Project on 3C Report

C-Company

C-Customer C-Competitor

Apple
(Marketing Management)
Submitted to: Submitted by:
Dr.Arvind Kumar Jain Suyash Jain
(Department of Marketing) Kritika Navetia
(BBA-Retail Management)
Acknowledgement
Every assignment big or small is successful largely due to
the effort of a number of wonderful people who have
always given their valuable advice or lent a helping hand.
We sincerely appreciate the inspiration; support and
guidance of all those people who have been
instrumental in making this project a success.
We would like to express our special thanks of
gratitude to our teacher Dr.Arvind Kumar Jain, who
gave us the golden opportunity to do this wonderful
assignment on making of Synopsis and 3C Report on
Apple which also helped us in doing a lot of research
and we came to know about so many new things. We are
really thankful to him.
We would also like to thank the teachers of UPES
who help us in our assignment. Last but not the least we
would also thank all our friends and family members for
their support and love given by them without which the
completion of this research was not possible.
 TABLE OF CONTENT

S. No Chapters Page No

1 Introduction of Apple 5
2 Global Players in Market 8

3 About
Samsung 9
Micromax 10
4 Market Shares of Smartphone in India 11

5
Marketing Mix 12
Product Mix 12
Place Mix 13
Price Mix 13
Promotion Mix

6 Product Life Cycle 14

7 Environmental Scan
Macro Environment 15
Micro Environment 16
8 SWOT Analysis 17
9 Competition 18

10 Target Market 19

11 Competitive Positioning 20

12 Pricing 20

13 Promotion 21

14 Apple Logistic & Supply Chain 22

15 Distribution Channel 25

16 Porter’s 5 Force Analysis 27

17 Apple's greatest untapped opportunity 29

18 Market Share Analysis 30

19 Strategies for the company 31

20 Recommendations 33

21 Conclusion 35

22 Reference 36
 Apple Profile
The company was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne on April
1, 1976, to develop and sell personal computers. It was incorporated as Apple
Computer, Inc. on January 3, 1977, and was renamed as Apple Inc. on January 9,
2007, to reflect its shifted focus toward consumer
electronics. On April 1 Steve Jobs, Steve Wozniak and
Ronald Wayne introduced apple 1 marked at a
price of $666.66 ($2,772 in 2016, adjusted for
Inflation).

Apple 2 was introduced on 16 April 1977. In 1984,

Apple launched the Macintosh, the first personal
computer to be sold without a programming
language at all. The Macintosh initially sold well, but
follow-up sales were not strong due to its high
price and limited range of software titles.

During his keynote speech at the Macworld Expo on January 9, 2007, Jobs announced
that Apple Computer, Inc. would thereafter be known as "Apple Inc.", because the
company had shifted its emphasis from computers to consumer electronics. This event
also saw the announcement of the IPhone and the Apple TV. The following day, Apple
shares hit $97.80, an all-time high at that point. In May, Apple's share price passed the
$100 mark. On October 5, 2011, Apple announced that Jobs had died, marking the end
of an era for Apple. From 2011 to 2012, Apple released the IPhone 4S and IPhone 5
and with the iPhone 5 (released September 21, 2012) becoming Apple's biggest IPhone
launch with over 2 million pre-orders.

Aside from being a top technology company worldwide, Apple has also paired up with
the (RED) charity to enhance its marketing strategy. The goal of this collaboration with
(RED) is "to fight for an AIDS-free generation by 2015" ("Apple - (PRODUCT) RED -
Help fight AIDS in Africa."). In order to do this, Apple has created red products and
every time a consumer purchases one of the red products, the profits go to AIDS
programs in Africa.

The charity has collected more than $50 million from Apple. In addition to using cause
marketing, the company has shown considerable interest for its effect on the
environment, specifically its environmental footprint.

5
One of Apple's main goals is to create environmentally friendly products. Apple aims
to do this by designing products that require less material and not only lessen carbon
emissions but eliminate common toxic substances that are used in manufacturing
products ("Apple - The Story Behind Apple's Environmental Footprint."). Additionally,
Apple also reduces greenhouse gas emissions by running several of their data centers
on 100% renewable energy.

Apple's aim has been to provide consumers, businesses, students, and educational
institutions with the best personal computing experience. Not only has Apple Inc.
redefined how consumers use computers at home, school, and work but has also
given consumers a whole new perspective on the mobile phone and music industry all
while exemplifying social responsibility and environmental sustainability for its
stakeholders. Apple's worldwide success is evidence that the company has succeeded
in accomplishing its mission in being one of the world's top innovative companies.

Mission Statement

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 (Apple).

Apple is committed to bringing the best personal computing experience to

students, educators, creative professionals and consumers around the world
through its innovative hardware, software and Internet offerings.

