Marketing Strategy for Apple Ipod

Executive Sum misdirecty The focus of this report is on the apple iPod that has created increasing demands in various eruptlets. The iPod allows consumers to download their favourite symphony but also books, movies and this instant even allows iodin to surf the internet. In this reports you find an extensive analysis on how orchard apple tree has became such a huge conjunction within its commercialise and go outside show us how the popularity of the iPod has seemingly supported orchard apple tree to be be tot up whiz of the most wagesously fill outn brands worldwide. In order to do this, the main aras of discussion I am going to focus upon be the play along itself.I entrusting look at the buckrams internal and remote tradeing environment in order to provide an insight in what position the firm is in. Furtherto a sweller extent, I get out look at the competition they ar facing and what give away this absorb upon their grocerying st targetgy. I will also pro vide recomm c relievoations will be provided on how apple eject strengthen their position in the commercialise. Introduction Established in April 1976, apple, pay offs, fails, and supports a series of personal computers, portable media medicinal drugians, mobile phones, computer softw ar, and computer hardw are and hardware accessories.Rather than cathartic multiples of littler yields to try and win over consumers through market saturation, orchard apple tree rel relieves higher end, high quality, and exampler friendly products. They believe in pitch in simplicity and invention to the mass market and for that reason redeem been extremely successful. As of September 2007, the company operates about 200 sell stores in five countries and an online store where hardware and software products are commixtureed bag.Its products accept the Macintosh line of desktop and nonebook computers, the Mac OS X operating system, the iPod medicine impostor and a portfolio of soft ware and peripheral products for education, creative, consumer and melody customers. 1 orchard apple tree introduced its first iPod portable digital practice of medicine player. The product has proved unbelievably successful over 100 cardinal units hand been sold in the six years since its introduction. In 2003, orchard apple trees iTunes Store was introduced, offering online music downloads in integration with the iPod.The service quickly became the market leader in online music services, with over 3 one thousand thousand downloads by August 2007. Steve Jobs denote that iTunes had reached 4 billion downloads during his keynote address at the 2008 Macworld Conference & Expo. 2 apple is recognized as an unparallel in computer designing and compatibility. The flowing and state of the art design of the apples products snatch away the consumers mind quite easily than the rest. The orchard apple tree iPod The iPod is the fastest selling music player in muniment. apple has sold over 100 million iPods since the players introduction in October 2001, 2 although gross revenue subscribe say to watch started diminishing the company currently enjoys a Microsoft- same domination of the MP3 player market. From the early iPods to the crude iPod touch, it has gone through a significant change and has opened the users world from the palm of their hands. In January orchard apple tree reported the best quarter taxation and earnings in orchard apple trees history so far. orchard apple tree posted record revenue of $9. 6 billion and record net quarterly profit of $1. 8 billion. 42% of Apples revenue for the First fiscal quarter of 2008 came from iPod gross sales. 3 Another interesting statistic for this is that 40% of ultimately quarters iPod sales went to first-time buyers, and just shows that the music player market is far from saturated as some drive home stated. 4 This iconic product is considered by some(prenominal) to be a must have item. The iPod is to music players what Kleenex is to tissue or Xerox is to copiers. 5 The Marketing Environment Apple operate on a global take with 200 stores in 5 countries.Nowadays Apple is to a greater extent comm however know for the iPod. The iPod has dominated digital music player sales in the United States and United Kingdom with numerous companies essay to find a product to challenge the iPod. Due to the ever-changing market, artes like Apple bring to monitor the ever-changing business environment and make sure they are going in the right direction. A business can then only plan where it is going if it knows where it is starting from. conclusion out where a business is at the moment involves looking at its micro and macro environment.Micro-Environment Porters Five Forces The microenvironment consists of those featureors that affect the firm directly. This model helps to contrast the micro environment of a firm. (Refer to auxiliary A) What we know is that competition in the market is t ruly keen A vilify move could have a harmful affect with your competitors moving onward of you due to the intensity of the competition in the market. In relation to that, customers are in a strong position as they have much bargaining power and due to the point there are many substitutes.With the Microsoft Zune 8 it makes it documentaryly difficult for new consumers to make a termination between the two. Often customers will pay due to the iPod give-and-take report and its most-valuable Apple keep this high. Macro-environment Pest analysis To further analyse the external marketing environment, the macro environment we conduct a PEST analysis. much(prenominal) external factors usually are beyond the firms control and sometimes chip in themselves as threats. PEST is the abbreviation for political, economic, social and technological. (Refer to accompaniment B for full phase of the moon PEST analysis) The CompetitionIn the PC market Apple await intense competition form t he likes of Dell, Toshiba and HP. Whilst in operating system, Microsoft are the biggest rivals. In both these Apple do not have a great hold. However in the Mp3 market, which is more than than relevant, Apple have dominated the Market since the release of the iPod. With the competition current coming from SanDisk and Samsung. 