A STUDY OF STAKEHOLDER RELATIONSHIP MARKETING AT

APPLE INC.
Dr Kennedy Amadi, PhD
Lecturer, The Great Lakes University of Kisumu
2019

1
Apple

CONTEXT:

Apple. Inc which is the 12th largest company in the world was established on April 1 st 1976 and
incorporated on January 3, 1977 by two college dropouts named Steve Jobs and Steve Wozniak
(Pethani, 2018).

Size of Apple

Apple is headquartered in Cupertino, California, United States and has its branches in 25 countries all
around the globe (Apple, 2019). As showed by statista (2019), Apple had over 130,000 employees
worldwide in 2018 and the number is rapidly increasing.

Main Markets

The top 5 markets of Apple are North and South America (gains more than 33% of Apple’s sales), Europe
(22% of apple’s sales), China (17% of sales), Japan (11% of sales) and Asia Pacific (7% of sales) (Mattera,
2019).
Although it is stated by Dudovskiy, J (2019) that Apple targets customers who are in the range of 18-30
years and 20-45 years, but its products are mostly used by young adults (teenagers- both male and
female) and bought by customers with high income and who live luxurious lives.

Products and services

Refer to appendix 1

Apple offers a wide range of products & services and these consists of; iPad, iPhone, iPod, Mac, Apple
TV, Apple watch, Professional software applications, iPhone OS (iOS), OS X and watchOS operating
systems, iCloud, Apple Pay and a variety of appurtenances and services (Editorial, 2019).

Key competitors

According to Eskify. (2019), Apple’s top ten competitors include, Samsung, PayPal, Tesla Motors,
Amazon, Dell, Hewlett Packard, Sony Mobile, Fitbit, Bose, Google and Microsoft (Google and Microsoft
being the 2 main competitors).
Table of Contents
INTRODUCTION...........................................................................................................................................4
1.0 The main stakeholders of Apple............................................................................................................5
Mendelow’s matrix..................................................................................................................................5
2.0 Stakeholder relationships......................................................................................................................8
3.0 Building customer loyalty....................................................................................................................11
Developing a stakeholder audit............................................................................................................13
Internal stakeholder:.............................................................................................................................13
External stakeholder:............................................................................................................................14
CONCLUSION.............................................................................................................................................15
REFERENCES..............................................................................................................................................16
APPENDICES...............................................................................................................................................19
INTRODUCTION

Apple, Inc., is a one of the world’s largest technology company which is head quartered in Cupertino,
California, and has a market value of 926.9 billion dollars. The multinational company’s mission is to
provide its customers with the best personal computing experiences. Below I have identified the primary
and secondary stakeholders of Apple and by using the Mendelow’s matrix I have analyzed the needs and
the level of power of each stakeholder in the company. I also used a strategy known as Six Market
Model to assess the relationship between Apple, Inc. and two of the company’s primary and secondary
stakeholder groups. Also, I briefly explained the meaning of customer loyalty and the importance of
customer loyalty and building customer retention within Apple. Lastly, I elaborated a stakeholder audit
for one internal and one external stakeholder using the stakeholder audit and planning stages.
1.0 The main stakeholders of Apple
A stakeholder is any individual or group that has an interest and can be affected either negatively or
positively by the organization’s decisions (Yourdictionary, 2019)

Mendelow’s matrix:
As reported by Eriksen-Coat, F. (n.d.), this is a tool that is used to examine stakeholders in terms of their
power—capability of affecting the company’s policies or project resources— and interest— the level of
interest they have in the company or the completion of a project.

According to Monir, A. (2013), the two types of stakeholders include:

Primary stakeholders: is an individual or group that is directly related to the business failure or success
for example, shareholders, customers, suppliers and employees.

Employees:

Employees can influence Apple because, according to the Mendelow’s matrix of Apple, the employees
are the “keep informed” as they have low power and high level of interest in the organization. Although
they can directly affect the success of the organization through the efficiency and the productivity in the
day to day activities that they carry out, but they are not involved in the key decision making in Apple as
it is said to be a very secretive organization (Business Insider, 2019).

Wileman, L. (2019), states that, the employees of Apple in China are powerless to an extent that in order
to get improved working conditions more than ten workers committed suicide while protesting in 2010.
Similarly, more than a hundred workers threatened to commit mass suicide in January 2012 but luckily
the people were able to convince them to descend from the roof of their building.
Shareholders:

Investors are basically the key players in the organization as they have high power and high interest in
the organization. Apple’s investors are focused more on increasing the earnings on their investment
(Panmore Institute, 2019).

