This article contains comprehensive evaluation of Apple’s marketing mix, focusing on the 7Ps (Product, Price, Place, Promotion, People, Process, and Physical Environment) and aims to analyze Apple Inc.’s marketing strategies.
Founded by Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple stands as the world’s largest technology company.
History
Established in 1977 in California, Apple Inc. is a global leader in designing, manufacturing, and marketing mobile communication and media devices, personal computers, and portable digital music players. As the largest IT company in the world by revenue and assets and the second-largest mobile phone manufacturer, Apple also offers a range of software, services, accessories, networking solutions, and third-party digital content.
At the core of Apple’s business strategy is its ability to innovate through designing and developing its own operating systems, hardware, software, and services. The company, with approximately 164,000 employees as of September 2022, achieved an 8% increase in net sales in 2022, driven by growth in Services and Wearables categories.
Apple’s business strategy emphasizes product design, capabilities, and ecosystem strengthening, aiming to reduce reliance on iPhone sales in the short-to-medium term. The company’s leadership, led by CEO Tim Cook, is known for a democratic style with a focus on innovation and collaboration, although there are critiques about the level of innovation compared to Apple’s past under Steve Jobs.
With a hierarchical organizational structure and a product-based grouping approach, Apple’s organizational culture promotes creativity, innovation, secrecy, diversity, and inclusion. However, the company faces challenges such as quality issues affecting sales and brand image, as well as increasing competition from China and India.
7 P’s of Marketing
The 7 P’s of Marketing consist of seven key factors that businesses should regularly assess. These include product, price, promotion, place, packaging, process, and people. Your marketing strategies should revolve around these seven elements:
1. Product
Take on the perspective of an external marketing consultant tasked with evaluating if your business is aligned with the current market and customer needs. Ask critical questions such as, “Does your product meet today’s market demands? Is it notably superior to competitors’ offerings?” The focus should be on developing a high-quality product that addresses specific customer needs effectively.
2. Price
This represents the second component of the 7 P’s marketing strategy. It involves setting the right pricing strategy based on market realities and production costs. Adjustments to pricing may be necessary depending on market trends. Sometimes, altering the price can positively impact customer perceptions and purchasing decisions, emphasizing the importance of pricing in how customers perceive your product’s value.
3. Promotion
Promotion encompasses all methods used to communicate the value of your product to the target market, including sales promotions and creating compelling content. Regular adjustment of marketing strategies has been proven to significantly increase sales. It’s important to remember that no marketing method lasts forever.
4. Place
Place refers to both the location where your product is sold and the channels used to make it available to customers. Changing location can sometimes boost sales. If sales are not performing well, consider reviewing your location as it could be a factor affecting sales.
Introducing multiple channels, such as telemarketing, retail outlets, and mobile distributors, or combining them, can also help increase sales rates.
5. Packaging (Physical evidence)
When customers encounter an unfamiliar product or service, it can feel risky because they can’t assess its quality until they try it.
However, you can mitigate this uncertainty by showcasing your offering through packaging.
Packaging is essentially how your product or service is presented. It extends to how your business office is set up and how customers are served. Great packaging can elevate your product’s perceived value, appealing particularly to affluent buyers.
6. Process
This encompasses the steps involved in delivering your product or service to customers. It includes aspects like your sales funnel, payment systems, distribution strategy, and customer relationship management. By focusing on processes that prioritize customer satisfaction, you empower your employees to consistently deliver positive experiences while operating efficiently. It’s crucial to assess your internal processes from the customer’s perspective. Are they user-friendly? Do your partners align with your company’s values?
7. People
The final “P” but certainly not the least in the 7Ps of marketing. Even the best marketing strategy will fail if not executed by the right people. Success hinges on having the right individuals carrying out each task. As a business owner, identifying the right people for each role and devising strategies to attract them should be a key focus for effective marketing.
Marketing Mix of Apple (7Ps of Apple)
1. Product
Apple’s product strategy, a key element of its marketing mix, is characterized by simplicity in design and user convenience. Known for their durability and high quality, Apple products undergo regular upgrades, integrating innovative features and capabilities. While the product range is limited, variations in sizes and colors cater to diverse consumer preferences. However, a downside is that Apple’s unique hardware and system are only compatible with the company’s own products.
