Apple Marketing Audit

Charles WeickertJennifer Shipowitz15 December 2010

Instruments of Marketing

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The Macroeconomic Environment

Demographic

Demographic shifts and changes can pose both opportunities and threats to Apple. Apple’s biggest challenge is to successfully cater to the most important demographic trend, the changing age structure of the population. Consisting of 30 percent of the entire population, the baby boomers, born between 1946 and 1964, are now reaching their forties. Targeting this group of the population is difficult, but knowing that the baby boomers hold 75 percent of the nation’s assets, Apple does reach out to this group. Many of Apple’s products are becoming more marketable to an older, business driven age group. The iPad has been introduced as an alternative to a laptop computer (Apple Inc, 12). This new product has been geared towards the older shift in the population and this segment’s need for an easy-to-use alternative for a laptop for travel, reading, and business. Another difficult group for Apple to target in this demographic shift is the group titled Generation X. This part of the population, born between 1965 and 1976, is less likely to frivolously spend money on technology such as Apple’s expensive products. On the other hand, the children of the baby boomers, born between 1977 and 2000, present opportunities for Apple. Apple has adapted their products well to this group of Millennials. Apple has made its products seem highly desirable to these teens and young adults. For example, Apple has made the iPod seem like a necessary music player to all ages of this group of the population, making it easy to use and “cool” to own. All of which are important aspects to this portion of the population.

Economic

With the introduction of every new product come challenges and questions for Apple. For example, the introduction of the iPhone was at the beginning of the economic downturn. Apple realized that although its business professional and high-end consumer demographic could continue to purchase these luxury goods, the rest of the population would not purchase the product. Therefore Apple gave its consumers options. Apple lowered the price of the iPhone and gave options on megabytes, colors, and functions. Apple has done this not only with the iPhone but also with the iPod and many of its computers. The iPod now ranges in price from $49 to $399 depending on type, capacity, and function of the iPod. This allows Apple to continue to be marketable to many different consumers even when developments in the economy change.

According to an article in Daily Finance News, “Real Per Capita Disposable Income Biggest Drop Since 1949.” Due to the economic downturn, consumers do not have as much disposable income to spend as they please. The graph below shows how debt has increased significantly since the economic downturn, giving consumers a reason to spend less. Consumer patterns are changing, and food, housing, and transportation are the most important places of spending. Therefore, Apple faces a huge challenge when trying to sell its technology products. As was stated earlier, Apple has attempted to lower prices of its more necessary items, such as the iPhone. Yet, as

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a high quality technology company, Apple will continue to face issues attracting customers until the United States pulls out of the economic downturn, and customers have more money to spend as they please as can be seen in the graph below.

(http://www.complexityinvestments.com/blog/tag/pall/)

Environmental

According to Apple’s own website and its annual report, Apple takes a very serious approach in regards to its impact on the environment. Recent trends have shown a need for the entire population to focus more on every individual’s impact on the earth, and the government is becoming more concerned about the future of our environment. There is currently a shortage of raw materials and a high increase in pollution. According to the Apple website, “Apple reports environmental impact comprehensively. We do this by focusing on our products: what happens when we design them, what happens when we make them, and what happens when you take them home and use them.” In response to these recent trends and the focus on the environment by the government, Apple has taken many steps to prove to its customers and the public that it is making changes to help the environment. According to Apple’s website, the majority of Apple’s impact on the environment, or otherwise known as its “carbon footprint,” is 97% related to the life cycle of the actual product. This life cycle includes the manufacturing, transportation, use, and then recycle of the product. The other 3% of the impact is created by Apple’s actual facilities. Apple recognizes that in order to improve its environmental impact, it needs to improve its products. Apple continues to improve its packaging to be more energy efficient and environmentally conscious, as well as continuing to make its products with minimal materials.

Technological

The changes in our technological environment are without a doubt the most dynamic forces changing the way we live now and the way we will live in the future. Technology shapes our environment and without many advances in technology, we would not be as successful as we are today. In response to this trend of increased

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technology, Apple has reacted in the most promising way. Apple is one of the most innovative technological companies, and is a leader in technological advancement. With the introduction of every new product, Apple continues to improve upon itself. New updates for its products are released frequently, showing that Apple continues to advance its original innovative creations.

The technology environment has also seen a recent trend in the improvement of the manufacturing and production of computers. In response to this trend, Apple will need to continue to create products consumers desire, because the production of computers will become cheaper, as will the selling price, eventually decreasing revenue.

Political/Social

According to Apple’s annual report, “Compliance with federal, state, local and foreign laws enacted for the protection of the environment has to date had no material effect on the Company’s capital expenditures, earnings, or competitive position.” Socially responsible behavior has become of higher importance in our political and social environment. As can also be read in the annual report, Apple continues to encourage its employees to act and do what is right, and takes many steps to making sure its employees are always socially responsible.

The copyright law, now more influential then once before, would now be more of a focus for Apple. The copyright law has become stronger because of the use of online music downloading and the legal issues facing many artists. Apple continues to have a positive approach when dealing with the copy right laws, as their service iTunes, only sells songs, movies, and shows that have been approved by the actual artist or the company owning the artist. For example, iTunes recently introduced all of the Beatles music to the store. Previously, the Beatles songs had not been offered for purchase because of copyright and legal issues.

Many faces of politics have begun to name themselves with different causes that affect our world, and now many companies are also beginning to connect themselves with different causes. (PRODUCT) RED, is a brand that was created to raise awareness and eliminate AIDS in Africa. HIV and AIDS education has become a more recent interest to those involved in politics, and Apple has joined this fight by selling some of their products with the Product Red logo.

Cultural

A new trend briefly stated earlier, is the shift in people’s view of nature. People are now beginning to realize that being environmentally conscious is important as well as trendy. Apple has taken steps to show its customers that the company is changing the way their products are produced and sold to be more environmentally friendly. Another shift in the cultural environment is the way products are purchased and promoted by people’s self views. Apple has responded to this shift by causing their customers to feel special and important by owning an Apple product. Apple gives the

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image of high quality, wealth, and trendiness to the public. Apple is one of the most well respected and well-liked companies of its kind. The attitude of its customers towards the business and its products is obvious in the shear volume of products sold and booming net sales. Apple prides itself on its friendly and knowledgeable staff, which keeps its customers coming back, as do the reliable products and product availability and options. Luckily, our world is only becoming more and more technologically inclined, and Apple will continue to lead the technology front in computer equipment and manufacturing. These lifestyle and value changes will only positively affect Apple, as Apple’s revolutionary approach to technology is what initiates the changes in lifestyle and value of the consumers.

