Marketing Plan Of The Apple iPad

The marketing plan of Apples the new iPad or iPad3 drives towards a strategic and mindfully crafted business plan, where an effective marketing strategy is developed to ensure its success with the changing consumer behaviours, worldwide technological competitors as Sony, Samsung and Motorola, and to maintain the overall brand hype and image within the enormous group of enthusiastic and loyal customers. No doubt, Apple’s latest iPad3 is a revolutionary product which is a third consecutive model in the iPad family, a portable mini device that can be used as a pc but with lot of ease (with a flick of figure) with its wide range of options, applications and irresistible design, but what make it so expansively acceptable in the tablet market is Apple’s marketing strategy. This report outlines the marketing strategies adopted by Apple Inc for their newly release tablet model “The new iPad” and illustrate that how they have targeted their customers to get the best out of this product. The report significantly target their strategy of supporting one product with the help of another product/service with their uniquely and sleek product designs coupled with additive consumer add-ons like after sales services, personal attention, customised solutions, wide range of software applications and state-of-art retail stores, which are all being used to attract prospect customers as well as to retain their loyal followers. It is just because of this extensive customer oriented marketing strategy of Apple Inc, consumers are willing to pay the premium price for their products, specifically iPad3. This report also shed light to iPad3 direct competitor to eBook readers as well as competitor to some of the products from Apple portfolio, like iPad2 and iPhones, iPods of different kinds. We have examined market segmentation, targeting strategies and positioning process of iPad3, that are all well backed up by marketing principles analysis and business models which have been used to present to detailed understanding of the product market scenarios followed by suggested recommendations and conclusion. (Group)

TABLE OF CONTENTS

1. INTRODUCTION

Apple Inc. is an American multinational company that was established in April 1976. Apple Inc was co-founded by Steve Jobs, Stephen Gary Wozinak and Ronald Wayne (Linzmayer, Ronald W. Apple Confidential: The Real Story of Apple Computer, Inc., 1999). Apple has so far been able to establish a unique recognition in the eyes of consumers as a company with the most unique products (Apple 2012). Apple, Inc. is based in California and is familiar to most people as innovators of the personal computer as it is known today. Apple Computer had introduced many of the now-commonplace features of personal computers, including the GUI, the mouse, the floppy disk drive, and color graphics. Apple Computer’s Macintosh line of PC’s had brought numerous software and hardware components within reach of the average home consumer, often in a stylish case and with an emphasis on usability. The restructured company, now called simply Apple, designs, markets, and sells not only personal computers but also consumer electronics in the form of portable media players, smartphones, tablets and TV. Apple also sells intangible goods in the form of software, music, and video. The Apple Store chain operates over 150 branches worldwide, where the devices and software are sold and serviced.

In the last decade, Apple has expanded into a complex company that specializes in much more than just computers. In 2001, Apple broke the barrier with the iPod, eventually becoming the dominant market leader in music players. In following, Apple joined the phone industry in 2007 with the iPhone, which has also been widely successful. Apple is known as a consumer goods company; therefore evaluating its value requires understanding its products and consumers. This would be very challenging where Apple competes with many different companies throughout the different industries it takes part in. Apple has established a unique reputation in the consumer electronics industry since it is flexible from its philosophy of comprehensive aesthetic design to its distinctive advertising campaigns. The unique characteristic about Apple is that it has a very strong customer base, which is extremely important in understanding Apple. Meanwhile, more press is associated with their CEO; Steven P. Jobs (late Apple chief executive) who is seen as the architect of many of Apple’s amazing products, and the reason for their success due to his presentations at Apple’s media events that are electrifying and revolutionary. (Apple 2012).

