The promotion budget remains high, however, and it is essential to maintain the promotions budget to defend the space, especially over the coming months when technologically superior rivals may finally enter the tablet space.
The iPad 2 has been given a premium price, consistent with Apple products. Competitors such as Samsung have chosen to meet Apple at this price rather than undercut. This brings the iPad 2 into direct competition with such products on the basis of features, something that at present favors the iPad 2. The price points are consistent globally, and are not expected to change until the next generation of iPad is introduced and the old devices need to be cleared from inventory. Apple typically does not discount its products while they are still current, and has no plans to change that policy for the iPad 2.
With respect to place, distribution of the iPad 2 is expected to remain unchanged. The issues that plagued the product during its first few months should be resolved, meaning that there will be fewer stockouts. The iPad 2 should be easy to obtain for the rest of its run. Distribution goes through official Apple stores and licensed retailers. In the United States in particular, major retailers are part of the distribution chain. There are also online sales, and deliveries are handled by FedEx as part of a longstanding agreement for online orders.
Consumer electronics has long been a global business, with major players coming from North America, Europe and Asia. Apple's business is also global, although the company's premium positioning keeps it from achieving significant market shares in the developing world. The company also has trademark violation issues in some markets, beyond the infamous fake stores in China. The iPad 2 is marketed around the world wherever Apple sells its products. It has a strong position in major markets such as South Korea and Japan. In all markets, including the U.S., the iPad 2 is a groundbreaking product that has created much of the tablet market. Major global issues to keep in mind, in addition to intellectual property issues, involve procurement and shipping. The tsunami in Japan in particular caused problems for the iPad 2 because the company had trouble sourcing a sufficient supply of components in the wake of that disaster (AFP, 2011).
The iPad 2 is in the maturity part of the product life cycle. As with most new Apple products of the past several years, the iPad did not have an introductory life cycle, but moved directly into the high-growth stage. Sales slumped slightly after the initial launch, but have recently recovered (Ong, 2011). The June quarter saw an estimated 6.7 million unit sales of the iPad 2. The product is expected to continue selling at a high level for the remainder of the calendar year, and will not enter the decline phase of the product life cycle until the next iteration of the iPad is imminent.
The iPad 2 has enjoyed a very successful launch. Many of the factors that have driven the company's success in recent years have driven the iPad 2's success. Strong build-up in the pre-launch phase, a superior product, leveraging the Apple name, stock shortages and pre-launch secrecy about the product all combined to drive sales to a very high level immediately after the product was launched. At this phase of the iPad 2's life cycle, the product is still in high demand and still dominates the tablet market. The tablet market was essentially created by Apple and this has kept non-Apple competitors from making headway into tablets. Some of the more recent competitors have developed products that are comparable in quality in to the iPad 2 and that trend is expected to accelerate as the iPad 2 gets older. These competitors, however, have yet to establish a strong brand or market for their products.
It is recommended that the iPad 2 receive significant marketing support, in particular in terms of promotion. The product lags other devices like the iPhone and the iPod in creating a halo effect for the Apple family. Without any strong tablet competitors, there is opportunity to use Apple's domination of the category to bring non-Apple consumers into the Apple fold. This can be done by focusing the promotions on the features of tablets in general, and the industry-leading iPad 2 in particular. Such promotions could convince more non-Apple customers to consider tablets as an option, knowing that the iPad 2 is going to be their top choice. This would not only help to grow the market for the iPad 2 but also for Apple in general, using a similar growth strategy as was employed with the iPod line and the iPhones.
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