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The Microeconomic Environment

Market

SIC Code: Electric Computers (3571)NAICS Code: Computer and Peripheral Equipment Manufacturing (33411)(IBISWorld)

Apple, technically, falls under the industry of Computer and Peripheral Equipment and Manufacturing. However, due to Apple´s growth in product mix, the company extends far beyond this classification. This industry bases its growth upon the number of broadband connections. Whenever an individual, business, or household decides to buy access to the internet, they are purchasing a “broadband” connection. This variable has a direct correlation with the market. In other words, a growth in broadband connections means there is a growth in computer purchases. Industry performance has seen a significant change over the last five years. As the manufacturing and production methods for computers become more efficient, the price of computers will become cheaper to buy. In turn, this means less revenue. In the last five years, the computer industry has grown an average of 0.9% annually; however, the value of the industry has fallen an average of 4.3% annually. The only positive aspect of this industry is the movement to “portables”. By the end of 2010, portables are expected to hold 46.7% of the industry, as compared to 41% in 2007. Over the next five years, this number is expected to grow immensely as the existence of desktop computers dwindle. (Hoover’s)

Since the start of the new millennium, Apple has had tremendous growth in market size. Apple has done this by line stretching and line filling. Additionally, it has added completely new products to its product mix. Apple´s market varies greatly depending on the product. According to Apple’s annual report, the company breaks up its marketing into three primary divisions: Personal Use, Educational Use, and Commercial Use. In addition to growing in terms of population, Apple is also expanding geographically. Below is percentage of revenue generated in various areas.

Millions ($) Percentage of TotalAmericas 18887 44Europe 11810 28Retail 6656 16Japan 2279 5Other 3273 7Total 42905 100

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Customers

Apple sells both necessary products and desired products. In today´s day and age, a computer and telephone are necessary items. Anyone looking to communicate in any form holds both of these items. When looking for both of these products, customers generally put forth a great deal of research. In no way do customer´s participate in an impulse purchase. In fact, customers put forth a tremendous amount of thought when buying a computer or telephone. However, Apple also offers desirable products such as the iPod and iPad. Both products are amazing pieces of technology, but are in no ways necessary aspects of life. Both are simply products for pleasure. However, similar to a computer or telephone, the “portables” such as the iPod or iPad require significant research before purchasing.

In the 2010 American Customer Satisfaction Index, abbreviated as the ACSI, Apple blew away its competition. In the past year, the popularity and overall satisfaction of computers grew 4%. Apple grew 2% to post a personal all-time high score of 86, a rating out of 100. This achievement marked the seventh consecutive year that Apple has been atop the ratings of computer customer satisfaction. After this past year, Apple holds a 9 point gap between its competitors; currently, HP, Dell, and Acer all remain tied with a score of 77. Although this information solely reflects American consumers, it is updated quarterly with the listed results from September 2010 (ACSI).

Distribution and Trade Channels

Apple is unique in that it distributes its goods both directly and indirectly. First, one may buy apple products through third party stores and websites such as retailers, value-added resellers or wholesalers. However, Apple distinguishes itself by offering products directly to consumers through its “Apple Store”. As of September 25, 2010, Apple owned 317 retail stores. Of this, 233 are located in the United States while 84 can be found internationally (Annual Report). Apple believes that its products are so differentiated and innovative that in order to fully appreciate and understand a product, a knowledgeable sales associate must be present. This Apple sales associate can explain every aspect of the product from hardware and software to lifestyle applications and compatibility.

Apple has put forth a significant amount of its profits towards more Apple Stores. One of the primary reasons for these Apple Stores is to ensure that customers can speak and shop with knowledgeable associates and have a satisfying shopping experience. Additionally, Apple has installed an “Apple Premium Reseller Program” in which associates at third party locations are informed and taught the advantages of Apple products. Additionally, Apple has invested in programs in which Apple stations and fixtures can be present at third party venders. These stations will contain information packets and briefings on various products (Annual Report).

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Facilitators and Marketing Firms

Manufacturing for Apple’s products is outsourced to a select group of companies. The majority of these companies are located outside of the US (primarily Tawian) but are concentrated in general areas. A detailed analysis of these companies and their participation can be found in the distribution section later in this report. It is important to know that Apple outsources 100% of its manufacturing; because of this Apple keeps its hands clean of any inventory; rather, the company exists as a supervisor that monitors all activity (Annual Report).

In addition to manufacturing, Apple has outsourced its transportation. In doing so, Apple is significantly saving money; however, it is a very risky decision considering it already is absent in the manufacturing stage. A great deal of uncertainty lies in this area production. With the outsourcing of both manufacturing and transportation, Apple loses a great deal of control over its products. If something is to happen to a product and its functioning, it could damage the reputation of the brand (Annual Report).

Apple’s marketing and advertising has been quintessential since its start. Apple, in general, advertises and markets on its own; however, on occasion the company has consulted the New York advertising firm known as TBWA/Chiat/Day. Apple’s success is a typical example of a product that was similar to its competitors, but had far superior advertising. In 1984, their birth into the technology world was made with a Superbowl commercial comparing itself to George Orwell’s 1984. In the 90’s, they marketed a “Think Different” and later a “Switch” campaign. In the new millennium, Apple launched its infamous “iPod People” commercials and the controversial, “I’m a Mac and I’m a PC”. All of its campaigns have been extremely successful. (New York Times)

Competitors

Apple’s major competitors include Dell, Toshiba, and HP. We have compared the competition to Apple using the following criteria:

1. Product Quality2. Number of lines3. Depth of Assortment 4. Product Availability5. Promotional Tactics Used6. Level of Service7. Price8. Product Image9. Process after Purchase10.Customer Relationship

1. Product Quality

#1: Apple

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Unlike any computer operating with Windows software, the Mac OSX systems are immune to thousands of viruses. Apple is constantly updating the software of its computers, and makes these updates available free to its consumers. Apple’s laptops are considered more reliable because Apple creates both the laptop and the operating system. Most other laptop producers create the laptop and then use the operating system of another company. Because Apple builds both the computer and the software the two “are literally made for each other.”Although Macs are reliable products, they can be difficult to navigate for first time users. Macs function differently than all other laptop computers, and can therefore make it a difficult adjustment for new users who are unfamiliar with the product.

#2: HPHP offers its customers many different care packages for their products called HP Total Care. This allows HP to constantly assist its customers in improving product quality, which is similar to AppleCare, a service provided by Apple. After reviewing many of the product reviews on HP laptops, most customers were impressed by the design and strong build quality of the laptops, but were most disappointed by battery life and the overheating caused by heavy usage.

