Discuss The Marketing Strategies Employed By Apple To Maximise Its Profits. How Does Apple Used Effecting Management Techniques To Achieve This Goal.

LETTER OF TRANSMITTAL TO ACCOMPANY REPORT ASSESSMENT GUOGENKAI 38 ST THOMAS WALK #12-02
Singapore 238118 [e-mail]
Dimple Chugani
PSB Academy
355 Jalan Bukit Ho Swee
Singapore 169567

30th May 2013
RE : Discuss The Marketing Strategies Employed By Apple To Maximise Its Profits. How Does Apple Used Effecting Management Techniques To Achieve This Goal.

Dear Ms. Chugani,
Please find enclosed my report entitled “Discuss the marketing strategies employed by Apple to maximise its profit. How does Apple used effecting management techniques to achieve this goal”.
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GUO GENKAI

Discuss The Marketing Strategies Employed By Apple To Maximise Its Profits. How Does Apple Used Effecting Management Techniques To Achieve This Goal.

Done by: GUO GENKAI Lecture: Dimple Chugani Due date: 30/05/2013

Table of Contents
1) Abstract…………………………………………………………………………………………………………………………………………………………………2

2) Justification…………………………………………………………………………………………………………………………………………………………........2

3) Introduction……………………………………………………………………………………………………………………………………………………………….3

4) Marketing………………………………………………………………………….3
4.1 Definition of Marketing……………………..………………………………...3 4.1 Marketing strategies used for the launch of IPod……………………………...3 4.3 Marketing Strategies Used in the Sales of the Mac…….……………3 4.4 Marketing Strategies used in the promotion of the iPhone...............3

5) Management ………………………………………………………………………4 5.1 Definition of Management…………………………………………………….4
5.2Apple’s Management strategies………………………………………………..4

6) Conclusion…………………………………………………………………………5

7) Recommendation…………………………………………………………………..6

8) References…………………………………………………………………………7

1.Abstract
Business management and marketing is a huge topic to discuss, to study this topic, it’s necessary to analyse a lot of facts and cases. Therefore, this report introduced several successful marketing strategies Apple company used to sale their product and these strategies will show that why Apple can become one of the biggest consumer electron company and gain so much of market share. Moreover, this report also analyse a few management techniques that Apple employed to manage its staffs and how these techniques drive Apple to maximize its profits.

2.Justification
I hope to be a successful businessman in the future and have thus applied to study Business Management and Marketing at the University of Newcastle. There are many ways to learn how to run a business well, and many a times, experience is important. While I myself have no experience to boast of, I can however look to the experiences of other successful businessman or to the history of companies that have done well, and learn much from them – I can learn and apply what other companies have done well, and also to avoid the mistakes they have made. For this reason, I have chosen to look in detail Apple Inc’s management and its wildly successful marketing strategies that have gained Apple products mainstream popularity. Through a deep analysis of the Apple case study, I hope to have a better understanding of how to run a business well.

3. Introduction
Apple was founded on April 1, 1976, by Steve Jobs, Steve Wozniak and Ronald Wayne (WIKIPEDIA, 2008). The first Apple product was actually not the Mac which many people mistakenly believe it to be. Instead, Apple was founded to sell the Apple 1 personal computer kit. This was just an assembled circuit keyboard and did not have any of the features that we associate with our computers today, such as a keyboard and monitor (WIKIPEDIA, 2008). One of Apple’s most famous products, the Macintosh, was only launched in 1984. While it gained success initially, it soon became evident that the success of the Macintosh was a flash in the pan. With a plot as dramatic as that of a soap opera, Steve Jobs, the face of Apple, was kicked out of the company a year later in 1985. Apple continued to decline after Jobs left the company. Though there were a few hits, Apple mostly scored when expensive misses. When Jobs finally came back as an interim CEO in 1997, he inherited a company which was facing a 3 year record low stock price and crippling financial losses (WIKIPEDIA, 2008). Yet, with astute management and marketing strategies, Jobs started to build the company up, scoring first mild success with the “computer geek” crowd with the release of the Macintosh 128K: the iMac, in 1998 and later strike gold with the release of the iPod in 2001 (WIKIPEDIA, 2008). The phenomenal success of the iPod saw the sale of 100 million units in a mere 6 years and catapulted Apple into mainstream success. Apple has continued to score many successes since then with both its hardware and software and set the bar high for other electronics companies.

