BRANDING-APPLE INC

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BRANDING-APPLE INC
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BRANDING-APPLE INC

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BRANDING-APPLE INC

CONTENTS
Abstract ................................................................................................................................2
Profile Of The Company......................................................................................................5
Problem Statement ...............................................................................................................5
Mission Statement................................................................................................................5
Vision Statement ..................................................................................................................6
Goal & Objectives................................................................................................................6
Motivation Of Research .......................................................................................................6
History Of Apple..................................................................................................................7
Decline & Restructuring ......................................................................................................7
Financial Analysis ................................................................................................................8
Branding ...............................................................................................................................8
Marketing Strategy...............................................................................................................9
Marketing Mix ...................................................................................................................10
Brand Awareness ...............................................................................................................11
Brand Recognition

11

Apple's Retail Strategy.......................................................................................................11

Apple's Brand Personality ..................................................................................................12
Customer Value Proposition ..............................................................................................12
Brand Positioning...............................................................................................................13
POD/POP ...........................................................................................................................13
Brand Equity ......................................................................................................................13
SWOT Analysis .................................................................................................................14
SWOT Analysis .................................................................................................................14
Conclusion .........................................................................................................................15

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Recomendations .................................................................................................................16
References ..........................................................................................................................20

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Brand Analysis
(Apple Inc)

Profile of Apple Inc:

Apple Inc is an American multinational organization selling personal computers,
consumer electronics, computer software and online services. It was founded in 1970s,
specifically to sell personal computers, by Steve Jobs, Steve Wozniak and Ronald Wyne.
It was incorporated as Apple computer, Inc but was renamed later as Apple Inc when its
focus towards consumer electronics increased.
Currently Apples major Hardware Products include Apple TV, iPod, iPad, iPhone and
Mac series and its major Software Products include OS X and iOS operating systems,
iTunes media browser, iLife, iWork and Safari web browser. Its online services include
iCloud, iTunes Store and Apps Store.

Problem Statement:
The reason of this study is to analyze the importance of brand analysis. The study will
help us about the related benefits of brand analysis. The details of the study will help us
learn about the consumers awareness about Apple Inc and how their loyalty has
increased towards the brand and how did Apple became so famous even after facing a lot
of difficulties in 1990s .The study will help us know how Apple has gained its
competitive edge. Also, analyzing the importance of branding will help us about Apples
strengths, weaknesses, threats, opportunities by using SWOT analysis. Whereas 4Ps can
be used to find out about the marketing mix that Apple has been using to become that
much popular.
Apples Mission Statement:
Apple mission statement shows that it is a social ecologist type of organization which
accepts its social responsibilities towards the environment as well as proving high quality
products to its customers.

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Apples Vision Statement:

Apple vision statement shows that it aims at new generation like students and also
professional people by providing highly technical products that can be used to cope up
with the fast growing technical lifestyle.

Goals & Objectives:

Goal:
Our goal, in a nutshell, is to obtain stellar products and services within tight
timeframes, at a cost that represents the best possible value to our customers and
shareholders. If that sounds like a daunting task, its the same one we assign
ourselves
Reference Website:
www.apple.com
Objectives:
Apple Inc has got three main objectives:
1. To expand their sales to customers who do not yet own Apples products
2. To provide easy products those provide quality service and enjoyment for customers
3. To become the leading business in the Mobile market.
Reference Webpage:
http://sites.cdnis.edu.hk/students/063628/2011/09/21/apple-objectives/

Major Competitors Of Apple Inc:

Samsung, Microsoft, Dell, HP, Blackberry, Nokia

Motivations of research:
As the competition in the technology industry has increased, it is important to carry out a
study on the importance of using marketing strategies of branding for Apple, to stay at
the top of consumer's mind, to cope up with the changing environment, to gain
competitive edge, to make improvements in future and to achieve goals set by the
company.

