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Marketing Strategy of Apple Inc – Apple Marketing Strategy

January 11, 2019 By Hitesh Bhasin Tagged With: Strategies

Apple is the largest brand in the technology industry in terms of its revenue generated as well as its brand ranking. It is not a surprise to many because Apple has time and time again presented products which were ground breaking and which revolutionised the market.

Apple has given us many delights over the years including the Macbook, the Ipod, Iphone, Ipad, Iwatch, Itunes and others. And due to its excellent product and differentiation, it is close to the heart of many techie enthusiasts.

Table of Contents

Here is the Marketing strategy of Apple

Segmentation targeting and positioning of the brand

There are three major segments which Apple targets. It generally uses lifestyle segmentation as Apple is the most premium brand out there. The segment is usually the urban population with enough buying power for purchasing Apple products. These are people who are early adopters in life but the brand equity of Apple is such that even laggards have started adopting the products.

In the Marketing strategy of Apple, it has three target groups

1. One is the music lovers who are targeted by the Apple Ipod and Itunes.
2. Another target the professionals or even teenagers who are targeted for Apple Iphone, Tablets, Macbook and other such gadgets which can be used by anyone, irrespective of age.
3. And third is the crowd which can use their other products and services like Apple TV and Apple Iwatch. They also use Ibooks, Apple pay etc.

Apple being the world’s number 1 brand has the topmost mind positioning and there is no doubt that when someone talks about Smartphones or Laptop or Tablets, Apple is the first brand that comes to mind maximum number of times.

Marketing mix in the Marketing strategy of Apple – Click here to read the Marketing mix of Apple, Apple Iphone and Apple Ipad.

SWOT analysis in the Marketing strategy of Apple – Click here to read the SWOT analysis of Apple Inc as well as SWOT analysis of Apple Iphone.

Mission in the Marketing strategy of Apple

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad.

Vision in the Marketing strategy of Apple

We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution.

We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self- honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.

Tagline – “Think Different” is one of the best slogans in the tech industry. Many people assume that Apple launched the slogan “Think different” in response to IBM’s slogan “Think”. However, since 2002, Apple stopped using the slogan in its marketing. But from time to time, the slogan has bounced back on Apple’s website or in their marketing and it has never left the mind of Apple loyal consumers.

Competitive advantage in the Marketing strategy of Apple

Apple has several competitive advantages over its competitors

1. Superior technology products – Macbook and Iwatch are clearly leaders in their market space because of the OS and the technology used.
2. Brand equity – Apple has repeatedly taken the top spot for its brand equity and has a cult following since ages.
3. Revenue over time – Apple has deep pockets due to its high margins.
4. R&D – A major competitive advantage of Apple is the amount it spends on R&D keeping its eyes on the future rather than on the present.

BCG matrix of Apple

When plotting the BCG matrix of Apple, the product portfolio of Apple is clearly divided into four parts.

1. The Cash cows are products which are existing since ages and which cannot be challenged in the current market conditions and have a majority market share when the global data is referred – These are Macintosh, Iphone, Iwatch (50% market share in 2015) and Itunes (a solid support service to all Apple products)
2. The stars are Ipad and Ibooks where there is a lot of competition and Apple has to invest a lot to keep these businesses on top.
3. The question mark is Apple TV which has low market share in an industry which is showing great potential and might grow at a rapid pace in the future.
4. The dog is Ipod because although it has a high market share, the industry itself is rapidly degrowing because Smartphones have replaced Ipods.

Distribution in the Marketing strategy of Apple

Apple has a very smart retailing setup. It has around 450 stores within the US. And these retail outlets are such that they are more focused in helping the customer and making him comfortable with using Apple rather then selling the product and stuffing the product down customers throat.

Apple has also introduced the Apple Genius Bar, which is a walk-in service center and can help any customer in problems they are facing in MacBook or Iphone or Ipad. Overall, the company owned Retail and Service outlets are great.

Along with company owned stores, Apple has set trade partners like Ingram Micro and Redington which are responsible for the sales and distribution of the brands. These trade partners will buy in bulk from the brand and then distribute the product in the market. Thus, besides its own retail stores, Apple is found present in other modern and premium retail stores. These stores are covered by its retail partners.

The Online E-commerce presence of Apple is fantastic. Most E-commerce portals promote the brand themselves because they know that the brand is in huge demand. Besides this, there is very less price penetration in Apple, and hence the channel partners and E-commerce portals are happy too as they don’t have to fight on price. from the home page itself. The combination of retail, distribution and E-commerce gives a complete market reach to Apple.

Brand equity in the Marketing strategy of Apple

Apple has the highest brand equity in the world as of 2016 and it is the topmost ranked brand in the world. The brand worth of Apple is 118.9 billion dollars. The brand has done a lot to reach this brand equity, but a major contributing factor was its ability to give hit products back to back, and to reach across the globe with these excellent products. The combination of both with the excellent marketing communications of the brand help Apple reach the highest brand equity possible.

