Marketing Analysis of Apple Inc.

Introduction and Company Background
Our group chose Apple as our product because it is one of the most well-known companies in the world. Apple is considered the top-selling brand of electronic gadgets and is well-known for their excellent customer service. Apple makes use of different types of marketing strategies, such as television commercials, newspaper, magazines and official online website to promote their products.

Apple is a multinational corporation that designs and sells electronic gadgets and software. Apple electronic gadgets include the iPhone, iPad, iPod family, iMac, MacBook’s like the MacBook Pro, MacBook Air, Mac Mini [Smallest desktop in the world], Mac Pro [CPU]. Apple software includes the MAC OS X operating system, ITunes media browser where you can listen or play videos in it, Aperture a professional photography software, iWORK, another alternative for Microsoft office in Mac OS, Final Cut Studio which is a suite of professional audio and film industry software products, Logic Studio for music production, lastly, the IOS which is an operating system for iPhone.
For Apple to become a successful company is its innovation. They are creative in every product that they created. Apple also encourages creativity among workers. They make full use of their marketing strategies to boost the sales of their products which makes them always the number one seller in the electronic gadgets industry. Apple knows their product well, being able to promote it to their customers and eventually getting them to be interested in it. Apple also set their target audience and they target it well, for example, a MacBook Air, people can simply parallel the laptop which allows them to use both the Mac OS platform as well as the Windows platform, this is one of the advantages of MacBook. It has a very sleek and thin design which is light and not a burden for consumers to bring it around. For example, in the laptop/desktop series of apple, they have different applications for people to make music, making graphic designs which actually make it easier for consumers who are in the music or design industry. Not only this, the new OS that that apple has recently introduced, Lion OS, allows people to multi-task easily and saving the data so that consumers would not need to afraid of their data is gone if their laptop has went out of battery which shows that Apple has utilized their marketing strategies which brought them to where they are today, leading us to choose Apple as our research target.

Survey Research
Research Objectives * To find out the popularity of Apple iPhone among Singaporeans of various ages * To find out if Apple iPhone is the most used phone in Singapore * To find out what improvements Apple iPhone need * To find out whether Apple iPhone is good based on consumers opinions
Approach, Contact method and sampling plan
For this project, we have surveyed 50 people in Singapore from all age range. We surveyed them through survey forms online and through hardcopy by approaching them in school and outside school.

Population – All Singaporeans’ opinions
Sample – The opinions of the 50 people surveyed

Attached at the back of report is a sample of the survey form.

Marketing Mix (4Ps)
Product
Three levels of product (good/service) 1. Core benefit
Core benefit is defined as what the customer is really buying as a form of problem-solving benefits/services. In this case, Apple iPhone’s core benefit is that consumers buy it for communication and for connecting with the world.

2. Actual product
Actual product consists of the brand name, features, design, packaging and quality level.
For Apple (according to the latest iPhone 4s), * Brand name : Apple(iPhone) * Features : 8 Megapixel Back Camera, Capacity of either 16GB/32GB/64GB, Height of 115.2mm, Width of 58.6mm, Depth of 9.3mm, Weight of 140 grams, Bluetooth 4.0 wireless technology, 802.11b/g/n Wi-Fi (802.11n 2.4GHz only), Assisted GPS and GLONASS, Digital compass, Wi-Fi, Cellular, Retina display, 3.5-inch (diagonal) widescreen Multi-Touch display, 960-by-640-pixel resolution at 326 ppi, 800:1 contrast ratio (typical), 500 cd/m2 max brightness (typical), Fingerprint-resistant oleophobic coating on front and back, Support for display of multiple languages and characters simultaneously, Video recording, auto focus, Face detection in still images, LED flash, Front camera with VGA-quality photos and video at up to 30 frames per second * Design : On/off button, Volume up/down, Ring/silent button, Home button, 30-pin dock connector, 3.5mm stereo headphone minijack, microphone, built-in speaker * Packaging: iPhone 4s, Apple earphones with remote and mic, Dock connector to USB cable, USB Power Adapter, Documentation * Quality Level: The quality level of iPhone 4s depends on the customer’s opinion of the iPhone 4s. It can either be high/low quality level or good/bad quality level. 3. Augmented Product
Augmented product is the additional benefits/services around the core and actual product such as delivery and credit, instructions, installation, warranty, service.
For Apple iPhone, the augmented product will be the warranty card for a period of one year and instruction manual in two languages: English and Simplified Chinese.

Category of consumer product
Consumer products are those bought by final consumers for personal consumption. It is the purpose for which the products are bought. There are four types of consumer products; Convenience, Shopping, Specialty and Unsought. In this case, Apple iPhone is a Shopping Product. Shopping products are consumer products that the customer compares carefully on suitability, quality, price and style. Therefore, Apple iPhone is considered a shopping product as consumers tend to compare it with other phones such as Blackberry, HTC, and Samsung based on the suitability, price, quality and style.

