Today, Apple Inc. is one of the most famous tech companies in the world. Since the popularisation of the iPhone 3, Apple products have been delivering consistently high sales all over the globe, making the company a distinctive industry leader. New releases of Apple products are long-awaited by the company’s loyal customers, many of whom own a variety of different Apple products and use the company’s services actively. Apple Inc. designs produce and sell a range of tech products, including smartphones, tablets, computers, and laptops, as well as branded accessories and applications. Throughout the years, Apple Inc. has managed to establish a reliable brand identity, developing and applying a competitive advantage to outperform major competitors. Despite some legal trouble about patented technology, Apple continues to develop and release innovative products and updates existing product lines annually. A wide range of products available and a solid brand identity allow Apple to be successful from year to year.
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However, such success would not be possible without a comprehensive and appropriate marketing strategy. Apple is widely considered to be among the world’s leading marketers and its annual results support the claim. Apple Inc.’s marketing strategy enabled the company to become popular and assists it in retaining the market share to this day. The present paper will seek to build on the case of Apple Inc., focusing on the company’s marketing strategy and its role in Apple’s success.
Key Marketing Concepts and Terminology
Apple Inc. has a strong marketing strategy that uses most of the key marketing concepts. Historically, Apple Inc. has been focused on developing its brand identity and releasing innovative products that would cater to the customers’ most important needs. Thus, most of the marketing concepts and principles applicable to the case are either product- or brand-related. However, Apple is also known for focusing on organizational culture, as well as for being effective in combatting its key competitors using a competitive advantage.
The term “product strategy” refers to the company’s vision and goals about the products it sells. Apple seeks to provide innovative, high-quality tech products and accessories, as well as software and services. However, despite encompassing the vast part of the tech sector, Apple still has a limited product portfolio. The range of products sold by Apple includes iPhone, iPad, iWatch, iPod, HomePod, iMac, and Macbook. Together, the products can satisfy all of the customer’s needs, whether it is listening to music at home or on the go, working, making graphic designs, and more. Therefore, the second feature of Apple’s product strategy is compatibility. All of Apple’s products are compatible with one another. A customer can transfer the data wirelessly and automatically between an iPhone and a Macbook, an iPad and a Macbook, an iPad and a HomePod, and between any other two products. In the long-term, this provides the benefit of customer loyalty, as it is easier for customers to buy an entire range of products from Apple and save time on synching data than to buy one product from Apple and another product from its competitor.
Nevertheless, keeping a limited range of products is rather challenging when operating in an industry driven by innovation. Another essential aspect of Apple’s product strategy is the annual release of new, updated versions of the same product. The annual release of the new iPhone is an event that is awaited by all Apple customers; it creates a certain buzz throughout the tech industry, driving more and more customers to preorder the product and be among the first people to try it. However, the difference between the two most recent models is not that apparent. For instance, iPhone 6, 6S, 7, and 8 have the same design and features and only differ in some tech specs. Releasing updated products instead of expanding the product portfolio creates a sense of safety by allowing Apple to retain consumer loyalty while also prompting customers to try newly released products.
The first thing that comes to mind when one mentions Apple Inc. is not a particular product but the brand itself. Throughout the years, Apple has managed to develop a solid brand identity that is also its most effective marketing tool. All Apple products gain popularity before they are released and there is a large share of customers who are loyal to the brand and would not buy any tech products from Apple’s competitors. Branding includes steps and strategies taken to build meaning behind the company’s name and Apple provides an excellent example of how a successful branding strategy works.
Apple Inc’s brand is based on three main concepts: quality, value, and innovation. Right from the start, Apple sought to establish a brand identity that would reflect these concepts and translate them to all Apple products. According to Schmidt and Baumgarth (2015), it is also important to note that Apple is a brand-oriented company. As opposed to a customer or market orientation, brand orientation focuses on branding as the key pillar of success, which is why branding is so important for the company. Brand-oriented companies follow strategies for building a brand from scratch and use a comprehensive approach to marketing where the whole brand is promoted and not just its latest product (Schmidt & Baumgarth 2015). Branding enabled Apple Inc. to become a global phenomenon and extended the reputation and popularity of the brand to each one of its products, thus providing greater security.
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A promotional strategy involves the activities used by a company to promote its products and the brand in general. Established brands such as Apple normally have a decreased need for promoting their new products, but still require certain promotional activities to remain competitive. There are a few marketing strategies that Apple uses actively, including advertising and product placement. For instance, before releasing the new iPhone X, Apple allowed a small fraction of Youtube stars to obtain the product first to boost its popularity and get early reviews on the product (Simon 2018). Another important aspect of Apple’s promotional strategy is advertising to businesses and institutions. For example, many educational institutions, such as colleges and universities, have computer rooms equipped with Apple products. Marketing products to businesses allows Apple to boost its sales while also promoting the brand: after using Apple products at work or in college throughout the day, employees or students will be more tempted to obtain them for personal use.