12 Its safe to say that although Apple is diversified more than most of its competitors, their differentiation is a biggest strength because they pass along so much on R, which is what seperates them from their competition. SWOT AnalysisA unofficial of Apples SWOT analysis is that Apple are in a very strong position because it has a powerful brand name and is appreciate globally, coupled with its huge fan base of consumers gives them many strengths within the market. The fact that they are so popular in the mp3 market gets them a pass out of prudence within the media. unless Microsoft due to be Apples biggest competitor will get a large amount of medi a coverage. The iPod itself in terms of ease of use and innovative applied science means that it is very difficult to match. Only the Microsoft Zune 8 can compare to the design and usability.Although whitethorn have been released to tardily in order to make real challenge against the iPod. For Apple to batter the potential threats, they must continue to be inventive and explore opportunities globally. R + D and product innovation are of the utmost importance. Apple must continue to improve and be innovative to remain market leaders, other other companies whitethorn capitalise on any kind of scratch off in standards. Although one of the largest digital music sellers in the world, iTunes face a bit of competition from amazon as well as Myspace, Apple have a coffin nail on their backs and only takes a company with good resources to challenge them. for full SWOT analysis refer to Appendix C) Marketing Objectives Due to Apples secretive attitude, finding real evidence of real goa ls is difficult. What we can deduce however is that although iPod sales are starting to slow they still want to defend high turnover and profit. Thats the major objective of any of its competitors. Also from research over various sources Apple are aiming hoping to break brand awareness Improve sales with the iPod touch. Improve position in the mobile phone market, with the help of the SDK for the i-phone (Aiming to sell 10 million iphones this yearImproving sales of the iPhone and the touch, as they are the in products which everybody wants, would help them gain a enormous amount of revenue and help spread the brand. Marketing stratergy I think Apples main stratergy is there cost to their customers. What you find in general with many of their products more btter looking than the competitions. bingle thing we can see is Apple building on the popularity of the iPod. It appeals to the the great unwashed market. Now appeal less as a computer company and more of a electronics co mpany and seem more user-friendly. Apple have a differentiation stratergy.Apple products are known to have a anomalous appeal, with its sleek designs a userbility. Due to this it gets a lot of attention from consumers and the media. Without much advertising or marketing on their part. They give something new and unique to talk about which everybody gets pulled in to. With the iPod there not only selling a mp3 player, there selling a social chic. Everybody has one and everybody wants one. Target Market Target market Apple Ipod focused specially at those between the age of 12-25, consistent with their advertising. Bright colours and and a man dancing. It will appeal to both males and females People who have a passion or interest in music and/or belles-lettres Technology enthusiasts The iPod appeals to the mass market, everyone is a potential customer. Young or old. They have music, literature and podcasts all avaiable for the iPod owners. The simplicity and sleek design is what attracts people. Although the latest ones (the touch) are expensive, and may be aimed at higher and older earners. Marketing mix The marketing mix consists of four elements Products, Price, Place and Promotion, bump known as the 4ps.The marketing mix can only be do when the target customer is known, which I have done above. Product Price This product allows consumers to download not only their When initially launched into the mp3 market, Apple utilise pricing favourite music but also books and photos.Nowadays with thestrategies in the form of psychological and skimming prices. Most of latest versions of the iPod you can tick videos and surf onthe websites have the iPod touch at ? 199. 00. This makes consumers the internet with one small device. Apple have introduced think it is much cheaper than ? 200. 00 but in reality it is only a up employmentd versions of the iPod starting from the first iPod in pounding less. The high price is on the basis of the companies 2001 to the iPod touch (refer to appendix D). These are popularity, and the unique design of the touch.It will also attract appendix stratergies to append the product animation cycle of an image of quality with their products. the iPod. pic The fact that the is product differentiated making it unique will make product both functional and desirable to potential consumers. Promotion Place By promoting the iPod it will satisfy the needs of the Apple has many dispersion channels, from their online Apple Store, customers.Consumers will gain discontinue understanding of the to their retail stores and many resellers nigh the world. Indirect product and how it works. all(a) in all advertising and distribution where third parties are involved in the sales process are promotions will bring more awareness to their products and also used. These resellers will sell to the smaller firms who cannot potentially more sales. aford to buy directly from Apple. Apples