REPORT

On

(A study on Marketing Strategy of Apple Company)

By
Sarthak Gupta: MBA (M&S)
Anuja Shinde: MBA (HR)

Under Supervision of

Dr. Mohd Afzal

AMITY UNIVERSITY MAHARASHTRA

2022
1.0 Executive Summary

Apple Inc. is a technological business that makes a variety of products such as iPhones, computers,
tablets, televisions, and wearable gadgets. "Apple Inc. was founded in 1976 as a computer software
and hardware company, but since then it has evolved into the manufacture of other technical
gadgets and has created a chain of retail outlets to provide their customers with a better shopping
experience," according to Aljafari (2016). Apple sells its products in shops, online, and through third-
party wholesalers and retailers.

Apple's objective is to provide the world with the finest inventions and technology. The organisation
is also dedicated to environmental protection, as well as the health and safety of its workers,
customers, and the worldwide communities in which they operate (Capilla, 2011). However, the
corporation is grappling with image concerns when emphasis was made on the harmful working
conditions in several of its facilities in china(Chong, 2018). As a result, this research emphasises a
crucial marketing strategy that will aid Apple in resolving its management and marketing challenges.

1. Situation Analysis

Communication, bill payments, and online banking are just a few of the reasons why personal
computers and mobile phones have become more popular over time. Apple must overcome
technology challenges and continue to spend in Research & Development in order to take advantage
of this profitable sector and remain competitive. Consistent advertising might also help Apple
maintain its market advantage. Apple must offer lower-cost items for low-income consumers in
order to expand market share in the technology sector.

2.1 Market Summary

Apple is well-known for being a pioneer in the computer and electronics industries. Even though
Apple faces stiff competition from its competitors, it relies on its fundamental skills to stay ahead of
the pack. Unlike its competitors, like as Samsung and Motorola, which utilise Google's Android
operating system, Apple designs and develops its own operating system and hardware.

Target markets

· Middle and upper-class consumers

· Students

· Professionals in media and design

2.1.1 Market Demographics

The profile for the typical Apple customer consists of the following geographic,
demographic, and behavioral factors

Geographics

According to Apple’s 10-K financial reports for the year 2018,Apple has good continental
presence. The Company operates in theAmericas, Europe, Greater China, Japan and Rest of
Asia Pacific. With reference to The Americas, this includes both North and South America.
With regards to the Europe segment, this includes European countries, as well as India, the
Middle East and Africa. Pertaining The Greater China segment, this includes China, Hong
Kong and Taiwan. The Rest of Asia Pacific segment includes Australia (Apple2018)

Demographics

Apple goods are not gender-specific; they are used by both men and women. However,
because Apple goods are expensive, only the middle and upper classes can afford to buy
them. Apple goods, on the other hand, may be used by both youngsters and adults. Children
often use the iPad to play video games, while adults typically use the iPhone and Macbook to
work and chat.

Behavioral Factors

Apple items are of the highest quality. Apple goods users are prepared to pay a lot of money
merely to stay in a specific social class. Owning an Apple product satisfies one's esteem need,
according to Maslow's hierarchy of requirements. In Ghana, for example, many individuals
buy Apple items to flaunt their affluence. Furthermore, Apple's after-sales support is
exceptional, so customers are more likely to stick with the company.

2.1.2 Market Needs

Apple provides its users with a wide range of products in order to satisfy its customer’s

technological needs. The company endeavors to achieve the following benefits that are key to

its users.

· Quality
Apple products are expensive, so customers deserve value for their money. No one is willing

to spend so much on a product that is not durable.

· Well-thought-out designs
Product design must be taken into account in order to stay relevant in the technological
industry. Apple's well-thought-out designs are one of the reasons the corporation poses such a
significant threat to its rivals. Apple's inventive staff has helped the corporation stay relevant
in the technological sector throughout the years by defining trends. The fact that the
corporation updates the design of its product once a year offers customers something to
anticipate.

· Customer Service
Outstanding service is one way to increase or maintain market share in the technology

market. The use of after-sales service and customer care can be used to build a loyal customer

base.

2.1.3 Market trends

Apple has a chance to distinguish out in the electronics business if they use the technology
that is currently popular. Drones have recently become a tool that everyone desires. Because
Apple is recognised for its high-quality video and camera, they may use this to their
advantage and create drones for its clients. Apple has moved one step ahead of its biggest
competitors, Samsung and Microsoft, by doing so. In other words, adding drones to the
company's consumers will increase income.