2. PRODUCT ANALYSIS

2.1. Apple Branding

To compete with several highly competitive market Apple Inc. use apple as brand. The market includes personal computer industry Macintosh line of computer and related software the customer electronic industry such as iPad, digital music: iTunes music, smart phone like Apple iPhone and Apple TV etc. Apple brand strategy focuses on emotions. It’s brand personality is regarding on lifestyle, innovation, imagination, liberty regained, dream, passion, hope and aspiration and power-to-the-people though technology. Simplicity and removal of complexity from people’s lives; people-driven product design and about being a really humanistic company are also their brand personality. They redefined their branding recently that is ‘blurring the lines between product and producer’ (Smalling 2012).

2.2. Product Profile

Tiwari & Singh (2012) acknowledge that “brand is the identity of a specific product, service or business”. Brand includes name, sign, symbol, color combination or slogan as well or it can be combination of all. Most important in the brand is the source of promise to the consumers. All activities of the company have to be related to their brand promises (Tiwari & Singh, 2012).

The iPad3 was announced on March 7th 2012 with following features.

1. A6 processor, this would make the ipad 3 as powerful as any high-end desktop, make the speed fast

2. iOS 5, the ipad3 will come with the latest ios 5 which will host the multi-touch gesture technology.

3. 3D feature and new retina display, with the Retina Display feature, the screen resolution of the iPad 3 will be 2048*1536 pixels.

4. cloud computing, apple announced its cloud services during the WWDC2011, with icloud users can store photos, apps, calendars, and access songs on itunes without having them to store in the phone’s memory.

5. Camera, the iPad 3 will come with an improved camera, since the previous version of the table didn’t seem impressive enough.

6. Fingerprint proof, the touch screen will be coated with oleophobic materials, which will reduce the oil and fingerprints on the screen.

7. Batter battery, more than ten hour battery has been used in the ipad 3, it is good for those uses who do not the access needed to recharged it.

8. Thinner design, reduce in weight and size.

9. More storage space .

The iPad 3 comes with a dock connector and a power adapter, along with the documentation. You receive free telephone tech support for ninety days and a one year warranty. You also can purchase a two-year maintenance plan for your new tablet computer. This will cover repairs and accidental damage iPad 3 has new retinal display that promising the most vibrant iPad. It also has 5 MP backside illuminated sensor that makes iPad3 compatible with high end digital cameras and it also has brand new processor. The new iPad also is the first Apple device to the LTE-enabled.

Figure 1: Specifications of Tablet iPad3

3. COMPETITOR ANALYSIS

Samsung and the other Android tablet makers were unable to make any real gains on the iPad3 during the year and half that the iPad3 has been standing out. Now Apple is leaping ahead while the competition is still struggling to catch up to where the competition was. Apple may make things even worse by keeping the iPad 2 in the product mix as a lower-cost alternative. The wild card in the mix is the forthcoming tablets running Microsoft Windows 8. Even with the release of a consumer preview of Windows 8 hours away, there are still more questions than answers about the tablet version. The markets for the apple ipad3 are highly competitive. Apple Inc competitors who sell mobile devices and personal computers based on other operating systems have aggressively cut prices and lowered their product margins to gain or maintain market share. For apple ipad3 the recent competitors are Samsung Galaxy tab 2, Samsung galaxy note 10.1, Google nexus7, Asus Transformer Prime, Samsung Galaxy Tab 2(7.0), Sony tablet S, Amazon’s Kindle Fire, Nook Tablet, LG optimus VU, Black Berry play book etc. But competing with Apple is difficult because Apple, Inc. is actually four diverse and thriving companies all wrapped up into one. It’s a hardware company, a software company, a services company, and a retail company. Most technology companies in the world can manage one or two of these disciplines, but only Apple has all four entities working in harmony. Apple, as we say, is vertically integrated. It controls all the major critical parts of the chain used to make and sell products. Apple builds great hardware, owns the core software experience, optimizes its software for that hardware, equips it with web services (iTunes and icloud), and finally controls the selling experience through its own retail stores. Beyond that, Apple’s approach to products is that they are at the union of liberal arts and technology. And nobody in the industry so far has been able to match Apple’s eye for design.

