Executive Summary
The Company designs, manufactures and markets personal computers and related software, services, peripherals and networking solutions. Apple computers also designs, develops, and markets a line of portable digital music players along with related accessories and services. The company’s situation, marketing strategies and mix relate to the quality value of Apple products and services such as the Macintosh line of desktop and notebook computers, the iPod line of portable digital music players, the Xserve server and Xserve RAID storage products, a portfolio of consumer and professional software applications, the Mac operating system, the iTunes Store, portfolio of peripherals that support and enhance the Macintosh and iPod product lines, and a variety of other service and support offerings and sells its products worldwide through its online stores, its retail stores, its direct sales force and third party wholesalers, resellers and value-added resellers and sells products for the purpose of education, consumer, creative professional, business as well as government customers.
Situational Analysis
History/Background
Apple Computers was incorporated under the laws of the State of California last January 1977 as Apple designs, manufactures and markets personal computers and related software, services, peripherals and networking solutions. The Company also designs, develops and markets a line of portable digital music players along with related accessories and services, including the online sale of third-party audio and video products. The Company’s products and services include the Macintosh line of desktop and portable computers, the Mac OS X operating system, the iPod line of portable digital music players, the iTunes Store, a portfolio of peripherals that support and enhance the Macintosh and iPod product lines, portfolio of consumer and professional software applications, variety of service and support offerings and the Xserve and Xserve RAID server and storage products. Apple sell its products worldwide through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers and value-added resellers in variety of Macintosh and iPod compatible products and various accessories and supplies through its online and retail stores.
Marketing Environment
The Company’s business strategy leverages its ability, through the design and development of its own operating system, hardware, and many software applications and technologies, to bring to its customers around the world compelling new products and solutions with superior ease-of-use, seamless integration and innovative industrial design. The Company participates in several highly competitive markets, including personal computers with its Macintosh line of computers, consumer electronics with its iPod line of portable digital music players, and distribution of third-party digital content through its online iTunes Store. While the Company is widely recognized as an innovator in the personal computer and consumer electronic markets as well as a leader in the emerging market for distribution of digital content, these are all highly competitive markets that are subject to aggressive pricing and increased competition. To remain competitive, the Company believes increased investment in research and development and marketing and advertising is necessary to maintain and extend its position in the markets where it competes.
The Company utilizes a variety of direct and indirect distribution channels. The Company believes sales of its innovative and differentiated products are enhanced by knowledgeable salespersons who can convey the value of the hardware, software, and peripheral integration, demonstrate the unique digital lifestyle solutions that are available only on Macintosh computers and demonstrate the compatibility of the Macintosh with the Windows platform and networks. The Company further believes providing a high-quality sales and after-sales support experience is critical to attracting and retaining customers. To ensure a high-quality buying experience for its products in which service and education are emphasized, the Company has expanded and improved its distribution capabilities by opening its own retail stores to improve the buying experience through reseller channels. The Company has deployed Apple employees and contractors in reseller locations around the world including the U.S., Europe, Japan and Australia. The Company also sells to customers directly through its online stores around the world. To improve access to the iPod product line, the Company has significantly expanded the number of distribution points where iPods are sold.
Apple Computers designs, manufactures and markets personal computers, software, networking solutions, and peripherals, including a line of portable digital music players. Apple's product family includes the Macintosh line of desktop and notebook computers, the iPod digital music player, the Mac OS X operating system, the iTunes Music Store, the Xserve G5 server, and Xserve RAID storage products. The company's products are sold online, through third-party wholesalers, and through its own chain of stores. Apple owns approximately 125 retail stores in the United States, as well as stores in Canada, Japan and the United Kingdom. Despite successes, Macintosh sales temporarily fell off after a promising start, and the company was troubled by internal problems. Infighting between divisions continued, and poor inventory tracking led to overproduction. Although originally a strong supporter of Sculley, Jobs eventually decided to oust the executive; Jobs, however, lost the ensuing showdown. Sculley reorganized Apple in June 1985 to end the infighting caused by the product-line divisions, and Jobs, along with several other Apple executives, left the company. They founded a new computer company, NeXT Incorporated, which would later emerge as a rival to Apple in the business computer market.
Product Evaluation
Current products
The iPod, shown here, is Apple's most successful product line. This is the most recent iPod model; it is currently available in GB models and is capable of playing video files as well as audio files.
