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MARKETING PLAN for APPLE INCORPORATED

"THE WORLD'S MOST POWERFUL BRAND"


-FORBES

MALIWAT, Regina F. 2FM4 June 13, 2013

Apple Inc. Company Profile


http://www.hoovers.com/company-information/cs/company-profile.Apple_Inc.4c9baa063908dbd8.html

Apple has an "i" for revolutionary technology. Since its release, the company's iPhone has spurred a revolution in cell phones and mobile computing. It also continues to innovate its core Mac desktop and laptop computers, all of which feature its OS X operating system, including the iMac all-in-one desktop for the consumer and education markets, the MacBook Air ultra-portable laptop, and the high-end Mac Pro and MacBook Pro for consumers and professionals. Apple scored a runaway hit with its digital music players (iPod) and online music store (iTunes). Its iPad tablet computer has become another gamechanger in the consumer market. Apple gets nearly 40% of sales from customers in the US.

Apple Inc. Mission/Vision


http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/Apple-Inc--Mission-Statement.htm

mission
A.

"Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and internet offerings."
B.

"Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced iPad 2 which is defining the future of mobile media and computing devices." vision "Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them." Apple lives this vision through the technologies it develops for consumers and corporations. It strives to make its customers masters of the products they have bought. Apple doesn't simply make a statement. It lives it by ensuring that its employees understand the vision and strive to reach it. It has put systems in place to enable smooth customer interaction. It has put objectives in place to continuously move forward; implemented strategies to fulfill these objectives; and ensured that the right marketing, financial and operational structures are in place to apply the strategies. (Hamilton, 2011)

Apple Inc. Ownership Profile


http://www.nasdaq.com/symbol/aapl/ownership-summary

Apple Inc. has not released a proper document regarding it's company's owners. But my researches instead provided me with this details:

Institutional Ownership
Institutional Summary Total Number of Holders 2,064 % of Shares Outstanding 60.75% Total Shares Held 570,229,741 Total Value of Holdings 249,532,534,662 Net Activity (56,306,317) Top 5 Holders VANGUARD GROUP INC STATE STREET CORP FMR LLC BARCLAYS GLOBAL INVESTORS UK HOLDINGS LTD NORTHERN TRUST CORP 43,247,824 37,194,631 34,747,682 25,668,431 13,848,715

Insider Trades
Insider Trades Summary Trade Type Number of Buys Number of Sells Total Insider Trades Net Activity Last 3 Mo. Last 12 Mo. 1 12 9 35 10 47 (36,278) (211,579) Top 5 Insider Trades (106,640) 93,360 (80,147) 69,853 64,151

COOK TIMOTHY D COOK TIMOTHY D OPPENHEIMER PETER OPPENHEIMER PETER FORSTALL SCOTT J

Apple Inc. Product Line http://www.everymac.com/systems/


Modern Apple Macs (Intel, 2006-Present) MacBook MacBook Pro MacBook Air Mac mini iMac Mac Pro PowerBook G3 PowerBook G4 iBook Mac mini iMac eMac Power Mac G3 Mac Server G3 Power Mac G4 Mac Server G4 Power Mac G5 Mac "Classic" Macintosh II Macintosh LC Mac Performa Mac Centris Mac Quadra Power Mac Macintosh WGS Network Server 20th Anniv. Mac PowerBook PowerBook Duo iPod iPhone iPad Apple TV MessagePad eMate

Recent Apple Macs (PowerPC G3-G5, 1997-2005)

Vintage Apple Macs (68k-604e, 1984-1998)

Apple iPods, iPhones, iPads, Apple TVs & Newtons (1993Present)

S.W.O.T. ANALYSIS for APPLE INC.


Strengths
1. Customer loyalty combined with expanding closed ecosystem 2. Apple is a leading innovator in mobile device technology 3. Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt) 4. Brand reputation 5. Retail stores 6. Strong marketing and advertising teams 1. 2. 3. 4. 5. 6. 7.

Weaknesses
High price Incompatibility with different OS Decreasing market share Patent infringements Further changes in management Defects of new products Long-term gross margin decline

Opportunities
1. High demand of iPad mini and iPhone 5 2. iTV launch 3. Emergence of the new provider of application processors 4. Growth of tablet and smartphone markets 5. Obtaining patents through acquisitions 6. Damages from patent infringements 7. Strong growth of mobile advertising market 8. Increasing demand for cloud based services 1. 2. 3. 4. 5.