Based on the report of Robins, M. (2015), the shareholders have become more powerful since Apple
allows them to assign 20% of the board members (but only if they have held shares for more than three
years and possesses shares worth more than 3% - $18 billion).

The shareholders can increase these earnings by increasing revenue, this is the reason why Apple keeps
launching new and developed products each year. When it launches new products, the prices of the old
products fall which is a win-win situation for Apple because the luxury class customers will buy the latest
products and the middle-class customers will buy the old products as the price falls (The Motley Fool
Singapore, 2019).

Customers:

The mission statement of Apple states that “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” (The balance small business, 2019).

The customers of Apple are the “key players” according to the Mendelow’s Matrix, as they have high
power and high interest in the organization. Apple takes its customers’ needs very seriously and has
ranked them as their top stakeholders and this has generated customer loyalty which ensures long term
financial success (Panmore Institute, 2019).

As highlighted by The Guardian. (2019), In 2017, Apple admitted that between February 2015 and 2016
it misled over two hundred customers about an “error 53” and told them that they can no longer fix that
problem if their device had been taken to a third party for repairing. In April 2017, The Australian
Competition and Consumer Commission took legal action declaring that Apple had deceived customers
about their warranty (assurance) rights by continuously denying to fix or even examine the defective
devices, therefore Apple was slammed by the federal court and had to pay a hefty fine of nine million
dollars.

As reported by BBC News (2019), Apple became the first public company worth one trillion dollars in
August 2016 and this shows that the high prices will not matter if the products and services are of high
quality.

Suppliers:

Suppliers will require product patterns and trends, new product advancement timelines and plans and
high level of synchronization to production schedules.

The suppliers of Apple are “key players”, this means they have high interest band high power because if
the suppliers cannot levy their demands (for example, high selling prices for raw materials) on
organizations like Apple and gets a better offer from other customers the suppliers can switch to them
(Panmore Institute, 2019).
The Nikkei staff writers Wantebe, N. and Hosokawa, K. (2017), specify that the Japanese suppliers took
more orders than expected when other suppliers were not able to meet the volumes requested by
Apple. Apple convinced them to lower the prices as the order was huge and this led to increased costs
for the suppliers and they decided to switch to other customers.

Secondary stakeholders: is an individual or group that is indirectly involved in the company’s decision
making, success and/or failure for example, the general public.

Government:

The government usually falls in the “keep satisfied” category as they have high power but low interest in
the organization and will only get involved when they need to (Stockmarketandbusinessguide, 2019)

The government of Ireland has both high interest and high power because Newcomb, A. (2017) specified
that, Apple dodged to pay the required amount taxes from 2003 to 2014. After a thorough investigation
in 2015 by the Brussels-based European Commission it was shown that Apple was gaining advantage
from dodging taxes and paying less than other companies therefore slamming them with a tax bill of
$15.4 billion.
 Stakeholder relationships

Stakeholder relationships:

Singh, D. (2013), clearly highlights that, the Six market model is a strategy that assists an organization to
learn about the significant key market areas and stakeholders. The organization can use this model
when it wants to grow because analyzing the six markets relates to both the internal and external
environment and it will help the organization to identify opportunities in each market.

(Money Matters | All Management Articles, 2019)

The Six markets model:

1. Internal markets:

As specified by Singh, D. (2019), this market relates to the employees and customers and it shows how
these stakeholders must have synchronization between them for the company can achieve its objectives
by working together. The internal stakeholders should understand how their relationships affect and
support the company’s goals and solves conflicts of interests.

Patel, N. (2019), states that Apple takes its customers’ needs very seriously and understands them
better than any other company. It focuses on finding new and improved ways to attract customers.
When some customers go to the Apple retail store, they tend to stay there for a long period and ask the
employees or what they call the “geniuses” questions about the devices. Apple has made sure that the
employees are welcoming and persuasive which therefore, encourages the customers to buy the device.

2. Supplier markets:

This market is the link of the company that distributes raw materials, products and services to the
company. Over the year’s organizations have realized how important it is to maintain a close and mutual
relationship with their suppliers to get benefits such as original and better-quality raw materials, faster
distribution and availability of discounts (Money Matters | All Management Articles, 2019).