The Mac mini is Apple's lowest-cost desktop computer.
IPhone is Apple's multi-touch smart phone
The iMac is similar in concept to the original Macintosh in that the monitor and computer are housed in a single unit. It is now in its third major design iteration, and has been upgraded by times using the same design.
Digital Lifestyle
The Company believes that for both professionals and consumers the personal computer has become the center of an evolving digital lifestyle by integrating and enhancing the utility of advanced digital devices such as the Company’s iPods, digital video and still cameras, televisions, CD and DVD players, cellular phones, personal digital assistants, and other consumer electronic devices. The attributes of the personal computer that enable this functionality include a high-quality user interface, easy access to relatively inexpensive data storage, the ability to run complex applications, and the ability to connect easily to a wide variety of other digital devices and to the Internet. The Company is the only participant in the personal computer industry that controls the design and development of the entire personal computer—from the hardware and operating system to sophisticated applications. This, along with its products’ original industrial designs, intuitive ease-of-use, built-in graphics, multimedia and networking capabilities, uniquely positions the Company to offer innovative integrated digital lifestyle solutions.
Peripheral Products
The Company sells a variety of Apple-branded and third-party computer hardware peripheral products directly to end-users through its retail and online stores, including printers, storage devices, computer memory, digital video and still cameras, and various other computing products and supplies. The Company offers a range of software products for education, creative, consumer, and business customers, including Mac OS X, the Company’s proprietary operating system software for the Macintosh; server software and related solutions; professional application software; and consumer, education, and business oriented application software.
Consumer Evaluation
One of the goals of the retail initiative is to bring new customers to the Company and expand its installed base through sales to computer users who currently do not own a Macintosh computer and first time personal computer buyers. By operating its own stores and building them in desirable high-traffic locations, the Company is able to better control the customer retail experience and attracts new customers. The stores are designed to simplify and enhance the presentation and marketing of personal computers and related products. To that end, retail store configurations have evolved into various sizes in order to accommodate market demands. The stores employ experienced and knowledgeable personnel who provide product advice and certain hardware support services. The stores offer a wide selection of third-party hardware, software, and various other computing products and supplies selected to complement the Company’s own products. Additionally, the stores provide a forum in which the Company is able to offer specialized service and personalized training.
The creative customers utilize the Company’s products for a variety of activities including digital video and film production and editing; digital video and film special effects, compositing and titling; digital still photography and workflow management; graphic design, publishing, and print production; music creation and production; audio production and sound design; and web design, development, and administration. The Company designs its high-end hardware solutions, including servers, desktops, and portable Macintosh systems, to incorporate the power, expandability, and features desired by creative professionals. The Company’s operating system, Mac OS X, incorporates powerful graphics and audio technologies and features developer tools to optimize system and application performance when running creative solutions provided by the Company or third-party developers.
Competitor Analysis
The Company is confronted by aggressive competition in all areas of its business. The markets for consumer electronics, personal computers and related software and peripheral products are highly competitive. These markets are characterized by rapid technological advances in both hardware and software that have substantially increased the capabilities and use of personal computers and other digital electronic devices and have resulted in the frequent introduction of new products with competitive price, feature, and performance characteristics. Over the past several years, price competitions in these markets have been particularly intense. The Company’s competitors who sell personal computers based on other operating systems have aggressively cut prices and lowered their product margins to gain or maintain market share. The Company’s results of operations and financial condition can be adversely affected by these and other industry-wide downward pressures on gross margins. The principal competitive factors include price, relative price/performance, product quality and reliability, design innovation, availability of software, product features, marketing and distribution capability, service and support, availability of hardware peripherals, and corporate reputation.
Furthermore, as the personal computer industry and its customers place more reliance on the Internet, an increasing number of Internet devices that are smaller, simpler, and less expensive than traditional personal computers may compete for market share with the Company’s existing products. The Company’s music products and services have faced significant competition from other companies promoting their own digital music and content products and services, including those offering free peer-to-peer music and video services. The Company believes it currently retains a competitive advantage from innovation and by more effectively integrating the entire solution including the hardware, software and distribution of content. Some of current and potential competitors have substantial resources and may be able to provide such products and services at little or no profit or even at a loss to compete with the Company’s offerings. The Company’s future operating results and financial condition are substantially dependent on the Company’s ability to continue to develop improvements to the Macintosh platform and to the Company’s hardware, software and services related to digital content to maintain perceived functional and design advantages over competing platforms. The Company attempts to mitigate these potential risks by working closely with these and other key suppliers on product introduction plans, strategic inventories, coordinated product introductions, and internal and external manufacturing schedules and levels.
