Apple Strategy

Title: Pioneers in the Mobile Phone Industry: An Investigation of Apple’s Innovative Strategies and Current Business Model

Abstract
This paper tries to analyse Apple’s marketing strategy in recent years and the reasons why it has overshadowed its competitors focusing on four marketing strategies such as product strategy, pricing strategy, promotion strategy and distribution strategy, offering comparison between Apple and some main competitors (Samsung, Blackberry and Motorola)

Introduction
In recent years, humankind has witnessed a boom in many aspects of life, particularly in the area of computer and information technology. A multitude of mobile phone devices have been developed and introduced into the market, offering people a convenience which simply they never had before. Amongst a fiercely competitive technology market, the company Apple has been attracting a lot of attention and more and more has gained many brilliant achievements. And is famous for its technological innovation and sophisticated designs. Apple’s products like the iPhone has gained consumers’ fascination, and the iPhone is considered to be one of the most desirable gadgets at the moment. As Chris Morrison has put it:
From the sleek design of its personal computers to the clever intuitiveness of its software to the ubiquity of the iPod to the genius of the iPhone, Apple consistently redefines each market it enters by creating brilliant gadgets that put the competition to shame (2009, p. 1) The Apple Company seems to be aware of how to stimulate consumers’ loyalty and, turning consumers from technology users to technology addicts. Although Apple was established later than some its competitors such as Samsung, Blackberry of Motorola, it still has overshadowed them through insightful marketing strategies. This essay will give an overview of Apple’s marketing strategy, focusing on the marketing strategies that have determined the company’s success over that of its competitors.

