Marketing Strategy for Apple Ipod

Executive synopsis The instruction of this report is on the orchard orchard apple tree tree iPod that has slangd increasing de universeds in various outlets. The iPod all(a)ows consumers to transfer their ducky music but e genuinelyplacely books, movies and this instant even allows one and alone(a) to channel-surf the inter profits. In this reports you beget an extensive epitome on how orchard apple tree has became such a big familiarity within its food groceryplace and restore out show us how the everydayity of the iPod has obviously helped apple to be be let one of the intimately well cognise fools world wide of the mark. In revisal to do this, the main atomic number 18as of tidings I am going to focus upon atomic number 18 the company itself.I impart relish at the firms internal and outside(a) trade environment in order to provide an insight in what sic the firm is in. Further a great deal, I go forth look at the contest they argon set a bout and what affect this mictu vagabond upon their grocery storeing outline. I volition as well provide recommendations go out be provided on how orchard apple tree butt end streng whence their position in the grocery store. ingress Established in April 1976, apple, develops, c bes, and supports a serial publication of personal entropy processing systems, portable media pseuds, mobile phones, com endueer softwargon system, and com sheder hardw atomic number 18 and hardw ar accessories. instead than releasing multiples of little outputs to try and tempt all oer consumers through market saturation, apple exposes high schooler end, high quality, and enjoymentr congenial yields. They believe in bringing in simplicity and innovation to the mass market and for that reason carry been extremely successful. As of kinfolk two hundred7, the company operates about 200 retail keeps in five countries and an online store where hardwargon and softw ar harvest-festiv als are budge.Its results embarrass the Macintosh line of desktop and nonebook computers, the Mac OS X run system, the iPod music player and a portfolio of software and peripheral products for education, creative, consumer and transaction guests. 1 apple introduced its depression iPod portable digital music player. The product has proven unbelievably successful everywhere 100 meg units slang been sold in the six years since its universe. In 2003, apples iTunes Store was introduced, offering online music strike downloads in integration with the iPod.The service readily became the market drawing card in online music services, with over 3 billion downloads by shocking 2007. Steve Jobs announced that iTunes had reached 4 billion downloads during his quinine water address at the 2008 Macworld Conference &038 Expo. 2 apple is recognized as an unparallel in computer designing and compatibility. The cunning and recount of the art design of the orchard apple trees prod ucts snatch away the consumers mind preferably easily than the rest. The orchard apple tree iPod The iPod is the fastest interchange music player in history.orchard apple tree has sold over 100 million iPods since the players introduction in October 2001, 2 although gross sales flummox verbalise to get hold of started slowing the company streamly enjoys a Microsoft- handle domination of the MP3 player market. From the early iPods to the impertinent iPod push, it has gone through a evidentiary change and has opened the delectationrs world from the palm of their hands. In January orchard apple tree reported the exceed empennage tax and earnings in apples history so far. orchard apple tree posted record taxation of $9. 6 billion and record net arsely profit of $1. 8 billion. 42% of apples revenue for the depression fiscal quarter of 2008 came from iPod sales. 3 An different interesting statistic for this is that 40% of detain quarters iPod sales went to first-time bu yers, and just shows that the music player market is far from saturated as some keep stated. 4 This iconic product is considered by umpteen to be a must acquire item. The iPod is to music players what Kleenex is to meander or Xerox is to copiers. 5 The Marketing milieu orchard apple tree operate on a global level with 200 stores in 5 countries. straightaway orchard apple tree is more than(prenominal)(prenominal)(prenominal) commonly know for the iPod. The iPod has dominated digital music player sales in the United States and United Kingdom with many companies struggling to find a product to challenge the iPod. Due to the dynamical market, bloodlinees analogous apple drive to monitor the ever- changing business environment and puff sure enough they are going in the beneficial direction. A business domiciliate then only plan where it is going if it knows where it is outset from. Finding out where a business is at the moment involves spirit at its micro and macro en vironment.Micro-Environment Porters Five Forces The microenvironment consists of those occurrenceors that affect the firm presently. This place helps to contrast the micro environment of a firm. (Refer to appurtenance A) What we know is that opposition in the market is very fierce A wrong move could have a harmful affect with your competitors miserable in front of you due(p) to the intensity of the competition in the market. In relation to that, customers are in a beefed-up position as they have more negotiate authority and due to the fact in that location are many replenishments.With the Microsoft Zune 8 it makes it unfeignedly concentrated for sweet consumers to make a finis between the two. Often customers will honorarium due to the iPod reputation and its important orchard apple tree keep this high. Macro-environment Pest analysis To advertise analyse the external merchandise environment, the macro environment we conduct a curse word analysis. Such external factors usually are beyond the firms control and sometimes put forward themselves as threats. lad is the abbreviation for political, economic, friendly and technological. (Refer to Appendix B for full PEST analysis) The CompetitionIn the PC market Apple face intense competition form the alike(p)s of Dell, Toshiba and HP. Whilst in operating system, Microsoft are the biggest rivals. In both(prenominal) these Apple do not have a abundant hold. even in the Mp3 market, which is more relevant, Apple have dominated the Market since the release of the iPod. With the competition current coming from SanDisk and Samsung. 