Marketing Strategy Of Apple

The marketing strategy that Apple uses mainly depends on developing products that
they themselves can use. For instance, the iPhone was actually developed for the Apple
employees who were not satisfied with what they were getting from their mobile phones.
They went out to create exactly what they would like to use.

Simply put, Apple gives customers what they want and they do not take any time to
play games like many other companies do.

There is no product in the market that has higher value than the Apple product and
there is no software in the market that is more intuitive than the Apple Software. Compare
any other smartphone to the iPhone 4 and you will think that it was developed by rookies.
There is just no way of comparing the two.

The iPhone was not the pioneer smartphone in the market but Apple was able to
engineer it in such a way that it is unique and one cannot help but look at it as a pioneer
smartphone in the market. The iMac is not the pioneer all in one in the market, but it
turned out to be the most significant one in the market.

The marketing angle is really never the most important aspect; the most important
aspect is the ability of the customers to identify with the marketing angle that you choose
to go with. Take time out today to look at any product release that Steve Jobs has done and
you will notice that he takes time to tell you the reason as to why all other products in the
market cannot stand up to what he is offering you. Go for an angle that your target market
can identify with.

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The price maintenance strategy is a double-edged sword. The incentive that the
retailers have to stock Apple products or provide them with advertising and retail space is
quite small taking into account the fact that the profits they stand to earn are quite low. On
the flip side, large chains are known to transform a barely profitable product into a ‘loss
leader’ so that they can raise the amount of traffic coming into their stores and increase the
amount of ancillary goods that are being sold like cables and accessories. These ancillary
goods usually hold a higher profit margin.
It is at this point that the second part of Apple’s price maintenance strategy becomes
relevant. Apple supplements its small wholesale discounts to retailers with monetary
incentives that are more significant that are only given under the condition that the
retailers advertise the Apple products above or at a certain price that is usually referred to
as the ‘MAP’ or the ‘Minimum Advertisement Price’. This agreement allows
the retailers to earn more money for every sale that they make but it does not allow them
to provide their customers with significant discounts. This is what produces the almost
homogenous Apple pricing that is witnessed everywhere in the world.
This strategy is advantageous to Apple in quite a number of ways. First of all, the
company gets to earn more money from direct sales and it is not forced to compete against
prices that have been marked down by its own retailers. Owing to the fact that the retail
operations operated by Apple itself are among the top in terms of profits in the entire
world, undercutting their prices to get a bigger distribution network would
prove counterproductive for it.

The Apple pricing strategy has resulted into a cumulative effect on customers that is
quite difficult to pin down. On one side, customers have been denied the chance to enjoy
the benefits that usually result from price competitions in the free market. The very familiar
phenomenon that Apple products have the tendency to cost more than what the products
of their competitors cost is not automatic, it does not happen magically. It is actually very
easy to get a laptop in the market that is not that expensive but it is very hard for one to get
an Apple laptop in the market that is not expensive.
On the other side, it is also very difficult to find an Apple laptop in the market that is
inferior or of low quality. The same applies to each and every other product that is
produced by Apple. A very tight grip and control over its entire distribution network and
high profit margins have allowed Apple to bring into the market goods of very high quality
that go for prices that are modestly above the prices charged for rival products. In the long
run, customers get to enjoy a much more enhanced general experience that is fully
satisfying when they opt for Apple products.
Regardless of how you choose to look at it, the pricing strategy that Apple uses is a
very interesting aspect of the notorious controlling nature that Apple is known of. All other
factors constant knowing the price stability that the Apple products come with significantly
reduces the stress that would be involved in shopping for them. The only time you will be
expected to exercise patience would be when you are waiting for the product to get to you!

SIRI
Apple is making speech interactivity more substantial by choosing to give it a
character; the personal assistant that goes by the name ‘Siri’. It is possible to in a way
customize Siri by making use of various idioms and languages. It is presumed that various
other personalization and customization features will be introduced.