#3: DellDell prides itself on the fact that the customer can create his or her own computer. Therefore every aspect of the computer is exactly what the customer wants. On the contrary, in comparison to Apple, Dell products are prone to constant problems. Viruses are a problem on Dell computers because of the use of Windows and although firewalls and security measures can be installed, these precautions are not enough to prevent a computer crash. Product support is also more difficult to come by, as there are no physical Dell stores, just the online producer.

#4: ToshibaWhen comparing key features of all products between the four companies, Toshiba seems to offer the least, revealing its poor product quality. Of the seven “Key Feature Types” noted on Toshiba’s website which include: Everyday Essentials, Business Essentials, Gaming and Entertainment, Ultrathin and Ultraportable, Maximum Security, Tablet PC, and Touch Screen, not one of the laptops contains all of these features. Toshiba also uses Windows software, leaving the computer prone to viruses and has poor battery lifetime.

2. Number of Lines

#1: Dell (5 Different Types) 33 Latitude Laptop

o 2110 Netbook, E4200 Laptop, XT2 Tablet PC, XT2 XFR Tablet PC, E4310 Laptop, 13 Laptop, E6410 Laptop, E5410 Laptop, E5400

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Laptop, E6410 ATG Laptop, E6400 XFR Laptop, E5510 Laptop, E6510 Laptop, Z Laptop

Vostro- Small Businesso 1015 Laptop, 1014 Laptop, V13 Laptop, 3400 Laptop, 3500 Laptop,

3300 Laptop, 3700 Laptop Inspiron and Studio Laptops

o Mini 1018 Notebook, 15 Laptop, M101z Laptop, 1012 Netbook, 15R Laptop, 14R Laptop, 17R Laptop, 15 Laptop

Dell Precision Mobile Workstationso M4500 Mobile Workstation, M6500 Mobile Workstation

Alienwareo M11x Laptop, M15x Laptop, M17x Laptop

#2: Toshiba (5 Different Types) 26 Satellite

o T210, T230, L630, L635, L640, C640, M640, C650, L650, A660, L670, U500, E205, L450, P500

Satellite Proo T110, L630, U500< L640, C650, L450, L670

Tecrao M11, A11

Qosmioo X500

Portégéo M780, R700

#3: HP (4 Different Types) 22 Everyday Computing

o Compaq Presario CQ62Z, G62m, G62t, G42t, G62x, G72t Ultra Portable

o Pavillion dm1z, Pavillion dm3t, Pavillion dv5t, Pavillion dm4t, TouchSmart tm2t

High Performanceo Pavillion dv6z, Pavillion dv6t, Pavillion dv7t, Pavillion dv6z Select

Edition, Pavillion dv6t Select Edition, Pavillion dv7t Select Edition Envy

o ENVY 14, ENVY 14 Beats edition, ENVY 17, ENVY 17 3D

#4: Apple (3 Different Types) 6 MacBook MacBook Air

o 11- inch, 13- inch MacBook Pro

o 13- inch, 15- inch, 17- inch

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3. Depth of Assortment

Depth of assortment for the four different laptop brands can be seen in how they are ranked by number of lines. Clearly Dell leads the group in number of lines, and the depth of assortment within the lines is much larger than any of the other brands. HP has a greater depth of assortment between its lines, while Toshiba has less assortment but more product lines. Apple falls last, as the brand has very few product lines and hardly any depth of assortment within the lines.

4. Product Availability

#1: AppleApple laptops can be found online at Apple’s online store. Mac laptops can also be found in Apple retail stores all over the world. There are also numerous resellers of the Mac laptops all across the world.

#2: HPHP laptops can be found on the online HP store, from a business reseller, or a local store reseller. HP differs from both Toshiba and Dell because HP does have physical HP parts stores where customers can buy parts needed for their computers such as a new battery, a new charger, hard drive, processor, etc.

#3: ToshibaToshiba is similar to Dell in that the Toshiba products can only be found on the Toshiba website, and physical Toshiba only stores do not exist. Customers can purchase Toshiba laptops from online resellers, from a business reseller, or from a local store reseller.

#4: Dell Personalized custom Dell laptops can only be found on the Dell website. Other retailers do carry Dell laptops, but these laptops have already been preconfigured, and may not meet all of the specifications of the customer.

5. Promotional Tactics Used

#1: HP“The computer is personal again.” This well-known statement and advertisement by HP allows its customers to believe that they can make the computer for themselves, as many famous personalities show in the advertisement. This encourages the customer to purchase HP, knowing that they too can have the same personal experience.

#2: AppleThe most recognized campaign by Apple to promote its Mac products has been the “Get a Mac” campaign released in 2006 and ending in 2010. These commercials compared two actors saying the phrases, “I’m a Mac” and “I’m a

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PC.” Apple’s promotional tactics constantly show why Apple believes it is the one and only choice in technology. Simple, easy, and modern advertisements force customers to understand the brand and the product in a relatable way.

#3: DellIn advertising, Dell continuously promotes itself as always having lower prices and better deals while also offering free shipping. In the early 2000’s, Dell promoted its products on TV through the actor, Ben Curtis, who always ended the commercial with, “Dude you’re getting a Dell.” In 2007 Dell began using the phrase, “Yours is here” as a way to show that everyone can create their own version of a Dell.

#4: ToshibaToshiba advertises many promotions on their online site. The current ad for a “72-hour sale,” encourages customers to buy quickly because of the prospect of a potential deal. Other than this advertisement, I very little information was found regarding effective promotional tactics or advertisements.

6. Level of Service

#1: AppleThe level of service that Apple offers to its customers both online and in-store is incomparable to its competitors. Because Apple has its own specialty stores, it can offer a different level of service to its customers that the other three competitors cannot. Apple provides many different ways to contact the company, and the customer can even schedule one-to-one workshops with the company to personally solve all of the client’s concerns.

#2: Dell Dell makes it very easy for customers to gain support and service. Although Dell does not have the same personal effect as Apple, Dell has many different modes of communication offered to its customer on the company’s website. There are many trouble-shooting quick links as well as suggestions of places to buy parts to fix a problem. Dell also offers the option to chat online with Dell Technical Support for instant assistance.

#3: ToshibaToshiba and Dell are equal when comparing level of support. Both offer online support in many different modes of communication. Toshiba’s website for these options is more clearly laid out, but ultimately offers the same support as Dell.

#4: HP Support and service for HP products was the most difficult to find on the company’s website. Once finding the support section, the website does not offer ways to quickly answer questions or offer help. The support and service section

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of a company’s website should be easy to use and find, and the website for HP does not facilitate an easy solution.

7. Price

The comparisons made between the companies for price is based on the lowest average price as well as how many different types of products the company sells.