New software features of the iPad3 that are not dependent on new hardware will be available on old iPads, and, where applicable, iPhones, on the day of launch. This makes the Android approach, where software updates are at the discretion of OEMs and carriers, look worse than ever. This week, manufacturers announced new Android tablets and phones running old versions of the operating system, with upgrades to the current Ice Cream Sandwich version promised for the vague future. All too often in the past, those updates have never materialized. Google’s inability to manage the Android upgrade process is the platform’s greatest failure and a key reason why its numerical dominance has failed to turn into true industry leadership. (Bose, T. K 2012).

4. Competitive Advantages

Apple iPad marketing strategy around its competitive advantages, and as a result has seen tremendous success with the 3rd generation iPad, maintaining its dominance in the tablet market despite tremendous competitive pressures. This example is meant to demonstrate to startups and expansion-stage companies that knowing your company’s identity and competitive advantages will provide great direction in terms of what marketing and product strategies will and won’t work for your company. Ultimately, that will increase the likelihood of success with implementing new corporate strategies.

According to a recent report from Forrester Research, Apple’s iPad tablet PC will continue to lead the tablet market through 2016 despite increased competition. The Cupertino-based company’s iPad is expected to account for 53% of the global tablet market in 2016, at which time emerging markets may account for nearly 40% of all tablet sales, The Financial Post reported on Monday. Over the next five years, the global tablet market is estimated to increase to 375 million devices, up from 56 million sold in 2011, for a total global base of more than 760 million tablet owners. The report identifies Amazon’s Kindle Fire as the only viable alternative to the iPad, while devices from Google and Research In Motion are said to be failing to keep pace with Apple’s tablet. Forrester also indicated that by 2016, about one-third of all tablet sales will be for businesses, accounting for roughly 122 million units (Forrester Research 2012)

Figure 2: Apple iPad3 Competitive Advantages

Apple’s key competitive advantages in the tablet (iPad3) space are its:

Premium brand image

Market position

Technology leadership and patents

Product development

Large number of ancillary service offerings

5. Marketing Analysis

Despite the entrance of price targeted competitors and the opening of a new set of more price-sensitive customers in the tablet space, Apple refined its iPad marketing strategy to address these changes in market dynamics, but made sure its competitive advantages in the market were at the heart of its iPad marketing strategy. The company has built its 3rdgeneration iPad marketing strategy and product strategy around the following eight factors, and has maintained a laser sharp focus to maintain its market position despite many competitor attempts to unseat Apple from market leadership in this product category.

5.1. Target Market

Target market for Apple’s new iPad3 varies with different age group individuals, students, professionals and senior citizen. So age group is vast but we can identify target groups that are likely to buy this product. (Apple Branding Strategy, 2012)

Children: new iPad can be used significantly with

Students: students who can used the product in their learning with vast variety of available application.

Laptop replacement: Users who are very cumbersome in using laptop and need an equivalent replacement which is quick and easy to use.

Multimedia and Internet focused users: Frequent Internet and social media users who find the iPad interactivity very easy and comfortable.

Senior Citizens: Old aged users who find iPad easy to understand and operate.

Frequent Travellers: iPad can be very attractive to Frequent Travellers in a form of amusement and at the same time one terminal to record all their important records.

Business Professionals: Busy business professionals can take advantage for ipad portability and its usage in their professional activities. (Tiwari, P. K. & Singh,D. R. 2012).

5.2. Market segmentation:

According to Bose (2012) “Market segmentation referred as the process of segmenting market in to different homogenous group”. These groups react in different way towards different marketing mix variable. Every customer has their individual need and preference but it is impossible to fulfill everybody’s needs. So marketers group customer into homogenous clusters and segmentation is practical way to create a group (Bose, 2012). It is not possible for the marketers to segment their market through a single way. There are four different ways that marketers can segment their market: geographic, demographic, psychographic and behavioural segmentation.

