Apple Consulting Project: Final Report

Mac or PC? Millions of Americans ask themselves this question when purchasing a personal computer. Although Apple is reckoned to be one of the most globally accepted and profoundly originative brands in modern history, they have yet to emerge as the leaders of the personal computer industry. As PCs continue to progress and advance rather rapidly, Apple is struggling to remain competitive against a far less expensive and arguably more advantageous adversary. After analyzing the Apple brand and specifically their latest MacBook Pro model, there is a multitude of ways in which Apple could advance and further develop their current marketing strategy.

Brand Description

Apple Inc. was founded on April 1, 1976 in Cupertino, California. Steve Jobs and Stephen Wozniak, two college dropouts, initially based their now multi-billion-dollar corporation out of the basement located in Steve Jobs’ childhood home. They released their first computer, the Apple 1, that same year in 1976. It was a traditional single circuit desktop computer. The original Apple MacBook Pro was released ten years ago on January 10, 2006. This innovative and exciting new laptop created by Steve Jobs was different than anything else on the market at that time. Currently, Apple competes against other premiere technology companies such as Dell, Asus, Acer, Sony, Samsung, and HP (Hewlett-Packard). All of these tech giants offer alternative options to the Apple MacBook Pro for a significantly lower price. A few PC products directly competing with Apple’s new 2016 MacBook models are the Dell XPS series, Lenovo Yoga Pro 3, ASUS ZenBook UX305, Microsoft Surface Pro 3, Samsung Ativ Book, Google Chromebook Pixel, and the HP Spectre series.

Apple has a very specific and incredibly well-defined market segmentation. Geographically Apple has become a successful global brand, although they primarily focus on selling their products within the United States. Apple now has 487 stores in 20 different countries. The MacBook Pro appeals to both both men and women between the ages of 20–50 living within urban developments. These middle to upper class individuals usually earn a high income working as either professionals, managers, or executives. Apple customers purchasing the MacBook Pro are generally considered loyalists and are extremely faithful to the Apple brand.

The Apple MacBook Pro offers many benefits and fulfills many wants and needs that cannot be met by another brand of personal computer. Macs and Apple products overall are often regarded as far more user-friendly than their counterparts. Macintosh computers receive far less viruses and security threats than other operating systems. Security is a major advantage that could persuade consumers to purchase a Mac instead of a PC.

Brand Critique

According to Apple’s official website, the least expensive model of MacBook Pro from their latest collection costs $1,299 (Apple Inc., 2016). In contrast, Dell charges $379.00 for a comparable model and countless other personal computers are marketed at similar retail value (Dell, 2016). This is an ongoing primary concern and reflects one of Apple’s greatest weaknesses for many reasons. Although Apple may have been more profitable than Dell last year, Dell sold far more individual laptops and distributed additional merchandise when compared to Apple. This does not bode well for their future especially if the same trend continues. Another reason why Apple is trailing their competitors in the computer market is that they allocate an incredibly reduced quantity and selection of merchandise when compared to other manufacturers. The New Statesman states that, “Apple makes very few products — Cook once said its entire range could fit on a tabletop — and they are more expensive than the competition.” (Appleyard, 2013, p. 1). Their inventory is highly regulated and they only grant permission for exclusive vendors to market their devices. Currently, MacBook Pros can only be purchased online, at a local Apple Store location, or through Apple Authorized Resellers such as Best Buy, Fry’s Electronics, and Guitar Center (Apple Inc, 2016). This makes it incredibly difficult for your average consumer to purchase these products since they are only sold at the aforementioned locations for a sky-high price and are often backordered due to an inability to meet the demand. Also, since Apple controls where these products can be purchased, most of these retailers refuse to offer any form of discount on these products making them utterly unaffordable for underprivileged consumers.

