...Case Study: iPod to IPad: innovation and entrepreneurship at Apple Q1)What are the market segments indentified by Apple and their relevance over the years? Apple identified four key segments within the market: -Business, -Creative Professionals, -Education , -High end cosumers In 2000, 75% of the sales were to the traditional business and professional markets. The first ipod was launched in 2001 later followed by a 10 GB version. In 2003, the ITunes Music Store opened. Access to music and downloads became easier. By 2009, the situation had reversed with 60% of sales in the consumer markets of education, students and the broader consumer market. The search for consumer product in 2001 was the cause of this dramatic turn around. Prior to the launch of Ipod, Apple wanted to enter the market for consumer digital devices. They found the market for Digital MP3 players was relatively under developed with no big players involved and significant design flaws in the products on offer. Apple chose music on the move since the market potential was huge and no one had got the right recipe. Price was no barrier to Apple. By tradition the company tended to follow a premium price entry model. They understood that the Key success factors in the market were design, size, capacity, battery life, software and download facility. Apple were looking for creative professionals to satisfy the above criteria and seized the opportunity to hire Fadell who had ideas for a brand new MP3...
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...Mission and Goals “Digital Lifestyle” is focus. Apple focuses on developing multimedia and personal digital assistant. They offer customers a small hard-drive-based, high quality digital music player, the iPod, and offer an easy to use, no-nonsense music service, the iTunes Music Store, which sells individual songs through the iTunes applications. With both iPod and iTunes Music Store integration, Apple is aimed at the digital music market. Making the ipod and iTunes the new “digital lifestyle” to revitalize apple’s sales and guarantee the long term security of the company is Apple’s hope. Threats and Opportunities Threats: - The legal sale of music online. - Competition with similar digital music player manufacturers and online music service. Opportunities: - The iTunes Music Store had the backing of the five major record labels. - Taking advantage of the explosion of personal electronic devices and digital downloads to add the values of products. - Consumer behavior and Market segmentation The iPod combines the innovation of Information and Internet technology with fashion, design and electronic consumption. Apple hopes that iPods can be popular in the pop music, fashion, motor vehicle, and cellphone markets and catch different level of customer’s eyes. Consumer behavior is high involvement: - Loyalty. - Reference Group influence is important on product category and brand level. - Personality and life-style are relevant in brand choice. Target segments ...
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...Steven Jobs – launched the Apple iPod in 2001 and the iPhone in 2007, he made a significant shift in the company’s strategy from the relatively safe market of innovative, premium-priced computers into the highly competitive markets of consumer electronics. This case explores this profitable but risky strategy. Note that this case explores in 2008 before Nokia had major problems with smartphones – see Case 9.2 and Case 15.1 for this later situation. Early beginnings To understand any company’s strategy, it is helpful to begin by looking back at its roots. Founded in 1976, Apple built its early reputation on innovative personal computers that were par-ticularly easy for customers to use and as a result were priced higher than those of competitors. The inspiration for this strategy came from a visit by the founders of the company – Steven Jobs and Steven Wozniack – to the Palo Alto research laboratories of the Xerox company in 1979. They observed that Xerox had developed an early version of a computer interface screen with the drop-down menus that are widely used today on all personal computers. Most computers in the late 1970s still used complicated technical interfaces for even simple tasks like typing – still called ‘word-processing’ at the time. Jobs and Wozniack took the concept back to Apple and developed their own computer – the Apple Macintosh (Mac) – that used this consumer-friendly interface. The Macintosh was launched in 1984. However, Apple did not sell to, or share...
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...Apple Inc.: the iPod, the iMac, and the Business Lessons of Closed systems Apple Inc.: the iPod, the iMac, and the Business Lessons of Closed systems Abstract The ambition of this paper is to provide a general description of the Apple Inc as a successful organization, unfolding its highlights (up’s and down’s) in the process of immense improvement and enormous extension. Furthermore, we will take a closer look into the challenges that Apple was faces with throughout its characteristic journey (such as closed systems with no compatible software). Finally, we will analyze the benefits of changing the previous used strategies and the future of Mac (desktop and portables) Apple Inc. Quick look into Apple Inc’s background Steve Jobs and Steve Wozniak successfully founded Apple Inc in 1976.They started their business by creating and releasing a computer called “Apple II “ , which was followed by another Job’s innovation ( in 1983) known as “Apple Lisa” . This was the first time that end-users were given the opportunity to operate a computer that contained a mouse and a GUI (graphical user interface). Unfortunately for Job’s and Apple Inc, Apple Lisa” was unsuccessful in its war against its competitors. Therefore, strong-willed Apple made a very much needed assessment and wisely decided to reverse its licensing strategies. Starting from year 2000, Apple and its executives centered their attention on electronic products other than computers: 1- portable media players...
