Executive Summary

The Company designs, manufactures and markets personal computers and related

software, services, peripherals and networking solutions. Apple computers also

designs, develops, and markets a line of portable digital music players along with

related accessories and services. The company’s situation, marketing strategies and

mix relate to the quality value of Apple products and services such as the Macintosh

line of desktop and notebook computers, the iPod line of portable digital music

players, the Xserve server and Xserve RAID storage products, a portfolio of

consumer and professional software applications, the Mac operating system,

the iTunes Store, portfolio of peripherals that support and enhance the Macintosh

and iPod product lines, and a variety of other service and support offerings and sells

its products worldwide through its online stores, its retail stores, its direct sales force

and third party wholesalers, resellers and value-added resellers and sells products

for the purpose of education, consumer, creative professional, business as well as

government customers .

About Apple Inc.

Apple Inc., formerly Apple, Inc., is a multinational

corporation that creates consumer electronics,

computer software, and commercial servers. Apple's

core product lines are the iPad, iPhone,iPod music

player, and Macintosh computer line-up. Founders

Steve Jobs and Steve Wozniak effectively created

Apple Computer on April 1, 1976, with the release of

the Apple I, and incorporated the company on

January 3, 1977, in Cupertino, California. Apple Inc.

(NASDAQ: AAPL; formerly Apple Computer, Inc.) is

an American multinational corporation that designs and markets consumer

electronics,computer software, and personal computers. The company's best-known

hardware products include the Macintosh line of computers, the iPod, the iPhone

and the iPad. Apple software includes the Mac OS X operating system; the iTunes

media browser; the iLife suite of multimedia and creativity software; the iWorksuite of

productivity software; Aperture, a professional photography package; Final Cut

Studio, a suite of professional audio and film-industry software products;Logic

Studio, a suite of music production tools; the Safari web browser; and iOS, a mobile

operating system. As of July 2011, the company operates 357 retail stores in ten

countries, and an online store where hardware and software products are sold. As of

September 2011, Apple has recently been the largest publicly traded company in the

world by market capitalization, and the largest technology company in the world by

revenue and profit.

Established on April 1, 1976 in Cupertino, California, and incorporated January 3,

1977, the company was previously named Apple Computer, Inc., for its first 30

years, but removed the word "Computer" on January 9, 2007, to reflect the

company's ongoing expansion into the consumer electronics market in addition to its

traditional focus on personal computers. As of September 2010, Apple had 46,600

full time employees and 2,800 temporary full time employees worldwide and had

worldwide annual sales of $65.23 billion.1976–1980: The early years

Apple 1 - Apple was established on April 1, 1976 by Steve Jobs, Steve Wozniak,

and Ronald Wayne, to sell

the Apple I personal computer

kit. They were hand-built by

Wozniak and first shown to the

public at the Homebrew

Computer Club. The Apple I

was sold as

a motherboard (with CPU, RAM, and basic textual-video chips)—less than what is

today considered a complete personal computer. The Apple I went on sale in July

1976 and was market-priced at $666.66 ($2,572 in 2011 dollars, adjusted for

inflation.)

Apple 2 - The Apple II was introduced on

April 16, 1977 at the first West Coast

Computer Faire. It differed from its major

rivals, the TRS-80 and Commodore PET,

because it came with character cell based

color graphics and an open architecture.

While early models used ordinary

cassette tapes as storage devices, they

were superseded by the introduction of a

5 1/4 inch floppy disk drive and interface, the Disk II.

The Apple II was chosen to be the desktop platform for the first "killer app" of the

business world—the VisiCalc spreadsheet program. VisiCalc created a business

market for the Apple II, and gave home users an additional reason to buy an Apple II

—compatibility with the office. According to Brian Bagnall, Apple exaggerated its

sales figures and was a distant third place to Commodore and Tandy until VisiCalc

came along.

Apple 3 - By the end of the 1970s, Apple

had a staff of computer designers and a

production line. The company introduced

the ill-fated Apple III in May 1980 in an

attempt to compete

with IBM and Microsoft in the business

and corporate computing market.

Jobs and several Apple employees

including JefRaskin visited Xerox PARC in

December 1979 to see the Xerox Alto.

Xerox granted Apple engineers three days of access to the PARC facilities in return

for the option to buy 100,000 shares (800,000 split-adjusted shares) of Apple at the

pre-IPO price of $10 a share. Jobs was immediately convinced that all future

computers would use a graphical user interface (GUI), and development of a GUI

began for the Apple Lisa.

When Apple went public, it generated more capital than any IPO since Ford Motor

Company in 1956 and instantly created more millionaires (about 300) than any

company in history.

