Apple and its marketing strategy

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Apple and its marketing strategy

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Abstract

In a world surrounded by technology and computers and largely dominated by Microsoft & Apple representing 7% of the worldwide computer sales and 72% of worldwide MP3 players' sales. Since 1976, Apple had diversified its products and imposed its Brand as a symbol of innovation and quality. The success of Apple is due to its innovation and more importantly to its marketing and communication strategy. For the last 10 years the Apple communication has gone through a series of changes in order to meet the demand.

Historical Analysis
Current strategy and objectives
1. The Packaging
2. The Genius Bar
3. The Customer Service
4. Innovation and Strategy
5. Apple Pricing Strategy
Customer retention process
1. Customer Expectation Versus The Delivered Quality
2. Value, Product uniqueness and suitability

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[...] Apple sold in 6 months more than 100000 Macintosh. It was more than what they had expected at this time. But this success was really short because the press started to decredibilize Apple's products. In 1986 the press were making bad publicity saying that Apple computers were too expensive, and also that their characteristics couldn't be compared to Microsoft computers. In order to push the Macintosh sales, Apple had the idea to gain of popularity by hiring Michael Jackson for their commercials and also to start innovating on new programs for their platform in cooperation with Microsoft. [...]

[...] On the other hand, iPod price against quality including HD memory is competitive. Product uniqueness and suitability: When a customer has access to almost identical products or services, the probability of purchasing any particular one decreases significantly. In addition, products must remain suitable to customers. Except for exclusive tracks, products in which iTunes Music Store deals in are not unique while its product line-up is richer than its competitors'. However, the console is the only way to shop on iTunes Music Store and run iTunes AAC files on portable music player. [...]

[...] The subscription type is also luring more customers as record labels have allowed more music to flow into the plans and have permitted CD burning and similar features. Rhapsody, leading operator acquired by Real Audio Networks in March 2003, has 450,000 subscribers as of May 2004 (up from 250,000 in 2003). With $ 9.95 monthly subscription fee, a subscriber can download as much music as he wishes and listen to them for a certain period. In case of burning a CD, extra $ 0.79 will be charged per song. According to Rhapsody, the average number of downloads is 200 tracks per month. [...]

[...] With an elegant packaging, we see the high standing brand. The Logo and slogan: The communication of Apple is designed and written in the slogan: A white apple with a short sentence: “Think different”. In fact, with these two tools of communication, we can see that apple tries to seduce potential consumer by their elegance. Apple's strongest marketing message is “Think Different”. When competing against a behemoth like Microsoft, the more difference the better it is. The consumer needs to feel privileged in his purchase. [...]

[...] However, we need to be very aware of the fact that it took Amazon several years to reach this 20% SG&A expense rate. While music download doesn't incur a physical shipping cost as that of Amazon.com, massive investment in servers and database is required to provide smooth and fast connection for average 2.7 million downloads per week. In short, it's obvious that net margin of pay-per-song business is extremely low with this pricing and some even doubt a feasibility of this business model itself. [...]

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