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...Industrial and Corporate Change, Volume 19, Number 1, pp. 81–116 doi:10.1093/icc/dtp032 Advance Access published June 22, 2009 Who profits from innovation in global value chains?: a study of the iPod and notebook PCs Jason Dedrick, Kenneth L. Kraemer and Greg Linden This article analyzes the distribution of financial value from innovation in the global supply chains of iPods and notebook computers. We find that Apple has captured a great deal of value from the innovation embodied in the iPod, while notebook makers capture a more modest share of the value from PC innovation. In order to understand these differences, we employ concepts from theories of innovation and industrial organization, finding significant roles for industry evolution, complementary assets, appropriability, system integration, and bargaining power. Downloaded from icc.oxfordjournals.org at University of Dhaka on June 19, 2011 1. Introduction The power of innovation to reward pioneers with exceptional profits is well known. Yet, as recognized in various strains of the business strategy literature, the value generated from the innovation is generally shared by the innovator with some combination of component suppliers, intellectual property owners, providers of complementary products and services, competitors, and consumers. This is all the more true as firms focus on a set of core activities and rely on a network of allies and suppliers to help them create and produce innovative products. In such...
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...Assessment task Marketing Plan Apple Ipod Contents Executive Summary____________________________________________3 Situation Analysis -Market Analysis_______________________________________________3 -Product Analysis_______________________________________________4 -SWOT Analysis_______________________________________________ 4 -Competitor Analysis ___________________________________________ 6 Marketing Objectives__________________________________________ 7 Identifying Target Market -Selecting Target Market_________________________________________7 -Target Market_________________________________________________7 Developing Marketing Strategies Marketing Mix: -Product_____________________________________________________ ___8 -Price_______________________________________________________ ___8 -Promotion___________________________________________________ ___9 -Place_______________________________________________________ ___9 Implementing the Marketing Plan__________________________________10 Monitoring and Controlling -Developing a Financial Forecast____________________________________10 -Comparing actual and planned results________________________________11 -Revising the marketing strategies____________________________________11 Appendix ______________________________________________________12 Appendix A_____________________________________________________13 Appendix B_____________________________________________________14...
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...In this assignment I will be comparing both Apple and Starbucks to find out how marketing techniques are used to market products. I will include an Ansoff’s Matrix, survival strategies, branding and relationship marketing. Marketing – is the process in which the producers of goods and services focus on satisfying the needs of the consumers. Also marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. Growth Strategies – is a strategy aimed at winning larger market share, even at the expense of short term earnings. These consist of 4 broad growth strategies: * Product Development – is the creation of products with new or different characteristics that offer new or additional benefits to the customer. For example Apple updates their iconic iPhone by adding additional features like a bigger screen or a better camera. Starbucks also use product development, for example, when Starbucks released their ice frappes it only came out in one flavour, vanilla, but now they have made it better by adding different flavours like chocolate and Strawberry. But some stores in America do a bubble gum flavour for children. * Market Development – is a marketing technique aimed at increasing a company’s market in order to widen the customer base for the purpose of selling more products. For example Apple used to only sell in the USA because that’s where they were founded but now they have...
