Ch. 7 - Business Marketing

Business Marketing- The marketing of goods and services to individuals and organizations for purposes other than personal consumption.

           

Traditionally, Apple’s products haven’t been primary recognized toward business organizations and enterprises because its high price level and limited diversity in the style of the products. The company’s main products such as Mac, Ipod, and Iphone didn’t have competitive advantages in business market. It more close to target individual’s consumer market. However, until the past three years, when the company came out with new product Ipad, its business market has identically increasing. With the iPad we can definitely start seeing the shift of Apple trying to appeal to business as much as the consumer.

          

        For educational institutions, many schools have implemented Apple’s iMac as their choice for technology use among students and faculty. In our school, we have at least four iMac in every computer lab and department.

Ch. 8 - Segmenting and Targeting Markets

             As one of the biggest technologic company around the world, Apple owns thousands and millions consumers. Thus, the market segmentation concept is crucial to the company and its market strategy. 

            Geographic Segmentation           

         For the past years Apple geographic segmentation has increase globally. Targeting to major cities around the world, such as China, Japan, Russia, Europe, and many more high-populated countries becoming a global brand. Apple has become a well-known company globally and its strategy concerning target segmentation and targeting markets are simple and open to everyone.

            Demographic Segmentation

            Apple builds its technology to suit every age group needs no matter genders. Apple income wise comes in with middle to high-class people and is use in all-ethnic groups. Apple Characteristics are very big when it comes to demographics, locations and meeting ethnic group needs. Apple computers are very big in the music industry as they are used to produce songs.

            Psychographic Segmentation

            In psychographic segmentation their personality, motive, lifestyle and geodemographics segmentation is to suit the middle to high-class consumer and customers. High income consumers more care about their living quality than others, and it also match the company’s mission statement that to bring high quality product experience to its consumers.

Ch. 11 - Developing and Managing Products

            Apple is always coming up with new innovative products or updating old ones to satisfy its consumers as it mission statement says, “Apple is committed to bring the best technology experience to consumers around the world through its innovative hardware, software and Internet offerings. "  As the textbook says, Apple was selected to be the one of the most innovative companies in 2011. There is no doubt that Apple is one of the very few firms that achieved a newly established product that have shown innovation in features and design that became very popular and profitable.

           Categories of New Products:

       New to the world products: these products create entirely new market such as Iphone, and Ipad. Maybe someone will question that Apple wasn’t the first company to introduce these two products. That’s true, the iPhone wasn’t the first smart phone, and the iPad wasn’t the first tablet to the market, but when we compare these two products to the first smart phone and tablet, they have really incomparable advantages and features. 

       New product lines: these products, which the firm has not previously offered, allow it to enter an established market, for example, Ipod series. Mp3 market existed before Apple had its mp3 player.

Additions to existing product lines: this category includes new products that supplement a firm’s established line. For example, Ipad mini is expansion of Ipad product line. Ipad mini has exactly same features and functions as regular Ipad but the size. The purpose of Ipad mini is to satisfy a special group of consumers’ expectation of its products.

       Improvements or revisions of existing products:  the “new and improved” product may be significantly or only slightly changed. Apple is always coming up with its revisions products every year replace obsolete items.

       Repositioned products: these are existing products targeted at new markets or market segments, which may be done to boost declining sales.

       Lower-price products: this category refers to products that provide performance similar to competing brands at a lower price. The purpose of Iphone 5c is to gain market shares in developing countries through its lower-price strategy. However, Apple hasn’t reached its goal yet because it still doesn’t have competitive price in those countries.

            Apple is so admired today for it’s innovation, not just because of their products, but the innovative ways they are used and interacted with and all the other innovations they have sparked.

This is the framework on which every Apple product development is hung:

Design: Every product at Apple starts with design. Designers are treated like royalty at Apple, where the entire product conforms to their vision.

A start-up team: Once a new product has been decided on, a team is organized and segregated from the rest of the company by secrecy agreements and sometimes-physical barriers.

Apple New Product Process (ANPP). Once the design of the product has begun, the ANPP is put into action.

Products are reviewed every Monday. The ET (Executive Team) meets every Monday to go over every product that the company has in process.

The EPM mafia. Once a product begins production, two responsible people are enlisted to bring it to fruition. The engineering program manager (EPM) and the global supply manager (GSM).