Siri brings out the marketing genius in Apple. Speech interactivity and control are not
new phone or computer features. For instance, smartphones using the Windows operating
system have provided such kind of functionality for a good amount of time now. The
creation of the ‘Siri Personal Assistant’ Character by Apple provided customers with a hook
that they could finally use to gain a clear understanding of what is entailed by speech
interactivity.
Simply put, Apple is now through with showing customers how to use touch gestures
and is now busy showing the same customers how they can talk to computers.
iKnow Siri?
The moment the users of Apple devices become accustomed to this kind of
interactivity, it is presumed that the natural language speech interaction will be included in
the Mac also; regardless of how much evolution the Apple full function computers will have
gone through by then. Probably, over a longer time period, it is allowed to assume that the
user’s Siri will be used to both embody and develop a feeling of a continuous experience
across multiple Apple devices; it will appear as if Siri will be moving with the customer from
device to device.
It will be possible to enjoy this continuity across devices because Apple is making use
of the iCloud to provide customers with multi-device synchronization and device-
independence; this means that whatever Apple device you use the experience will still be
the same because the device that you have just moved to will be well aware of the actions
that you were carrying out on the previous one. The new device will have the
ability to continue dialogues like chat messages from right where you had stopped them.

Apple’s Brand Positioning

The Apple logo was originally designed in the year 1977 and up to today it is among
the most famous logos the world over. The branding strategy that is used by Apple focuses
more on ease of use, simplicity and lifestyle.

Apple has received a very wide recognition for being a premium brand that both
earns and demands a price premium. The price premium goes across all the products that
are manufactured by Apple including the iPhone, iPod, Macintosh, accessories and
software. The positioning that Apple has is in line with targeting a customer that is less
sensitive to price. Due to this, all the internal activities and culture of Apple are structured
to cater the needs of the customers. Strategists refer to this as needs-based positioning.
This means that Apple has managed to develop a set of activities and a culture that allow it
to differentiate itself from all its rivals so as to allow it to cater to the needs of the
customers that it targets.
In the event that Apple was to make any attempt to compete for all segments of
consumers, it will be required to decrease the prices that they charge for their products.
The disadvantage that comes with such an approach is that it would both get rid of and
undermine the premium brand image that the company has been able to create for itself. It
will also undermine the internal activities and culture that the company has been able to
establish for itself.
 Currently, we still struggle to determine whether Apple’s primary competitor is
Samsung or Google. The struggle also exists with the iPad; is it Microsoft or Amazon. With
iTunes, is it Spotify or Netflix? There is no denying that the Mac is in stiff competition
against Toshiba, Dell and hp. Google Drive and Dropbox are also greatly competing gains
the iCloud. Google Docs and Office are also great threats to iWork.

MMI DIseration Eve

Pagina 17 – 29

Apple Inc.´s main advantages

As of May 2016 Apple Inc.´s advantages have been updated and studied. The Brand
Apple Inc., is one of the company´s main advantages. According to an article written in
Forbes, the Apple Inc. brand is valued at approximately $151 billion (Annex1), the fact that
Apple Inc.is considered to be simple, and it is able to make something that by many is seen
as complex to be simple. Apple Inc.´s design is also considered to be one of its main
advantages, which consequently links with simplicity. Another Apple Inc. advantage is the
amount of profit it has per year (Annex 7). Estimably $10 billion per quarter (David Mercer,
1996)
We are able to conclude that Apple Inc.is concentrated mainly on high quality
products, high prices and it values the customer by offering its clients the best experience
through quality products and expert client services. (Heracleous, L. 2013; 92-99.)