2.1.4 Market Growth

"While the iPhone has been Apple's main revenue driver, accounting for 63 percent of total
revenues," Chandra (2017) writes, "increased competition and an increasingly saturating
smartphone market has driven Apple to diversify into segments such as wearables (Apple
Watch), machine learning (Perception, Turi, and Tuplejump acquisitions), energy (Apple
Energy, LLC – wholly owned subsidiary), and mobility ($1 billion investment in Didi
Chuxingii) and to increase focus on acc Although the smartphone business is profitable, it is
packed with rivals, making it difficult to break into. To thrive in such a saturated market, you
must be innovative.

2.2 SWOT Analysis

The following SWOT analysis shows the major strengths and weaknesses of the company

and outlines the opportunities and threats facing Apple.

2.2.1 Strengths

· Innovative: Innovation is one of Apple’s core competencies and this is what gives the

company competitive advantage over its rivals. Apple is always ahead of the game

with its designs, operating systems and hardware. Apple is constantly enhancing the

features of its products to keep its users satisfied.

· Quality: Apple products are made of quality materials in order to give users value for

their money. Moreover, Apple products are the only products in the market that

cannot be attacked by viruses. The operating system is built to be resistant to viruses.

 · Easy to use: One of the main reasons why people buy Apple products is that fact it is

easy to use. No training is required to operate Apple devices.

· Brand Awareness: Apple is one of the most popular brands in the world. The

company’s consistent marketing and advertising is one of the reasons why the brand

is known by many.

2.2.2 Weaknesses

· Price of products: Apple products a premium-priced which makes it difficult for low

income consumers to buy the company’s products.

· Brand Reputation: Apple’s brand reputation has been negatively affected due to the

news about the unsafe working conditions in some factories in China.

2.2.3 Opportunities

· Increasing Demand: The demand for smartphones and personal computers increases

year after year because these devices have become an intrinsic part of people’s

lifestyles. Everyone wants to be able to communicate and have information at their

fingertips.

· Economies of scale: Apple can take advantage of decreased product costs through

economies of scale. Profits from economies of scale can be used for research and

development.

2.2.4Threats

Increased competition: The fact that the electronics market is a lucrative one, many

companies crowding this market.

Pricing Pressure: Apple products are expensive relative to its competitors’ products.

Therefore, at some point in time, Apple may be forced to cut down prices in order to stay

competitive and survive in the market.

2.3 Competition

In the technological industry, there is a lot of competition. "Apple is in direct rivalry with
corporations like as Google, the Hewlett-Packard Company, Samsung Electronics Co. Ltd.,
and Amazon," according to Maverick (2018). These competitors, like Apple, spend a lot of
money on research and development as well as marketing. "One thing that makes the
business so highly competitive is the comparatively cheap switching cost," Maverick (2018)
adds. Changing brands does not necessitate a major financial expenditure. In other words,
buyers are not financially bound to a specific brand.

In the technology market, Michael Porter's five forces can be utilised to examine
competitiveness. In terms of competitive rivalry, there is fierce competition among the big
technological businesses that compete directly with Apple.

In terms of the danger of newcomers, the high cost of starting a firm within the sector, as well
as the added expense of building a brand identity, makes it tough to break into the
[Link], buyers in this market have a lot of bargaining power because of the low
[Link] of switching If a consumer is dissatisfied with a company's goods, switching to a
new brand is simple. Buyers' negotiating power is increased as a result of this.

Furthermore, due to the large number of possible providers, suppliers' negotiating strength in
this market is rather limited. Because of the large number of possible providers, businesses
may quickly swap suppliers.

In terms of the threat of substitute products, there is a significant risk of substitute products
since the market is packed with rivals. Furthermore, due to the large number of possible
providers, suppliers' negotiating strength in this market is rather limited. Because of the large
number of possible providers, businesses may quickly swap suppliers.

In terms of the threat of substitute products, there is a significant risk of substitute products
since the market is packed with rivals.

2.4 Product Offering

Apple offers several products to its customers including mobile phones, portable computers

and peripheral devices. The list of products are as follows;

 · Iphone -This is the company’s line of smartphones

· Ipad -This is the company’s line of tablets.

