotion and desensitize the

weight given to price.

Another way to think about the marketing mix is to use the image of an

artist's palette. The marketer mixes the prime colours (mix elements) in

different quantities to deliver a particular final colour. Every hand

painted picture is original in some way, as is every marketing mix. Lets

look at the elements of the marketing mix in more detail. Click on the

links to go to the lesson on each element.
http://www.marketingteacher.com/lesson-store/lesson-pricing.htmlhttp://www.marketingteacher.com/lesson-store/lesson-place.htmlhttp://www.marketingteacher.com/lesson-store/lesson-three-levels-of-a-product.htmlhttp://www.marketingteacher.com/lesson-store/lesson-promotion.htmlhttp://www.marketingteacher.com/lesson-store/lesson-services-marketing-mix.htmlhttp://www.marketingteacher.com/lesson-store/lesson-process.htmlhttp://www.marketingteacher.com/lesson-store/lesson-people.htmlhttp://www.marketingteacher.com/lesson-store/lesson-physical-evidence.htmlhttp://www.marketingteacher.com/lesson-store/lesson-brand.htmlhttp://www.marketingteacher.com/lesson-store/lesson-brand.htmlhttp://www.marketingteacher.com/lesson-store/lesson-physical-evidence.htmlhttp://www.marketingteacher.com/lesson-store/lesson-people.htmlhttp://www.marketingteacher.com/lesson-store/lesson-process.htmlhttp://www.marketingteacher.com/lesson-store/lesson-services-marketing-mix.htmlhttp://www.marketingteacher.com/lesson-store/lesson-promotion.htmlhttp://www.marketingteacher.com/lesson-store/lesson-three-levels-of-a-product.htmlhttp://www.marketingteacher.com/lesson-store/lesson-place.htmlhttp://www.marketingteacher.com/lesson-store/lesson-pricing.html


25/52

25

Price

Price is the amount the consumer must exchange to receive the offering

The companys goal in terms of price is really to reduce costs through

improving manufacturing and efficiency, and most importantly the

marketer needs to increase the perceived value of the benefits of its

products and services to the buyer or consumer.

There are many ways to price a product. Let's have a look at some of them

and try to understand the best policy/strategy in various situations.

Place

Place includes company activities that make the product available to target

consumers.

Place is also known as channel, distribution, or intermediary. It is the

mechanism through which goods and/or services are moved from the

manufacturer/ service provider to the user or consumer.


26/52

26

Product

Product means the goods-and-services combination the company offers to the

target market.

For many a product is simply the tangible, physical item that we buy or

sell. You can also think of the product as intangible i.e. a service.

In order to actively explore the nature of a product further, lets consider

it as three different products - the CORE product, the ACTUAL product,

and finally the AUGMENTED product.

The Product Life Cycle (PLC) is based upon the biological life cycle. For

example, a seed is planted (introduction); it begins to sprout (growth); it

shoots out leaves and puts down roots as it becomes an adult (maturity);

after a long period as an adult the plant begins to shrink and die out

(decline).

The Customer Life Cycle (CLC) has obvious similarities with the Product

Life Cycle (PLC). However, CLC focuses upon the creation and delivery

of lifetime value to the customer i.e. looks at the products or services that

customers NEED throughout their lives.


27/52

27

Promotion

Promotion includes all of the activities marketers undertake to inform consumers

about their products and to encourage potential customers to buy these product

Promotion includes all of the tools available to the marketer for

marketing communication. As with Neil H. Borden's marketing mix,

marketing communications has its own promotions mix. Whilst there is

no absolute agreement on the specific content of a marketing

communications mix, there are many promotions elements that are often

included such as sales, advertising, sales promotion, public relations,

direct marketing, online communications and personal selling.


28/52

28

DATA ANALYSIS

MARKETS AND COMPETITION

PORTERS FIVE FORCES

Viewed through Michael Porters strategic framework, Apple is a company with

several advantages that will enable it to continue along its trajectory of high

performance, strong growth and healthy profitability. The five forces framework

reinforces our investment recommendation on Apple, but also highlights areas

where investors should be mindful. In this section, we provide both hindsight and

forward looking analyses examining the advantages that the company has

successfully developed as well as scenarios under which those advantages could

be eroded.