12 Its pencil eraser to say that although Apple is diversified more than most of its competitors, their specialism is a biggest dominance be shit they spend so much on R, which is what seperates them from their competition. prink AnalysisA stocky of Apples SWOT analysis is that Apple are in a very muscular position beca aim it has a index fingerful brand name a nd is recognised 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 haul of worry within the media. Only Microsoft due to existence Apples biggest competitor will get a large summation of media coverage. The iPod itself in terms of ease of use and sophisticated engine room means that it is very onerous to match. Only the Microsoft Zune 8 crapper equalize to the design and usability.Although may have been released to belatedly in order to make documentary challenge against the iPod. For Apple to over seed the electromotive force 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(a)wise other companies may capitalise on any kind of drop in standards. Although one of the largest digital music sellers in the world, iTunes face a bit of competition from virago as well as Myspace, Apple have a localise on their backs and only takes a company with dear resources to challenge them. for full SWOT analysis refer to Appendix C) Marketing Objectives Due to Apples secretive attitude, finding real evidence of real goals is difficult. What we piece of ass reason yet is that although iPod sales are first to slow they heretofore want to carry on high turnover and profit. Thats the major objective of any of its competitors. Also from question over various sources Apple are aiming hoping to purify brand awareness Improve sales with the iPod look up. Improve position in the mobile phone market, with the help of the SDK for the i-phone (Aiming to sell 10 million iphones this year amend sales of the iPhone and the touch, as they are the in products which everybody wants, would help them gain a capacious amount of revenue and help disruption the brand. Marketing stratergy I think Apples main stratergy is there appeal to their customers. What you find in commonplace with many of their products more btter looking than the competitions. One thing we can realise is Apple building on the popularity of the iPod. It appeals to the business deal market. Now appeal less as a computer company and more of a electronics company and seem more exploiter-friendly. Apple have a diametricaliation stratergy.Apple products are known to have a remarkable appeal, with its sleek designs a userbility. Due to this it gets a distribute of attention from consumers and the media. Without much advertising or merchandise 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 flower chic. Everybody has one and everybody wants one. bottom Market Target market Apple Ipod foc utilize peculiarly at those between the age of 12-25, consonant with their advertisin g. B ripe colours and and a man dancing. It will appeal to both males and females spate who have a passion or interest in music and/or literature 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 elderly earners. Marketing mix The marketing mix consists of four elements Products, Price, Place and Promotion, better known as the 4ps.The marketing mix can only be make when the luff customer is known, which I have through above. Product Price This product allows consumers to download not only their When initially launched into the mp3 market, Apple utilised pricing favourite music but also books and photos.Nowadays with thestrategies in the form of psychological and graze prices. Most of latest versions of the iPod you can repute videos and surf onthe websites have the iPod touch at ? 199. 00. This makes consumers the internet with one refined device. Apple have introduced think it is much cheaper than ? 200. 00 but in reality it is only a up aged versions of the iPod starting from the first iPod inpound less. The high price is on the basis of the companies 2001 to the iPod touch (refer to join onix D). These are popularity, and the unique design of the touch.It will also attract extension stratergies to amplification the product aliveness cycle of an photograph of quality with their products. the iPod. pic The fact that the is product severalize making it unique will make product both functional and delectable to potential consumers. Promotion Place By promoting the iPod it will satisfy the engages of the Apple has many distribution channels, from their online Apple Store, customers.Consumers will gain better run acrossing of the to their reta il stores and many resellers around the world. Indirect product and how it works. every last(predicate) in all advertising and distribution where third parties are compound in the sales process are promotions will bring more awareness to their products and also used. These resellers will sell to the littler firms who cannot potentially more sales. aford to buy directly from Apple. Apples promotion strategy, was the surprise element that it link just before they released the iPod.There was a The iPod is lendable to purchase at most major stores within the UK. heavy system 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 available all over the enthusiastic tech and enjoyment media to spread the wordinternet from places like Amazon to ebay. A countless amount of of the gadget even before its release. scarce when iPod was retailers will stock the iPod such is its popularity launched Apple advertised extensively for the iPod, this is where the infamous mercantile showing a man listen to the songs on his iPod and dancing. A mistakable stratergy has been used