Ch. 8 - Segmenting and Targeting Markets

According to MKTG 5 market segmentation is defined as “the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups.” Apple has done a great job in recent years of creating itself as a major player in the computer. Apple does not use one market segment to target its products, in fact it combines different strategies for selecting and segmentation its target market. Instead of targeting different people, Apple creates one product for a particular use, for example an iPad for reading, an iPod for listening, and an iPhone for apps.

Market segmentation and new innovation played a big role in Apple’s success Apple recognized four key market segments within the customer profile, Business, professionals, Education, and “high-end” consumers. Apple tends to focus on middle and upper class income customers, who are willing to pay a little more price for a better user service. Customers mainly turn toward the company that is able to maintain its good brand image, like wise Apple product users come back because they already had a good experience with its previous product. Apple demographic segmentation consist of music enthusiasts and fans ages 12-35. Apple’s winning and realistic segmentation strategy has been psychographic segmentation, which is based on personality, motives, lifestyle, and geodemographics. Apple designs its products as “lifestyle brand”, which appeals to Tweens to Boomers, and their pricing strategy is aimed toward low to high income consumers.

Apple has selected a niche market (one segment of the market) for targeting its marketing efforts. Because Apple is appealing to a single segment, it can concentrate on understanding the needs, motives and satisfactions of that segment’s member and on developing and maintaining a highly specialized marketing mix. 

Ch.11 –Developing and managing Products

In MKTG 5 “Developing and Managing Products.” the new product development that Apple created is iPhone5, which comes into the category of “improvements or revisions of existing products”. Apple did improvements to iPhone 4 and created the new product as iPhone5. The other product they improved is iPad, which can also come in to the category of “improvements or revisions of existing products” and also “additions to existing product line”.

In the new product development process, Apple generated its idea mainly to compete with its reveal competitors and also to capture the market share. Generally it was very successful at gaining the market share, and undercutting its competitors LG and Motorola.

Another critical part of development of new product is R&D. It serves as a strengthen factor to the new product development, Apple’s R&D plays a huge role in making iPhone 5 enormously successful. According to ycharts.com R&D Expense Quarterly, for Sept. 30, 2012 was 906 M; 30M higher than previous quarter June 30, 2012. Luckily for Apple the spread of new products comes to the “Innovators” which basically means that consumer are eager to try new product, all most as an obsession. This is mainly due to the consumer loyalty and also experience from the previous version of iPhone.  MKTG 5 also discuses product life cycle, for Apple it is currently at maturity stage with the demise of Steve Jobs, and the second reason can be the innovations such as iPhone5.

MKTG 5 discuses product characteristics and the rate of adoption, Apple comes into the category of compatibility. Compatibility is the degree to which the new product is consistent with existing values and product knowledge, past experiences, and current needs.

Ch. 16 -Integrated Marketing Communications

According to MKTG 5 promotion is “communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response.”  Apple uses promotional and advertising tactics to capture the attention, interest, and desire of the consumer. Apple captures our mind and interest through innovating and sleek descriptions of their products on Apple's official website as well as keynotes and other publication. For example, just prior to the highly anticipated IPhone 5 being release, it received a great amount of advertising that captured many potential customers attention.  

Our interest and desire is fulfilled by the "new features" on the IPhone 5 that is appealing to our needs and wants.

Ch. 10 - Product Concepts

Ch. 10 - Product Concepts

According to MKTG 5 a “product is everything both favorable and unfavorable, that a person receives in an exchange.” When it comes to Apples products they are very precise. They have variety of products available for consumers. Apple focuses on the needs of their consumers and their wants that they cannot get from other products. Apple has created a well developed brand name, which is very favorable for its products.

Apple can be classified as a business product, consumer product and specialty product. Apples business products include iPhone in Business, iPad in Business and Mac in Business. It has designed iPhone for business us, iPhone is the business standard with powerful out-of-the-box features and apps. Apple provides apps for business use, which can be used on iPhone, ipad, and Mac. An Apple product can be called a shopping product, because it is "more expensive than a convenience product and found in few stores," however Apple products benefit from the status of specialty products.

Apple also offers a warranty. When you buy Apple's products, they have an option for consumers to get warranty. The warranty prices ranges. It also can be free. For example, if you buy an iPhone Apple will provide a year free of warranty. But for instance if your iPhone screen gets cracked, in order to get a new screen it would cost close to the amount that you would originally pay for an iPhone with warranty. Apple has a 24 hours genius bar for all the technical help.  Apple’s website provides all the detail for the products warranty is available. Below is the link to Apples hardware warranties:

http://www.apple.com/legal/warranty/

Branding:

A company's brand name is often its most valuable asset. The benefits to Apple as company for this superior branding strategy are huge. It provides a fantastic platform for future new products. Consumers continuously seek out their new products and view them as the next generation with a cool image and technological dominance; it will also provide them with superior pricing power over the long term.  Apple is dynamically protecting and expanding the trademarks around the iPhone. The link below provides all the trademarks used by Apple:

 http://www.apple.com/legal/trademark/appletmlist.html

Packaging:

Apple has set standards even for packaging; its packaging is extremely impressive anyone who's purchased anything from Apple in the last decade knows how beautiful an experience unboxing their products is. In fact, there's a small team at Apple who take the subject very seriously.

