Product Profile on “Apple iPad”

7/22/2019 Product Profile on Apple iPad

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A Product Profile on Apple iPad Submitted To

Suryadatta Institute of Management (SIMMC), Pune

Submitted By,

Nirav Mistry

PGDM Sem-I(12-14 Batch)

(Marketing + IT)


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ACKNOWLEDGEMENT

Survey is an excellent tool for learning and exploration. No classroom routine

can substitute which is possible while working in real situations. Application of theoretical

knowledge to practical situations is the bonanzas of this survey.

Without a proper combination of inspection and perspiration, its not easy to

achieve anything. There is always a sense of gratitude, which we express to others for the help

and the needy services they render during the different phases of our lives. I too would like to

do it as I really wish to express my gratitude toward all those who have been helpful to me

directly or indirectly during the development of this project. I would like to thank my

professors, who were always there to help and guide me when I needed help. I am thankful to

them for their encouraging and valuable support. Working under them was an extremely

knowledgeable and enriching experience for me.

No words can adequately express my overriding debt of gratitude to my parents

whose Support helps me in all the way. Above all I shall thank my friends who constantly

Encouraged and blessed me so as to enable me to do this work successfully.


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Executive Summary

This report aims to present the marketing analysis of Apple iPad. The company sold 1 million

units in 1 month and in last one year they have sold nearly 19 million units which made it a

huge success. There are 5 business models which have been used to present a detailed

understanding of the product followed by discussion, conclusion and suggested

recommendations. The product no doubt is getting support of Apples brand image but the iPad

has changed the way to consumer media. They have started a new consumer segment and provided a

platform for media industry to develop and publish news and magazine content complimented

with advertisement of brand at the same time. iPad is well received by LOreal, South Part

Hotel, GE where they are using innovative apps to fulfill their customized requirement. The

product has is operating under premium pricing and hybrid distribution strategy and gained 80%

market share in since 2010. Though the rivalry is getting tougher but Apple iPad has used his innovative and

expensive marketing strategy to reach out to young and now adult consumers. The product is also had

halo effect on iPhone resulting in greater sales. The company has also used eco-friendly raw

material and packaging to take care of the environment as part of their green strategy initiative.

(Apple Environment Report, March 2012)


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Table of Contents

Acknowledgement...................................................................................... 2

Executive Summary .................................................................................... 3

Research Methodology. 5

Objective of study... 6

1. Introduction to Apple Inc......................................................................... 7

2. Product Profile..................................................................................... .. 7

3. Product Lifecycle ............................................................................................................. 8

4. Marketing Analysis .......... ........ ........ ........ ........ ........ ........ .. ........ ...... ........ ... 8

5. Technical Specifications.......................................................................... 12

6. Technology...................................................................................................................... 13

7. Economic Factor............................................................................................................... 13

8. Social................................................................................................................................ 13

9. Legal................................................................................................................................. 13

10. Environmental Factor..................................................................................................... 13

11. Industry Factor............................................................................................................... 15

12. SWOT Analysis............................................................................................................... 16

13. Conclusion..19

References................................................................................................. 20


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Research Methodology

This chapter describes the methodology of the study. This project is based on information

collected from primary and secondary sources. After the detailed study, an attempt has been

made to Present comprehensive analysis of profile of Apple iPad as a product consumed by the

people. The data has been used to cover various aspects like

consumption, consumers preference and customers satisfaction, market analysis, competitor

analysis, product life cycle, satisfaction index, sales and financial arrangements, research and

development and future outlook regarding Cadbury chocolates. In the process of collecting

requisite data and information regarding the topic, I visited many places of prospective

importance. Information gathering methods like questionnaire, interview were applied on

selective samples.

Survey Design

The study is a cross sectional study because the data were collected at a single point of time.

For the purpose of present study a related sample of population was selected on the basis of

convenience.

Sample Size and Design

A sample of 100 people was taken on the basis of convenience. The actual consumers were

contacted on the basis of random sampling.

Research Period

Research work is only carried for a week.

