Hardly there is a person nowadays who would argue the unprecedented success of the Apple Company considered one of the most revolutionary in the world of computers. The bitten apple for a long time has been a synonym for impeccable design and quality. Apple products have become a cult for hundreds of millions of people worldwide.
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Such a triumph is not occasional and was made possible by the unique approach of its founder towards the very essence of computer and mobile devices, as well as to the ways of their distribution through specialized brand stores.
Apple always strives to be several steps ahead of its competitors in terms of technology, product optimization, and exceptional customer service. However, those are not the only prerequisites for the company’s leading positions in the market. Even though Apple became known by dint of their products, its stores, and the positive environment in them allowed the company to achieve success and win customer loyalty.
The idea of the creation of creative stores was preceded by more than 20 years of the rapid company’s development. The union of two computer geniuses Steve Jobs and Steve Wozniak very soon turned into a business strategy. They founded Apple Computers on April 1, 1976, which had its office in the garage of Jobs’ parents. Wozniak was responsible for the technical side of the work, while Jobs was in charge of marketing.
The first model of a computer had a logical name, Apple I; during the first year, 200 computers were sold at a very symbolic price of 666 dollars 66 cents. Apple II released in 1977. The stunning success of the two models of Apple computers attracted serious investors, which helped the young company to take a leading position in the computer market. In 1984, as a result of the partnership of Apple and Xerox, the first truly personal computer Macintosh with a human-friendly interface was released.
Those developments transformed Apple into a huge corporation. Its competitors could not catch up with its technological capacity and volume of sales (Finkle and Mallin 34-36). During the period from 1985 till 1997, Jobs was dismissed from the management of the company due to his obnoxious behavior, often a disrespectful treatment of the employees and the authoritative style of governing. No matter how complicated the personality of Steve Jobs may be, he remained a visionary and a relentless seeker of perfection.
When Jobs returned to Apple, which was experiencing hard times due to poor management, he immediately closed the unprofitable areas of the company’s activities and launched the development of the new computer iMac (Finkle and Mallin 37).
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Later, Jobs led Apple to the discovery of the new markets not directly to computer technology markets, which resulted in the introduction of the music player iPod in 2001, iPhone touches smartphone in 2007 and iPad tablet in 2010. (Mallin and Finkle 66).
Thanks to Jobs’ genius and wise management, which after his death in 2011 was taken over by Tim Cook, in 2014, Apple became the world’s most expensive company by market capitalization, making up for 750 billion dollars (Gensler par. 3).
However, the devices produced by Apple would not get their unique halo of reasonable luxury and highest quality if it were not for the places where they were sold (McKiernan 11). From the marketing point of view, the place of the product distribution is one of the core elements of the 4Ps marketing paradigm. The place includes not only the physical location of the store but also the personnel and their attitude towards the customer.
Among the key advantages of the retail store distribution channel for the high-tech companies is the possibility for the customers to try out the product, to get the required initial consultation, and to receive the psychological impact of belonging to something unique (Rosenbloom 155).
As Lancaster and Reynolds note: “Stores, like people, possess ‘personalities’ which consumers readily perceive and often associate with the merchandise located in the stores” (184). For Apple, which positioned itself as the leader in the field of personal computers, the place could become of the primary tool to promote the product and enhance the brand value in the customers’ eyes (Lüsted 62).
At the time when Jobs was thinking about establishing Apple stores, personal computers could mainly be found in large shopping centers, which often did not provide separate departments for specific companies. The products of one brand would share shelves with the competing brands; consultants aimed to sell the products regardless of their brand. For Jobs, this was seen unacceptable due to his unique brand philosophy as the foundation of the company.
Apple computers were also sold through online stores, but this option solved the problem only partly as the company and customer were not engaged in personal interaction. Moreover, the computer stores were mainly located in the suburbs; such conditions were acceptable and relatively convenient because computers were not purchased frequently, and the customers managed to go far away to buy the product.
Steve Jobs, on the contrary, was convinced that it is possible to provoke the customers to buy more and deliver a better service by giving them a chance to visit a computer store just outside their homes (Kelly 195).
Jobs considered the two most discussed examples of the experience of establishing the network of retail stores. The first negative one was the Gateway IT Company, which tried to open a network of suburban stores but failed to attract customers there. The second example was the success of Gap Company, the clothes seller (Ratner 2).