Definition of Marketing and Marketing strategy
Marketing is an essential ingredient of a company, which contributes to its success. By dint of being surrounded by a huge number of TV commercial, advertising posters or email pitches, many people believe that marketing is concerned only with selling and advertising. As the American Marketing Association (AMA) points out, “Marketing is the activity, the set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (Paul, & Chris, & Kelly, 2008, p. 6). While, on the other hand the Chartered Institute of Marketing (CIM) defines marketing as “the management process of anticipating, identifying and satisfying customer requirement profitably” (Paul, & Chris, & Kelly, 2008, p 6). Although, as seen above there are more than one idea about what marketing is, the emphasis on customers’ considerations and their needs is unquestioned. In terms, of marketing strategies, which is one of most important areas in the marketing field, Kotler and Armstrong note that marketing strategies are one of most essential activities a company or organization implements in order to satisfy its customers’ demands and establish profitable relationships in the market. In addition, a company’s strategies will help make up who their customers, their service method and its entire market is going to be (Phillip, & Gary, 2010, p. 27). In highly-structured organizations such as computer companies, it is necessary to establish good marketing strategies in order to effectively control and support all parts of the company. Hence, only when marketing strategy works effectively, can the marketing field play its prescribed role in a company.
Apple’s Products and achievements
The Apple computer company was established in 1976. From then until now, it has developed from being a mere computer manufacturer to being a pioneer in personal electronic devices, launching an innovative online business model. It always attempted to diversify its products with several new computer models such as Apple III in 1980, the Lisa in 1983, Macintosh Graphical User Interface (GUI) in 1984, iMac in 1998 or iBook in 1999 ( Robin, & Robert, & Gail, 2010, p3). In 2001, Apple launched iPod mp3 player which was a breakthrough of the company before introducing iTunes in that year, the iPhone in 2007 and the iPad in 2010 (Robin, & Robert, & Gail, 2010, p. 3). iTune was the first major success of Apple. It is an application in which music, movies, HD TV shows, apps, games, podcasts can be installed on PCs, iPhones, iPods, iPads and Apple TV and is in use in 23 countries at the moment (Robin, & Robert, & Gail, 2010, p. 4). Apple has really made a revolution in technology back in 2007 when it introduced this device which brought together three concepts popular with consumers at that time: a mobile phone, a widescreen iPod and an Internet communication device (Robin, & Robert, & Gail, 2010, p. 5). In 2007, Apple had some finance related issues to deal with, as at the time the company’s shares had fallen 35%: a result coming from the slowing down of sales from the iPod sales at a time when the iPhone – the first mobile with touch screen – was introduced (Burrows, & Peter, 2008). At the time the iPhone was introduced in the market it was instantly recognised as being something completely new, bringing real cutting edge technology into mobile service, bringing unexpected success to Apple (Emílio, & Arruda-Filho, & Mark, & Lennon, 2011). Besides, iPad has been one of the most leading Apple’s products. Although iPad was debuted latter than iPhone ( April 2010) and was predicted that it would cause a drop in Apple’s company sales, after its launch it immediately dominated the market leaving behind such companies as Motorola and Samsung who had some of their most popular gadgets,. for example, Motorola Xoom and Samsung’s Galaxy Tab, recalled. In addition, the iPod which was released in 2001 also has been one of the most attractive and outstanding products in portable music player. According to Robin C, Robert E. H, Gail C, the iPod touch 2010 (32G)- the fourth-generation iPod with photo and video capture, FaceTime video chat and a GameCenter is evaluated as Best 5 MP3 Players on Cnet.com (2010, p. 18). In 2011, after researching people’s need in entertaining by television, Apple released Apple TV with many noticeable functions Apple’s iTunes, NetFlix, Vudu and electronic retailer (Robin, & Robert, & Gail, 2010, p. 15). In other words, thanks to a wide range of extraordinary products, Apple is one of the most well-known and respected companies in the world. It is undoubted that Apple really was the top for innovativeness on Fortune Magazine’s list of World’s Most Admired Companies in both pre-recession 2007 and post-recession in 2011.
Apple’s marketing strategy
Overview about Apple’s competitors
It is undeniable that Apple now is an unchallenged power in the technology field. However, although Apple has gained some certain achievements with the introduction of iTune, iPod as well as computers, but after debuting iPhone in 2007, Apple really conquer the peak of success in Smartphone part and prove its competence and creativity. With iPhone, Apple gained the growth in sales, accompanying with a rising number of competitors
Samsung has been assessed serious Apple’s competitor, the recent increase of Samsung has given Apple many challegens, simply beats all every corner of market. By dint of advantages of its IT manufacturing capabilities to the extent as well as the innovation following Apple, Samsung still get a huge amount of profit from the Smartphone market share (Joel,& Michael, 2010). Samsung galaxy tablet has competed severely with Apple’s iPad tablet because advanced design and lower price compared with iPad in normally. Now, Samsung is serious contender, but Technology analysts at Garnet Research (Robin, & Robert, & Gail, 2010, p. 19) forecast that by precise design and excellent applications, iPad will continue to prevail against its counterparts.
Although it has been a long-time leader in mobile phone, Motorola - One of Apple’s competitors has faced serious dificulities, decreasing remarkably in sales and market after the release of iPhone and Blackberry (Robin, & Robert, & Gail, 2010, p. 17). Because of transnational integration policy and misjudged product strategy, Motorola’s market share falls from the top to the fourth place and lost its reputation. In 2008, Motorola sold 100 million phones, but one year later its sales decreased by 45% before recovering and getting profit from 2007 to 2009 (Robin, & Robert, & Gail, 2010, p. 17). In 2011, Motorola attempted to retake market by some marketing strategy such as renaming from Motorola to Motorola Solutions and rebounding new products as well as changing distribution system in 40 countries. However, it still has not obtained its position in mobile phone market share. Beside Samsung and Motorola, The Blackberry (Research In Motion) has followed close behind Apple in the struggle to gain mobile market. Blackberry of RIM enterprise has faced some difficulties in the battle with Apple due to RIM’s approach to Wi-Fi and slow advance in following the trend. Although RIM introduced Blackberry OS 6 system with the improvement in browser, multimedia and user interface, it was not upgraded as well as iPhone. With billions of loyal fans, despite some disadvantages such as limited product breadth, not follow the trend and circumscribed market target, Blackberry still is evaluated as a strong compertitor in comparison with Apple and other enterprises (Robin, & Robert, & Gail, 2010, p. 18). Along with a prominent CEO like Steve Jobs, marketing strategy has been pivotal role in all Apple’s accomplishments. Thanks to product, pricing, promotion and distribution strategy,