Apple maintains a good relationship with the suppliers as long as they understand Apple’s culture and
vision (which is mainly innovation) and for this, suppliers must learn about what the company expects
from them. Apple expects its suppliers to be committed to quality assurance and commitment to assure
high levels of social responsibility (Apple, 2019).
 3. Employee markets:

Singh, D. (2019), also highlights that, this market assists the company to hire the employees that are
experienced, skilled, loyal, creative, productive and talented. The internal stakeholders directly affect
the profitability therefore, the organization needs employee those who share the values of the
organization, can improve production and add value to the business.

In the opinion of Painter, L. (2019), Apple does not just randomly pick its employees; it examines plenty
candidates to select the perfect employee; therefore, the employees need to be exceptional. The
company seeks for applicants that can associate with people on a personal level and provide the best
customer experience.

4. Referral markets:

Based on the report of Singh, D. (2019), this form of marketing can be described as “word of mouth”,
this is when something is bought after it is suggested by someone for example, friends or relatives. It is
divided into two groups: customer and non-customer referral markets.

Apple products are highly recommended by most people not only because of the quality of their
products, but because of the outstanding customer service. A major example is that; when a customer
goes to Apple to get a broken screen repaired, he/she leaves with a brand-new iPhone instead of just
getting the screen repaired. Therefore, the customers will have no reason to be upset and they will
recommend the product to their friends and/or relatives (Referral SaaSquatch, 2019)

5. Influence markets:

Singh, D. (2019), states that, this market includes of people and organizations who have the capability to
have a positive or negative impact on the marketing surroundings where the business competes. The
influencers include stakeholders including competitors and the third party. For example, consumers that
have bought a product, will give feedback to his/her friends, fans and/or relatives. For most
organizations, customers are the influencers and when supply partners and retailers influence
customers to buy products, they are known as value added influencers.

Most of Apple’s influencers are celebrities on social media and Apple has really benefited from this as
people tend to imitate what their favorite celebrities do. Refer to appendix 5. Social media networks
such as Facebook, Instagaram and Twitter, have said to be the vital for social advertising (WIRED, 2019).
One of the examples of a ground-breaking campaign to make people focus on the feature of one of
Apple products (the iPhone camera) was the hashtag — #ShotOniPhone. Many people took part in this
campaign and encouraged more and more people to upload a picture taken with there iPhones with the
hashtag, this led to an outstanding achievement for the marketing Apple (Hawkemedia, 2019).
 6. Customer markets:

As identified by Singh, D. (2019), this market consists of the individuals or the companies that buy the
final goods/services the individuals can either be customers or intermediaries. This market directly
affects the organization because if the customers are not satisfied with the product or service, the
company will not be able to keep hold of them therefore the company must find innovative ways to
attract new customers and retain the loyal ones.

Apple retains its customers and attracts new ones because of two main reasons. Firstly, meeting the
customer wants by the quality of the products because for apple, it’s about quality and not quantity.
Secondly, establishing a long-term relationship by providing the best customer experience by coming up
with creative ideas to make the retail stores more fun, for example a famous dancer known as Michael,
performed in one of the Apple stores therefore, attracting more people (WordPress, 2019).
3.0 Building customer loyalty
Customer loyalty: is when a customer chooses to continue buying products and/or services from the
same company despite of having alternatives (Market Business News, 2019).

The benefits of customer loyalty and building customer retention within Apple:

Martin, R. (2019), claims that, one of the advantages Apple gets from customer loyalty is, an unusual
improvement in financial performance. Over the past number of years Apple became the world’s most
valuable organization mainly due to their loyal customers. Also, the customer loyalty of Apple has given
them a competitive advantage over their main competitor— Samsung and this is because customer
loyalty means constant support; therefore, the customer is committed to the company and they will not
shift to other companies that produce similar products. Contrary to Samsung, Apple has managed to
keep the prices of their products artificially high as it affects the customers behavior towards the
products (some customers think that products with high prices are of great quality), this encourages the
customers with high income to buy the products of Apple; therefore, boosting the sales of the company.
the customers of apple have such enthusiasm for the brand that has resulted them to positively
publicize through word of mouth therefore, strengthening the company’s brand.