Ch. 18 - Sales Promotion and Personal Selling

According to MKTG 5 “Sales Promotion is marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentives motivates consumers or members of the distribution channel to purchase a good or service immediately, either by lowering the price or by adding value.”

Apple uses promotional techniques using special short-term method to convince members of a target market to react or accept their products. Examples of certain methods Apple uses for sales promotions are money back guarantees, lower purchase price and rebates. “A Rebate is a cash refund given for the purchase of a product during a specific period.”

Through special consumer promotions, Apple has its defined tests in which they target directly. For example during the month of July to September 1st, Apples promotes their Mac book laptops for college students. When students show their school I.D, they pay for a Mac book and get any free iPod they desire and a free printer. This is a wonderful way to convince students to use Apple goods. If they feel comfortable with the product, they are probably more likely to become faithful customers in the future.  According to www.apple.com “Buy a Mac for college and get $100 to spend on apps. Or buy an iPod and get $50 for apps.” 

Ch. 17 - Advertising and Public Relations

According to MKTG5 Advertising is defined “as impersonal, one-way mass communication about a product or organization that is paid for by a marketer.”

In the past two decades, Apple Inc. has become well known for its advertisements. Its most significant ad campaigns include the "1984" Super Bowl commercial, the 1990s Think Different campaign, and the "iPod people" of the 2000s. 

This ad is the perfect example for the creatively and uniqueness Apple uses in its ad's. Apple has always been a trendsetter when it comes to style and technology, but with these ads, Apple had started something epic...the silhouette of a person dancing to a song that they're listening to on their Ipod. By viewing this ad, a person can imagine themselves owning an Ipod and jamming wherever or whenever. These ads help take mp3 players to another level where Microsoft created some competition with a product called Zune. There were other companies creating ads very similar to Apple’s. This was a great marketing strategy and the profits showed for Apple. Today, Ipods still are the biggest music player in the world. Various types have hit the stores over the years. Apple continues to be the cutting edge company in technology, and this was the ad to help take Ipods to a new level.

Apple mainly focuses on product advertising, According to its annual filing; Apple spent $933 million on advertising in 2011, $691 million in 2010, and $501 million in 2009. Its total sales those years were $108.249 billion, $65.225 billion and $42.905 billion. Apple Inc. have deepen discussions to start an advertising-supported streaming radio service by early next year, because sales of music downloads are declining , Apple and record companies want to create new ways for customers to discover and buy digital music.

 

According to the MKTG 5 Public relation refers “Public relation is the element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern, and executes programs to gain public understanding and acceptance.” For Apple Inc. the public relation can be defined as a 

Ch. 15 - Retailing

The Role of retailing

The MKTG 5 describes retailing as “all the activities directly related to the sale of goods and services to the ultimate consumers for personal, non-business use.” This means that Retailing is a distribution channel function where one organization buys products from supplying firms or manufactures the product themselves, and then sells these directly to consumers.

This week I had the chance to visit one of the Apple store located on Fifth Avenue, 767, New York. Just like Apple Product, the retailing stores are also very unique and distinctive. The appearance of the Apple store is very appealing; no matter which Apple store you’re visiting you will always be able to identify an Apple store. What I noticed on my visit is that Apple has been successful due to the exceptional products, exclusivity services and calibers of the staff, all these factors collectively determine its popularity. All Apple stores in NYC are conveniently located, none being more than 3 blocks from a train stop and also in high traffic areas. Apple Store, Fifth Avenue, is open 24 hours a day, 365 days. Recently when you inter the store, the first thing is the new eye catching iPhone posters, which are displayed on the walls.

The retailing mix consists of six Ps: the four Ps of the marketing mix (product, place, promotion, and price) plus presentation and personnel.The classification of retail operations can be classified into four stages. These stages are ownership, level of services, product assortment, and price. Apples ownership consists of being private as it operates for the purpose of profit. Basically, The Apple Store is a chain of retail stores owned and operated by Apple Inc., dealing in computers and consumer electronics. The level of services for Apple comes into the category of full-services. The stores offer an excellent level of service, including free workshops, one to one membership service, and the genius bar. The Genius Bar is the name for the in-store tech support provided in retail Apple Stores. The next classification is the product Assortment, Apple has expanded its product assortment over the years, however its beginning in 1976, not only limited its product assortment in breadth, but also depth. Even now Apple has introduced several new products but still the diversification is very limited which make Apple unique and successful. The last classification is Price. Apple doesn't try to compete with PCs directly on price for many motives. First of all lower pricing leads to reduced profits and loss of shareholder value and it also weakens the reputation of the Apple brand.

