In this era of globalization, marketing function has emerged as an important business function for organizations. The large organizations have realized the importance of marketing. The leaders and marketers have realized that customer acquisition is difficult because of ever rising competition (Stratton & Northcote, 2014). Therefore, it is important that product positioning should be adequate. The analysis of marketing environment helps marketers to devise specific marketing strategies and policies. It is important that any marketing plan or strategy should be based on a deep understanding of internal and external environment. The objective of this paper is to discuss the marketing environment of Apple I Phone. Apple is a large company that have various Line of Businesses like mobile phone, laptops, tablets, etc. This paper is based only on its mobile phones division. The paper would discuss the background of the company and would analyse the target market. The paper would also discuss the key external factor analysis for Apple I phone. A brief organizational background can be discussed as:
Apple Inc. is one of the most innovative company in the world. The company is American multinational company that was established in the year 1976. Apple Inc. has a strong presence in developed nations like USA, Australia, UK and other European nations. It is also trying to emerge as a market leader in developing countries like India. Apple always believe in providing high quality products to consumers and It will always sell its products at a premium price (Chen & Ann, 2016). Steve Jobs was the founding member of the company and a lot of success of Apple can be attributed to the efforts made by Steve Jobs. He was the one who focused on the culture of innovation for Apple Inc.
It is very important for any marketers to understand the key internal and external factors that ca influence the marketing strategy of organization. There are various tools to perform the situational analysis. The two widely used of situational analysis are PESTLE analysis and SWOT analysis (Dissanayake & Amarasuriya, 2015). These tools for Apple I phone division can be discussed as:
PESTLE analysis is a powerful tool to conduct the situational analysis. The PESTLE analysis for Apple I Phone can be discussed as:
Political & Legal factors: The political and legal factors are positive for mobile phone manufactures in Australia. The government encourages the presence of companies in mobile phone industry as it would mean more jobs for the people and more taxes for the government (Chen & Ann, 2016).
Economic factors: In recent times, there has been a sudden increase in the demand of smart phones in the market. This increase could be attributed to the increase in the disposable income of consumers. The economic factors have been favourable for Apple I Phone division as there has been an increase in consumer spending and this is a good sign for the organization.
Social factors: A decade back, smart phone was not a necessity product. However, today, smart phone is a necessity factor. His societal change has benefited smart phone manufacturers a lot. Today, there is a huge market for smartphone due to favourable social factors (Dissanayake & Amarasuriya, 2015).
Technological factors: The smartphone industry is probably one such industry that has witnessed massive growth in technology (Chen & Ann, 2016). Every year, companies would launch new smart phones that are better than the previous generations. The technological factors are definitely positive for smart phone manufacturers.
Environmental factors: The environmental factors are one such factors that are not positive for the organizations in the smart phone manufacturing sector. The manufacturing of any smart phone needs a good amount energy and in the last decade or so, there has been an increase in the technological waste.
The SWOT analysis is a powerful tool to assess the internal and external environment of the company. The strengths, weaknesses, opportunities and threats for Apple’s I Phone division can be discussed as:
The key strength of the company is its innovation. The company would manufacture the smart phones that cannot be imitated in the market (Shaomian & Heere, 2015)
The strong cash reserves are also a strength for the company as it provides a platform to Apple to take risks in the emerging markets
The large number of patents and copyrights associated with its products is also a key strength
Apple has not been able to control the prices of its smartphones and this is one of the weaknesses of the company
The lack of penetration in the developing markets like India is also a weakness for the company
After Steve Jobs, the company has lacked the power of strong leadership at top and this is also a weakness for the company
The biggest threat for Apple is the threat from competition. The companies like Samsung and Chinese companies like VIVO are eating away the market share of Apple.
There also exist threat from government regulations and policies as some governments does not allow Foreign Direct Investment in their countries
Probably the biggest opportunity for Apple lies in the developing countries. The increase in the disposable income of consumers is a good sign for Apple and it is a perfect opportunity for Apple to use this opportunity (Berman, 2016)
The SWOT analysis suggests that the threat from competition is the biggest threat for Apple. Therefore, it is important that Apple must have a strong understanding of its competitors. The two biggest competitors of Apple I Phone are Samsung and One Plus. One of the key differentiation between Apple and its competitors is the pricing strategy. Most of the competitors of Apple use cost leadership strategy; whereas, Apple use product differentiation strategy to create a unique position in the market (Yadav, Joshi & Rahman, 2015). The competitive analysis of Apple versus these competitors can be discussed in detail as:
Apple’s, I Phone and Samsung’s smart phones
Samsung is a large player in smart phone industry and it produces phones at different price points. The closest match to I phone would Samsung Galaxy series like S8, S9 or Note 8. The analysis of marketing mix of I Phone, and Samsung Galaxy series phone would suggest that there is a considerable difference across all the elements of marketing mix. These differences can be discussed as:
Product: Apple has more unique product with I Phone as compared to Samsung Galaxy phone.