Brand Development Strategy
Brand development strategy consists of four types of strategy; Line Extension, Brand Extension, Multibranding and New Brands. Apple has launched other products such as iMac, iPhone, iPod and MacBook. Therefore, Apple is in the brand development strategy of Line Extension. It is the introduction of additional items in a given product category under the same brand name. It consists of the same brand but different products and names. It has the objective to serve different customer needs or market segments while taking advantage of the widespread name recognition of the original brand.

Price Apple’s General Pricing Approach Apple has adopted the Value-Based pricing approach. Value-Based Pricing is when companies set the prices based on buyer’s perceptions of value rather than on the seller’s cost. This means that the company cannot design the product then set the price. They go through the process of the customers first, then calculate the value, sets the price, find out the costs of materials and then create the product. Apple products may cost higher than other phones, but the price does suit their products’ value. For example, the iPhone has functions such as touch-screen based; most applications out of the millions available at App Store could function properly if the requirements such as Internet Connection are met. This makes the iPhone not just a phone to communicate with people, consumers can also use it to watch videos of the full screen of size 115.2mm screen, use it as a mp3 player, map, and also a wide variety of game choices that are available through App Store. The games can include motion-sensors, shake and many more types. Apple’s MacBook Pro’s price is also high at S$1648 for its base model compared to other laptops such as Dell and Samsung. This is because; MacBook has features that are different from other laptops. They have the ability to dual-boot; use either OS X or a Windows Operating System. Not only that, they also have a variety of features, such as an aluminium body, prolonged battery life and also amazing mouse features. Price compared with competitors Apple, in regard to mobile phones has a few lists of competitors such as Blackberry, HTC and Samsung. Since Apple has different versions of iPhones such as 3GS(8GB), 4(8GB), 4S(16GB), it has different prices in accordance to the different versions. For example, the current market price as of December 2011 for these three models without contract is S$548, S$788 and S$948 respectively. As for Blackberry, there are various types of models such as Blackberry Torch, Blackberry Curve, Blackberry Storm, Blackberry Bold and many more. The current market price as of December 2011 for Blackberry Bold 9900, Blackberry Torch 9860, and Blackberry Curve 9360 is S$927, S$793 and S$518 at RRP (Recommended Retail Price) inclusive of GST, without contract, respectively. Blackberry, too, has recently release its very own Playbook, priced at S$668 for 16GB. HTC too has many various models; however, we choose the most recent models which are HTC Rhyme, HTC Sensation and also HTC Radar. The prices of these phones as of December 2011 are S$699, S$750 and S$569, without contract, respectively. These few brands listed above are considered Apple’s competitors as they are also the most common used phone by consumers besides iPhone. Product Mixing Strategies Apple adopts two out of the five product mixing strategies. They are Product-line and Optional-product pricing. Product-Line Pricing: Product-line pricing involves setting price steps between various products in a product line based on cost differences between products, customer evaluations of different features and competitors’ prices. In this case, it is based on cost differences between products. For example, Apple sells its iPhones at different price points. Using iPhone 3GS as a base, Apple sells its iPhone 4S 16GB, 32GB and 64GB at S$948, S$1088 and S$1238 respectively. This strategy makes consumers who buys according to price to buy the 16GB, while for those who do not care about the price will take the more expensive 32GB and 64GB iPhone with a larger memory space. Not only for iPhones, Apple uses this strategy for their iPods also. Optional-Product Pricing: Optional-Product Pricing is pricing optional or accessory products sold with the main product. Apple uses this strategy in terms of the App Store, where many applications are available for free or on purchase. The applications on purchase are examples of optional-product pricing. The Apple iTunes is also available where consumers can use it to pay for the songs and videos they want. The iTunes acts as an additional accessory. Price Adjustment Strategies Apple uses the Psychological Pricing strategy for its product. Psychological Pricing considers the psychology of prices and not simply the economics. The consumers usually perceive higher-priced products as having higher quality. Evidence is, “just because they can i suppose, people buy them so why would they lower their prices. I can understand why they would be more expensive than anything else on the market, the build quality of their products is the best I’ve come across...” This is found at a discussion forum at www.neowin.net. Consumers also use price less when they judge the quality of a product by examining it or recalling experiences. In this case, the price given for Apple iPhones in terms of their memory space is also an option that consumers will think about and calculate first before purchasing the product. For example, as stated in Product-Line pricing, an iPhone with 16GB, 32GB and 64GB has different prices according to their memory space. Therefore, if consumers were to purchase their product according to the memory space given, it would be more profitable to purchase the 64GB iPhone as it only costs them about S$20 per GB (1238/64). Consumers will end up buying the 32GB and 64GB iPhones if they were to calculate the cost per gigabyte. Place Number of Channel Levels For Apple, the number of channel levels used is the Indirect Marketing Channel. Indirect Marketing Channel is a channel containing one or more intermediary levels. In the case of Apple, the process to be gone through is, Apple, as the manufacturer, sells the products to a wholesaler which then distributes it to retailers, finally selling the products to the consumers. Therefore, the products are transferred from one to another; in this case, it is transferred about two times before it is sold to the consumers. Channel Intensity Apple’s channel intensity is Selective Distribution. Selective distribution is a strategy when a producer uses more than one but fewer than all of the intermediaries willing to carry the producer’s products. Since Apple’s products are known as a shopping product, it usually has selective distributions. As Apple products can only be found in electronic shops and not in common places such as NTUC Fairprice, it is considered a shopping product. Number of Outlets and Locations Apple has 112 outlets in Singapore now, including other outlets and not only apple shops, such as Best Denki, Challenger and Epic Centre. Out of the 112 outlets, 62 outlets are located in the Central areas (Alexandra, Bukit Timah, Chinatown, City Hall, Douby Ghaut, Holland, Kitchener, Novena, Orchard, Outram, Raffles Place, River Valley, Rocher, Thomson, and Tiong Bahru);19 Outlets in the East areas (Bedok, Changi, Geylang, Marine Parade, Pasir Ris, Paya Lebar, Tampines);16 Outlets in the North (Ang Mo Kio, Bishan, Hougang, Seng Kang, Serangoon, Toa Payoh, and Yishun);5 outlets in the South areas (Harbour Front) and lastly 10 outlets in the West areas (Boon Lay, Bukit Panjang, Jurong East and Jurong West).

