Situational Analysis of Apple

Discuss about the  Marketing Plan of Apple Organization.

Marketing plan of an organization is a comprehensive document which outlines the marketing and advertising efforts of company throughout the year. It allows the organizations to comply with a structure to attain their predetermined goals and objectives. This report includes the marketing plan for Apple Inc. In this marketing plan, there is the discussion about the marketing strategies and tactics of Apple Inc. for its iPhone product in United Arab Emirates (UAE). The organization has introduced this product to target the customers who require to store the data and communicate and who want entertainment. The report conducts the situational analysis for Apple by analyzing its internal and external factors i.e. strengths, weaknesses, opportunities and threats. Furthermore, it includes the financial projections to analyze the performance of company in smartphone industry. An action plan is created to implement and to monitor the marketing plan for Apple iPhone in UAE.

Apple is an American Multinational Corporation that was established in the year 1976. The organization has introduced its products and services in the industry of software, hardware, consumer electronics and digital distribution. In the year 1976, Apple was founded by Steve Wozniak, Steve Jobs and Ronald Wyne. Currently, the organization is headquartered in California, United States of America.  In the beginning, this organization has started its business operations with the name of Apple Computer, Inc. to produce and offer the personal computers only. With the passage of time, it has removed computer from its name. This change indicated the intention of Apple to expand its operations in other products including consumer electronic market.

Currently, it has been offering various products and services such as iPhone, iPad, iPod, Smart Watch, Apple TV etc. Moreover, it is offering some online services iTunes Store, iOS app store, Apple Music, iCloud and Mac App Store. Apple is running its business operations in different countries and making significant profits in information technology industry (Apple Inc., 2017). At Apple, primary product segment is its iPhone smartphones. In the year 2007, the company has launched the first generation of iPhone with various unique specifications. After its launch, the firm has experienced a better growth in international market.

The major goal and objective of Apple Inc. is to keep on expanding their business operations in current and new country markets. The organization wants to operate its business all over the world with the strategy of enhancing the technological products. For this, it has introduced various technological products for its customers by different channels of distribution. It would like to continue with its current chain of products, for example iMacs and iPhones for their clients. In the future, the organization wants to introduce more products which will assist Apple to deal with the competition in the industry. Thus, main emphasis of the company is to focus on extending its products on international level for personal computers, telecommunication and technology products (Eason, 2014).

Strengths of Apple

Situational Analysis is the process that is used by the organization’s managers to analyze the internal and external environment of a company, so that they can understand the customers, business environment and capabilities of organization. To conduct situational analysis, the managers of an organization can use SWOT analysis that includes different internal and external dimensions of company like strengths, weaknesses, opportunities and threats. However, Apple is the strongest player in the smartphone industry but it has some weaknesses and threats which are affecting the growth of its business (Battistella, 2014). The situational analysis of Apple is stated below;

Modern Technology and Innovation

One of the major strengths of Apple is its innovation and adoption of advanced technology. Apple Company is manufacturing its products by the use of updated technology and innovation. IPhones of the company are prepared by including different innovative and unique features. It has an innovative touch screen and has various functions of other mobile phones all in a single device. The iPhone works with the iTunes, OS software tools and other Apple products that have infinite potential for upgradability.

Strong Brand Image

This organization has strong brand image in Information Technology industry due to the enticing quality and design of products and services. Currently, the organization has proficiency in hardware, software and other online services. This is the major reason behind its strong brand image all over the world (Foo, 2014).

Customer Loyalty

By offering quality and innovative iPhones, this organization is able to make trust among customers. There are various customers who only love to use iPhones. Thus, company’s brand quality is able to develop loyalty among customers. Due to this, it has the ability to charge higher prices for its products.

Prices of iPhones

One of the major weaknesses of Apple Organization is the prices of its iPhones. The prices of its smartphones are higher than other competitors like Samsung and Nokia. Still, the company does not offer lower priced phones for its cost conscious clients. It has reduced the customer base of Apple iPhones (Jenkins, Ambrosini & Collier, 2016).

User Interface

The products of Apple are not user friendly so people are facing various issues while using the iPhones. Touch screen interfaces suffer from the issue of gorilla arm. It has affected the response of customers adversely towards its products and services.

Decrease in Market Share

Market share of Apple Company started to decline in front of its major competitors such as Microsoft, Samsung etc. Other organizations are offering the products with similar functions and specifications at comparatively lower prices (Yeung, 2017). It has decreased the market share of Apple in smartphone and Information Technology industry worldwide.