6
Current Profile

7
Global Players in Market
 Samsung
 Micromax
 LG
 Lenovo
 HTC
 Sony
 Nokia
 Blackberry
Product Mix

Apple Inc. has continued to expand its product mix. This component of the marketing
mix determines the outputs of the business organization. In Apple’s case, the
following are the main product lines:

1. Mac
2. I-Pad
3. IPod
4. I-Phone
5. Apple TV
6. Apple Watch
7. Software

These Apple products currently available in the market show the firm’s diversification in
this component of the marketing mix. However, as part of its product development
intensive growth strategy, the company continues to develop new products, such as
the Apple electric vehicle, which is under development through collaboration with firms
like Tesla Motors. This product mix shows that Apple’s marketing mix is extensive in
terms of product variety to address customers’ needs in different areas of their lives.

8
 Competitors

Samsung was founded by Lee Byung-chul in 1938 as a trading company. Over the
next three decades, the group diversified into areas including food processing, textiles,
insurance, securities and retail. Samsung entered the electronics industry in the late
1960s and the construction and shipbuilding industries in the mid-1970s; these areas
would drive its subsequent growth. Following Lee's death in 1987, Samsung was
separated into four business groups – Samsung Group, Shinsegae Group, CJ
Group and Hansol Group. Since 1990s, Samsung has increasingly globalized its
activities and electronics, particularly mobile phones and semiconductors, have
become its most important source of income.

Samsung comprises around 80 companies. It is highly diversified, with activities in

areas including construction, consumer electronics, financial services, shipbuilding
and medical services.
In FY 2009, Samsung reported consolidated revenues of 220 trillion KRW ($172.5
billion). In FY 2010, Samsung reported consolidated revenues of 280 trillion KRW
($258 billion), and profits of 30 trillion KRW ($27.6 billion) (based upon a KRW-USD
exchange rate of 1,084.5 KRW per USD, the spot rate as of 19 August 2011) However,
it should be noted that these amounts do not include the revenues from all of
Samsung's subsidiaries based outside South Korea.

Vision 2020
"Inspire the World, Create the Future."

9
Micromax is an Indian consumer Electronics Company headquartered
in Gurgaon, Haryana. The company was established as an IT software company
operating in the embedded devices domain; it later entered the mobile handset
business. Micromax was incorporated as Micromax Informatics Ltd on 29 March 2000.It
started selling mobile telephones in 2008, focusing on low pricing to compete with
international brands. Micromax's co-founder Rahul Sharma once saw a public call
office being powered by a truck battery because of frequent power cuts in its locale. It
prompted him to launch a feature telephone with an extended battery life. Micromax
launched X1i, its first telephone with a month-long battery back-up. By 2010, it was one
of the largest domestic companies making handsets in the low-cost feature phone
segment in India. In 2010, Micromax entered the tablet computer market with the
Funbook series.

In 2014, Micromax's sales exceeded those of Samsung to become the mobile telephone
manufacturer shipping the most telephones in one quarter in India. On 24 January
2014, Micromax became the first Indian mobile company to start sales in Russia. As of
Q3 2014, Micromax is the tenth largest smart phone vendor in the world. Micromax
launched its first eight-core flagship smart phone, Canvas Knight A350, in January 2014
in Russia. In the same year, Micromax launched the Android One smart phone, Canvas
A1. In November 2014, Micromax partnered with Cyanogen Inc. to provide Cyanogen-
based smart phones in India, under the brand name YU

On June 17, 2015, Micromax launched Micromax Canvas Sliver 5, which it claimed was
the slimmest telephone in the world. While most of Micromax's smart phones run the
Android OS, the company also markets smart phones that operate Microsoft's Windows
Phone 8.1. The company is an official Windows Phone 8.1 hardware partner; it
launched two Windows Phone handsets, the Micromax Canvas Win W092 and
the Micromax Canvas Win W121, in June 2014.

10
Market Share of Smartphones in India

Smartphone Market(2013)
Others
Samsung
26% 32%

Nokia Micromax
6% 19%
Sony
6% Karbonn
11%

Smartphone Market(2014)

Samsung
Others 26%
41%
Micromax
18%

Lava Intex
7% 8%

Smartphone Market(2015)

Others
Samsung

26% 27%

Intex
10% Micromax
14%
Lava Lenovo
11% 12%

11
 Marketing Mix

1. Product Mix:
IOS operating system-The first and foremost quality which the company provides was
access to the world renowned Apple IOS operating system. The Mcbook is probably
the most desired laptop and the Iphone gave access to a similar operating system like
Mcbook which was IOS. As android and Windows operating systems came later on
smart phones, Apple was able to spellbound its customers with its mobile operating
system. Iphone hardware was very much compatible with the software and the OS
used to run smoothly. Thus the high quality processing speed also lend a hand towards
the popularity of the product.

ITunes, apple store and exclusive apps – Before Iphone, IPod came and at that time itself
ITunes store came in existence. Till date ITunes is the major attention grabber for Apple
Iphone users. The Apple store has more number of apps than the Google play store which
is a compliment for the large developer network which Iphone has. Thus, ITunes, Apple
store and the developer network form the secondary products for Iphone.

