Functional Strategy of Apple Company

Marketing Strategy
Apple is the largest brand in the technology industry in terms of its revenue generated as
well as its brand ranking. It is not a surprise to many because Apple has time and time again
presented products which were ground breaking and which revolutionized the market. Apple has
given us many delights over the years including the Mac book, the Ipod,
Iphone, Ipad, Iwatch, Itunes and others. And due to its excellent product and differentiation, it is
close to the heart of many techie enthusiasts. The following are the marketing strategy of Apple;

 Segmentation targeting and positioning of the brand

There are three major segments which Apple targets. It generally uses lifestyle segmentation as
Apple is the most premium brand out there. The segment is usually the urban population with
enough buying power for purchasing Apple products. These are people who are early adopters in
life but the brand equity of Apple is such that even laggards have started adopting the products.

In the marketing strategy of Apple, it has three target groups

1. One is the music lovers who are targeted by the Apple Ipod and Itunes.
2. Another target the professionals or even teenagers who are targeted for Apple Iphone,
Tablets, Macbook and other such gadgets which can be used by anyone, irrespective of age.
3. And third is the crowd which can use their other products and services like Apple TV and
Apple Iwatch. They also use Ibooks, Apple pay etc.

 Competitive advantage in the marketing strategy of Apple

Apple has several competitive advantages over its competitors

1. Superior technology products – Macbook and Iwatch are clearly leaders in their market
space because of the OS and the technology used.
2. Brand equity – Apple has repeatedly taken the top spot for its brand equity and has a cult
following since ages.
3. Revenue over time – Apple has deep pockets due to its high margins.
4. R&D – A major competitive advantage of Apple is the amount it spends on R&D keeping
its eyes on the future rather than on the present.

 Distribution in the Marketing strategy of Apple

Apple has a very smart retailing setup and these retail outlets are such that they are more focused
in helping the customer and making him comfortable with using Apple rather than selling the
product and stuffing the product down customers throat.

Apple has also introduced the Apple Genius Bar, which is a walk-in service center and can help
any customer in problems they are facing in MacBook or Iphone or Ipad. Overall, the company
owned Retail and Service outlets are great.
Along with company owned stores, Apple has set trade partners like Ingram Micro and
Redington which are responsible for the sales and distribution of the brands. These trade partners
will buy in bulk from the brand and then distribute the product in the market. Thus, besides its
own retail stores, Apple is found present in other modern and premium retail stores. These stores
are covered by its retail partners.

The Online E-commerce presence of Apple is fantastic. Most E-commerce portals promote the
brand themselves because they know that the brand is in huge demand. Besides this, there is very
less price penetration in Apple, and hence the channel partners and E-commerce portals are
happy too as they don’t have to fight on price. from the home page itself. The combination of
retail, distribution and E-commerce gives a complete market reach to Apple.

 Brand equity in the Marketing strategy of Apple

Apple has the highest brand equity in the world as of 2016 and it is the topmost ranked brand in
the world. The brand worth of Apple is 118.9 billion dollars. The brand has done a lot to reach
this brand equity, but a major contributing factor was its ability to give hit products back to back,
and to reach across the globe with these excellent products. The combination of both with the
excellent marketing communications of the brand help Apple reach the highest brand equity
possible.

 Promotions in the Marketing strategy of Apple

Apple is one of the most elegant advertisers as can be seen from any of its print ads in
newspapers. You will commonly find Apple ads to be clear and crisp in their message. Their
background will be white and there will be a splash of colors on the print ad introducing the
product or differentiating the product.

And that is one major strength of the brand. Apple has so many differentiation points that it can
have a slew of ads, all targeted towards differentiating the products that it is offering. Not only
the print ads, even the video ads do the same. They tell you one point which highlights the
product features.

Here is a simple image made by Apple to differentiate between PC and Macintosh. Look at the
clean and to the point copy.

Overall, the advertising and promotions of Apple are used tenfold when there is a new
product launch. The hype created is so much that you just can’t ignore it. And this hype is
continued until the product becomes a success. As the number of products with Apple is less, it
is no doubt that it wants each one of its product to be a hit.

The Marketing strategy of Apple and its brand can teach a lot to marketers with regards
to differentiation, brand building and most importantly – Innovation.
 Financial Strategy

Financial Strategy of Apple is based on the concept that is maximizing margin. This was single
mindedly pursued by no other than the brains behind Apple, and that was Steve Jobs.

The financial strategy of which is to maximize margin that can be seen on every product model
of Apple. Apple gadget and model have unique features of which the consumers cannot buy from
other market except Apple. The product that was been launched by Apple will ensure that the
buying public cannot buy it from any other except Apple. Every gadget, product models
introduced by Apple will make the consumers get a frenzy, and that they will drain their pockets
dry up to the last; penny just to get hold of the latest gadget being offered by Apple. Apple
products has a cutting edge design, unique and hard to emulate features had made Apple
dominate the world of technology.

Another financial strategy of Apple is soundly based on their product features and which is hard
to emulate thus making the buying public go nowhere else except to Apple. This is what the
financial strategy of maximizing margin is all about. Apple will not let their competitors get
close to their standard in order to make them be of par excellence.