Degree of Rivalry

Several factors make the technology industry extremely competitive. Rapid

technological advancement, sudden shifts in consumer preferences, savvy

competitors, and a fragmented global supply chain all impact the ability of firms


29/52

29

in the technology industry to capture market share. Apple has outmaneuvered its

rivals by focusing on the user experience. Instead of emphasizing features and

tech specs, Apple concentrated on making its products easy to use. The comfort

that users feel toward Apples products is responsible for the companys high

brand loyalty and distinctive brand image. Rivals have found it very difficult to

garner the same level of devotion amongst their users. Even Samsung, Apples

most successful rival in the tablet market, captured 17% of the tablet market by the

end of 2010 compared to 73% for Apple23. Consequently, we feel that Apple, more

than any other company, is best positioned to thrive in the cutthroat consumer

electronics industry.

One word captures the threat Apple faces: convergence. Once iconic companies

have been knocked on their heels as a result of convergence. Convergence has

dealt serious blows to once proud industry leaders. Kodak suffered when solid

state drives rather than film became the standard for storing pictures. Kodak has

also been harmed by phones with built in camera capabilities.

Apples iPod faced the same problem. Aware that the smartphones could

potentially make the iPod obsolete, Apples move into mobile phones was a

strategic imperative. By successfully creating and marketing mobile phones,

Apple was able to strengthen its balance sheet and protect its position as a

distributor of content.

R&D Spending of Leading Tech Companies


30/52

30

Source: SiliconAlley Insider

Convergence has ratcheted up the pressure on Apple. Apple has gone from

competing against niche electronics companies like Rio and Sandisk, to competing

against established companies such as Sony and Samsung. The convergence of

entertainment, ecommerce and productivity into smartphones and tablets means

that Apple now competes not only against electronics and computer companies

(Samsung, Sony, HTC, Hewlett Packard, Dell, Huawei), but also against

internet/software companies(Amazon, Google). Apple, like any company, could

stumble, but its track record of anticipating threats points to a future in which

Apple continues to extend its reach.


31/52

31

Supplier Power

The popularity of Apples products gives it an enviable bargaining position vis --

vis suppliers. In commodity semiconductors, for example, Apple has virtually

unparalleled pricing power. iPads and iPhones consume a large share of mobile

DRAM and Apple alone is responsible for 30 percent of worldwide NAND flash

demand24. LG is the leading supplier of Apples LCD touchscreens, but Apple has

at times employed the threat of defecting to Samsung in order to keep LG in

check.

Tactical purchasing sharpens the companys pricing edge. Apple uses its cash

hoard to place large components orders and gives its suppliers as little notice as

possible, forcing them to quickly ramp up production in order to fulfill the

order25. This gives competitors very little time to re spond to Apples moves and

creates pricing volatility for competitors. The size and timing of Apples

component purchases has a tendency to force sudden price jumps, leaving

competitors little recourse but to pay exorbitant prices for essential components.

Tim Cook, in his role as chief operations officer, led Apples negotiations with

suppliers. In his current role as CEO, we feel that Apples bargaining power is

strengthened.


32/52

32

Buyer Power

Consumers have a wide array of choices. In all four markets in which Apple

competes, Apple faces several savvy and very aggressive companies. Whats more,

in terms of features and application, there are very few differentiating factors. The

screen resolution, disk space, and CPU clock rate of leading smartphones is more

or less uniform. Twitter, Facebook, email and Google search, are accessible on all

smartphones and function the same regardless of platform. Capabilities being

uniform, consumers can easily switch brands. Looking only at technical features,

Apple should have very little power relative to consumers.

Apples brand cachet persuades consumers to buy Apples products. Among

consumer electronics companies, only Apple has succeeded in making its products

into status symbols. Second, Apple goes beyond entering markets: it defines them.