2. Place Mix:
The company uses a selective distribution strategy, which involves some degree
of exclusivity that could limit market reach. Apple authorizes sellers to ensure control
over this component of the marketing mix. The following places are included in Apple’s
distribution strategy:

1. Apple Stores
2. Online Apple Store and App Store
3. Authorized retailers
4. Telecom companies
5. Fulfillment services

Apple Stores are the most visible places that sell the company’s products. Apple uses
authorized retailers, such as Walmart, Big Bazaar, Croma, and Best Price. All modern
retail outlets are distributed the Iphone through a carrying and forwarding agent. On
the other hand, individual retailers are given the product through distributors.

12
Finally, the stores which are the exclusive showrooms are given the product directly from
the company at best discounts. The company also includes telecom companies like
Airtel, Reliance outlets which sell IPhone units. In addition, Apple uses fulfillment services
from companies like Flipkart, Paytm, Amazon.com and EBay, through which third parties
sell Apple products online. Thus, Apple’s marketing mix is comprehensive in exploiting
different types of online and non-online distribution channels.

3. Pricing Mix
Apple uses a premium pricing strategy. With a premium target, and with the product
and promotions to support the targeting, Iphone has a skimming price. It is of higher
price as compared to most phones in the market. Samsung has recently introduced
many phones to rival with Iphone. However, Apple customers are not budging and they
are very much loyal to the Apple brand and to Iphone.

In Iphone pricing policy is that it does not offer any discounts. However, discounts might
be given in the form of sales promotions or by exchange offers. But otherwise there is
no discount given in Iphone. A standard price is maintained across the market. This
pricing strategy helps maintain the high-end image of the company and its products.
Another effect of this pricing strategy is that Apple products attract a smaller market
share composed of people from the middle and upper classes.

4. Promotion Mix
Promotional activities emphasize the premium image and quality of the firm’s products.
The promotional or marketing communications mix supports business position in reaching
more target buyers. The components are Advertising, Personal Selling, Sales Promotion,
Public Relations. The company also uses personal selling in the form of Apple Store
employees who provide product-specific information in the aim of convincing store visitors
to make a purchase. In addition, the company’s marketing mix involves sales promotion,
which usually happens at the Apple Stores. For example, some Apple Stores offer old
models at discounted prices when bundled with larger and more expensive products.
Moreover, the company uses public relations to optimize its corporate image. For
instance, Apple Events, leaks of new product features, press releases, and exclusive
interviews are carefully implemented to maximize positive publicity. Thus, Apple has
mastered the promotion component of its marketing mix.

13
Product Life Cycle

With the introduction of the new iPhone, all other iPhones will be on the decline,
perhaps not the most recent on prior to the iPhone 6, which is the 5C and the 5S . The
IPhone 5C and 5S may be nearing maturity as they both have only been out for a
year, and the iPhone 5S is still similar to the iPhone 6, so may be still in the growth
stage of its life cycle, As for other products, as new versions of the same product are
released, the older versions either reach maturity or decline.

The Apple iPhone 5s is now moving into the maturity phase of the product life cycle.
During this phase the primary objective of Apple is to defend market share while
maintaining revenue. During the earlier phases of the product life cycle the iPhone was
able to catapult itself into superstar status. This eventually led to many similar products
showing up in the market place. Because of this, the market has become overly
saturated with iPhone like products.

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Environmental Scan
Macro Environment
Social factors:
o Social trends which change over time
o New versions of products to keep up with trends and technological changes in
opinions
o IPhone 3G, 3GS, 4, 4S, 5, 5C, 5S, 6, 6 Plus
o Values, ideas, attitudes and beliefs in which consumers have in regards to
these products.

Technological factors:
o New innovations and ideas to create new products
o New technologies and introductions of products entice
the o consumer to buy the product
o Can create negative sides for business
o Too hard to keep up with new technology
o New products being released straight after each other and not making a
substantial profit.
o MacBook Pro, iPhone, iPod and iPad changed the way the world looked at
technology
o Portable technology – on the go.

Economic factors:
o Consumer purchasing power and spending
patterns o Income and wealth
o Money available to spend
o Economic factors of Apple revenue in 2013 were less compared to those in 2015
o Revenue growth in 2009 increased by 10%
o IPhone and iPod sales increased, however, computer sales decreased by 8%
o
Political factors:
o Laws and policies that limit the company to work effectively and
produce products that go beyond technology and laws
o The government’s perspective of what can be sold and bought within a certain
country determines the availability and supply and demand of Apple products.

Legal factors:
o Must ensure that all products are protected by copyright
laws o All Apple Products do not cause copyright infringements
o Operating software is similar
15
Micro Environment:

Customers:
o Trialing products and providing feedback on products o
The main targeted customers are from 14-55 years
o Customer satisfaction surveys may be used for feedback
o Help in determining what products are being successful and what products are
not
o Enable Apple to see which direction the company should go in when introducing
new/developed products.

Suppliers:

o Crucial when Apple is determining their pricing and profit margins o

Ensuring that all parts are working properly and are not faulty
o Apple ensures that their workers undertake full training
o In India there are no suppliers because apple products are imported from other
countries.

