IILM GRADUATE INTITUTE OF MANAGEMENT

MARKETING MANAGEMENT
PROJECT WORK
FACULTY MS. TRIPTI GHOSH SHARMA

8/30/2011

GROUP 9
Chandra Shekhar Singh, Rishi Panwar, Shashi Kumar, Raj Kumar Jaiswal and T. Bhanu Prasad
This Project is accomplished by collaborative efforts of five PGD-FS students of IILM-GSM, Gr. Noida. This Project is based on Marketing Strategies of a Leading name is the arena of Computers, Hardware, Software and Consumer electronics, i.e. APPLE. The company has round the globe presence and is widely appreciated for its Change Making Products and Services.

CONTENTS
y A Brief introduction to APPLE Inc. y A Brief Introduction to Steve Jobs and his Marketing Strategy. y 4Ps Product Place Promotion Price y STDP Segmentation Targeting Positioning Differentiation by Rishi Panwar & Shashi by T. Bhanu & Raj Kumar by Chandra Shekhar Singh by Chandra Shekhar Singh by Rishi Panwar by T. Bhanu Prasad by T. Bhanu Prasad by Chandra Shekhar by Raj Kumar Jaiswal

by Shashi Kumar

y Conclusion

by Chandra Shekhar and Raj.

INTRODUCTION TO THE APPLE

Company Profile
Apple Inc (previously Apple Computers) is an American multinational corporation that designs and markets computer electronics, computer software and personal computers. The company s best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad. . Apple software includes the Mac OS X operating system, the iTunes media browser, iWork, Aperture, Final cut Studio, Logic studio. As of August 2011, Apple is one of the largest companies in the world by market capitalization, and the most valuable technology company in the world, ahead of Microsoft.

STEVE JOBS AND HIS ACHIEVMENTS WITH APPLE

Steve Jobs is co- founder, chairman and former chief executive officer of apple
Inc. In 1970, Steve Jobs with Apple's co- founder Steve Wozniak and others designed, developed and marketed one of the first commercially successful lines of personal computer, i.e. the Apple series ll. In early 1980 Jobs was among the first to see the commercial potential of Xerox Parc, a mouse driven graphic user interface, which led to creation of the Macintosh. In 1985, Jobs founded a computer platform development company specializing in the higher education and business market. On August 24, 2011 job announced his resigning from his role as Apple's CEO. In his letter of resignation job strongly recommended that the Apple s executive succession plan must be followed and Tim Cook be named as his successor. Later, as been requested, Jobs accepted the offer and has been appointed as chairman of apple board of directors of the Apple Inc.

STRATEGY REGARDING THE 4P s

PRODUCT STRATEGY OF APPLE
For last few years Apple's product strategy involves creating innovative products and services. Core competency of Apple regarding products can be understood by the Punch Line for their advertisements i.e. Think Different . Apple's core competence is delivering superb user friendly products that are different from the rest. The company's product strategy is based around this, with iTunes, the iPhone with its touch screen "gestures" that are re-used on the iPad, and the Apple Apps store all playing key roles.

WHY PEOPLE BUY AN APPLE PRODUCT? y Because it the one company that excels in Length, Breadth and Depth of its offering and offers varied products. y Because it offers Products That Delivers on Performance and Quality. y Because of the consistency, customers who already using Apple products have a good knowledge of what they'll be getting before they make a purchase y Because of the Innovations, the design of Apple products is consistent but its portfolio is not. The company offers consumers a number of different ways to enjoy its products.

APPLE carefully considers what consumers are looking for, so its products are
results of both extensive research and strong design and this ultimately results in high customer satisfaction rates and customers willingness to buy more products from Apple in the future.

PICTORIAL REPRESENTATION OF APPLE PRODUCTS

PROMOTIONAL STRATEGY OF APPLE

How They Advertise? Advertising the product before creating the product completely is one of the unique promotion strategies of apple. Apple's promotion strategy which was widely appreciated due to the surprise element that it attached just before it rolled out its products. There was a heavy speculation and curiosity regarding the

product and everyone was watching out for it. Apple did this with every other product which it launched subsequently. For example:Apple advertised extensively for iPod. Just when iPod was launched, an introductory campaign which would explain an unfamiliar product was needed. The commercial illustrated iPod's portability and ability to easily play songs downloaded from one's computer. All media channels including television, print, hoardings, posters and wrap advertising were used to advertise iPod.

5 reasons which make apple advt. unique: 1. 2. 3. 4. 5. The ads are memorable. The ads are well-placed. The Apple brand speaks for itself. Apple Stores are their own best advertisement. Word of mouth.

While Apple's rating on the American Consumer Satisfaction Index was down 1.2 points this year but that was still 9 to 10 points above its nearest competitors. Apple users tend to be intensely loyal, and they do the company's evangelical work for free.