Apple acquires components through a combination of formal purchase orders, supplier contracts, and open orders based on projected demand information. The personal computer industry is highly competitive and is characterized by aggressive pricing practices, downward pressure on gross margins, frequent introduction of new products, short product life cycles, evolving industry standards, continual improvement in product price/performance characteristics, rapid adoption of technological and product advancements by competitors, price sensitivity on the part of consumers, and a large number of competitors. Price competition in the market for personal computers and related peripherals has been particularly intense as competitors who sell Windows and Linux based personal computers have aggressively cut prices and lowered their product margins for personal computing products. The Company’s results of operations and financial condition have been, and in the future may continue to be, adversely affected by these and other industry-wide pricing pressures and downward pressures on gross margins.
Marketing Objectives
In actualizing vision, Apple determined two major objectives, which are to remove resellers in the supply chain process and sell directly to consumers and to assemble computers based on the specifications of the customer. Cost is minimized in not relying on resellers for its products to reach customers because having resellers means an increased final retail price that prevents Apple computers from gaining a competitive advantage in terms of price. To meet these objectives the company developed strategic management mechanisms that meets its needs. In product development, the company opted to manufacture computer parts and accessories that customers are sure to need. Apple manufactured its own storage products and network switches as computer components as well as printers and projectors as computer accessories. The company only chose to manufacture products that would further decrease the cost of computer assembly relative to purchased parts and accessories. The integral principle in doing so is standardization to lower cost relative to branded parts.
The Company are to be committed to bringing the best personal computing and portable digital music experience to students, educators, creative professionals, businesses, government agencies, and consumers through its innovative hardware, software, peripherals, services, and Internet offerings. The Company’s business strategy leverages its unique ability to design and develop its own operating system, hardware, application software and services to provide its customers new products and solutions with superior ease-of-use, seamless integration, and innovative industrial design. The Company believes continual investment in research and development is critical to facilitate innovation of new and improved products and technologies. Besides updates to its existing line of personal computers and related software, services, peripherals, and networking solutions, the Company continues to capitalize on the convergence of digital consumer electronics and the personal computer by creating and refining innovations like the iPod and iTunes Store.
The Company’s strategy also includes expanding its distribution network to effectively reach more of its targeted customers and provide them with a high-quality sales and after-sales support experience. Apple need to establish distribution, evaluate distributors' merits and problems, select and open new channels. While this is also true of all other manufacturers, we specialize in high technology products because we have true expertise in this area. Apple focuses on high-technology in computer hardware and software, services with important customers are executives in corporations like marketing managers, general managers and specific channel focus.
Marketing Strategy
Strategy is focus – Apple strategy involves focusing on a specific area of expertise in which the company is strong a group as in any company anywhere in the world as experts in the introduction of technology products, especially through channels of distribution. The company will then focus on geographical markets; the United States, Europe and Latin America and in limited product segments; personal computers, software, networks, telecommunications, personal organizers and technology integration products. The target customer is usually end-users in professional and student grand occasionally an owner or president of a medium corporation in a high-growth period. Apple’s value proposition is high-powered extremely valuable expertise to boost major league market entrance to new markets across international borders, at a price premium commensurate with the high value as well as compete on price, on quality that makes the price more than worth it.
Target Market Strategy
Apple focusing on vertical markets, but relatively broadly defined as the knowledge and expertise is most valuable when applied to the market entrance phase of high-tech products to be marketed through channels in new markets usually across international borders so they need to establish new channel relationships.
Target Market Messaging
Target Market Messaging
Market Segments
Messaging
US High Tech
Making mistakes will cost you much more than Apple do.
European High Tech
This is an investment in the future.
Latin America
How much does it cost to do it wrong?