Weaknesses of Apple

Strategic Partnerships

It is one of the best opportunities for Apple in the Information Technology industry. In the future, Apple can collaborate with several strong mobile phone firms to surge the market with the iPhones. It will assist the organization in decreasing marketing costs and enhancing the revenues via long-term deals (Hollensen, 2015).

Business Expansion to a new target segment

In addition to above, the company can reduce the prices of its products, i.e. iPhones and offer its products to the cost conscious customer segment also. The organization can attract a new customer segment by adopting technology advancement and reducing the prices of products.

Intense Competition

The major threat faced by Apple Organization is increased competition in smart phone industry. Now, smart phones are very easy to make than ever. There are various organizations such as Samsung, Nokia and Sony etc. which are offering similar products on comparatively lower prices. There are many players which are planning to enter in this industry. It has an adverse impact on the business of Apple organization (Weinstein, & Pohlman, 2015).

Downward pricing Pressure

As mentioned above, this organization is offering its iPhones on higher prices than its competitors. The products of Apple are marketed as high end phone, but its prices are going to fall when its competitors challenge the prices of iPhones. It has affected the revenues and profits of organization smartphone industry. In this way, the above analysis indicates that Apple is on one of the top ranks in the smartphone and information technology sector (Wagner & Eggert, 2016). However, the organization is facing some threats due to its pricing policy and competition but still it holds a top position in the industry because of its strengths and growth opportunities. It is competing with other players by using effective marketing strategies and tactics so that it can stay competitive in mobile phone market.

Before creating its marketing strategies, Apple Inc. will select a market segment to offer its products and services. For iPhones, the company has divided its targeted audiences in two segments i.e. primary target market and secondary target market. The company has targeted its prime customers by considering demographic characteristics i.e. income and age of population. This target market of the company includes the people of 30 to 55 years old who are from upper and middle classes. These people are the reason behind the sales of Apple’s iPhones and increased revenues. Moreover, it is targeting business professionals who utilize iPhones to communicate with their family, colleagues and friends. Apart from this, the secondary market of the company is teenagers and young adults (Kotler, 2015). Under this segment, organization includes the students from high school and college who prefer to buy iPhones for entertainment and communication purpose. These people purchase the iPhones to show off their social status to their friends and social groups. To attract the above targeted population, Apple Organization has adopted various effective strategies which are stated below:

Opportunities for Apple

Under the product development process, Apple Organization is using effective strategy and conducting market research to know about the needs and demands of customers. Due to this, the organization is able to manufacture and provide perfect products according to customer needs (McDonald, & Wilson, 2016). It keeps on enhancing and launching improved products like iPhone, iPod, Apple TV, iPad, Apple Watch, Mac OS etc. This organization always makes efforts to attract the public and its customers with its advanced and innovative products. In addition to this, they are considering competitors’ offerings.

Apple Organization is setting its prices on the basis of costs of production and manufacturing. The technology market is becoming very expensive with the passage of time so suppliers sell their materials at higher prices due to quality and advancement of materials. Apple is considered as an expensive brand and still its customers are ready to spend their money on Apple iPhones (Kanagal, 2015). However, the company is charging variable prices for its products according to their features and functions. The company is able to maintain its brand image using premium pricing strategy.

Apple Inc. has already expanded its business in various countries such as Europe, Asia, America, Africa etc. It is engaged in enhancing of its stores which are located in Canada, UK and US. For iPhones, the organization has adopted a strong place and distribution strategy. The company has established its own stores and showrooms where the people can shop their iPhones. The products of Apple are available on several e-commerce sites such as Flipkart, Amazon, e-Bay etc. In addition to this, the organization has tied up with the independent stores. These stores provide iPhones with other brands’ smart phones. They buy the products from distributors (Luttrell, 2015).

Apple has established a unique and top position in smartphone and information technology industry worldwide. Every model of iPhones has different tagline that attracts customers towards this. For example, the tagline for iPhone 6 is “the only thing that has changed is everything”. Additionally, it is using various modes of advertising to promote its products (Huang, & Sarigöllü, 2014). To grab the attention of tech savvy customers, the organization is placing ads on social media sites such as Instagram, Facebook and Twitter. It has been focused on developing its relationships with targeted people.