promot ion strategy, was the move element that it attached just before they released the iPod.There was a The iPod is operational to purchase at most major stores within the UK. heavy dead reckoning and curiosity regarding the product and From specialist electronic stores to supermarkets. Stores from Apple everyone was watching out for it. It allowed fans and retailers to Tesco sell the iPod. They are also operational all over the avid tech and entertainment media to spread the wordinternet from places like Amazon to ebay. A countless amount of of the gadget even before its release. retributive when iPod was retailers will stock the iPod such is its popularity launched Apple advertised extensively for the iPod, this is where the notorious commercial showing a man listening to the songs on his iPod and dancing. A similar stratergy has been used throught the release as with increasing the popularity of iTunes. Evaluation of the Apple Strategies The overall position o f Apple is profitable as sales have increased over the last years. Sales of the iPod have been increasing since it had been released. Although sales for this quarter have been said to be slow. pic starting time wikipedia2 This has been reflected in their strategies to puff out through the introduction of newer more innovative designs and this is why they are market leaders in the mp3 market.Apple has a lot of few different range ranges of iPod products, like the shuffle, the nano, the video and touch. All of which have different prices. This is a good strategy as it appeals to a wide mass market. The fact that Apple append very little on Advertising on their products compared to many of its firms, is down to the general buzz and interest of their products. There bug with products entices the media and technology enthusiast tin wanting more. However this may not always be the case, for apple to consider more advertising may be important.The differentiation approach sets Apple apar t from its competitors however Microsoft is contend Apple. They have the property and resources to match. It would be fairly foolish to think that Apple is too strong in the market. They need to continue to invest a lot of money in R+D. With products like the iPhone and the Touch it can be said they are going in the right direction, in achieving innovative, unique designs. I also think Apple have a huge opportunity in supporting the social unit education system. It has the money and resources to do this.Possibly negotiating contracts with schools and universities, for pod casts even computers could put Apple in a challenging position in the computer market. Having agreements with universities, and schools can increase there popularity and awareness. Conclusion Apple has nearly 250 stores worldwide and now derives 20 per cent of its revenue from them. And those numbers are growing. In the quarter to the end of September 2007, for example, Apple reported that its retail stores acc ounted for $1. 25bn of the companys $6. 2bn revenues a 42 per cent increase over 2006. 14Since the release of the iPod, about half of Apples revenues come from music and iPods. Interest in the iPod and iPhone has made other apples products popular, like the Mac whose sales have increased. Apple has demonstrated how to create real, breathpickings growth by dreaming up products so original and imaginative that they have taken industries by storm. To maintain control in the mp3 player market, they need to maintain their quality and strategic marketing plans if they want to keep ahead. Apple leads the assiduity in innovation and many other things like design features.Sony, Microsoft, originative are all right behind Apple. The battle of the MP3 players will for sure be an excellent example of competition that breeds better products, with Apple taking the first step with the iPod Touch and iPhone. The iPod was ground-breaking technology that was absorbed by mainstream culture, and n ow has become the epitome of portable audio. Companies such as Apple will need to be self-motivated if they are to stay ahead of the game. Differentiation and innovation is the key in maintaining their dominance. Apple has a high competitive advantage because of its excellent product image.They use simplicity and lustrous designs to appeal to customers. The electronic market gets connected more and more with the entertainment market. With already the market leader in the digital sales market, it would not be move to see Apple move in to TV. Appendices Appendix A pic Source corporate Stratergy finntrack. com8 (Rivalry Calling the level competiton in the mp3 industry as intense is an understatement. The this case we have the like of Sony, Samsung and Creative, with many more in the whole market. Apple commands 70 percent of the MP3 player market. 10 However with concerns of the MP3 market being saturated, its puts more pressure on businesses to succeed. With the innovative designs l ike the iPod touch and the iPhone it shows why apple are leading the market. (Threat of Substitutes Countless substitute products are available for the iPod whether they are actually better or even appeal more is a different matter, but the threat is still very high. The more differentiation th less like a surpass to a substitute will occur. To regard no company have come close to meet the popularity of the Apple products.Reason being the innovative designs and ease of use have convinced most customers to stick with Apple. Higher prices need to be justified by the differentiation of the product. Substitutes such as the Sony NW-(A806), Microsoft Zune 8 and many others, can still attract many customers but with imaginative designs like the iPod Touch leaves many companies playing catch up. (Threats of new entrants Although it is possible, its unlikely. go away up costs would be very high so little chance new entrants would enter a very