Brand Management 1

Brand Management Apple Inc. Brand Management Authored by TONNY OCHIENG’ ONDENG’ University of Nairobi Department of Plant Science and Crop Protection March 2017 1 QUALITY AND SERVICE 2 Literature Review Apple Inc., now one of the largest computer manufacturers started out as an idea from a single individual called Steve Jobs. Jobs and his friend Steve Wozniak were sharp school dropouts with very intelligent and innovative minds. In those days, the two were living in the Silicon Valley (Rawlinson, 2016). During this time, the two were working for Hewlett Packard and this they started at the basement of Steve Job’s family home. The establishment of Apple Inc. was officially done on 1st April, 1976 by Ronald Wayne, Steve Wozniak and Steve Jobs with an aim of selling the Apple I PC kit. At its establishment, both Jobs and Wozniak had a 45% company ownership each while Wayne the remaining 10%. Wayne however, inasmuch as he was already old in business, decided to quit and sell his shares to both Jobs and Wozniak for $800 only (Rawlinson, 2016). This, it is said, that would he have continued, he would be owning a share worth over 3 billion dollars but now that’s past. Just as its name goes, it has a logo with a bitten apple. Apple Inc. logo (Dougherty, 2010) QUALITY AND SERVICE 3 Apple Inc. did not just wake up one day to become successful. In fact, it is recorded that it struggled financially for over 30 years for it to start enjoying its fruits. It was just recently in 2007 when Apple Inc. started to enjoy its success when it became widespread all over the world with the launch of the iPad, iPhone and the iPod touch (Dougherty, 2010). Apple Inc. Executive Team For the few last couple of years Apple Inc. has had changes within its executive team. This has been improving from time to time. The company, however, experienced such a difficulty when its founder and CEO Steve Jobs passed on. Finding a new CEO was the most difficult task they had ahead of them but they had to do in order to maintain or improve the quality and services of the products produced by this company. In August, 2012, the team therefore decided to name Tim Cook, a former COO for Apple Inc. (Apple Press Info, 2016). This to them was a strategic step as they saw the potential of Cook towards managing Apple Inc.’s sales activities, supply chain, services as well as any other marketing support. In addition to Cook’s previous experience in Apple Inc., he earlier on was the head of Apple Macintosh division. He played a key role in the sales and supply wing as part of the marketing. In addition, before joining Apple Inc., Cook had worked for other electronics related companies including IBM and Compaq. In addition to his experiences, Cook had a good educational background including MBA from Duke University. One of the main reasons as to why Apple Inc. had to consider all these factors was because as a CEO, apple needed someone who could help continue improving the Apple Inc.’s quality and services. The next in line is the senior Vice President-Software Engineering, Craig Federighi, a key QUALITY AND SERVICE 4 player towards introducing Apple’s online store as well as iTunes store. Other executive members include; Senior Vice President-Internet Software and Services, Senior Vice President-Industrial design, Senior Vice President of Technologies, Senior Vice President and The Chief Financial Officers, Senior Vice President-Hardware Engineering, Vice PresidentWorldwide Marketing, Senior Vice President-Operations, responsible for supply chain and quality control and others (Apple Press Info, 2016). The new CEO is already producing better fruits no wonder over the past five years Apple Inc. is always improving annually in its sales and Marketing. The diagram below shows the Apple executive team as summarised by Dediu 2013) The Vision and Mission Statement of Apple Inc. Apple Inc.’s vision is what keeps the Company focused on quality and service and daily success through innovation. In its vision, Apple Inc. is committed to ‘‘bringing the best personal computer experience to students, educators, creative professionals and other QUALITY AND SERVICE 5 consumers around the world through its innovative hardware, software and internet offerings’’(Rowland, 2015). When the new CEO joined Apple Inc., he introduced a rather long but comprehensive vision. He said, “We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self- honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well” (Rowland, 2015). According to Rowland (2015), Apple’s mission statement states that, “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad.” Considering the company’s vision and mission statements one notices why this company has successfully been growing over time. Critically analysing the vision and mission, one can rightly say that the number one priority of this company is to meet and satisfy its customers’ needs and not just for profit making purposes as most private entities would do. Ensuring customer satisfaction is one major strategy that Apple Inc. has used over time as a marketing strategy and ensuring that a correct service provision and products of good quality get to its customers. Johnson and Li et al, (2012) notes that Apple Inc. believes in investing continually QUALITY AND SERVICE 6 in research development, marketing and advertisement, technology and sell of innovative products. Quality of Services and Marketing in Apple Inc. Naidoo, Lukea, et al (2010) states that over time the service industry is playing an increasingly important role towards improving the economy of many countries worldwide. They further notes that provision of quality service is one of the greatest and most successful strategies that has been used by the top