Promotions
NOTE: (Persuasive/Reminder)
Marketing Communications Objective
The Marketing Communications Objective of Apple is Informative. Apple promotes its new products such as the iPhone, iPod, iPad, iMac etc. through providing the customers with more information. Apart from introducing the new product, Apple also suggests the functions of their new products that may be greatly useful to us in our daily lives. Apple also goes the extra mile to tell their customers how their products work. All of their products come with reading manuals that guide Apple users how to operate their products.
Apple of course spent no less effort in building up their company image. Not forgetting to maintain a good company image while promoting their new products to their customers, Apple does its best to ensure their customers the best after-sales service they can provide so as to make sure that every single customer is satisfied with their service after purchasing their products and keeps a good impression of the company. Apple also sets up FAQs on their websites to correct false impressions of them by answering customers’ doubts or enquires.

Elements of Promotion Mix
Apple has made use of Advertising and Sales Promotion as their elements of promotion mix.
Advertising is defined as any paid form of non-personal presentation and promotion of ideas, goods or services by an unidentified sponsor. It can reach masses geographically dispersed buyers, repeat a message many times and is impersonal. As mentioned earlier, Apple makes use of Informative to advertise about its products. It is one of the most major elements of promotion mix as it requires not only time and effort to prepare, also creativity, ideas, advertising budget and appropriate message execution. Out of the six available types of advertising, Apple has made use of three: Magazines, Outdoor and Internet.
One would realize we seldom see Apple put up advertisements in the newspapers, or commercials on televisions or broadcasted on air. That is because Apple did not make use of the other three types of Advertising: Newspaper, Television, and Radio.
Apple mainly does its promotions through pass-along audiences – by providing one customer with good service and promotes your product when that customer passes along good feedback about the company. Apple relies on these pass-along audiences more than on advertisements and commercials. In this way, Apple can not only save up the money spent on advertising, but can also concentrate better on serving their customers well and ensuring that every customer that steps into an Apple store leaves the store satisfied. That is the best way to promote their products.
Sometimes, one will spot a number of advertisements on certain magazines promoting Apple’s products. Also, Apple’s official website, the Internet. Magazines are often set to target specific readers. For example, a promotion of Apple’s products may appear in a magazine that introduces latest electronic products in the market. In this case, readers of this particular magazine would definitely be interested to be updated of the latest products introduced hence Apple would select certain magazines to target certain group of readers to place their advertisements in so that it would be effective.
The Internet is also so widely-used by everyone in the world today that it may be a more effective mean of advertising compared to television commercials and such to a certain extent. Apple’s online website provides customers with many features like, showing the details of an Apple product or answering customer’s questions through the FAQs page. The user-friendly internet makes people more willingly to purchase products online or view the new products available. This works very well especially for certain customers who are not willing to leave home and go to an Apple store to purchase a product.