Research Instrument

This work is carried out through self-administered questionnaires. The questions included were

open ended, dichotomous and offered multiple choices.

Data Collection

The data, which is collected for the purpose of study, is divided into 2 bases:

Primary Source: The primary data comprises information survey of consumer behavior towards

Apple iPad. The data has been collected directly from respondent with the help of structured

questionnaires.

Secondary Source: The secondary data was collected from internet, References from Library.


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http://www.apple.com

http://www.apple.com/ipad/

http://www.macnn.com

http://www.google.com

http://www.apple.com/in

http://www.zdnet.com

http://www.reuters.com/

http://en.wikipedia.org/wiki/IPad

Data Analysis

The data is analyzed on the basis of suitable tables by using mathematical techniques. Thetechnique that I have used is bar technique.

Objective Of Study

This project is based on the extensive study of Apple iPad as a marketable product.

Objectives of the study are:

To know about the customer satisfaction level associated with the product and the customer

preference level.

To increase customer satisfaction and recapture the market share by fulfilling

The customer needs.

To study the factors affecting the consumption pattern.

To increase the market share of product through a detailed marketing campaign.

To target key customers, increase customer loyalty.

To gain greater insight into behaviours and habits in market place.

To assess customer-purchasing habits for products to understand how to position new product

offerings.

To analyse purchaser profiles against media profiles to better understand customers lifestyle

habits and how to best reach them
http://www.apple.com/http://www.apple.com/http://www.apple.com/ipad/http://www.apple.com/ipad/http://www.macnn.com/http://www.macnn.com/http://www.google.com/http://www.google.com/http://www.apple.com/inhttp://www.apple.com/inhttp://www.zdnet.com/http://www.zdnet.com/http://www.reuters.com/http://www.reuters.com/http://en.wikipedia.org/wiki/IPadhttp://en.wikipedia.org/wiki/IPadhttp://en.wikipedia.org/wiki/IPadhttp://www.reuters.com/http://www.zdnet.com/http://www.apple.com/inhttp://www.google.com/http://www.macnn.com/http://www.apple.com/ipad/http://www.apple.com/


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1. Introduction to Apple Inc.

Apple Inc. is based in USA and been the pioneer in the development & marketing of innovative

products by using innovative business methods. The company was formed in 1977 and they

have developed Mac Computers to start with followed by iPod, iPhone 4 and the iPad in the

tablet PC section. Not only in hardware but the company has gained a competitive edge in the

software industry with the development of Mac iOS, OSX operating system which is the

backbone of their hardware products along with the famous iTunes which is used to transfer

data in Apple iPhone, iPad or iPod.

2. Product Profile

The company has sold 85M iPad till the first quarter of 2012 and 175M iPhone & 46.5M iPod Touch till second

quarter of 2012. (ZDNet Staff, 2012) So this gives a good idea how wanted the products are althoughthey

Have lot of practical issues like problem with internet, no wide screen or no multitasking, the

next section will review those aspects in the SWOT analysis.


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1.Product:

Ipad is using iOS operating system with weight between 601-730 grams and size of 9.5 x 7.4 x

0.5 inches. It has Wi-Fi and Bluetooth (limited to keyboard &headphone use). The main parts

are assembled by Foxconn in China which is also planning to change location to Brazil. The

company started taking orders for iPad from 12th Mar 2010 and there was a gap between Wi-Fi

& Wi-fi + 3G versions. The company made strict policy to buy contract from AT &T with 2

contract options (unlimited data plan and 250MB per month). There are various components

which are taken from different companies shown in figure 1 which reflects the management of

strategic supply chain and integration of suppliers which has contributed the success of Apple

iPad. (Wong, 2010)

2.Price:

The company started selling iPad at $499 onwards and it was $638 (399) in UK. The company

is very sensitive and adopted the same pricing strategy as they had done for iPhone. Their best

fit strategy is focused on price insensitive consumers who want to use the latest product and

ready to pay expensive prices. Thus products are sold using skimming and versioning pricing

strategy. Even the company decided to reduce the price by $100 when the sales were low, none

the less the company made good profits by launching the products after 1-2 months

interval. The company sold nearly 1 million units in one month and 19 million in one year