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History Of Apple Inc:

Apples history started when two friends Steve jobs and Steve Wozniak started building a
computer in their garage and came up with their first computer APPLE I. It was a
wooden-made box with a basic motherboard inside and had 8KB of RAM which was sold
for 666$.Later Apple II was released with color graphics and a floppy disk drive added.
It had a 64KB of memory and also included software called VisiCalc.In 1980 Apple III
was released which had 128KB of RAM and was specifically designed for business
purpose but caused a lot of problems and didnt do well. Apple LISA was released in
1983 and became the first personal computer sold to the public with GUO but failed
commercially due to its high price and limited software function.
In 1984 Apples famous Macintosh was introduced which had strong sales in the
beginning but because of its high price its total consumption was not as desired. It
contained Motorolas 68000 CPU and was sold for 2495$.Apple Inc introduced it
Macintosh Portables for the first time in 1989 but they too failed in the market as they
were quite slow. Later in 1990 & 1991 Apple made more portable efforts like Macintosh
LC & Powerbook100 and they succeeded to gain some good revenues when
Powerbook100 was introduced which establish layout of the laptop computers.

Decline & Restructuring:

After the Macintosh Portables low success rate, Apple learnt several lessons on what to
do differently. During this time Apple experimented with many other products like
cameras, Portable CD players, Speakers, TV appliances etc but these products were of no
help in the growth and success of Apple. Hence in late 1990s Apple announced to join
hands with Microsoft to release new version of Microsoft office for the Macintosh. In
1997 Apple introduced the Apple store and new build to order manufacturing strategy. In
1998 new iMac with Mac OS X was introduced. Then came the iBook, Apples new
laptop.

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Return to Profitability:
In May 2001 Apple opened more Apple retail stores in Virginia & California. Apple
Retail stores are a platform where potential customers could use products without
purchase and Apple has 425 of such retail stores. In the same year Apples blockbuster
iPod was introduced which came to be a huge success. It was a portable digital audio
player of which over 100 million units were sold in the first six years. In 2003 Apple
iTunes store was opened which offered online download and became market leader in
online music services. In 2006 Mac book pro and iMac were the first apple products
sold with Intels core Duo and in the same year PowerMac, iBook and PowerBook were
replaced with Mac Pro, Mac Book, Mac Book Pro. At this time Apples success was at its
peak and left Dell behind. June 2007 was the time when Apple introduced its 1st
generation of iPhone which runs on Apple IOS. In April 2010 Apple came up with a
Tablet Pc followed by iCloud service in 2011.

Financial analysis:
After Apple introduced its iPod mp3 player, it experienced tremendous increase in its
revenue. Since then the company introduced various electronic products including
iPhone, iPad, Mac computer series and had huge revenue growth, that is, from 5.36
billion (2001) to170.9 billion(2013), 96% increase in 12 years.

Table 1 shows the profitability and growth since 2004 till 2013:
2004 2005
2006
2007 2008
2009 2010
2011
2012
2013
Revenue USD Mil
8,279 13,931 19,315 24,006 32,479 42,905 65,225 108,249 156,508 170,910
Gross Margin %
27.3
29
29
34
34.3
40.1
39.4
40.5
43.9
37.6
Operating Income USD Mil 326 1,650 2,453
4,409 6,275 11,740 18,385 33,790 55,241 48,999
Operating Margin %
3.9
11.8
12.7
18.4
19.3
27.4
28.2
31.2
35.3
28.7
Net Income USD Mil
276 1,335 1,989
3,496 4,834
8,235 14,013 25,922 41,733 37,037

The table shows that Apples revenue increased consistently from 2004 till 2013 and the
gross profit margin has increased from 27.3 to 37.6 that is an increase of about 27%.This

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tremendous growth in profitability and margins is definitely because of the brand

recognition and customers trust in Apple Inc. This is ultimately the success of Apples
branding strategy and now we will look into this.

What is branding?
Brand is the unique sign, symbol or word which differentiates its product or services
from that of the competitors A company is recognized because of its brand name and its
products and services are also trusted because of this brand name.

Apple's Branding Strategy:

Apple uses the Apple brand to compete in its competitive market including personal
computers with its Macintosh line of computers/laptops, the consumer electronics
industry with products and services like iPod, iTunes, the smart phone market with the
Apple iPhone. The company is also establishing a very strong marketing presence in the
advertising market, via its business Apps and iAd network.
Apples Marketing:
According to Rob Enderele (2004), Apple really stands out in its marketing. The
company simply seems to understand what will get people excited about its products and
services, then only it executes on its vision. They dont talk about features or technology,
but about how the computers will make your life better. Apple has also not been afraid of
in-your-face campaigns. The company has run campaigns that have shown Intel-based
laptops catching fire and getting flattened by steamrollers. Also, the place where Apple
puts its logo on its products is unique; on laptops the logo is right side up when the screen
is open. As Apple believes that the logo is not for the person who bought the computer
but for the person who is in the market for one. It is good advertising placement which
should not be a throw-away design element. Apple also does the best placement in the
TV shows which really showcases a logo. Even when the other vendors get a spot, their
logos are quite hard to see, as their logos on laptops do not light.