4. Apple’s Marketing Strategies

4.1 Definition of Marketing
“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (American Marketing Association Board of Directors, 2007).

4.2 Marketing Strategies Used for the Launch of iPod
Simple. This is the best word to both describe Apple products and its marketing strategies. This is perhaps best seen through the product that propelled Apple into mainstream success – the iPod. Even up till this day, it remains the most successful and is “now the market leader in portable music players by a significant margin, with more than 350 million units shipped as of September 2012” (Sloan, 2012). When MP3 players were first released, many MP3 makers peppered their advertisements with tech specifications that a large majority of the public could not understand. However, Apple did the total opposite. Jobs marketed the iPod with the now famous tagline, “1000 songs in your pocket”. The lesson to be learnt here was that Jobs recognized a gap in the market. While everyone focused on selling MP3 players to people who knew what they were and how to use them, Apple instead chose to focus on the masses and develop a MP3 player that they could understand and use. For this reason, Apple has placed a large focus on the aesthetical appeal of the iPod as well, designing it such that people would not only be proud to use it, but also would want to flaunt the fact that they are the proud owner of an iPod.
According to David Taber While everyone else was making an MP3 player that was better/cheaper/faster, Apple was making electronic jewelry that also played MP3’s. Never focusing on price, they brought to market more value, more style, and new ways of interacting with digital media
(Weisbein, 2008).
One of the most famous iPod advertisements simply features the silhouettes of both men and women dancing on a coloured background. While many advertisements choose to feature famous celebrities, Apple chose instead to go “incognito”.
This advertisement is ingenious for many reasons. For one, you don’t know where these people are. They could be anywhere in the world. Secondly, you don’t know who they are or what they do for a living. They can be anyone. All you know is that they are enjoying the music and rocking out. This is what makes that commercial so great and such an excellent idea. It allows anyone in the world to be that person (Weisben, 2008).
In other words, by choosing to buy the iPod, you can buy into the identity that Apple has constructed – being the cool kid dancing to the music. This campaign was highly successful, with many people forking out the money to buy the new identity that Apple created. Apple was also smart in providing its users a seamless music playing experience. 2 years after the launch of the iPod, Apple’s iTunes store was introduced. Apple also ensured that its products were integrated. Many features were available to users who have both the Mac and the iPod as compared to iPod users who used an ordinary PC. they made it work better on the Mac than on a PC for obvious reasons – to get people to buy more Apple computers, both iPod and Mac sales benefited from is strategy (Weisben, 2008).

4.3 Marketing Strategies Used in the Sales of the Mac
“Mac is a line of personal computers designed, developed, marketed by Apple Inc. It is targeted mainly at the home, education, and creative professional markets” (WIKIPEDIA, 2013).
As mentioned above, Apple has made “sleek” its middle name. The design of the Mac is no exception. It immediately captures people’s attention for its design which features clean lines and give off a futuristic and upscale feel.
Apple has added a twist to the skimming strategy. Rather than introducing their products at a high price and then lowering their prices later, Apple stakes out a price and then maintains and defends that price by significantly increasing the value of their products in future iterations (Kirk, 2013)
Apple used the skimming strategy for Mac’s marketing strategy as they wanted to sell a quality product and let their customers know that the computers they get are worth every dollar they spend even if the Mac seems more expensive than other computers on the market with similar specifications. Nevertheless, this marketing strategy was a huge success because this meant that more money could be devoted to research and development (R&D) which would in turn allow Apple to continue to develop quality products to give them an edge over competitors in the same market. As with the marketing of the iPod, Apple always aims to provide their customers with a seamless experience when using their products. For the Mac, Apple came up with the iLife Suite, which includes a video editing program (iMovie for consumers and Final Cut Pro for professionals) and a music creation program (GarageBand)