Before Tim Cook became CEO, he claimed that all of Apple’s products could fit on a single table, as the company had just 14 products at the time. However, the situation has changed significantly since then. Today, there is a diverse range of Apple products, including iPhone smartphones, iPad tablets, Mac desktop and portable computers, and iPod digital music and media players.
Apple’s marketing mix includes a range of impressive products such as
- MacBook series (MacBook, MacBook Air, MacBook Pro)
- iMac series (iMac, iMac Pro)
- Mac mini
- iPad lineup (including iPad mini 4, iPad Pro)
- iPhone series (including iPhone SE, iPhone 14 Pro, iPhone 13, iPhone X, iPhone 8, iPhone 7, iPhone 6s)
- Apple Watch series (Apple Watch Series 3, Apple Watch Edition, Apple Watch Series 1)
- Apple TV (including Apple TV 4k)
- Apple Music
- iTunes, along with various accessories
The success of Apple can be attributed to its expertise in designing exceptional products. The company maintains strict confidentiality during product development and invests heavily in research to create innovative designs. Moreover, Apple products are known for their outstanding features. For instance, the iPhone 14 Pro has groundbreaking safety features and a cutting-edge 48MP camera.
For example, the Apple Watch Series 1 enables users to track activities, measure workouts, and monitor health.
Similarly, the new iPad offers remarkable power surpassing many PC laptops while remaining user-friendly and lightweight.
These examples highlight the superior features and functionality of Apple products, solidifying their positions as market leaders.
In addition to hardware, Apple generates revenue through various services such as iTunes, the iTunes Store, the Mac App Store, iCloud, and Apple Pay. The company also develops operating systems like iOS and OS X, as well as application software like iLife and iWork.
Furthermore, Apple designs, manufactures, and sells both its own and third-party accessories that are compatible with Mac and iOS devices. These accessories include Apple TV, headphones, cases, displays, storage devices, and various connectivity and computing products.
Lastly, Apple sells third-party digital content and applications through platforms such as the iTunes Store, App Store, Mac App Store, TV App Store, iBooks Store, and Apple Music.
Product Categories | Description | New Additions in 2020 |
---|---|---|
iPhone | A series of smartphones running on the iOS operating system | iPhone SE, iPhone 12, iPhone 12 Pro, iPhone 12 Pro Max, iPhone 12 mini |
Mac | A range of personal computers running on the macOS operating system | 16-inch MacBook Pro, 13-inch MacBook Pro, 27-inch iMac |
iPad | A series of versatile tablets running on the iPadOS operating system | Updated iPad Pro, eighth-generation iPad, all-new iPad Air |
Wearables, Home, and Accessories | AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and various Apple-branded and third-party accessories | AirPods Pro, Apple Watch Series 6, Apple Watch SE, HomePod mini |
Table 2 presents the categories of services provided by the company, along with their brief descriptions and new additions in 2023:
Service Categories | Description |
---|---|
Advertising | Involves various third-party licensing agreements and the company’s own advertising platforms. |
AppleCare | Offers a collection of fee-based service and support products branded under AppleCare. |
Cloud Services | Includes storage and synchronization of customers’ content across multiple Apple devices and Windows PCs. |
Digital Content | Encompasses platforms like the App Store, enabling customers to explore and download various digital content. |
Payment Services | Encompasses payment options such as Apple Card™, a co-branded credit card, and Apple Pay, a cashless payment service. |
2. Place
The “Place” element in Apple’s marketing mix encompasses various sales channels:
- Apple Stores: Operating over 518 retail stores globally, located in high-traffic areas within quality shopping malls and urban districts. These stores provide a spacious and creatively designed environment where customers can experience products and receive assistance from customer service representatives.
- Online Stores: Customers can purchase Apple products directly from the official website.
- Direct Sales Force: Utilized in specific markets to promote and sell certain products, such as iAd in 2016.
- Third-Party Cellular Network Carriers: Major carriers like AT&T, Verizon, and Vodafone include Apple products in their service packages.
- Wholesalers: Apple partners with wholesalers for a significant portion of product distribution.
- Retailers: Local Authorized Retailers, such as Carphone Warehouse and Mobile Guru, serve as additional sales points.