Price: Apple charges a premium for its prices where Samsung phones are relatively cheaper than I Phone (Etzioni, 2016).
Place: Samsung has better distribution reach and market penetration as compared to Apple.
Promotion: Samsung focuses on both offline and online advertisements for its flagship launches like S8; whereas, Apple focuses more on global event and online channels for its I Phone (Berman, 2016).
Apple’s, I Phone and One Plus smart phones
One Plus is a Chinese company that has taken away the market share of Apple and Samsung. The analysis of marketing mix of I Phone, and One Plus series phone would suggest that there is a considerable difference across all the elements of marketing mix. These differences can be discussed as:
Product: The uniqueness of product is high for I Phone as compared to One Plus phones.
Price: The strategy of One Plus is price differentiation and Apple would never match the prices of Apple I Phone as One Plus wants to be a mass market player (Laroche, Habibi, Richard & Sankaranarayanan, 2012).
Place: One Plus has few products that sold exclusively one commerce websites like Amazon and this is the biggest differentiation point between Apple and One Plus.
Promotion: In terms of promotion, it can be said that One Plus focuses more on online channel or promotions as compared to Apple. For I Phone, Apple would usually have various offline events where the phone is launched. This is not the practice used by One Plus.
Consumer Buy characteristics
In the current tine, the purchase of mobile phone is a high involvement decision for customers. Today, customers want to analyse different factors and parameters of mobile phones before making any decision. There are both internal and external factors that affects the consumer buying decision (Kim, Dwivedi, Zhang & Jeong, 2016). The key internal and external factors that defined the consumer buy characteristics and influence the consumer purchase decision can be discussed as:
The key internal factors are motivation, psychological involvement, interest of individual, etc. These internal factors have a key influence on the purchase decision of consumers (Berman, 2016). These factors also create the loyalty among consumers and once the internal factors support any particular mobile phone brands then the chances are high that the individual would want that particular brand only.
The external factors are the social and the cultural factors that have the influence on the purchase decision. The external factors could also be the opinion of others and the opinion of industry experts (Zhang, Zhou, Su & Zhou, 2013). For example, any individual may want to consult the friends and family members before finalizing the brand and phone that they want to buy.
Target market, positioning and brand analysis
It is important that marketers and leaders should have an understanding of the target market and its key characteristics (Odoom, 2016). The key approach of segmentation, targeting and positioning helps marketers to achieve the marketing objectives. The segmentation, targeting, positioning for I Phone can be discussed as:
There are various variables segmentation variables that companies can use. The key segmentation variables that organizations use are demographics, income levels, geographic, etc. The key segmentation variable that Apple uses for I Phone is income levels (Berman, 2016). The company has divided the market on the basis of income level or purchasing power of consumers.
Once the segmentation variables are defined, the next step for organizations is to define the targeting strategy. For I Phone, Apple wants to target high income consumers. As discusses above, Apple always sells its products at a premium price and it make sense for Apple to target the high-income consumers as they would be willing to pay the premium price (Etzioni, 2016).
Once the segmentation and targeting are done the next step for any organization is to define the positioning strategy. The positioning strategy of Apple is ‘nothing but the best’. The company believes in manufacturing the best product based on innovation. Apple has positioned I Phone as a high-quality product with unique features that no other company can match. For example, the latest model of I Phone, I Phone X has a faced detection option.
Key brand strategies
Once the segmentation, targeting and positioning is done, the next step for organizations to develop the key brand strategies that could help them to differentiate themselves from the rest. The key brand strategy of Apple for I Phone is ‘product differentiation’ (Kuo & Feng, 2013). With its strategy of product differentiation, the company has been able to create a buzz in the market. In fact, the brand strategy of product differentiation has helped the organization to develop a loyal customer base over the years (Kim, Dwivedi, Zhang & Jeong, 2016). I Phone has been able to generate a fan club wherein the fan will stand in the queue for a night to get the latest version of I Phone.