First Macintosh – 1984

Steve Jobs began working on the Apple Lisa in

1978 but in 1982 he was pushed from the Lisa

team due to infighting, and took over JefRaskin's

low-cost-computer project, the Macintosh. A turf

war broke out between Lisa's "corporate shirts"

and Jobs' "pirates" over which product would ship

first and save Apple. Lisa won the race in 1983

and became the first personal computer sold to

the public with a GUI, but was a commercial

failure due to its high price tag and limited

software titles.

In 1984, Apple next launched the Macintosh. Its debut was announced by the now

famous $1.5 million television commercial "1984". It was directed by Ridley Scott,

aired during the third quarter of Super Bowl XVIII on January 22, 1984, and is now

considered a watershed event for Apple's success and a "masterpiece".

The Macintosh initially sold well, but follow-up sales were not strong due to its high

price and limited range of software titles. The machine's fortunes changed with the

introduction of the LaserWriter, the first PostScript laser printerto be offered at a

reasonable price, and PageMaker, an early desktop publishing package. The Mac

was particularly powerful in this market due to its advanced graphics capabilities,

which had necessarily been built in to create the intuitive Macintosh GUI. It has been

suggested that the combination of these three products was responsible for the

creation of the desktop publishing market.

In 1985 a power struggle developed between Jobs and CEO John Sculley, who had

been hired two years earlier. The Apple board of directors instructed Sculley to

"contain" Jobs and limit his ability to launch expensive forays into untested products.

Rather than submit to Sculley's direction, Jobs attempted to oust him from his

leadership role at Apple. Sculley found out that Jobs had been attempting to

organize a putsch and called a board meeting at which Apple's board of directors

sided with Sculley and removed Jobs from his managerial duties. Jobs resigned from

Apple and founded NeXT Inc. the same year.

1986-1993: Rise and Fall

Having learned several painful lessons after introducing the bulky Macintosh

Portable in 1989, Apple introduced the PowerBook in 1991. The Macintosh Portable

was designed to be just as powerful as a desktop Macintosh, but weighed 7.5

kilograms (17 lb) with a 12-hour battery life. The same year, Apple introducedSystem

7, a major upgrade to the operating system, which added color to the interface and

introduced new networking capabilities. It remained the architectural basis for Mac

OS until 2001.

Apple saw the Apple II series as too expensive to produce, while taking away sales

from the low end Macintosh. In 1990, Apple released the Macintosh LC with a

single expansion slot for the Apple IIe Card to migrate Apple II users to the

Macintosh platform. Apple stopped selling the Apple IIe in 1993.

1994-1997: Attempts at Reinvention

In 1994, Apple allied with IBM and Motorola in the AIM alliance. The goal was to

create a new computing platform (the PowerPC Reference Platform), which would

use IBM and Motorola hardware coupled with Apple's software.In 1996, Michael

Spindler was replaced by Gil Amelio as CEO. Gil Amelio made many changes at

Apple, including extensive layoffs. After multiple failed attempts to improve Mac OS,

first with the Taligent project, then later with Copland and Gershwin, Amelio chose to

purchase NeXT and its NeXTSTEP operating system, bringing Steve Jobs back to

Apple as an advisor.

1998–2005: Return to profitability

On August 15, 1998, Apple introduced a new all-in-one computer reminiscent of

the Macintosh 128K: the iMac. The iMac design team was led by Jonathan Ive, who

would later design the iPod and theiPhone. The iMac featured modern technology

and a unique design, and sold almost 800,000 units in its first five months.

Through this period, Apple purchased several companies to create a portfolio of

professional and consumer-oriented digital production software. In 1998, Apple

announced the purchase of Macromedia'sFinal Cut software, signaling its expansion

into the digital video editing market. The following year, Apple released two video

editing products: iMovie for consumers and, for professionals, Final Cut Pro, which

has gone on to be a significant video-editing program, with 800,000 registered users

in early 2007. In 2002 Apple purchased Nothing Real for their advanced

digital compositing applicationShake, as well as Emagic for their music productivity

application Logic, which led to the development of their consumer-

level GarageBand application. iPhoto's release the same year completed

theiLife suite.

On May 19, 2001, Apple opened the first official Apple Retail Stores in Virginia and

California. Later on July 9 they bought Spruce Technologies, a DVD

authoring company. On October 23 of the same year, Apple announced

the iPod portable digital audio player, and started selling it on November 10. The

product was phenomenally successful — over 100 million units were sold within six

years. In 2003, Apple's iTunes Store was introduced, offering online music

downloads for $0.99 a song and integration with the iPod. The service quickly

became the market leader in online music services, with over 5 billion downloads by

June 19, 2008.

