1TrillionApples

A blog about the in depth analysis of Apple's brand and its marketing strategy.

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Post 12 - Promotion

Apple’s promotion strategy is very different compared to other companies.  The first point and the most interesting point is that Apple began using social media starting in 2016. 2016 was the year Apple finally embraced social media and launched a Twitter account to promote the iPhone 7 (Lewsing 2016). The only thing about their Twitter page is that there are no tweets. You read that right, Apple has not tweeted anything, yet has over 2.4 million followers. However, Apple is active on their Instagram page and somewhat active on their Facebook page. The reason for this is that Apple uses their social media as a tool for engagement rather than a tool to sell. They have a Twitter for support, @AppleSupport, where they converse with consumers who have certain problems (Team 2017). They are not using it as social commerce, but rather a different medium to connect with Apple owners. 

While Apple doesn’t usually use social media to sell, it uses various social media campaigns that are accessed through promotional posts on Facebook, Instagram etc. They have recently utilized promotional posts to promote and bring awareness to the Apple Watch. Apple, however, seems to not value or care about social media as much as other companies. They utilize some tools but haven’t really marched deeper into the world of social media just yet. They do use blogs to display and announce information regarding fixes or problems that occur within an Apple product, but many aren’t aware. Overall, Apple chooses not to focus heavily on social media, but rather, it focuses on TV ads, some of which are extremely well done and show rather than tell, which is a major part of Apple’s promotional strategy. 

Sources:

Leswing, K. (2016, December 03). Apple needs to hire some teens to help with its social media strategy. Retrieved from https://www.businessinsider.com/apple-has-no-social-media-strategy-2016-12

Team, O. (2017, September 11). Apple Has A Social Media Strategy That's Completely Strange, Yet Makes Perfect Sense. Retrieved from https://officechai.com/stories/apple-social-media-strategy/

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Post 11 - Place (Distribution)

Regarding the 4 P’s, Place is a major component of the marketing mix. How a product a distributed and where it is distributed from is a fundamental property that every company must perfect. In the case of Apple, they have a very interesting distribution channel. For one, they operate using a mix of inclusive and exclusive distribution channels; they provide their products through the means of retailers, specifically Amazon, Best Buy, AT&T, Walmart, Verizon, and many others. They also offer all of their products through their own retail stores. Their retail stores alone have brought increased revenue in which the CFO of Apple, Peter Oppenheimer, said that “Apple’s 372 stores collectively generated $4.1 billion in revenue” (Mossberg 2012). While this shows that Apple’s retail stores are successful, it is not the main area where Apple products get sold. A lot of their sales come from online retailing, and more iPhones were sold at the company’s retail partners, “AT&T and Verizon stores both sold more than Apple, with 28 percent and 26 percent shares of sales, respectively. And Best Buy and Amazon (via fulfillments) together sold nearly as many iPads as Apple itself (Mossberg 2012). 

Apple’s supply chain model is also a huge part of the overall distribution of its products. It is known for being one of the most efficient distributors while having a very simple supply chain. The process a product normally goes through for Apple consists of sourcing to China, the U.S, or Europe, then manufacturing the actual product in China, where it then goes to a warehousing storage facility to later be distributed to their retail partners, their own retail stores or kept in the warehouse for retail sales that go directly to the consumer. All of this gives Apple a dual distribution in which they have multiple channels to distribute their product.

Sources:

Mossberg, W., Swisher, K., Dearing, M., Hesseldahl, A., Cha, B., Goode, L., . . . Digital Solution. (n.d.). Breaking Down Apple's Retail Distribution Strategy. Retrieved from http://allthingsd.com/20121003/apple-stores-get-the-glory-but-retail-partners-shoulder-load/ 

SupplyChainOpz. (n.d.). Is Apple's Supply Chain Really the No. 1? A Case Study - Supply Chain 24/7. Retrieved from https://www.supplychain247.com/article/is_apples_supply_chain_really_the_no._1_a_case_study

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Post 10 - Trends/Pricing

Trends within a market are relatively difficult to see coming. Companies try to time these trends and become the first to start one with hopes of it becoming the newest innovation. Trends may often pose a threat to companies in a marketplace and negatively impact its earnings; it can also be a huge opportunity to do further research for and see how much potential it has in the marketplace. A trend that may be an opportunity to Apple is the growing use of AR and VR. On Apple’s website, it reads, “With iPhone and iPad, those experiences are not only possible, they’re here. Augmented reality is a new way to use technology that transforms how you work, learn, play, and connect with almost everything around you. And this is just the beginning” (Apple 2018). In the coming years, Apple really has an opportunity to dive deeper into artificial reality and virtual reality as well. Apple has recently been set on, “working on a headset that combines both AR and VR given its intense focus over the past year on pushing augmented reality in iPhones and iPads” (Tibken 2018). The opportunities are endless and Apple is actively jumping on this trend.