#1: Toshiba$300- $2,000

#2: Dell$349- $1,199

#3: HP$400- $1,200

#4: Apple$999-$2,299

8. Product Image

#1: AppleProduct image is clearly an important aspect to the designers at Apple. As Apple shows in its advertisements, customers are made to feel “cool and modern” for using Apple products. The laptops are sleek and the apple image in the middle of every laptop is recognizable by any potential customer.

#2: HPIn the most recent and most easily recognized advertisements by HP, famous personalities show why they love their HP computers before showing their faces in the commercial. This image of luxury encourages customers to create their own personal experience like the famous personalities in the commercial. By using commercials such as these, HP is able to create a different image to separate itself from the competition.

#3: DellDell’s product image is simple, but not necessarily recognizable at all times. There are many different types of Dell laptops and therefore not one specific recognizable trait to a Dell. The company’s logo on all of its laptops is recognizable and the product is often seen as desirable in its advertisements.

#4: ToshibaBesides every Toshiba laptop wearing the brand logo, Toshiba does not carry much of a desirable product image. The product image seems to be more about

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function, and less about design. Toshiba’s website does not show much of any “personality” behind the product, but really just the product itself.

9. Process after Purchase (Delivery time/method)

The comparisons of the delivery times and methods of the competitors is based on the options presented by each company’s website.

#1: AppleAll of Apple’s laptops ship within 24 hours of placing the order online. Currently Apple is offering free shipping for all of its laptops as part of a holiday offer.

#2: ToshibaToshiba offers a “rapid shipping option” for a few select laptops, and the rest of the company’s laptops ship within one to two days. Like Apple, Toshiba is also offering free shipping as part of a holiday offer.

#3: DellDell offers that most of its laptops take 1 to 2 days to ship, while other can take up to 10 days to ship from the purchase date. Unlike Apple and Toshiba, Dell always offers free shipping to its customers.

#4: HPOf the four competitors, HP offers the worst process after the purchase of a laptop. HP can only guarantee free standard shipping on “most” orders, and only gives the build date to the customer of 12 days from the purchase date.

10. Customer Relationship

The way the customer interacts with the company and the brand is important to the success of the product. The four brands would rank in the same order as the “Level of Service” criteria. Apple surpasses all of the competitors because the customer can actually have a face-to-face relationship and conversation with an employee of Apple. The customer can get real feed back from a real person and get assistance easily with the convenience of the physical store, rather than just online or telephone assistance.

Conclusion on Competitors:

Below is a table to summarize the data and conclusions created in the comparisons. The numbers correspond to the rankings presented above. A ranking of 1 meaning the company is the best option, and a ranking of 4 meaning the company is considered the worst option of the four competitors.

As can be seen by the average rating presented in the table, when comparing the four companies on the ten different qualities, the competitors fall in the following

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order from best to worst: Apple, Dell, HP, and Toshiba. The companies are not separated by a great amount, proving that each company thrives in its own category.

SummaryApple Dell Toshiba HP

Product Quality 1 3 4 2Number of Lines 4 1 2 3Depth of Assortment 4 1 3 2Product Availability 1 4 3 2Promotional Tactics Used 2 3 4 1Level of Service 1 2 3 4Price 4 2 1 3Product Image 1 3 4 2Process After Purchase 1 3 2 4Customer Relationship 1 2 3 4

Average Rating: 2 2.4 2.9 2.7

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Marketing Strategy

Mission Statement

“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 reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices (Apple Investor Relations).”

This mission statement is, overall, very clear. The company mentions the three main markets that it is involved in- computers, phones, and portables. In doing so, Apple also prides itself on pioneering technology such as the “digital music revolution”, “revolutionary iPhone”, and “magical iPad”.

However, the company fails to indicate any plans or goals. While a traditional mission statement focuses on its core ideas that it strives for, Apple simply states past products that it has released and the ensuing success. While using past products as an indication of success may work, it does not fit a mission statement. Therefore, the idea of whether the mission statement is “feasible” or not, does not apply.

Marketing Objectives and Strategy

Steve Jobs once said, “We want to make all our users happy. If you don’t know that, you don’t know apple” (Marketing Apple). This is one of Apple’s primary marketing objectives. Happiness, although a simple concept, is the essential element that a consumer looks for in a product. Steve Jobs and his Apple team try and market this aspect as much as possible. Apple, however, is not one to set goals, or at least publically.

In a project conducted in 2007 by Steve Chazin, former Marketing Executive of Apple, he leaked information to the public regarding some of Apple’s so called “secrets” that other companies are so curious of. One of the first points he made was that products don’t sell, people sell (Chazin). This quote revolves around the fact that Apple focuses on the customer first. What needs to happen for the customer to buy the product? Once the elements necessary to make a sale have been recognized, Apple constructs the product around these elements. Furthermore, in Apple’s advertising and marketing, commercials are focused on the individual. A close up of a Macbook or iPod does not sell as well as an individual happily using (or dancing in the case of many iPod commercials) the product.

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Apple also utilizes the idea or following rather than leading (Chazin). While most companies would believe that leading a business venture can tackle a market, with technology Apple tends to follow. The PC, MP3 player, downloadable music program, and mobile phone were all long in existence. Apple simply chose to follow these simple ideas, but vastly improve them.

Steve Chazin is quoted for saying, “focus on the feel”. When customers enter an Apple Store, they feel like they are moving into a new world of technology, a museum some might say. Apple has centered its ideologies off of “feeling” for decades. In doing so, customers feel something that most products fail to create. Whether it be the physical feeling and design or the feeling of belonging to a technological self-created “Apple Culture”, Apple aims for its products to stand out as unique.

John Sculley, Apple’s ex-CEO, gives a very in depth interview with CultofMac.com and comments on Steve Jobs methodologies as CEO. While Jobs currently is very mysterious, 20 years ago Sculley had the opportunity to work above Jobs and see his tactics. According to Sculley, Jobs is a “minimalist” and “is constantly reducing things to their simplest level. It’s not simplistic. It’s simplified. Steve is a systems designer. He simplifies complexity” (CultofMac). It is not the decisions that you make that are most important, but the decisions that you don’t make which are even more valuable.

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Marketing Functions: Product

Product Mix:

Apple has been a company infamous of widening its product mix. Originally, the enterprise consisted of solely the Macintosh computer.  However, soon a product line of accessories was added to the mix.  These accessories consisted of wireless keyboards, mice, airports, and monitors.  Later, iPods were released, a product line with tremendous depth.  Apple then introduced the iPhone, moving towards a product line within mobile technology.  The company, in accordance with its iPod, released iTunes and iTv, a means of obtaining copyrighted music, television, and movies.  Most recently, Apple has released the iPad.  All of these additions are examples of Apple widening its product mix.