(MacAnn reporters, 2011) Although the product costs around $260 according to a report from

iSuppli but it doesn't include the taxes or R &D costs. (Raphael,2010; Wong, 2010)

3.Place:

The company started selling the iPad only from their retail outlets and then Apple Stores but

soon they also joined hands with AT & T, Amazon, Wal-Mart outlets as show in Figure 2. They

started selling in Europe (UK, Spain, Switzerland) by May 28 2010and in the south east Asia like

HK, Singapore during July 23 2010. Israel denied the selling as they were concerned about the

Wi-Fi issues. It is available at stores in India and require 3G service available from major service

provider like Airtel, Vodafone, Idea & BSNL

Figure 2


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4. Promotion

The company has been promoting the product with the help of social media campaigns and

multi-channel media strategy. Some of strategic campaigns company has designed for

promotion is given below.


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The company has launched no. of TV commercial & social media marketing campaigns.Currently Apple iPad has gathered nearly 2,800,617 likes on Facebook. The company is

using Apple Store , retail outlets to discuss updates, happenings and business analytic

reports. Company also allowing its website visitor to sign up for digital newsletters via

Email & Social media websites.

Faster, Thinner & Lighter were the most used keywords by Apple in iPad adverts. Theseadverts are made to sell iPads on the basis of functional attributes and users are shown

the various features like Email, Photo sharing, Airplay & playing games on it.

The iPad marketing is also helping to sell iPhone. People who have iPad but not iPhonehave decided to buy iPhone as their next Smartphone according to a survey. Also apple

is marketing that the users can reduce the cost of their investments as they can use

same app on iPad and iPhone as well. The company is also targeting old users and quitesuccessful in that with help of their easy life adverts. Nearly 20% of iPad users are above

55 Years and above. The company also organize special events MacWorldExpo & Apple

Expo to announce updates on iPad.


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5. Technical Specifications


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6. Technology

iPad is built on iOS operating system and is challenged by Android from Google along with other

companies like Samsung, LG, Toshiba. The company already has over 200k apps which is the

highest in the tablet category. Microsoft and Google are still fighting to get their share but now

iPad is most wanted productalthough report says that people are quite less aware of the mainfeatures. The limitation of Bluetooth to transfer data is a major limitation along with no

multitasking capability as iPad was expected to replace Laptops however it has drastically

affected the sales during April 2010 and it is estimated that the sales will be over 60 million by

2011. (NAT Reports, 2010) In other new reports, Android 3.0 is rather unstable and the tablet makers

like HTC, Asustek Computers are forced to delay the production after the bad review of

Motorola Xoom with only 100k sales(Marshal, 2011) Apple on the other had being proactive and gave

upfront cash for the key components as opposed to other manufacturers who are affected by

Tsunami in Japan which limited their capability to supply. iPad has provided new platform in the

health care industry where the data from electrocardiograph (ECG) will sent directly to the iPad

using the new app called Airstrip Cardiology and AirStrip Cardiology is available as screenshot.

This is expected to be a new platform for health care development & research and this is just

the starting. (Mearian, 2011)

7. Economic Factor

Apple is facing tough controversy for exploiting the consumers with their excessive pricing strategy in

the tough economic conditions. The loyal customers mostly dont get exclusive treatment and

still have to face the tough pricing decisions of the company. The price of iPad started at $499

but in developing countries like India its $544. This is a premium product and due to

increasing purchasing power the company is targeting the high end users but the company is still facing

tough challenge of low 3G service in the country which has drastically impacted the sales.