As for Apple’s pricing strategy, Job’s vision was always to create and sell premium products (Yahoo Finance 2014). Apple’s strategy is based on four pillars:   

1. Offer a small number of products.    

2. Focus on the high end    

3. Give priority to profits over market share    

4. Create a halo effect that makes people starve for new Apple products  

The price Apple uses for its iPhones usually ranges between mid to high price points. They also implement a very interesting retail distribution strategy, “Apple maintains the popularity of its high-priced products by only offering retailers such as Wal-Mart or Best Buy a marginal wholesale discount” (Yahoo Finance 2018). The premium price allows for a revenue increase and bigger profit margins for the company.

Sources:

Apple's premium pricing strategy and product differentiation. (2014, February 07). Retrieved from https://finance.yahoo.com/news/apple-premium-pricing-strategy-product-191247308.html

IOS - Augmented Reality. (n.d.). Retrieved from https://www.apple.com/ios/augmented-reality/

Tibken, S. (2018, April 27). Apple's working on a powerful, wireless headset for both AR and VR. Retrieved from https://www.cnet.com/news/apple-is-working-on-an-ar-augmented-reality-vr-virtual-reality-headset-powered-by-a-wireless-wigig-hub/ 

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Post 9 - Services

While Apple is known for its products and hardware, Apple is positioning itself to be a major service giant. Apple has refocused its efforts to a new opportunity that is showing tremendous growth, “In its most recent quarter, Apple posted $8.5 billion in revenue in its services category, up 13 percent year over year. At present, services revenue has grown to about $30 per active device” (Wuerthele 2018). The services sector of Apple offers iCloud, Apple Pay, Apple Music, and the App Store to name a few. These platforms are so valuable to not only Apple but the consumer as well; it allows Apple to create a mass customization across Apple products which allow them to, “be distributed to an active installed base of roughly 1.3 billion devices” (Schomer 2018). These services give Apple the opportunity to branch out and innovate in a completely different way than they have been in the past few years.

Another service provided by Apple is their customer service. Apple is one of the best customer service providing companies today. A huge positive for their customer service is their responsiveness. Although Apple products were designed to be simple and straightforward to use, technology has a way to complicate things from time to time. Luckily, if any problem occurs a drive to the nearest store can quickly solve a problem, “they take care of it on the spot in most cases. Or if you need more hand holding, they turn you over to the Apple Geniuses” (Bajarin 2012). The Apple Geniuses are a big plus that helps Apple have great customer service; they are available at any time and can really help solve and discuss the problem well. They give assurance by knowing the product extremely well, thus leading to a happy customer without any problems. The reliability of Apple’s customer service can be replicated across all stores and through phone calls as well. The same customer service can be seen and given anywhere, which gives the consumer an ease of mind when buying Apple products or services.

Sources:

@bajarin, T. B. (2012, May 07). 6 Reasons Apple Is So Successful. Retrieved from http://techland.time.com/2012/05/07/six-reasons-why-apple-is-successful/

Molla, R. (2017, May 03). Why Apple's Services business is so valuable. Retrieved from https://www.recode.net/2017/5/3/15523268/apple-services-business-revenue-growth  

Schomer, A. (2018, August 02). Apple's Services segment is on a growth tear. Retrieved from https://www.businessinsider.com/apple-services-segment-fueling-revenue-growth-2018-8

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Post 8 - Brand Detail

Apple is known for their branding, “ which was primarily focused on human’s emotions (Martin 2016). Creating a sense of control for the consumer and giving them a simple and convenient, yet powerful product is what they seek in each and every product. Throughout the evolution of Apple and the change of its logo, its main focus has not changed. Apple’s brand consists of creating a better computing experience; with the release of a new product or service, this is their main focus, “the company expanded into its first major new product area with the launch of the iPod in 2001, followed by iPhone in 2007, iPad in 2010, then Apple Pay and Apple Watch in 2014″ (Marketing Minds) The main products from Apple include the iPhone, Macbook, iPod, and the iPad. All of Apple’s products require more research than a convenience product and cost more as well, which makes the majority of Apple’s products shopping products.

