Undeniably, Apple is one of the largest and most recognizable technological companies in the 21st century, with brand loyalty being one of its core revenue-generating factors. The worldwide recognition and outstanding brand loyalty has been an attribute of its marketing strategy of consistently positioning itself as a premium brand in the technology market. According to Bhasin (2019), Apple primary target is often the urban population, mostly consisting of early adapters with enough purchasing power. Bhasin further adds that most of the early adopters who are primarily technology enthusiasts where over the years the brand equity has also seemingly attracted laggards to its portfolio. To achieve this, Apple's marketing strategy has continuously focused on offering groundbreaking technological products embedded premium user experience so to retains its loyalty base and attract new consumers to its ecosystem.
Product Marketing Strategy
When Steve Jobs left Apple in 1985, the company faced stiff competition from IBM PCs and Microsoft Windows-based personalized computers (Yeung, 2019). Apple struggled to maintain sales as the technology enterprise sold an array of computers products that were not only confusing to use but redundant. With the return of Steve Jobs in 1996, he was quick to note the poor performance as an attribute of poor product strategy (Yeung, 2019). Steve Jobs new product strategy revolved around doing away with unprofitable products and rearranging the remaining products to offer a premium experience. The end goal of this new strategy aimed at creating a competitive advantage over other competitors by using innovation, technology and simple user interface as the key competing factors.
Currently, Apple product marketing strategy encompasses retroactive and proactive product strategy through its flagship products such as the iPad, MacBook, iPhone, iPod and iTunes (Yeung, 2019). Apple's retroactive and proactive approaches involve developing products that already exist in the market based on its competitors' portfolio by improving them. Improving such products revolve around integrating new and different features after removing undesirable qualities. This creates a premium user experience where the consumer receives a product that not appears new and innovative but easily recognizable. This approach has enabled Apple products to be highly intuitive and user-friendly compared to their competitors, which has enabled it to capture the attention of early adaptors and laggards whenever there is a new product release (Yeung, 2019). As such, over the years, product strategy has been at the center of the marketing strategy of Apple marketing and continues to be even today.
Establishing Brand Loyalty in the Apple Ecosystem
Apple astonishing brand loyalty and high consumer preference is based on its marketing model of 'owning the consumer' after wooing them into their ecosystem with the end goal of holding them at that position (Montgomerie & Roscoe, 2013). To achieve this, Apple offers a diversified line of uniform products at premium prices embedded with 'state of the art' technology, which is easy to use. The ease of use is based on Apple products have the same functionality and design principles centered on innovation and simplicity to give the consumers new products with a familiar user interface. Apple tends to exploit the halo effect on drawing its consumers to the same pool as they offer products that compliment other apple products (Yeung, 2019). The halo effect enables customers to shop under one manufacturer, especially when they are satisfied with one product of the manufacturer and are assured of homogeneity of the next products in quality and experience.
Apple exploits the halo effect as it positions its loyal customer base to stick to Apple products rather its competitors. For instance, the iPhone sleek metallic design complements the MacBook similar design whereby an iPhone or IPad would not be complete if not paired with App store or iTunes. Considering the broad consumer and loyalty base Apple has, most of its buyers tend to shop under the Apple brand. Apple marketing is based on its extensive loyalty base, which is the driving force behind its sale performance. To ensure Apple clients get the best service, the company places its personal on every retail outlet who are trained in every aspect of customer delivery. This enables Apple to offer the best after-sales service as Apple device users get articulate information on an issue they desire to be addressed.
Supply Chain Management
Apple success and profitability, even after the death of its founder, Steve Jobs, has been attributed to its ability to maintain high margins in its end to end supply chain. Apple has strategized its supply chain to maintain a low cost of production and maintain high-end price points through branding and great retail experience (Montgomerie & Roscoem 2013). To maintain high-end price points and low productions costs, Apple has had to outsource along its supply chain to deliver premium products in a highly competitive technology environment. Outsourcing not only allows a company to specialize in what it does best but also select suppliers who add the most value to their products at the least cost possible (Kotler & Armstrong, 2010). Outsourcing always helps a company identify other companies that can add more value to them at a lesser cost than their operating one, which helps expand profitability output without negatively affecting the output quality.Apple usually outsources its raw material and hardware from low labor cost counties such as China. As such, Apple does not outsource its software technology from such countries, especially China, due to its weak patent protection rights. One of the main disadvantages of outsourcing is the risk of losing one's control over technology and design (Kotler & Armstrong, 2010). Undeniably, this one why Apple products are designed in the USA and assembled in China. Apple's brand image is always placed on the line whenever it outsources from low labor cost countries as most of the manufacturers engage in human rights and labor violations as they strive to increase their profit margins. Over the years, Apple's leading suppliers, such as Foxconn have been accused of poor working conditions, extremely low pay and long working hours.
To fix this, Apple has engaged in CSR (corporate social responsibility) by setting standards such as minimum pay, fixed working hours and standard working conditions for all its suppliers. For any manufacturer to be a supplier of any product or raw material to Apple, he/she must adhere to the minimum standards. This has further stretched to the company exerting its environment responsibility whereas of 2018; the company completely runs renewable energy. This is because the 21st-century consumer is more social and environmentally conscious in that such consumers do not associate or purchase products from a company associated with environmental and human rights violations (Kotler & Armstrong, 2010). As such, a company goal should not only be aimed at making a profit at the expense of the wellbeing of society.
Once assembled at China, Apple products are shipped by air or by sea to the USA and other countries and in China, mostly by trucks. Apple marketing strategy always aims to release new products especially a few months before Christmas. As such, it relies on forecasting to prevent stock-outs as the demand is usually very high during this period. Forecasting helps a company analyze future sales at the same time have enough stick when they anticipate the prevents stakeouts especially with the release of a new iPhone by having transportation of new models from China through the air which normally takes a product lead time of 3-5 days instead of 30 days by sea.
Apple marketing is centered on its deep consumer loyalty base, who are the driving force behind its sales. It utilizes a familiar user interphase which makes it easy to attract both early adopters and laggards due to the simplicity of their products. In an attempt to offer a premium experience, Apple not only focuses on innovation but stabilizes their prizes until the release of the new version. To remain profitable, Apple usually outsources most of its components from low labor countries. Outsourcing from low labor countries raises a lot of labor and human rights issues. As a part of its CSR initiative, Apple requires its suppliers to maintain a minimum wage limit, standard working conditions and appropriate working hours. Forecasting helps Apple determine which mode of transportation, whether air or by sea to prevent stock out especially with the release of a new iPhone. Apple marketing relies on its product strategy which involves satisfying their consumer with innovation, which is simple to use.
Bhasin, H. (2019, January 11). Marketing Strategy of Apple Inc. - Apple Marketing strategy. Retrieved July 6, 2019, from https://www.marketing91.com/marketing-strategy-apple/
Kotler, P., & Armstrong, G. (2010). Principles of marketing. Pearson education.
Montgomerie, J., & Roscoe, S. (2013). Owning the consumer-Getting to the core of the Apple business model. Accounting Forum, 37(4), 290-299. doi:10.1016/j.accfor.2013.06.003
Yeung, N. (2019, June 07). The marketing strategy of Apple: A concise analysis. Retrieved July 6, 2019, from https://www.versiondaily.com/the-marketing-strategy-of-apple-a-concise-analysis/
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