Apples iPod became synonymous with mp3 players to the extent that rival

products were left with little recourse but to compete on price. iPads make up

68.3% of all tablet sales and have also become status symbols. For this reason, we

see Apple as better able to command higher prices and to influence buying

decisions than its competitors.

Threat of Substitutes

In terms of tech specs, little separates Apples products from its competitors.

Apples superiority in software, not hardware, gives its products an edge.

Consumers choose to buy Apple hardware because they know they will have

access to the latest and coolest apps.


33/52

33

Apple faces a tough dilemma. The popularity of Googles Android software has

made it more difficult for Apple to claim it has an edge in apps. Although iPhone

apps outnumber Android apps, Android has more free apps. Around 66% of

Android apps are free versus 34% for iPhone apps26. Moreover, several of the

most popular apps and games are available on both mobile operating systems.

The popularity of Googles operating system also makes competitors products

more viable. Before the advent of Android, Apples competitors used to write their

own smartphone operating systems. Lacking experience in writing graphical

software, Apples competitors wrote system software that was often buggy,

cumbersome and difficult to use. Apples lawsuits against Androids partners

prove that Apple is taking the Android threat seriously. Apples software is still

the best in the industry, but it will need to find ways to lock consumers into its

ecosystem if it wants to tip the balance of power in its favor.

Threat of Entrants and Disruptive Innovation

It is not difficult to enter the tablet PC or smartphone space. Smartphone

components are commodities and high quality operating system software, such as

Googles Android, is free. Several of the apps that compel users to upgrade from

feature phones to smartphones, such as Angry Birds and Bejewelled, are

available across all major cellphone platforms meaning that there is little to

differentiate one phone from another content-wise.


34/52

34

But while its easy to enter the tablet and PC space, its not very easy to stay.

Without scale, a new entrantsproducts cannot compete effectively with

incumbents products. To survive, a new entrant would have to enter the market

with a blockbuster product, a feat that even incumbents have found difficult to

achieve. Compounding the difficulty is cost. Apples profit margins are driven by

costs too low for competitors to match. Acer had admitted to losing money on

tablets and the rumored Amazon tablet is speculated to be a loss leader for the

company. The current business model of the tablet industry provides Apple with a

decisive advantage.

Innovation, at least as it is conceived in the smartphone space, usually conjures

images of faster chips, sharper screens, bigger hard-drives, and better internet

connections. All of these features are important, but do not help companies stand

apart. To stand apart, companies have to consistently improve the user experience.

Since mobile and tablet screens are small, users have to adjust to using email,

social apps, GPS, and other features. If a phones software makes navigating

between Facebook, Gmail, or iTunes cumbersome, then users will switch to a

competing product. Moreover, users now demand phones whose apps and features

can talk to each other. The newest phones, for example, have high resolution

cameras integrated with Facebook and YouTube so that users can instantly upload

photos onto Facebook profiles and YouTube accounts. Another feature that is

popular is contact synching. Synching enables a phone to access a users email and

social media in order to build a comprehensive and easily accessible list of a users


35/52

35

friends and coworkers contact information. Although controversial, location

based apps are also popular. We feel that since mobile software is still in its

nascent stages, that there are still many opportunities for phone companies to

innovate and differentiate themselves from their competitors.

We believe Apples position of leadership in the mobile computing space is well

hedged. One area of weakness for Apple is ITunes. iTunes close integration with

the Apple ecosystem as well as its site security, made it the go-to-destination for

music lovers, despite competition from sites that offered music at a cheaper price.

Yet, the mobile internet has changed the way people access music. Downloading

music onto devices dedicated only to playing music and videos made sense when

phones only made phones calls and when the mobile internet was slow and

expensive. Downloading music will still appeal to many consumers, but to

compete, Apple will need to recognize that streaming music will probably eclipse

downloaded songs as the preferred method of listening to music. Instead of

downloading music from iTunes, a smartphone owner can stream music over the

internet through Pandora or Yahoo music. Whats more, these services have apps

specially tailored forproducts cannot compete effectively with incumbents

products. To survive, a new entrant would have to enter the market with a

blockbuster product, a feat that even incumbents have found difficult to achieve.

