Apple Inc And The Use Of Global Marketing Concepts Report Example
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What principles are being discussed and applied?
Apple incorporation has continued to advance its market segmentation and penetration across the globe with through their aggressive innovation culture and product differentiation. The strategy was necessitated by the fierce competitive environment in the mobile consumer industry from Samsung, Nokia, LG, Blackberry and other low-priced phone manufacturers. In 2014, the company introduced the Apple watch into the market following successful sales in its iPhone products.
In the recent market updates, the company’s demographic segmentation marketing strategy targeting affluent consumers has caused a stir in the industry. Demographic segmentation is marketing approach that entails defining consumers based on their age, social status and also income disparity. Upon launching iPhones products in China, the company’s brand trailed other firms like Lenovo, Samsung and Xiaomi (Irish Times par.5). However, the company’s partnership with China Mobile has enabled the high-priced iPhones to attain a market niche in China. Further, the company expanded its number of stores to a total of 25 stores in China (Chen par.9).
The analysts express their concerns on the firm’s price skimming strategy targeting high-income earners to buy its Apple Watch. The Watch traded at a minimum of $10000 way priced above other market players (Halzack and Tsukayama par.6). The premium pricing strategy used by Apple has survived due to the company’s brand loyalty, thus influencing consumers to have a share of the product’s services. Premium pricing strategy is an advanced skimming strategy in that in the former strategy, the price remains high as a tactical approach to raising the product’s reputation for high quality.
What are the implications?
One of the major implications of the company’s marketing approach is that the low-income consumers have been sidelined in accessing the iPhones and the Apple watch. Only the high-income earners whose demonstrate an inverse demand curve and rigid responsiveness to product changes have access to buy the products. The high-end consumers are more quality sensitive than price sensitive hence Apple management channels enormous research and product promotion to arouse the interest and action of potential consumers in the target market. To assert the firm’s success strategy, the company recorded an $18bilion profit in the year’s first quarter (Chen par.3).
However, the demographic segmentation on high-income earners poses a risk to the firm in the long-term considering the rapid penetration of other key firms such as Samsung to capture the high-end market. On the contrary, the market expands at a slower pace, indicating a looming marginal increasing return at a diminishing rate. For that reason, the declining returns in the long-term could hinder the firm’s pace to advance in research and innovation to sustain the target consumers’ demand for quality and convenient products and services. Market rivals such as Samsung and Nokia have capitalized on targeting low medium and high-end consumers –a strategy that diversifies its pool of risk for long-term market sustainability.
Do you agree or disagree with the way the concepts are being applied? Why or why not?
In a personal perspective, Apple’s marketing approach is not safe in the future considering the rapid growth in the technology world and the increased consumer’s market and product awareness. Launching iPhones and Apple watch using high pricing mechanisms denies the firm’s market penetration in the medium income consumer segment that has an insatiable product interest but is slow in action due to the budget constraint. The company ought to re-think their marketing approach in a bid to gain universal brand awareness. For instance, Apple Company could outsource production unit in China due to the market’s readily available and low-cost inputs to produce medium-cost iPhones to gain market competitiveness across all the segments. The strategy would capture the medium earners interest to possess Apple products. As a result, consumer’s brand-oriented degree of substitutability would shift in favor of the Firm’s products.
The major reason for opposing Apple’s premium price strategy and high-income market segmentation is the fact that the young people between 20 and 35 years account a significant percentage of the world’s population thus implementing focus generic strategy to the youthful consumers will create a strong foundation for product differentiation, price affordability and the overall competitive advantage.
Therefore, the firm should re-structure their production strategy and capitalize on the rising medium income segment as a precautionary approach to deter the rising wave of low-priced market entrants whose innovation aggressiveness could gradually consume the company’s market share.
What elements of the marketing mix are being reviewed or discussed and what evidence is there of standardization versus adaptation?
Based on the company’s marketing mix strategy, pricing, product and place approaches have been key to the firm’s market penetration. Apple Company used price premium strategy to lure high-end consumers with its iPhone and Apple watch products. The company launched a larger an iPhone 6 with a larger screen than other market rivals products such as LG and Samsung. Innovation has been the driving force to satisfy consumer needs through differentiating product mix approach.
However, unlike other firms that adopt Hybrid marketing standardized products and adapt other market differentiating elements, Apple Company applies an ideal global marketing strategy where products are standardized and marketed using a uniform strategy. The essence of the marketing approach is to strengthen global brand awareness, expand economies of scale and maintain a universally accepted standard.
"Apple’s China strategy pays off with surge in earnings." Irish Times 28 Jan. 2015: n. pag. Web.
Chen, Brian X. "IPhone Sales in China Bolster Apple Earnings." New York Times27 Jan. 2015: n. pag. Print.
Halzack, Sarah, and Hayley Tsukayama. "How the Apple Watch will transform the most successful store strategy in a generation." Washington Post 6 Mar. 2015: n. pag. Print.
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