Apple is utilizing demographic and psychographic segmentation to reach their customer. Apple’s demographic segmentation is by age. Their advertisement target for iPad was ‘what is believe to be the most potential consumers’ that is commune about youth and they are from the age of 15 to 30 years (Shiqing, 2009). On the other hand psychographic segmentation is also implementing to meet young customer attitude towards their culture. According to Shiqing (2009) “in the Hip-Hop culture, there is a trend-setting impact on adolescents was utilized to its limit in the iPad advertisement”. The dark silhouettes are also listening to Hip-Hop music using a distinct white iPad and dancing in dynamic and random style. According to Moren (2007) “the stark images of the iPad dancer have really burned themselves into your brain”. Therefore iPad specifically meets the psychological need of their targets that enable Apple to achieve its penetration in the youth market. (Evaluation of the effectiveness of Apple’s iPad advertisements, 2012)

5.3. Price , POLICIES & TACTICS

Apple iPad is priced at a minimum of $499 with some variations in different countries, due to currency exchange and local buying power. However, Apple has never made an attempt to compete in tablet market on the basis of price. It is a tablet market leader due to its unique design, features and value it show case to the consumer. Also the iPad pricing strategy includes the flexibility to price reduction whenever company feels the consumer’s slow response. Though the iPad3 remains the dominant tablet in the space, Apple is facing increased competition from capable tablets at lower price points, which may affect its price tactics in the launch of iPad3.

Apple always engages in a premium price strategy. It is a good way of testing demand to establish the supply chain. Prices are more easily reduced following a product introduction than increased. A cheap product might sell some units. Then people get it home, use it and the joy is gone. And the joy is gone every day you use it. You never think, “Oh I got a good deal!” because you hate it. Apple has so much confidence in the product offer, they are never afraid to premium price. Then the prior premium price is followed by a plethora of price points. The iPod product range exemplifies this strategy. By retaining the iPad2 in the product line up and dropping the price by $100, the plethora of price points strategy is exemplified. (Evaluation of the effectiveness of Apple’s iPad advertisements, 2012)

5.4. Promotion

Apple have different ongoing promotional activities and offers that attracts its customers. Apple has over 200 retail stores worldwide and growing, which is one of the attractions that play a huge role in iPad promotion where user can use the product before buying it. Recently Apple has packaged back-to-school offers, aimed at students, that assisted in iPad3 sales growth. Also the new customers conversion strategy includes personalized customer service through their support methodologies that are designed for different audiences like home users and corporate. (Apple Branding Strategy, 2012)

5.5. Distribution

Apple attracts different business partner and retailers in their distribution channel to aid the promotion of its product. The attraction of iPad3 was created through different public concerts and public relation events like MacWorldExpo as well as through creative advertising including modern and catchy artistic ideas. Apple is also expanding it ties with different retailers like Wal Mart, that are visited by large number of audiences with every walk of life. Apple also seeks contract with telecommunication partner like Telstra in Australia that package the iPad3 product with significant value to the customer. (Tiwari, P. K. & Singh,D. R. 2012).

6. CONCLUSION & RECOMMENDATION

The Apple iPad3 marketing strategy example provides an example of how to effectively build your company’s product and marketing strategies around its core competitive advantages, despite tremendous pressure from changing market dynamics. Losing sight of these factors will spell failure more often than not. Stay true to what makes your company what it is, and leverage those factors to make it something great, just as Apple has done time and time again over the last two decades with its iMac, iPod, iPhone, and now iPad products.

Short term we don’t see much change in the offing for business computing paradigms. As long as mandatory daily attendance at a specified workplace remains the norm for the vast majority of businesses, then a wave of purchases of Apple tablets will simply mark a shift in the operating system of choice for desktop computing (PCs and laptops users converting into Apple tablets). Once again steps ought to have been taken quite a while back, as required, to port any/all applications to this platform. If the portability question has not yet been addressed then, Apple should do it now. As well, plan for the fact that you are absolutely late to this game. It’s the longer term implications that catch our eye. If tablets facilitate an explosion in remote computing, then all sorts of opportunities will be on the table for new applications that exploit a business user class empowered with computing anywhere capabilities.