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Marketing Mix of Apple Inc.:

Product:
Product is the physical attraction of a specific product or service that makes people wants
to buy that thing.
Apple uses Product Differentiation and Product Development to make its products and
services attractive to the customers.
Apple actively develops new products and replaces old and inferior products as
technology and customer taste changes. Newer product series and versions are available
as soon as the older ones are out of date and out of taste.
Apple is known for its innovations. As history shows apple has always come up with
unique products along with supportive options in it e.g. when iPod was introduced Apple
ensured that it also has iTunes store in place.
Price:
Pricing means what exactly the company would charge its customer for a product or
service. Its an important element of marketing mix. Apple is premium brand that uses
Price Skimming and Premium Pricing Strategies. In the beginning the prices are quite
high but Apple eventually reduces them. Apples Brand loyalty and Brand Positioning
can easily get its customers pay high for a new product launched.
Placement:
Placement means the channel through which the product is going to be made available to
the audience. Whether the product is sold directly through the company, retail outlets,
whole sellers or internet etc. Firstly, Apple uses direct distribution through Apple stores
which are located in many countries. Secondly, Apple uses retailers to stock up and
distribute its products further to customers.
Promotion:
Promotion means how the product is promoted in front of the audience. Its includes all
kinds of advertising, brochures, packaging, sales people, sales methodology etc.
Apple has used a range of media advertising to promote its adverts. Electronic, print,
internet, billboards have all been used while promoting Apple products.
It also promotes its products via personal selling by highly trained staff who have
complete knowledge on the range of Apple products. Apple also use methodologies like

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discounts, free shipping, gift cards etc to make its product more attractive towards the
purchaser.

Brand Awareness:
It is when the consumers are familiar about the life or availability of the product. It is the
degree to which consumers associate a companys brand with a specific product or
service.

Brand recognition:
Brand recognition is when the consumers have good knowledge of brand when they are
asked Questions related to a specific brand and they are able to differentiate a brand on
the basis of having noticed or heard about earlier.
E.g. Is I-phone related to Apple or Samsung?
Apples marketing strategies have been successful in making its audience recognize its
brand at first instance when they hear about I-something or any other product or service
associated with it. The main reasons of such great Apples success and brand recognition
are its marketing and advertising capabilities, vertical integration, brand reputation, retail
stores and strong distribution channels.

Apple's retail strategy:

Apple has their own retail stores, though many of the companies failed miserably at
having their own stores. However, for Apple this has been one of the most brilliant
moves they made. The reasons that why some other companies tried owning their own
stores and failed was due to location or a lack of priority, but Apple got both of those
correct. Apple had been very careful about how people buy their products, they
authorized retailers with small shops that carried Apples products and accessories, also
they provided an outlet for support and repair. They later decided to control the retail
experience themselves instead if investing heavily in external retail experience.

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Table 2 shows the effect of Apples retail stores strategy on its revenue.

Since 2001 till 2014 there is a tremendous increase in revenues generated Apples retail
stores. Thats why coming up with Apples own retail outlets turned out to be one of the
best strategies to spread its brand.

Apple's Brand Personality:

Apple has a branding strategy that focuses on the emotions of people. Apple brand's
personality is about lifestyle, imagination, liberty regained, innovation, passion, hopes,
dreams and aspirations, and power-to-the-people through technology. The Apple brand
personality is also about simplicity, making life easier for people as they have peopledriven product design, and is a humanistic company with a heartfelt connection with its
customers.
Customer Value Proposition:
Customer Value Proposition consists of the benefits that a company offers to its
customers in return of the price they are receiving for that product or service. Apples
value proposition seems to best in the industry as it knows how to engage customers to its

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products and services. Apple was the first one who came up with a Smartphone with
touch screen. Since then Apple came to know about the need and requirements of its
customers and always come up with something so innovative that customers cant wait to
purchase that product. CVP plays the important role for a company to gain competitive
edge from its competitors. Apples strong CVP makes it gain a competitive advantage
from its competitors by producing products and services according to the needs of its
consumer.

