Apple’s 5Cs

Discuss about the Global Marketing Strategy Development.

Apple is a technology company based in the United States and is famous for the design and developments of high-end consumer electronics and software. The company was founded in 1976 and incorporated the following year as Apple Computer, Inc (Library of Congress, 2015). The company was renamed in 2007 to Apple Inc, which is more in line with its focus on consumer electronics and applications. Apple Inc. is the largest technology company in the world in terms of revenue and assets. The core value associated with the company is to think differently. The slogan was developed by one of the founders, Steve Jobs, in 1997 to revive the company and focuses on approaching design and marketing from a customer’s perspective. Other slogans that have been used in the past include, ‘the power to be your best,’ ‘the computer for the rest of us,’ and ‘simplicity is the ultimate sophistication.’

The main mission of the company is not only staying ahead of competition, but also ahead of the market by defining consumer demand. For example, the company launched its first market changing product in 1997, the iPod, and eliminated Sony’s walkman from the market. In line with Apple’s vision of not only staying ahead of competition, but also defining consumer preferences, the company launched the iPhone in 2007. The iPhone led to decline in iPod sales but the company demonstrated its ability to identify and develop what consumers like before they even realise it themselves (Chen, 2015).

Apple Inc. offers high-end consumer electronics and software. One of the most successful products in the company’s catalogue is the iPad. Launched in 2010, the iPad is a portable computer that is steadily replacing Personal Computers. Software products include Apple Store and iTunes, which is the largest music store in the world in terms of sales volume. The company also has an online payment service referred to as Apple Pay. As of 2016, the company had more than one billion registered customers using its products across the world (Dillet, 2016).

The main strength the company enjoys is brand reputation. Across the world, people identify Apple products as being of the highest standards. Therefore, the company is a market leader in a range of services and products, including mobile phones, their applications, and music (Tar, 2013). The main weakness the company faces is the high prices of its products and the occasional technical issues of the same. The company’s products and services are incompatible with products and services from other companies, something that hinders a considerable number of consumers from buying their products. Some opportunities the company can explore include making its products and services compatible with others from different companies to attract customers who may prefer only particular products from the company. The main threats the company is facing include the rising cost of production and the intensifying competition from new entries into the technology sector from India and China.

Target Market and Collaborators

Apple’s target market is not restricted by age; however, because of the high cost associated with its products, only those with a significant amount of disposable income can afford to purchase Apple products. The focus of the company is in developed markets and middle income economies such as China, India, and the Asia tigers. The company has products and services that serve the needs of users across the age divide. Teenagers can use Wifi enabled iPods to not only listen to music, but also browser their favourite social media sites. College students and business people find the company’s iPad and MacBook indispensible because they can quickly store and retrieve important information from them. The devices are also lightweight, which makes carrying them easier (Hadri and Mikhail, 2014). The many features in the company’s products, such as making calls, maps, audio recording, and camera mean anyone can find a use for the company’s products. The touch interface of the electronics devices makes them easy to use, which means even children can use Apple devices.

The main collaborators of Apple include Chinese companies, such as Foxconn that employ huge numbers of workers to assemble and repair apple products. The high number of skilled persons in China willing to work for less than their counterparts in the United States also means a fair share of the company’ quality control and execution is outsourced to Chinese companies. Currently, only the design of Apple products is done in the United States, the production is done in China among other Asian countries. Apple’s competitors include Microsoft, Hewlett-Packard, Dell, Lenovo, and Acer in the personal computer sector. In the mobile computing sector, competitors include Samsung, Google, Asus, and Nokia. The same competitors are in the Smartphone sector with an addition of companies, such as Huawei, HTC, and Sony. Google is the main competitor in the software sector. The company operates in a legal, social, and political context that impact on its success (Khan, Alam and Alam, 2015). For example, most of the raw materials used by the company’s production chain come from less developed economies. Less developed economies have a high potential for social and political unrest that can negatively affect Apple’s production and sales. Less developed economies also have limited production capability; therefore, in some instances demand exceeds raw material supply.

Before coming up with an effective marketing strategy, Apple marketers first identifies what consumers prefer to enable developers come up with the right products and to present them in the right manner. The main mode used by Apple to collect consumer preferences is applications. Applications and devices developed by the company have tracking technologies that run in the background and collect useful information that enable the company to determine users’ shopping and browsing habits (Parsons, 2016). Information in popular blogs and news media outlets enable the company to identify the perception of consumers towards the company, which facilitates the development of approaches to improve or sustain the perception.

Apple’s Market Research and Intelligence

Apple has a number of collaborators including competitors, such as Samsung, which is the largest supplier of LCD screens. Apple continuously monitors suppliers and competitors to ensure it knows what they are doing or planning to do. For example, according to the Korean Times, Samsung is planning to stop its collaboration with the company because it does not consider the partnership is in the best interest of the company in the long-run (Lee, Lee and Heo, 2015). Such intelligence is enabling the company to prepare for a possible shortage of LCD screens by seeking alternative suppliers before the contract between Samsung and Apple expires. Most of the company’s raw material suppliers are located in less developed economies where the capability is limited in terms of production volume without overlooking quality. Some of the important components, such as memory chips are produced in Vietnam and Taiwan.