Threats
Rapid technological change 2013 tax increases Rising pay levels for Foxconn workers Breached IP rights Price pressure from Samsung over key components 6. Strong dollar 7. Android OS growth 8. Competitors moves in online music market

*based on APPLE Inc.'s SWOT Analysis for 2013. http://www.strategicmanagementinsight.com/swot-analyses/apple-swot-analysis.html

Strengths 1. Customer loyalty combined with expanding closed ecosystem. While at first Apples closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apples closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apples expanding closed ecosystem and customers loyalty increases firms competitive advantage. Apple is a leading innovator in mobile device technology. Apple has been chosen as the most innovative business in the world for the 3rd time in 2012. Companys core competency of producing innovative products is the strength the company builds upon and is able to bring the most innovative products to the market. Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt).Apples financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets. Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound business performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012. Retail stores. Apples retail stores ensure high quality customer experience; provide direct contact with knowledgeable staff and increases brand awareness. Besides, Apples stores are one of the most profitable in terms of sales/ft2. Strong marketing and advertising teams. Marketing is one of the strongest functional areas Apple has. It can sell pricier products, build superior stores (they are more or less built to achieve marketing goals) and advertise their products in a compelling manner.

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Weaknesses 1. 2. 3. 4. 5. 6. 7. High price. Apples products cost much more than its competitors devices. Some critics argue that the price is not justified. When theres such a fierce com petition, Apple products price becomes a weakness because consumers can easily opt for similar quality but lower price products. Incompatibility with different OS. The iOS and OS X are quite different from other OS and uses software that is unlike the software used in Microsoft OS. Due to such differences, both in software and hardware, users often choose to stay with their accustomed software and hardware (Microsoft OS and Intel hardware). Decreasing market share. The less market share Apple has, the less it can influence its potential customers and persuade them to jump into using Apples closed ecosystem products. Patent infringements. The firm is often accused of infringing other companies patents and has even lost some trials. This damages Apple brand and its financial situation. Further changes in management. Apple has lost Steve Jobs in 2012 and Tim Cook became the new CEO. Scott Forstall and John Browett (chief of retail) left the company too and this will have an impact on companys management, which, as many think, will be negative. Defects of new products. This is not current Apple weakness but one that jumps out time to time. Some of Apples iPod and iPhone releases had clear fa ults and thus disturbed sales of the products and firms reputation of superior product performance. Long-term gross margin decline. Current Apples gross margin is one of the highest in the tech industry but analysts fear that due to increasing component pr ices and competition current margins will not be sustained. Hence, glooming firms future financial performance.

Opportunities 1. 2. 3. High demand of iPad mini and iPhone 5. iPad mini sales will increase Apples market share in the tablet market and, will strengthen firms competitive advantage. iTV launch. iTV launch will support Apple TV sales and the products ecosystem. Emergence of the new provider of application processors. Samsung, the main Apples competitor, is also the only provider of application processors for Apples products. Apple has to find a new source for the component but could not find a suitable one yet. Nonetheless, new manufacturers with superior engineering capabilities are arising and its just a matter of time, when Apple will seize upon the opportunity of being less dependent on its direct competitors. Growth of tablet and smartphone markets. Growth of tablet and smartphone markets is a good opportunity to expand firms share in these markets. Obtaining patents through acquisitions. Apple lacks of some patents to sustain its growth and the best way to acquire those patents is to acquire the firms holding them. In addition, Apple could develop new skills and competencies. Damages from patent infringements. Apple patents are often infringed by its competitors. Thus, collecting the damages from the companies that do so is a viable opportunity to not only increase the cash reserves but to damage the competitors reputation and sales as well. Strong growth of mobile advertising market. Apple has developed iAd advertising platform, which allows advertising on Apple iPhone, iPad and iPod touch. The growth of mobile advertising market is an opportunity which could be further seized upon. Increasing demand for cloud based services. Apple could expand its range of iCloud services and software as the demand for cloud-based services is expanding.

4. 5. 6. 7. 8.