Competitors:
o Competitors influence the pricing of products, and the services in which
the product, or Apple as a whole provides
o Competitive pricing ensures that there is a market for the product
• iPhone vs. Samsung Galaxy
• iPad vs. Samsung Galaxy Tab
• iMac/MacBook vs. Microsoft computers
• OS X Mavericks/Yosemite v. Windows
o By having competitors in the market, this ensures that Apple would be able to
continue to strive to do better and be better

Interest groups:
o Help with new products and with market research
o The testing of products before they go on the market
 Checking if there are any glitches in the interface
 Whether or not the system runs smoothly
 The product is user friendly for the specified audience

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 SWOT Analysis of Apple
Strengths Weakness
 
Strong Brand Image Higher Prices than competitors
 
Financial Strength Narrow Product Range

High Profit Margin 
 No major improvements in
Market leader for a large
latest product versions
range of products. 
Occasional technical issue
related to product functionality.

Opportunity Threats
 
Product Diversification Aggressive competition
 
Formation of Strategic Loss of innovative potential
Partnership
 due to decease of legendary
Investment in R&D
founder Steve Jobs (Lack of
Department

Increasing compatibility of
Innovation)

Product Intensifying competition from
China and India.

Increasing in Manufacturing
Cost
Rising labor cost in countries
where Apple plants are
located.

Recommendations Based on Apple’s SWOT Analysis

Apple’s SWOT analysis indicates that the company possesses major strengths that can
be used to effectively address organizational weaknesses. The company can also use
these strengths to exploit the opportunity to expand its distribution network. Apple can
use its strong brand image and rapid innovation processes to successfully develop and
launch new product lines. However, the firm faces the significant threats of aggressive
competition and imitation, which are major challenges affecting players in the industry.
17
Competition

Apple creates computers, phones, tablets, music players, operating systems, television set- top
boxes, lifestyle, productivity software, professional media software, wireless routers, and also
sells movies and music. Products created by Apple are intuitive and easy to understand and
learn. Apple offers great customer service and in- store service experiences. Further, Apple stays
at least two years ahead of its competitors, having geniuses in design, software, and retail; Apple
has the cash to invent components, and manufacturing processes.

Apple’s direct competitors are Samsung, Micromax, Lenovo, Karbonn etc. Apple by forging the
modern smartphone layout first and patenting its screen-centric design, Apple now finds itself in
the position of being able to force competitors to tread warily in their layout of smartphone
elements. Apple has perfected the precision and responsiveness of screens, the iPhone showed
the potential of new screens by increasing their size, given the screens a hard glass surface that
responded to light finger gestures. Majority of other technology companies have fewer design
patents than Apple, design has become an advantage in consumer choice as weak design patents
will have to catch up. Competitors have fewer design patents because they are less driven by
design, unlike Apple much of the industry has produced predictable standard computer boxes,
laptops, and phones and make a minimal investment in design. Apple ignored the competition
and remained convinced that the original iPhone’s 3.5 inch screen was sufficient and stuck with
it, however when Apple finally embrace a larger screen size with the iPhone 5, it did not follow
directly in its competitors’ footsteps, rather it implemented the new phone’s larger screen in a
way that clung to the original iPhone’s design goal of being usable with one hand. When Apple
unveiled the iPad, competitors released knockoff tablets with different screen sizes. Apple
responded to the iPad’s competitors by releasing the iPad mini which is $329, while the Kindle
Fire costs $159 and the Google Nexus 7 starts at $199.

Apple is providing premium features but it only lacks in the field of pricing from its
competitors according to Indian customers. The customers are not willing to pay for iphones
because they are too costly for middle class customers. Samsung is leader in Indian market
because; they are able to fulfill the demands and requirements of middle class and rich class
customers. Samsung, Micromax, Intex, Karbonn etc are launching their mobile phones at
prices between 8000/- to 21000/- with exclusive features in it which attracts the customer most.
Recently Samsung has launched J series with 4G in it at only 8990/- (online store prices).

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Target Market
There is no point to having great products if there is no target market for those products.
Apple, Inc. focuses on marketing to people with a few different characteristics. Apple
targets users who are typically between ages 14 and 55 plus. Apple's computers all target
home users, schools, and media and design professionals . Middle and upper class income
people are a primary focus for Apple because these demographics are usually willing to
pay slightly more for “a better user experience” because $500 for a laptop is not a stretch
for them. The Iphone has a stylish design and it targets those who want to make it a fashion
statement. Loyal iPhone users are known for staying up to date with the latest technology
so the device also targets those who are tech-savvy.

Apple are going to focus on people who like to have fun with technology; Apple’s
extensive line of entry level devices and tools is beginning to appeal to people of all
ages and not just the coveted 18 to 34 year old demographic that seems to be
thoroughly enthralled by the company and its products. Because of iPods and iTunes
(and their impressive compatibility with all other Apple products), Apple is able to target
music enthusiasts from a large age demographic. Additionally, their cutting-edge
technology, Apple is also able to target professionals that work in media and design.
While Apple’s prices are generally higher (a new iPhone could be $800 or a new iPad
almost $2000), they are able to appeal to people of all ages and demographics due to
their reputation of impressive technological breakthroughs, while still managing to
focus on targeting the customers that were just discussed.