Apple’s operating context is filled with social, legal, and political challenges. For example, the main assembling company, Foxconn that is located in China, faces a number of legal and social challenges because of the working conditions in its factories (PUN et al., 2016). Many of the workers in the company are school aged children between the age of 16 and 18. The workers live in dormitories and have to work up to two years at a time. Most are forced to work overtime throughout the month to ensure the company meets the high demand of its products. Also, they are paid as low as $1 an hour, which is low even by Chinese standards. People employed by the company’s collaborators also have an unusually high rate of suicide because of the stressful working conditions. Occasionally, the company has to delay delivery of products to customers because of riots in assembling plants (Chan, Pun and Selden, 2013). Apple faces legal problems from its competitors because of issues of copyright infringements. Now and then, the company is engaged in costly legal battles with competitors such as Samsung because it has used a technology that is patented by the company (Court of Appeal, 2013).

Technology is playing an increasingly important role in the day-to-day lives of people across the world. The importance of technology in improving lives is most evident in developing economies in Africa and Asia. Developing economies have a constantly growing population and purchasing power, which translates to increased technology consumption. Apple’s high-end products target end users with significant amounts of disposal income, which is a relatively small percentage of the population in developing economies (Al-Laham and Huth, 2011). Apple’s main competitors, such as Google and Samsung are engaged in this untapped markets and have developed affordable products to satisfy the needs of this new market. The company should consider leveraging its brand image and technical expertise to get a share of the market.

Operating Context

Most consumers of Apple products purchase the products because they associate them with luxury and quality. Developing affordable products for consumers in developing economies may result in the company tarnishing its brand image and losing its competitive advantage. Therefore, the best approach the company can adopt is leveraging its technology and expertise by collaborating with existing companies to enable them address some of the technical challenges that are limiting the competitiveness of their products (O’Regan, 2015). The company can collaborate with less successful companies by supplying them with certain components and manufacturing techniques that will enable the company to design and develop quality products that have a competitive edge in the market.

Apple was not the first company to produce desktop computers or mobile devices; however, it enjoys unparalleled success because of its marketing approach. Developing high quality premium products is not the most important contributor of the company’s success. The most important contributor of success is customers being able to identify with the company’s products (Davis, 2013). Apple has managed to develop a marketing angle that everyone can identify with. For example, every time the company launches a product, it goes to lengths to explain why no other product in the market can compete with its product. The company does not just provide technical information that has little meaning to the end user rather, it details in what aspects its products can enhance user experience. Such an approach has enabled the company to become a leader in the market. For example, unlike other companies that refer to their products as Smartphone, an Apple phone is an iPhone. The company’s tablet is an iPad and its personal computer is a MacBook or iMac (Katherine et al., 2012).

There are many companies targeting emerging economies across Africa and Asia; however, their marketing campaign lack the level of targeting Apple has demonstrated in high-end markets. The company can collaborate with an existing company that shows potential in the market or start a new brand specifically designed for emerging markets. The major challenge facing Apple’s competitors is the internal competition of products within the same company. Unlike other companies, Apple does not develop competing products, it only develops high quality products that are above those available in the market and make minor tweaks in later products to maintain a leading edge (Han and Park, 2010). Emerging markets lack the infrastructure available in developed economies; therefore, Apple should target these economies with a product that can be used across platforms. Current Apple devices are restricted to using Apple’s operating system and applications. Developing a device that can use popular operating systems such as Android means people in emerging markets will be more willing to purchase Apple products. Users should also be able to choose their service provider.

Conclusion

Apple has a tight ecosystem because its devices run on their operating system and use their applications. The products developed by the company are top notch in their categories, which means the company commands a big share of the market. The company is a leader in the development of new technologies, especially technologies concerned with computer-human interface. The latest product the company has added to its catalogue is the iWatch. While there is no significant difference between Apple products and those of its competitors, the company enjoys a cult-like following because of its differentiated marketing strategy (Montaqim, 2012). Some features that are considered standard in developed markets are yet to penetrate emerging markets. The company can collaborate with emerging companies to include these features in devices and applications targeting emerging markets. Alternatively, Apple can have its own subsidiary to develop products for these markets.

Price is a major factor in emerging markets and perhaps the main hindrance to Apple products adoption in their current form. Apple is known for high-end products that cost a premium. Consumers in emerging markets are very price sensitive because of their limited financial capability. While it is important for Apple to maintain its distinction as a premium product, tapping into this market is increasingly important because of its size (Fischer, Staffieri and O’Rourke, 2008). Collaborating with another company and limiting the number of technologies incorporated into devices targeting these markets without compromising performance means the company can sale its products at a range that consumers in emerging economies can manage. Apple is constantly upgrading its products and consumers are always replacing their devices with the new ones. This means people are disposing old models for the new ones. Components from the old models can be used to make affordable devices for the emerging markets.

The place Apple should target includes emerging markets in Africa and Asia. Emerging markets in these places are under served. Most places in Africa and Asia are opening up to the rest of the world as electricity and Internet spread to this places. Mobile computing is experiencing success in these places and in many cases is the only piece of technology connecting people to the rest of the world (Wresch, 1996). As computing power increases in mobile devices, the issue of battery life becomes more important, especially in developing nations where power is inadequate and there are frequent interruptions. The company can leverage its technologies, such as its power efficient processor and long life battery to provide solutions to the challenges facing these markets.

Apple’s promotion strategy is the main contributor of the company’s success. By differentiating its products from those of its competitors, the company has managed to curve a market segment for its self. Applying such an approach in developing markets will enable the company to grow its share in the market and further guarantee its position as a market leader in the technology sector. Apple has the technology to address some of the challenges facing these markets and can avail the technologies to existing companies in the markets (O’Guinn, Allen and Semenik, 2003). For example, the company can run a promotion that focus on battery life or the ability to get good reception even in remote areas.  Another approach Apple can use to promote its products in emerging markets is localising their products. For example, a similar approach is taken by their competitor Samsung. The company has a range of phones specifically designed for the African market.

References

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