2011–present: Post–Steve Jobs Era

On January 17, 2011, Jobs announced in an internal Apple memo that he would take

another medical leave of absence, for an indefinite period, to allow him to focus on

his health. Chief operating officer Tim Cook took up Jobs' day-to-day operations at

Apple, although Jobs would still remain "involved in major strategic decisions for the

company." Apple became the most valuable consumer-facing brand in the world. In

June 2011, Steve Jobs surprisingly took the stage and unveiled iCloud. iCloud is an

online storage and syncing service for music, photos, files and software which

replaced MobileMe, Apple's previous attempt at content syncing.  This would be the

last product launch Jobs would attend before his death. It has been argued that

Apple has achieved such efficiency in its supply chain that the company operates as

a monopsony (one buyer, many sellers), in that it can dictate terms to its

suppliers. Briefly in July 2011, due to the debt-ceiling crisis, Apple's financial

reserves were greater than those of the US Government. 

On August 24, 2011, Jobs resigned his

position as CEO of Apple. He was replaced by

Tim Cook and Jobs became Apple's

chairman. Prior to this, Apple did not have a

chairman and instead had two co-lead

directors, Andrea Jung and Arthur D.

Levinson, who continued with those titles.

On October 4, 2011, Apple announced

the iPhone 4S, which includes an improved

camera with 1080p video recording, a dual core

A5 chip capable of 7 times faster graphics than the A4, a voice recognition system

named Siri, and cloud-sourced data with iCloud. It was released on October 14,

2011. On October 5, 2011, Apple announced that Jobs had died, marking the end of

an era for Apple Inc.

On October 29, 2011, Apple purchased C3 Technologies, a mapping company, for

$240 million. C3 is the third mapping company Apple has purchased so far.

Product Strategies

            Apple Company has designed a range of products and services to meet the

needs of education customers. These products and services include the iMac and

the MacBook, video creation and editing solutions, wireless networking, professional

development solutions, and one-to-one learning solutions. The iPod remains a

mostly closed and vertically-integrated platform. Although Apple provides

documented interfaces for hardware accessories, developers have no supported

way to add features to the software and although the iPod supports the mainstream

MP3 and AAC formats, the iPod does not support other proprietary formats

like Windows Media and Real Audio, and Apple refuses to license

its FairPlay DRM to other online music vendors. Apple did add Windows PC support

with their second generation iPod series. The service itself is a key component to

marketing mix as the service should be the best advertisement as there is

specialization on product valuation intended for international product marketing

means and develop contacts with people who can be loyal buyers and

recommenders. The taking of the products across national boundaries into fresh

markets, explore channels, guide customers and establish better relationships. The

service itself is a key to the markets.

Product Length and Product Width

Portable Computers – including Mac products such as Mac Book Pro, iMac,

MacBook Air, Mac Mini, Xserve

Servers – including Xserve, Xsan, MacOS X Ser, MobleMe.

Accessories – including MagicMouse, Keyboard, Led Cinema Display.

Wi-fi Based Stations - including Airport Express, Airport Extreme, Time Capsule.

Developer – including Developer Connection, Mac Program, iPhone Program.

iPod – including iPod Shuffle, iPod Nano, ipod Classic.

iPhone – including iPhone3GS, iPhone3G, iPad.

iTunes – including movies, TV shows, audio books, games.

Periphal products – including Printers, Storage devices, digital videos and cameras.

Mac and Accessories

Mac mini, consumer sub-desktop computer and server introduced in 2005.

iMac, consumer all-in-one desktop computer introduced in 1998.

Mac Pro, workstation-class desktop computer introduced in 2006, replacing the

Power Macintosh.

MacBook, consumer notebook introduced in 2006, replacing the iBook, now only

being sold to educational institutions.

MacBook Pro, professional notebook introduced in 2006, replacing the

PowerBook.

MacBook Air, ultra-thin, ultra-portable notebook introduced in 2008.

Apple also sells a variety of computer accessories for Mac computers including

the AirPort wireless networking products, Time Capsule, Thunderbolt Display, Magic

Mouse, Magic Trackpad, Wireless Keyboard, and the Apple Battery Charger.

The MacBook was a brand of Macintosh notebook computers built by Apple

Inc. First introduced in May

2006, it replaced the iBook and 12-

inch PowerBookseries of

notebooks as a part of

the Apple–Intel transition.

Positioned as the low end of

the MacBook family, the Apple

MacBook was aimed at the

consumer and education

markets. It was the best-selling

Macintosh in history, and according to the sales-research organization NPD Group in

October 2008, the mid-range model of the MacBook was the single best-selling

laptop of any brand in U.S. retail stores for the preceding five months.