The secrecy surrounding Apple’s new releases is also an important aspect of its promotional strategy. According to Lewis (2014), each product release evokes a strong emotional response, thus allowing the brand to connect with customers on a neurological level. Besides, the hype about Apple’s new releases stimulates emotional buying behaviors, prompting customers to preorder the product or queue in the streets to be among the first people to get the new iPhone or iPad.
Organizational culture reflects the company’s values and beliefs that constitute the internal environment of the organization. For a large and growing company such as Apple Inc., a strong organizational culture helps to ensure that employees are committed to the organization’s goals. Besides, healthy organizational culture is known to have a positive impact on productivity, which is why working on this aspect of the company is important (Shahzad, Iqbal & Gulzar 2013). The core values included in Apple’s organizational culture are simplicity, diversity, and innovation (Baer 2015). These values are transmitted to every employee of the organization, which helps to ensure coherency and a shared positive environment within the company.
The Role of Marketing in Apple Inc’s Success
Apple Computers Inc. was created by Steve Jobs and Steve Wozniak in 1976. However, the company remained in the back of the tech industry for a long time before becoming a market leader. The company faced strong competitors, such as Microsoft, and was unable to win the battle for decades. According to Umoh (2017), the first turning point in Apple’s history of success was the return of Steve Jobs as CEO in 1997, when the company was on the verge of bankruptcy. Instead of continuing the competition with Microsoft, Steve Jobs focused on restructuring the company and developing a new product line. The second turning point was the release of the first iPhone in 2007. With a multi-touch screen and video-call features, the iPhone added to Steve Job’s vision of innovation and largely contributed to the success of the brand (Umoh 2017).
Marketing has played a significant role in Apple’s success ever since then. Vision, innovation, and simplicity became the key pillars of Apple’s marketing not just for iPhone, but for the brand’s entire product line. From the beginning of Apple’s success, the brand was seen as one entity and not as a collection of independent products. Apple’s advertisements were all completed in a single and recognizable style that projected simplicity and elegance. As noted by DeMers (2014) simplicity in marketing has had a strong influence on Apple’s success because it appealed to a wide variety of populations. The simple look of Apple devices means that they can be used by a college student or a business executive, whereas an intuitive and simple interface allows people of all ages to use the features important to them.
Similarly, innovation was always part of Apple’s marketing. For example, while advertising the new iPhone X, Apple largely focused on its tech specifications and new features to attract the attention of customers (Simon 2018). The focus on innovation allows Apple to distinguish its products from key competitors and retain customers while also attracting new buyers. Also, it helps to strengthen the brand’s image and promote the vision of innovation first proposed by Steve Jobs, whose image is still closely tied to Apple’s success.
However, there are also some ethical considerations involved in Apple’s marketing strategy. First of all, the secrecy surrounding new releases affects the company’s transparency and might affect public opinion in the long term. By withholding details about features and design of the future products, Apple generates major hype while also withholding valuable information from potential customers, thus decreasing their trust in the brand. Secondly, the buzz created in the industry due to Apple’s secrecy stimulates emotional buying. Combined with the factor of secrecy, this aspect of Apple’s marketing does not allow customers to assess all of the alternatives available and choose the best one, instead of driving them to queue in stores for the latest iPhone. While this enables the company to achieve higher profits, such a strategy may be considered unethical because it limits the customer’s choice by playing on their emotions. Lastly, innovations proposed by Apple were subject to multiple patent disputes and legal consequences. While most of the disputes resulted in settlements of various amounts, this aspect of the company’s history might affect the customers’ perception of Apple’s innovations, thus affecting future marketing success.
Overall, marketing played an important role in Apple Inc’s success as it enabled the establishment of the brand and support Steve Jobs’ vision. Marketing used by Apple served to create a distinct brand identity, which became associated with quality and innovation, thus helping to promote each one of Apple products. Nevertheless, there are also a few ethical considerations regarding Apple’s marketing strategy that needs to be addressed by the company to secure success.
Marketing Concepts and Principles in Apple Inc’s Daily Organisational Operations
To stay competitive and retain its large market share, it is critical for Apple Inc to apply marketing concepts and principles to its daily organizational operations. For example, Apple Inc is constantly in the process of developing new products and thus needs to perform marketing research and apply an extended marketing mix to ensure the success of future products. Besides, the company needs to be aware of the external factors affecting its success by using appropriate research and marketing methodology. The present section aims to show how certain marketing concepts and principles are used by Apple Inc continuously to remain popular and profitable.
7 P Formula
The 7 P Formula is an extension of the traditional marketing mix used by companies to provide a foundation for their marketing strategy. The formula includes the product, pricing, promotion, place, packaging, positioning, and people. This is an extension of the traditional marketing mix only using price, product, promotion, and place. Using a more elaborate framework allows establishing a cross-functional relationship between marketing and the activities of other departments. For instance, the formula allows viewing packaging in terms of marketing, thus contributing to the link between production and marketing. A single framework can be used to support Apple’s operations by providing a focus and a clear direction of activity.