competitive market unless they have a very dif ferentiated and innovative product.Existing firms have established themselves in the market and have created strong brand awareness. (Bargaining actor of Customers The bargaining power of customers is high due to the fact it is easy to switch to a substitute where quality or price, even both is better elsewhere. With so many substitutes of similar quality, its down to the business to make their products more appealing. Apple have done this with their strong vision to build innovative, unique products and have made their products easy to use. (Bargaining Power of suppliersSuppliers dont have much power over larger corporations like Apple. With the booming Chinese economy, Apple can change suppliers without any major consequences, if they are in disagreement over price and quality. However Apple have construct a strong relationship with their suppliers, with strict procedures and this in turn helps Apple achieve it targets. Our business environment is competitive and fast-paced. Our suppliers must understand this kinetic and be agile and flexible in responding to changing business conditions. 11 Appendix B Political Governments with stricter laws on copyright An anti-american agenda may be brought against them. Some people may choose not to use american products Economical Inflation currently has increased in UK and the US and may affect current sales of ipods which have already slowed. orbicular economy in a down turn The exchange rate will also affect Apple as they are importing or exporting goods within the international market. Social Again anti-American agenda may cause potential customers to but from another company. A generally aging british population, so many may be put off by the technology As much as it is a iPod culture, it can go away as quickly as it came.People may find something else which is better and more value for money. expert Many substitutes available from iRiver, Samsung and sony Competition moving away from copy trade protection on songs. Such as amazon. Peer-to-peer file sharing applications like Limewire and Kazaa are still extremely popular. Although this is a problem with the music industry on a whole.This still however affects iTunes. Appendix C Strengths The products itself appeals to both males and females All the iPods starting from the very first have a great reputation amongst it customers for its userability. Great technology underpinnings that allow the creation of powerful products. Allows them to attract a huge customer base due to their innovation and technology precise user focused and always committed to a superb user experience, in all their products expressage edition ranges, increases product life cycle.Limited editions ranging from U2 to BMW Weaknesses High prices may push potential customers to competitors with substitutes at a better price. Technology is changing at a faster rate than ever. For Apple to remain profitable, they must invest huge amount of mon ey in their R&D to remain competitive. Questions over reliability of the iPod 2 Oppurtunities iPod was is revolutionary technology that has become part of mainstream culture, Apple can capitalize on that To develop themselves in to other markets due to the reputation they earned from the iPod. New designs may be available to boost sales and extend the product life cycle e. g. the iPod touch. iPods have also gained popularity for use in education. Apple offers more information on educational uses for iPods on their website. 13 Threats Very high level of competition, a lot of substitutes, possibly offering cheaper prices i. e. iRiver Cheap fakes being made of the iPod and the iPod shuffle Concerns of market being extremely saturated. Competition, with the like of Amazon in digital sales 7 Appendix D picSources Wikipedia 2 and Mactracker Apple Inc. Model database References 1. http//en. wikipedia. org/wiki/Apple_Computer 2. http//en. wikipedia. org/wiki/Ipod 3. Apple Reports Fi rst Quarter Results(January 2008), Accessed date fourteenth March 2008-http//www. apple. com/pr/ subroutine library/2008/01/22results. html 4. Tim Conneally, (February 2008) Nearly 3% of America became iPod converts over the holiday, Accessed date 14th March 2008- http//www. betanews. com/article/Nearly_3_of_America_became_iPod_converts_over_the_holiday/1204309531 5.Betsy Morris, (March 2008 ) What makes Apple golden, Accessed date 9th March 2008 http//money. cnn. com/2008/02/29/news/companies/amac_apple. fortune/ 6. Q/A with apple employees and analysts(January 2008) Reading the runes for Apple Accessed date fifth March 2008-http//www. guardian. co. uk/technology/2008/jan/10/apple. steve. jobsswot 7. Jefferson Graham, (March 2008), Amazon takes on Apple with copy-protection-free music Accessed date 20th March 2008- http//www. usatoday. com/money/media/2008-03-25-sony-music service_N. tm 8. Corporate strategy Accessed date 25th March 2008 -www. finntrack. com/corporate_strat. htm- 9. http//www. tutor2u. net/business/strategy/porter_five_forces. htm Accessed date 25th March 2008- 10. Leander Kahney, (March 2008)How Apple Got Everything Right By Doing Everything do by Accessed date 27th March 2008-http//www. wired. com/techbiz/it/magazine/16-04/bz_apple 11. Apple and Procurement Accessed date 29th March 2008- http//www. apple. com/procurement/ 12. Jeremy Horwitz(August 2006) iPod maintains 75. % share of U. S. MP3 player market Accessed date 31st March 2008 http//www. ilounge. com/index. php/news/comments/ipod-maintains-756-share-of-us-digital-music-player-market 13. iTunes U and mobile learningAccessed date second April 2008 http//www. apple. com/education/itunesu_mobilelearning/ipod. html 14. John Naughton(March 2008) Core values that turned Apple into the best store in town Accessed date 4th April 2008 http//www. guardian. co. uk/media/2008/mar/30/marketingandpr. apple Bibliography