There have been three separate designs of the MacBook: the original model used a

combination of polycarbonate and fiberglass casing that was modeled after the iBook

G4. The second type, introduced in October 2008 alongside the 15-inch MacBook

Pro, used a similar unibody aluminum casing to the 15-inch Pro, and was updated

and rebranded as the 13-inch MacBook Pro at the 2009 Apple Worldwide

Developers Conference in June 2009. A third design, introduced in October 2009,

used a unibody polycarbonate shell as aluminium is now reserved for the higher-

end MacBook Pro. On July 20, 2011, the MacBook was quietly discontinued for

consumer purchase in favor of the new MacBook Air. However, Apple continues to

sell the MacBook to educational institutions.

iPAD

The iPad is a line of tablet computers designed, developed and marketed by Apple

Inc., primarily as a platform for audio-visual media including books, periodicals,

movies, music, games, and web content. The iPad was introduced on January 27,

2010 by Apple's then-CEOSteve Jobs. Its size and weight fall between those of

contemporary smartphones and laptop computers. The iPad runs the

same operating system as the iPod Touch and iPhone—and can run its own

applications as well as iPhone applications. Without modification, the iPad will only

run programs approved by Apple and distributed via the Apple App Store (with the

exception of programs that run inside the iPad's web browser.

Like iPhone and iPod Touch, the iPad is controlled by a multitouch display—a

departure from most previous tablet computers, which used a pressure-

triggered stylus—as well as a virtual onscreen keyboard in lieu of a physical

keyboard. The iPad uses a Wi-Fi connection to access local area networksand the

Internet. Some models also have a 3G wireless network interface which can connect

to HSPA or EV-DO data networks and on to the Internet. The device is managed

and synced by iTunes running on a personal computer via USB cable.

Apple released the first iPad in April 2010, and sold 3 million of the devices in 80

days. During 2010, Apple sold 14.8 million iPadsworldwide,representing 75 percent

of tablet PC sales at the end of 2010.

By the release of the iPad 2 in March 2011, more than 15 million iPads had been

sold– selling more than all other tablet PCs combined since the iPad's release. In

2011, it is expected to take 83 percent of the tablet computing market share in the

United States.

iPOD

iPod is a line of portable media players created and marketed by Apple Inc. The

product line-up currently consists of the hard drive-based iPod Classic, the

touchscreen iPod Touch, the compact iPod Nano, and the ultra-compact iPod

Shuffle. iPod Classic models store media on an internal hard drive, while all other

models use flash memory to enable their smaller size (the discontinued Mini used

aMicrodrive miniature hard drive). As with many other digital music players, iPods

can also serve as external data storage devices. Storage capacity varies by model,

ranging from 2 GB for the iPod Shuffle to 160 GB for the iPod Classic. The iPod line

was announced by Apple on October 23, 2001, and released on November 10,

2001. All of the models have been

redesigned multiple times since their

introduction. The most recent iPod

redesigns were introduced on September

1, 2010.

Apple's iTunes software can be used to transfer music to the devices from

computers using certain versions of

Apple Macintosh and Microsoft Windows operating systems. For users who choose

not to use iTunes or whose computers cannot run iTunes, several open source

alternatives are available for the iPod. iTunes and its alternatives may also transfer

photos, videos, games, contact information, e-mail settings, Web bookmarks, and

calendars to iPod models supporting those features.

For iOS versions prior to iOS 5, the iPod branding is also used for the media player

applications included with the iPhone and iPad; the iPhone version is essentially a

combination of the Music and Videos apps on the iPod Touch. (As of iOS 5, separate

apps named 'Music' and 'Video' are to be standardized across all iOS-powered

products.) In either event, the iPhone and iPad have essentially the same media-

player capabilities as the iPod line, but they are generally treated as separate

products.

Discontinued models of the line include the iPod Mini and the iPod Photo, the former

being replaced by the iPod Nano, and the latter reintegrated into the main iPod line

(now the iPod Classic).

iPHONE

The iPhone is a line of Internet and multimedia-enabled smartphones marketed

by Apple Inc. The first iPhone was unveiled bySteve Jobs, then CEO of Apple, on

January 9, 2007, and released on June 29, 2007. The 5th generation iPhone,

the iPhone 4S, was announced on October 4, 2011, and released on October 14,

2011, two days after the release of iOS 5.0, the Apple operating system for handheld

devices.

An iPhone can function as a video camera (video recording was not a standard

feature until the iPhone 3GS was released), a camera

phone, a portable media player, and an Internet client

with email and web browsing capabilities, can

send texts and receive visual voicemail, and has both Wi-

Fi and 3G connectivity. Theuser interface is built around

the device's multi-touch screen, including a virtual

keyboard rather than a physical one. Third-party as well

as Apple application software is available from the App

Store, which launched in mid-2008 and now has over

500,000 "apps" approved by Apple. These apps have

diverse functions, including games, reference, GPS

navigation, social networking, security and advertising for

television shows, films, and celebrities.

There are five generations of iPhone models, each

accompanied by one of the five major releases of iOS (formerly iPhone OS).

The original iPhone was a GSMphone that established design precedents like

screen size and button placement that have persisted through all models.

The iPhone 3G added 3Gcellular network capabilities and A-GPS location.