Compounding the difficulty is cost. Apples profit margins are driven by costs too

low for competitors to match. Acer had admitted to losing money on tablets and

the rumored Amazon tablet is speculated to be a loss leader for the company. The


36/52

36

current business model of the tablet industry provides Apple with a decisive

advantage.

Innovation, at least as it is conceived in the smartphone space, usually conjures

images of faster chips, sharper screens, bigger hard-drives, and better internet

connections. All of these features are important, but do not help companies stand

apart. To stand apart, companies have to consistently improve the user experience.

Since mobile and tablet screens are small, users have to adjust to using email,

social apps, GPS, and other features. If a phones software makes navigating

between Facebook, Gmail, or iTunes cumbersome, then users will switch to a

competing product. Moreover, users now demand phones whose apps and features

can talk to each other. The newest phones, for example, have high resolution

cameras integrated with Facebook and YouTube so that users can instantly upload

photos onto Facebook profiles and YouTube accounts. Another feature that is

popular is contact synching. Synching enables a phone to access a users email and

social media in order to build a comprehensive and easily accessib le list of a users

friends and coworkers contact information. Although controversial, location

based apps are also popular. We feel that since mobile software is still in its

nascent stages, that there are still many opportunities for phone companies to

innovate and differentiate themselves from their competitors.

We believe Apples position of leadership in the mobile computing space is well

hedged. One area of weakness for Apple is ITunes. iTunes close integration with

the Apple ecosystem as well as its site security, made it the go-to-destination for


37/52

37

music lovers, despite competition from sites that offered music at a cheaper price.

Yet, the mobile internet has changed the way people access music. Downloading

music onto devices dedicated only to playing music and videos made sense when

phones only made phones calls and when the mobile internet was slow and

expensive. Downloading music will still appeal to many consumers, but to

compete, Apple will need to recognize that streaming music will probably eclipse

downloaded songs as the preferred method of listening to music. Instead of

downloading music from iTunes, a smartphone owner can stream music over the

internet through Pandora or Yahoo music. Whats more, these services have apps

specially tailored for smartphones, meaning that iTunes close integration with the

Apple ecosystem is no longer as much of an advantage. We see Apples fiercest

competition coming from Netflix, Pandora and Amazon.com. As mobile speeds

accelerate, we see new entrants gaining enough market share and user attention to

pose a direct threat to Apples content business. A new entrant to the market,

Stockholm based Spotify, is gaining media attention and market share.

Subscribers to Spotify pay a flat monthly fee ($5 per month for unlimited, $15 per

month for unlimited +mobile) and gain complete access to Spotifys library of

more than 15 million songs. Spotifys large library and relatively cheap monthly

fee make the service an attractive alternative to iTunes.

To remain the gold standard of online content, we believe that Apple will need to

redefine iTunes. Since iTunes is now a direct competitor to Pandora, iTunes might

need to co-opt some of Pandoras features. On Pandora, customers can create


38/52

38

customized playlists based on their favorite songs, artists, or genres. While

listening to the customized radio station, users are often introduced to new songs

and artists, which, in turn, helps users create even more customized radio stations.

The icloud service, which will enable users to access music online through any

device, is a good product and a step in the right direction, yet we feel that Apple

will need combine iCloud with a method of allowing users to listen to music for

free.


39/52

39

SWOT ANALYSIS OF APPLE INC


40/52

40

Strengths

Well recognized amongst most consumers

4th largest player in the global mobile phone market

Strong brand image provides an edge over competitors

Robust financial performance strengthens investors confidence and

provides capital for future growth avenues

Focused R&D driving innovation & consolidating its market position

Holds 5% market share in mobile phone market

18.5% market share of global smartphone market

Provides unique design and development of operating systems,

hardware, application software and service to its customers


41/52

41

Weaknesses

Patent infringement lawsuit may affect financial condition and operating

results -January 2010, Nokia filed law suit for patent infringement with US ITC

Product recalls may harm Apples reputation and ass significant warranty

and other expenses- 2010, antennae problems in iPhone 4- replacements free of

charge

Product defects harm Apples reputationa nd add significant warranty and

other expenses

Opportunities

Strong growth in smartphone and tablet markets to boost Apples

revenues

Robust outlook for mobile advertising market provides growth

opportunity


42/52

42

Shipment of smartphones expected to be 850 million by the end of 2013

iPhone business continues to increase (2009-2010 93.2% increase in

sales)