Pagina 36 – 41 Samsung
Samsung Electronics competitive advantage and competitive strategy
Samsung Electronics Group´s advantages is known as the red ocean strategy. It
consists in gaining advantage by dealing in an existing market and bettering its competitor’s
weaknesses. Apple Inc. Practically coined the production of Smartphones. Thus it is now
one of the largest cell phone company if the world. Samsung´s main competitive advantage
of Samsung Electronics is that it enters the market and provides it with as much products as
possible and in a short time frame. This is a different strategy from Apple Inc., as it takes a
longer time before it launches a new product. Samsung Electronics is able to present
markets with new devices because Samsung Electronics develops man of its own pieces
that are used in the process of building smartphones. With this strategy Samsung
Electronics has an enormous cost advantage when compared to Apple Inc., which relies on
external suppliers. However, Samsung Electronics Group´s red ocean strategy may also
cause disadvantages because the company becomes vulnerable to the Porter´s five forces
which were mentioned above and detail Samsung´s threats and weaknesses. (Forbes,
2013).
Samsung Electronics Group allows its customers to have the support they need and
when and where they most need it. Samsung Electronics Groups’ products and services are
available in almost every country and dispersed on a base of direct dealers and indirect
partners in order to provide as much support in its product lines. Thus, giving the
opportunity, that even though Samsung Electronics is located in one location, customers
benefit from having the company´s partners in their precise location. (BusinessInsider,
2013)

International Business expansion (The case of the Chinese market)

As mentioned before, Samsung Electronics has always concentrated its main focus to
its home market and regions close by. Samsung Electronics first entered the Chinese market
in 1993, at the time there was not a difference between Samsung´s strategies and the
strategies of its competitors in the market. Samsung Electronics adjusted its strategy
toward the Chinese market specifically, which gave it an advantage in relation to its
competitors. China is Samsung´s most important international business. (IDG News Service)
Samsung´s well-known Brand allowed it to deliver its publicity and market through
sports, for example, Samsung Electronics is the main sponsor of the annual Beijing
International Marathon. (CBSnews.com)
The difference in internationalization strategies: Apple Inc. and Samsung
Electronics
Samsung’s innovative strategies in China have earned itself enormous profits.
Samsung Electronics has an enormous workforce in China, which resulted in making China
the biggest host country of overseas investments of the world. (businessinsider.com)
Even though Apple Inc. iPhones became very popular in China, the majority of the
Chinese population found the products to be very expensive. For example, on its release
the iPhone5S was priced at around 864 USD, which is higher than the average Chinese
salary obtained in Beijing per month.
It was later leaked that Apple Inc. was going to release a cheaper iPhone version, the
iPhone5C in order to allow fans to afford Apple Inc.´s products. There was however a
mishap, because the iPhone 5C was only about 17% cheaper than the iPhone5S. This meant
that like before, the Apple Inc. product was out of the price range for the most part of
China´s population. In consequence, potential clients were left unsatisfied. The South China
Morning post, quoted a SinaWeibo user as feeling “cheated”. Thus this had a negative
effect on Apple Inc.´s stock price, which decreased nearly 16%. (Forbes.com)
 Based on the company´s business model, “Apple Inc. Is not just trying to sell phones
to as many different people as possible. In fact, avoiding this strategy has been instrumental
in its success in China”. (Apple.com)
China´s population is massive, roughly over 1.35 billion people, in may do not have
age buying power now, but eventually will (worldometers.info). Many believed this to be
the solution, but the truth is that Apple Inc. is unable to compete with China´s prices. Apple
Inc.´s iPhones are subject to tariffs that make its prices higher and therefore unable to
match prices with the domestic manufactures such as Xiaomi, that sell smartphones for as
low as 100 USD. Even if Apple Inc.was able to lower its prices, the consumers will always go
for the cheapest buy. This will eventually go sour, because Apple Inc.is known for luxury
products, which reflects its brand identity and as for China, Apple Inc. still has this claim on
status for its customers. (The Atlantic, 2013)
Apple Inc.´s attempt to create a cheaper phone aimed mostly to the Chinese market
but it was also successful in other markets due to clients brand loyalty. Certain people will
buy Apple Inc.´s products no matter the price, theywill buy the latest Apple Inc. Inc.
products. To Apple Inc. Inc. What truly matters is “banking that type of customer, rather
than the number of them, is what truly matters”. (The Atlantic, 2013)

