Marketing Communication and Brand Strategy

MKT/571

Melissa Simmons

September 10, 2018

Roberto Ancis

Price and Place/Distribution of Apple Inc

Introduction

Apple Inc. has been in the forefront in ensuring that it aligns its actions with the clients’ needs as well as the market conditions. Having an analysis of Apple’s pricing as well as distribution plans is essential in determining its performances in the domestic and the foreign market as a reputable company in the communication industry, mainly dealing with the mobile devices such as iPhone. Hence, the incorporation of several channels and with the ever-increasing product portfolio is significant in the promotion and success of the company in both the domestic and foreign markets according to Khan, Alam, & Alam (2015). Such marketing features are significant in understanding the way Apple Inc. is continually expanding in its business internationally via the several channels addressed in this paper.

Distribution Strategies:

a. Domestic Distribution Strategies

Apple Inc. relies on all-inclusive distribution that enjoys the benefit of the various distribution channels available in its domestic market. For instance, there are various stores located countrywide that act as the company’s primary ways of reaching the local customer base with a remarkable rate of success. As an American multinational technology company with its headquarters in Cupertino, California it has made progress in its sales and customer services locally through advertisements in the local media and ensuring that all the products are customer-tailored. Moreover, regarding the quality of the products and services offered by the company in its endeavors, most of the local players. For example, the stores in which the company operates from the customers are always ensured of quality products and services, and this makes the marketing process more manageable because of testimonials from one person to another work efficiently. Therefore, the organization through its distribution strategies ensures that the local people are satisfied with the products and services provided by the company (Khan, Alam, & Alam, 2015).

b. Foreign Distribution Strategies

Apple Inc. channels, as well as international outlets, are close and prevalent to make sure that distribution is more comfortable according to (Chikhale & Mansouri, 2015). In most of the cases, the company ensures that a particular distribution plan is adopted for the international supply of products and services to the clients. The organization gives some suppliers and seller the control over advertising o marketing strategies and tools, which bake the marketing process effective because the marketer will choose the most effective ones. Some of the most general marketing tools used in the Apple’s distribution strategy and include authorized retailers, online store, fulfillment services, and Apple stores (Chikhale & Mansouri, 2015). The company enjoys the highest customer retention rates in the Smartphone in the show in figure 1 below, thanks to its marketing and loyal customers across the world. Comment by Grammarly: Deleted: the

Figure 1. Retention Rates in The Smartphone industry

Source: Statista

Daily Pricing, Promotion Pricing, List Pricing:

a. Domestic Market

In the US Apple Inc. uses a premium pricing strategy to ensure a low price of goods and deliver a reasonable profit margin. The premium pricing strategy is aimed at attracting the customers in the local market since customers are willing to pay for the value they receive from the products (Jackson & Ahuja, 2016). As a marketing element, Apple is very keen on how it prices its products locally. Such an approach is a daily and promotion pricing strategy that is connected to high prices (Jackson & Ahuja, 2016). As a result, the company is mainly interested in maintaining corporation and high-end replication of its products. Jackson & Ahuja (2016), further note that by adopting such a strategy, the company aims at introducing their products to a smaller market share that includes middle and upper classes in the US. The premium pricing strategy implemented in the local market is proof that the company intends to maintain a high level of profitability.

b. Foreign Market

It is not customary for Apple to offer a discount on their products through the sales on direct channels. Nonetheless, the company offers its international customers discounts on refurbished products. In all times, Apple Inc. maintains the same reseller pricing. Albeit there are legal implications for setting dealer prices, the company retains stable retail prices (Jackson & Ahuja, 2016). In international markets, the company maintains the prices of its products by limiting its dealers’ profit margins, maintain the terms involved in reselling their products, and offering no discounts. For international markets, there are many retail and online stores which are attractive.

Dynamic/static pricing strategy:

a. Domestic Strategy

In the United States, Apple Inc. uses a static pricing strategy that stays the same much of the time (Chen & Ann, 2016). The lack of change in its static pricing strategy is because the company is focused on the delivery and production of its premium products that are available at almost the same price in varying markets. Moreover, this has made the company improve concerning the units sold in most of its products as indicated in the graph figure 2 below for its Smartphone devices.

Figure 2. iPhone, iPad and iPod sales from 1st quarter 2006 to 3rd quarter 2018 (in a million units)

Source: Statista 2018

b. Foreign Markets

Apple Inc. has an unmatched marketing prowess for it has managed to maintain the same prices in most international markets. The same prices in different markets are an indication that the company targets consumers who need premium products (Chen & Ann, 2016). Pricing of products is strategically done to ensure that the middle class and lower class consumers are attracted. The promotion and pricing of the products are used by the company to communicate effectively with potential customers in every part of the world.

Conclusion

It is vivid that Apple Inc. has an efficient price and place plan to maintain and improve its product marketing. The company has been capable of managing quality services at a fair price, both locally and internationally. In some cases, Apple Inc. has been capable of maintaining the prices via maintaining the dealership margins and providing discounts. The examination of the company’s distribution and pricing strategies is essential. Moreover, knowing Apple’s various strategies in its business is significant in promoting the business in the global arena.

References

Chen, C. M., & Ann, B. Y. (2016). Efficiencies vs. importance-performance analysis for the leading smartphone brands of Apple, Samsung, and HTC. Total Quality Management & Business Excellence, 27(3-4), 227-249.

Chikhale, M. M., & Mansouri, M. (2015). An agile and collaborative framework for effective governance to enhance management in large-scale enterprise business systems: The case of Apple Inc. Global Journal of Flexible Systems Management, 16(3), 283-293. Jackson, G., & Ahuja, V. (2016). Dawn of the digital age and the evolution of the marketing mix. Journal of Direct, Data and Digital Marketing Practice, 17(3), 170-186.

Jackson, G., & Ahuja, V. (2016). Dawn of the digital age and the evolution of the marketing mix. Journal of Direct, Data and Digital Marketing Practice, 17(3), 170-186.

Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of the internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), 955-961.