Raybould, S. (2011), highlights that, Reichheld loyalty-based effect is a theory that focuses on building
am extremely loyal customer base and maintain good relationship to gain long term customers;
therefore, to retain high quality customers and/or employees, the company can reinvest cashflows after
considering the economic effects of retention.
Based on Reichheld loyalty-based effect, value creation (by providing better quality products and
services) for customers results in customer loyalty and therefore, leading to profit and growth.
In accordance with Reichheld loyalty-based effect, customer retention has benefits like; Sales growth,
low operating and acquisition costs because of the fact that long-term customers have less demands;
therefore, a company like apple can use that money to innovate its products and/or services.

Customer retention involves the capacity of an organization to hold on to its customers for a particular
period of time (Market Business News, 2019).
Davies, J. (2019), claims that, although one of the ways that Apple uses to retain customers is the top
quality and creativity, it also focuses on taking care of the customers by serving them with dedication
and making them feel welcomed to encourage them to keep buying from them and this has led to Apple
being able to achieve higher sales and it has created and maintained a recognizable and reputable
name.

Honen, M (2019), summarizes that, the service profit chain is a theory that states that employee
satisfaction, employee capability, employee satisfaction, customer satisfaction, customer loyalty, growth
and profitability are directly linked. For example, if employees are satisfied with their current work
situations, they will work both, effectively and efficiently therefore, providing excellent quality services
and satisfying the customers. This why Apple tries their best to treat their employees well and they have
managed to provide the best services. The theory also reflects that, satisfaction and loyalty are directly
linked, if the customers are satisfied with the product, they are going to be loyal to the company and the
company will be able to retain customers. Apple trains its employees to serve their customers with
dedication so that the customers feel welcomed and encourage them to come back again.
Based on the reports of Bohata ALA. (n.d.), the human resource strategy of Apple is one of the reasons
of the company’s constant growth and outstanding performance in the industry. When recruiting
employees, the company focuses on whether or not the candidates have computer-based knowledge
and they will recruit the ones who fall into place and are suitable to the culture of the company
regardless of their experiences. Apple gives the credits of success to the efforts on the employees. The
company’s management has been equipped with the most talented approaches of management and
efficient and effective skills of management— this is the reason Apple has become the leading
electronics manufacturing company. Apple boosts the efforts of its by investing in developing and
improving their skills. Apple has a program called Apple Fellows Program that was established in 1995 to
identify workers that make remarkable participation in the company and the rewarded by being
authorized as leaders to motivate them to work harder and with dedication. Apple applies strategies
that involve collaborative culture (the culture of working together) which motivates the employees to
take part in the decision-making process hence increasing commitment and helping the employees to
grow and develop. Not to forget, the multinational company categorizes its workforce as an important
factor for its general competitiveness because if the workforce is skilled it will make sure to provide the
best quality services and make sure that the customers come back to the company.

Not to forget, Apple launches new and innovative products almost every year and makes sure the
features match the customers wants and demands and improves the products by considering both the
negative and positive feedback. For example, as stated by Lynch, J. (2015), Apple has made mobile
computing much better by making it easier for customers to have multiple windows accessible in the 27-
inch 5K iMac desktop. Refer to appendix 6. The customers also say that “it is not always about the good
looks, it is about how good the quality is and how well it performs for the customers”.
 Developing a stakeholder audit

Stakeholder audit:

Nelson, R. (2014) describes stakeholder audit as; a method of examining the stakeholders of your
company and aligning them with the business strategies and it plays an important role in problem
solving as it is a part of good conduct. Some companies may decide to use stakeholder audit when
carrying out the analysis of the environment.

Internal stakeholder:
Is a person who is interested in the business and is within the company for example, owners, managers
and employees (Courses.lumenlearning, 2019).

Employees:

The main concern of every employee is not always to get higher wage, they also expect to be treated
well. Apple has gotten very serious about treating their employees well by helping them to resolve
issues, work together to work with a shared determination both, easily and productively (Apple (Latin
America), 2019).

The employees of Apple are the “keep informed” according to the Mendelow’s matrix as they have low
power and high level of interest in the organization. But according to Dormehl, L. (2015), Tim Cook is
making sure that his employees feel important and not scared, in 2015 Tim Cook led more than 8000
Apple employees in the 43rd Annual Gay Pride Parade in San Francisco and this made the employees of
Apple feel united and not left out. Refer to appendix 7.