Once a product is done, it is designed, built and tested again. At times there are leaks that display versions of a product like the iPhone that we never see released.

The packaging room.  A room in the Marketing building is completely dedicated to device packaging.

The launch is controlled by the Rules of the Road. An action plan for the product launch is generated, called the Rules of the Road.

Work cited  http://thenextweb.com/apple/2012/01/24/this-is-how-apples-top-secret-product-development-process-works/

Ch. 18 -Social Media and Marketing

        The definition of social media is to interaction among people in which they create, share, and/or exchange information and ideas in virtual communities and networks. Social media provides a way for businesses to increase their "word of mouth" advertising. Word of mouth has always been a powerful method of promoting products and services. For example, when I need a phone, I would like to do a research online about how consumers think about the phone not how the company advertizes its phone.

 The objectives of social media

1     .      Listen and learn: listen what is being said about the company and learn from competitors.

2     .     Build relationships and awareness: Increased visibility in search engines will boost the number of visitors who find the website when searching keywords related to the company.

3     .     Promote products and services: give customers a platform to talking about the company’s products and services, which ultimately translates into sales.

4     .     Manage your reputation:  When you are actively involved in social media, you have the opportunity to manage your reputation. You can respond to complaints in a timely manner, encourage people to talk about their good experiences with your company, and keep an eye on what is being said about you in general by your client base.

5     .     Improve customer service: participate in social media discussions and groups helps you see what is going on with your products and find out what people want to see in the products and services you offered.

            Apple has very different marketing strategy in social media. There is not link from its website, and not any discussion group or command board as other companies do. Maybe Apple doesn’t need a social media presence. Its fans are going to drive conversations on their own without using other social media such as tweeter or facebook. The only thing I find that Apple really needs social media is its Apps. Almost every Apps we can find in app store is able to connect to social media where people can share their experiences and suggestions. 

Ch. 10 - Product Concepts

            In order for a marketer to create a marketing mix the first thing they need is a product. According to the book, consumer product can be divided into four types: convenience product, shopping product, specialty product, and unsought product. An Apple product can be classified as shopping product because is usually more expensive than a convenience product and is found in fewer stores. The basic product concepts for the company are “think different”, it means the company innovates new way to do old things or do new things that have never been done before, for example, the product Iphone fully interprets that idea. Before Iphone was introduced, nobody had any idea about what is smart phone and nobody thought about to put opera system into a phone until Apple did it. And “make complexity simple.” As Steve Jobs said "the best technology is invisible - things work like magic".

            Apple has different product mixes such as Iphone, Ipad, Mac, Ipod, and Itunes, and there are several product items under each product line, for example, right now the company is offering four types of Ipad. The most recent one is Ipad Air, and Ipad Mini with retina display and then regular Ipad mini and Ipad 2. Every product targets to different group of consumers to attract them with different preferences, to increase sales and profits. The company’s product quality, functional, and style modification are changing frequently in order to respond to changes in the environment and increase the advantages in market competition. Beside the company’s major products, Apple also sells convenience products such as their white headphones, Ipad and Iphone cases, Mac laptop keyboard casing to place over your keypads, case to store your phone,ipod and Ipad touch as you exercise.

            Planned obsolescence is always a change in Apple product as their come out with new forms of technology. The Iphone 5 would find obsolete while some people have either 5c or 5s even though I’m still using the 4s.

            Just a month ago Apple passed Coca-Cola as most valuable brand in the world. There is a funny thing that back to a decade ago the fruit apple would appear to people’s mind when someone says “apple”. However, nowadays, it’s changed. The Apple logo will appear to people’s mind instead the fruit. This is the power of brand.

Ch. 17 - Personal Selling and Sales Management

“Advertising offers the consumer a reason to buy; sales promotion offers an incentive to buy”.

            According to the book, personal selling has several advantages over other forms of promotion:

1.     Personal selling provides a detailed explanation or demonstration of the product.

2.     The sales message can be varied according to the motivations and interests of each prospective customer.

3.     Personal selling can be directed only to qualified prospects.

4.     Personal selling costs can be controlled by adjusting the size of the sales force in one-person increments.

5.     Personal selling is considerably more effective than other forms of promotion in obtaining a sale and gaining a satisfied customer.

