paper reviews the marketing strategies

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Strategic Review on Apple Inc Marketing in the United States of
America
Dr. Robert Greg
ISSN: 2617-359X

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Strategic Review on Apple Inc Marketing in the United
States
Dr. Robert Greg, University of Virginia
Email of the corresponding author; [email protected]
How to cite this article: Greg R. (2020). Strategic Review on Apple Inc Marketing in the United
States.
Journal of Marketing and Communication. Vol 3(2) pp. 47-83.
Abstract
The paper reviews the marketing strategies adopted by Apple Inc. Apple Inc. is a Multinational
Corporation whose headquarter are in Cupertino California America, that designs and markets
consumer electronics, computer and personal computers. Its CEO is Timothy Donald Tim Cook.
Apple is considered one of the Big Four tech companies along with Google, Amazon, and
Facebook. Its best known hardware products include the Macintosh line of computers, the ipod,
iPad and iPhone. The company’s software includes the, Mac OS X operating system ,iWork suite
of productivity software, Aperture, a professional photography package iTunes media browser,
iLife suite of multimedia and creativity software, final cut studio a suite of professional audio
and film-industry software products, logic studio a suite of professional and film industry
software products. Apple lost market share as the market for personal computers expanded
through the 1990s to the lower price duopoly of Microsoft Windows on Intel PC clones. As the
market for personal computers expanded and evolved through the 1990s, Apple lost market share
to the lower-priced Jobs pensively regained leadership status, becoming CEO in 2000. As the
Think different campaign was done Apple returned to profitability, this was through rebuilding
of Apple status by launching iMac in 1998. In 2001, Apple opened retail chain store and
acquired numerous companies to broaden software portfolio. To reflect the shift focus towards
electronics consumer Steve Jobs renamed the Company in 2007 and launched the iPhone to great
critical acclaim and financial success. Steve Jobs Resigned as the CEO due to health
complications in August 2011 and Tim Cook became the new CEO. Jobs died Two months later
marking the end of an era for the company. Apple is now recognized as the world’s largest
information technology company in terms of revenue, total assets, and largest mobile phone
manufacturer.
Keywords: Apple Inc, Marketing & United States
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Introduction
Apple Inc. (Previously Apple Computer, Inc.) is multinational corporation whose headquarter are
in Cupertino California America, that designs and markets consumer electronics, computer and
personal computers. Its current CEO is Timothy Donald Tim Cook. Apple is considered one of
the Big Four tech companies along with Google, Amazon, and Facebook.
Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in April 1976 to develop
and sell Wozniak’s Apple I personal computer, though Wayne sold his share back within 12
days. It was incorporated as Apple Computer, Inc., in January 1977.
Its best known hardware products include the Macintosh line of computers, the ipod, iPad and
iPhone. The company’s software includes the, Mac OS X operating system ,iWork suite of
productivity software, Aperture, a professional photography package iTunes media browser,
iLife suite of multimedia and creativity software, final cut studio a suite of professional audio
and film-industry software products, logic studio a suite of professional and film industry
software products etc.
Apple lost market share as the Market for personal computers expanded through the 1990s to the
lower price duopoly of Microsoft Windows on Intel PC clones.
As the market for personal computers expanded and evolved through the 1990s, Apple lost
market share to the lower-priced Jobs pensively regained leadership status, becoming CEO in
2000. As the Think different campaign was done Apple returned to profitability, this was through
rebuilding of Apple status by launching iMac in 1998. In 2001 Apple opened retail chain store
and acquired numerous companies to broaden tsoftware portfolio.
To reflect the shift focus towards electronics consumer Steve Jobs renamed the Company in
2007 and launched the iPhone to great critical acclaim and financial success. Steve Jobs
Resigned as the CEO due to health complications in August 2011 and Tim Cook became the new
CEO. Jobs died Two months later marking the end of an era for the company.
Apple is now recognized as the world’s largest information technology company in terms of
revenue, total assets, and largest mobile phone manufacturer with 123,000 employees (last
recorded in 2017)
Value Proposition
Technology
Apple offers a better integrated computer operating system that its competitors. It is an expert in
the computer technology and the electronics industry becoming a global leader in the computer
industry and its research and development. They have expanded computer technology into
phones, laptops, tablets, music players and watches.
Manufacturing
Is has achieved both the internal and external economies of scale by becoming the number one
firm in their industry which lower their cost of production.