The first line in Apple’s product mix would be computers. This line consists of desktop computers and laptops/notebooks. Within the subcategory of desktops, Apple offers the iMac (27” and 21”). Within notebooks, Apple offers the Macbook, Macbook Air, and Macbook Pro.

The second line in Apple’s product mix would be computer accessories. Apple sells the Airport Express, Airport Extreme, Time Capsule, Keyboard, Magic Mouse, Magic Trackpad, and the LED Cinema Display.

Apple also offers applications and servers such as Mac OS X, iLife, iWork, MobileMe, Safari, QuickTime, Aperture, Final Cut Studio, Final Cut Server, Final Cut Express, Logic Studio, Logic Express, Apple Remote Desktop, Mac OS X Server, Xserve, and Xsan.

At the beginning of the new millennium, Apple opened a new product line of portable music players and accessories. Currently, Apple offers the iPod Shuffle, iPod Nano, iPod Touch, iPod Classic, Headphones, Protective Cases, and iTunes.

After tremendous success with the musical devices, Apple ventured into the market of smartphones. The most current product is the iPhone 4; however, the iPhone 3G is offered as well. All iPhones include the same software; it is the hardware that changes between each generation. Additionally, it should be noted that Apple has drastically narrowed its product line of cell phones. Originally, there were numerous variations in color, shape, and size; now, Apple sells just two variations.

The last product line in Apple’s product mix is luxury products. This includes the Apple TV, and the newly released iPad.

Apples two largest product lines are computers (including any related accessories) and iPods. Both of these lines have large variations among the products

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offered. A large amount of Apple’s focus encompasses these two successful lines. While the iPhone and iPad are showing great success as well, they have no variation or assortment of products, and therefore have no length in their product lines.

Apple is unique in that it focuses on a very wide market. An iPod, for example, could be sold to an 8 year old child, a music enthusiast, a student, an adult, or an elderly citizen. Computers fall under the same category. Apple is so successful because its products are unique, popular, and extremely reliable. Since the iPhone’s release, it has seen tremendous growth with just AT&T as its carrier. In 2011, Apple and Verizon are expected to join forces for another massive growth spurt for Apple’s iPhone (Beatweek). All in all, Apple is well known and successful because its products are basic and simple to use, yet cater to an extremely large amount of people.

Comparison to Competitors:

Although Apple surpasses its competitors when comparing almost all other aspects of the laptop computers, Apple falls short when comparing the width and depth of its laptop product line to its competitors. Apple offers the least options and variations of laptop computers.

Offering a total of 33 different types of laptop computers, Dell leads the competition with its wide range of laptop variations. Dell offers 5 different types of laptops, while also offering multiple variations of each of these types. Dell offers the largest width and depth of this product line, once again enforcing the idea that the consumer can basically create a Dell to match his or her own needs.

Similar to Dell, Toshiba and HP offer many different types of laptops as well as variations to these different types. Although Toshiba does not offer quite as many variations of each laptop, Toshiba still offers more than HP, which only offers 22 different types of laptops.

Unlike all of its competitors, Apple has an incredibly narrow laptop product line. With only a total of six different computer variations offered, Apple shows its biggest weakness when compared to the competition. Every other competitor offers what Apple cannot – choices. An Apple customer has few options when choosing a laptop, leaving zero opportunity for laptop personalization; a concept Apple’s competitors pride themselves on.

Thoughts on Change:

For the following section, analysis on the future product mix will focus on the product lines of computers and portable musical devices.

Currently, Apple holds a very narrow product line with its computers. In total, there are less than 10 variations. Competitors have upwards of 50 variations in some cases. If Apple were to expand its product line, Apple could have prices more in line

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with its competitors; in turn, this would create more competition. Apple prides itself and even markets its products to seem luxurious, high-quality and desirable. Because of this, it has generally held higher prices than its competition. Creating more lines could not only create competition but could open up the opportunity of capturing new markets. A cheap Apple computer, for example, could coerce a once-loyal HP buyer to switch over to the new wave of Apple products. Currently, Apple offers one type of desktop in two different sizes. A possibility exists for a third smaller size (less than 20”). When analyzing Apple’s computer product line, it is obvious that phasing out should not take place. Opportunity lies with line stretching, but Apple has been infamous for a very small product mix.

Apple’s iPod and related musical accessories have pioneered the portable music industry since its introduction to the public in the fall of 2001. Since its original release, Apple has continuously stretched the product line. Initially, Apple offered only one portable music player; however, now the company offers four different types with numerous buying options for each product such as physical size, memory, color, applications, and features. Apple currently dominates the music industry. New consumers to the industry immediately turn to Apple because of its notorious brand image and amazing brand awareness. Apple should not consider phasing out any of its products, yet the company should be cognizant of filling its lines with too many variations. Apple has been very smart in eliminating old generations once a new generation is of a product is released. With current technology, line widening doesn’t appear to be a profitable endeavor. However, loyal Apple consumers would certainly be open to the idea of a new musical device if technological innovation is present.

Improving the Product and Brand Strategy:

Apple has been known to have one of the best branding and marketing strategies of all time. Since its “1984” Macintosh Ad, it has had a firm grasp on the attention of the public. Apple, lead by Steve Jobs, has been a company of uniqueness. Never will a consumer find a product that “looks like Apple” or even operates in a similar manner. Because of this, Apple has been able to stand apart from its competition. Anyone who knows computers will have heard of Apple. Anyone looking for a portable music player will be lead to Apple’s line of iPods before anything else.

Steve Jobs was promoted to CEO in 1997, after Apple absorbed the company he ran at the time called NeXT. At the time, Apple was solely computers and accessories; however, since then it has expanded greatly under Jobs’ reign. Steve Jobs has been next to flawless with his operations and decisions as CEO. Because of his infallibility, Apple really does not need any areas of improvement. Apple is perfect with its operations, and the only unknown elements in the company’s planning are future economic events and competitor inventions. Not surprisingly, both of these elements are uncontrollable. However, if an area had to be targeted for an improvement, it seems that the iTV has been unsuccessful. Yet, it is only in its first generation of use, and recently announced the creation of a second generation at a third of the price and a

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quarter of the size of the original version. The second generation seems that it will make up for its preceding generation. BCG MATRIX:

After analyzing Apple’s annual report and comparing Apple to its fellow competitors, the BCG Matrix for Apple’s product mix can be seen below. Currently, the iPhone is a star for Apple. The iPhone has a relatively high market share among its competitors as well as high market growth. A lot of Apple’s expenditures are put towards the advertising and promotion of the iPhone, leading it to be the star of Apple’s current product mix. The iPad is a question mark in the product mix because this is an incredibly new product for Apple. The iPad has high-expected market growth, but currently low market share because of the newness of the product. Apple’s iPod sits in the cash cow position because of its continually high revenue for Apple as well as its incredibly high market share in the market of portable music devices. Apple desktops and laptops need some improvement and attention in the Apple product mix. Both products are lacking in market growth and market share, because both reside in very competitive markets.