Comparing those two experiences, Jobs concluded that the key point in opening a truly successful network of stores was the customer-oriented approach towards sales. As well as the clothes, the computers could also be tried on directly in the store. Jobs decided to make the head of the board of directors of Gap, Millard Drexler, one of the members of Apple’s board of directors.
Jobs also hired Ron Johnson, the vice-president of sales in the Target retail company. Millard advised Jobs not to hurry with the opening of the store and to work out its every detail. Jobs often spent hours away in the rented warehouse in Cupertino, thinking about how the store should look like and what service concept should be established. Jobs did not limit his creativeness, and gradually the empty warehouse began to resemble a design studio (Schlender and Tetzeli 397).
The initial project of the store was developed in six months. It was a room with one entrance, divided into four parts representing the main Apple products of that time – iMac, iBook, Power Macintosh G3, and PowerBook G3.
Eventually, Johnson realized that the product line approach is actually not unique and inconvenient. It would be much better to divide the sections according to the intended area of work with the products, such as computer operations, music, video, accessories, and so on. Jobs had to acknowledge the rationality of Johnson’s critique and to postpone the opening of the store for several months.
As a result of these delays, the first store, “Tyson’s Corner,” was opened on May 19, 2001, in McLean, Virginia. On the same day, and the second store, “Glendale Galleria,” was opened in Glendale, California (Schlender and Tetzeli 399). The shops were the canonic reflections of the modern minimalist style. The interior decoration included such materials as wood, stone, steel, and glass.
Jobs himself thought out every detail, from the sandstone floors and unique glass staircase to the posters on the walls and switches. Johnson’s idea was the “Genius Bar”; it resembled a bar and a reception desk where Apple’s genius experts as consultants were to sit and provide consultations (Ratner 3).
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Success in the USA encouraged Apple to open the stores in Europe and the rest of the world. The first Apple Store outside America was established in 2004 in London and immediately became one of the most profitable buildings in the UK capital (Kunert 12). Today there are 38 stores in the UK. The total amount of stores worldwide is 450.
In 2014, every square foot of Apple stores brought 4798 dollars (Wahba par. 1). Of this amount, 265 are located in the USA. The most famous of them is the one on Fifth Avenue; this majestic transparent cube has become one of the most beloved tourist sites in New York. Various presentations, master classes, and other creative events take place in the store, gathering even more people. The opening of every new Apple shop is anticipated no less eagerly than the release of a new Apple device (“Apple Store, Fifth Avenue” par. 1).
From the very beginning of the functioning of the stores, the analysts predicted the failure of this idea. They claimed that Apple will the company got involved in a losing cause and that in a few years would have to give it up after suffering heavy losses.
However, the first three years of the work of the stores showed that they had more than 5000 visitors a week. Craig explains such a success was made possible because Apple stores were focused on the products that had already earned a good reputation (13). It would be much harder to attract customers to the stores at the beginning of the company’s functioning because both the product and services would be unfamiliar to people.
One of the most unique and staggering features of Apple stores in the service culture of their employees. The company standards provide that every customer should be given as much attention and care as possible. The paramount features of the employees of the Apple Store are their developed psychological and communicational qualities rather than flawless technical education. The code of conduct of the geniuses requires a high level of empathy and respect towards the customer. Apart from elaborate verbal interaction, the employees should have developed non-verbal communication skills.
The manual for employees of the Genius Bar contains instructions on how to distinguish the mood of the customer by his gestures and identify his needs. For example, if a man is scratching his nose, that means he has something to hide, and if he smiles, it is a sign of openness and readiness to communicate. Genius Bar personnel has no moral right to deny any appeal or complaint coming from the customer.
The employee should not correct the customer’s words but only give a point of view. Geniuses should abstain from using negative words such as, for instance, “bug” or “problem”; they should be replaced with “issue” or “condition” (Biddle par. 3-10).
The customers feel like home in every Apple Store – they are allowed to stay there as much time as they want, to learn how to use the software and receive profound consultations. Moreover, many stores have special playing zones for kids so that parents can be sure that they will not be disturbed while making their choice of a product. The customers can be sure that the comfort and security of provided services are the key priorities of the company (May 4).
Thus, it can be seen that the case of Apple Stores is a bright example of how the already successful company can ensure its prosperity in the rapidly changing competitive environment thanks to applying the principles of customer-oriented retail policy.
The idea of the network of device stores might be not completely a new one, but its interpretation by the genius Steve Jobs is truly unique and remarkable. Apple Stores contributed to the formation of Apple Company as not a simple device provider, but as a flagship of innovation, customer-centricity, and the highest quality.
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