PRICING STRATEGY OF APPLE

"Good marketers don't lead with price." -- Carl Howe Apple is Premium Brand in its product segment and it doesn t try to compete with other players on the parameter of Price for the several reasons well known. A few of them are y It leads to diminished profits and ultimately loss of shareholders Value. y It might diminish hard earned reputation of the Apple brand as Premium Quality Brand. y Being a Premium brand, Apple s experience regarding Price elasticity of demand of its Product.

Reality that prevails:Historically, Apple appeals to prosperous customers as its target. Hence Apple has only about 10 percent of the total market share of computers in the U.S. and 3.5 percent worldwide. So, In Unfavorable situations like Recession, It is hard to imagine that a company like Apple would be affected because of its Price Moreover, today, Apple has cash assets, enough to sustain 10% decline in its total sales in Unfavorable situation. If Mac prices will go down, Apple will have to cut down on customer support and this would directly impact Apple s ability to offer premium after sales support. Which is one of the main reasons people choose Macs? Steve jobs as a CEO believed that Rebates are like bribes to customers for making them buy mediocre products. Human Psychology behind pricing strategy of Apple:There is this factor of human psychology too plays its part while we analysis Apple s pricing policy. Something which is a bit out of Budget makes it desirable if it has some really exiting benefits. A huge number of people buy an Apple s product because it has become a status symbol in itself. Those with less income resources buy it the moment when there is an increase in their affordability.

STRATEGY REGARDING PLACE OF APPLE

Apple Inc. Headquarters are located at 1 Infinite Loop, Cupertino, California. Apple's Consultants Network includes independent professional service providers and technology consulting firms that specialize in Apple's third-party solutions. Certified on Apple technologies, these providers deliver on-site technology services and support to home users and businesses of all sizes. Apple service providers are equipped with Apple's training and offer repair services, and exclusive access to genuine Apple parts. They are located in Asia/Pacific, Africa, the Middle East Europe and Latin America.

Apple has more than 300 retail stores worldwide including the US, UK, Canada and India. Apple Inc, authorized Training Centers are located throughout the U.S., provides instruction on Mac systems, Mac OS X, and Apple s professional applications. The Apple Consultants Network website provides a search tool allowing visitors to locate nearby certified Mac product consultants in the U.S, Canada, and a number of international locations.

Now, as we move further, we will analyze Segmentation, Targeting, Positioning and Differentiation Strategy of Apple Inc.

Market Segmentation of Apple Inc.

"Market share matters above all else. Even profits." -- Carl Howe What market is Apple in? Apple has three major customer segments. It appeals to:  Early adopters who think different (the creative types who like to stand out),  Late majority consumers who want something not complicated that just works (like iPod and iLife products) and,  Professional content creators (authors, musicians, artists, filmmakers who want tools that free them to focus on their art, not the technology) Apple has a unique ability to appeal to the first 2 groups because of positioning they create. The USP of Apple Inc. is that it makes things Uncomplicated.

However surviving in real market is a different phenomenon. Apple has to see

that their vendor keep improving and updating the products they build their business on. And again optimum work flow of business sh d also not get affected. It s easy when one builds a new product and attack a reigning competitor but then one's ability to innovate slows down as focus shifts to business share. Market segmentation strategy enables a company to drive complete, unified product solutions that are harmonious with communicating, customer outreach, and channel strategies for selling and supporting customers. In this regard, Apple's product strategy is a study in market segmentation. It is quite visible as we analysis Apple s product and its features.

Targeting Strategy of Apple Inc.

Apple Doesn't Target Markets. It Targets People It s quite noticeable that Apple targets only those who are willing to pay $2 to $3k. Some people often get upset by the idea that Apple targets the rich only. The Mac is almost exclusively for creative professionals like artists, editors, writers, photographers, musicians and the like. However a lot of people don't fall into these categories. But a lot of consumers buy a Mac because it has created a niche in itself and has become a status symbol. Apple Targets following set of consumers:1. Middle/Upper income group who are willing to pay a bit more for a better user experience. Paying 500 more for a compute ting experience is not a huge deal if you have a decent income, at times.

2. People who like to have fun with technology. No other, offers as many entry level tools (the whole iLife bunch and more). This includes people who like to shoot a lot of digital photos or video. It's the whole digital hub concept. 3. Professionals in media and design. Why? Apple doesn t seem to the target markets in the way other companies do. Because as the Apple's culture and trend is observed, it targets people. It focuses on users and let them decide how, why and where they want to use its products. This is how great companies are built. They focus on individuals and build exceptional products for them, and let these individuals decide how to use the innovative technology at its best. However, just having a great product doesn t work unless there is good customer support. This is where Apple excels. Every time a customer visits a Genius Bar (Apple's service centre), she/he feels that they holds his/her hand and solve his/her problems at his/her ease. Even the tech support call is returned within 1-2 minutes.