When surveyed, out of twenty-five people, nine responded that they do not believe Apple products are more reliable than their competitors. Eight also indicated that they could not confirm or deny that Apple products were worth their high price value. While Apple has established a fiercely loyal congregation of followers since their origination in 1976, could Apple’s once unwavering system of support be showing signs of age? Recent sales reports are indicating a new era for Apple. For the first time in fifteen years, since 2001, “Apple’s annual sales or profits have declined and some analysts are concerned that the world may have reached ‘peak Apple’, meaning nearly everyone who wants (and can afford) an iPhone or other products already has one” (Neate, 2016, para. 3). This appears to be in direct correlation with the harsh reality that Apple products can be found everywhere and they are regarded as overly commercialized. After decades of increased public attention, it seems that even their most loyal supporters may be growing weary of Apple and all of their achievements. Apple was founded on the forefront of creativity and innovation and it is time for them to rely on those principles once again. Otherwise, Apple will be surpassed by a younger, more innovative company at their heels and on the cusp of greatness. Consumers will move forward as well in pursuit of the next big thing.

Additionally, in recent years, Apple has been accused of portraying a sense of supremacy through their advertising. They appear to be a rather snooty and upscale brand that only associates with the elite and wastes no time on the forgotten man. In some ways, average consumers believe that they invoke a sense of shame or even guilt on those who cannot afford to join the Apple family or have simply chosen not to. If these feelings prevail and more people find themselves agreeing with these opinions, then they could develop a bitter distaste for the Apple brand and influence others to avoid the technology giant through negative word of mouth. Once these issues come to fruition they could be difficult or even impossible to stop.

Pertaining to social class, culture, subcultures, and cross-cultural influences, Apple is struggling on a global scale as well. In China, the Apple brand is not nearly as strong as it once was and their investment in importing goods across the ocean no longer seems to be paying off. Apple products used to be seen as a symbol of status and a great source of pride within the Chinese social hierarchy however that is not necessarily the case anymore. In recent years, China has emerged as a leader in technology production and their people seem to be perfectly content with the phones manufactured and constructed within their country. China produces plenty of exceptional products themselves and the Chinese people no longer feel the need to choose Apple over the local competition. Marketing research has found that, “These people are now choosing the local brands instead … Although they are not yet in direct competition, they have certainly taken a lot of potential Apple customers.” (Webb, 2016, para. 18). Last but not least, a few years ago, Apple found themselves at the center of an international scandal when Chinese factory workers began committing suicide due to unbearable working conditions and a lack of employee protection. When it was revealed that Apple had contracted with this company and they were working together to produce their products, China began to see Apple in a whole new light and regarded their lack of oversight as reckless endangerment. Needless to say, this significantly damaged their foreign relations and might have been the driving force behind why Apple is no longer successful in the Chinese marketplace.

In the future, Apple should reevaluate their business entirely and take a long hard look at what has made them wildly successful for over thirty years. Apple should continue its incredible legacy while looking to expand upon its current consumer basis through the use of social media, expansive sales outlets, offering more budget friendly items to bring customers into the Apple family, and expanding upon their current marketing outlets.

Recommendations

As a marketing consultant, there are numerous ways that Apple could considerably advance their current marketing strategy. First of all, Apple must begin by actively maintaining multiple social media accounts across a legion of various platforms such as Facebook, Twitter, Instagram, YouTube, LinkedIn, and Google+. Apple instituted a Facebook profile and designated an official Twitter handle in 2011, however their profiles contain absolutely no ongoing postings and remain conspicuously empty. By declining the opportunity to capitalize on social media usage and audaciously refusing to virtually correspond with potential customers, Apple is overlooking a preeminent promotional opportunity. According to marketing authorities, Richard Hanna, Andrew Rohm, and Victoria Crittenden, “In marketing, social media is not just an optional element in the promotional mix, but a mandatory element within many companies’ marketing strategy.” (as cited in Aichner & Jacob, 2015, p 259–261). Why is Apple repudiating this remarkable business opportunity to further publicize their brand? It appears that Apple is aiming to act in a countercultural manner and rebuke the status quo in order to appear anomalous and innovative. This parallels their brand persona perfectly and their profound success without the use of any major social network is astounding in this day and age. However, with 2.3 billion active social media users in 2016, Apple will be incapable of ignoring their social media responsibility for much longer if they desire to remain competitive amongst the younger smartphone savvy generations to come (Smith, 2016, para. 4). When surveyed, out of twelve people, seven said that they would follow Apple on Facebook and Twitter, six respondents indicated that they would interact with Apple on Instagram, and lastly three people would appreciate Apple’s presence on YouTube. Also, Apple should entertain the notion of starting up their own social network exclusively available to Apple users, which would further expand the Apple family and influence future purchasing decisions. Thirteen people evaluated would eagerly participate in this new social platform. Evidently, Apple should carefully consider revising their social media strategy and introducing a more eclectic line of products offered at various values and locations before it is too late.