8. Social

iPad is changing the way people have thought about the product, with the help of over 85 million

iPad users the company is providing new opportunity for making changes in the life of the people

around it. The users are in touch using social media sites is just a start but the product is well

suited for the consuming media and there are many opportunities for the brands where

features like iP adverts give high appeal visual & imagery presence for the users with the help of

sound, touch and motion. The users can interact with the banners which are on the side of the

editorial. This is a good strategy which is attract lot of publishers than even before. The CEO

have been using the iPad for corporate presentations Companies like Lexus have created a

virtual tour of the car which reflects the level of portability which is brought by Apple. The

application is widespread even in hospitality industry where hotel like The Plaza Part South


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Hotel is using the iPads for their rooms and they can order the drinks or food at their

convenience or can request wakeup calls or look at the city guides & even airlines schedules.

Another company like L'Oreal is using it to show the application and usage (after and before

affects) which is helping the brands and the consumers easy access & enhancement of brand

building. (Young, 2011) So Apple has provided a new platform apart from web where themarketers can get targeted consumers. It is well received by media and publishing companies

where Change Management can be facilitated by iPads. (Larrson, 2010)

9. Legal

Fujitsu is claiming that they have launched and used the name iPad before Apple similar to

iPhone controversy with Cisco. Also feature like ebook reading by Amazon Kindle faced lawsuit

as they are not paying the author for reading his book. Still no issues have been noticed with

iPad but time will tell if they will face legal consequences. (Shvartsman, 2011; Sullivan, 2010)

10. Environmental Factors

Apple has taken great care and done full environmental impact analysis (as in figure 3) and have

used environment management methods during the design and develop life cycle including the

material to be used for manufacturing and significant efforts were done to reduce the energy

consumption of iPad by 80%. iPad is made of recyclable glass and Aluminum and the packaging

material is recyclable & the packing is efficiently done so more iPad's can go in one container.

The company is not using Arsenic, PVC, Mercury as the company has started following

Environmental friendly European directive and restrict the use of harmful chemicals. The

company has also stared recycling programs at majority of the places where Apple iPad is sold.(Apple Environment Report, 2012)

Figure 3
http://images.apple.com/euro/environment/reports/docs/iPad_Product_Environmental_Report_March2012.pdfhttp://images.apple.com/euro/environment/reports/docs/iPad_Product_Environmental_Report_March2012.pdfhttp://images.apple.com/euro/environment/reports/docs/iPad_Product_Environmental_Report_March2012.pdfhttp://images.apple.com/euro/environment/reports/docs/iPad_Product_Environmental_Report_March2012.pdf


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11. Industry Factors

Suppliers:Apple has high power over consumers as they have partnered with big brands and therefore

using monopolistic price policies. Their product is standard and can't be customized by others.The company is taking products from so many other companies and assembling it which has

helped them to decide the prices and high brand image is helping them to cash the price of

advertising from the consumers. The company has changed the product and launched iPad 2

from March 2,2011 and iPad 3 from March, 2012 but still there are lot of buyers who haven't

used iPad first generation yet. (Apple Annual Reports, 2012)

Buyers:The buyers have no control over iPad and they are at the mercy of the company. The buyers

want to get products as soon as possible but mostly the company says 3-4 weeks for iPad toreach the consumers. Due to strong ties with the network providers the buyers have to take the

products under contract otherwise they have to pay huge money to get the iPad alone. The

price is $499 in US but its $ 544 in Asia but the buyers cant do anything due to low power over

the supplier. The products in this category are quite high and so the switching cost is also quite

high. (Shin, 2010)

Threat of Substitutes:The threat is moderate but according to the Garter reports the Tablet market will significantly

affect the sale of laptop and PC (10.5 % only) and the tablets is expected growth of 100%

amounting the figure to reach 54 million in 2011 alone. Apple had 80% market share last year

and it is expected that LG, Motorola, RIM, HP etc. will affect the sales of Apple sales. The

company has stopped the production of iPad and now iPad 2 & iPad 3 is in place. But time will

tell who will be the leader. (Garter, 2011)

Competitive Rivalry:The rivalry is quite high in the Tablet industry and IT giants like Google, LG, Samsung, Toshiba, Acer and

other local brands are entering the market and what to have their share of consumer markets.