· Mac - This is the company’s line of desktop and portable personal computers.

· Apple Tv – This is the company’s line of television.

· Apple Watch – This is the company’s line of smartwatches.

· Ipod Touch – This is the company’s line of a digital music and media player.

· Airpods – This is the company’s line of wireless headphones.

2.5 Keys to Success

The key to success in the electronics sector is to be inventive. In this industry, companies
must be able to create items that fulfil market demand. Apple's competitiveness is primarily
reliant on new product and technology development, as well as quality and well-thought-out
designs. Furthermore, in order for Apple to remain competitive in this market, it is critical
that the business improves existing goods and invests in research and development to extend
its product line.

2.6 Critical Issues

· Repairing bad brand reputation with regards to poor working conditions in china

factories.

· Providing cheaper devices for low income consumers

· Monitoring customer satisfaction to ensure great customer service

· Developing new technologies and enhancing existing products.

1. Marketing Strategy

Apple is dedicated to providing its customers with the greatest possible user experience via
new hardware, software, and services (Apple, 2018). The company's marketing approach
focuses on creating a premium brand for market customers. This approach aids in the
company's differentiation from market rivals. Furthermore, Apple is "focused on simplicity in
all they do," according to Kovácsová (2014). According to Kovácsová (2014), the most
significant aspect of Apple's marketing strategy is simplicity, and it is the company's driving
power.
3.1 Mission

Apple’s mission is committed to providing the best innovations and technologies in the

world. The company also strives to protect the environment, to ensure good health and safety

of the company’s employees, customers and the global communities where they operate

(Capilla, 2011).

3.2 Marketing objectives

· Position Apple as a premium brand

· Increase brand value and market share

· Manufacture and sell products directly

· Invest in research and development to come up with new products and technologies

3. Financial objectives

"Apple expects to quadruple the size of its services company within the next four years,
converting sales from the App Store, iCloud, and its Music and video services into a nearly
$50 billion-a-year industry by 2021," writes Bradshaw (2017). Apple's service profits are on
the rise, putting the corporation in a better financial position to invest in new products and
technology (Bradshaw, 2017).

3. Target Markets

Since Apple products are high-end products, customers of the company’s products are

usually financially strong and willing to pay more for user experience. Geographically,

Apple’s prime target market includes Americas, Europe, Greater China, Japan and Rest of

Asia Pacific (Apple,2018). The following are a list Apple’s target market;

· Middle and upper income consumers (Usually consumers with a high

purchasing power)
 · Customers who enjoy using technology. These include people who take

delight in capturing moments.

· Students

· Professionals in media and designs

3. Positioning

Apple establishes itself as a premium brand by maintaining a high price point for its products
and services in order to create favourable consumer views based only on price. Because
Apple items are pricey, buyers with a lot of money are more inclined to purchase them. If
Apple makes its goods less expensive, some medium and upper-income consumers may
cease buying them. In other words, the fact that Apple products are expensive is one of the
reasons why some people link the brand with it. Apple items are located in the high quality,
high price area of the perceptual map.

4.0 Marketing Tactics

One of Apple’s main objectives is to position itself as a premium brand. The company

strives to achieve this objective by using the 4P’s which includes Product,Price, Promotion

and Place.

4.1 Product

In every form of business, the most significant part of the business is the product or service
given. This is because there will be nothing to market, price, or distribute if there is no
product or service. As a result, in order to be successful, stand out, and dominate the market,
every firm must deliver the finest product or service. Customers may purchase both items and
services from Apple. The corporation makes phones, laptops, tablets, televisions, watches,
and wireless headphones, among other things. The corporation also creates its own operating
system, known as iOS, which is used to operate the goods.

Customers may purchase, download, or stream music and TV shows, rent or purchase
movies, and download free podcasts through Apple's services. Apple also owns Apple Pay, a
cashless payment service that is only available in specific regions. Apple Pay is a convenient,
safe, and private method to pay. In addition, Apple Care is a service that the corporation
offers. This is a fee-based service that provides technical support and repairs to users. Apple's
products and services are one-of-a-kind, allowing it to rule the market. Another factor for the
company's success is its consistent product and technological development.