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...(A.1) Referral selling is when a consumer is persuaded to purchase goods or services by promising a rebate, commission or other benefit for supplying information that helps the trader sell to other consumers. The consumer does not get the promised benefits unless the supplied information is fulfilled. For example a salesman for a telephone company persuades you to sign up to a contract for a mobile phone plan and says that you will receive a commission for introducing the product to other customers who buy the same product. (A.2) Unconscionable conduct is when the consequences of a contract is unfair and harsh. Where one party is in a position to exploit a particular weakness of the other; either a business to business contract or a business to consumer contract. For example if a real estate agent drew up a lease agreement for a mentally deficient man and the contents in that contract exploited the lessor because of his condition. The contract for example would include things such as obligating the lessor to replace fixtures of the property even though the damage was not at fault of the lessor it was general fair wear and tear. The lessee exploited the fact that the lessor did not fully understand the laws regarding to the landlord’s obligation to replace fixtures of his property if the fixture is not fit for its use due to wear and tear. (A.3) i) A compliance program is designed to identify and reduce the risk of breaching the Competition and Consumer Act 2010 and...
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...for Apple’s iPod MKT / 230 September 6, 2009 Life Cycle Management – Page 2 The Apple iPod allows consumers to download music, videos, and various other entertainment items. The iPod can be seen everywhere from the gym to the local coffee shops. Even automakers have started to install iPod outlets in newer vehicles to draw a new kind of consumers to their autos. This report will provide some insight into Apple’s product objectives, marketing strategies, introduction phase, product growth, maturity stage, and decline of product in the market place. Product life cycle typically consists of five main aspects: (1) product development; (2) introduction; (3) growth; (4) maturity; and (5) decline. Various marketing objectives that will help the company achieve the overall product goal are as follows: Be the leading supplier of MP3 players in all markets in which Apple competes. Increase product sales. Increase company revenue. Increase brand awareness. Expand distribution to department stores. Develop a campaign to encourage current users to increase current use of product. Life Cycle Management – Page 3 During the introduction stage, Apple made careful choices with their marketing strategies by paying close attention to pricing, promotional and placement decisions. The introduction of the iPod transformed Apple into an entertainment giant. Apple’s approach to introducing the iPod to consumers was geared more towards young adults. The iPod was introduced...
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...new Apple Ipod product that has created increasing demands in various outlets. This product allows consumers to download not only their favourite music but also books and other literature which can be read and listened to. Additionally this Ipod can be used in your car and in other mobile settings. This report is for Apple to give a brief description of this product. Within this marketing report there is an insight of the situation analysis of this product, marketing objectives, the target market, marketing strategies that have been used and the forecasted strategies, monitoring and controlling. Situation Analysis Market Analysis Internal Influences • Management: Effective management is required for the training and development of employees for the continue innovation of Apple Ipod and for retraining sufficient funds during competitor introducing new product. • Capital Availability: Competition may cause mishap in the cash flow. Sufficient funds must be available when competitors unpredictably put forward their product in the market. • Technological Adoption: Technology must be adopted to improve overall efficiency. It must be integrated directly into operations (to increase productivity), as well stay on date with the amounts of Ipod’s ordered, made and delivered. External Influences: • Competitors: Competitors will regulate what, when, how and why strategies will be adopted. The introduction of new products will greatly influence Apple Ipod. ...
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...writing about. In the case of the Apple Ipod I know what a great product it is because I own one. Since I know about the product it will be interesting to learn some of the marketing tactics that appeal to the market. I will also be looking at the product life cycle of the Ipod and where it stands today. I will enjoy getting to know one of the best known computer and electronics brands from the marketing standpoint. The first steps of the marketing process of the Ipod I will look are the objectives and marketing strategies. The Ipod is attractive to many different groups and age ranges. It is great for active people, travelers, children, teens and adults\. It is also small so no bulky system to carry around and you don’t have to take twenty CD’s to get a variety of music. They also have to look at the over all price and use that someone can get out of the product. It needs to be something that many people can afford, but not a piece of junk. These are just some of the things that I can think of the Apple would have discussed as some of their objectives. If I take all of the people that I mentioned before and now have to market the product to all of them that is where the work really starts. Apple has to reach as many people as possible with their marketing strategy. I know that there were many ads out for the Ipod such as magazines, internet and commercials. Now I want to take a look at the introduction stage of the process for the Ipod. Apple had to look at the overall product...
