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Distribution Strategy of Apple.Inc

Distribution Strategy of Apple.Inc

Discuss Distribution Strategy of Apple.Inc within the Elements Of Logistics forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; Apple Inc. (NASDAQ: AAPL; previously Apple Computer, Inc.) is an American multinational corporation that designs and markets consumer electronics, computer ...

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Distribution Strategy of Apple.Inc
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Netra Shetty
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Distribution Strategy of Apple.Inc - March 3rd, 2011

Apple Inc. (NASDAQ: AAPL; previously Apple Computer, Inc.) is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad. Apple software includes the Mac OS X operating system; the iTunes media browser; the iLife suite of multimedia and creativity software; the iWork suite of productivity software; Aperture, a professional photography package; Final Cut Studio, a suite of professional audio and film-industry software products; Logic Studio, a suite of music production tools; the Safari internet browser; and iOS, a mobile operating system. As of August 2010[update], the company operates 301 retail stores in ten countries, and an online store where hardware and software products are sold. As of May 2010[update], Apple is one of the largest companies in the world and the most valuable technology company in the world, having surpassed Microsoft.

Established on April 1, 1976 in Cupertino, California, and incorporated January 3, 1977, the company was previously named Apple Computer, Inc., for its first 30 years, but removed the word "Computer" on January 9, 2007,[9] to reflect the company's ongoing expansion into the consumer electronics market in addition to its traditional focus on personal computers.As of September 2010[update], Apple had 46,600 full time employees and 2,800 temporary full time employees worldwide and had worldwide annual sales of $65.23 billion.

For reasons as various as its philosophy of comprehensive aesthetic design to its distinctive advertising campaigns, Apple has established a unique reputation in the consumer electronics industry. This includes a customer base that is devoted to the company and its brand, particularly in the United States. Fortune magazine named Apple the most admired company in the United States in 2008, and in the world in 2008, 2009, and 2010. The company has also received widespread criticism for its contractors' labor, environmental, and business practices

DISTRIBUTION STRATEGY:

Initially Apple wanted to control it all with an iron fist. In an effort to expand its sales, they have been slowly adding other distribution channels with high sales volume . Such is the case with AT&T, Best Buy and now Wal-Mart. Wal-Mart Stores Inc said on Friday it will start selling Apple Inc’s iPhone on Sunday.

Wal-Mart plans to sell the black 8-gigabyte iPhone 3G model for $197. The 16-gigabyte model, in black or white, will be priced at $297. All of the phones require a new two-year service agreement from AT&T Inc or a qualified upgrade.

The move gives Apple the chance to reach millions of Wal-Mart shoppers who may not be as familiar with the company’s products. The phones will be available in nearly 2,500 stores beginning Sunday, December 28.

Despite the 2009 recession, Apple made significant alterations to its products and also the company decided to change its strategy in 2010 to compete with Google, Microsoft and other companies. There is a possibility that the company will open the iPhone to various companies, also it will release an iPod Touch that will come with a camera, broadening its retail footprint, launching the tablet PC as well as releasing the Beatles catalog to iTunes.

Despite the fact that many tech carriers underwent losses because of the recession, Apple achieved rising profits and revenue during 2009.

Some strategies for 2010 of the company are already known such as to augment a number of retail stores. Also it plans to launch a tablet PC. Apple has a lot of plans for 2010 that are possible to achieve.

AT&T is the only provider of the iPhone in the US that has brought both advantages and disadvantages as well. The smartphone achieved big success in sales. It became known that the smarphone traffic has augmented by 5,000 percent for the last three years.

But still AT&T was criticized because the iPhone did not cover in major urban areas like New York City.

Apple also has its network of stores, which gives it a major advantage in distribution.

"There's no question Apple has done something that will help extend their leadership position," said Tim Bajarin, president of Creative Strategies, a research firm in Campbell. "If I'm another vendor, I'm concerned about Apple's extremely solid operating system and their retail presence. That's where it's going to be hard for any of these guys to compete."

The company also buys components in bulk, so it is able to keep the price lower than its rivals.

Apple also has its network of stores, which gives it a major advantage in distribution.

"There's no question Apple has done something that will help extend their leadership position," said Tim Bajarin, president of Creative Strategies, a research firm in Campbell. "If I'm another vendor, I'm concerned about Apple's extremely solid operating system and their retail presence. That's where it's going to be hard for any of these guys to compete."

The company also buys components in bulk, so it is able to keep the price lower than its rivals.
The huge promise of the Apple brand, of course presents Apple with an enormous challenge to live up to. The innovative, beautifully-designed, highly ergonomic, and technology-leading products which Apple delivers are not only designed to match the brand promise, but are fundamental to keeping it.

