Apple Research Paper

Apple Inc.
Texas A&M University – Commerce

Table of Contents
Abstract 3
Apple Inc. 4
Product 4 Promotion 5 Place. 6
Competitive Environment……………………………………………………………..…10
Conclusion…………………………………………………………………………….....12
References 14
Tables………………………………………………………………………………….…15

Abstract
This research paper is designed to evaluate and discuss the history and marketing strategies of Apple Incorporated. In this paper the reader will find information on the four P’s of Apple’s marketing mix; Product, Promotion, Place, and Price, along with information on their Competitive Environment.

Apple Inc.
Apple, Incorporated developed from the friendship and interests of Steve Wozniak and Steve Jobs. Together Wozniak and Jobs collaborated the development of the “Apple I in the early 1970s. The Apple I was a step ahead of most computers of the time featuring a use of TV as a display system and a cassette interface for recording programs” (Friesner, 2014, p. 1). Nearly 4 decades later, Apple Inc., is a well-respected leader in the Information Technology industry. Once upon a time when Apple launched the first iPhone – Apple was well ahead of all competitors, however in 2014 with the launch of iPhone 6, Apple is far behind the Samsung Android devices. Even though Apple does not pack the technology housed in the Samsung devices, people around the world waited outside for days in line for a new iPhone 6. The reason behind Apple’s current leadership is their fool proof marketing strategy, this strategy makes consumers want their products – simply because they are Apple products. To further evaluate and understand Apple’s marketing strategy, this research paper will break down the original marketing mix; product, promotion, place, and price. In addition to evaluating Apple’s marketing mix, their competitive environment will also be evaluated to give a complete understanding of how they have remained at the top for so long, and who they are competing against for that spot.
Product
Kotler and Keller define product as “anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, person, places, properties, organizations information, and ideas” (Kotler & Keller, 2012, p. 347). The product decision involves deciding what goods or services should be offered to a group of customers. These product decisions also involve differentiations, product lines, branding and image positioning (Jobber, 2007). Apple Inc. offers many products to support their customers both home users, and business. Apple currently offers portable computers; [Mac Book Pro, iMac, MacBook Air, Mac Mini and Xserve], servers; [Xserve, Xsan, MacOS X Ser, MobleMe], accessories; [MagicMouse, Keyboards, Led Cinema Displays], Wi-Fi based stations; [Airport Express, Airport Extreme, Time Capsule], Developer tools; [Developer Connection, Mac Program, iPhone Program], iPod; [iPod Shuffle, iPod Nano, iPod Classic], iPhones; [iPhone 1 through iPhone 6, and iPad], iTunes; [used for downloading TV shows, audio books, games, and music], and Peripheral products such as printers, storage devices, digital videos and cameras.
Promotion
Promotion is a major key to having a strong marketing strategy. Look at musicians for example, in small towns all over the world there are talented artists that could easily blow current celebrity artist out of the water, however even though their product is better – the world has not discovered them yet. Apple was not the first company to create products such as MP3 players and phones, however they were the first company to actually promote their product in a successful way that even today keeps them ahead of their competitors. A competitive advantage is the achievement to provide superior performance through differentiation to provide superior consumer value or by managing to achieve lowest delivered cost.
“Apple Inc. used iPod to convey consumer benefits in excess of what the competition is offering. The iPod’s small size and its capability to download and store music can, therefore, be regarded as the creation of competitive advantages over previous market leader in portable music players, the Sony Walkman” (Jobber, 2007).