Regarding the product mix of Apple,  they offer a wide range of products with a wide choice of options, giving Apple lots of width in its product mix and lots of depth in its product lines. Its product mix fits perfectly into Apple’s brand by including a variety of lines within each product. For example, a product item, the iPhone, has a deep line of phones, some of which most recently include: iPhone  7, 7 Plus, SE, 8, 8 Plus, X, XR, XS, and XS Max. They also have a deep line with their iPad product, which includes over 14 different iPad models. From the iPhone and iPad to the Apple Watch and iCloud, Apple continues to have a very solid line of products that all enhance the brand further.

Sources:

Apple's Branding Strategy. (n.d.). Retrieved from http://www.marketingminds.com.au/apple_branding_strategy.html

The Apple Product Strategy. (2018, February 17). Retrieved from https://www.cleverism.com/apple-product-strategy/

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Post 7 - Packaging

Apple is known for being a simple, minimalist, yet elegant brand. From the logo to the website, you can see that Apple is very minimalistic. The whole aesthetic of Apple is modern, sleek, and clean. The brand name and logo are so strong that no other labeling is required to sell the product. Persuasive labeling is not seen anywhere near an Apple product. Apple also provides informational labeling and UPC’s (Universal Product Codes) to further enhance the packaging. The design of this particular box eludes to it being a high-class item that ties into the overall brand look Apple is going for.

Being that Apple is a global brand, their logo, as well as the product name, are all on the packaging displayed in a subtle manner. What makes the packaging for Apple so special is the way it looks. It just looks great. The simple design to some, might seem boring, but I feel that it makes Apple stand out; in this case, less is more. The packaging is just beautiful. Also, included inside are Apple stickers, which are so nice that I don’t want to ruin them, therefore never use them for what they are for. Instead, I keep them in the packaging and admire how nice they look. Another extra item provided in this specific package were earphones. This was a really nice touch and definitely helps lower consumers cognitive dissonance. I feel that the packaging is very cohesive and shows the brand aesthetic very well; there is nothing I would change.

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Post 6 - Competition

Apple is no stranger to competition; Since they began producing technology, various amounts of companies have tried to take a percentage of their market away with their own versions of the tech. products. Apple has many key competitors: Dell, IBM, Microsoft, Google, HP, and of course Samsung. I believe that Samsung may be the toughest competitor (specifically) for smartphones today with the rise of the Galaxy S line and Galaxy Note line devices which seem to be a constant problem, especially in the holiday seasons, however, “Apple climbed back to the top of the smartphone market for just the third time since losing pole position to Samsung in 2011″ (Richter 2018). Samsung has proven that they could overtake Apple and compete with them for market share in smartphones, “Samsung ended 2017 with 21.9% market share in the worldwide smartphone market” (Resinger 2018). This shows that Apple may need to try repositioning the iPhone or try product differentiation to expand and compete with the multiple lines of Samsung smartphones. Apple may need to do some market research and find the motive behind why Samsung is taking market share from Apple. As for Apple’s Macbook, Microsoft is definitely a huge competitor to this product, with the release of its Surface Book line. Computer manufacturers and smartphone manufacturers alike all strive to beat Apple and compete with its products.

Apple currently holds a 15.2% market share in the smartphone industry with Samsung leading at 21.9%. 

Sources:

Apple Trails Samsung in Smartphone Market-And Won't Catch Up in 2018. (n.d.). Retrieved from http://fortune.com/2018/02/13/apple-iphone-samsung-market-share/

Richter, F. (2018, February 05). Infographic: Apple (Briefly) Dethroned Samsung This Holiday Quarter. Retrieved from https://www.statista.com/chart/7941/apple-vs-samsung-smartphone-shipments/

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Post 5 - Target Market

Apple’s target market consists of a very broad spectrum - from creators and professionals to general consumers from around to world. Their target market is also segmented into various categories that help Apple create multiple marketing mixes to satisfy and meet the needs of consumers; these segmentations include psychographic segmentation,  benefit segmentation, and demographic segmentation. The lifestyle of the consumer is very important when marketing to certain groups; Apple targets middle to upper-class customers who are more likely to be adventurous with their money for the majority of their products, “The average household income for Mac owners is $98,500″ (Gaille 2015). By segmenting, Apple can distinguish that they are targeting those with more disposable income and those who live similarly. As for benefit segmentation, consumers value different features in products, so Apple has various products that are convenient to a certain group, be it students or trained professionals. Some features include, “Speed of service, advanced features, and capabilities” (Dudovskiy 2018). They also have a wide range of products that fall into several SBU’s (Strategic Business Units), some of which include accessories, software, personal computers, and smartphones.