- Value-Added Resellers: Professionals authorized by Apple to deliver tailored solutions to customers.
Apple has implemented a focused distribution strategy, making its products accessible through Apple stores, authorized premium retailers, telecommunications providers, and select online platforms.
The USA has over 270 Apple stores, with Canada hosting 28 (Tankovska, 2022). These exclusive outlets serve as direct sales points for Apple products.
Customers can conveniently order Apple products through the online Apple store (www.apple.com) and have them delivered to their doorstep.
In the UK, customers can also purchase iPhones from telecommunications company stores like BT, 3, EE, Vodafone, and O2.
Additionally, retailers such as Carphone Warehouse, Curry’s PC World, and Argos offer Apple products for sale.
To ensure timely availability of its products, Apple collaborates with numerous suppliers.
In 2022 alone, the company spent over $50 billion working with more than 9,000 U.S. suppliers and manufacturers (Apple, 2023).
3. Price
The “Price” element in Apple’s marketing mix incorporates several strategies:
- Premium Pricing: Apple adopts a premium pricing strategy, placing high price tags on its products and services. For instance, the iPhone 14 Pro is priced at USD 999.00 or higher. The company believes that consumers are willing to pay more for excellently designed products they can’t imagine living without.
- Price Skimming: Apple frequently uses price skimming, initially setting high prices for new products and later reducing them as competitors introduce similar offerings. This strategy has been applied to iPhones, iPads, and other Apple products.
- Geographical Pricing: Apple employs geographical pricing, setting different prices for products in various regions based on exchange rate differences between local currencies and USD.
- Minimum Advertising Price (MAP): Apple integrates a MAP strategy, prohibiting resellers or dealers from advertising its products below a specified minimum price.
Apple employs a premium pricing strategy, as seen with the iPhone 14 Pro priced at £1099 in the UK and starting from $999 in the USA, or $41.62 per month for a 24-month contract (Apple, 2023). This approach, coupled with Apple’s unique and innovative product offerings, helps uphold its prestigious brand image and drives profitability.
Despite offering minimal wholesale discounts to major retailers, these discounts often don’t translate into substantial price reductions for end customers. As a result, consumers typically purchase Apple products at prices very close to the manufacturer’s suggested retail price (MSRP). However, retailers may occasionally reduce their profit margins to provide discounts and attract new customers.
4. Promotion
Promotion within Apple’s marketing mix encompasses various strategies used by business marketers.
These strategies include advertising, personal selling, direct marketing, public relations, word of mouth, sponsorship, and social media, among others.
Apple implements sophisticated and effective promotional campaigns, investing significantly in advertising, with an annual expenditure of approximately $100 million on Twitter alone (Bhaimiya, 2022).
Additionally, Apple has ventured into sports sponsorship, evident in its exclusive partnership with the renowned German football club Bayern Munich through Apple Music. The company also utilizes public relations methods to enhance its corporate image and visibility.
5. People
People in Apple’s marketing mix are integral to the company’s customer experience strategy. Apple invests significantly in its workforce to ensure exceptional customer service and support. With a team of highly trained professionals, Apple aims to deliver positive and engaging experiences for its customers.
Apple is a major contributor to job creation in the United States, supporting approximately two million jobs across all 50 states (Apple, 2023). However, the company has faced criticism in the past regarding its people strategies. For example, Apple settled a $30.5 million lawsuit related to its failure to compensate retail workers for mandatory security checks after work (Hearing, 2022).
6. Process
Process in Apple’s marketing mix refers to the strategies and systems the company uses to ensure a smooth and efficient customer experience. Apple has invested in automated processes for tasks like order processing, delivery, and returns, allowing for fast and efficient service.
7. Packaging (Physical Evidence)
In terms of the physical evidence, Apple has also made substantial investments.
It consists of unique packaging of Apple products and its sleek design.
The company’s physical evidence strategy focuses on creating inviting and appealing spaces for customers. This includes elements such as the design of its website, stores, products, logo, and other visual aspects, all crafted to be modern and aesthetically pleasing.
Conclusion
Apple has emerged as a global leader thanks to its effective marketing strategies.
These strategies have not only fostered customer loyalty but also fueled its market expansion. Apple’s commitment to delivering seamless, efficient, and engaging experiences has been a key factor in its success.