Brand Positioning:
Apple has positioned itself to a certain type of customer, wealthy people, innovators,
people with good jobs, good lifestyle, etc. If Apple targets the poor, the trendy people
will stop buying Apple. This would hurt the brand more than the increasing sales because
of lower prices, and in good times, where everybody has more money.
On the other hand, there are no real substitute products, there are no similar machines that
one can buy to have the same user experience as with Apple.

Point Of Difference & Point Of Parity:

POD & POP are completely opposite in nature. POD refers to attributes and benefits in a
product or service that differentiates it from that of its competitors whereas POP refers to
attributes and benefits that can also be obtained from a similar product or service from
another competitor. To maintain its brand and customers a company needs to maintain its
POD and this POD must not turn into POP. Apple is maintaining its POD from years and
is not letting any other competitor turn its POD into POP. Apple continuously comes up
with unique and different products and associated services that other companies hardly
provide. However Samsung is in tough competition with Apple nowadays.
Apple's Brand Equity:
Brand equity is the premium value that the company realizes from a product with a
recognizable name as compared to its generic equivalent firm. Companies can create

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brand equity for their products by making them memorable, easily recognizable and
superior in quality and reliability.. Brand equity is said to be positive if the consumers are
willing to pay more for a branded product than for a generic one. Brand awareness plays
a key role in building brand equity. Create reliable brand image, slogans and taglines,
helps to strengthen brand awareness which therefore improves brand equity. Since Apple
has strong brand awareness, it has high sales and high market share, and the consumers
are well acquainted and familiar with the brand and its products. They are also willing to
pay premium price for their products, relative to the competitor's brand due to Apple's
positive brand equity. Apple is not just intimate with their consumers but there is a real
sense of community among users of its main product lines. Therefore, this also helps to
create consumer's brand loyalty (where brand loyalty is when the consumers become
committed to your brand, choosing it over competitors and making repeat purchases over
time.)
Table 3 show 1st ranking of Appl Inc in year 2013 for its Brand Value:

SWOT Analysis of Apple:

It is a method of is a method of analyzing a business, its resources, and its environment.

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To analyze internal and external factor of Apple Inc SWOT analysis will be carried out.
SWOT analysis help to identify Strengths, Weaknesses, Opportunities and threats faced
by an organization. It provides with internal and external factors that the company is
good at and factors where the company needs improvement and consideration.
Strengths relate to internal resources and capabilities that can be used in a competitive
advantage:
Apple has positioned itself for producing highly technical and innovative products in the
computer (MAC), mobile (iPhone) and electronics (iPad, iPod) industry. It is one of the
original hardware producers in the market that controls both the manufacturing of its
products as well as they create their own internal components for the core of its
computers. Apple produces high quality products in order to meet customer satisfaction.
It has a strong and dedicated Research and Development department which helps in
creating of new efficient, innovative products for its consumers. A company is known for
having the most brand loyal customers who buy their products for quality, regardless of
the high price. Such powerful loyalty of customers means that Apple has a strong
positioning of their brand and that they not only creates new customers but retains them,
as they keep returning back to avail the company's products and services. They have a
strong presence in the corporate and education segment, with a strong brand name known
globally. Apple does smart marketing, that is clever and which takes advantage of
customer's frustrations with other brands products. They have got Eye catching retail
stores with highly technical products and providing experiences of Apple's software.
Weaknesses relate to the internal factors of an organization that work against the
outcome desired:
Increasing competition in the market, many similar producers of tablets, smart phones
and computers might create difficulty in ensuring consistency and quality for its products.
Apple has failed to promote two of their products, Apple TV and Mac mini which may
lead to lower sales hence lower market share in future. Apple is facing pressure to
increase the price of their music download files on itunes as many of the music industry

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artists make more money from iTunes (i.e. downloadable music files) than from the CD
sales. Premium pricing for all products lose a potential customer base that are price
conscious, who wish to buy Apple but cannot, because of its premium pricing.
Opportunities are the external factors that help in achieving the objectives of the
organization. These are factors related to the market and environment which help in the
growth of the organization:
Apples products demand may increase in the future due to constant growth of computer ,
mobile and technology market. There is growing market of green and energy saving
products as consumers are now aware of environmental issues as well. They now prefer
environmental friendly products and Apple claims to be providing such products and
taking care of the environment. Apples Joint venture and acquisitions help to maintain
good relationships with companies and to eliminate competition .It is expanding more
internationally into the Asian countries with more and more retail stores being opened.
Threats are the external factors that which are hurdles in achieving the objectives of the
company:
Apple has to face high competition in the market with mass existence of technology
giants like Microsoft, Dell, Samsung, HP, HTC, Nokia, Toshiba, etc, making the market
highly saturated. Samsung has captured a huge market with its latest series of smart
phones. Hence there is a shift in consumers tastes from Apples products to other firm's
products. New products have been emerging as substitutes like Samsung Tablet, which
has a potential to end the need of
having a phone along as it allows making calls along with the tablet features. Moreover,
with unemployment increasing and global recession may reduce wants of the customers
for such premium products.