companies in enabling successful marketing of their products (Naidoo et al., 2010). With quality service, not much advertisement is required from the company itself as a good and quality service will always spread by itself from one consumer to other consumers like fire. Currently, even the big public sector companies are under pressure to providing quality services. With the upcoming of affordable and quality services from the private sector, the government sector is becoming threatened as most consumers are going for quality services. The government services have for a long time been believed to be very slow and of less quality. As a government begins its projects, its long term target is to attract investors to their areas of operations. This is not true for the private sector as their main objective is to make profits hence they will do everything possible to ensure that they market their products. According to Naidoo et al (2010), every customer seeking any service usually evaluate the quality of the particular service in five distinct ways which include; responsiveness, empathy, tangibles, assurance and reliability (Ramseook, 2010). If any company, say Apple Inc. succeeds in these five dimensions, the company has succeeded in convincing its consumers thus the success in its marketing. QUALITY AND SERVICE 7 Apple Inc. has a support care that offers a wide range of services and products. These services are designed and suited for service providers, businesses, institutions, resellers as well as individuals. Such services are majorly meant to satisfy the customers’ needs thus making marketing simpler for the apple company. Some of these services offered include; iOS Direct Service program, Apple Authorized Service Provider Program and Self-Servicing Account Program. The iOS Direct Service Program makes it efficient and convenient for the organisations connected to Apple Inc. services (Apple Inc., 2016). Through this service, such organizations related to Apple Inc. or those that do business with the company can easily order for genuine Apple products and parts for repair of damaged apple devices. This service is available to either individuals, businesses, schools or any other government agencies. Apple’s Self-Servicing Account Program is specially designed for businesses and other institutions with a motive of repairing their own products rather than seeking physical assistance from Apple Inc. Such program participants are however restricted to repair only the Apple Inc. products that they lease or own. Finally, The Apple Authorised Service providers are those that have been given a go ahead in handling Apple Inc. products and services. The company is also strict in authorising other entities and this is one way that they have used to maintain a high Apple products quality profile. Obtaining a licence follows such a strict guideline that not just any entity that wants to do business with Apple Inc. can do it (US Edition, 2013). Such services have been put in place by Apple Inc. as a strategy for maintaining a high quality profile as well as bring services nearer to its customers. One time a friend had an Apple product that broke down but the person could not get it repaired in time because there were no Apple Service providers in the area. That was about 5 years ago. That is no longer the case now as Apple Inc. has made a greater effort in ensuring that such services are near their consumers worldwide and that is a reason for increasing the number of retail shops dealing with its products. To any serious entity, bringing services nearer to the QUALITY AND SERVICE 8 consumers is as important as the products themselves. As a consumer, one would want to have a product that can be operated on as quickly as possible in case of breakdown. Specific Apple service businesses include; iCloud, Apple Pay, iTunes, Apple Stores and Apple Care. Cook, the new CEO, earlier this year reported that revenues from such services grows to about 19% each year and that’s what enabled them hit the June record of 6 billion dollars. He goes on to note that Apple App Store’s revenue went high up to 37% for that particular product. With this statement one notices how important services are for any company that wants to grow and become a Fortune 100 company. Apple Inc. began as a hardware company. The service part, however, as the company executive has realized is equally important in enabling the company achieve its desired dreams. Campbell (2016) notes that earlier this year the investment bank Piper Jaffrey had an estimated gross margin of 60% coming from apple services for the fiscal year 2015. This statement means that the physical goods took only 40%, a difference of 20%. From this analysis one notices how important the services are to any single serious company. Quality of Products and Marketing in Apple Inc. A quality concept in any organization varies with the consumers of the product itself. What is quality to a certain consumer may not be quality for another consumer of the same product. Quality concept also requires establishment of a link between the perception of the producers (manufacturers) in our case the Apple Inc., and the consumers like myself. This link is what enables the manufacturers to keep improving in the quality of the product they manufacture to a point where it suits the consumer. Quality assessment is as important as marketing of a particular product because low quality products have to be marketed through unscrupulous means whereas good quality products market themselves. The only challenge with quality products is that many at times they have to be expensive like in the case of apple QUALITY AND SERVICE 9 products. They are only assessable to the societies believed to be well of. This