Survey Findings
*The questions for this analysis can be found at the back of this report as a part of the appendix.
Product
Question 1

As this is a survey regarding Apple iPhone, we targeted all those who use iPhone. Therefore, 50 iPhone users participated in this survey.
Question 2

Out of the 50 surveyors, 86% of them would still continue to purchase Apple product in the future and 14% of them would not. This shows that Apple products are popular and would still be used by those who already owned the iPhones. They will keep track of the launch of new products.

Question 3

In question 3, surveyors were asked to tick the field that describes their agreement or disagreement with the three statements. The statements are “Apple iPhones are affordable.”, “Apple iPhones are popular among teenagers.” And “Apple iPhones are the most commonly used phones.” 47% of the surveyors strongly agreed with the statements listed above, 44% of them agreed with the statements, 4% of them do not know, 5% of them disagree, and 1% of them strongly disagree.
Question 4

Based on Apple iPhone, surveyors were asked to rate different criteria on iPhone from 1(Best) to 5(Worst). The criteria rated are the battery life, it’s camera, it’s design, it’s function, and the value for money. According to the bar chart, 4% of the surveyors have rated 5, 11% of them have rated 4, 36% of the surveyors have rated 3, 27% of them have rated 2, and 22% of them have rated 1.

Question 5

In question 5, surveyors were asked to tick the brand which they think is the best for each particular factor. The factors include durability, features, price, quality, and user-friendliness. 51% of them preferred Apple, 12% of them preferred Blackberry, 24% of them preferred Nokia, 7% of them preferred HTC, and 6% of them preferred Samsung.
Question 10

As you can see from the graph, 38% of the surveyors wrote NIL which indicates that they are satisfied with the current Apple IPhone. However, there are still some areas where the users think Apple IPhone should improve on. This includes better features such as better camera, battery, design, bigger screen and high tech features such as hologram. From this question, we are able to conclude that Apple IPhone users though, are satisfied with the current IPhone, they are still looking forward to a better IPhone with better features as stated above.
Question 11

From the graph, other than using an Apple IPhone, 42% surveyors do not own other Apple product such as IPod, IPad , IMac and etc. More than 50% of the surveyors own other Apple product. Thus, we can conclude that surveyors quite support Apple product.
Price
Question 7

The bar chart above shows that the 50 random people we surveyed have about three-quarter earning S$0 to S$1000 a month. This is probably because most of the people we surveyed are students studying in Nanyang Polytechnic and they are either working part-time or not working at all, depending on their monthly allowance given by their parents.
Place
Question 6

The pie chart above showed that more than 70% of the people surveyed bought their iPhone from the telecom providers. This shows that the iPhone is favorably and most popularly bought with hand phone line maybe because of the price, as it is cheaper if bought with line. The remaining options such as Online Apple Store, Premium Reseller and Others shows that less than 30% of the people surveyed bought their iPhones there.
Question 9

This question tests on the loyalty of Apple customers. 76% of the 50 respondents showed that they are willing to travel the distance to purchase Apple’s products. In conclusion, most of the respondents are Apple fans and hence are willing to travel further just to get themselves Apple’s products. 24% on the other hand, expressed that distance affects their decision on purchasing Apple products. It may be due to transportation costs reasons that they are not willing to travel further to purchase an iPhone. It may be also that the respondents are open to other choices of electronic products instead of Apple products. Promotions Question 8

Out of the 50 respondents, 25 of them got to know about Apple through their family or friends. As mentioned earlier, Apple mainly uses pass-on audiences to promote their products and statistics has proved this. Apart from family & friends, the internet is the next useful means of promotion. In this era where Internet is so useful, it is very effective for companies like Apple to promote their products online. 20% of the respondents got to know Apple through TV advertisements while newspapers or magazines took up only 6%.
Conclusion
From our survey findings, we can conclude that Apple products are favorable and popular, since the statistics of the survey not only shows the loyalty of Apple consumers, but also the desire for Apple products. Also, Apple’s product quality is of high standard and therefore makes consumers want to purchase from them in the future.
We recommend that Apple use the consumers’ suggestions to improve on their products and make use of more promotions to make their products more well-known. Apple should always be open to suggestions and understand what their consumer target audience wants so as to boost their sales.
Apple can also consider improving their product qualities as respondents in the survey commented that apple products are not as durable as other brands. Apple can make use of such surveys to improve on their products so that consumers are satisfied with Apple’s products.
Lastly, we think that Apple can make use of surveys to understand what consumers want and needs, what features would they prefer in new products, what improvements can be made etc. This way, Apple would fulfill the requirement of current Marketing: to make products that the customer wants, not to make customers buy the products you make.