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Distribution
Apple has strong direct sales capabilities. Brick and mortar stores has provided them with strong
direct sales capabilities by dealing directly with the customers themselves and this has allowed
them to handle customer complaints and gauge the overall demand for their goods.
Skills and capability
Apple have design expertise this is through hiring upper level managers, computer technologists
and specialists, programmers , engineers and research and development scientists who have craft
unique designs that grab consumers and command their attention.
Superior Quality
Apple has product which are of high quality compared to its competitors that why the customer
base is very large.
Appealing design
The Apple product design is appealing combining software and hardware design into one device.
Brand Reputation
Apple brand is known for its safety and security features. This has enabled apple retain its brand
image and thus large customer base.
Swot Analysis of Apple Inc.
This is a method of analysis of the environment and the company’s stand in it. It comprises
internal and external environment.
Strengths and Weaknesses
Strengths
Strong Research and Development
Apple puts dedication into its product designs. Apple’s innovation is the primary sources of its
competitive advantage. It focuses upon the user experience and tries to upgrade its product to fit
the users need. With the research and development Apple focuses on growing its range of
products and also improves on the existing ones. It has also invested heavily on the research and
development.
Strong brand image
Apple has been listed by Forbes as the most valuable brand in the world. It enjoys a high level of
brand equity or customer trust and this can be attributed to its exemplary customer focus. This
also gives Apple a considerable bargaining power in negotiations with its distributors and
vendors. While Apple still continues to rule, its continued focus upon user experience has helped
it strengthen its brand equity. High brand equity has also translated into superior financial

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Email: [email protected] ISSN: 2617-359X
performance for the technology brand and heavy influence in the computing and smartphone
industry.
Distribution and Leadership Position
The geographical coverage of Apple is 499 store across 22 countries worldwide as of December
2017. In regards to the revenue generate Apple is the leading technology company in the world
and second largest smart phone manufacturer. It was the largest publicity traded company in the
world in 2014 and the first US Company to cross 700 billion dollars. It is far ahead in the
leadership game.
High profit margins
The company’s profit margins are high with every new iPhone, iPod, and Mac laptop upgrade.
The company’s gross margin for 2018, 2017 and 2016 amounted to 38,3%, 38,5% and 39,1%
respectively, although the gross profit margin has declined to a certain extent to 37,99% by the
Q4, 2018, nevertheless it remains one of the highest in the industry. When company makes high
profit margin can allow the business to maintain its operations in times of economic uncertainties
thanks to cash reserve. Apple’s Net sales kept increasing between 2008 and 2012 by $Million
119,017.
Products Portfolio
Apple has been innovative in its product line up; it has expanded from core hardware and
software products to include several new services. The company’s product mix has enabled it to
maintain its competitive advantage in the market. This has been its major strengths. The products
include iPhone, iPad, Mac, Apple Watch, AirPods, Apple TV, HomePod, a portfolio of
consumer and professional software applications, iOS, macOS, watchOS and tvOS operating
systems, iCloud, Apple Pay.
Weaknesses
Price too high for some consumers
Apple’s products price is too high such that the product can be considered for the luxury or high
income consumers only. Despite growth in the competitive market of smartphones it still has
maintained its premium prices, otherwise the brand would have large customer base. Due to their
premium pricing, only middle or high-class individuals can afford their products and this
constitute to a hindrance to sales growth.
Incompatibility with other software
The company’s product are not compatible with the other software’s thus when one buys the
products they enter the Apple universe. These has caused customer to exclusively purchase apps
or accessories for Apple to continue using the products.