Threats 1. Rapid technological change. One of the most severe threats Apple and the other tech companies are facing is rapid technological change. Companies are under the pressure to release new products faster and faster. The one that cannot keep up with the competition soon fails. This is especially hard when a business wants to introduce something new, innovative and successful. Apple was able to bring very innovative products to the market so far but for the m oment, even Apple hasnt unveiled any plans for the new products (except iTV) and may lack new introductions to keep up with competition. 2013 tax increases. Tax increases in USA in 2013 will negatively affect Apple. Rising pay levels for Foxconn workers. Pay levels for Foxconns workers already rose 3 times from 2010 to 2012. Foxconn is the main manufacturer of Apple products a nd the rising pay level for Foxconns workers will likely raise the prices for Apple products. Breached IP rights. The companies that breach Apple patents might not be discovered soon and may benefit from it, while weakening Apple at the same time. Price pressure from Samsung over key components. Samsung has already asked Apple to pay higher price for its application processors. Due to intense competition and no viable substitutes, Apple may be asked to pay even more. Strong dollar. Apple earned more than half of its revenues from outside US. Dollar appreciation against other currencies reduces potential profits from those countries. Android OS growth. Android OS is the main competitor for iOS in mobile device market. The domination of Android decreases iOS power over influencing consumers to join Apple. Competitors moves in online music market. Apple faces threat from online music stores, such as Amazon, Wal-Mart and online music subscription companies, such as Spotify.

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Apple Inc., formerly Apple Computer, Inc., is a multinational corporation that creates consumer electronics, personal computers, computer software, and commercial servers, and is a digital distributor of media content. Apple's core product lines are the iPhone smart phone, iPad tablet computer, iPod portable media players, and Macintosh computer line. 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,[1] in Cupertino, California. For more than two decades, Apple Computer was predominantly a manufacturer of personal computers, including the Apple II, Macintosh, and Power Mac lines, but it faced rocky sales and low market share during the 1990s. Jobs, who had been ousted from the company in 1985, returned to Apple in 1996 after his company NeXT was bought by Apple.[2] The following year he became the company's interim CEO,[3] which later became permanent.[4] Jobs subsequently instilled a new corporate philosophy of recognizable products and simple design, starting with the original iMac in 1998. With the introduction of the successful iPod music player in 2001 and iTunes Music Store in 2003, Apple established itself as a leader in the consumer electronics and media sales industries, leading it to drop "Computer" from the company's name in 2007. The company is now also known for its iOS range of smart phone, media player, and tablet computer products that began with the iPhone, followed by the iPod Touch and then iPad. As of 2012, Apple is the largest publicly traded corporation in the world by market capitalization, with an estimated value of US$626 billion as of September 2012.[5][6] Apple Inc's market cap is larger than that of Google and Microsoft combined.[7][8] Apple's worldwide annual revenue in 2010 totaled US$65 billion, growing to US$127.8 billion in 2011[9] and $156 billion in 2012.[10] Apples Marketing Strategy Sell On Value, Not Price In 2010, Apple made headlines when they surpassed Exxon Mobile as the worlds most valuable company, released the iPad, which revolutionized the globe, and were named the most profitable retailer in the entire United States. So the question on everyones mind is: How did they do it? What was Steve Jobs magic that seemed to make everything he touch turn to gold? While theres many secrets that made Apples marketing methods so successful, here are just a few: The Key To Steve Jobs Insanely Great Marketing Apples marketing strategy can be summed up in one word: Empathy. The ability to understand another person, connect at a core, gut level with their innermost emotional wants and desires, and give them a product so useful they cant live with out it (think about the feeling you get once you use an iPhone, iPad, or iPod), and refuse to accept any other product or substitute as an option because the product is so simple, clean, and easy-to-use. That what separated Apple from every other business on the planet, and what made Apples marketing strategies so phenomenally successful And this is where Apples marketing strategy begins When Steve Jobs returned to Apple in 1996, they were on the edge of bankruptcy, Apple had a loss of $1 billion dollars from the previous year, and was 90 days from bankruptcy. Then, in 1997, the year Steve came back, and applied his marketing strategies, Apple recorded a profit of $5.9 billion, then, over the next 10 years, he took Apples stock market cap from $3 billion, to $702 billion dollars (Microsoft has $226 billion, and Google has $218 billion) so how did he do it? Well, it starts with a great mindsethere was Steves: If we want to see Apple healthy again, we have to let go of this notion that for Apple to win, Microsoft has to lose (Competing). We need to embrace a notion that for Apple to win, Apple has to do a really good job; its about Apple being able to make incredibly great contributions to the industry (Creating Value). The next year, Apple created the first computer that made it easy for consumers to get onto the internet (most computers took over an hour of complicated set-up, while the iMac had you surfing the web in less than 10 minutes). Steve Jobs knew that if he focused on SERVING THE CUSTOMER, and if he built exactly what customers wanted, they would continue to open their wallets. Because Apple was more focused on meeting the customers needs than anything else, so they didnt need to compete on price, and could set their own prices, because they were delivering something much more powerfulVALUE. The Magic Marketing Strategy That Drove Apple To The Top What made Steve different from other marketers, is he understood that his job as a marketer was NOT to focus on making money or sales, and, unlike other marketers, it showed in the way he presented his products: Here are some of the quotes that reflect Steves focus in business: "If it could save a persons life, could you find a way to save ten seconds off the boot time? Youve got to start with the customer experience and work back towardnot the other way around. Being the richest man in the cemetery doesnt matter to me. Going to bed at night saying weve done something wonderful; thats what matters to me. Steve made the marketing process simple; if you give people what they want, educate them on why they need it, show them how it will improve their lives, and why no competitors products can compete with the convenience and ease of use of yours, customers will open their wallets."

