Analysis of Apple and its marketing strategies

Analysis of Apple and its marketing strategies This report analyses information and facts on the apple iPad in relation to the product itself and the marketing strategies of Apple. It provides an over view of the product such as the brand, pricing and application. The report focus on the identification and development of the primary target markers to create a profile which will help explain the product life cycle of the iPad. In Australia both models of the iPad were released in May 28, 2010 this report will cover both of these. Apples iPad is already huge. In fact, after just its first quarter of sales, its already the companys third-biggest business segment. In the June quarter, the iPad business generated $2.2 billion of revenue for Apple. Thats more than Apples iPod business generated last quarter $1.5 billion. (Though the cheaper iPod obviously had larger unit sales.) And its almost half as big as Apples 26-year-old Mac business, which put in its best quarter ever at $4.4 billion. Very impressive. And the fact that the ipad and Mac can apparently coexist is especially good news for Apple. Read more: http://www.businessinsider.com/chart-of-the-day-ipad-ipod-mac-2010-7#ixzz0xOXGC2sE Frommer (2010, p.1 of 4) Introduction This report has been prepared to provide facts, details and information relating to the Apple iPad. The best way to experience the web, email, photo and video. Hands down. Apple (2010, p.1 of 7). This quote is taken from Apples website on the iPads features, it shows the way Apple has chosen to market and present the iPad as the one shop for an ever changing environment in which we are always on the move. 2.0 Overview 2.1 The Brand The growth of Apple around the world has led to expantial growth in sales of Apple products since the start of the company on April 1, 1976 .The Company was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne, with Ronald selling his share in the company back to Jobs and Wozniak for $800 in 1977. From 1976 until 1982 Apple released three personal computers, these were all over priced and werent taken up by the market. Then Apple released its iMac along with its new g laptop range as Steve Jobs returned and we also saw an increase in 1996 of the share price to $24.19 followed by another substantial increase in 1998 with the release of the iMac, shares hit $41.00. 10 Jan 2006 15à ¢Ã¢â€š ¬Ã‚ ³ Macbook Pro and iMac 28 Feb 2006 Mac mini 24 April 2006 17à ¢Ã¢â€š ¬Ã‚ ³ Macbook Pro 13 May 2006 13à ¢Ã¢â€š ¬Ã‚ ³ Macbook 7 Aug 2006 Mac Pro Below is the Apple Product Timeline (Wikipedia, 2010, p1) This timeline of Apple products is a list of all stand-alone Apple II, Macintosh, and other computers, as well as computer peripherals, expansion cards, software, ancillary products, and consumer electronics sold by Apple Inc. in order of introduction date ( Wikipedia, 2010, p1). 2.2 The iPad The Apple iPad was released on two different dates depending on the model you wanted: the Wi-Fi model (U.S.) April 3, 2010  (2010-04-03) and Wi-Fi + 3G Model (U.S.) April 30, 2010. It was released May 28, 2010 worldwide with pre order numbers going into the thousands. The Technical Specifications are as following: -Wireless and cellular support with the production of two different models one with wireless and cellular and one with just wireless. -Apples own 1 GHz Apple A4 chip this is the same used in the iphone 4. The storage in the iPad is 16 64 GB of Flash storage; flash is the fastest current storage method in terms of types of hard drive Bluetooth 2.1 802.11n this is the latest standard of wireless technology with transfer rates of up to 600 Mbit/s being achieved Speaker, microphone and 30-pin connector 9.7 inch IPS LED backlit LCD combined with 10 hours of battery life Half an inch thick Accelerometer and Compass and Assisted GPS and Digital Compass (3G version only) 3G UMTS/HSPDA and GSM/EDGE data (optional) 3.5mm headphone jack VGA out support or AV out via dock connector and converter cable. Warren (2010, p.1 of 5) 2.3 The applications use in everyday life There has been a huge push in the applications available for the iPad with the main updates coming in games that rely on the motion senses in the iPad, social networking applications such as flip board and the last area is business applications such as filemaker. The games are one of the reason the iPad had been such a great success with the world market. This is because people are now looking for new ways to entertain themselves when they are moving around during their day whether this be on trains and buses or when they are waiting for events to start. The iPad is able to play games in high definitions this creates a better and sharper image for the user with games such as Real Racing HD and Touch grind HD. The social network craze has hit the western world with Flipboard, a so-called social magazine viewable on tablet computers that offers content drawn from online social networking sites.  The Apple iPad is said to be the ideal means of reading Flipboard.  McCue is said to wa nt to make technology simple and Flipboard does this for online social networking by making it more accessible. This app pulls links, photos and events directly for social network sites which puts every that people view and look for very day in one place making life simpler. The business side of the iPad is greatly increasing as well with apps like filemaker a Mac database manager. Michaels (2010) the CEO of Apple stated The iphone may fit in your pocket, and the iPad may not be much larger than a hardcover book, but FileMaker thinks it can fit an entire database application on each device.   This evolution of being able to access your data bases and edit it on the fly via 3g wireless connection has huge advantages such as increasing productivity, efficiency and effectiveness. Its easier to carry and offers longer battery life than most notebooks which allows it to work well with other apps like macpractice. Macpractice is a Mac package that has all the needed and extra features f or a doctors office. These are some of the reasons I believe that the iPad is slowly becoming a must have product in the 21st century. 