Product related segmentation is another major marketing strategy used extensively by the
company. Every Apple device is targeted specifically to different groups of consumers and
businesses and features in the products are built around their needs. Apple's retail stores
are dedicated to serving the needs of all new and existing customers and are considered
"friendly" places where consumers can look at and test out the company's products. The
staff in these retail locations that are well educated on these products and are there to
assist customers with whatever need they have. By selling products to new consumers that
are on their lower end on price range, they effectively promote their higher end products
because consumers who become satisfied with their iPod or iPhone for example, will most
likely buy a Mac computer in the future.

Customers will generally be loyal if there are only a few competitors out there
offering the same product and your product offers better quality overall.

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Competitive Positioning:

Apple has built a truly sustainable competitive advantage and is definitely worth the
current valuation premium. It is harder and harder to beat Apple with its deep
integration between apps, OS and devices. Apple is building a fortress around its suite
of product/services/experiences and it is almost impossible to break that and it is not in the
space of music and devices but Apple is also foraying in other categories of products.
Every single Apple product complements every other. Apple recently reached third place in
personal computer sales in the U.S., selling more Macs the past few quarters than analysts
expected. Also, Apple is the leader in the tablet space with its popular iPad. Many iPad
buyers are first-time Apple customers. Just as many of the nearly four million buyers who
purchased Mac computers in the most recent quarter are first time Apple customers. The
reason for Apple's compounding, growing success is a simple multiplier factor involving
customers. Once they buy one product, like an iPad, Apple's other products like the iPhone
or a laptop computer become a natural product for them.

It is widely recognized that Apple is a premium brand that demands and earns a price
premium. This price premium spans the entire Apple product lineup encompassing the
Macintosh, iPod, iPhone, software, and accessories. It is widely recognized that Apple
is a premium brand that demands and earns a price premium. This price premium
spans the entire Apple product lineup encompassing the Macintosh, iPod, iPhone,
software, and accessories. Apple products appeal to buyers who are not price
conscience and therefore, price elasticity is not a major concern.

Pricing

The different types of pricing strategies Apple uses is that they set their products and
offers different price ranges for each product based on the amount of storage
(gigabytes) the product offers. Apple’s strategic pricing of their products has helped the
company succeed, because whenever a new Apple product comes out, many
customers are already waiting in a never ending line to buy this hot new product. After a
quarter or so, Apple lowers the price of the product for example, when the original
iPhone was released one quarter later, Apple cut the retail price by $200 each. The
similarities of the iPod, iPhone, iPad, iPod Touch, iMac, is that for each product one can
purchase a product with the capacity varying from as little as 2GB, to as much as 64GB
from all of the different models and products Apple offers. The similarities of the iPod,
iPhone, iPad, iPod Touch, iMac, is that for each product one can purchase a

20
product with the capacity varying from as little as 2GB, to as much as 64GB from all of
the different models and products Apple offers. They all have versions that you can
purchase with more capacity capability. It is interesting because people want to pay
that extra money to get the best features on their product, whereas the oldest versions
would just be less extravagant and less cool than the hottest version out.

Recently Apple released the iPhone 6 & 6s that everyone has been raving about. The
price for iphone 6s is set based on the capacity of the phones is 16GB for Rs 62000
and 64GB for Rs 72000. Due to iPhone 6s, Apple lowered the prices for Iphone 5s
models. The phones are significantly lower priced than when they have first come out,
the iPhone 5S now stands at Rs 20800 for the 16GB & Rs 26899 for the 32 GB. Based
on Apple’s quality of their products and exemplary customer service it is easy to say
that they are pricing their products at reasonable prices, because of their well-known
products all over the world, Apple’s profit margin does not cease to continue to rise
each year. The extent of Apple’s products is that an average person would be able to
purchase at least one of their products if not more.

Promotion

An average customer would most likely find out about the firm’s products through
friends and just the people around them. Due to high demand for their products, there
is a vast majority of people who own and prefer their products over companies’
products; therefore this is one of the ways Apple is able to advertise their products
which is through consumers. When it comes to promotions, they offer many different
promotions that allow many people to purchase their products. Recently, Apple has
almost been doing no advertising on their products. But even though almost no
advertising is done anymore, the Apple store is almost always consistently packed on a
daily basis. Most of all their advertising is done through their customers and their well -
known products; Apple’s image is also branded based on their sleek, most trendy items
in the technology world.

When Apple announced that they would finally be coming out with the long
anticipated iPhone 5, just by hosting just one conference to introduce the iPhone 5,
thousands of people lined up to purchase the iPhone , on the opening day to
purchase their new iPhone 5, many people even pre-ordered their phones. Because
Apple products are sold worldwide and Apple is such a well-known brand, it is easy to
publicize their products though their store fronts and their customers only.

21
Apple’s Logistics and
Supply Chain

22
Digital supply chain
Is a new media term that encompasses the process of the delivery of digital media, be it
music or video, by electronic means from the point of origin (content provider) to
destination (consumer).

The main processes of a digital supply chain are as follows:

1.) True on-demand product availability

2.) Ease of use and speed for content search and activation.