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Lack of Marketing & Promotions
Even with the poor marketing the company has solidified their grounds by establishing loyal
customers. It does not feel the need for additional investments towards marketing funds because
of their success.
Lack of Competition
Apple doesn’t really compete against its competitors. Apple does not market its product but only
heard when launching a new product or updating.
Opportunities and Threats
Opportunities
Invest in Research and development
Apple should invest much in research and development this will enable the company to be able
to come up with new products and also will be able to get to know what their competitors have in
research. It will enable the company boost its profit margin and increase its sales.
Qualified professional
Apple have team of product specialists, researchers and developers who are highly qualified
professionals and have years of experience in branding consumer products. Because of this
qualified team Apple can continuously build new opportunities.
Expansive Distribution Network
Its distribution is very limited but has the opportunity to expand its distribution network. This
will help the company generate high revenue and sales.
Invest in green technology:
Sustainability is not just a fad and the way its importance has grown in this century is well
known and in several areas the popularity of sustainable technology has grown from power to
transport. Apple can also invest in these areas to find faster growth and to grow its popularity.
Threats
Economic fluctuation
Currency fluctuation and economic changes also affect the international businesses and these are
like Apple. This affects the profit of the Apple by decrease in lower demand of the product.
New competitors
The rise in increase of company’s quality of smartphones has grown immensely for companies
like Samsung, HTC. This is increasing pressure to Apple to come up with new product features.

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Apple software and hardware are expensive
Apple software and hardware are expensive as compared to other competitors such as dell, this
will push consumers to go to their competitors since there can afford. Customers are getting
bored with constantly updating their phones. This is called phone fatigue.
Heavy Competition in laptops
Competition in the laptop industry has kept intensifying and Apple has retained its popularity
despite the rising competition. Apple is not at the top in terms of PC sales even though the
market is still enlarging to brands like Lenovo and Dell which has the best laptop models like
XPS which is giving competition to Macbook. HP is another name produces affordable computer
product for consumer around the globe.
Apple Five Forces Analysis
This Five Forces analysis gives insights about the external factors influencing the company’s
success. A Five Forces analysis of Apple Inc. sheds light on what the company does to ensure
industry leadership despite the negative effects of external factors in the competitive landscape
of the computer software and hardware, consumer electronics, and online digital content
distribution markets, which involve firms like Samsung, Sony, Google, Microsoft, Amazon,
Lenovo and Wal-Mart.
Threats of new entrance
The threat of new entrants has remained relatively weak for Apple, this is because of:
High cost of establishing a new technology company
Brands cannot generate Apple’s kind of brand image and recognition
For companies to enter into the market they must have lots of capital and good brand recognition
can to diversify into this area to challenge Apple’s market share.
Threat of substitute
It is not the same product offered by the company but rather a different product that satisfy the
same need. The substitutes for Apple are available in the market, for example people can use
digital cameras to take photos and landline to make calls. The substitutes have limited features
which result to low performance. Many customers would rather use Apple products based on
convenience and advanced functions. This condition makes substitution a weak force in
impacting the company’s business. Also, buyers have a low propensity to substitute. For
instance, customers would rather use smartphones than go through the hassle of buying and
maintaining a digital camera, a cellular phone, and other devices. Apple does not need to put
priority for threat of substitute.
Buyer bargaining
This is affecting Apple’s business, because it determines how buyer’s purchase decisions and
perception impact businesses.