Strongest player in mobile apps market (350,000 apps)

Mobile advertising market is forecast to reach approximately $25 billion by

2015

Threats

Rising popularity of Google Android may affect its market share - 350,000

Android smartphones are activated daily, 150,000 iPhone activated

daily

Steve Jobs death impact high growth sustenance levels - Steve Jobs

was innovative and a visionary for Apple. His death may hinder further

developments in Apple

Dependence on specific suppliers may affect to operations

Intense competition may affect revenues and profitability


43/52

43

Marketing Mix

During research marketers need to identify the consumer in order to

know with certainty what kind of product offer. The buyer is exposed to

stimuli that are also known as the marketing mix and can be identified

with the four Ps: product, price, place and promotion (Blythe 2008).

Apple Inc. is an example of a successful marketing mix, this company has

a positive feedback by the consumers because they know how to deal

with them, Apple Inc. knows exactly what the consumer wants and its

success is given by a powerful research.

Product

The first thing to take into account about the marketing mix is the

product. Basically the product is anything tangible or not, may be a

service, a physical good, a place, a product is anything that satisfies a

need (Blythe 2008). Apple gives to their customers a wide range of


44/52

44

products that covers many field in technology for example they have

different kinds of laptop with different size and power, also they

invented the iPod which now is not only an mp3 player but is a status

symbol of our era (MarketingTeacher.com), in addition in the last four

years they have created a brand-new market for smart-phones and

tablet-pc, this is called by the Apples CEO Steve Jobs the post-pc era

(Jobs 2011). According to Apples product portfolio (OnlineMba.com

2010, see appendix) most of the profits come from iPhone and in less than

a year iPad has generated revenues almost as high as those from laptops.

Price

The price is the amount of money the consumer pays for the product or

service. The price in our modern market should be competitive, this

means that it should not be so high but there are exceptions (Blythe 2008).

The price of Apples products is not low compared to other brands but

there is a reason for this. Apple is a premium brand, it dominates the

market and this company knows that even though the price in some

countries is quite high they will have customers anyway

(MarketingTeacher.com). Generally their products are a union between

technology and liberal arts so they do not just sell products but they sell

art


45/52

45

Place

The place is the location where consumers purchases the product and

where they can receive support, it is also called distribution channel

(Blythe 2008). As the Apples CEO said during the last keynote held in

San Francisco in 2011 one of the reason of this success is the powerful

network of retail they have around the world (Jobs 2011). Apples retails

are everywhere, the major cities in the world usually have at least three

big stores where they can receive customers and, most important,

customers can test the product before the purchase and receive support.

Promotion

The promotion is the set of rules for advertising a product, for example a

product can be advertised by PR, personal selling, also different kinds of

advertising are used such as digital marketing adverts, television,

billboards and so on (Blythe 2008). Of course for Apple this is very

important, in the last six years the brand-awareness has significantly

increased because they are able to create powerful and funny adverts

where they explain how their product works. Also they offer different

kinds of discounts for students and professionals .


46/52

46

Factors affecting the consumer buying process

The process of purchase is influenced by other aspects related to the

customer in a more closely way, these are : cultural, social, personal and

psychological. The culture in which the consumer lives and grows is the

starting point from where the needs arise and will also shape the

behaviour. It is also necessary to take into account demographic factors

such as sub-cultures and groups of people. Then, the marketer must be

able to identify changes in the consumer culture in order to keep updated

on new needs and behaviours. With regard to social factors can be

referred to social groups to which the consumer belongs, an important

social group is the family of the consumer (Kotler et al. 1999). In this

environment is outlined the DNA of the potential buyer. Other social

factors are the role and status held by the consumer in the society, in fact

in the purchase of a product is often influenced by the groups to which it

belongs. With regard to personal factors is indispensable to consider

characteristics such as age, job, economic circumstances, life-style and the

personality of the buyer. Finally, a more difficult issue to study and

understand is the psychological aspect of the purchase. Marketers must

identify the reason for this purchase, the marketer asks why consumers

should buy a particular product and of course you ask why he should


47/52

47

buy his own (Kotler et al. 1999).