Who Are Your Products Designed For? Apples marketing strategy relies on creating products THEY are going to be using themselves (the iPhone was built because Apple employees were unsatisfied with their mobile phones, so they built the phone theyd want to use). Apple built the iPad thinking about how to build a product that made it effortless, easy, and fun to browse the internet, watch movies, and read books from anywhere, they started by creating a product the customer would want, then offering them that product. Microsoft starts with making money, and theyre more focused on competing with Apple than they creating a great customer expe rience (which determines if people buy their products or not, and how much money they make). Apple simply gives people what they want, and doesnt waste time turning it into a game like all other companies. ______________________________________________________________________________________________________ Apple has been able to accumulate massive success and riches over the years. Many people associate this success to their relentless hard work and their ability to foresee and act on the changing marketing trends. However, if there is one single factor Apple can crown as the reason of its success then it is the simplicity. Apple and simplicity? Now that may seem like a far-fetched notion but it is true. Apple, just like some other big names out there, has been able to strike a chord with its customers but over the course of years, it has also been able to significantly increase its market share in the mobile industry which is becoming an increasing competitive market. Given the current popularity and status of iPhone, it is over whelming to imagine that the phone only came out in 2007. Its been successful, all right. But how did Apple do it? Heres the Apple Marketing Strategy. Effective Advertisement Apple has successful employed the same strategy here as well. In its advertisement campaign, rather than challenging peoples intellect and throwing all kinds of computing or mobile jargons at them, Apple sticks to the basic. The latest ad campaign for iPhone 4, rather than concentrating on its oh-so-powerful processors simply magnifies some of its very basic functions such as improved picture quality and email experience. From presentations to advertisements, Apple marketing strategy has been in a language people can understand and that is definitely one of the biggest reasons why they are so successful in every thing they do. Presentations If there is one area where Apple beats all other industrial giants such as Microsoft, Nokia or even Samsung hands down, it is the presentations. Each time Apples goes into producing any new product, the whole world stops and zooms in to analyze and counter-analyze the specs of the upcoming products. Despite having plenty to share, Apple chooses the simplest route and that is of addressing the general public. As far as I am concerned, Steve Jobs alone can give all tycoons a run for their money. The man, other than being a genius, speaks a language a common person right off the street can understand and that is the beauty of just about any given Apple Presentation, which is meant as much for the general public as it is meant for the media. Brand Loyalty Apple Inc. was founded only a year after Microsoft, at the moment it is on the pinnacle of its popularity and success. Unlike most of its rivals, Apple especially is not known to care for the budget of a commoner. In fact, it wont be wrong to say that Apple, ever since its foundation, has only targeted a certain brand conscious class. For that very reason, none of the products of Apple are meant to fall within the budget of a normal man but more and more people are covetous of Apple products than ever before, since it is established to represent a certain class. Apple fever proved to be an epidemic and now it has spread far and wide. Take the example of Nokia on the other hand. It manufactures all kinds of phones, not just the ones meant to drill some major holes in your pockets (and purses). Despite being economical as well as reliable, Nokia has lost significant market share to Apple, the brand that refuses to lower its prices. More and more people are changing their loyalties in favor of a brand that comes with a promise of delivering or more importantly, enrolling them in the class. Make Beautiful Products Apple does not only price their products much higher than the competitors but unlike others, takes a lot of effort in making its products beautiful. They take even the smallest details in to consideration and make it look so good that people are ready to pay up for it.