In addition to above marketing strategies, Apple Inc. is adopting some marketing tactics to provide effective customer satisfaction while enhancing thee business to maximize the promotion of its iPhones. Conducting marketing research is one of the most significant marketing tactics of Apple iPhone that assisted the organization in reading the minds of customers. The organization always considers the reviews from customers whether they are positive or negative and make changes accordingly. It enhances the customer satisfaction towards the products of Apple (Babin, & Zikmund, 2015). The firm is focused on designing the customer experience not just a product. Following this thought, Apple has introduced iPhones and approach of Apple’s interface created a legacy of exclusive experience which is difficult to get in other mobile phones. Furthermore, Apple is continuously employees in research and development department to understand their growth. The organization is using different surveys and feedback system to get response of people towards iPhones.

Threats to Apple

To implement this marketing plan, the company will create a marketing and promotional budget. This budget will be used to promote the iPhones among targeted population by the use of different modes (Sedaghat, Sedaghat & Moakher, 2012). This budget for Apple Inc. is given below:

Apple Inc.
Promotional Techniques	Amount
	(in $)
Social/Digital Media Marketing
1. Facebook	$6,000
2. Twitter	$7,000
3. Youtube	$4,500
Total Social Media	$17,500
E-mail Marketing	$20,000
Online ads	$6,500
Online promotional Campaigns	$27,000
Total Budget for Online Media	$53,500
Print Media
1. Newspaper	$16,000
2. Magazine	$25,000
Total Print Media	$41,000
Traditional and Broadcasting Media
1. TV Channels	$50,000
2. Hoardings	$26,000
Total	$76,000
Personal Selling	$10,000
Sales Promotion	$6,000
Direct Marketing	$3,100
Total Budget for Marketing and Promotion	$207,100

The break even analysis of Apple is assumed whole sale revenue of $700 per unit, variable costs of 400 per unit and fixed cost of $60 million. The break even calculations of the company indicate that it will become very beneficial after the increase in the sales volume of 250K. It is estimated that sales volume of the company will increase continuously till the year 2020. In the year 2020, the operating profit of the company is estimated to $75000 million. The below-graph shows the financial growth and projections of the company (APPLE, 2018).                           

The organization has been estimated that sales volume of Apple will be increased with the introduction of new models of iPhone. It will decline the effect of fixed costs and enhance the business opportunities to increase the production scale. Ultimately, it will enhance the revenues and profits of Apple Inc. in long run.

Under any marketing plan, it is one of the most important steps that assist in implementing the marketing plan in practice. After implementation, Apple organization will evaluate and implement control to different stages. The implementation and controls for the chosen organization is stated below;

After the development of marketing plan, the organization will be implementing this marketing plan in the process. In the implementation of this marketing plan, Apple Inc. will conduct a market research and analyze the needs and demands of customers towards mobile phones. Under this activity, research and development department will play an important role. After analyzing this information, the organization will manufacture the products accordingly (Shimp, 2008). To offer its new products, it will develop its mission and objectives. In order to achieve a significant market share, the organization will make efforts for effective implementation of this marketing plan in practice.

Action	Manager	Responsible Department	Time Frame
Conduct marketing research to understand the needs and demands of customers	Middle level managers	Research and Development division	3 Months
Analysis of data gathered from market research	Research and development managers	Research and Development division	2 Months
Decision making on new product development (iPhones)	Senior managers	Top-level management	1 month
Establishment of objectives and mission	Board of Directors and Top managers	Senior Management	1 Month
Implementation of marketing plan in practice	Marketing Managers	Marketing, advertising and promotion department	3 Months

To monitor the effectiveness of marketing plan, senior level managers at Apple Inc. will supervise all the actions of marketing plan. Before implementation, middle level managers will take the approval from top managers. The head of marketing division will be responsible for measuring and controlling the costs and report about needed variations in the plan. The organization will create a team that will oversee the whole process of marketing plan implementation. It will be reviewed on a regular basis (Sheth, & Sisodia, 2015). Under controlling process, the mangers will be meeting with the Board of directors of Apple Inc., present the information and formulate the proposal for marketing and advertising efforts. Before every meeting, the team will meet personally and tell them about the proposal. In this way, the company can monitor and control the effectiveness of marketing plan.

Conclusion

From the above report, it can be concluded that implementation of marketing plan is an important process for an organization. An organization can bring its new products and services to the market by using marketing plan. Apple is one of the most popular organizations in IT and telecommunications industry worldwide. The company is offering a variety of products and online services. The above marketing plan shows that Apple is implementing effective marketing strategies and tactics to promote its products and attract customers towards them. This organization will be able to stay competitive by the use of this marketing plan.

References

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