Regarding demographics in the target market, Apple is very popular with millennials, “2 out of every 5 Mac owners is younger than 34″ (Gaille 2015). Millennials are very tech savvy and have grown up with Apple, so them being a big market for Apple is not very surprising. Being that Apple is a premium brand, they are primarily looking for young wealthy consumers, which also helps boosts its image. It's for this reason that teenagers are also a big demographic that Apple targets. The brand and the way people perceive Apple is a big motive for this young demographic to buy Apple products, however, gender is not really important or focused upon because their products are universal and don’t cater to one gender or the other. 

Sources:

18 Key Apple Target Market Demographics. (2015, October 12). Retrieved from https://brandongaille.com/18-apple-target-market-demographics/

Apple Segmentation, Targeting and Positioning. (2018, January 27). Retrieved from https://research-methodology.net/apple-segmentation-targeting-and-positioning/

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Post 4 - SWOT

This SWOT analysis of Apple provides insight into what management should do regarding the future of the company. The strengths, weaknesses, opportunities, and threats all help to evaluate where Apple stands compared to competitors.

Apple’s main strengths are its services, which can grow into a huge business of its own, the product ecosystem that allows for seamless transitions between products, their brand image, and the amazing customer loyalty that they have grown. The services sector of Apple has reported saw, “revenue jump 31% to $9.2 billion”(Reisinger 2018). These strengths give them a big competitive advantage that set them apart. As for the weaknesses, Apple has very high price points that may not be desirable for some consumers and while Apple products work beautifully together, they aren’t as compatible with other brands, forcing a closed ecosystem (which may be bad or good depending on how you see it). It could bring more sales for Apple accessories and products or drive customers away. In regards to opportunities, Apple has some great options to further develop and expand on. Some of these opportunities include developing the Apple Watch, a product that is relatively new and in a new space in technology that Apple has already started to dive into. The product development of the Apple Watch could be amazing for Apple. The most unique and ambitious project Apple can do is the Apple Car, which can disrupt the auto industry. This diversification can bring Apple to a whole other level, however this is something for the future that Apple knows can be a big opportunity to take advantage of, “ Apple may not be saying much about Project Titan, but it's more than evident that the company is committing significant resources to the endeavor” (Cava 2018). The major threat for Apple is, of course, Samsung. The competition with Samsung is definitely something to be wary of due to the popular products that are direct competition. 

My two recommendations for management would be having the implementation of a new Apple Watch, and further distancing themselves as the leader of smartwatches, while also taking a huge chunk of the smartwatch market share. I would also recommend focusing on market penetration, as well as market development for Apple Services. The services sector for Apple is a fast-growing market, “It’s the second-largest Apple division behind the iPhone and generated billions more in revenue than Apple’s Macs” (Reisinger 2018). The services are an emerging star for Apple and the growth of Apple Services can prove to be beneficial in sustaining and furthering Apple’s dominance.

Sources:

Apple Has Already Built Its Next Big Business. (n.d.). Retrieved from http://fortune.com/2018/05/02/apple-services-business-growth/

Cava, M. D. (2018, August 22). Would you subscribe to an Apple car? Why this secret project could be your next monthly fee. Retrieved from https://www.usatoday.com/story/tech/news/2018/08/22/siri-get-my-icar-apple-could-cars-2023-analyst-says/1041978002/

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Post 3 - Strategy

Apple has an amazing sustainable competitive advantage. The way Apple allows for each of their products to work seamlessly with each other is something that I can’t say I have experienced with other companies. With the use of Airdrop, Apple Pay, iCloud, and many other features, Apple allows the consumer to easily switch from one device to another with no hassle at all. This gives Apple a very strong advantage compared to other companies. Another competitive advantage Apple has is its brand. Apple has created a brand so strong, that it has almost created a sort of cult following. After a new release of an iPhone, these same supporters flock to the nearest Apple store to pick one up; this speaks volumes about the brand and the product. Apple is more than just a company - its a message, and a lifestyle. The Apple logo has become a symbol now, instead of just a logo for a company. You see the logo and automatically correlate it to the brand Apple has created and its message that it is trying to convey. The brand alone is a very strong competitive advantage that allows Apple to challenge these other companies. 