Although the growth of Apple is 61% and it is expected that they be the dominant player but

still the competition is quite high especially due to high inflation in the countries and

the products are quite expensive for normal users. Another challenge is the compulsion to use

only Apple apps from Apple stores in a consumer world where everyone is getting use to freeware or low

price preference due to software piracy. (Shin, 2011; Kotler,2010)


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12. SWOT Analysis

Strength:

The company has excellent brand awareness which is helping the iPad's to sell quickly like in

just 1 year the company sold 19 ml iPads. The brand is getting leverage from iPods, iPhones andother Mac loyal customers who want to try new Apple products. The company has used

innovative marketing skills to sell iPads with lot of halo effect. (MacNN Staff, 2011)

The product has good battery life and when its locked it can stay for longer periods. The

product is small and easy to handle, its light and portable & has changed the Document

manipulations unlike Smart phones with multi-touch features. This lightweight device is making

the Book Publishing easy like Amazon's Kindle as the company is managing the publishing value

chain & presented a new way to consume content. (Bapun, 2010; indianic.com, 2011)

The iPad software developers can embed the advertising content in the applications and it hasprovided a new market for software developers. Over 30000 iPhone apps can be installed on

Apple iPad which give lot of choices for the users. The product has the first mover advantage

and has made a strong presence. (Apple Annual Reports2010)

The product is eco-friendly and the company has studied environmental impacts while

developing the product which is more likely to attract environmental conscious buyers. (Apple

Annual reports, 2010)

Weakness:

The product is facing lot of limitations which makes it difficult to sell in markets like India or China

where 3G is still in the developing phase. The iPad is not having any camera and there is no multitasking,

so two applications can't run in the product so the users can't download the music if they are

working. The internet is only for data usage and no VOIP service like Skype can be used. Like in

iPhone there is no USB port and so no external DVD drive can be used so its a challenge to transfer data.

Incompatible Flash support makes it difficult to open Flash sites. The maximum storage size is

64GB as compared to normal PC's or Laptops where 300+GB is normal. Without screen

protector the product is quite delicate. (Bapun, 2010)

The product can only run on iOS operating system and so widespread Window

Linux programs can't run on the system. Only the apps from Apple Store can run on the system

which further limits the usability. (Bapun, 2010)

The product is small but the price is high and with limited distribution channels its tough to get the

product and if ordered from website it takes at least 2-3 weeks before they ship the product. The product


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is not so much suitable for business professionals although the company is marketing the product for

business presentations. (AppleAnnual Reports, 2010;www.apple.com, 2011)

Opportunities:

The company can The trend of online book publishing is picking up which has given rise to new iPad publishersand developers. With millions of iPhone and iPad users, the company can earn lot of money as they

always charge when the apps are downloaded and share it with the developer company. The

company can sell their iTunes content more widely which will help them to sell future

products to them. It cant be considered that Apple has cannibalize the PC segment as the

tablet market is still underserved and has been in existence since and the product has new

market of its own.

Threats:

The company is facing huge competition from Windows Tablet, Kindle, Google Nexus One (soldnearly 80,000 units in one month), Blackberry has launched Storm and so there are lots of competitors.

Lot of users are using Windows operating system and Window 7 is a new brand competitor

which is a dominant operating system and

lot of applications already exist in the market which are also free compared to iPad apps

(140,000) compares to millions of other softwares which can run on Windows.(Stern, 2010)

The company is offering products at a higher price in Asia and Europe compared to USA, which is discrimination

and not much appreciated by consumers.


