Integrated global marketing case study

Apple is a designer and marketer of consumer electronics. Based in California, Apple sells its products around the world. The company has grown rapidly over the course of the past decade, and has become one of the world's most recognizable brands (Interbrand, 2012). The company has achieved this high level of sales growth and brand recognition through extensive advertising and promotions. This paper will study the marketing strategy of Apple at all levels, with the objective being to ascertain where the company has succeeded and where it has failed.

The marketing mix consists of price, promotion, product and place (NetMBA, 2010). The greater the degree of synergy between the four components of the marketing mix, the more effective the strategy is likely to be. In general, Apple's market strategy has a high degree of integration between the different elements, and this gives the company strategic advantage. Apple has always occupied premium positioning in the market, and every element of the market mix supports this. The company focuses on design so that it will have a premium product, which allows it to have a premium price in the market. Apple has adopted a differentiated strategy that allows it to pursue a high end strategy around the world. The company's supply chain strategy supports this, as Apple suppliers are not on a low-cost model, but they often are premium producers as well.

Apple does not engage in many promotions, the exception being Black Friday as its main sales event of the year. The promotion is short-lived and does not offer major deals, only minor ones. Otherwise, Apple largely eschews formal promotions and sales in its marketing mix. For the most part, these are not needed to clear out inventory as the company sells almost everything it has made.

Apple has a strong domestic marketing strategy incorporating a number of different types of media. It builds its product and its branding around the idea of family continuity. There is a high degree of cohesiveness within the product lines, such that the different hardware and software components work well together. The brand is consistent throughout the family of products -- the "i" marque, for example -- and as a result the consumer not only sees individual products but the overall brand as well. In each Apple advertisement, no matter what media type, the product is only part of the promotion, and the majority of what the company is selling is the Apple brand. The company also believes that customers who purchase one Apple product are likely to purchase subsequent Apple products because of the synergies between each product.

Apple has a majority presence in domestic markets, but it is also a significant player in other markets as well. Apple stores are in around a dozen countries around the world and its licensed retailers provide additional distribution as well. The use of local partners supplements the company's own stores, allowing Apple to have a greater reach around the world with its products. As a result, Apple has either a strong share or a growing share in a number of markets, especially with its iPad and iPhone products. Apple must also deal with competition, and must deliver the superior product offering that they are promoting in order to retain customers in the face of intense competition.

I believe that Apple's direction is positive. The company has established one of the strongest brands in the world. This allows it to introduce new products to a welcoming fan base, and to secure the necessary distribution channels to bring its products to the mass market. Apple also enjoys economies of scale with respect to all aspects of the business, and this bargaining power is used to gain special advantages with the company' supplies.

CRM

Apple emphasizes building a brand relationship with its customers. The company uses a few different elements to enhance its CRM. The first is a high standard of customer service when dealing with the company. The second is simplifying the products and the purchase process. The third is bringing customers into the clique of Apple customers. While Apple does not engage directly with customers outside of the sales and service component, it has leveraged its strong fanbase to do the work of CRM for it.

The company also solicits feedback directly in order to gather more information. Apple Customer Pulse is a system that the company uses in order for customers to provide feedback to Apple directly about their purchases. The company solicits this information because it feels that its loyal customers will be willing to provide it. Thus, the company has created a feedback channel for information other than customer complaints. In addition, the company is builds feedback mechanisms into its software as well, that allows for usage data to be relayed to the company providing feedback about popular features and allowing the company to get a better understanding of how its customers use its products. This understanding will help Apple to better predict future usage patterns.

Market Segments

Apple competes in a number of different markets with its consumer electronics. By dollar value, based on fiscal year 2011 figures, the company's biggest segments are smartphones, tablets, laptops, mp3 players and desktops. Chronologically, it was the personal computers (desktops and later laptops) that Apple first used to enter the personal electronics business, and was the focal point for the company's early resurgence in the late 1990s. The iPod mp3 player was the company

Apple began life as a personal computer maker with a vertically-integrated platform combining proprietary software with the company's hardware. It has continued to focus on this core product, which includes the iMac and MacBook Air lines as staples. These lines have seen varying growth over the past few years, with desktops enjoying strong growth in 2010 and slow growth in 2011, and laptops experiencing the opposite (2011 Annual Report).

Apple is a differentiated player in the consumer electronics market. This market is generally mature, and is now being threatened by substitutes as many buyers are seeking tablets over personal computers (Etherington, 2012). Apple stands as the #3 player in the U.S. personal computer market, behind Hewlett-Packard and Dell. It is one of only a handful of truly differentiated providers, as most personal computer makers compete more on price leadership, with products that lack significant differentiation from one another. Apple's proprietary software and focus on high-end aesthetics and performance lends it the needed differentiation to compete (Epstein, 2012). Apple is therefore the only company in the industry that is growing its market share and many competitors are losing share to both Apple and to tablets.

The maturity of this industry keeps it off the radar of many, but Apple has performed well. The MacBook Air in particular was an innovative product that faced very little competition for a few years. Today, many PC makers have emerged with competing products (Westbrook, 2012). However, these products have not taken off in the market as their producers had hoped, and there is significant clutter of brands that make the purchase decision more challenging. Sales of the MacBook Air have held their own against this competition, and ultrabooks have yet to present a credible competitive threat to Apple (Pepitone, 2012). Apple remains a niche player in personal computers, but is building its share steadily and there is little evidence to support the idea that it will stop growing this share any time soon. Its products are not being cannibalized by tablets to the same degree that other PC makers are facing.