Apple, “has always been at the forefront of selling the dream to consumers, long before those people even know they wanted the product (O’Reilly, 2012, p.1). High-Tech consumers who are more focused towards specifications on all products and strong comparisons, often nickname Apple customers “Apple Followers” in a sense, they are claiming that Apple customers will blindly follow and buy whatever product Apple launches – simply because it is an Apple product. Steve Jobs gave his developers and marketing team a vision of creating innovative products, and focusing more on consumer interest – not necessary hardware specifications.
“For tech brands to build out a legion of followers that mimic Apple 's evangelist customers it is essential marketing is core to every element of their businesses. Developers, coders and even the HR department should have the brand 's vision deeply entrenched into all aspects of their work. Having the world 's fastest processor, thinnest screen or lightest device won 't make the average consumer blink. To really make them open their eyes tech brands must communicate a purpose and why people 's lives will never be as dull, arduous or lonely without them. Many tech brands are now starting to address their communications approach, rolling out lifestyle based campaigns and straplines -- but there is still work to do” (O’Reilly, 2012, p.1).
Marketing researchers often look at the iPod as the tone for the launch of the iPhone series, in which Apple showed a declining slope in spending, heavy upfront for awareness and a decrease as time progressed and consumers became more familiar with their product, “When it introduced the iPod in 2001, Apple unleashed an all-out marketing and public-relations blitz, spending $28 million in just three months to demonstrate to users how the device worked. The next year it scaled back spending on iPod to $4 million” (Bulik, Cuneo, & Johnson, 2007, p. 26).
Place
Apple Inc headquarters are located in Cupertino, California only 50 minutes outside of the birth place of Steve Jobs, San Francisco, California. Apple has many service providers located in Asia/Pacific, Africa, the Middle East Europe and Latin America. Apple also boosts over 200 retail stores worldwide, in the United States, United Kingdom, Canada, and China. Due to the high demand of Apple products, Apple outsourced their work to manufacturing supply chains overseas. Many Americans dislike the use of outsourcing as they feel it takes away from the American economy. However, having quick and cheap labor allows Apple to reap the benefit of their prices and keep up with availability. Unfortunately, “in 2010, 18 employees working for Foxconn in China attempted suicide. These shocking events focused the world’s attention on the manufacturing supply chains of China’s export industry and the experience of working within them” (Chan, 2013, p. 1). Apple received a heavy set of backlash as many of these workers attempted suicide due to horrendous working conditions in their factories. As a result, many factories forced their staff to sign pledges not to commit suicide. Similar to the Nike consumers who wear their products unaware of the suffering that goes on behind the scene of factory workers – Apple consumers are only given vision to the happy dream Apple is selling. Due to the high demand and lack of quality conditions overseas, Apple would simply be unable to produce their highly demanded iPads and iPhones in the United States as quickly and cheaply as possible. See the table below, as an example on Apple’s leadership:
Top Five Tablet Vendors, Shipments, and Market Share, Second Quarter 2014
(Preliminary Results, Shipments in millions)
Vendor
2Q14 Unit Shipments
2Q14 Market
2Q13 Unit Shipments
2Q13 Market Share
Year-over-Year Growth
1. Apple
13.3
26.9%
14.6
33.0%
-9.3%
2. Samsung
8.5
17.2%
8.4
18.8%
1.6%
3. Lenovo
2.4
4.9%
1.5
3.3%
64.7%
4. ASUS
2.3
4.6%
2.0
4.5%
13.1%
5. Acer Group
1.0
2.0%
1.5
3.4%
-36.3%
Others
21.9
44.4%
16.4
37.0
33.4%
Total
49.3
100.0%
44.4
100.0%
11.0%
Source: IDC Worldwide Quarterly Tablet Tracker, July 24, 2014