4.2 Pricing
Another important component of the marketing mix approach is price. Apple goes to great

lengths to ensure that its customers get the most bang for their buck by providing high-quality

goods. Furthermore, a firm's performance is determined by its pricing policy, which decides

whether the company makes a profit or loses money. Apple has a solid reputation in the

industry due to the high quality of its goods and the company's inventive spirit. As a result,

Apple is able to demand exorbitant pricing for their products. People are prepared to pay a

premium for Apple items, no matter how pricey they are. Apple's premium pricing approach

enhances the company's earnings while also increasing the brand's worth. However, it is

possible for Apple to generate higher revenues by manufacturing cheaper versions of their

products for low income consumers.

4.3 Promotion

Simply said, promotion is the process of making people aware of a company's products and
services. Apple uses a variety of avenues to advertise its products and services, including
public relations and personal selling. When it comes to personal selling, Apple stores have
well-mannered, dynamic, and highly informed sales professionals that give consumers with
all of the required information about the company's products and services. Potential buyers
are also persuaded to acquire the company's items by these sales personnel. Apple, on the
other hand, may raise brand recognition by collaborating with brand influencers or
celebrities. These individuals have a large following and can take the company's products and
services to the next level.

4.4 Place

The company's location in the marketing mix shows where it sells its products and provides
its services. Apple uses a variety of distribution methods to make its products available to the
general public. "The Company distributes its products internationally through its retail shops,
online stores, and direct sales force, as well as third-party cellular network operators,
distributors, retailers, and resellers," according to Apple's Form 10-k (Apple, 2018).

Given the huge demand for Apple products, the business should expand its retail shops,
particularly in Africa, where there are now only a handful. In addition, the corporation can
form partnerships with third-party cellular network operators in countries other than America
to make the items more accessible to customers.

4.5 Marketing Research

Apple does not rely on marketing research, according to Philip W. Schiller, senior vice
president of worldwide marketing. "We don't employ user surveys, focus groups, or normal
things of that type," Philip Schiller said during the Apple vs. Samsung patent-infringement
court hearings. That has no bearing on the development of our products" (Lowensohn, 2012).
Furthermore, "late Apple co-founder Steve Jobs famously denounced market research, saying
it's hard for customers to tell you what they want when they've never seen anything remotely
like it," according to Lowensohn (2012). As a result, Apple focuses on its inventive character
rather than market research to please its consumers.

5.0 Financials

This section outlines Apple's financial picture in terms of marketing initiatives. Net sales

grew 16 percent, or $36.4 billion, in 2018 compared to 2017, according to Apple's 2018 Form

10-K, driven by greater net sales of iPhone, Services, and Other Products. Furthermore, the

company's net sales rose in each of the geographic reportable categories year over year.

Apple launched a $100 billion capital return programme in May 2018 and increased its

quarterly dividend from $0.63 to $0.73 per share starting in May 2018. During 2018, the

Company spent $73.1 billion on share repurchases and paid $13.7 billion in dividends and

dividend equivalents (Apple, 2018).

5.1 Sales Data

The following table shows net sales by reportable segment and net sales and unit sales by

product for 2018, 2017 and 2016 (dollars in millions and units in thousands) (Apple, 2018):
The data above shows that, overallthere has been a positive change in net sales and unit sales

from 2016 to 2018.

6.0 Controls

The purpose of Apple’s marketing plan is to help guide the company in the right direction.

The company must have monthly meetings to discuss the progress of the company. Also, the

following areas will be kept under systematic review to track the company’sperformance:

· Revenue

· Expenses

· Customer Satisfaction

· New-product development

6.1 Implementation

· In case of slow sales, the company can offer discounts to loyal customers

· Increase the number of Apple stores, especially in Africa where there are only a few
 · Develop strong relationships with existing and potential customers to maintain or

increase customer base

· Provide better working conditions for employees in china.

· Invest in Research and development in order to stay relevant in the market

6.2 Contingency Planning

Difficulties and Risks

· High competition and rapid technological changes keeps Apple underpressure

· Consistently stimulating customer demand

· Successfully managing frequent product and technology development

Worst-Case Risks

· Future operation depends on the Apple's ability to obtain sufficient quantities of the

rare metals and other components used in production

· Growth of Apple’s own retail store could discourage third-parties from selling and

promoting the company’s product