The iPhone 3GS added a compass, faster processor, and higher resolution camera,

including video recording at 480p. The iPhone 4 has a rear facing camera

(720p video) and a front facing camera (at a lower resolution) for FaceTime video

calling and for use in other apps like Skype. The iPhone 4 featured a higher-

resolution 960x640 display; it was released on June 24, 2010. In the U.S., AT&Twas

the only authorized carrier until February 10, 2011, when a CDMA version of the

iPhone 4 launched for Verizon. On October 4, 2011, Apple announced the iPhone

4S. The iPhone 4S added a higher resolution camera (8 megapixel)

with 1080p video recording, face detection, and video stabilization, a faster, dual

core processor, world phone capability (allowing a single handset to operate on

networks based on both GSM/UMTS and CDMA technologies), GLONASS support

and a natural languagevoice control system called Siri.It will be available in 16 GB

and 32 GB, as well as a new 64 GB capacity. In the United States, it was announced

that two carriers, C Spire and Sprint, would begin carrying the iPhone 4 and iPhone

4S on October and November 2011, respectively.

Apple TV

Apple TV is a digital media receiver

developed and sold by Apple.

It is a small form factor network appliance

designed to play IPTV digital content

originating fromthe iTunes Store, Netflix,

YouTube, Flickr, MobileMe,MLB.tv, NBA

League Pass or any Mac OS X or Windows

computer running iTunes onto an enhanced-

definition or high-definition widescreen

television.

Apple offered a preview of the device in September 2006 and began shipping it the

following March. It initially shipped with a 40 GB hard disk; a 160 GB version was

introduced two months later and the earlier model was ultimately discontinued.

In September 2010, Apple announced a second-generation version of the Apple TV.

About one quarter of the size and one third of the price of the original Apple TV, the

new device can stream rented content from iTunes and video from computers or iOS

devices via AirPlay. The new version no longer has the hard drive; however, it does

have an undocumented internal 8 GB flash storage, speculated to be used for

smoother playback of streamed media. All content is drawn from online or locally

connected sources.

Price

The Price forms one of the 4 P’s of the marketing mix. The Pricing decisions and

strategies have an implication on the overall profit of the organization since it is the

factor which determines the income source. Pricing strategy refers to the methods by

which a business calculates how much it will charge for a product or service. It is

based not only on the cost of the product, but also on profit margin and a holistic

view of the market and future viability.

One can say that apart from technology or design, Apple sells pricing. Steve Jobs is

a master of using pricing decoys, reference prices, bundling and obscurity. Apple's

Sept. 1 announcement of new products was a classic example. The popular iPod

Touch media player has been revamped at three price points - $229, $299, and $399

- all costing more than the iPhone, which does everything the Touch can plus make

phone calls.

Such pricing games are vital for Apple, because competition is fierce in the tech

world and product hits just don't last. The current iPad costs $499 in its lowest-

powered configuration vs. the Archos 7 Home Tablet ($189) or the Dell Streak ($299

with a two-year AT&T contract). And competitors are rushing to offer more

functionality for hundreds of dollars less; the Streak tablet throws in a videocam and

phone, which iPads don't yet match.

Pricing Strategy:

Apple uses skimming and premium pricing strategies.

Price skimming involves charging a high price because you have a substantial

competitive advantage. However, the advantage is not sustainable. The high price

tends to attract new competitors into the market, and the price inevitably falls due to

increased supply. A classic example is Apple's iPod. Most iPod consumers are

technically sophisticated, and 75% of them are previous Apple customers. This

consumer base is very likely to contain people who are nearly not price sensitive to

Apple products: The consequence of the iPod's pricing strategy is to progressively

skim off the demand (starting with the less elastic portion), sacrificing high sales to

profit at the beginning.

Premium pricing uses a high price where there is uniqueness about the product or

service. This approach is used where a substantial competitive advantage exists.

Such high prices are charged for luxuries.

Price list of its products:

ipad2- from$499

iphone- from $49

ipod touch- from $199

ipod nano- from $129

ipod shuffle- just $49

ipod classic- just $249

apple TV- just $99

Macbook Air- from $999

Macbook Pro- from $1199

Mac mini- from $599

imac- from $1199

Macpro- from $2499

Marketing tricks adopted by Apple in pricing :

1. Price decoys

Decoys, in marketing, are products, services, or price points that a business doesn't

really want you to take, but rather use as a reference to make another product look

better. The addition of iPad to its product portfolio, potentially cannibalizing product

to its lineup of iPods, iPod Touches, iPads, laptops and computers, one realize that

this gadget is likely a decoy.