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Apple’s strong buyer power is based low switching cost (strong force), small size of individual
buyers (weak force) and high buyer information (strong force).Customers can change brands
very easy making them powerful in compelling companies like Apple.
This forces shows that Apple must include the bargaining power of buyers or customers as one
of the most significant strategic variables in the business.
Supplier bargaining power
Apple’s bargaining power of suppliers is relatively weak force, this is because of high number of
suppliers and thus Apple is free to choose from among the large number. Apple is a major
customer for the majority of its suppliers and supplier switching costs for the company is not
substantial.
Apple’s does not depend on one supplier to supply part of its products because the different parts
may be supplied by different suppliers. This has enabled Apple to maintain excellent control
over its supplier.
Rivalry against existing players
There are several competitors of Apple in the industry including Google, Amazon, Microsoft,
Lenovo, HP, Samsung and others. These brands engage in completion where the loss of one can
benefit the other.
Whereas these companies focus on price Apple does not, thus this is the differentiator of Apple
from its competitors. Apples products never go on sale. Apple generates superior product to
android phones which makes it compete based on the quality, service and unique ecosystem.
Pestel Analysis of Apple
PESTEL analysis of identifies the most significant external factors that the company must
strategically address in its industry environment in order to maximize profits. It evaluates the
political, economic, sociocultural, technological, ecological, and legal factors relevant to the
business.
Political Factors
Because of low labour cost and dependency of Apple to china, this could lead to high cost of
production and product price if Apple was to look for an alternative manufacture
and markets
makes it vulnerable to political unrest in that China.
The close association of Apple to China could become a political issue to other countries if it
were to be perceived China is a threat to them, for example, Japan.
The unsettled political environment in China disrupts manufacturing for Apple products now and
then and this has increased cost of manufacturing.
Also the restriction of imports from China to America in order to enhance the manufacturing in
America has also immensely affected the US-based companies in China this will lead to
increased price of Apple products.

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Ban on Tim Cook in Russia -A lawmaker in Russia, who is noted for his harsh approach towards
gay propaganda due to his public acknowledgment of his homosexuality in October has made a
suggestion to ban Apple CEO Tim Cook from visiting Russia.
Economic Factors
Increase in labour cost in China- This could mean good news for China as the poverty line level
for the Chinese people will rise. However, it may mean rise of wage inflation which would affect
Apple and this may cause the product price to rise in order to curb the gap.
Increased competition has also affected Apple and also lost in the market share to companies like
Lenovo in laptop and PC sales.
Rising value of dollar – its rising value and exchange rate are increasing which is directly
affecting the cost of Apple products. This is mainly because the difference between the dollar
and other currencies like Euro and Yuan makes it more expensive for the company to do
business in countries like China.
Social factors
Increased use of mobile devises and social media is an opportunity for Apple to continue
providing east to use mobile devises. Apple has an opportunity because there is an increase
demand for digital products like Apple.
Possessing an Apple product is considered as status symbol in many countries (societies) and this
has increased purchase of Apple products.
Technological Factors
The increased cyber-criminal has raised level of security and safety of internet. This makes
Apple’s systems less secure and takes away its strongest competitive advantage.
Increases competition of smartphones such as Samsung and Huawei has also demonstrated
strong ability to copy Apple’ services. This makes Apple not relax and keep on researching more
to remain at the top.
Competitions as Apple competitors offer the same products and services which were once the
signature of Apple. For example Google took less than a year to build payment application like
Apple so it’s no longer unique to Apple.
Environmental Factors
Apple like any other company is experiencing expense in disposing nonworking or used
electronic devices.
Due to climate change in global worming Apple could face disrupt in supply chain and this could
lead to decrease in sales.
Legal Factor
These are the factor that can be imposed in countries that can cause Apple face challenges in its
operations, for example imposition of tax, levies and entry restriction into the market.

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Value Chain Analysis
Primary Activities
Inbound Logistics
Apple has a very large supply chain for raw materials. Most of its suppliers are located in Asia in
China and Japan.
Operations
The manufacturing of Apple products takes place in several countries. China being the largest of
its suppliers this where most of the products are assembled. Apple is also focused on reducing
the use of toxic substances in the manufacturing and assembly of its product and instead recycles
more; this has managed to reduce its production cost.
Outbound Logistics
It has a very large distribution channel which consist both the direct and indirect channels. It is
also focusing on to remain green in packaging and eliminating wastage.
Marketing and Sales
Apple being famous brand known for its design, quality and technological innovation, this has
made its marketing very easy. Apple has acquired remarkable brand loyalty by use of creativity
and innovation in its advertising strategy.
Products and Services
Apple provides a comprehensive after sales support to its customers, this is because most of its
product have a one year warranty and 90 days complementary support.
Support Activities
Technology/ Research and Development
Apple has invested heavily on research and development. Apple is known for its innovation and
for greater quality and unique design of its products.
For Apple to remain on top and retain its competitive advantage it has to invest more on research
and development.
Human Resource Management
Apple focuses on hiring highly skilled personnel and paying them well in order to retain them.
Tim Cook however, tried to change the style of HRM and brought about several changes.