SWOT Analysis The SWOT analysis is made up of Apples strengths, weaknesses, opportunities and threats. Each segment will be analyzed as an independent component followed by a conclusion. Apples Strengths. Many believe it is the individuals that are the greatest asset of any company and not their products, but now that the legendary innovator Steve Jobs is gone is Apple still competitive? The answer is yes. There is a time and place for every type of leader and this is the ideal time for Tim Cook to take over as the leader of Apple. Tim Cook, is ranked as the number one CEO in the US by Glassdoor, with a 97% staff approval rating (James Johnson, March 30th, 2012). Tim Cook has cut Apple Inc.s inventory from months to days, with ultra-efficient supply channels and is leading the fair wage movement in China (Adam Lashinsky, August 24th, 2011), but Tim is not the only superstar; the artistic genius behind Apple is still Jony Ive, as he is known to devoted Apple followers. The second key strength for Apple is their products ecosystem. Apple OS, iOS and iCloud, make up the foundation in which this ecosystem has evolved. The ecosystem enhances each new product making the ownership of two or more apple products worth more than the sum of their parts. This system is revolutionary because it goes against all post-internet thought. Its uniqueness is that it is a closed system, maintaining its own store, hardware and software applications (apps). This closed system has allowed Apple to enact control over the user experience minimalizing third party costs and maximizing profit. The Walled garden experience minimizes technical issues and is considered by most to be a virus free environment (Daniel Lyons, March 25th, 2010). Although most would consider Apples products to be their key strength, they are simply the by-products of their environment. The iPod, iPhone, iPad, iMac, iTunes Store, and the Mac Book Pro, are all the bestselling products and services in their category, with each classified as a benchmark product. As a final note it is the depth of their assets that provide diversity for the company. Some example assets include their cash position, which exceeds $100 Billion (Peter Svensson, Vancouver Sun, April 10th, 2012), their branded stores, and leading professional and consumer software apps to name just a few. Weaknesses. Apples central weakness may simply be its ideology. Open systems are what have made the internet the powerful tool it is today and remains the mantra of companies such as Google and Microsoft. The diversity and specialization of competing open products highlight this issue. Individuals who are not already hooked on the Apples ecosystem or swayed by any social encouragement can usually find exactly what they are looking for with another brand. This segues into Apples second, weakness of significance, which is the price of their products. Even when their products are not higher priced they are perceived as having a higher price. Most consumers of electronics dont have the knowledge to compare based on value or to recognize the potential for a poorly made product offered by a competing electronics company. Opportunities. It has been a well-publicized rumour that Apple is going to enter the TV market with what has been called iPanel. In the Walter Isaacson biography called, Steve Jobs (Oct, 2011) he announced what is usually a well-kept apple secret and made it a highly publicized and anticipated product offering. As a result the TV industry in general has been undergoing significant innovations in an attempt to keep ahead of the coming Apple launch. Unlike the iPad and iPhone, the iPanel may not make it into the number one selling position but analysts believe that it, could produce a halo effect that leads to consumers picking up an iPad or iPhone along with the new TV (Steve Schaefer, Forbes, April 5th, 2012) The strength of the apple ecosystem is that products like the iPod Touch act as a gateway product for other Apple purchases (T. Sheridan, ApplenApps, Sept 6, 2011). With each new product, the ecosystem expands and as a result a new added gateway increases the likely hood and opportunity for the expanded consumer use of apple products. Threats. Under the leadership of Tim Cook tensions between Apple and Google have relaxed. Although apple has gained a dominant position in consumer computing products, that balancing point could shift back to open systems quite easily like we saw in the late 90s when Microsoft essentially controlled the PC market. Such a return could be foreseen through inspired competitive leadership and a competing open OS that just works (R. Eberhard, personal remarks, 2012). Microsoft is coming out with their highly anticipated Windows 8. Google is also ever present and could easily expand its android operating system onto the desktop. Isnt the android tablet a computer after all? Android currently represents Apples biggest threat to its ecosystem if they can tap into the youth market and bring an end to the cult following that has been apples forte for the past 15 years. One final threat could come in the form of a serious computer virus which would hurt apple from a public relations perspective. SWOT Summary It is the battle of the ideologies. Apples competition is cheap and abundant. It is essentially Apple vs. everyone else. That is a tough battle for any company because one false strategic move and a lot can be lost. That being said Apple appears to be under good management. Their growth trend does not appear to be slowing any time soon. Technology moves fast but not fast enough to realistically see a competitive threat anytime in the next two years based on this SWOT analysis. Quality leadership in association with an expanding ecosystem that encourages the purchase of additional Apple products is a very healthy argument for continued growth.

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