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Other products like HTC Flyer is coming with camera while Black Berry Playbook has got two

cameras Other competitors include Dell Steak 10, Toshiba has got SD card slots and removable

battery & 2 cameras, Acer has also launched Iconia TabA500 with 2 cameras, LG is another big

challenger and has launched G-Slate with HDMI out port while Samsung Galaxy is quite cheap ($249 with

contract) and has Bluetooth features and 2 cameras and lastly Motorola Xoom is expensive but iscompatible with 3G & 4G technology with 2 cameras. (Shin, 2011)


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13. Conclusion

Apple iPad is a product which has made a history of tablet business domain and is a first

successful product after several failures of Apple and its rival Microsoft. This has also ignited

the demand for new and improved tablets from Apple and other rivals. iPad has gained

competitive advantage due to first mover approach and the company has benefited from

globalization which played a big roll in helping Apple to gain better profit by getting iPad

assembled in China. The company is using channel partners to sell the product like they have

done in iPhone and they have used the same pricing and marketing strategy as they done for

earlier products making difficult to be imitated by the rivals. Apple has also proved that iOS is

far better than Android which is still developing is still threat for Apple. In coming years there

will be more demand for innovative products and company still need to adapt changes in iPad

which they have already started in The New iPad(3rd

Generation).


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ReferencesApple iPad Product Overview Webpage[Available at]

http://www.apple.com/in/ipad/

Apple Environment Report, 2011, iPad Environment Report, [Available at]

http://images.apple.com/environment/reports/docs/iPad_Product_Environmental_Report_Ma

rch2012.pdf

Apple Q2 Sales report, ZDNet [Available at]

http://www.zdnet.com/blog/btl/apples-q2-2012-iphone-sales-dip-can-the-ipad-3-save-the-

day/74196

Apple iPad buyers survey[Available at]

http://ipad.blorge.com/wp-content/uploads/2010/04/ipad_buyer_survey.png

Apple iPad domination infographics[Available at]

http://www.planetdamage.com/wp-content/uploads/2012/08/FINAL-infographics-t2c-02-

ipaddomination-500x662.jpg
http://www.apple.com/in/ipad/http://www.apple.com/in/ipad/http://images.apple.com/environment/reports/docs/iPad_Product_Environmental_Report_March2012.pdfhttp://images.apple.com/environment/reports/docs/iPad_Product_Environmental_Report_March2012.pdfhttp://images.apple.com/environment/reports/docs/iPad_Product_Environmental_Report_March2012.pdfhttp://www.zdnet.com/blog/btl/apples-q2-2012-iphone-sales-dip-can-the-ipad-3-save-the-day/74196http://www.zdnet.com/blog/btl/apples-q2-2012-iphone-sales-dip-can-the-ipad-3-save-the-day/74196http://www.zdnet.com/blog/btl/apples-q2-2012-iphone-sales-dip-can-the-ipad-3-save-the-day/74196http://ipad.blorge.com/wp-content/uploads/2010/04/ipad_buyer_survey.pnghttp://ipad.blorge.com/wp-content/uploads/2010/04/ipad_buyer_survey.pnghttp://www.planetdamage.com/wp-content/uploads/2012/08/FINAL-infographics-t2c-02-ipaddomination-500x662.jpghttp://www.planetdamage.com/wp-content/uploads/2012/08/FINAL-infographics-t2c-02-ipaddomination-500x662.jpghttp://www.planetdamage.com/wp-content/uploads/2012/08/FINAL-infographics-t2c-02-ipaddomination-500x662.jpghttp://www.planetdamage.com/wp-content/uploads/2012/08/FINAL-infographics-t2c-02-ipaddomination-500x662.jpghttp://www.planetdamage.com/wp-content/uploads/2012/08/FINAL-infographics-t2c-02-ipaddomination-500x662.jpghttp://ipad.blorge.com/wp-content/uploads/2010/04/ipad_buyer_survey.pnghttp://www.zdnet.com/blog/btl/apples-q2-2012-iphone-sales-dip-can-the-ipad-3-save-the-day/74196http://www.zdnet.com/blog/btl/apples-q2-2012-iphone-sales-dip-can-the-ipad-3-save-the-day/74196http://images.apple.com/environment/reports/docs/iPad_Product_Environmental_Report_March2012.pdfhttp://images.apple.com/environment/reports/docs/iPad_Product_Environmental_Report_March2012.pdfhttp://www.apple.com/in/ipad/

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