Segmentation, Targeting, and Positioning (STP)
The three activities outlined by the STP method are actively used by all large companies to gain an insight into the market. According to Dudovskiy (2018b), segmentation refers to “dividing population into groups according to certain characteristics, whereas targeting implies choosing specific groups identified as a result of segmentation to sell products” (para. 1). Positioning, on the other hand, is the process of creating a marketing mix suitable for the customer segment chosen. The results of STP are used by Apple to develop marketing strategies, design new products, and plan for future organizational development. Besides, STP can be used to design packaging and determine distribution channels that would be appropriate for the customer segment.
Marketing research is the process of gathering data about the target market and interpreting the information for the benefit of the company. When it comes to marketing research, Apple Inc. has a relatively non-traditional position. The company’s executives have previously shared that the company does not use marketing research in the form of surveys or focus groups to learn about the customers’ needs. Instead, the company uses ethnographic research, which allows it to track customer behaviors. The results of marketing research can help to indicate favorite apps or Siri requests, monitor the use of FaceTime or other unique features, and more. This information can be applied to various daily activities of Apple, starting from developing new apps to designing updates and future products.
Societal marketing is an important marketing concept that involves making decisions for the benefit of society rather than in the interests of a brand or its customers alone. A significant part of societal marketing is corporate social responsibility, which has become an increasingly important concept in the past decade. Companies that use societal marketing principles have a more positive image among various consumer groups, which is why it is important to include societal marketing in daily operations. In Apple, societal marketing is applied to most daily operations. For instance, as reported by Dudovskiy (2018a), Apple seeks to provide fair employment conditions, promote diversity and oversee employees’ health and safety. Also, the company runs regular training opportunities and develops community support programs all over the globe, which contribute to its societal image.
Cross-Functional Relationship of Marketing and Other Departments
Marketing encompasses a wide range of activities and functions. The most successful companies use a comprehensive approach to marketing by ensuring stable relations between marketing functions and other departments. Apple provides an excellent example of a company that uses the cross-functional nature of marketing and extends its role to other activities, including human resource management, product development, production, and more.
For example, the relationship between marketing and human resource management in Apple can be understood in terms of diversity. Diversity is a key component of Apple’s societal marketing strategy, which is why it is important to ensure that human resource management functions used by the company provide equal opportunities and help to encourage diversity (Dudovskiy 2018a). Besides, many employees hired by the company communicate with customers either face-to-face or over the phone. These employees represent the brand and thus the experience of interacting with them will most likely affect the customer’s perception of the brand overall. Provision of adequate training and development opportunities, as well as a rigorous recruitment process, can help generate a positive impression on customers. Thus, marketing functions can help to set goals for human resource management regarding workforce diversity promotion, employment conditions, training opportunities, and other HR-related services.
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In addition, a significant part of Apple’s marketing relies on product quality and innovation, which are among the key functions of production and product development departments. To begin marketing new products, it is crucial to ensure that they meet the customers’ needs regarding quality, functionality, and innovativeness. Thus, marketing, production, and product development can cooperate to ensure the quality of new products. Besides, the marketing department provides research information that can assist in creating new products or features, fixing bugs or technical issues, and more.
Conclusions and Recommendations
Apple is a well-developed brand with a strong global identity that allows it to maintain a leading position in the tech market. Apple Inc. has managed to use most of the marketing concepts and principles to its success. Today, the most important principle for Apple remains to brand. The image and qualities associated with the brand extend to all of its products, thus ensuring high profits and the ultimate success of all new releases. Apple Inc. also applies the promotional mix, advertising, and marketing research to promote and develop new products and features, as well as to support the brand’s image. The case of Apple Inc. shows that a successful application of marketing principles requires a comprehensive effort of the entire company. Therefore, Apple Inc. has managed to establish cross-functional relationships between marketing and other functions, which also assist in creating new products and promoting Apple’s brand identity.
Nevertheless, some of the strategies used by Apple Inc. to increase the popularity of its products can be considered unethical or dubious. For example, the secrecy surrounding new releases helps to create the hype but affects transparency within the company, thus impairing its societal image. The primary recommendation would be for Apple Inc. to improve the involvement of ethics functions in marketing. For instance, appointing an ethics officer to work closely with the marketing team would help to ensure effective yet ethical marketing. Besides, it would be recommended for Apple Inc. to improve organizational transparency before new releases. Although the secrecy surrounding new product development creates a significant buzz in the tech industry, it contributes to emotional buying and impairs the organizational image. Thus, releasing a preview of the proposed innovations or features before introducing a finished product could help to address the issue. Resolving ethical issues from the marketing perspective could help Apple Inc. to retain its popularity while also improving its brand image.
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