3.) Pricing and subscriptions

4.) Quality management built on licensing and refunds

23
Material Suppliers of IPhone

24
Distribution Channel
Apple distributes the I-phones and its other products mainly through:

1) Apple websites will allow the customers to purchase their products like iPods,
laptops mobile, directly through the apple online.

2) Apple stores many cities have a building store either free-standing or in a

shopping mall.

3) Large electronics /computer sell apple products in their store as well as online
.amzon.com also sells most apple products.

4) By the help of the media and giving advertisement and promotion will attract
the buyer to purchase the product

Distribution Channel

25
Apple Store Retail Outlets

Apple Premium Resellers

26
Porter’s 5 Forces Analysis

Apple’s Five Forces analysis, based on Porter’s model, shows the following strengths or
intensities of external factors in the industry environment:

1. Competitive rivalry or competition (strong force)

2. Bargaining power of buyers or customers (strong force)
3. Bargaining power of suppliers (weak force)
4. Threat of substitutes or substitution (weak force)
5. Threat of new entrants or new entry (moderate force)

Competitive Rivalry or Competition with Apple:

Apple faces the strong force of competitive rivalry or competition. Companies like
Micromax, BlackBerry, Samsung, LG, and others aggressively compete with Apple.
Such aggressiveness is observable in rapid innovation, aggressive advertising, and
imitation. On the other hand, switching cost is low, which means that it is easy for
customers to switch from Apple to other brands, thereby making competition even
tougher.

Bargaining Power of Apple’s Customers/Buyers:

The bargaining power of buyers is strong in affecting Apple’s business. It is easy for
customers to change brands, thereby making them powerful in compelling companies
like Apple to ensure customer satisfaction. On the other hand, each buyer’s purchase is
small compared to Apple’s total revenues. This condition makes customers weak at the
individual level. However, because it is easy to shift from Apple to other brands, buyers
still exert a strong force.

Bargaining Power of Apple’s Suppliers

Apple experiences the weak force of the bargaining power of suppliers. Apple has less
than 200 suppliers of components for its products. The company has more options
because there are many suppliers around the world. This condition makes individual
suppliers weak in imposing their demands on firms like Apple. In relation, there is a
high level of supply for most components of Apple products. This shows that Apple
does not need to prioritize the bargaining power of suppliers in developing strategies
for innovation and industry leadership.

27
Threat of Substitutes or Substitution
The threat of substitution is weak in affecting Apple’s business. Substitutes to Apple
products are readily available in the market. For example, people can easily use digital
cameras instead of the IPhone to take pictures. They can also use landline telephones
to make calls. However, these substitutes have low performance because they have
limited features. Many customers would rather use Apple products because of their
advanced features. Thus, substitution has a weak force in impacting Apple’s business.

Threat of New Entrants or New Entry

Apple experiences the moderate force of the threat of new entrants. Establishing a
business to compete against firms like Apple requires high capitalization. Also, it is
considerable costly to develop a strong brand to compete against Apple. These
factors make new entrants weak. However, there are large firms with the financial
capacity to enter the market and impact Apple. Google has already done so through
products like Nexus smart phones. Samsung also used to be a new entrant.

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India remains Apple's great untapped opportunity

Apple Iphones had their worst-ever quarter, growing at the slowest pace since they
were first introduced in 2007, and Apple itself is forecasting its first ever revenue fall in
over a decade. The latest data from IDC, covering India's smartphone market, provides
a rather unusual visualization: a pie chart representing smartphone market share where
the iPhone is nowhere to be seen. Sales of Apple's iPhone in India are so vanishingly
small that the company ranks 18th among smartphone vendors, with a meager 0.9
percent of shipments. Samsung is the dominant vendor in the country, securing nearly a
quarter of the market with its more affordable 4G-capable devices like the Galaxy Grand
Prime and Galaxy J2.

Apple had a very low market share in smartphones in India. The market share ranges
from2%-7% in Indian market. The reason behind this low share in Indian markets are
income of population of the country, people are not able to afford Apple's current lineup
of smartphones. Apple has great interest in expanding its business in the country. It
recently crossed the $1 billion milestone of annual sales in the country, but for now
remains an aspirational brand that very few can afford outside of second-hand markets.

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Market Share Analysis

Smartphone Market(2015)
Others Samsung
26% 27%

Intex Micromax
10% 14%
Lava Lenovo
11% 12%

The chart above shows the market share for different smartphone companies in India in
2015 and the one below for 2013.

Smartphone Market(2013)
Others
Samsung
26% 32%

Nokia Micromax

6% 19%
Sony
6%
Karbonn
11%

Take a look at the pie charts above. There are a few minor shifts – the fortunes of
companies such as Nokia, Sony and Karbonn have shifted in favour of Micromax,
Intex, Lava and Lenovo. But the broad structural characteristics of the Indian market
remain the same. Samsung and Micromax remain the leaders; new competitors such
as Intex, Lenovo and a host of Chinese companies fight over low margins and churn
out phones that are of high-quality but come with a relatively cheap price tag.