Apple is also involved in non-store retailing. For consumer’s convenience, Apple has setup an electronic retailing which includes online retailing and the 24-hour, shop-at-home through internet.

Ch. 6 - Consumer Decision Making

In order for the product to be successfully marketed, businesses need to recognize consumer behavior. According to MKTG 5 consumer behavior is “processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use.” It basically means that Consumer behavior is the study of when, why, how, and where people do or do not buy product. The five stages of consumer behavior are: problem recognition (perceiving a need), information search (seeking value), alternative evaluation (assessing value), purchase decision (buying value), and post-purchase behavior (value in consumption or use).

It is well understood by Apple consumers that they (anyone who owns an iPod of any generation) can go out and buy an mp3 player for a portion of the price that an iPod cost, but why people purchase Apple products that cost higher price than other manufactures? The first stage of consumer decision making process is consumers recognizing something that they want and don't have. Basically Apple has been successful to charge consumers with hundreds of dollars for their products because they have successfully marketed their product to us (consumers). They have built their image on the bases of high price equals to higher quality products, and they have also gained consumer’s blind trust no matter what products they produce there is always a large segment of people willing to spend money.

After recognizing a need or want of consumers, they will then search for information seeking a good value. For Apple Inc. information inquiries are external and internal. External information is the advertisement and other consumer’s recommendation, fortunately Apple has a well developed reputation and this is mainly because consumers have a positive experience with the pervious products. For internal information, Apple consumers are very loyal. Many people upgrade their iPhones as soon as the next generation is out, example can be seen recently for release of iPhone 5, and people lined up several days before the release to get the product as soon as possible.

Third step is Evaluation of alternatives, after getting reasonable information; the consumer is now ready to make a decision, With Apple being very popular and in a position of being on top in the markets of electronic, their product are viewed as one of a kind knocking off the alternatives when it comes to purchasing a computer, or any other gadgets.

Next in the process is purchase. Fortunately for Apple, people are purchasing a lot of their products.

The last step is Post purchase behavior. This step determines whether the consumer was satisfied or dissatisfied. When a consumer purchases a product, they have high expectation that might encourage them to purchase products in future. When that expectation is not upheld, it means that consumer was not completely satisfied with the product and you as the company may have potentially loss a loyal customer. So far Apple has been extremely successful in following this tradition. Every time new product is released Apple get awfully high sales and this is result of consumer satisfaction.  

Ch. 5 - Developing a Global Vision

Developing a Global Vision

According to the MKTG 5 global marketing is a “marketing that targets markets throughout the world.”  Basically this means that global marketing is a marketing strategy used mainly by multinational companies to sell goods or services internationally.

Apple stores are spread all other the word, throughout the years, staring from 2005 Apples stores have increased substantially. The graph below shoes change in number of stores from 2005 to recent 2012. Recently Apple has 391 stores all over the world.

According to book global vision is “recognizing and reacting to international marketing opportunities, using effective global marketing strategies, and being aware of threats from foreign competitors in all market.” Apple has created a well awareness in the global vision, by providing good customer services and they offer training to workers, to fulfill the best customer services. Apple provides products that are easy to use, more comfortable and advanced than the products available in their country. They also provide their oversea customers with products with their own country language. Since every country follows different cultures, Apple offers accommodates to people globally, with very modern stores, and welcoming. Apple's straightforward and well-known logo has allowed many countries to be able to distinguish and identify the apple logo being Apple Inc. Recently apple has been manufacturing in China mainly because of the cheap labour. But now that Chinese wages are rising and transport costs are rising that is why it is stated that Apple manufacturing might be leaving China. Some of it will be coming back to United States; other parts of manufacturing companies might go to where labour is even cheaper. 

Ch. 4 - The Marketing Environment

Chapter 4 in MKTG5 deals with the external marketing environment, social factors, demographic trends, growing ethnic markets, economic factors, technological factors, political and legal factors, and competitive factors.

Apple has been successful in these last years because of the fresh, imaginative way to think and do its business. Apple has a winning combination of exceptional products, great style and design, great strategy, innovative marketing, sleek and enticing communications. Basically they know how to grab hold of the external marketing environment, such as the target market. According to MKTG5 book target market is “a defined group most likely to buy a firm’s product.”Apples target market includes attracting upper and middle class people; mostly music enthusiasts and fans ages 12-35, also professionals in media and design. They want people that will pay more money for a better computer. Recent example is set by the reveal of new iPhone 5; Apple Inc. has sold over 5 million iPhone 5 Smartphone in the three days since it came out. For iPhone 5 people are willing to pay a premium price for it. Apple’s marketing environment tends to always follow popular technology. For example, as technological advancements take place in the world, so do Apple’s products.