Competitive analysis in the Marketing strategy of Apple

Although on a company level there is very less competition for Apple, on product levels, there is repetitive competition for each of its individual products. Ipad faces competition from Samsung tablets, Iphone faces major competition from Android based phones, Macbook is facing stiff competition from Dell which also has superior products.

The unique services offered by Apple such as Itunes also face competition from other online music players which are cropping up every day. Ibooks faces strong competition from Amazon and even Apple TV faces competition from Fire TV of Amazon. Samsung gear and other smart watches are rising competitors to Iwatch although Iwatch still holds a majority market share.

Promotions in the Marketing strategy of Apple

Apple is one of the most elegant advertisers as can be seen from any of its print ads in newspapers. You will commonly find Apple ads to be clear and crisp in their message. Their background will be white and there will be a splash of colors on the print ad introducing the product or differentiating the product.

And that is one major strength of the brand. Apple has so many differentiation points that it can have a slew of ads, all targeted towards differentiating the products that it is offering. Not only the print ads, even the video ads do the same. They tell you one point which highlights the product features.

Here is a simple image made by Apple to differentiate between PC and Macintosh. Look at the clean and to the point copy.

Overall, the advertising and promotions of Apple are used tenfold when there is a new product launch. The hype created is so much that you just can’t ignore it. And this hype is continued until the product becomes a success. As the number of products with Apple is less, it is no doubt that it wants each one of its product to be a hit.

This was the Marketing strategy of Apple. The Brand can teach a lot to marketers with regards to differentiation, brand building and most importantly – Innovation.

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Apple’s Business Strategy: What Your Company Can Learn

This article is part of our Business Strategies series, an insight and analysis into the makeup and model of some of the world’s most successful startups.

One of the most iconic brands of the 21st century, Apple is a technology and consumer phenomenon. With a global legion of fiercely loyal customers, an almost cult-like employee devotion to its leadership, and a legacy of innovation, it is a case study in branding, growth and masterful marketing.

To find out how it has gone from a California driveway to one of tech’s ‘big four’, we’re taking a closer look at Apple’s business strategy, as well as all the other significant factors that have driven its success — and what you, as a business owner, can learn from them.

Vital Information

Apple’s corporate strategy – one of creativity, innovation, and the pursuit of excellence – can be summarised in its mission and vision statements:

Apple is dedicated to the empowerment of man—to making personal computing accessible to each and every individual so as to help change the way we think, work, learn, and communicate.

Apple Mission Statement (Original)

Man is the true creator of change in this world. As such, he should be above systems and structures, and not subordinate to them.

Apple Vision Statement

Key Details

felixtm / Deposit Photos

• Founded: April 1976
• Founder(s): Steve Jobs, Steve Wozniak, and Ronald Wayne
• Headquarters: Cupertino, California, USA
• Current CEO: Tim Cook
• Global Employees: 132,000 (2018)
• Type: Public (floated December 1980)
• Initial Funding: $250k angel investment (Mike Markkula, 1977)
• Key Products: iPhone, Macintosh, iPad, iPod

Apple’s Business Strategy

While the sale of consumer tech products has been Apple’s modus operandi since 2003, the crux of its commercial success lies in its forced marriage of hardware with software. If you buy an iPod, for instance, then you need to download, install and subscribe to iTunes, while if you want to use the revolutionary Apple Pay service at a checkout, then, yes, you guessed it: you need to buy an Apple Watch, iPhone or iPad.

This practice – dubbed «owning the consumer» by University of Manchester academics in a 2013 paper – is nothing new of course; after all, people were buying Windows-operated machines for the sole purpose of using Microsoft Excel as far back as the late 1980s. However, no other company has employed or implemented this strategy as effectively as Apple, before or since.

Starting Business

As you can see below, iPhones still make up the core bulk of the company’s unit sales, although the market maturity of smartphones has somewhat stunted growth in this area; moving forward, this is arguably the next big growth challenge for CEO Tim Cook, who has already sought to appease investors by acknowledging the plateau.

Apple Net Sales by Unit for the Period Sep 2018 to Jun 2019:

Apple, 2019
Value

In terms of value, meanwhile, Apple’s is unique. Its product upgrades are heralded almost fanatically by loyal consumers, regardless of the actual levels of innovation involved in their design, yet this is what has set Apple apart since its «rebirth» in 2003: brand status.

Essentially, Apple devices are as much consumer accessories as they are mobile telephones or computers. Through a combination of the legendary marketing techniques employed by Steve Jobs, and the unique design and usability features implemented by Apple’s engineers, its products have long since exceeded mere functionality.

As already mentioned, there is enormous value in Apple’s software and services, too. Consumers may buy iPhones en masse because of their sleek and revolutionary design, but this hardware is just a gateway to what really hooks them in: platform-exclusive programmes, such as the App Store, iMessage and FaceTime.

Partners

As part of its business model, Apple also needs to maintain solid relationships with key partners – particularly its manufacturers. Given the number of units it sells per year, this has inevitably lead to issues with contractors, with accusations from critics of poor labour and environmental practices.