To its credit, Apple has managed to nearly double its market share in the country over
the past two years. In the process, however, it has had to really reach into the bottom of
the barrel with EMI schemes, buyback programmes and partnering with bigger retail
partners. The company has slashed prices on older phones with the hope of boosting
market-share. These attempts, however, have had a quick and adverse effect on its
high-margins strategy.

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Strategies for the Company
What gives then? Why is Apple so bullish on India? The simplest explanation is that
with China’s smartphone market slowly heading for saturation, Apple has no choice
but to look at India, regardless of whether the company has a fool-proof plan to crack
the market while retaining its appetite for high profits.
A more nuanced perspective is that Apple is banking on a number of factors. Whether
this will amount to anything if Indian income levels don’t tick up, and they start
spending more on their smartphone purchases, remains to be seen.

1. The Apple Store-The piece de resistance of Apple’s retail strategy; a corporate

retail outlet that has the highest sales per square foot of any commercial real estate
space. More importantly, the Apple Store is the first step in establishing Apple as a
luxury brand. If you’re shelling out over Rs. 60,000 on a smartphone, you need to be
able to buy into the experience; to flaunt your purchase and more importantly to do it in
style.

India has no Apple Stores: sales are done through a whole range of stores from the
common, where iPhones are placed next to Samsung phones like a vegetable cart
vendor, to Apple’s “authorized resellers” which are better but still a pale imitation of
the real Apple Store.
Does Apple believe that opening Apple Stores in India, as it plans on doing, will raise
sales? A few commentators and analysts believe so. If this is to be accepted,
however, one has to buy into two main assumptions.

The first goes something like this: Apple isn’t considered a luxury product right now
but with the Apple Store coming to India, it will be. This is a difficult premise to
swallow: India’s elite flaunt their iPhones, journalists are given iPads as Diwali gifts,
and India’s youth stick Apple stickers on their normal PCs. iPhones are more of a
Veblen good in India than the US; Apple is the very definition of luxury in India.

The second assumption, which makes more sense, is as follows: Apple products are
luxury items, but the process of purchasing an Apple product in India is anything but
luxurious. Apple’s authorised resellers in India don’t do a very good job of letting
consumers hold, touch and ultimately fall in love with an iPhone or iPad. If one is to
accept that there is a certain magic present in the Apple Store, it’s safe to say that
there’s no magic currently in the stores that sell Apple’s products in India.
While the primary premise here is still weak – that the opening of Apple Stores will
result in more footfalls and sales than the current stores selling Apple products – it’s a
plausible outcome.

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2. The Refurbished iPhone Plan-Come September, India and other developing
countries will be flooded with refurbished versions of the relatively latest iPhone. Last
year, the company introduced an ‘iPhone upgrade scheme’ in the US that puts its
customers on a slightly more expensive permanent rolling contract in exchange for a
new phone every year. As part of this deal, consumers are required to hand in their one-
year old iPhones to Apple every year. Apple is explicitly entering the second-hand
market for iPhones: the company plans on taking these old iPhones, putting them
through a strict examination of quality testing, give them a new serial and IMEI number
and package it along with a one year warranty. These phones can then be sold in
developing countries for anywhere between $260-$350 (the current going price in
Western markets for a year-old iPhone).

As it happens, Apple has currently applied for permission from the government to import
and sell these type of phones in India. In order for it to receive permission it has to
prove to the environment ministry’s Technical Review Committee that it isn’t trying to
move e-waste from the US to India.
If this does come through -what could happen is that when the iPhone 7 comes out
later this year, a one-year old, refurbished iPhone 6S could be sold for approximately
Rs. 25,000 in India. It would normally take the company three years to be able to drop
prices to that extent; the iPhone 5S is currently sold online in India for Rs. 22,000. If the
refurbishing plan goes through, the company could shorten this time period to one year.

Ultimately, both these factors that Apple may be banking on to improve its market
share here in India aren’t product or technological innovations. They are clever ways of
pumping up sales numbers. That doesn’t mean that Apple should rush to offer more
discounts or bring out cheaper iPhones; that’s a rush to the bottom that every player
should avoid.

It’s a waiting game: the Indian consumer and market isn’t a shy animal that needs to be
carefully coaxed into eating food out of a person’s hands. The average Indian consumer
simply needs to have more discretionary income to spend, like the average Chinese
consumer, and until that happens Apple may need to look elsewhere for growth.

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Recommendations

Apple is an innovative company that does not mean that everything done by the
company is perfect. Every company has room for improvement and Apple’s future of
innovations is definitely one of them. Implementing some, or even all, of the
following recommendations, Apple could greatly increase it sales worldwide, and
become an even better company than it currently is.

There are several ways Apple can promote their products yet they go by simple strategies
such as personal selling, “word-of-mouth,” and product differentiation. The late co-founder
of Apple, Steve Jobs, was greatly known for his speeches and how he promoted Apple
without using a lot of their marketing budget, through public relations. Though these are all
great ways to promote Apple, there are still many ways they can improve or work on to
attract new customers or gain the customers of their competitors.