Apple has provide its customers the best products, making the customers satisfy with all of the enormous and convenient application.
Product strategy
According to Phillip and Gary “A product as anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need” ( 2010, p. 248). Factors related to a product include: Product attributes, Branding, Packing, Labelling and Product support service, which are the key elements making up a product (Philip, & Gary, 2010, p. 253-258). In its effort to become one of the most successful companies, Apple has a determined clear product strategy, and has, in turn, invested a huge amount of money as well as qualified human resource into researching and producing its prominent products such as iPhone, iPad or Macbook. Innovation is always the prime factor which Apple is concerned with in terms of marketing strategy. All Apple’s products are designed to look unique and glamorous from fine details to its packaging, attract. iPhone is a good example of Apple’s product strategy. After the initial success in 2007, Apple created two different versions that would fit different needs as part of its marketing technique: An iPod touch with the iPhone operating system, PDA features and ecosystem without the phone capabilities and updated versions of iPhone (Joel, & Michael, 2010) which was aimed for two different types of consumer.
Pricing strategy
In this competitive era, companies need to formulate their pricing strategy to adapt and deal with the customers’ demands and costs’ changes, leading to maximize business opportunities and bring out timely response to pricing tactics of competitors (Phillip, & Gary, 2010, p. 72). In order to deal with this, Apple has released many new products which focus on different markets, resulting in unique pricing decisions. Rather than following a competitive pricing strategy, it used “skimming” and “premium pricing strategy” and reality has shown that it always reduces price after some initial products’ introduction.
Promotion strategy
Modem marketing really focuses on promotion strategy which a company can use to impacts on target market in order to obtain its business destination and can be seen as marketing communication activities. This consists of advertising, personal selling, sale personal, public relations and direct marketing, which affects directly buyer’s decision (Phillip, & Gary, 2010, p. 441). Instead of traditional types of advertising in short-term which are announcement about the products, Apple has used many different approaches to introduce its brand. As a result, millions of people know Apple’s products as the most modern and convenient devices all time. After establishing reasonable promotion strategy, Apple has affirmed its position in technology marketing and provided customer the opportunities to enjoy the best service and convenience. Apple enables Training centres which provide instruction in Mac Systems, Mac OS X, and Apple’s professional applications. Moreover, a wide range of certification exams and courses offer innovative learning opportunities for IT and creative professionals, educators and service technicians- delivered exclusively by Apple certified Trainers. Another point contributing to promotion strategy of Apple is the Apple consultants Network website where provides customers any useful information related to its products (Joel, & Michael, 2010).
Distribution strategy
Phillip and Gary report that distribution channel is a set of independent and interdependent organizations or individuals attending in progress taking the products from the producer to the customer ( 2010, p. 360). With clearly its target and distribution strategy, a range of its distribution systems with small outlets was replaced by national chains, following by its retail stores ( 280 stores in 10 countries) which now occupy 16% Apple’s total revenue (Hong, 2012). These affect indirectly driven sales of Apple products by raising overall brand awareness; we are less convinced that they have directly stimulated sales (Sacconaghi, & Yin, & Shing, & Eric, 2006). By dint of the full range of Apple hardware: iMacs, MacBooks, Mac Pros, iPads, iPhones, iPods, and more, Apple stores give easier condition to customer approach and use its products. Every detail information about particular device is displayed on an iPad combined with Apple service providers- certified technicians who complete regular Apple training and assessments to assist and suggest products being suitable with customers’ demand and ability (Caldwell, 2012). In addition, thanks to iTunes, Apple stores and ibookstore, it has set up a business lineup to iMac, Macbook, iPod, iPhone and iPad, which helps customers download diverse contents such as music, video, books and software as well as a value chain so that users can continue to use diverse applications that can be used with Apple’s iPod and iPhone (Hong, 2012).

Conclusion
To sum up, the exploitation in high technology field has more and more attracted many new enterprises with ambition obtaining market share and potential customers. In competitive market, hardly a company gains successes without marketing, especially suitable marketing strategy. One of the most brilliant companies all time which has allured most people over the world is Apple – the pioneer in the mobile phone industry. The purpose of present study is to report four marketing strategies which Apple has applied during its operation in order to its achievements compared with its competitors. Apple not only focuses on separated strategy, but it also combines these strategies together in order to satisfy all its customers. Innovation, distinguished design and beneficial applications always have been the priority of Apple in product strategy, ” skimming” and “premium pricing strategy” still has been noticed in pricing strategy which associates with advertising or public relations in promotion strategy and national chain, retail stores in distribution strategy. Moreover, with some overview about its competitors, it is undoubted that because of the marketing strategy, Apple can become more reputable and dominate other enterprises. Although Apple has gained many accomplishments, it still should not disregard its competitors, but need to continue improving marketing strategy to be worthy with it reputation.

Biography
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