Apple Inc. segmentation strategy

Apple Inc. ´s Strategy reflects a dispute between two market outsets. Apple Inc.´s
focus on one hand is to produce products that are able to join in a large number of
functions aimed for a large scale market. According to Kobayashi and Sculley utopian
visions, this market outset the perfect smartphone would be able to deliver to its clients all
the functions possible such as computing, communications, entertainment content,
information management and any other function that could be offered in a portable device.
Apple Inc.´s strategy on is iPhone allows for a device that is able to connect to the internet
without the need to use other users applications, and it is obviously not used as a
computer. According to Paul Kedrosky, a venture capitalist believes that this has
condemned the iPhone and he wrote the following in the matter: Is Apple Inc. serious that it
won’t let third-party developers build software for the thing? If so, and put simply, the
device will fail. A closed-box consumer electronics mentality will work in music players,but
the future of mobile devices is as a platform, and that requires developers. (SONE, A. –
McCALL, J. B. 2004).
The Samsung Electronics market for its products is divided by using segmentation
variables which consists of geographical, demographic, behavioral and psychographic
characteristics. The geographical segmentation of Samsung´s market is aimed at a reginal
focus, Samsung Electronics divided the Asian market into different regions also it targets
different Asian countries in a different way by diving the markets. Samsung´s Demographic
segmentation consists in groups such as age which is not an important factor for Samsung
Electronics however, Samsung’s main costumers are adults. Samsung Electronics offers its
users products that are appropriate for families and the family´s size. Samsung´s product do
not aim specifically to a certain gender. Samsung´s products aim to the society as a whole,
and does not determine its products to high end or low end of the societies, it allows
anyone to purchase its products range prices that are appropriate for buyers with a high
purchasing power and also to buyers with low purchasing power. Nevertheless, Samsung
Electronics has divided its consumer market into categories based on the costumer’s
occupation. In addition, Samsung Electronics has acquired awareness on its costumer’s level
of knowledge of its target market. (Academic.brooklyn.cuny.edu.)
Samsung Electronics psychographic segmentation
Samsung Electronics also has segmented its market in reference to its consumer’s
lifestyle and personality. This details in Samsung’s behavioral segmentation which may
generate benefits for Samsung Electronics users, which are targeted differently based on
the benefits that they look to acquire from Samsung’s products. Samsung’s loyalty status is
also important to consider, as it will allow Samsung Electronics to have a better perception
on which costumers will continue to buy their products and which will switch to the
competition’s products and services. (Horrigan, J. B. (2012)
Apple Inc.´s market segmentation is different form Samsung Electronics as it divides its
segmentation into criteria and target segments. Concerning Apple Inc.’s Geographical
segmentation is dived by regional in which devices are mainly within the United States of
America and in an International markets, mainly in urban areas. Apple Inc.’s demographic
segmentation consist in ages that are mainly aimed from 20-45 year olds. It is not however
aimed for a specific gender. Apple Inc. aims its products into its costumer’s life stage,
whether they are single or married, and its products are aimed toward costumers that have
high purchasing powers. Is also aims towards the costumer’s professional occupation
namely to executive professionals. In a behavioral segmentation, Apple Inc. aims for “hard
core loyal” these are the loyal customers that will not only continue to purchase Apple Inc.
products but will actually buy everything and anything Apple Inc. launces. Apple Inc. targets
ambitious and successful costumers. (Comaford, C. 2007)
In a psychographic segment, Apple. Inc. aims its segments into social classes namely
the middle and upper class of society, which also determine that Apple Inc.’s consumers
also have a high-end lifestyle. (TheEconomist.com2009)
We can conclude that Apple Inc. and Samsung’s market segmentation differs in
many ways, Apple Inc. prefers design to function and it aims towards a controlled user
experience Samsung Electronics however prefers a more functional character and it allows
costumer to customize its products.(Parmerlee, David 1993) Samsung Electronics provides
its customers with a wider range of products than Apple Inc., and allows its customers to
connect its devices to home appliance without mandatorily locking costumers to their
products like Apple Inc.’s narrow product line does. Samsung Electronics strategy consists in
better the devices and services of its competitors while Apple Inc. provides the market with
innovation. (Chapman, R., & Haskisson, R. e. (n.d.). Case 14)
Past partnerships
Before 2010, Samsung Electronics was Apple Inc.’s main supplier, this meaning that
the iPhone was not produced entirely by Apple Inc. The production and final assembly was
done by its third party suppliers that included Foxconn and Samsung. Samsung Electronics
provided Apple Inc. with its most important components such as flash memory and
applications processor. (Annex 19) In a total amount Samsung Electronics was responsible
for 25% of the iPhone. For some period of time, Samsung Electronics used the fact that
Apple Inc. was one of its biggest client, in its business model, the fact that Samsung
Electronics was producing components for other companies allowed it to produce its
products at a lower cost. Apple Inc. entrusts its suppliers to manufacture and assemble its
products m to allow room to concentrate in their strongest aspects which is design a luxury
product, software and hardware. The image below details how much an iPhone is actually
manufactured by supplier components, note that this relates to the iPhone4 in 2011. (The
Economist, August, 2011.)