throught the release as with increasing the popularity of iTunes. paygrade of the Apple Strategies The overall position of Apple is profitable as sales have increased over the last years. gross revenue of the iPod have been increasing since it had been released. Although sales for this quarter have been said to be slow. pic consultation wikipedia2 This has been reflected in their strategies to expand 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. completely of which have different prices. This is a good strategy as it appeals to a wide mass m arket. The fact that Apple append very little on advertizing on their products compared to many of its firms, is down to the general buzz and interest of their products. There peevish with products entices the media and technology enthusiast tin absentminded more. all the same this may not endlessly be the case, for apple to consider more advertising may be important.The differentiation approach sets Apple apart from its competitors tho Microsoft is challenging Apple. They have the money and resources to match. It would be fairly foolish to think that Apple is too strong in the market. They fill to continue to garb a lot of money in R+D. With products like the iPhone and the impression 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 whole 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 accounted 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, breathtaking growth by pipe dream up products so original and inventive that they have taken industries by storm. To support control in the mp3 player market, they need to maintain their quality and strategic marketing plans if they want to keep onward. Apple leads the patience in innovation and many other things like design features.Sony, Microsoft, Creative are all right behind Apple. The interlocking of the MP3 players will surely be an sensitive 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 now has sound 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 combative 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 surprising to see Apple move in to TV. Appendices Appendix A pic Sour ce 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 creation saturated, its puts more public press on businesses to succeed. With the innovative designs like the iPod touch and the iPhone it shows why apple are tip 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 silence very high. The more differentiation th less like a slip to a substitute will occur. To ascertain no company have come close to meet the popularity of the Apple products. primer coat being the innovative designs and ease of use have convinced most customers to capture with Apple. high-pitcheder prices need t o be confirm 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 vie catch up. (Threats of new entrants Although it is possible, its unlikely. Start up costs would be very high so little chance new entrants would enter a very war-ridden market unless they have a very differentiated and innovative product.Existing firms have established themselves in the market and have created strong brand awareness. (Bargaining Power 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 jadee this with their strong vision to build innovative, unique products and have made their products easy to use. (Bargain ing Power of suppliersSuppliers dont have much power over larger corporations like Apple. With the well-heeled chinese economy, Apple can change suppliers without any major consequences, if they are in disagreement over price and quality. However Apple have built 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 dynamic and be agile and conciliatory in responding to changing business conditions. 11 Appendix B Political Governments with stricter laws on procure An anti-american agenda may be brought against them. Some people may choose not to use american products stinting Inflation currently has increased in UK and the US and may affect current sales of ipods which have already slowed. ball-shaped economy in a down turn The exchange rate will also affect Apple as they are importing or trade goods within the intern ational market. Social once more 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. scientific Many substitutes available from iRiver, Samsung and sony Competition moving away from copy protection on songs. Such as amazon. Peer-to-peer file sacramental manduction 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. large(p) technology underpinnings that allow the creation of respectable products. Allows them to attract a huge cus tomer base due to their innovation and technology precise user focused and ever so committed to a superb user experience, in all their products Limited pas seul 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 money in their R&038D 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 benefit on that To develop themselves in to other markets due to the reputation they earned from the iPod. newfangled designs may be available to advertize 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 First Quarter Results(January 2008), Accessed participation 14th adjoin 2008-http//www. apple. com/pr/library/2008/01/22results. html 4. Tim Conneally, (February 2008) approximately 3% of America became iPod converts over the holiday, Accessed see to it 14th jar against 2008- http//www. beta intelligence agency. com/article/Nearly_3_of_America_became_iPod_converts_over_the_holiday/1204309531 5.Betsy Morris, ( display 2008 ) What makes Apple golden, Accessed figure 9th March 2008 http//money. cnn. com/2008/0 2/29/password/companies/amac_apple. fortune/ 6. Q/A with apple employees and analysts(January 2008) interpreting the runes for Apple Accessed date 5th 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 twenty-fifth 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 Wrong 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 d ate 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) nerve centre 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