The consumer buying process can be analysed by following five stages

which are: problem/need recognition, information search, evaluation of

alternatives, purchase decision, post-purchase behaviour.

Problem/needrecognition

In this stage the consumer is trying to find a solution to a problem or a

need. Marketers work is to identify which is this problem and try to find

a solution with their product.

Information search

Before the purchase the consumer does research about the product. He or

she can have information from friends, neighbours but also from

commercials. Obviously the mass media plays an important role in

giving information about a product (LearnMarketing.net).

Evaluating of alternatives

After the research the consumer has different solution to satisfy its needs.

He or she is now in the position to evaluate alternatives products to


48/52

48

purchase. The consumer, in this stage, face the decision of which is the

best solution to the problem. This is an important step because is when

the consumer makes the choice about the product to buy

(LearnMarketing.net).

Purchase decision and post-purchase behaviour

This is the stage where the consumer actually buy the product, he or she

evaluates the brand which likes the most. Also the consumer calculate the

risk of the purchase and this could lead to change his/her mind about it.

In the post-purchase stage the buyer might think if its purchase is good,

this feeling could be avoided by marketers by convincing the consumer

that what he/she purchased is the best product on the market .


49/52

49

Findings

I think that Apple is be bringing back the mass marketing approach, they

don't really concentrate their advertisements on certain groups of people,

they try to include everybody. You can see all the ads that are meant to

resemble you, see if you can find a silhouette that fits you. Apple is

becoming a cult brand that has gained to respect of world wide users who

share one thing in common, their love for Apple's innovation. And I say

that Apple is going back to mass marketing because when you go in to an

Apple retailer you can see people of all ages, cultures, social classes, and

colors; like a small scale ethnic melting pot. The iPod has become a symbol

of our modern digital music culture, and the iTunes store is now the 2nd

largest music retailer in the U.S. Steve Jobs says that "if you make

something great than anybody will want to use it", and that model has

worked for them because they've never really invented anything but they

made what some considered the best technology available; thus eliminating

the need for an specific target market, because their products appeal to

everyone.

Apple offers amazing products that include hardware and software that

just draw all different kinds of people into the market.( Their major

hardware products are displayed in the page.) Software like the iLife '11


50/52

50

which allows you to manage your music, movies, and pictures, the Final

Cut in case you want to make a whole length film, or the iWork, make you

look at Apple products as essential to your life. Benefit segmentation works

in 2 ways, first, it helps you segment your market and second, it advertises

your product which makes people want to buy it; and s that's the point

right? Apple in one of the most successful firms in the technology industry

so however it is that they are segmenting the market , they are doing it

right.


51/52

51

Conclusion

Apple is more than just a brand, its a lifestyle, part of growing culture of

consumers who are artist, musicians, writers, photographers, and most of

all innovators. The firm has positioned itself as a high end brand that offers

beautiful hardware designs and also an amazing users experience. Apple

targets a market that consist of people from their teens to their 40's that are

interested in doing more with their technology than just the usual boring

old stuff that other companies offer. Their product lines offer similar

products that offer different benefits in order to prevent cannibalization.


52/52

52

Bibliography

WWW.Google.Com

www.wikipedia.com

www.marketing teacher.com

www.slideshare.com

www.scridb.com
http://www.google.com/http://www.wikipedia.com/http://www.marketing/http://www.slideshare.com/http://www.scridb.com/http://www.scridb.com/http://www.slideshare.com/http://www.marketing/http://www.wikipedia.com/http://www.google.com/

Apple Fina

Documents

Transcript of Apple Fina