The company also needs to forge productive relationships with telecommunication providers around the world to gain access to telephone and internet data networks, while indirectly, it relies on publishers, content creators and app developers to populate its software services, such as iTunes, the App Store and its other digital content providers.

Key Figures

Apple’s entire culture is linked intrinsically to its leadership or, more specifically, to that of its co-founder and legendary former CEO, Steve Jobs, who was responsible for much of the company’s marketing bluster and creative vision in the late 1990s and early 2000s.

CEO: Tim Cook (2009, 2011-Present)

Although it’s difficult to pinpoint an exact management style for Apple’s current CEO, it’s fair to say that he shares few similarities with the predecessor who appointed him. Although Cook does possess elements of Jobs’ autocratic streak (as evidenced by his dismissal of several senior executives following a disappointing fiscal return in 2013), it’s unfair to describe him as a visionary.

Instead, Cook’s style is more democratic; he is far more hands-off in terms of product development, preferring instead to cultivate a more cooperative culture at the company. This approach is undoubtedly favoured by Apple employees, who rate him as one of the top CEOs in the world.

COO: Jeff Williams (2015-Present)

Having followed a similar career trajectory as Cook, Jeff Williams has been Apple’s COO since December 2015; he is considered a highly influential figure within product design – the heart of Apple’s core business – especially since the departure of long-time design guru Jony Ive (the man responsible for Apple’s iconic minimalist designs) in 2019.

Apple’s Branding Strategy

As previously mentioned, Apple has enormous brand value – the largest in the world, in fact.

Forbes, 2019
This success is built upon several factors, such as the company’s perceived value when compared to competitors, but the critical ingredient is Apple’s «think different» mantra. The exclusivity of their product launches is more akin to a luxury brand, for instance, while users develop an emotional attachment to the brand that is almost unprecedented; this has resulted in a consumer environment where people are not buying Apple products because they are the best on the market – they are buying them simply because they are Apple.

Competition

For much of the 1970s and 1980s, Apple’s primary competitor was, of course, Microsoft, with the rivalry very much driven by the personalities of Jobs and Microsoft founder Bill Gates. Despite what CIO refers to as «hot and cold periods» in their willingness to collaborate, Apple’s modern-day approach to its competition is more definitive: it’s open for business – or at least when it comes to technology.

In terms of consumer goods, Apple famously dethroned the hitherto undisputed king of mobile phones, Nokia, with the advent of the iPhone in 2007, although it now appears to be losing ground to its main competitors, Samsung and, increasingly Huawei.

On the services front, things aren’t so cosy, either; Apple, as with all established firms, faces new and different challenges, such as from the music streaming app, Spotify (although, at the time of writing, Apple is seemingly giving way to Spotify’s demands to be accessed through the Siri voice technology, despite previously refusing to do so).

Apple’s Company Culture

As an enterprise that is almost entirely reliant upon the technical and artistic vision of its employees, Apple has sought to create an environment that, in line with its mission and vision statements, is all about innovation; as Jobs himself once remarked, the company doesn’t hire people to tell them what to do, but rather «hire(s) smart people, so they can tell us what to do».

Cook is clearly attuned to this mantra, preferring to manage the experts rather than instruct them, but all employees must buy into the organisational culture of the company. Secrecy is one such characteristic, with the company seeking to maintain its competitive edge by protecting its intellectual properties.

Ultimately, Apple’s growth and success are attributable to two things: vision and branding. From the Apple II computer in the 1970s to the iPod and the iPhone in the early 2000s, the company has been able to identify where the next significant technological shift is going to occur — and then capitalise on it. In Apple’s case, this can be credited to the company’s leadership – particularly under Steve Jobs and Steve Wozniak.

Apple also represents a masterclass in branding. It can be (and regularly is) argued whether or not the iPhone is the best in class from a functional and technological perspective, but the bottom line is that it doesn’t matter: Apple has cultivated an almost fanatically loyal consumer base through the power of its brand, which is a lesson in itself for entrepreneurs who doubt the importance of a brand strategy.

Key Takeaways:

• Find the Right Investor – Not only did Mike Markkula have the funding, but he had a technical background, enabling trust and understanding between himself, Wozniak and Jobs. Find a funding source that aligns with your goals in the long term.
• «Own» the Consumer – Don’t just sell a product; sell around it, too, whether it’s accessories, subscriptions or software.
• Create a Brand Strategy – Good branding and a loyal customer base are invaluable assets.
• Build Strong Relationships – If your product requires B2B interactions, ensure that you are building strong and robust relationships with your partners.
• Understand Your Business – Whether you are driving its vision or enabling others with the requisite abilities to do so, know/blog/business-strategy-apple what is best for the business – not for you.

For similar insights, don’t forget to take a look at our breakdowns of Netflix and Uber’s business strategies, either!

What other vital lessons can we learn from Apple’s business strategy? Let us know your thoughts in the comments below.

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