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Market Share

Mar

ket G

row

th

Star Question Mark

Cash Cow Dog

High

High

Low

Low

iPod

iPhone

Desktops

Laptops

iPad

Marketing Functions: Price

Apple generally keeps its prices very similar from store to store. There are no real differences in price between stores. It can be assumed that these differences are simply stores marking up Apple’s prices for a greater profit. However, in general, Apple’s prices tend to exceed the prices of competitors.

When observing Apple’s pricing strategy, it is very clear that they set them apart from the competition. Not only in terms of product quality and uniqueness, but Apple also is different when it comes to pricing. By focusing on its product and marketing, Apple feels that the pricing will come naturally. In a way, Apple sets the bar for pricing, and lets other companies compete with them. Instead of basing its price off of other brands and competitors, Apple sets a price based on what is profitable, yet desirable for the consumer.

Steve Jobs is cognizant of his products and what they offer. Apple realizes that by changing the price of a product to compete with other companies, it would simply reduce its earnings rather than gain more consumers. It comes down to being a follower, or hater, of Apple. Those who like Apple are extremely loyal and disregard price. Those that hate Apple will not be persuaded by price, but by product quality and design. This is one reason why Apple’s prices tend to exceed its competitors. In general, Apple’s demand is inelastic; because of this, the company holds higher prices.

Apple prides itself on luxury and quality. An Apple laptop is no ordinary computer, and because of this, cannot match the price of competitors. By setting a slightly higher and out of reach price, Apple emanates a feeling of a “dream” product that can be attained with a slight splurge in expenses.

Another evident aspect of Apple’s pricing strategy is the idea of new generations. By releasing a new generation of iPhone, Macbook, or iPod, Apple can overprice the new product and underprice the old version. The new iPhone 4, for example, is currently priced at $199 or $299 (depending on GB size) while the old iPhone 3G tumbled to just 99$. With the release of new generations, many tech-savvy followers feel the need to upgrade to the newest and most recent Apple product. Apple is well aware of this, and most certainly prices its products above normal.

Technically, the majority of Apple’s products fall under value-added pricing. Although Apple’s products may be more expensive than the competition, it is due to their products’ value and quality. Paying more does not stop customers from buying Apple because of the greater reward and better designed product.

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Marketing Price AuditChannel/

Store ProductPrice

(€)Sale Price

(€) Type of SaleEl Corte Inglés Toshiba C660 555El Corte Inglés Toshiba Qosmio F50 1399El Corte Inglés Toshiba Satelite L635 799El Corte Inglés Toshiba Satelite L500 659El Corte Inglés Toshiba Satelite L675 899

El Corte InglésToshiba Satelite A500D 799

El Corte Inglés HP Dv6 749El Corte Inglés HP G62 599El Corte Inglés HP Pavilion Dv3 999El Corte Inglés HP Touchsmart tm2 1199El Corte Inglés HP Touchsmart tx2 1199El Corte Inglés HP Probook 669El Corte Inglés HP Pavilion Dv6 599El Corte Inglés HP Pavilion Dv8 1299El Corte Inglés HP Envy 13 1299El Corte Inglés HP Pavilion Dv7 999El Corte Inglés HP HDX 799El Corte Inglés MacBook Pro (15) 1719 AppleCare: 355 € /3yrsEl Corte Inglés MacBook Pro (13) 1118 AppleCare: 253 € /3yrsEl Corte Inglés MacBook 989 AppleCare: 253 € /3yrsEl Corte Inglés MacBook Pro (17) 2199 AppleCare: 253 € /3yrsEl Corte Inglés MacBook Air (13) 1372 AppleCare: 253 € /3yrsFNAC Toshiba Qosmio 1399FNAC Toshiba A660 999FNAC Toshiba L675 899FNAC Toshiba A500 949FNAC Toshiba Satelite L500 699FNAC Toshiba 660 649FNAC Toshiba R630 999FNAC Toshiba C660 555FNAC Toshiba C650 549FNAC HP Pavilion Dv8 1699FNAC HP Pavilion Dv7 949FNAC HP Pavilion Dv6 899FNAC HP G72 699FNAC HP Envy 15 1249FNAC HP G62 699 649 Sale from Nov 23- Jan 5FNAC HP Envy 14 1399

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FNAC HP Pavilion Dv3 899FNAC HP Pavilion Dm4 799 749 Sale from Nov 23- Jan 5FNAC MacBook Air (11) 999FNAC MacBook Pro (17) 2199FNAC MacBook Pro (15) 1719FNAC MacBook Pro (13) 1118FNAC MacBook 989FNAC MacBook Air (13) 1319PC City Toshiba C650 599

PC City HP G56 489Buy with Case and Norton and Save 60 €

PC City HP Pavilion DM1 449PC City HP G62 579PC City HP Pavilion DV6 699PC City HP Pavilion DV7 699PC City HP Pavilion DV3 799PC City HP Pavilion DM4 898PC City HP Touchsmart TM2 999PC City HP DM3 699PC City Apple Macbook Air 11" 959PC City Apple Macbook 13.3" 962

PC CityApple Macbook Pro 13.3" 1089

PC CityApple Macbook Air 13.3" 1539

PC CityApple Macbook Pro 15.4" 1659

PC CityApple Macbook Pro 17" 1999

PC CityDell Inspiron M101Z 11.6" 499

PC City Dell Inspiron 1546 499PC City Dell Vostro TM 3500 658PC City Dell Vostro V13 689PC City Dell Latitude E5410 910PC City Dell Alienware m15x 1649

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Marketing Functions: Distribution

IPHONE SUPPLY CHAIN:

Singapore:Samsung CPU and videoprocessing Sent to ChinaInfneon Baseband Communications Sent to China

Taiwan:Primax Electronics Digital Camera Modules Sent to ChinaFoxconn International Circultry Sent to ChinaEntery Industrial Connectors Sent to ChinaCambridge Silicon Bluetooth Set Sent to ChinaUmicron Technology Printed Circuit Boards Sent to ChinaCancher Technology Stainless Metal Casings Sent to China

United States:Broadcomm Touch Screen Controllers Sent to ChinaMarvell 802.11 Wireless Sent to China

China:Apple “Shenzen” China receives all of the above parts and is in charge of

assembling. This center is also in charge of inventory, and packaging and shipping.