Marketing Mix of I Phone
The core element of any marketing plan is marketing mix. The analysis of various internal and external elements eventually enables the organizations to develop a strong marketing mix. The marketing mix consists of four elements of product, price, place and promotion. Each of these elements are different from each other. Still, it is important that all the elements should be used in an integrated manner. Simply defined, marketing mix is a combination of factors that can be controlled by a company to influence consumers to purchase its products (Yadav, Joshi & Rahman, 2015). The different elements of marketing mix for I Phone can be discussed as:
Product: It would be correct to say that product is one of the most important elements for the companies that manufacturers product. The underlying product or the core product for I Phone is the unique smart phone that no other company can manufacture. The focus on the product element provides a strength to Apple to have a unique position in the market (Etzioni, 2016).
Price: The pricing strategy of Apple is to charge premium for its products. The company does not want to compromise on its quality and this is the reason that it charges premium for its product. Apple has reached a position in the market where people are crazy about I Phone and would buy the phone irrespective of the price position (Kim, Dwivedi, Zhang & Jeong, 2016).
Place: Apple sells its products in both offline and online markets. The company has a strong network of dealers and resellers across the globe that sells the product of Apple. At the same time, consumers can also order the I phone on the website of the company. The integrated approach with a combination of both offline and online channels help Apple to solve the distribution problems (Brodie, Ilic, Juric & Hollebeek, 2013).
Promotion: Apple uses both online and offline methods of promotion to market I Phone. The company would usually launch the new version of the I Phone in a grand event. Moreover, the company would also use the online and digital marketing platforms like mobile advertisements, social media marketing, Facebook advertising, etc. to reach out to consumers. With the focus on social media marketing and offline promotions, Apple has been able to market its products effectively in the market (Kim, Dwivedi, Zhang & Jeong, 2016).
The above paper discusses the marketing environment of I Phone. The number of competitors is high in the market. However, the good thing for Apple is that the market is not saturated. There is definitely a scope of different players to operate together. Apple has been using the strategy of product differentiation to reach its target audience. This strategy has helped Apple to create a niche in the market. The company has been able to create a pull in the market and the end consumers have always appreciated different versions of I Phone
Berman, B. (2016). Planning and implementing effective mobile marketing programs. Business Horizons, 59(4), 431-439.
Brodie, R. J., Ilic, A., Juric, B., & Hollebeek, L. (2013). Consumer engagement in a virtual brand community: An exploratory analysis. Journal of Business Research, 66(1), 105-114.
Chen, C. M., & Ann, B. Y. (2016). Efficiencies vs. importance-performance analysis for the leading smartphone brands of Apple, Samsung and HTC. Total Quality Management & Business Excellence, 27(3-4), 227-249.
Dissanayake, D. R., & Amarasuriya, T. (2015). Role of brand identity in developing global brands: A literature based review on case comparison between Apple iPhone vs Samsung smartphone brands.
Etzioni, A. (2016). Apple: Good Business, Poor Citizen?. Journal of Business Ethics, 1-11.
Kim, Y., Dwivedi, R., Zhang, J., & Jeong, S. R. (2016). Competitive intelligence in social media Twitter: iPhone 6 vs. Galaxy S5. Online Information Review, 40(1), 42-61.
Kuo, Y. F., & Feng, L. H. (2013). Relationships among community interaction characteristics, perceived benefits, community commitment, and oppositional brand loyalty in online brand communities. International Journal of Information Management, 33(6), 948-962.
Laroche, M., Habibi, M. R., Richard, M. O., & Sankaranarayanan, R. (2012). The effects of social media based brand communities on brand community markers, value creation practices, brand trust and brand loyalty. Computers in Human Behavior, 28(5), 1755-1767.
Odoom, R. (2016). Brand marketing programs and consumer loyalty–evidence from mobile phone users in an emerging market. Journal of Product & Brand Management, 25(7), 651-662.
Shaomian, A., & Heere, B. (2015). The Path to Loyalty Among Theater Patrons: The Importance of Interaction and a Sense of Brand Community. MEIEA Journal, 15(1), 13.
Stratton, G., & Northcote, J. (2014). When totems beget clans: The brand symbol as the defining marker of brand communities. Journal of Consumer Culture, 56 – 67
Yadav, M., Joshi, Y., & Rahman, Z. (2015). Mobile social media: the new hybrid element of digital marketing communications. Procedia-Social and Behavioral Sciences, 189, 335-343.
Zhang, N., Zhou, Z. M., Su, C. T., & Zhou, N. (2013). How do different types of community commitment influence brand commitment? The mediation of brand attachment. Cyberpsychology, Behavior, and Social Networking, 16(11), 836-842.