Other
The strategy is to focus on Apple computers main area of expertise as the company have plenty of competition in international marketing and in product introduction expertise, but nobody can down the company as it stay focused on introducing high-tech product into better services for the global markets. The tactic is to keep those realistic in terms of the quality of products offered as well as stable based marketing and the use of innovative technologies in global communications like for instance the web technologies. The Company manages its business primarily on a geographic basis. The Company’s reportable target operating segments are comprised of the Americas, Europe, Japan, and Retail. The Americas, Europe, and Japan reportable segments do not include activities related to the Retail segment. The Americas segment includes both North and South America. The Europe segment includes European countries as well as the Middle East and Africa. The Retail segment currently operates Apple-owned retail stores in the U.S., Canada, Japan, and the U.K. Other operating segments include Asia-Pacific, which includes Australia and Asia except for Japan, and the Company’s subsidiary, FileMaker, Inc. The Company offers its iPod line of portable digital music players and related accessories to Macintosh and Windows users.
The Company’s reportable segments are comprised of the Americas, Europe, Japan, and Retail. The Americas, Europe, and Japan reportable segments do not include activities related to the Retail segment. The Americas segment includes both North and South America. The Europe segment includes European countries as well as the Middle East and Africa. The Retail segment operated Apple-owned retail stores in the U.S., Canada, Japan, and the U.K. during 2006. Each reportable geographic operating segment provides similar hardware and software products and similar services. Although the Company believes it has taken certain steps to strengthen its position in the education market, there can be no assurance that the Company will be able to increase or maintain its share of the education market or execute profitably on large strategic. Apple’s ability to compete successfully and maintain attractive gross margins and revenue growth is heavily dependent upon its ability to ensure a continuing and timely flow of innovative and competitive products and technologies to the marketplace. As a result, the Company generally incurs higher research and development costs as a percentage of revenue than its competitors who sell personal computers based on other operating systems. Many of these competitors seek to compete aggressively on price and maintain very low cost structures.
Marketing Mix
Promotion Strategies
Since the introduction of the Macintosh in 1984 with the 1984 Super Bowl commercial, Apple has been recognized for its efforts towards effective advertising and marketing for its products. The promotion strategy focuses heavily on Public Relations, with emphasis on strong product value in advertising and sales market. Advertising is crucial part of Apple’s marketing mix and thus, depend on quality delivery and customer satisfaction Public relations is imperative part of the marketing mix as the right PR can get the company quoted as experts in innovative products that has a great touch of technology advancement and continuous updates as supported by the target market and can possibly launch retainer relationship and a detailed plan for public releases and events as well as company reports and interviews. The underlying objective of the PR program is to establish Apple computers expertise in product evolution and positive updating and upgrading of product services standards and principles and be able to keep potential customers to patronize the services offered.
Product Strategies
Apple Company has designed a range of products and services to meet the needs of education customers. These products and services include the iMac and the MacBook, video creation and editing solutions, wireless networking, professional development solutions, and one-to-one learning solutions. The iPod remains a mostly closed and vertically-integrated platform. Although Apple provides documented interfaces for hardware accessories, developers have no supported way to add features to the software and although the iPod supports the mainstream MP3 and AAC formats, the iPod does not support other proprietary formats like Windows Media and Real Audio, and Apple refuses to license its FairPlay DRM to other online music vendors. Apple did add Windows PC support with their second generation iPod series. The service itself is a key component to marketing mix as the service should be the best advertisement as there is specialization on product valuation intended for international product marketing means and develop contacts with people who can be loyal buyers and recommenders. The taking of the products across national boundaries into fresh markets, explore channels, guide customers and establish better relationships. The service itself is a key to the markets.
Pricing Strategies
Apple pricing needs to match with their positioning and not to be very economical and must be at moderate end of the pricing scale that reflects best quality products. Effective marketing and sales initiatives require a thorough understanding of your target markets and channels. Seizing a potential window of opportunity can be critical to establishing a competitive advantage. While Apple is an industry leader in many ways, it falls far short of its peers in recycling and e-waste. This situation creates unnecessary risks, both for Apple and for the environment that we would like to see the company address. The company has not offered innovative free supplemental take back programs.