Price
Consumers show mixed support on pricing and availability. Often they will not purchase something if the price is too high – and at other times, they will feel something is too cheap if the price offered is too low. Apple understands the strong skillset of offering the most appropriate price at the most appropriate time – not hitting to high, yet not hitting too low. As Apple “pushes into the market and other developing economies, it seems a foregone conclusion that cheaper devices – and the lower margin that comes with them – must be the price of its admission. But with the 5C, Apple appears to be starting relatively high and seeing what these new markets will bear, rather than plunging headlong into the bargain bin” (Gottfried, 2013, p. 14). In basic economics if demand goes up, and supply stays the same – price will also go up. As a consumer, you can walk into any Best Buy and notice the high end prices on Apple computers, many users who have purchased MAC products in the past, still use their MAC products in recent times. However in contrast to the lower priced Microsoft PCs, users often complain of virus issues and more than likely will only keep their computer for one to two years. This simple etiquette of quality Apple maintains… gives them the brains behind their beauty. As you can see in the table below – Apple maintains a higher price than their competitors over the years
Even though Apple maintains a higher price, consumers continuously purchase their products as a sign that they are satisfied with the quality received for their products. Consumers are not blind enough to buy Apple products and experience low quality and continuously purchase them. Year after year, Apple has developed a trend of consumer excitement and sales lead upon the new product launches; mostly for their iPhones.

“Apple is a premium brand computer that does not attempt to compete on price. The company has reduced prices after some initial product launches. It uses skimming and premium pricing strategies” (Friesner, 2014, p1).
Competitive Environment
“The competitive environment, also known as the market structure, is the dynamic system in which your business competes. The state of the system as a whole limits the flexibility of your business. World economic conditions, for example, might increase the prices of raw materials, forcing companies that supply your industry to charge more, raising your overhead costs. At the other end of the scale, local events, such as regional labor shortages or natural disasters, also affect the competitive environment” (Mack, 2014, p1). Apple has disbursed itself across many different marketing environments, which leaves them with various competitors. When it comes to smartphones, Samsung is considered Apple’s biggest competitors. Often online and television advertisements will be geared to a company’s biggest competitor, and not all competitors in the market. In September of 2014, the internet and television was overwhelmed with the advertisements of the new iPhone 6 and Samsung’s backlash against the limitability of the iPhone. Although Samsung clearly had a high technical lead over the iPhone – consumers still waited outside (of which they did not do for the Galaxy phones) of Apple stores all over the world to be one of the first to receive the new iPhone 6. Currently in the tablet world, Apple is feeling heat with the new Microsoft Surface Pro tablets. Many IT companies allowed their employees to use their iPhones and iPads to do daily work, however with the lack of flash functionality – many users still relied on their work PCs to take care of business. In a consulting project with CenterPoint Energy, I witnessed firsthand the removal of iPads from top managers and replacement with the new Microsoft Surface Pro tablets. However, according to financials sources such as Forbes – it appears that even with the better specifications, users still prefer Apple products over that of Microsoft and Samsung.
“Apple Inc. is operating its business in a very competitive environment. The new companies are entering into the market and the old companies are also launching new products and services which is a biggest threat for Apple Inc. The electronic industry is very competitive and it is very necessary for the companies operating in it that they should develop the effective strategies which could be helpful for them in gaining the competitive edge. In order to deal with the threats of new entrants and the competitors introducing latest products and services it is necessary that Apple Inc. should develop the competitive strategies and focus on bringing innovations. The newly innovated and latest technology development can be very effectively used for incorporating the essence of innovation within the company and help Apple Inc. gain competitive edge. To gain the competitive advantage and deal with the increased threats of competitors, Apple Inc. can focus on its manufacturing strategies to bring enhancement in the customer responsiveness, efficiency and quality of work. The product efficiency helps the company in lowering its cost and thus it does not have any such impact on business and helps the company in gaining competitive edge” (Alexander, 1994)

