Apple iPodApple iPod
Brief HistoryBrief History Established in 1976 by
Steve Jobs and Steve Wozniak in California
For funding Wozniak sold his Hewlett Packard scientific calculator
Raised a net start of $1300
Apple delivered the first Apple I to hobbyists
Apple quickly earned $774,000
Corporate StrategyCorporate Strategy
Apple Inc. is a company that is vertically integrated, designing its own operating systems software and hardware, and selling these products through its own retail stores
To retain an edge in the highly competitive personal computer and consumer electronics markets, Apple’s stated philosophy is to increase investments in research and development, as well as marketing and advertising to extend market position
RecommendationsRecommendations
Competitive prices due to established name Expand in the foreign market (France,
Canada) Research and Development for new product
areas. Competing companies have nearly doubled Apple
in advertising Expand into user generated videos (YouTube,
Soapbox) YouTube earned over $90 Billion in advertising
revenue.
Marketing StrategyMarketing Strategy
Committed to bringing the best portable music device and mobile communication experience for people of all ages
Innovative product designs and styles Adhere to customer preferences in size,
capacity, and weight
Target MarketTarget Market
Primary Target Market: Teens and Young Adults to age 29
Secondary Target Market: Adults ages 30+
RecommendationsRecommendations
Learning tool for kids (alliance with school) Expand with other brands (like Nike and
Starbucks) Travelers (airplanes, boats, cars) Spend more on advertising (radio) Working with car companies for satellite
radio connections Change style and colors to work with
customers expectations
CompetitorsCompetitors
Zune (Microsoft) – send music and videos to others, personalized background pictures, radio
Zen Vision (Creative) – personal organizer, recorder, more song storage, more hours of video, and radio.
Sandisk Sansa View – lighter and smaller, microSD expansion slot, radio, and recorder.
DRM issue Not compatible with other players. Sued over issue.
Product and Pricing Product and Pricing StrategiesStrategies
Product Pricing
Product – iPod Touch; Product differentiation with a
3.5 inch widescreen 8 mm thin Multi-Touch screen,Wi-Fi
wireless technology Internet access Movies and music stores Reference tools - entering
maturity stage in the life cycle
Focus on uniqueness of Apple’s products to create brand equity
Price – 8GB - $299.99 16GB $399.99 32GB $499.99 – Price is inelastic due to
brand loyalty and quality of products, less sensitive
Perceived-Value Pricing, by delivering quality to the customer
Offer refurbished ones for discounted prices (make it known)
Placement and Promotion Placement and Promotion StrategiesStrategies
Placement Promotion
Online, in-store resellers Focus on establishing
more Apple stores Maintain competitive
advantage with multiple distribution channels
Acquire constant feedback from customers
television, radio, magazines, print ads
Offer sales promotions to repeat customers
Questions or CommentsQuestions or Comments