Distribution Strategies
The Company distributes its products through wholesalers, resellers, national and regional retailers, and cataloguers, many of whom distribute products from competing manufacturers. In addition, the Company sells many of its products and resells certain third-party products in most of its major markets directly to end-users, certain education customers, and certain resellers through its online stores around the world and its retail stores. Many of the Company’s resellers operate on narrow product margins and have been negatively impacted in the past by weak economic conditions. Considerable trade receivables that are not covered by collateral or credit insurance are outstanding with the Company’s distribution and retail channel partners.
The company’s business and financial results could be adversely affected if the financial condition of these resellers weakens, if resellers within consumer channels were to cease distribution of the Company’s products, or if uncertainty regarding demand for the Company’s products caused resellers to reduce their ordering and marketing of the Company’s products. The Company has invested and will continue to invest in various programs to enhance reseller sales, including staffing selected resellers’ stores with Company employees and contractors. These programs could require a substantial investment from the Company, while providing no assurance of return or incremental revenue to offset this investment. The Company believe in high-quality buying experience with knowledgeable salespersons that can convey the value of the Company’s products and services greatly enhances its ability to attract and retain customers. The Company sells many of its products and resells certain third-party products in most of its major markets directly to consumers, education customers, and businesses through its retail and online stores. The Company has also invested in programs to enhance reseller sales, including the Apple Sales Consultant Program, which places Apple employees and contractors at selected third-party reseller locations.
Apple believes providing direct contact with its targeted customers is an efficient way to demonstrate the advantages of its Macintosh computer and other products over those of its competitors. The Company has significantly increased the points of distribution for the iPod product family in order to make its products available at locations where its customers shop. By the end of fiscal 2006, the Company had opened a total of 165 retail stores, including 147 stores in the U.S. and a total of 18 stores in Canada, Japan, and the U.K. The Company opened 5 additional stores in October and November 2006. The Company has typically located its stores at high-traffic locations in quality shopping malls and urban shopping districts. The Company distributes its products through wholesalers, resellers, national and regional retailers and cataloguers. No individual customer accounted for more than 10 percent of net sales in 2006, 2005, or 2004. The Company also sells many of its products and resells certain third-party products in most of its major markets directly to consumers, education customers, and businesses through its own sales force and retail and online stores.
Apple’s ability to compete successfully is heavily dependent upon its ability to ensure a continuing and timely flow of competitive products, services and technologies to the marketplace. The Company continues to develop new products and technologies and to enhance existing products in the areas of hardware and peripherals, consumer electronic products, system software, applications software, networking and communications software and solutions and the Internet. The Company may expand the range of its product offerings and intellectual property through licensing and/or acquisition of third-party business and technology. Many of the Company’s products are designed to include intellectual property obtained from third-parties. While it may be necessary in the future to seek or renew licenses relating to various aspects of its products and business methods, the Company believes, based upon past experience and industry practice, such licenses generally could be obtained on commercially reasonable terms as there is no guarantee that such licenses could be obtained at all. Because of technological changes in the computer industry, current extensive patent coverage and the rapid rate of issuance of new patents, it is possible certain components of the products and business methods may unknowingly infringe existing patents of others.
Evaluation, Monitoring and Control
The Apple Company is currently focused on market opportunities related to digital music distribution and related consumer electronic devices, including iPods. The Company faces significant competition from other companies promoting their own digital music products including MP3 players, music enabled cell phones, free peer-to-peer music and video services, and free streaming of digital content via the Internet. The Company expects competition in this space to intensify as competitors attempt to imitate the Company’s approach to tightly integrating these components within their individual offerings or work more collaboratively with each other to offer solutions that are more integrated than those they offer currently. Some of these current and potential competitors have substantial resources and may be able to provide such products and services at little or no profit or even at a loss to compete with the Company’s offerings. There can be no assurance the Company will be able to continue to provide products and services that effectively compete in these markets. The Company may also have to respond to price competition by lowering prices and/or increasing features which could adversely affect the Company’s music product gross margins as well as overall Company gross margins.
Market Demographics
Market Demographics
Market Segments
Summary
Decision Level
Loyalty Status
Buyer Readiness
Product Attitude
US High Tech
Mature
Manager
Medium
Skeptical
Positive
European High Tech
Growth
Director and up
High
Informed
Indifferent
Latin America
Growth
CEO
High
Informed
Indifferent
Other
Develop
Variable
Variable
Variable
Indifferent
Apple needs to fulfill the promise they make and take a product across national boundaries into new markets, explore channels, guide client through the maze, and establish the relationships the client needs. The market mix is exciting, Apple computers live in an age of growth, change and business revolution. The computer and technology driven generation offers company opportunities and threats.