Conclusion Apple Inc., as silly as this may sound, can be compared to the popular student at an average high school – along with its competitors being compared to the less popular student’s competing for student council. Often Apple’s competitors scratch their heads and try to understand why Apple continuously maintains a bigger audience and acceptance rate, when their products are often better. As both an Apple and Samsung consumer – I can vouch that even though my Samsung Galaxy S5 phone is technically better than the iPhone 6, having my phone doesn’t bring nearly as much attention or appreciation in my peer community as the iPhone 6. Apple has developed a substantial amount of universal Apple only products, feature, and accessories that leaves users unable to transition easily from their Apple products to their Android products. For example, a user who decides to switch to the Android would have to get rid of their iHome, iConnections, and other iRelated products that worked only with their core Apple products and accessories. Apple sold a dream and the world bought the entire package deal.
“Apple sold the dream back in 2007 when it launched the first iPhone and it will take a lot of vigorous shaking before consumers wake up to a new aspiration. IOS is second to Android in terms of market share, which is largely due to devices running Google 's operating system carrying lower price points, but in terms of brand sentiment and preference, Apple dominates. Good technology is about great design, but really great technology is powered by companies having a solid marketing ethos that makes consumers as passionate about owning the products as the developers were about creating them” (O’Reily, 2012).
Until Apple’s competitors can fully understand their marketing mix, and target consumers both young and old with products that fit their everyday needs, it will be exceptionally hard to outdo the loyalty Apple receives from its customers.

References
O 'Reilly, L. (2012). Tech brands wake up to the Apple way of marketing. Marketing Week (Online Edition)
Bulik, B., Cuneo, A. Z., & Johnson, B. (2007). APPLE 'S NOT THINKING DIFFERENT. Advertising Age, 78(26), 8.7
Chan, J. (2013). A suicide survivor: the life of a Chinese worker. New Technology, Work & Employment, 28(2), 84-99. doi:10.1111/ntwe.12007
IDC Worldwide Quarterly Tablet Tracker, July 24, 2014 [Tables]
Gartner, Apple, a16z [Table]
Friesner, T. (2014, May 9). Apple Marketing Mix. Retrieved October 8, 2014, from http://www.marketingteacher.com/apple-marketing-mix/
Reporter, D. (2011, May 1). You are NOT allowed to commit suicide: Workers in Chinese iPad factories forced to sign pledges. Retrieved October 8, 2014, from http://www.dailymail.co.uk/news/article-1382396/Workers-Chinese-Apple-factories-forced-sign-pledges-commit-suicide.html
Mack, S. (n.d.). What Is the Meaning of Competitive Environment? Retrieved October 8, 2014.
Jobber, D. (2007). Principles and Practice of Marketing. London: McGraw-Hill.
Apple Inc. Environment Analysis | Researchomatic. (n.d.). Retrieved October 8, 2014.

Tables
Top Five Tablet Vendors, Shipments, and Market Share, Second Quarter 2014
(Preliminary Results, Shipments in millions)
Vendor
2Q14 Unit Shipments
2Q14 Market
2Q13 Unit Shipments
2Q13 Market Share
Year-over-Year Growth
1. Apple
13.3
26.9%
14.6
33.0%
-9.3%
2. Samsung
8.5
17.2%
8.4
18.8%
1.6%
3. Lenovo
2.4
4.9%
1.5
3.3%
64.7%
4. ASUS
2.3
4.6%
2.0
4.5%
13.1%
5. Acer Group
1.0
2.0%
1.5
3.4%
-36.3%
Others
21.9
44.4%
16.4
37.0
33.4%
Total
49.3
100.0%
44.4
100.0%
11.0%
Source: IDC Worldwide Quarterly Tablet Tracker, July 24, 2014

References: O 'Reilly, L. (2012). Tech brands wake up to the Apple way of marketing. Marketing Week (Online Edition) Bulik, B., Cuneo, A Chan, J. (2013). A suicide survivor: the life of a Chinese worker. New Technology, Work & Employment, 28(2), 84-99. doi:10.1111/ntwe.12007 IDC Worldwide Quarterly Tablet Tracker, July 24, 2014 [Tables] Jobber, D. (2007). Principles and Practice of Marketing. London: McGraw-Hill. Apple Inc. Environment Analysis | Researchomatic. (n.d.). Retrieved October 8, 2014. 11.0% Source: IDC Worldwide Quarterly Tablet Tracker, July 24, 2014