3.0 Primary Product Markets 3.0 Product Markets The Apple iPad has come into the market as a niche product but all at a risk to one of Apples largest markets their laptops. This is because the iPad doesnt really seem to sit anywhere as it is not quite a smartphone and so far not your laptop. So what is the Apple iPad being marketed as , my understanding is that it is being marketed as a product to be used wirelessly for business needs to improve productivity and effectiveness or for personal needs such as having a common calendar or phonebook and step-by-step videos. 3.1 Demographic The Definition: a statistic characterizing human populations (or segments of human populations broken down by age or sex or income etc.) The demographic of the iPad is complicated because the people buying them are sometimes not the ones necessary using them. The typical person buying ipads are upper class men and women, can be people with one or more incomes and usually aged between 24-40 years old. The other variables such as family size, race, ethnicity and education do not matter with this product. This is because the main barrier stopping people from purchasing this product is the price. With iPod touch prices at A$289.00 for an 8gb and the cheapest macbook(laptop) coming in at A$1249.00 and a iphone 16GB is A$ 859.00 and the cheapest ipad is A$629 for a 16gb Wi-Fi model. This is why Apple released the ipad to be the in between for a iPod touch and macbook. 3.2 Geographic The Definition: study of the earths surface; includes peoples responses to topography and climate and soil and vegetation. The geographic of the iPad is very similar to most technological products with the main market sales being in capital cities with high population areas the highest users and purchases of iPads. Below is a table of shops that stock the sale of iPads in Perth. Shop Name Number of Stores Online store Apple Store 1 Yes Dick Smith 3 yes Next Byte 2 no ProByte 1 yes PRA Imaging 1 Yes T4 Technology 1 No MAXstyle 1 Yes David Jones 1 No Jb Hi-Fi 10 Yes Mac Worx Joondalup 1 No Winthrop UWA 1 No XCITELOGIC PTY LTD 1 No Domayne 1 No Myer 1 No total 26 3.3 Psychographic The Definition: any attributes relating to personality, values, attitudes, interests, or lifestyles. There is definitely a high psychographic variable involved in the purchase of an iPad, this comes mainly from lifestyle and motives being the biggest push for people to want to purchase this product. Apple focuss a lot of time and resources into making the iPad seem like it is a need rather than a want, with many online advertising campaigns and TV adverts. These all help to create the need for the iPad and appeal to the personal attributes of the customers. An example of this type of advertising is the Apple iPad Commercial TV Ad (Official) HD on YouTube listed below: 3.4 Behaviouristic The Definition: an approach to psychology focusing on behaviour, denying any independent significance for mind and assuming that behaviour is determined by the environment. The behaviouristic variables of the iPad are the pricing sensitivity, brand loyalty and benefit expectations, these are key in how the iPad has been able to reach such high sales targets. Buskirk E (2010) One million ipads in 28 days thats less than half of the 74 days it took to achieve this milestone with iphone, said Apple CEO Steve Jobs This quote from Steve Jobs show just how explosive the launch of the iPad was, most of these sales were by Apple addicts. These are people who compulsory buy Apple products and have very high brand loyalty with very little price sensitivity and high benefit expectations of achieving a new or high social status by owning the newest Apple gadget .The next lot of buyers in the months after have higher benefit expectations these people that believe they will be given a social status or hierarchy by owning an iPad. 4.0 Product life cycle (PLC) There are five distinct stages in the product life cycle: product development, introduction, growth, maturity and decline. This model is used to show the sale and profit stages or patterns in a products life cycle from finish to end. 4.1 Product Development This is when the company starts to develop and work on a new product idea or range; during this stage sales are zero with the company having to invest all the capital behind the product. During this stage of the product I would keep the product idea/range a secret because of how many other companies are looking to enter the market and with the Amazon kindle and Tablet pcs already having been released the iPad would need to be kept under wraps. 4.2 Introduction As a new product much time will be spent by the organisation to create awareness of it presence amongst its target market. Profits are negative or low because of this reason. My understanding is that the iPad skipped this stage because of Apples already large dedicated customer base and with the combination of Apples marketing strategies which they do very well. 4.3 Growth If consumers clearly feel that this product will benefit them in some way and they accept it, the organisation will see a period of rapid sales growth. This I believe is currently where the iPad is now with sales slowing down from the introduction phase but still rising and new features in terms of software updates such as reduced cost of games and applications through the introduction of iADs an advertising platform built into the ios 4 this is the operating system that the iPad currently runs on. At this stage you would want to keep up your marketing strategies and start to lower prices as at the start Apple used a price skimming technique because it was a monopoly market but as competitors enter the market this will push out and slow down the entrance of competition. 4.4 Maturity Rapid sales growth cannot last forever. Sales slow down as the product sales reaches its peak as it has been accepted by most buyers. At this stage you want to be using product mix pricing strategies, this will most likely be in the form of product line pricing, by releasing a new and updated version of the iPad or by optional product/service pricing. In Apples case this would be extended Apple care warranty or by combining the sale of the iPad with other Apple products to compliment the use of the iPad just as Apple wireless router the air port extreme. 4.5 Decline Sales and profits start to decline, the organisation may try to change their pricing strategy to stimulate growth however the product will either have to be re-modified, or replaced within the market. Conclusion