The business marketplace is for the most part made up of mature markets and with maturity comes sophistication. It is by necessity that marketing communication is an evolutionary process and must satisfy the ever-increasing demands and emphasis placed on it as the single surviving, sustainable, competitive edge in the marketing environment. (1991) Aside, customer behavior holds the key to understanding what it is that moves specific groups of prospects closer to a decision to commit and buy and that customer perceptions and behavior are crucial to crystallizing that all important key to a successful marketing plan; identifying the individual customer within such targeted niche markets ( 1994). With over two million iPod’s sold, Apple has garnered acceptance from many different people from baby boomers to young teenagers, with the majority of its customers being college students and young adults in the United States. (1997) These consumers, who have the financial ability and the willingness to invest in electronic gadgets, will be the primary target for the iTrip/V and speech-enabled MP3 files which will sell for a premium over traditional MP3 music. People in this bracket are computer-savvy consumers who demand and are willing to pay for the products and features they want. Understanding how these consumers make buying decisions is crucial to the success of the product. (1997)
Technology will enhance the emergence and sharing of knowledge among participants via such venues thought leader access, learning advances, mentoring and business simulations. While technology is useful for some aspects of leadership development, it cannot replace the importance of bringing leaders together to deepen their relationships and their learning experience. There will help ensure that communications reach the intended audiences and that the audiences notice and act upon the messages they receive of marketing communications planning that will harness the power of an effective communications plan to advance your own organizational objectives. There are problem in the marketing department within its communication process as it is to ensure that the company is visible, accessible and accountable to the society it serves. There needs to employ a variety of ways and means to communicate and convey information in multiple formats to accommodate diverse needs.
There is a must in creating a communications plan as most of the time, communications are required to mobilize support, build acceptance, remove uncertainty and reduce risk. There is one major underlying theme to the ideas presented here: Implementing business information systems requires flexibility and an open mind. Adding productivity and proprietary software products will result in developing and adapting new systems for its operations. Since, technology is changing so rapidly it is becoming a challenge for everyone to stay aware of its implications in people’s lives, if it were possible through technology to make these improvements become a reality. The reliability and quality of products and services offered by Apple are designed from the results of the continuous process of constantly innovating the manufacturing process to reach exceed the present level of efficiency. This practice has been ingrained in the company practice since the inception of the company that Apple has become a top business in relation to product and manufacturing innovation as the company has become the number one computer manufacturer and seller outperforming its competitors.
Apple maintains quality assurance by ensuring that the specific demands of different customers are met despite mass production. The company initially applied a traditional assembly line method in its production plants. Production in an assembly line requires different workers to be assigned with a single task constituting the different tasks involved in making a computer. There is also successive process to be followed in making the computer. Apple has always been concerned with customer satisfaction as the company offered an on-site service the next day for any customer complaints as a solution to the inconvenience experienced by customers in having to send their computers back to Houston for repairs. The recognition of bundling as a selling point for customers prompted Apple to provide spare parts including training to service providers so that technical support integrates hardware, software and service-provider repair needs of customers. Innovations and product development were made through constant research on new technological advancements in computer gadgets and hardware, choosing which hardware offers the greatest potential in sales in terms of utility and price and developing these gadgets in a less costly manner.
In terms of technology, the primary value that Apple adheres to is standardization that the company does not include brand equity in the determination of price to decrease the overall cost of its products. To meet the broad range of customer requirements, the company customizes the building of computers by ordering, making and utilizing basic computer parts in a working computer. This means that the company always has a stock of these parts to meet its order. It is only the parts specially requested by customers that the company order from its suppliers. However, the company also conducts research on the common specifications and the expected requests based on documentations of customized orders, the needs of individuals and businesses, and technological advancements. Apple must successfully manage frequent product introductions and transitions to remain competitive and effectively stimulate customer demand. Due to the highly volatile and competitive nature of the personal computer and consumer electronics industries, which are characterized by dynamic customer demand patterns and rapid technological advances, the Company must continually introduce new products and technologies, enhance existing products to remain competitive, and effectively stimulate customer demand for new products and upgraded versions of the Company’s existing products.