The biggest market segment by sales is the smartphone segment. This segment is around five years old or so, depending on one's definition of a smartphone. The industry could be said to have its roots in the personal digital assistance business, meaning that Blackberry and Palm were some of the earlier examples. Apple was an early mover with the iPhone, and this product brought the category from niche status to mainstream. The smartphone business is still in the growth stage. Rapid growth has allowed Apple to experience strong sales growth of 87% in 2011 and 93% in 2010 while experiencing rapidly diminishing market share at the same time. Apple currently holds 18.8% of the smartphone market worldwide. It had been the undisputed market leader for a couple of years, but Android has recently taken to dominating the market and currently has a 68.3% share. The dynamics of this market are constantly shifting. Blackberry may or may not revive its fortunes, and Microsoft is expected to make another, much stronger push into the mobile operating system business in the coming years, with strong channel partners (Graziano, 2012). It is also worth noting that Western markets are expected to see maturation in this industry in the coming years, such that most of the industry growth is going to come from developing markets. This does not bode well for Apple, because the company is unable or unwilling to adopt price points that are friendly for developing markets. By contrast, Android and Microsoft are willing to bring their phones in at lower price points and this will help them to capture greater market share. Apple remains committed to its differentiated positioning, and that will inherently limit their share of the market.

Tablets are Apple's second-largest market. The iPad was launched in fiscal 2010 and in fiscal 2011 it enjoyed 311% growth. It has now begun to emerge as a substitute for personal computers, even in the corporate market (Etherington, 2012). This has helped to drive growth. The iPad has always been a differentiated product within this market, based on its rich features and high price point. As with smartphones, Apple faces competition primarily from Android for this business, with Blackberry and Windows trailing. The tablet business has better low-end options than the smartphone business. For example, Amazon's Kindle and Barnes & Noble's Nook are low-end tablets that evolved from e-readers and have taken a large share of the tablet market. Apple is also going to face increased competition from Microsoft in this market, as Windows 8 is set to be the first operating system to integrate across PCs and tablets. The tablet market is rapidly growing. It is newer than the smartphone market, and many consumers are beginning to re-envision their computer usage around the capabilities of the tablet rather than those of the computer. Thus, the tablet industry holds tremendous promise, even compared with the smartphone industry, and the potential of this industry is evolving. Apple will face challenges entering emerging markets with the iPad, given its price point but the product will remain at the forefront of consumer's minds in the West because there are alternative high-end options beside the Galaxy Tab.

Apple has several other billion-dollar segments as well. The technological shift that took Apple into the smartphone and tablet market initially was in the mp3 player market. This market has long been dominated by Apple, but is in the decline stage of the product life cycle. The industry standard is the iPod, and its sales declined 10% last year. Smartphones, tablets and computers are all viable substitutes. iTunes and other entertainment software lines are worth over $6 billion in revenue to Apple and still growing despite the sluggishness of the iPod, building on the strength of iPhone growth. Peripherals and software are also billion dollar businesses for Apple. As with iTunes, these businesses are ancillary to the core consumer electronics businesses, and build on the strength of the company's core products.

The company's strategy involves a high level of integration between its different products, so that unlike other consumer electronics companies, Apple has a suite of products. Consumer familiarity with one Apple product serves as an inducement to purchase other Apple products. The company's segments, therefore, all support one another. Apple does not have any orphan products that are unrelated to its other businesses. This allows the company to market all products in its own stores and to the same consumers; there are benefits to the consumer to this approach that have helped Apple to build share. All told, Apple's approach to segmentation is to build on its ideas and extend its brand to related products, an approach that has allowed it to enjoy considerable marketing synergies so that growth in one product has a multiplier effect on the growth of other products as well.

Integration of Marketing Communications

Apple makes the integration of marketing communications and promotional activities a central component of its marketing strategy. The concept of integrated marketing is that "all types of marketing communications are carefully linked together" (Girard, 2012). Apple emphasizes tight integration of its messages and its products. The integrated message is particularly important. Apple has a high degree of brand consistency (Eisenberg, 2011), not only with Apple but with "i." It is immediately clear that there is a high degree of relationship between the iPad, the iPod, the iPhone, iTunes and the iMac. The products are also all high end, with simple design that each other emulates. The mobile operating system is consistent across a wide range of platforms.

Apple uses a number of different advertising platforms, including television, print and digital media. The message with respect to brand and the positioning of the brand is consistent across the different platforms. This message -- of Apple as a stylish, superior, premium brand -- has also been consistent across time. The company uses multiple platforms to deliver this message because it wants to reach as many consumers as possible. Each individual product receives its own advertisements, but there is a high level of consistency in the way that each ad looks and feels that conveys the Apple brand, rather than the individual product. The messages are kept simple, and they do not vary significantly across different platforms. For example, a promotion about a new product, the iPad Mini for example, will focus on delivering the same messages about features no matter what platform is used. The different platforms simply help Apple to reach multiple audiences, and to reinforce the message across platforms where spillover occurs.

There are a number of different elements to the promotional mix at Apple. The promotional mix refers to the different types of communications that are used, including advertising, personal selling, and public relations (Riley, 2012). Apple emphasizes advertising as the lead component of the promotional mix. The company controls its message and ensures that the advertising has a high level of reach to its audience.

The second element of the promotional mix for Apple is public relations. Apple excels at creating buzz around its products, and it does this by feeding a sophisticated public relations machine. The company shrouds new releases in secrecy, then leaks information about them through a network of bloggers. This promotion amplifies the interest in the new product before the company brings in the help of the media, who cover new Apple releases to a degree much higher than they cover new releases from competitors (Horwell, 2011). Apple then integrates the buzz with its own advertising and, very occasionally, with press releases. The company releases so little official information that when it does, the release serves the dual purpose of informing and of quieting the rumor mill. Thus, the launch of a new Apple product receives much more attention than the launch of similar products from competitors.