         

           As we learned from the previous chapter, sales promotions are part of important strategies to increase sales. Unfortunately for the consumers, Apple doesn’t offer many promotions even though recently the company unlocked certain Apps for free. However, may be Apple is right to choose no focus on promotions because they can sale its products pretty well without using aggressive promotional campaigns. This is the difference between Apple’s market and others.

            Although Apple does not emphasis on promotions, the company very cares about personal selling. One of the reasons why Apple has a lot of loyal consumers is the company understanding the importance of relationship with its consumers and everything happens in its retail stores. The company's Apple Stores are home to many young and knowledgeable sales representatives who are trained thoroughly in both product information and customer service. They are salespersons, but they are unlike traditional salespersons. They don’t attempt to persuade the consumers to buy its products. The primary job for these sales representatives is to answer and explant the questions consumers asked. Walking into any Apple Store will reveal that employees are often young and most likely fall within the Generation Y or X age range and once the company releases of new products and upgrades the company produces every few months or so, these young sales representatives are able to assist its consumers to make purchasing decisions. Today, technology explosion has caused people to either accept the new changes or quickly fall behind. For those who fall behind, these sale representatives are able to help them catch up technology.

Ch. 16 - Advertising, Public Relations and Sales Promotion

             

     Many a small thing has been made large by the right kind of  advertising. 

                                              ------Mark Twain

            

           Advertising is impersonal, one-way mass communication about a product or organization that is paid for by a marketer.

         

            Why do we need advertising?  Because of we need advertising to make customers aware of a product or service. We need advertising to create demand. Advertising is like a tube, which uses to spread a firm’s idea to everybody.  Through the tube, customers begin to familiar with the firm. According to the words above, there might be some people think Apple doesn’t need advertising because it is a worldwide well-known and successful company. That’s no true. Products don’t sell themselves, no matter how good they are. They need to be introduced to market in order to be purchased. On the other hand, even though Apple has great products, it still needs advertising and sales promotion to increase its market shares. In addition, the purpose of advertising is not only to increase sales and informs products, it also be able to transforming a person’s negative attitude about a company or a product into a positive one.

            Apple has many iconic ad campaigns, and its most significant and inspired ad campaigns include the 1984s Super Bowl commercial, the 1990s Think Different campaign, and the IPod people of the 2000s. Because of these meaningful commercials, I would determine Apple as advocacy advertising. Additionally, the company no only satisfies with TV commercials, it also advertises on Internet. The company has its own official website for customers to discover more information about its products. Besides advertising, the company begins to slightly focus on sales promotions. For example, recently the company announced to make its certain Apps for free such as I-work, Pagers, and Numbers.

           

            Since 2009, Apple has doubled its ad budget, hitting $1 billion in 2012. Back in 2009, Apple’s ad budget was a mere $501 millions.

Ch. 14 - Marketing Channels and Retailing

            

           Apple has over four hundred retail stores worldwide, and four of them are located in NYC. All these stores are owned and operated by Apple. The company hires around 26,000 U.S retail employees and includes 4,000 retail employees in the New York state. The large number of retail employees supports the company’s remarkable and unique services. In NYC, Apple store are no only retail stores. It also plays a role as landmark in NYC, which attracts thousands of tourists visiting its stores everyday.

            The stores offer outstanding level of services, including the genius bar, free workshops, muti-language service and one to one service and unique design of stores. These features make the retail stores completely different from other competitors’ stores.

            In the apple store you can find all its products on the old fashion wooden tables and customers representatives are there waiting to help you. One of my most like about the stores is genius bar where super knowledgeable employees will help its customers solve problems or questions. The stores have a very welcoming atmosphere, and the personnel at the stores are very attentive and knowledgeable. An apple employee tells me that the one I visit in Grand Central is the biggest apple retail store in the United States. The store sets up its Macs and offer free web connectivity to customers, so it’s look like give its customers freedom to do whatever what they want do. I think it is a smart way to introduce its products to customers.

          

       

 Apple no only sells its products in its retail store. It also has strategic channel alliances such as Best Buy, Wal-Mart, AT&T, and Target. This helps Apple to obtain markets in small cities where has no Apple store.