MACBOOK SUPPLY CHAIN:

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Vertical Integration

Apple is considered to be an expert of vertical integration. From the very starting stage of development, Apple outsources its products. Quanta Computer Inc, a Taiwanese computer company, designs and manufactures computer technology for not only Apple, but 65% of computer companies including others such as Dell and Sony. Quanta is not limited to computer design; in fact, the Taiwanese company has just reached an agreement for the assembly contract for Apple’s iPad2”.

Apple outsources casing to “Catcher Technology Company”. According to Reuters, “CATCHER TECHNOLOGY CO., LTD. is principally engaged in the manufacture, processing and distribution of casings and components for computer and consumer electronic products. The Company provides metal casings and components, which are applied primarily in notebook computers, mobile phones, moving picture experts group layer-3 audio (MP3) players, personal digital assistants (PDAs), portable devices and other computer, communication and consumer electronic (3C) products.”

Apple’s Hinges are provided by Shin Zu Shing, another Taiwanese technology company. This business, however, deals solely with hinges and springs. Apple outsources all research, development, and manufacturing to Shin Zu Shing; additionally, all inventory is shipped from here to China for assembly (Reuters).

The creation of Apple’s battery is a joint effort of Simplo and Dynapack. Simplo Technology and Dynapack International Technology are expected to split the heavy battery demand needed for Apple’s computers, iPads, iPhones, and iPods. Both Simplo and Dynapack, not surprisingly, are located in Taiwan. Both companies ship their lithium batteries to China for assembly (Reuters).

Similarly to Apple’s batteries, two manufacturers are utilized by Apple to create modules, or in simpler terms, LCD displays. The first, Chimei Innolux Corporation, is a Taiwanese-based company with an extremely large market. Apple is just one of its many business partners. The second company, AU Optronics Corporation, is also a Taiwanese-based company but focuses a bit more on research and development. Au Optronics also has an extremely large market (Reuters)

Apple is highly vertically integrated in this first step of the distribution process, manufacturing. While Apple does not own a single part of the manufacturing process and outsources entirely, it plays a vital role as administrator. Apple oversees as the supervisor. One unique part about Apple’s outsourcing is that all of the businesses utilized are located in Taiwan. By concentrating its outsourcers, Apple holds a stronger grip on the development of its products. Overseeing development is extremely easier when the developers are in a concentrated area. In Apple’s annual report it touches on their outsourcing and goes further by recognizing the possible risk, “Many of these manufacturers are located outside of the U.S., and are concentrated in several general locations. The Company has also outsourced much of its transportation and logistics

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management. While these arrangements may lower operating costs, they also reduce the Company’s direct control over production and distribution.” However, Apple keeps a very strong watch over its manufacturers. Steve Jobs is aware that his company runs off quality and reliability; anything to damage this reputation, such as a manufacturing error, is a dent in Apple’s stellar reputation. “Apple’s trick is that it not only owns all of those inputs, but controls them tyrannically and makes external companies carry the inventory,” says Richard Brass, a tech-journalist. While Apple does not technically “own” there inputs, the phrase is figurative. The companies involved in manufacturing are well aware of how lucrative their relationship is with Apple; in this sense, the manufacturers are “owned” by Apple.

Distribution:

Customers may obtain Apple’s products through a number of options.

Option 1: Option 1 consists of buying through a retailer. Through a strategic alliance or contractual marketing system, Apple arranges a deal directly with a retailer. Products are shipped from China to the retailer (i.e. CompUSA or Sears), and then sold to customers through the retailer. While this method may be effective, it does not allow direct contact between Apple and its consumers.

Option 2: Option 2 consists of a wholesaler, such as Ingram Micro, purchasing a large number of Apple Laptops. From there, Ingram Micro distributes the products to smaller stores such as FNAC, PCCity, Best Buy, or Circuit City. Here, customers can visit one of these stores with more knowledgeable computer associates (at least more knowledgeable than a Sears associate). This option, similarly to option 1, does not allow direct contact between Apple and the consumer; however, Apple can feel more comfortable knowing that its products are with tech-savvy salesmen. Additionally, Apple saves a great amount on distribution costs. By shipping all of its products to the wholesaler, it is saving large amounts of money in transportation costs.

Option 3: Option 3 is also an indirect channel. In this case, Apple sells its product to an online website. From here, customers can buy products through a third-party website. This instance is very similar to Option 1, but here products are viewed virtually rather than physically.

Option 4: Option X is a direct channel from Apple to its consumers. By visiting Apple’s Online Store or a physical “Apple Retail Store”, customers can purchase a product directly from Apple. Eventually, Apple aims to have the vast majority of its sales follow this route. Any intermediaries or middlemen are eliminated as a direct transfer takes place between Apple and its consumer. In Apple’s annual report, the company mentions that “providing direct contact with its targeted customers is an effective way to demonstrate the advantages of its products over those of its competitors and providing a high-quality sales and after-sales support experience is critical to attracting new and retaining existing customers.” Apple values its products, and in order to fully appreciate the uniqueness and competitive edge, a customer must meet with a knowledgeable

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salesman. Apple believes so strongly in this idea that it is implanting well-trained salesmen into third-party venders.

Apple is more and more moving away from Options 1, 2, and 3, and more towards Option 4. The horrible buying experience and computer environment in third-party venders such as Sears or CompUSA lead Apple to pursue its own retail store. So far, Apple’s movement towards disintermediation has paid off profitably. As more and more Apple Stores are created, Apple utilizes less and less its third-party sellers.

Apple currently is vertically integrated as an administrator with its manufacturing and distribution; however, most of this vertical integration occurs in the manufacturing side. In the past, Apple utilized solely wholesalers and retailers for the sale of its products. Now, Apple is looking to do the opposite and sell directly to the consumer. Apple appears to be moving away from the idea of a vertical marketing system. In many instances, this marketing system would prove more profitable; yet for Apple, after their products are assembled it would like to sell its products personally.

In Spain, Apple currently holds just two Apple Stores located in Barcelona and Xanadu. These two Apple Stores are recent additions as of 2010, but are clear indications of Apple’s international expansion. Besides these Apple Stores, consumers in Spain can buy Apple products through retailers such as El Corte Ingles, FNAC, PCCity or MediaMart. Additionally, consumers can utilize the Online Apple Store.