Some key differentiators that set Apple apart from their competitors are its design, marketing, and its location. In my opinion, Apple has one of the best-looking products out there today. From a design point of view, it is so simple, yet classy and elegant at the same time. Every Apple product I’ve owned just looks and feels so nice; it is very sleek and looks amazing. Apple also has great marketing strategies. Their marketing strategy for their products involves positioning themselves as a more high-end luxury business. We can see this in the way they announce new products. The press conferences always generate massive amounts of buzz and showcase how Apple approaches new releases. Some of the marketing tactics, such as commercials, are very creative and memorable, something I don’t believe many other companies are as strong at. Another differentiator is the location of Apple. By this I mean, where Apple has its stores and how it is an advantage for them. Apple is a huge global company, this alone makes for a strong advantage. Their marketing objective is to reach their target market, which includes: students, creative professionals, and consumers from all around the world. This is why location is such an important part of Apple’s strategy. They have stores all over the world, which allows them to reach their target in these areas.

Overall, Apple has a very good strategy in place that allows for it to be a strong competitor and differentiate itself from the competition.

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Post 2 - Brand

Apple is a company that focuses heavily on their brand by creating products and services. They have created the iPhone, iPod, Macbook, iPad, iWatch, and many other products that all integrate with each other seamlessly. Recently they have been heavily focused on creating and maintaining stronger services such as Apple Music, iTunes, App Store, iCloud, and Apple Pay. These services have been the strongest for Apple due to the fact that it “generated 17 billion last quarter” (Molla 2017). The services are also the glue that holds all of Apple’s hardware together; Apple’s Services can definitely be the main selling point for others to adapt and switch over to the Apple ecosystem, causing more sales to occur in iPhones, iPods etc. 

Apple’s annual sales have been reported at 229.2 billion in 2017 according to Yahoo Finance. While iPhone sales have been spiky, Apple’s Services have shown to be the most consistent and are a steadier source of income for Apple as of right now. For me, the value of Apple comes in the services because data proves that it is huge and growing, “Services revenue grew 1.05 billion, or 18% year over year” (Molla 2017). This growth is what I believe a lot of value comes from; being able to sustain and grow this sector can prove to be a competitive advantage for Apple in the future. Not only is this a competitive advantage for Apple, but it is also a sustainable competitive advantage because no other company can create an ecosystem that incorporates so well with its hardware like Apple has. If you have an iPhone the chances of you using iTunes or Apple Music is high.

Apple’s headquarters are in Cupertino, CA (which is why the weather app is always on Cupertino when you first use it) and currently has 100,000 full-time employees (Yahoo Finance). It is also a public company traded on the stock market with a price of $221.30/share at the time of this post.

Looking at Ansoff’s Matrix for Apple I see that they have done a great job of using product development and diversification to increase their sales. Apple’s mission statement reads, “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store  Apple has reinvented the mobile phone with its revolutionary iPhone and App Store and is defining the future of mobile media and computing devices with iPad" (Farfan 2017).

Sources:

AAPL Income Statement | Apple Inc. Stock. (2018, September 07). Retrieved from https://finance.yahoo.com/quote/AAPL/financials?p=AAPL

Farfan, B. (n.d.). What Is Apple's Mission Statement? Retrieved from https://www.thebalancesmb.com/apple-mission-statement-4068547

Molla, R. (2017, May 03). Why Apple's Services business is so valuable. Retrieved from https://www.recode.net/2017/5/3/15523268/apple-services-business-revenue-growth

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Post 1 - Apple

The reason why I chose Apple as my brand for this project is due to the fact that they are constantly innovating and changing with the times to excel. From starting in a garage to being the first company valued at 1 trillion dollars, Apple is an amazing company. Not only are they a company, they are also a leader in change. Their products have become some of the most recognized in the world and are a big reason for shaping the world we live in today. Seeing what Jobs and Wozniak did is inspirational and a huge motivator for me choosing Apple. I am a huge fan of their marketing work thus far because they have created a lifestyle around Apple, instead of just another product; they have given us a reason to buy from them. Apple tells stories and this can be seen in their ads; they have some of the best commercials I have ever seen. They also are a  market orientation company because of the way they make decisions: Based on what the customer needs. Apple’s ability to innovate is another factor in why I chose them and why I think they are a great company.

This leads me to why I believe that Apple is an important company. They have proved to be innovators that will continue to move humanity forward introducing new technology and providing “the best personal computers in the world”, as stated in their mission statement. Their customer satisfaction is very high due to the service they provide and the overall quality of the products they sell. They are also the first company valued at 1 trillion dollars which is a huge feat to accomplish and is an extremely important mark to reach in the stock market. They also have many strategic business units, or SBU’s in various sectors of technology, in which they continue to add more to. In the future, I see them continuing their success and leading the lines in new technology. Whatever the next innovation may be, Apple will be there.