Ch. 6 - Consumer Decision Making

      In the previous chapter, we already talked about the target market and understood who are our current and future customers. After that, we have to analyze consumer behaviors how consumers make purchase decisions. Understanding the factors of consumer decision making can help marketing managers attract customers’ eyes in order to increase market shares.

      Consumers do not come out with the purchase decisions without thinking about and comparing the products. When making a decision of whether to buy, or not to buy, and what to buy or when to buy the consumer generally follows the consumer decision process. According to the book, there are five steps can be used as a guide for study how consumers make decisions.

      The first stage in the consumer decision-making process is need recognition. Back to a decade ago, people used to consider electronics to be a want more than a need. Now a day, electronic has become more popular and necessary than ever in human history that gives Apple a chance and confidence to become a giant technological company. Through its effort and (ex)internal stimulus, Apple makes its products become daily necessary goods.

      After recognizing a need or want, the next step will be search for information. There are two types of information search, internal or external information search. Most Apple consumers are loyal customers. Thus, they prefer to use internal information search that rely on previous experience with its products. For new customers, they choose external information search such as advertizing, friend’s recommendation, and promotion. All in all, if you are living on the earth, you will be able to find something about Apple.

      After getting all the information, the next step is to evaluate alternatives and purchase. Even though Apple is very popular and on the top of electronic markets, it may be lost its customers in this step because of the price. However, as we know high quality products always company with high price. Apple has so many competitors in different products. For example, Iphone v.s Samsung Galaxy, and Ipad v.s Windows tablet (I prefer Win pro). Purchasing Apple’s products is very easy, you can just simply order online with free shipping or go to one of the 253 retail stores in the U.S.

      Finally, the last step is post purchase behavior. A lot of businesses think when the product was shipped; they have done with the consumers. This is a dangerous thought. Businesses should also pay attention to post purchase behavior that determines whether the consumer is satisfied or dissatisfied with the purchase. If consumers expectations were satisfied, they will become your consumers again, otherwise, they will turn around their heads and walk away.

Ch. 5 - Developing a Global Vision

        First of all, congratulations to Apple. According to Interbrand, Apple has become the world’s most valuable brand and over CoCa-Cola’s thirteen years domination. The success of Apple today cannot without its global vision, which directly help the firm become world’s most valuable and successful corporation.

        After Iphone 5c was introduced on weeks ago, it is very clear for us that the company begins to more focus on the global market. The company tries to make it products affordable for its potential customers around the world. Increasing the cost competitive advantage will help Apple to attract those middle or lower income customers to purchase its products.  On the other hand, various new colors on Iphone give consumer more option to choose what they want. In addition, recently, the golden Iphone 5s becomes hot topic in Asia countries such as India and China, where have deep gold culture. It is kind of market strategy to cater foreign markets.

   

    Apple got 63% of its revenues of iphone from outside of the U.S on 2012, and the market shares keep growing.

         In addition, globalization brings benefits to the firm, such as outsourcing, which reduces Apple’s wage expenses, potential global market that increase its product market share, and gains skillful engineers, who will help to build Apple’s future.

Ch. 4 - The Marketing Environment

             Be able to understand marketing environment is an important skill for companies to success, especially for companies like Apple. As a global technology company, Apple has to think more about external marketing environment than internal. According to the book, the factors within the external

environment that are important to marketing managers can be classified as social, demographic, economic, technological, political and legal, and competitive. On the other hand, business internal environment is controllable for managers through the creation of the marketing mix. However, external environment is uncontrollable. It keep changing and reshaping by the environment.

            When Apple introduced Ipod it was not a new market, MP3 players had existed for some time without being a big success but customers’ preferences were changing rapidly. After that, Apple quickly saw a new market and created music store, iTunes, which sold millions songs though web. Soon Apple was making big money on Ipod and iTunes. That’s a good and appropriate case for managers to know the importance of understanding external environment of social factors.

            As mentioned before, Apple is a global company, so it requires Apple must have global vision to discover global market. Joining China to WTO creates opportunity as well as threat for Apple.  Lower investment barrier and market barrier gives opportunities for Apple to take advantage of low cost labor as well as getting potential market. On the other side, similar opportunities are also available to competitors.  When competitors move its plant into China and become more efficient, Apple has to respond or will get cost inefficiency disadvantage over competitors.