4.4 Marketing Strategies used in the promotion of the iPhone
Even with new players in the smartphone market, Apple continues to widen its lead and control the market with the iPhone at 40% domination (Campbell, 2013). This is a huge number – every 4 in 10 smartphone owner uses an iPhone. Even though Apple has a reputation for quality hardware and software, without clever marketing strategies it would have been impossible to control such a large market share. After Apple’s success with the Mac and the iPod, Apple continue to ride on the success of its previous two products and launched the iPhone which too had a sleek packaging that was soon becoming its trademark and with the interface that many Mac/iPod users have fallen in love with. By convincing consumers that not only their products were the best but the only ones in the market, the sales of the iPhone only saw an upward trajectory.
The actual iPod device had been extremely popular up to this time, and also the apple iPhone had been said to be the actual next-generation ipod device, oh yea, also it’s the telephone (Apple Pirate, 2011).
Mobile phones were already available in the market when the iPhone was launched, with brands such as Nokia dominating the market. Instead of being contented with merely differentiating themselves in this market oversaturated with competitors, Apple instead created a whole new market of their own – the smartphone market. The iPhone has an all-in-one. Not only did it have the usual phone functions, it allowed consumers to play games that were more complex than the iconic “snake”, read their emails and surf the net on a much larger screen than what many Blackberry users were using and even camera/picture applications (apps) that allowed for editing of photographs. All additional apps were available through the Apple owned and designed App store and like before, iPhone users could download music into their iPhone from the App store. As seen once more, a seamless user experience that its users fall for “hook, line and sinker”. Another marketing tactic that Apple utilizes was the secrecy it adopted before the launch of its products. This was particularly evident in the marketing for the iPhone where each new upgrade of its products might see many significant changes. By keeping mum about what consumers could expect in the soon-to-be-launched products, Apple ensured that the hype for its products would be high and this would in turn help to generate publicity especially on social media platforms. This leaves Apple fans especially hungry for each new release of their products and eagerly snap up the products once they hits the shelves.
When shoppers sleep outside of stores just to be one of the first to buy an iPhone it 's obvious that Apple Inc. is a company that enjoys fanatical brand loyalty (INSIDECRM, 2009)
On the eve of the release of Iphone, the company releases photos of the lengths that people would go to get their hands on the new products – the long queues outside various stores across and the world, and release this photos on the internet, further hyping up the release of their iPhone.

5. Management

5.1 Definition of Management
As defined by the (Business Dictionary), business management is “The organization and coordination of the activities of a business in order to achieve defined objectives.” Again in layman’s terms, business management can be simply said to be how a company manages its employees.

5.2 Apple’s Management Strategies
The management of Apple is outstanding as seen from the success Apple has achieved in slightly more than a decade. Of course, this was only possible from adopting a management style different from most large organizations. While most companies, from food to manufacturing is run by the “business” people (the managers and section heads), Apple is instead run by its engineers and its designers, the people who understand what they are creating and this in turn helps them create the products that millions all over the world love.
At Apple, if an employee was using a product and found an issue that bothered them, they had the freedom to go in and fix it without having to deal with layers of bureaucracy to get approval (Male, 2010).
A lot of freedom is given to Apple’s employees and this allows creative to flourish. This helps the employees to “own” the products they create and this give births to products that the masses like simply because the engineer and designers who work on them love them too.
By the standards of retailing, Apple offers above average pay — well above the minimum wage of $7.25 and better than the Gap, though slightly less than Lululemon, the yoga and athletic apparel chain, where sales staff earn about $12 an hour. The company also offers very good benefits for a retailer, including health care, contributions and the chance to buy company stock, as well as Apple products, at a discount (Denning, 2012).
Providing an incentive for one’s employees may not be anything new or groundbreaking. However, Apple has recognized a good business strategy and put it into practice, and also tailored it so that it would be in line with the company’s visions and beliefs. For example, keeping in mind that they are marketing to the masses, they allow their employees to buy their products at a discounted price to serve as walking advertisements. A company that cares for its employees would always benefit when the employees treat the company as family, giving their all to bringing their company to new heights.