Conclusion and Recommendations:

Conclusion

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The main aim of this branding project was to conduct a study on the branding and current
marketing strategies of Apple Inc. The Project helped to find out more about the brand
positioning, branding strategie , brand awareness, brand equity and marketing mix
strategies. Furthermore, a SWOT analysis was to recognize the strengths and weaknesses
of Apple along with the opportunities and threats that the company might be facing. The
analysis also identified the success factors that will help in gaining a competitive edge;
allowing it to increase its profits, brand power and customers loyalty providing it to be a
well-known, leading and a successful company in a highly competitive industry.

Recommendations
Value for Existing products:
Apple is already providing its customers with premium quality products that are different
from other brands. It must keep on adding value to its products to maintain its
differentiated and premium products n the industry.

More Promotional Programs:

To retain its existing customers and attract new customers Apple must focus a lot on new
promotional programs and very attractive advertising campaigns even on TV so that more
and more customers can be diverted towards Apple. Moreover, Apple must always run
adverts on all of its products not only the new ones. If old products are not advertised
anymore they will lose customer attractiveness leading to decreased sales.

More Innovative Products:

Apple is known for its mind blowing innovative products. So to dominate the market it
must keep on coming up with more and more highly innovative and different products
continuously.

Changing prices from time to time:

Apple need not change its premium pricing strategy but it may offer its products at a
reduced price by giving discounts, vouchers etc in order to attract a new target group and
increase its sales and fans as well.

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Introducing more Apple retail outlets in different areas

Apple makes most of its sales online but its important for apple to introduce new stores
located near residential area so that customers can have easy access to Apples products
and services.

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Questionnaire:
Q1.Are you brand conscious?
Q2.How confident do you feel about branded products?
Q3.Do you know what is Apple Brand?
Q4.Have you ever used Apple products or services?
Q5.How satisfied are you with Apples prices?
Q6.From where do you buy Apples products?
Q7.Which Apple products do you Buy the most?
Q8.Where did you first hear of Apple?
Q9.Which brand would you prefer while buying a Smartphone today?

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References

Printed Resources:
1.Kotler, P. et al. (1999).Principles of Marketing, 2nd Edition, Europe: Prentice Hall.
2. Zinkmund, W. (2000). Business Research Methods [6th edition].Orlando: The
Dryden Press
3. Kotler P, Armstrong G, Saunder J and Wong V.(1999).Principle of marketing. [2nd
edition].

Online Resources:
4. Wikipedia
[http://en.wikipedia.org/wiki/Apple_Store.]
5. Apple Inc.:
[http://www.apple.com/]
6. Marketing Minds, Apple's branding strategy:
[http://www.marketingminds.com.au/branding/apple_branding_strategy.html]
7. Marcia Yudkin
(http://www.namedatlast.com/branding3.html)
8. Matt Asay, Apple doesn't target markets, It targets people.
[http://gigaom.com/2010/08/26/apple-doesnt-target-markets-it-targets-people]
9. Marketing teacher.com
[http://www.marketingteacher.com/lesson-store/lesson-targeting.html]
10. Switchtomac, Understanding Apple's positioning:
[http://switchtoamac.com/site/understanding-apples-positioning-part-1-apremium-brand-at-apremium-price.html]
11. Slideshare, SWOT Analysis for Apple(online)Available at:
[http://www.slideshare.net]
12. Rob Enderele, .Apple's competitive advantage(online:
[http://www.technewsworld.com/story/33061.html]

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13.Morningstar,Finalcial Analysis
[http://financials.morningstar.com/ratios/r.html?t=AAPL]
14.MarketRealist: Competitive Advantage
[http://marketrealist.com/2014/02/ecosystem]
15.9t05Mac: Brand Value
[http://marketrealist.com/2014/02/ecosystem/]

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