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Procurement
This is a key focus for Apple and because of this Apple has managed the relationship with its
suppliers well. The suppliers are supposed to look at the social welfare on the staff that is safe
working conditions and provide products and services as per the standards.
Firm Infrastructure
The better the management of a firm’s infrastructure the higher the ability of creating profits for
any firm. Firm infrastructure is the key role to the success of an organization.
Table 1: Apple Inc. Annual Financial Report for October –September, All Values Given In
USD

2013 2014 2015 2016 2017
Sales Revenue 170.87 B 183.24 B 231,28 B 214.23 B 228.57 B
Cost of goods sold
(COGS) incl. D&A
107.24 B 112.55 B 142.26 B 131.51 B 141.7 B
Gross Income 63.63 B 70.69 B 89.03 B 82.72 B 86.87 B
Net Income 37.04 B 39.51 B 53.39 B 45.68 B 48.45 B

Table 2: Financial Analysis

Ratio Descriptions The Company Profitability Ratio
Net Profit
Margin
An indicator of
profitability, calculated
as net income divided
by revenue.
Apple Inc.’s net profit margin
ratio improved from 2017 to 2018
but then slightly deteriorated from
2018 to 2019
2019- 21.24 %
2018- 22.41%
2017- 21.09%
ROE A profitability ratio
calculated as net income
divided by shareholders’
equity.
Apple Inc.’s ROE improved from
2017 to 2018 and from 2018 to
2019.
2019- 61.06%
2018- 55.56%
2017- 36.07%
ROA A profitability ratio
calculated as net income
divided by total assets.
Apple Inc.’s ROA improved from
2017 to 2018 and from 2018 to
2019.
2019-16.32%
2018-16.28%
2017-12.88%
Gross Profit
Margin
Gross profit margin
indicates the percentage
of revenue available to
cover operating and
other expenditures
Apple Inc.’s gross profit margin
ratio deteriorated from 2017 to
2018 and from 2018 to 2019.
2019- 37.82%
2018- 38.34%
2017- 38.47%

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Strategic Plan
This is a process which organizations use to define strategy or direction and making decisions on
allocating its resources to pursue this strategy. It may also extend to control mechanisms for
guiding the implementation of the strategy.
Formulation
This involves selecting the most appropriate course of action that Apple will use to achieve the
organization core goals in order to achieve the anticipated results. This includes vision, mission
core values of the organization.
Vision statement
To be the most loveable, admired computing brand in the world that people ever use
Mission
To produce best quality product to satisfy our client
Objectives
For any organization to success in the business it must have goals which it would like to achieve.
Apples objectives include the following:
To continue breaking ground by producing free products that provides service and joy for the
customer
To ensure that they expand their sales to all customers who do not have or own any Apple
product
To continue success of having the best products this enables them to be the leading mobile
market
Problems Apple Is Facing
Global competition increases
There is increased competition around the world for smartphone and PC manufacturers. Cheap
labour and the accessories part manufacture in other countries costing less making the
competitors increases. This makes the companies to be more innovative.
Software piracy
It has been a problem for software and operating systems producing companies. The more
technology advances the more susceptible the companies become to additional piracy. Piracy has
grown over time to global proportions and stopping unlawful copying and distribution of
copyrighted software does not seen to have a remedy for prevention in the future.
Aggressive pricing practices
Highly competitive market faces overcoming aggressive pricing practices, continuous product
improvement and rapid technological changes. This makes it difficult for the companies to stay