As highlighted by Delaney, J. (2015), Apple has a training and development program which focuses on
educating the employees about health and safety, prevention of injuries and most importantly, workers’
rights. The program ensures whether Apple is meeting the expectations of working conditions and
societal expectations. To retain their employees, Apple has come up with the following methods;
student loans, education compensating for employees, parental leave. The company has also decided to
recruit the best people for the job, involve employees in decision making so that they do not feel
alienated and persistent training and development.

As for employee loyalty, Martellaro, J. (2017), states that, the employees of Apple are dedicated to the
company as there are less fixed work schedules and deadlines or any project codes to juggle. One of the
Apple company employee says that he enjoyed working there because Apple did not force the
employees to work for long hours or did not give a lot of work load, he also said that Apple is a joyful
place to work in mainly because of the enthusiasm.

The main origin of customer interest are not the good quality designed products but it is the way that
the employees treat them (iNotes4You, n.d.).
 External stakeholder:
is a person who is not within the organization, but cares about the company and is affected by the
decisions. For example, government, customers, suppliers and creditors (Courses.lumenlearning, 2019).

Customers:

Based on the reports of Brannan, B. (2015), most of Apple company’s customers are high end customers
therefore, they choose quantity over quality, which means that they would pay any amount just to get
the best quality product. The main concern of the customers is that they want the company to identify
the customer needs, and that is what Apple has done throughout the years. The multinational company
has made sure all the customers needs are taken into consideration by making its products simple yet
sophisticated.

The customers of Apple are the “key players” according to the Mendelow’s Matrix, as they have high
power and high interest in the organization. As stated by Leswing, K. (2018), Apple produces what the
customers need for example, rather than being glad that most people are glued to their phones, Apple
has given users tools to limit their own use. Also, Apple used to focus on developing various software,
but now the company has decided to focus on resolving day to day problems that the normal users face
and care about.

Apple uses Customer Relationship Market (CRM)—a tool which is used to improve customer service and
customer experiences for existing and new customers— in its customer service department and it has
gone from sending emails to customers who have used the in-store services so that they can focus on
examining the feelings of the customers when talking to the Apple staff to ensure the customers get the
best experience instead of just plainly buying the product. The also company uses CRM to build a strong
and long-term relationship with the customers. To maintain a good relationship with the customer,
Apple intensifies the experience by focusing on teaching their customers to become fond of the product
and value the advantage of having the device so that the customer has an everlasting memory of
purchasing the device. Not only Apple uses CRM for themselves within its retail stores, but it also has a
CRM tool for their customers which is cloud-based (hosted on the internet) (Expert Market, n.d.).

Steve jobs himself was face to face wit the customers in the customer service department to build
customer relationships by paying attention to the customers and being patient with the customers so
that the employees follow his footsteps. Contrary to other leaders, Steve handles a number of his
organization’s day to day customer service inquests. The company has come up with a system beyond a
help center, with something called ‘Genius Bars”, where customers bring their devices and let the Apple
specialists work on them. The truth is that Apple listens to its customers very carefully and methodically.
It is one of the best listeners as it takes into consideration whatever the customers tell them (complaints
or demands) (iNotes4You, n.d.).
CONCLUSION

Apple, Inc., is one of the leading technology company although it faces strong competition from
competitors such as Samsung. The company focuses on continuous innovation and to provide their
customers with the best experience. While evaluating the stakeholders of Apple using the Mendelow’s
matrix I came across some stakeholders that negatively impact the company. It was difficult to find
information on the suppliers of Apple as they want to keep it confidential but after a thorough research,
I managed to find some information regarding the suppliers. I could easily find information about the
customers because Apple targets a large number of audiences around the world, therefore I found out a
lot about why customers are loyal to Apple and came across ways Apple retain their customers. I could
also use social media sites such as Instagram to get information, for example: the influencers of Apple. It
was difficult to carry out the stakeholder audit because I did not get information on the SMART
objectives of the chosen stakeholders therefore, I used other stages to audit.
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APPENDICES

1. Some of the Apple products:

2. Apple iPhones throughout the years:

3. Chart 1: Satisfaction Rating Based Upon Mobile Operating System:

4. The brand value of Apple throughout the years:

5. The famous footballer David Beckam advertising of of Apple’s products The iPhone 6:

6. The apple 5k 27-inch iMac:

7. Tim Cook leads over 8000 employees in the 43 rd Annual Gay Pride Parade in San Francisco