In the United States, Apple is thriving with its Apple Stores. Seeing as the company is based out of California, it is only natural that America is the company’s most successful country. Currently in the United States, Apple has implemented 236 stores in 42 different states. Consumers can also buy Apple products through retailers such as Best Buy or Circuit City. Additionally, nearly all technological online stores carry Apple’s products.

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Marketing Functions: Communications

Promotional Mix:

Followers of Apple have been known as the Cult of Apple, but this “cult” was not created without the strategic marketing and advertising by Apple itself. The approach Apple takes to advertising has allowed the company to reign superior in its advertising techniques in comparison to its competitors since its first big break in advertising with its “1984” Super Bowl advertisement. The approach Apple uses in all of its advertising is simple, thoughtful, and clear. All of the ads are easy to understand, relatable to many customers, and have caused many competitors to attempt to imitate these simple and ingenious advertisements (Bulik 1-2).

Apple’s use of sales promotion to encourage its customers to buy its products is most commonly found during back-to-school shopping and the later holiday seasons. For the past few years during the annual back-to-school shopping craze, Apple has encouraged its customers to buy a Macbook by giving all purchasers a free iPod. Likewise, during the holiday season, Apple offers a few short-term deals such as, with the purchase of an iPad or an iPod during the holidays; Apple offers the customer free engraving and gift-wrap.

The secretiveness and air of uncertainty regarding new Apple product release dates and designs is part of the Apple “Cult”, and Apple’s successful public relations. The company’s secretive product publicity keeps consumers interested and curious about future products. An example of Apple’s positive relations with the public can be seen in how Steve Jobs and Apple handle the release of product information. At conferences, such as the MacWorld conference, Steve Jobs creates speculation among the public by releasing some information about future products, but does not divulge all of the details of the future products (Bulik 1-2). Through these conferences, he is able to keep the public informed about what is next for Apple, but he is also able to keep the consumers interested by causing them to question what is to come next.

One key characteristic of Apple’s productive selling capabilities is its exceptional use of personal selling. Apple prides itself on its knowledgeable staff and “geniuses” (as they are called in store) that can help assist any and all customers that visit an Apple retail store.

Through the use of online marketing, new digital technologies, and face-to-face selling, Apple has extended its direct marketing into many different technology outlets. Through online marketing on the company’s own retail website, Apple is able to encourage customers to buy while they are also learning about the product. When opening the Apple store home page, all products along with different promotions instantly appear, such as the Valentine’s Day advertisement listed below. Another unique aspect of the Apple retail specialty stores, is the use of the actual products to carry out sales and book appointments, while also learning about the products. This is an innovative way to introduce customers to new products while they can also ask the

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experts questions about the new technologies provided in the store. As stated earlier, face-to-face selling is a component of the Apple experience that puts Apple a step above its competitors. The convenience of the Apple retail stores and the knowledgeable experts available to help are elements incomparable to any other technology provider. Face-to-face marketing encourages customers to purchase, while also helping to validate a purchase for a consumer (Apple Inc, 58). When a customer makes a purchase at an Apple retail store, he or she can have all questions answered by an expert before making a large purchase. This aspect of assurance from an actual person is an important part of the buying experience.

Advertisement #1: “Love at first touch.”

Content:

The ad contains many different iPod touches formed into a heart. Every iPod is showing a different app or song with a pink, purple, or red background to help allude to the idea of Valentine’s Day. The advertisement could be found on the opening page of Apple’s website during February. The ad also contains the phrases: “Love at first touch. iPod touch. The perfect Valentine’s gift.” The advertisement has a very simplistic approach, but has a more creative touch than other Apple advertisements.

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Structure/Format:

By using such a simple symbol with the iPods formed into a heart, the ad clearly conveys the message of Valentine’s Day to the consumer. Underneath the lettering, there is a link to “Buy Now.” This ad was featured on the home page of the company’s website, and the link leads the customer into the website to the Apple Store to easily purchase the product.

Communication Objectives:

The target audience of the advertisement could be anyone looking for a Valentine’s gift for his or her significant other. The ad is relatable to many different customers by reminding the public that the gift of the iPod touch is the perfect gift for Valentine’s Day. With the quote of “Love at first touch,” the customer is reminded that by giving the gift of an iPod touch for Valentine’s Day, Apple alludes to the idea of love between two people, and the love you can have if you purchase an iPod.

The advertisement is an example of reminder advertising. At the time this article appeared, the iPod touch was a newer item, but this ad was meant to serve as a reminder to customers that the iPod touch can serve as a great option for a Valentine’s gift. The ad could also be seen as persuasive advertising, by convincing the consumer that the iPod touch is the perfect gift to give for Valentine’s Day.

Advertisement #2: “iPad is…”

http://www.youtube.com/watch?v=Lpo__xhTSv8

Content:

The advertisement flashes a serious of hands using the iPad for different purposes and follows each example with a word to describe one of the qualities of the device. The advertisement lists the following characteristics: delicious, current, learning, playful, literary, artful, friendly, productive, scientific, and magical. The advertisement appeals to the audience with its simplicity. Apple advertisements are known for their simple yet modern appeal, which creates a desire of Apple products by the public.

Structure/Format:

Like the appeal, the structure and format of the advertisement is also simple. It is structured around the iPad, and the use of hands to direct different functions on the device. Each clip of a different function of the iPad is followed by a word to describe the iPad. Each word resonates with a different demographic segment, causing the ad to be relatable to a large portion of the population.

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Communication Objectives:

The target audience for the Apple iPad includes many different segments of the population. All of these characteristics of the device can relate to a different segment of the population. For example, “delicious” relates to a foodie interested in looking for recipes, “learning” and “playful” relate to younger children using the iPad for games and teaching tools, while “productive” relates to the business person using the iPad as a small personal computer. The different segments can also be recognized by the different hands used in each clip. Smaller, child-like hands are used to show the gaming and learning pages, while more aged hands are used to relate to the literary and scientific pages.

This advertisement is an obvious example of informative advertising. Apple is simply showing potential customers and the public the capabilities of the iPad. By showing the audience all that the iPad can achieve, it informs the public of the product it should be interested in buying.

Push vs. Pull Marketing

Apple is a clear example of pull marketing. Rather than pushing the products onto its customers, Apple draws in the attention and desires of the consumer. Through the use of pull marketing, Apple makes their products wanted by the customer. When Apple uses the pull strategy, the desire of the product begins with the customer, rather than in push marketing where the interest of the product begins with the producer. Apple believes that by increasing research and development of its marketing and advertising strategies it can continue to remain competitive within the highly competitive market it serves (Apple, Inc 28). Companies that use the pull marketing strategy invest a large amount of the budget in marketing and advertising in order to draw the customers to the product, and Apple continues to focus on this aspect of advertising.

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