            In order to gain global market, Apple keep opening its retail store around the world. It opened 33 new brick-and-mortar stores during 2012, 28 of which were outside the U.S., bringing the total number of worldwide Apple Stores to 390. In addition to this, Apple will keep opening up to 35 new retail stores in 2013. For economic consideration, Apple prefers to choose developing countries to expand its business. For example, most recently, the company opened the doors to its largest Asian outlet at the Wangfujing mall in Beijing, China.

Ch 3 - Ethics & Social Responsibility

    Ethics refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, and benefits to society, fairness, or specific virtues. Ethics is different from law, which consists of unwritten rules people have developed for our interactions with one another. Ethics and social responsibility are part of elements that companies need to have in order to achieve companies’ goal and further development. 

Ethics in Business

         A company or a businessperson has obligation to be honest with customers, to broader social and philosophical questions. One the other hand, fairly treat and respect its employees also is an indicator to demonstrate a company’s ethical behavior.

Steps to make ethics and social responsibility work for you.

1.   Set goals (what do you want your company to achieve?).

2.    Decide what cause you want to align yourself with (analysis the cause- effect).

3.    Choose or set a nonprofit organization to partner with (cooperate with developing a partnership).

4.    Design a program, and propose it to the nonprofit group.

5.    Negotiate an agreement with the organization.

6.    Involve employees.

7.    Involve customers.

Apple’s Ethical and Social Responsibility Challenges

·      Foxcoon worker abuse scandal: Although Apple did not directly involve exploitation of workers, it indirectly supported Foxcoon’s unethical behavior that caused those employees’ economic and physical lost. As a global giant electrical company, Apple has obligations and rights to negotiate with its suppliers about treatment of employees.

·      Product quality: Apple’s brand hinges upon product quality, so mistakes can create serious ethical dilemmas. Once consumers purchase the product, the company has responsible for the after-sale services. For example, after Iphone4 introduced, consumers began to complain of reception problems. The problems were caused by antenna interference that occurred when users held the phone a certain way.  Apple must take regarding product quality. Consumers view product quality as inseparable from Apple. Hence, a mishap in this area could damage the brand’s strength.

·      Privacy: privacy is another major concern for Apple Inc. In 2011 Apple and Google disclosed that certain features on the cell phones they sell collect data on the phones’ locations. Consumers and government officials saw this as an infringement on user privacy.

·      Sustainability: the company admits that the majority of its emissions come from its products. In 2009 Apple stated that its operations contributed to 9.6 million metric tons of metric gases being released. While 2percent came from its facilities, 97 percent came from the life cycle of its products.

Ch.2 - Strategic Planning for Competitive Advantage

       The firm’s orientation is production orientation that focuses on what the company can do best and what can their engineers design. However, since the competition of the technology market grow, the company slightly changes the firm’s production orientation to market orientation. Right now, the company more focuses on customers wants and needs in order to satisfy them rather than just focuses on what the company management and engineers think should be produced.

Apple Inc’s mission statement is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

SWOT Analysis:

Strength:

1       .     Keep inventing and improving products

2       .     Strong and well known brand name

3       .     Strong financial performance

4       .     Owning retail stores

Weakness

1       .     High price

2       .     Decreasing market share

3       .     Doesn’t get high marks for treatment of foreign workers

4       .     Haven’t come out with revolutionary product for several years.

5       .     Following product design from other companies

Opportunities

1.     Strong product demands in developing countries

2.     Reducing price to gain market share

3.     Unlocking App for free download

Threats

1. Intensive competition with Samsung, Google and Microsoft

2.  Foreign business policies and regulation

3. Global economic slowdown

Competitive Advantage

     

    Apple owns a lot of its loyal consumers than other brands. Basically, it will guarantee that the company will occupy curtain amount of market shares. In addition, the company has some special customer services and programs that keep its consumers participate in product discovery and education. It will help the company’s long-term relationship with its customers in right direction.

Objective

To increase market shares and keep innovates competitive products.

Target Market

Attracting potential customers who are swinging in current market and focusing on developing countries.

Marketing Mix

Product: allowing customer upgrade their products after two-year warranty with addition curtain amount of money.

Place: making products available in majority counties at same time and available online shopping globally.

Promotion: taking 5% discount for all students and instructors.  Makes special limit time discount for the company’s Apps.

Price: keep reducing the previous version product price after the new product release.