Marketing Analysis Apple Inc Marketing Essay

Published Date: 23 Mar 2015

Apple Inc., formerly known as Apple Computer, Inc. is one of the largest companies in the world with annual sales in excess of $65 billion. (Pollson 2008). Three technologically savvy entrepreneurs, barely old enough to vote, established Apple Computer, Inc. in the spring of 1976. With each founder possessing an uncanny ability to foresee the tremendous potential of the user interface and explain that potential in laymen's terms, the three were able to establish credibility and gain public support. Apple fought to get a foothold early on in an industry that was literally non-existent and technically understood by few. Today, the personal computer is virtually in every household, and Apple, having weathered the storm of infancy, has emerged as the" leader in the personal computer industry, as well as in the consumer electronic industry". (Spindler 2008). With a devoted customer base that expands worldwide, Apple continues to look above and beyond today's technology with the same foresight that defined their early success. For example, imagine a small handheld device that is able to diagnose medical conditions by scanning a patient's retina? How about a cell phone that can trouble shoot car problems simply by plugging into the car's cigarette lighter for 60 seconds? Heresy you say? Science fiction? That is what the general public thought about cell phones fifty years ago!

Product-Market Analysis

Apple offers a variety of innovative products that are both stylish and contemporary, but current success did not come easy. Apple first came onto the scene to sell the Apple I personal computer kit. Next came the Apple II personal computer with a platform that was compatible for business applications. In an attempt to compete in the business and corporate computing arena, the company introduced the Apple III which soon proved to be a disappointing failure. Next came the Macintosh with its advanced graphic capabilities in 1984. With the Mac initially selling well, Apple began experimenting with a number of consumer targeted products with mixed results. However, because of some costly investment decisions, Apple's market share and stock prices continued to decline through 1993. The iMac, introduced in 1998 was the beginning of Apple's return to a more productive tenure. Through this period, Apple expanded into the digital video editing market, released Mac OS X in 2001 which was geared towards consumers and professionals, and opened their first retail store that same year. As 2001 was coming to a close, Apple introduced the iPod portable digital audio player. With 100 million units sold in the first six years of production, it appeared that Apple's troubles were behind them. In 2006 Apple announced that their entire product line was now using Intel chips and that the Mac Pro, MacBook, and MacBook Pro had permanently replaced the previous product line.

Currently Apple's product line includes Mac computers and accessories, the iPad media tablet which was introduced in January 2010, four different iPod music players, Apple TV, iPhone, consumer oriented software, professional and business oriented software, and a variety of third party applications.

External Situation Analysis

Because of Apple's decision to branch out in recent years, competition for market share has forced the firm to manage its resources more effectively and respond with a market strategy that is competitive across the board. Market needs and market demands are continuously changing because of innovation and the development of new technologies. Apple has embraced these changes and responded to them in a manner that keeps them competitive. Two key components of the marketing environment comprise Apple's competitors and within these components, current trends determine market strategy. First is the Macro environment which is comprised of technological forces, economic forces, political forces, and social forces. Competition from technological forces would include Intel, and AMD. Software competition would include Microsoft. Next, you have competition from economic forces. This would include IBM, HP, and Dell for example. Next, competition from political forces would include joining China to the WTO. This could be a two edged sword with opportunity and threat coexisting as possible outcomes. Last, you have social forces which would include lifestyle changes and current needs of consumers.

The next component is the Micro environment which is based on "Porter's five forces" (Rafter 2002). In this environment, firm position in competition is characterized by rivalry, bargaining power of supplier, bargaining power of consumers, threat from product substitution, and threat from new entrants into the business arena. For Apple, this is competition from IBM, Compaq, Dell, Acer, etc.

Apple's ability to modify their strategy in response to change in the marketing environment is remarkable and indicative of a successful business model. "As of May 2010, Apple had 46,600 full time employees and 2,800 temporary full time employees worldwide and had worldwide annual sales of $65.23 billion". (Macworld 2007).

Marketing Mix

Apple currently has over 300 retail stores worldwide with Headquarters located in Cupertino, California. Apple also has a network of independent professional service providers and consulting firms that are strategically located around the world.

Promotional incentives include special discounts on selected products, training centers that provide instruction on Apple products, certification for a variety of applications, free shipping on orders over $50.00 USD., iTune gift cards, $100 rebate on select computers and printers, and back to school offers. (PC Mag 2009).

Apple is considered a premium brand and therefore they do not attempt to compete on price. They use premium pricing and skimming strategies and have reduced prices in the past on some initial product launches. Recent price cuts on the iPad and price cuts on the iPhone in 2007, indicates flexibility if consumer response warrants it.

Environmental Sustainability

In response to social pressure on environmental issues, Apple has continued to improve with policy changes that reflect a greener method of operation. Greenpeace's "Guide to Greener Electronics" ranked Apple 9th out of 18 leading electronics manufacturers, in October 2010, on toxic chemical policies, recycling, and factors leading to climate change. In 2006, Apple ranked last. With growing awareness of the negative consequences associated with negligence and irresponsibility, Apple committed to becoming more environmentally friendly. This change has earned the company a top position as an ideal business model to strive for. Apple is far from perfect though. Greenpeace continues to criticize Apple for the lack of information on chemical management procedures and chemical phase-out plans designated for specified dates in the future. If consumers and watch-dog groups fail to hold violators accountable for negligence and malfeasance, should we really expect policy change on a large scale? Probably not, which demands that we each do our part to strive for greener sustainability.