Economist Dan Ariely, author of Predictably Irrational, gives the classic example of a

Realtor who shows you a home that needs a new roof, right before taking you to a

higher-priced house she really wants to sell. Now consider $499 for an iPad. Well,

compared with a smaller one with fewer features, it suddenly looks great.Decoys

explain why Apple often sells each gadget in a pricing series, such as the new iPod

Touch's $229, $299, and $399 price points for different storage capacities. The $399

"decoy" has clouded people’s judgment. Apple wins the best of both worlds - stoking

demand for products that look like bargains and for all the decoys it sells at much

higher prices. Yes, some people will spend $399 for a music player with slightly

better technology - and Apple makes even fatter margins.

2. Establish a high reference price

Consumers constantly need "reference prices" for comparison to make decisions

about the value. A dress costs Rs.1000.. Is that too much? Not if it's marked down

50 percent from Rs.2000. The trick is, that artificial Rs.2000 reference price may not

really exist. Apple has played this game by launching products such as the iPhone at

artificially high reference prices - the iPhone cost $599 when it first hit the streets -

and then rapidly lowering that price. Apple in essence is using its first-iteration

pricing as a reference to make its current products feel affordable.

3. Obscure the reference price

This is a more clever Apple marketing trick; instead of giving consumers a reference

price, hide the pricing altogether. Candy in movie theaters is a classic example of

price obscurity, because it comes in unusual, large boxes that are shaped nothing

like what you see at other stores.

Apple also obscures references by making its products look like nothing else, from

the first iPod with a unique scroll wheel to the current iterations wrapped in gleaming

aluminum. Apple seems wondrously unique, until you consider aluminum is the

same material you wrap leftover fish in and then it hits you: Apple is disguising itself

so you can't compare prices.

4. Bundle price components to hide what you can

Buy an Apple product and you'll spend more downstream. For every iPad or iPhone

sold, Apple likely counts on your future song purchases, video rentals, and soon iAd

clicks on app advertising.

Apple is not unusual here; almost every mobile handset, for instance, has some of

its costs buried in future monthly data fees over a two-year phone contract. All of this

"bundling" means the price over time is much more than what you think picking up

the Apple gadget.

The pricing strategy is brilliant. By staging a series of perceived technology

innovations and then adding price decoys, reference prices, obscurity and bundling,

The communication breakthroughs are mostly an illusion, but with shiny aluminum in

our hands, cost takes a secondary seat.

Place

Apple has over the years developed a very strong distribution system. it spreads

from the more conventional distribution to the more recent online store

Apple online store

The apple online store was started in 1996 soon after apple acquired NEXT..apple

built the store using nexts’ web application server.it was an immediate success

because the online store did a business of US$ 12million in the first year of its

operation.the setting up of online store was keeping in mind the following benefits.

Making savings in set-up and operational costs. You don't need to rent high

street premises, pay shop assistants or answer a lot of pre-sales queries.

Reducing order processing costs - customer orders can automatically come

straight into your orders database from the website.

Reaching a global audience, thereby increasing sales opportunities.

Competing with larger businesses by being able to open 24 hours a day, seven

days a week.

Being able to receive payment more quickly from online transactions.

Attracting customers who would not normally have investigated your type of high

street outlet.

Improving your offerings using the data gathered by tracking customer

purchases.

Using your online shop as a catalogue for existing customers.

Apple store

Conflict with the existing retailers drove apple to open their own retail

stores..customers didn’t have a pleasant experience when they entered a compUSA

or Sears to buy apple products. Realizing that they were being held over a barrel by

big retailers that were used to calling the shots with computer OEMs and frequently

provided a horrible purchasing environment for Apple products, the company did

what it had to and took control of distribution. Apple took a lot of heat and fought off a

lawsuit from disgruntled retailers when Apple launched the retail stores. But the truth

is that many of those retailers were damaging Apple's relationship with its customers,

at a time when the company was being relentlessly pressured by Dell's direct

distribution model. The combination of Apple's retail stores and well-implemented

online store have helped boost Macintosh sales to record levels. 

Apple has expanded and improved its distribution capabilities by opening i retail

stores in key cities around the world in up-market, quality shopping venues. Apple

provides Apple Mac-expert retail floor staff staff to selected resellers' stores (such as

Australian department store David Jones); it has entered into strategic alliances with

other companies to co-brand or distribute Apple's products and services (for

example, HP who was selling a co-branded form of iPod and pre-loading iTunes onto

consumer PCs and laptops though in retrospect this may now just have been a

stepping-stone). Apple has also increased the accessibility of iPods through various

resellers that do not currently carry Apple Macintosh systems (such as Harvey

Norman), and has increased the reach of its online stores.

The very successful Apple retail stores give prospective customers direct experience

of Apple's brand values. Apple Store visitors experience a stimulating, no-pressure

environment where they can discover more about the Apple family, try out the

company's products, and get practical help on Apple products at the shops' Guru

Bars. Apple retail staff are helpful, informative, and let their enthusiasm show without

being brash or pushy.