Secondly, Apple should expand the diversity of their current product line and provide an assortment of computers sold at various price points and venues. This would allow Apple to broaden its current customer base and continue amplifying the acclaim of the company. The most considerable customer concern regarding the Apple MacBook Pro is its exceedingly high price especially when compared to its competitors. Many customers cannot or are reluctant to spend a bulk of their hard-earned paycheck on an Apple MacBook Pro when they are provided with comparable alternatives. 40% of the customers surveyed were willing to spend $1,500-$1,8–00 on a new laptop. Microsoft and their allegiance of personal computer corporations are offering a range of models at a fraction of the price of a MacBook Pro. Additionally, personal computer technology is improving at a rapid rate, which greatly threatens the very future of Apple’s technology empire. In order to retain their competitive advantage, Apple should pursue producing their accustomed luxurious models whilst simultaneously contriving a line of standard technology that is both affordable and accessible to less affluent individuals. Formulating a family of ordinary laptops will familiarize new clientele with Apple and further secure Apple’s future as the dominant force in the computer industry. This contemporary course of action will rebrand Apple, propelling them from an association of elitists to a far more welcoming and inclusive organization in the eyes of less affluent buyers.

Many major enterprises have emerged as the overwhelming forerunner of their industry through offering an array of merchandise at assorted amounts. Take Toyota for example. Toyota Motor Corporation has matured into the world’s preeminent automobile manufacturer by marketing a multitude of materials at contrasting monetary rates. The Business Strategy Review states that, “More recently, Fortune ranked Toyota as top automobile manufacturer in the world” (Fane, Vaghefi, Deusen, & Woods, 2003, p. 51). Their lowest model, the Toyota Yaris, starts at $15,250, their moderately priced vehicle, the Toyota Camry, starts at $23,070, and their highest priced Lexus luxury line begins at $35,085 (Toyota Motor Sales, Inc., 2016). Evidently, Toyota presents products diverging in expenditure and accommodating any lifestyle or financial status. Apple would be wise to pursue an analogous approach to Toyota, undertaking a more divergent inventory, which would greatly benefit their business. Last but not least, selling their products at retailers besides Best Buy, Guitar Center, and the Apple Store would make the MacBook Pro much more accessible. 82.6% of those surveyed wished Costco and Target carried the MacBook Pro.

Although Apple is a widely successful multi-billion dollar corporation, they are far from perfection. If Apple wants to continue their longstanding legacy of continuous innovation, they would be wise to make some major marketing adjustments. As aforementioned, Apple must meet their customers where they are at and strive to make more beneficial business decisions that will promote future growth and allow Apple to take their rightful place as the undisputed leader of the personal computer industry. Otherwise, they will become another American corporate star that burned out way before their time only to be replaced by the next big thing. It is up to Apple whether or not they will continue striving to uphold their reputation and receive universal recognition as the forerunner of the personal computer industry.

References

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Neate, R. (2016). Apple’s annual profits fall for first time in 15 years as iPhone sales decline. Retrieved from https://www.theguardian.com/technology/2016/oct/25/apple-profits-sales-decline-2016-iphone-7

Smith, K. (2016). Marketing: 96 amazing social media statistics and facts for 2016. Retrieved from https://www.brandwatch.com/blog/96-amazing-social-media-statistics-and-facts-for-2016/

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Webb, A. (2016). Apple’s China problem is that local phones are good — and cheap. Retrieved from https://www.bloomberg.com/news/articles/2016-07-24/apple-s-china-problem-is-that-local-phones-are-good-and-cheap

Weber, R.M. (2007). I (mostly) love my Mac. Journal of Financial Service Professionals, 61(2), 34–36. Retrieved from Business Source Complete database.