6. Conclusion:

In conclusion, it can been seen that a company 's marketing and management strategies are essential not only for its success but its existence itself. As the case study of Apple has shown, a product can be good in its own right, but great marketing would make the product phenomenal. Similarly, while talented people can boost a company 's performance, a combination of talented people and astute management tactics would bring a company to much greater heights.

7. Recommendation
The marketing strategies and management techniques that Apple used are very smart and successful, it really help Apple to increase its profits and revenue. But the world changes so fast and a lot of competitors like Samsung, HTC and Blackberry are pursuing behind. Therefore it is also a big problems that if Apple can keep up with the changing society. In addition, if Apple company wants to keep ahead it must continue to innovate and create more sustainable, viable, with the core competitiveness of strategies and products.

8. Bibliography
WIKIPEDIA (18/08/2008) Apple Inc. Available from: http://en.wikipedia.org/wiki/Apple_Inc [Accessed 15/05/2013]

American Marketing Association (October, 2007) Marketing. Available from: http://www.marketingpower.com/aboutama/pages/definitionofmarketing.aspx [Accessed 15/05/2013]

Paul Sloan (12/09/2012) Apple by the numbers: 84M iPads, 400M iOS devices, 350M iPods sold. Available from: http://news.cnet.com/8301-13579_3-57511323-37/apple-by-the-numbers-84m-ipads-400m-ios-devices-350m-ipods-sold/ Jeff Weisbein (01/03/2008) The iPod Success: Thank The Marketing Department. Available from: http://www.besttechie.com/2008/03/01/the-ipod-success-thank-the-marketing-department/ [Accessed 15/05/2013]

John Kirk (21/03/2013) Android’s Penetration Vs. Apple’s Skimming Marketing Strategies. Available from: http://techpinions.com/androidss-penetration-vs-apples-skimming-marketing-strategies/15255 [Accessed 15/05/2013]

Mikey Campbell (03/05/2013) Apple widens lead in US smartphone market as iPhone nears 40% share. Available from: http://appleinsider.com/articles/13/05/03/apple-widens-lead-in-us-smartphone-market-as-iphone-nears-40-share [Accessed 15/05/2013]

Apple Pirate (12/06/2011) iPhone Marketing strategies. Available from: http://www.applepirate.com/iphone-marketing-strategy/ [Accessed 15/05/2013]

INSIDECRM (01/10/2009) 11 Effective Strategies Apple Uses to Create Loyal Customers. Available from: http://www.insidecrm.com/articles/crm/11-effective-strategies-apple-uses-to-create-loyal-customers-53510 [Accessed 15/05/2013]

Business Dictionary (08/10/2003) Definition of business management. Available from: http://www.businessdictionary.com/definition/business-management.html [Accessed 15/05/2013]

Bianca Male (02/08/2010) 8 Management Lessons I Learned Working At Apple. Available from: http://www.businessinsider.com/management-lessons-i-learned-working-at-apple-2010-7?op=1 [Accessed 15/05/2013]

Steve Denning (25/06/2012) Apple 's Employees Have A Hell Of A Ride. Available from: http://www.forbes.com/sites/stevedenning/2012/06/25/apples-employees-have-a-hell-of-a-ride/ [Accessed 15/05/2013]

References: 3. Introduction Apple was founded on April 1, 1976, by Steve Jobs, Steve Wozniak and Ronald Wayne (WIKIPEDIA, 2008) value, more style, and new ways of interacting with digital media (Weisbein, 2008). by significantly increasing the value of their products in future iterations (Kirk, 2013) At Apple, if an employee was using a product and found an issue that bothered them, they had the freedom to go in and fix it without having to deal with layers of bureaucracy to get approval (Male, 2010).