Although Apple is considered a shopping product, where people plan to buy it after
considering competitors’ prices, it is priced as a prestigious product in the technology
industry. They are considered the “technology industry’s ‘high price’ leader,” which
simply means they sell their products at a higher end value, knowing that their loyal
customers will pay this price. They should market to sell their products at a slightly
lower price, to still make profit but also to synchronize with customer satisfaction. It is
known that once Apple comes up with a new product, or expands the depths of their
products, they lower the prices of the least up-to-date product.

There are consumers who appreciate this because they do not need the new, big
thing, but Apple has customers who like to keep up-to-date, especially with Apple’s
innovative products. Apple’s loyal customer base is one of the largest in the industry
and strategizing in a way that makes them feel they are an exclusive member might
make them happy to spend more. Ways that Apple can do this is by starting an Apple
Loyalty membership. If they are a member in this Loyalty program, they get perks that
do not apply to non-members. For example, if the member spends a certain amount,
$500, annually, (not including a laptop that already costs a thousand dollars), they can
get a product in store for free, or for a lesser price than valued, such as head phones
or an iPhone case. It is easy to buy a laptop cover, or phone case elsewhere,
especially at a lower price than Apple sells it for, but if Apple had this incentive;
consumers might have more initiative to buy from them.

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Apple can or should also promote their iTunes Application by providing customers in
the loyalty programs, worth of iTunes services for every $250 they spend. This type of
CRM (Customer Relationship Management) would definitely increase customer
satisfaction while promoting Apple’s products. They should also organize little events
that only Loyalty members are invited to, where they can explore new technologies or
let the members be the first to know of the new products they are working on. This
would be a great way to keep the customers on their toes, excited about the upcoming
products but also making them feel special and important to the company.

Apple is a leader in the technology industry because they are unique in what they do
and they stick to their originality. Whether it be product differentiating, where all their
products, inside and out, are cluster free, or if it is the way they advertise their
products, which is not very often.

Apple recently came out with a commercial that introduced the new Apple
headphones, a never before seen headphones which are shaped to fit your ear hole,
instead of the custom round earpiece. Apple would also do great in product placement,
as many celebrities already use their products. But if it were seen on more television
shows or movies, it would be attract more consumers and other target markets. These
simple strategies are a great way for Apple to save money on their budget but they
should definitely consider making more advertising through the television. As an
innovator of technology, maybe they can find a way to use their new feature,
holographic, through the television to promote such a neat service.

One way to create product diversification is to create a "phablet" to compete with

Samsung’s note II. The tablet will be smaller than the iPad mini but bigger than the
iPhone. Specifically a 6 inch tablet with the availability of a phone. This will also add
product length to Apple's tablet line which includes the iPad and iPad mini. Creating this
"phablet" will allow Apple to target a whole new market which would include consumers
that want a mobile device larger than a smartphone but smaller than an actual tablet like
the iPad or iPad mini ("Phablet."). With the creation of this "phablet" device, price should
be a big concern. Apple should try a new pricing strategy and maybe make the price of
their product lower than its competitors but still higher than what it costs the company to
make the product in order to make a profit. In order to lower its product cost; however,
apple must reduce production costs. This can be done by increasing its use of recycling
in its products and cutting down energy costs. Energy can be cut down by using energy
efficient computers, lighting, and machinery.

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CONCLUSION

Apple created a very strong overall marketing strategy for the iPhone and managed
every aspect of the iPhone’s launch very effectively. Like almost all products, the
iPhone has some flaws and drawbacks, but Apple was able to develop a unique product
for tech-savvy consumers interested in a combination smart phone-music player and
make those customers aware of the product through well-managed marketing efforts
and strong publicity.

The iPhone exemplifies Apple’s knack for creating excitement about products among its
fiercely loyal customer base, who keep attention focused on the company, and then
justify the hype by delivering a high-quality, desirable product. In addition to satisfying
consumers with an easy payment method, Apple built a powerful partnership with
telecom companies like Airtel & Reliance and selling the I-phones from their retail
outlets through easy down payment procedure. All of these efforts boosted Apple’s
stock price considerably and further solidified Apple’s image as a leader in consumer
electronic gadgetry.

The Apple was also promoted by our Prime minister. CEO of Apple Tim Cook was
invited for Make in India by Prime Minister Narendra Modi. To promote Apple in India,
Mr. Narendra Modi proposed a solution to Tim Cook to set up a manufacturing base in
the country. This would cut down on the company's production, logistics, and distribution
costs, and could offer a route to making its devices more affordable. The CEO
responded positively.

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REFERENCE
 http://www.apple.com/in/
 http://seekingalpha.com/article/2542745
 http://www.saleschase.com/blog/2012/03/13/the-best-of-apples-
marketing-strategies/
 https://www.scribd.com/doc/100244510/Apple-Inc-Assignment-docx
 http://store.apple.com/us_edu_354020/browse/campaigns/education_
pricing
 http://www.economist.com/node/21551058
 http://www.informationweek.com
 http://gadgets.ndtv.com/

“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”

-Tim Cook (CEO, Apple)

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