Legal mishaps
There is a great conflict between the smartphone industries´ top selling companies
Apple. Inc. and Samsung. The companies have been competing in a worldwide battle for the
past six years (since 2010) to hit number one in the charts. This conflict began when in
2010, Samsung Electronics which at the time was actually a supplier for Apple Inc., debuted
a smartphone that was esthetically identical to the Apple Inc. iPhone, the two companies
have been in court for copy rights and plagiarism for years. (Investopedia.com)
The legal battle between Apple Inc. and Samsung Electronics took place in four
different continents and spread billions of dollars in awarded damages. As research has
been made, when considering this situation from a business model perspective, the two
companies are constantly converging and modifying, however, similarities are still obvious.
Samsung Electronics has been a global company longer than Apple Inc. has and because of
that it has more entries in various industries. Even though it might be a younger company
Apple Inc. has risen in the market in a very focused and unique manner. (Investopedia.com)
Samsung Electronics adopted the same Integration strategy as Apple Inc., it also
concentrates on a Vertical integration, and however, it also concentrates on product
volume. (Investopedia.com)

Apple Inc. has since continuously sued Samsung Electronics for patent infringement.
Lawsuits seem to be a common strategy for Apple Inc., which is one of the most legally
aggressive firms in the world, but the focus on Samsung Electronics is particularly repetitive
and intense. Apple Inc.is known for defending its brand and products in 2011, it had already
been in court with Motorola and then merged to Samsung Electronics for infringement of
its tablet and smartphone designs. (Investopedia.com)
The first accusation done by Apple Inc. towards Samsung Electronics was in the
begging of 2011, by mid-year there had been already reported 19 different cases taking
place in 9 different countries, in which each company claimed billions of dollars in damages.
Each firm won multiple decisions against the other between 2012 and 2015, often in
conflicting rulings from German, Japanese, South Korean, American, French, Italian, Dutch,
British and Australian courts. (Investopedia.com)
Apple Inc. won an initial ruling in 2012 that targeted more than a dozen Samsung
Electronics phones, but the appeals and countersuit process dragged out until 2014, which
took place when every single target model was out of production. For this reason, the real
damage is not in the production line, but rather in the mountain of legal costs incurred by
Samsung Electronics and Apple Inc. around the world. (Investopedia.com)

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