The success of new product introductions is dependent on a number of factors, including market acceptance; the Company’s ability to manage the risks associated with product transitions, including the transition to Intel-based Macintosh computers, and production ramp issues; the availability of application software for new products; the effective management of purchase commitments and inventory levels in line with anticipated product demand; the availability of products in appropriate quantities and costs to meet anticipated demand; and the risk that new products may have quality or other defects in the early stages of introduction. Accordingly, the Company cannot determine in advance the ultimate effect new products will have on its sales or results of operations. The Company must order components for its products and build inventory in advance of product shipments. Because the Company’s markets are volatile and subject to rapid technology and price changes and because of the transition to Intel-based Macintosh computers, there is a risk the Company will forecast incorrectly and produce or order from third parties excess or insufficient inventories of particular products.
In terms of the product development objective of developing new products and diversification, Apple will consider venturing into other products such as television, dvd players, video cameras, and even robotics as long as the product offers a potential for profit if the company applies its customization strategies. Apple should continue focusing on PC manufacturing and in the areas where it has competitive edge over the competitors such as on its supply chain and customer service capabilities but at the same it has to recognize that it has to defend its leadership status and wage offensive action against the threats of its competitors. Marketing plan strategy is very important for any organization as it offers the direction the organization would like to pursue to attain its objectives. In the recent years, the integration of strategic planning and functional marketing has been perhaps the most relevant development in the field of marketing management as marketing managers have all the more realized that tactical marketing decisions must be made within a wider strategic framework. In addition, it is necessary that management of the marketing function be built upon purposively defined and analytically based marketing strategies. Strategic marketing planning offers the analytical process which develops efficient marketing strategies.
The Company must successfully manage frequent product introductions and transitions to remain competitive and effectively stimulate customer demand due to the highly volatile and competitive nature of the personal computer and consumer electronics industries, which are characterized by dynamic customer demand patterns and rapid technological advances, the Company must continually introduce new products and technologies, enhance existing products to remain competitive, and effectively stimulate customer demand for new products and upgraded versions of the Company’s existing products. The success of new product introductions is dependent on a number of factors, including market acceptance; the Company’s ability to manage the risks associated with product transitions, including the transition to Intel-based Macintosh computers, and production ramp issues; the availability of application software for new products; the effective management of purchase commitments and inventory levels in line with anticipated product demand; the availability of products in appropriate quantities and costs to meet anticipated demand; and the risk that new products may have quality or other defects in the early stages of introduction. Accordingly, the Company cannot determine in advance the ultimate effect new products will have on its sales or results of operations.
Apple Computers must order components for its products and build inventory in advance of product shipments. Because the Company’s markets are volatile and subject to rapid technology and price changes, and because of the transition to Intel-based Macintosh computers, there is a risk the Company will forecast incorrectly and produce or order from third parties excess or insufficient inventories of particular products. Consistent with industry practice, components are normally acquired through a combination of purchase orders, supplier contracts, and open orders based on projected demand information. Such purchase commitments typically cover the Company’s forecasted component and manufacturing requirements for periods ranging from 30 to 150 days. The Company’s operating results and financial condition have been in the past and may in the future be materially adversely affected by the Company’s ability to manage its inventory levels and respond to short-term shifts in customer demand patterns. To design strategy, Apple must learn to search for and to identify patterns of change over time. To practice strategy design and to act proactively, there should replace our transaction-driven calculus with scenario analysis. Apple must implement the buyer/decision model was not specifically designed for new products and its substance was concerned with search and problem solving. Consumers cannot begin to consider a new product or service as a solution to need-related problems without this awareness.
Successful innovative products should attempt to be problem-solving as successful innovative products should attempt to be problem-solving as far as the customer is concerned as awareness can come about as a result of the marketing effort of Apple computers communication. If the product has potential interest and appeal, then potential purchasers will seek further information. Consumers then evaluate the new product against existing products and then make an initial adoption by obtaining a trial sample, which might be a free sample or a 'trial' purchase. Consumer behavior can also be characterized through the use of psychological factors which include motivation, perception, learning and attitudes and beliefs. Motivation or drive refers to an urgent need which causes a person to seek satisfaction of the need. The next psychological factor is perception which is the process of selecting, organizing and interpreting information in order to form a meaningful picture of the world (2001).
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