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at the top. This make those companies with considerable market share to continue battle to
prevent relinquishing any while those with little market share push with the items above to take
any amount of the market share they can get.
Apple’s Strategic Issues
Legal issues – Apple has been facing legal issues which have led to negative perception of the
security of the company. For example the recent event of a customer who sued Apple over an
application which turned him gay.
Cloud service – even after launching the icloud Apple customers still in doubt whether it has big
server after an attempt to buy dropbox.
Social- Apple has to be social, this not through acquiring their social network but they should
ensure that the customer fell special when using their product and are friendly.
Cheaper substitutes for Apple products- This poses a big threat to Apple as many companies are
coming up with products which are cheaper than Apple this has caused Apple to be at per by
ensuring that they maintain their quality.
Risk Apple Is Facing
Market Risk
These are risks due to increased competitors which may lead to decrease in sales due to cheap
affordable products. Apple has maintained its unique characteristics of their products and this has
helped them still remain leading in market.
Financial Risk
Apple has been facing financial risks this is evident when the sales drop but has still maintained
to mitigate them by ensuring their sales are increased quarterly.
Environmental risk
It’s concerned with the environment generally that is soil, air but Apple has tried to mitigate this
risk by introducing recyclable materials so they may not end up dumping and polluting the
environment.
Operational risk
These are risks which Apple faces while in this industry.
Political and legal risks
This are risks which multinationals face in their host countries because of decisions made by the
government in those countries.
Apple have some of its offices’ in different countries may face a lot of this risk which may deter
them from achieving its objectives and making it difficult for them to operate.

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Evaluation
This is the process of determine the effectiveness of a given strategy in achieving the
organization goals and taking corrective action.
It is the final step in strategy management process. These are internal and external factors are
analyzed.
For strategic plan evaluation to be effective it must exhibit that the activities are economical,
meaningful and provide timely information.
Conclusion
Apple is in a position to enjoy because of its current leadership. The uniqueness in its design
gives the company competitive advantage which in return reflects in their sales and revenues.

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References
Apple Inc (2020). Retrieved from https://www.apple.com/
Dave, J. G. (2018). A Case Study on Marketing Strategy: Apple i-Phone.
IJRAR-International
Journal of Research and Analytical Reviews (IJRAR)
, 5(4), 106-114.
Ewa, W. J., Milosz, P., Martyna, K., & Michal, N. (2017, June). Apple products: A discussion of
the product life cycle. In
2017 International Conference on Management Science and
Management Innovation (MSMI 2017)
(pp. 159-164). Atlantis Press.
He, M. (2020). Analysis of iPhone’s Marketing Strategy. In
6th International Conference on
Financial Innovation and Economic Development (ICFIED 2021)
(pp. 669-672). Atlantis
Press.
Kotliar, V., & Yurchyshyn, I. (2018). Marketing principles of «Apple» corporation.
Tien, N. H., Dat, N. V., & Chi, D. T. P. (2019). Product Policy in International Marketing.
Comparative Analysis between Samsung and Apple.“.
International Journal of Research
in Marketing Management and Sales
, 1(2), 129-133.
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Appendix 1: Implementation

Action Step Person/s
responsible
Date to be
Completed
Resource Collaborators Barriers
Franchise
Stores
Board of
Directors
Top
Management
2020-2025 Capital
Budget
Marketing High capital for
franchisee
Brand Loyalty
Growth
Strategy that is
market
development
strategy and
product
development
strategy
Board of
Directors
Top
Management
2020-2025 Budget
allocation
Marketing
Public
Relations and
IT department
Hesitant to
introduce new
products
Strict legislations
from other
countries for them
to venture into their
market.
Penetrating
untapped
Potential
Markets
Boards of
Directors
Top
Management
2020-2025 Capital
Budget
Marketing
IT department
Government
policies from
different countries
Continuing
training and
development
for employees
Human
Resource
Management
2020-2025 Budget
Allocation
Finance
Department
High cost of
training
Retention of the
employees
Research and
development
that is consider
infiltration of
the business
sector with
enterprise
resource
planning
system merger.
Board of
Directors
Top
Management
2020-2025 Budget
Allocation
Finance
Department
Legal
Department
Resistance form the
management
High cost of
infiltration