The overall feeling is one of inclusiveness by a community that really understands

what good technology should look and feel like - and how it should fit into people's

lives.

Promotion

Promotion is one of the 4 Ps of marketing (Product, Price, Place, and Promotion). It

is a link of communication between sellers and buyers for influencing, informing, or

persuading a buyer’s purchasing decision.

5 elements: personal selling, advertising, sales promotion, direct marketing and

publicity which together form the promotional mix. Objectives like increasing sales,

new product acceptance, brand equity creation, positioning, etc. basically define the

budgeting to be allotted for each element.

However, promotion has 3 main objectives:

1. To present information to consumers as well as others

2. To increase demand

3. To differentiate a product.

Promotion is done via different mediums. It may be in form of internet

advertisements, endorsements, television commercials, special events, and

newspapers to advertise their product. Apple went through the entire gamut of

promotional mediums to create a brand for itself that people could relate to and recall

in an instant.

Its advertising and marketing campaigns often had that edge, that little quirkiness

that kept them interesting yet functional. Let’s look at some of the successful

integrated marketing campaigns that Apple has had over the years.

Advertising Campaigns

Apple has always been well known for its creative advertising campaigns, designed

to reflect their innovative ideas to market to creative individuals. Some of their

notable ad campaigns include the ‘1984 Super Bowl’ commercial, the 1990’s ‘Think

Different’ campaign, the ‘iPod people’ campaign in the 2000s, and the ‘Get a Mac’

campaign in 2006.

1984

It is Apple’s most iconic advertisement

which launched the Apple Macintosh

personal computer for the first time. This

ad showed a young unnamed heroine

wearing a tank top and shorts running with

a large sledgehammer, chased by a 4

police officers in complete riot gear.

She races towards a large screen with an

image of a Big Brother-like figure giving a speech and hurls the hammer at it. As the

screen is destroyed, shocking the people watching it, the ad concludes with a black

text scrolling over the screen which reads:

“On January 24th, Apple Computer will introduce Macintosh. And you’ll see why 1984

won’t be like 1984.”

It’s been lauded as a classic winning critical acclaim over time. It is now regarded as

one of the most memorable and successful American television commercials of all

times.

Think Different

‘Think Different’ is an advertising slogan created during the 1990s for advocating the

use of Apple computers instead of the usual IBM-derived Windows computers. It was

used in TVCs, print ads and several promos for Apple. The TVC featured 17 20th

century personalities, iconic in their own

respect. The commercial ended with a

young girl with her eyes closed, as if

making a wish.

Print ads in the same campaign had a

portrait of a famous historic figure with a

small Apple logo and the words “Think

Different” in one corner.

In many ways, the new ad campaign marked the beginning of Apple’s reemergence

as a technical giant. This campaign, along with the return of Steve Jobs at Apple, put

Apple in the spotlight and with many new successful products, it marked as the new

birth for the tech giant.

iPod People

Apple introduced this campaign in 2002 when they

launched the iPod. The campaigns included TVCs,

print ads, posters, and for the first time wrap

advertising campaigns. These campaigns were

uniquely different and followed a consistent style

that different from Apple’s usual ads.

The commercials simply featured dark silhouetted

characters against bright-coloured backgrounds. The silhouettes were usually

dancing, (usually accompanied with music in TVCs) holding iPods.

Segmentation-Targeting-Positioning Analysis

Market Segment

Apple Inc. With its entire product range reaches out to a market which can be

segmented into four broad categories which include households, education,

professional and commercial. This classification is done on the basis of need usage

and purchasing power. Table A illustrates the details of market segmentation.

sector segment Power

macen

tosh

4G

Power

book

G4

IMAC Power

macentosh

4G server

ibook Emac Iphone Ipad

consu

mer

Individual

s

Small /

home

office

Students

Teachers

profes

sionals

creative

Large

business

Media

publishin

g

Here we can see that the market segmentation covers a large market area across

demographics but one common feature is high disposable income. Apple competes

for profits. The company carefully picks and chooses its product markets and defines

which segments of these markets in which to compete. This is why Apple doesn't

manufacture nor sell cheap PCs, cheap phones, etc. Apple competes in select

market segments such as the $1,000+ PC market because in that segment Apple

has greater pricing control and thus greater opportunities to realize higher profits.

Targeting strategy

The target market of the company involves almost all sectors of the society.

1. They want to provide Apple Computers Inc to young or old, boy or girl.

2. Middle/Upper income folks who are willing to pay a bit more for a better user

experience. paying 500 more for a computer is not a huge deal if you have a

decent income.

3. People who like to have fun with technology. No other platform offers as many

entry level tools (the whole iLife bunch and more). This includes people who

like to shoot a lot of digital photos or video. It's the whole digital hub concept.

People are starting to buy into it.