Moreover, Apple financial strategy involves launching super hyping products in order to attract
the buying public at the early point when the product was launch.

Research and Development (R&D) Strategy

The (R&D) Strategy of Apple to improve products that don't currently generate revenue.

There are three primary drivers in (R&D) Strategy;

 A growing product range: Apple's hardware product range is growing. Apple has four primary
hardware segments: the iPhone, iPad, Mac, and Apple Watch. Within each of these, the number
of devices is expanding as well — for example, the company now offers three iPhones instead of
two. That growth begs a need for new or increasing investment.
 An expanding services segment: Apple's Services segment, which comprises revenue from
internet services, Apple Care, Apple Pay, licensing, and the App Store, is expected to grow to the
size of a Fortune 100 company this year, according to Apple CEO Tim Cook. That's about $28
billion in revenue for the year, or a year-over-year growth of 15%. To support this growth, Apple
is building out the underlying services for iCloud, Siri, and Maps, which requires substantial
investment.
 A greater focus on in-house technology development: As technological advancements
continue to converge, Apple is working to keep its degree of difference from the rest of the
industry and retain proprietary information. It's doing this by directing its R&D spend in-house,
and investing in building its own core technology, including work with processors and camera
sensors for upcoming devices, which is costly and might bump spending.
Manufacturing Strategy
More than anything else, Apple's marketing strategy requires flexibility in manufacturing. This
flexibility comes in several forms
 New Product Flexibility
 Volume Flexibility
 Product Mix Flexibility
Apple's factories must be able to reconfigure for new products very quickly because of the fast
life cycles (New Product Flexibility). The factories must be able to increase production from
pilot to maximum demand quickly because of the initial promotions and short life-cycles
(volume flexibility). If the factory cannot produce it probably has lost sales. Since sales forecasts
are notoriously inaccurate and new product forecasts even more so, the factory must be prepared
for a landslide, a fizzle and anything in between. Then, as the product life cycle nears its end, the
factory must be able to decrease production and prepare for the next new product.
Quality
Apple has a reputation for good quality but quality is not their most important selling point.
Good quality is important to Apple's customers because they perceive a risk in purchasing new,
innovative unproven products. Once individuals decide that quality is good enough, they buy the
products for their innovative features.
Consumers do not want to be stuck with an orphan or a lemon. Because of Apple's spectacular
initial promotions, quality must be right in the beginning or Apple's reputation would be severely
damaged.
For Apple, quality is what Terry Hill calls a qualifier. Apple does not need the highest quality in
the market, just acceptable quality. A reputation for poor quality, however, would damage
Apple's reputation with disastrous effects on the next new product. Hill calls such qualifiers
"Sensitive Order-Losers." In other words, quality only becomes critically important if it falls
below acceptable levels.
Cost
Apple charges a premium price and enjoys high profit margins. This means that, within limits
manufacturing cost is not the most important consideration when designing or operating an
Apple factory. Flexibility is far more important.

Human Resource Strategy

HR strategy is the reason why the company stand strong and grow big to rule the world. Apple
Recruiting Strategy is something that become the key of success. Apple requires all candidates
to be hard worker, committed to the company, and get every precise detail perfect. Many times,
Apple recruits high-quality workers from other firms. Some people call it pirate raiding.

Apple is known as a different company in many ways. Instead of promising work and life
balance, Apple is emphasizing hard work for all workers. Instead of promising career
progression, Apple concept is for employees to own their career. Career path is not fully
supported by Apple. Employees must seek information about other jobs in different units
themselves.

Apple makes things so different in talent management. Instead of providing training and
development program, Apple make the employees do it themselves. Trainings are available but
Apple does not give or create learning plan for the employees. Apple reinforces the employees to
have strong self-reliant and develop their skills on their own. When others use development
program as part of retention strategy, Apple does the opposite. The important retention factor of
Apple is economic reward. Employees will get stock grants periodically if they could contribute
something big to the company. They call it an opportunity for wealth creation that you will have
a nice retirement if you can reach your own individual accomplishment.

Agility is believed as the most important key in Apple success. As the world can easily see
Apple agility to shift from a computer company into music industry and then rules smartphone
industry, agility in talent is the real key behind it. Instead of making the employees focus on one
thing and improve themselves on the subject, the company reinforces employees to prepare
themselves from next big thing.

It is not that employees could not focus on a project but after one project is successful, they must
prepare themselves to do something new. The new project could be something completely
different from the previous project. Workers must prepare themselves to learn and retool in very
short time. The preparation is not only physical but also mental and work of brain, for sure.

Instead of creating a strong team to work on something, Apple assigns several teams to work on
one project. All teams are competing to create something new that full of innovation. The work
of each team would be reviewed and one best would be chosen.

To force freethinking that creating innovation at the end of the design, Apple make all design
teams to have two meeting every week. The first meeting is something common with discussion
of small refinements and the second is go crazy meeting. Go crazy meeting have been gaining
attention of many people in the world, because Apple let anyone to brainstorms and speak about
anything crosses their mind. Nothing is impossible in go crazy meeting.