Positioning Strategy of Apple Inc.

A Premium Brand that meets your need Apple is known as a premium brand that demands and earns a premium price for its products. This image spans the entire Apple s product lineup, i.e. the Macintosh, iPod, iPhone, software, and accessories. Apple's positioning is aligned with targeting a less price sensitive customer. As a result, Apple's culture, both external and internal, is structured to meet the needs of these customers. Strategists call this needs-based positioning.

Many a times, a positioning strategy that a firm uses to delivering a certain value
might end up confusing customers or perhaps undermining its own credibility and reputation. The attempt to simultaneously deliver inconsistent offerings will not serve a firm's strategic position.

THINK DIFFERENT! Apple's positing strategy is about being different from rivals. For years Apple used the phrase 'Think Different', a marketing slogan that not only shaped consumer perception but also represented the company's internal activities. Today, these all the activities of Apple Inc. revolve around the slogan despite Apple dropping it in 2002. The 'Think Different' mindset is firmly embedded in the company's culture and is clearly evident in Apple's approach to product and software design and integration. WHAT IF THEY HAVE TO CHANGE?? If Apple has to compete for all customer segments, it would have to lower its product s prices. Possibly, it could not only undermine and erode the company's premium brand image but will also affect company's culture, it has been built upon.

Differentiation Strategy of Apple Inc.

Apple's differentiation strategy for computers and portable electronics has been consistent since the introduction of the Macintosh in 1984. It is visible by the trends as:y Integrated hardware and software from a single supplier. y Attention to design details and innovation. y A pricing policy that allows them to command a highly profitable market segment This strategy now spans to all its product line. For Example:-

Macintosh computers are different from other Windows systems as a single

company is responsible for both the operating system and the hardware on which it runs.

Other computers are made by integration of different products from different manufacturers and one cannot control either the minimum baseline of the hardware, or the variety of components which may be included in the final product. Apple, on the other hand, has complete control over the variety and range of Macintosh hardware, which minimizes end-user technical complications and make sure that every Macintosh owner will have a common hardware platform creating their user experience. Apple computers and electronics are designed to be ahead and different from its competitive products. The iMac line of computers was the first home computer to omit a floppy drive; this was considered by most observers to be mandatory, but they were proven wrong by the success of the model. Even failed Apple products show innovative design planning, such as the Macintosh Cube, a physically small desktop computer which paved the way to the more successful Mac mini-line.

The impact of this design philosophy is that Macintosh computers consistently bought higher profit margin for Apple than most competing brands return to their manufacturers. Apple never competes for the low end of the market, where profit margins are razor thin. Apple's cheapest computers and electronics are consistently lies in the midrange, but include sufficient hardware and software features to ensure a high quality user experience. Apple hardware is designed to provide a lot of a value for the money, which ultimately keeps profits high.

AN EXPERIMENT THAT DID NOT WORK Apple briefly experimented with allowing third-party companies to sell Macintosh clones. That time, the Macintosh market began to look similar to other window based machines. While Macintosh OS users briefly had access to a wider variety of hardware, Macintosh clone makers largely competed by selling cheaper and less well-designed computers. Apple pulled the plug on Macintosh clone licensing to prevent the poorer-quality user experience from being permanently associated with the Macintosh brand and so ultimately disobey Apple s key differentiation strategy.

CONCLUSION
One of the world's top PC makers, Apple's products has created a niche status in
a market dominated computers using Microsoft Windows software and Intel processors. Apple has offered unique designs such as the colorful iMac that distinguishes its computers from their competitors. APPLE S COMPETITIVE ADVANTAGES:  A loyal customer base.  Apple's engineering and software skills.  Despite Apple's small market share, it often set the aesthetic and technical standards for its competitors to follow.  Apple has one of the best management teams in place.  Apple is the only vertically integrated Computer Company and thus can manage all aspects of the customer experience. APPLE S WEAKNESS:  Apple is lagging behind in adaptability with other good software, hardware and applications that corporate and educational buyers are concerned about.  Wide availability of Complementary Products with aggressive pricing.  Pricing Policy which is always out of pocket of low and middle income consumer segment which has a huge potential for flourishing any computer and mobile consumer electronics manufacturer. Bad Times Check:Apple is still to define price elasticity of its product acc. to the changing market environment. Today, Cash rich Apple can sustain drop in sales due to recession to save its premium brand value; however, it can be achieved in future as well or not, is a Big Question mark??? CRITICISM:The criticism is sourced from the press, customers, and competitors. Recently, Microsoft has unleashed a PR campaign in which they call out an "Apple tax", that is the premium paid by consumers who choose Apple's Macintosh computers.