explains why Apple Inc. products including their smartphones are not well distributed in Africa. Majority of its retail shops are within our boundaries in the United States. However, it is important to note that for any quality product, there has to be a market (US Edition, 2013). Considering the Apple Inc.’s iPhones, the earliest Iphones were made aluminium plastic and glass (Sarkani, 2016). These materials were never durable. For instance, they could easily get scuffed and scratched, when it falls down it could easily braek. Its weight also betrayed it. That was back in 2007. Currently, the kind of iPhones being produced by the Apple company are durable, heavy, tough and not easy to break. From products made of plastic like children’s toys to hard materials made of metal and glass. And this is what is currently marketing apple products. No one ever had to tell me about Apple Inc.’s iPhone 6s, I just saw it, its features QUALITY AND SERVICE 10 and functionality and then decided to go for one. That’s how simple quality products can make get marketed. In Apple Inc., quality control is a very vital practice as it builds trust between the company and its customers. Apple has set up a very high quality standard, a journey that began with the former CEO, Steve Jobs. Although it was a longer journey for the company as illustrated with the example of the iPhone products above, the company can now be said to have achieved its vision. Going back to the company’s vision statement, ‘‘bringing the best personal computer experience to students, educators, creative professionals and other consumers around the world through its innovative hardware, software and internet offerings’’, one notices that giving the customers the best quality products is the aim of this company. This is an important strategy to use in marketing. Considering the specific mission statement of this company, that “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad,” it talks about designing best products that will enable its customers to have the best personal experience (Sarkani, 2016). Best personal experience comes with the quality put in place. Talking about quality, the apple logo itself can best describe its mission towards producing best quality products (though expensive products). When addressing quality, there are two considerations that need to be made for any company that wants to get to the top. That is, the quality of products being manufactured by the company and the quality of services being offered by the company. The two are equally important to any to any consumer hence should be equally addressed. QUALITY AND SERVICE 11 There are, however, repercussions of promising your customers quality products as one has to maintain their promise even when they are making very little profits. Apple Inc. understands the importance of its customers experience hence they seem to be satisfied with their products and its prices even as the world experiences a stiff competition in the electronics market (US Edition, 2013). Consider the currently operating own retail shops around the world, most if not all these shops are located in upmarket and quality shopping places. As a marketing strategy, Apple Inc. has also partnered with other companies in helping them expand its capabilities in distribution. For instance, the recent co-branding agreement between Apple Inc. and HP was a way of helping Apple distribute its products and services as wide as possible. Therefore maintaining the quality of products of a company is very critical as this is what most customers need. It would however be impractical and illogical to produce quality products as a market strategy and not be able to sell them. QUALITY AND SERVICE 12 References Apple Inc. (2014, September 5). Apple's Quality Is A Competitive Advantage - Apple Inc. (NASDAQ:AAPL) | Seeking Alpha. Retrieved from http://seekingalpha.com/article/2475125-apples-quality-is-a-competitiveadvantage Apple Press Info. (2017). Apple - Press Info - Apple Leadership. Retrieved from http://www.apple.com/pr/bios/ Bajarin, T. (2012, May 7). 6 Reasons Why Apple Is So Successful | TIME.com. Retrieved from http://techland.time.com/2012/05/07/six-reasons-why-apple-issuccessful/ Dediu, H. (2013, July 3). Understanding Apple's Organizational Structure | Asymco. Retrieved from http://www.asymco.com/2013/07/03/understanding-applesorganizational-structure/ Martin. (2016, February 3). The Apple Product Strategy. Retrieved from https://www.cleverism.com/apple-product-strategy/ Ramseook, Prabha, Soolakshna D. Lukea, and Perunjodi Naidoo. (2016, November) "SERVICE QUALITY IN THE PUBLIC SERVICE." INTERNATIONAL JOURNAL OF MANAGEMENT AND MARKETING RESEARCH 3 (November 2010). Rawlinson, N. (2016, April 1). History of Apple, 1976-2016 - Features - Macworld UK. Retrieved from http://www.macworld.co.uk/feature/apple/history-of-apple-stevejobs-what-happened-mac-computer-3606104/ Rowland, C. (2017, January 29). Apple Inc. Operations Management: 10 Decisions, Productivity. Retrieved from http://panmore.com/apple-inc-operationsmanagement-10-decisions-areas-productivity QUALITY AND SERVICE Rowland, C. (2017, January 29). Apple’s Vision Statement & Mission Statement. Retrieved from http://panmore.com/apple-mission-statement-vision-statement Sarkani, Armand. (2016, May 18) "How have Apple products changed in their quality from 2007 to 2016, especially the iPhone?" Quora. Retrieved from https://www.quora.com/How-have-Apple-products-changed-in-their-qualityfrom-2007-to-2016-especially-the-iPhone. US Edition. (2013, December 2) "Apple CEO Explains Why Apple's Products Are So Expensive (Sort Of)." The Huffington Post. Retrieved from http://www.huffingtonpost.com/2013/02/12/apple-ceo-tim-cook-expensiveproducts_n_2670366.html. 13