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...its competitors who sell Windows-based personal computers. If Apple is unable to continue to develop and sell innovative new products with attractive gross margins, its results of operations may be materially adversely affected by its operating costs structure. Apple has also been lacking in their business marketing strategies and distribution networks. With regards to the personal computer industry, the familiarity of the Apple software is not there. The original goal of teaching on an apple computer has been over shadowed by Microsoft. Education is now geared toward a version of Windows which is not compatible with Apple hardware. The most important hardware developed by Apple has been the iPod that is capable of downloading mp3 files to a device. Many of Apple’s products are manufactured in whole or in part by third-party manufacturers. While outsourcing arrangements may lower the fixed cost of operations, they also reduce the company’s direct control over production and distribution. This diminished control will have negative effects on the quality or quantity of the products manufactured, or the flexibility of the company to respond to changing market conditions. Apple’s key business marketing strategy in the company’s early years was to market heavily on the educational market. Their assumption was, if students learned computer applications and techniques on Apple computers in school, they would demand Apple products in the business environment, therefore they could migrate...
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...Itu CHAPTER 6- ANALYZING MANAGERIAL DECISIONS iTUNES MUSIC PRICING MAUREN PIUCCO Songs have different values to consumers. The category may be the same, which is music, but the sub-categories has many variations. Consumers value each sub-category different, which some people may give more or less value based on what type of music they like or if it is a new release or not. I do not know which one of these characteristics they should prioritize setting up price discrimination but I assume it could be implemented (the price differentiation) in order to maximize revenue since people would be willing to pay more for something they value more. According to our textbook, there are several others pricing policies that can be implemented such as: * Block Pricing: A consumer might be motivated to buy more songs at once if more he buys cheaper it gets per song, for example. First song is 99 cents, second song is 98 cents and so on. People buy a lot from impulse and this strategy might explore this consumer behavior. * Two-part tariffs: consumers could pay a monthly fee to use iTunes, maybe a VIP membership for example, and then have advantages such as access to new releases first, special discounts and promotions, and then also pay per song. The company would have the upfront fee’s and also the per song fee’s. * Group pricing: the company could differentiate consumers providing different prices for different group of consumers for example. For example, like on...
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...rather than high levels of research and development (R&D) spending or intensive mergers and acquisitions (M&A) to acquire patents. The differences between companies who rely on innovation-based strategies relative to those that rely on speed-based ones are most prevalent during the decision of when and how to launch new products. This specific decision is in fact quantified as the single greatest and profit-generating event in the analysis completed (Kim, Mauborgne, 2004). Apple dominates innovation-based decisions and often looks to completely redefine a given marketplace through the sequence of product and service innovations developed. This mindset and resulting decisions within Apple to pursue a strategy of innovation and the development of an entire ecosystem for digital content including iTunes, iPods, and iPhones/iTouch devices has created a platform the company capitalizes on with each product introduction (Jonash, Koehler, & Onassis, 2007). The decision of which features within a given iPod to launch, how to specifically position its video capabilities and the offer of bundling for specific services on iTunes all relate to this innovation mindset. The computer peripherals marketplace is one marked by rapid product introductions and the continual development of new features. This is an industry marked by rapid technological change and a mindset of speed...
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...fallen more than 80% from its record three years ago as Apple’s iPhone and Google’s Android platform siphoned off smart phone customers. Now RIM has a market capitalization of $13.6 billion, where as Apple is valued at 11 times earnings next year. Similarly, Finland based Nokia has lost it’s earnings at 48%. And it is loosing its market share to Android and Windows based phones as well, compared to its Simbian based phones. Along the same lines, we can take the example of the Display Ad market in the US where Facebook piped Yahoo to take the number 1 spot. So, what do we learn from these examples? The basic thing to note here is that none of the manufacturers faced the threat of loosing their market share to their competitors operating in the same domain. They lost their market to companies who were operating in an altogether different domain and then out of the blue, they came and wiped the competition clean. The best example for this is again the iPhone. Apple, from being a computer manufacturer suddenly turned into the manufacture of mobile phones and dethroned traditional mobile companies like Nokia, RIM and Motorola to name a few. Similarly, Sony could never have predicted that Apple would eat up its share of the MP3 player market with the introduction of the iPod. Again, now with the advent iCloud, the traditional HDD manufacturing companies like Segate etc stare at an uncertain future. Then again, in the future, there can be a case of online services...
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