4. Music enthusiasts and fans ages 12-35.

5. Professionals in media and design.

This target market is a larger source of income. The company has different

marketing strategies that can cater to the taste and appeal of such markets. The

company makes sure that its stores and branches are located in the most profitable

places where clients can easily see the store and they can be encouraged to visit the

store and buy products. The company also makes sure that competition in the

location they want to put up the branch will not be too heavy.

Positioning strategy

Apple uses the Positioning by attribute and also positioning by user.

Positioning by attribute:

iMac – Extreme hardware, costlier than the regular PC

Mac OS X - Good graphics, many user oriented features more stable than

windows

Final Cut pro – World class movie editing softwares, used by Steven

Speilberg

iPhone – Changed the face of smart phones, the best hardware and software

combination at the moment.

Ipod – Durable, and well segmented into shuffle, nano, classic, touch, and

many more to yet launch.

Positioning by user:

Apple has positioned itself to a certain type of customer, wealthy people, innovators,

peoplewith good jobs, good lifestyle, etc. If Apple targets the poor man type, the

trendy guys will stop buying Apples, because everybody can and Apple is not the

Porsche of the computers anymore, this would hurt more the brand than maybe the

increasing sales because of lower prices, and in good times, where everybody has

more money, Apple would have the problem that they cannot rise prices, because

everybody expects a cheap.

SWOT Analysis

Strengths

•    iTunes Music Store is a excellent source of revenue, especially with the iPod and the accessibility on Windows platform.

•    Apple Computer are expert in Developing own software and hardware.

•    Apple’s niche audience provides the company with some lagging from the direct price competition.

•    Giving a face-lift to desktop and notebook lines.

•    Web technology can be used to improve product awareness and sales.

•    Low debt—more manoeuvrable.

•    Apple Computers have good brand loyalty.

•    Partnership with Intel Computers in 2006 – Present.

•    Strong Research & Development Department.

Weaknesses

•    Weak relationship with Intel and Microsoft.

•    Weak presence in business arena.

•    The product life cycle of Apple products are very small for that reasons revenues are more depend on launch of new products and  services.

•    Weak presence in markets other than education and publishing.

•    Slow turn around on high demand products.

•    Apples market share is far behind from major competitor Microsoft.

•    In past the relationship between Steve jobs and employee were not good which result in reputation loss.

Opportunities

•    Increase in worms and viruses on PCs so the antivirus solution can be developed by Apple

•    Large population (Gen X&Y) which are extremely individualistic and name brand conscious.•    The ties of apple other companies are weak, Apple can develop good relationship for joint ventures

•    Downloadable music and MP3 players are highly marketable.

•    The online sales of computer are increasing with rapid speed.

•    The laptop market growth is high; Apple Computers should focus to develop new models to cater the need of customers.

Threats

•    Companies not seeing Apple as compatible with their software.

•    Apple facing strong competition from Dell, HP, Sony and Toshiba in laptop segment.

•    Downloading free music from other online source without paying cost is common it may impact the iTunes sales.

•    Apple software, Cell phone and hardware are expensive as compared to other competitors such as Dell.

•    The long lasting recession may impact the sales of the company due to higher prices of the products and services

•    Microsoft launched Microsoft Vista, Windows 7 which is gaining market share.

•    The switching in technology is very fast.

Conclusion

We feel that Apple must focus on several key aspects to continue to grow and

succeed.

They must continue a stable commitment to licensing, push for economies

of scope between media and computers, and become a learning

organization.

Apple apparently made a commitment to licensing. Although it should continue,

Apple may want to consider other forms of strategic alliances. An equity strategic

alliance may offer Apple the opportunity to obtain additional competencies. An

effective way for a company like Apple to accomplish this would be in the form of a

joint venture. Apple should continue pushing the new line of media-centric

products. Meanwhile, Apple should not lose focus on its computers. Macintosh

computers were 39% of Apple’s sales in 2005. (Burrows) This very innovative

company exploits its second-mover position. In the future, they will need to

continue innovating to expand the boundaries of both media and computers. One

persistent element of both competitive advantage and risk is Steve Jobs. He is both

synonymous with Apple’s success and has a large equity interest in Apple and

Disney. If he were to divest his leadership position, the reaction of both the market

and consumers would be uncertain. Given his position within the organization as

well as the history of the company when he was gone, Apple must find a way to

learn as an organization. This will allow the company to withstand a departure by

Jobs. Based on the actions of the organization, we feel that the mid-term

performance of Apple will be strong. This period allows Apple time to overcome

their challenges if they move swiftly. For this reason, we feel that they will

continue to succeed and will continue to outperform their peers.

Bibliography

www.apple.com

forums.appleinsider.com

www.entrepreneur.com

www.bloomberg.com

Marketing management -Philip Kotler

Positioning the battle for your mind- Al Ries and Jack Trout