Apple fully understands that all aspects of the customer experience are important and that all brand touch-points must reinforce the Apple brand.

Apple is expanding and improving its distribution capabilities by opening its own retail stores in key cities around the world in up-market, quality shopping venues. Apple provides Apple Mac-expert retail floor staff staff to selected resellers' stores (such as Australian department store David Jones); it has entered into strategic alliances with other companies to co-brand or distribute Apple's products and services (for example, HP who was selling a co-branded form of iPod and pre-loading iTunes onto consumer PCs and laptops). Apple has also increased the accessibility of iPods through various resellers that do not currently carry Apple Macintosh systems (such as Harvey Norman), and has increased the reach of its online stores.

The very successful Apple retail stores give prospective customers direct experience of Apple's brand values. Apple Store visitors experience a stimulating, no-pressure environment where they can discover more about the Apple family, try out the company's products, and get practical help on Apple products at the shops' Guru Bars. Apple retail staff are helpful, informative, and let their enthusiasm show without being brash or pushy.

The overall feeling is one of inclusiveness by a community that really understands what good technology should look and feel like - and how it should fit into people's lives.
Apple Brand Architecture

From a brand architecture viewpoint, the company maintains a "monolithic" brand identity - everything being associated with the Apple name, even when investing strongly in the Apple iPod and Apple iTunes products.

Apple's current line-up of product families includes not just the iPod and iTunes, but iMac, iBook, iLife, iWork, and now iPhone. However, even though marketing investments around iPod are substantial, Apple has not established an "i" brand. While the "i" prefix is used only for consumer products, it is not used for a large number of Apple's consumer products (eg Mac mini, MacBook, Apple TV, Airport Extreme, Safari, QuickTime, and Mighty Mouse).

The list of Apple's Trademarks reflects something of a jumbled past. The predominant sub-brand since the introduction of the Apple Macintosh in January 1984 has always been the Apple Mac. Products whose market includes Microsoft computer users (for example MobileMe, QuickTime, Bonjour, and Safari) have been named so they are somewhat neutral, and therefore more acceptable to Windows users. Yet other product have been developed more for a professional market (eg Aperture, the Final Cut family, and Xserve).
The iPod Halo Effect

Though Apple's iPhone and iTunes music business is profitable in its own right, Apple's venture into these product areas was based on a strategy of using the music business to help boost the appeal of Apple's computing business.

Apple is using iPod, iTunes, and now iPhone to reinforce and re-invigorate the Apple brand personality. At the same time, these product initiatives are growing a highly relevant, appealing brand image in the minds of consumer segments that Apple has not previously reached.

In a so-called iPod halo effect, Apple hoped that the popularity of iPod and iTunes among these new groups of customers would cause these segments to be interested in Apple's computer products. This does seem to have happened. Since the take-off of the iPod there has been a dramatic rise in Apple's computer sales and market share.

A couple of years ago, Apple's aspirations for the iPod halo effect was was highlighted most strongly when it used the slogan "from the creators of iPod" in its promotion of iMac G5 computers. In this instance, the Apple brand came full-circle - having been built into a branding system that originates in the personal computer market, then leveraged into the consumer electronics market, and then back into the consumer personal computer market.
Apple Brand Strength Now Creating Financial Success

So far, Apples' branding strategy is bearing fruit. For example, Apple reports that half of all computer sales through its retail channel are to people new to Macintosh, the company's sales and margins have been growing strongly since 2006, and Apple has achieved several "best ever" quarterly financial results during the past couple of years.

Leveraging the success of the iPod, Apple launched the iPhone (released in July 07) to extend the brand even further. Apple's buzz marketing efforts in the first half of 2007 were truly superb, culminating in the release of one of the most highly anticipated products for many years - and launching apple into a completely new market: mobile handsets. By July 2008 the buzz about the 3G iPhone resulted in over 1 million units being sold in the first 3 days of its release in over 20 countries around the world.
Apple Re-entering the Corporate Market via the iPhone Halo

Though no-one at Apple would say so today, the next phase of Apple's strategy seems focused on the Corporate marketplace.

A long time ago, Apple had a fairly strong market share in large companies.

A long, long time ago (at the end of the 1970's) the first spreadsheet program (VisiCalc) was launched on the Apple II. The first PC (the IBM PC) to run a Microsoft operating system (PC DOS) did not appear until 1981. When Microsoft launched its Excel spreadsheet in 1984 it appeared first on the just-released Apple Mac, such was Apple's presence among accounting and finance departments.

Even though Apple effectively stopped competing for corporate business during the 1990s, the Apple Mac is still used in some corporate environments. Microsoft still has a vigorous applications development team totally dedicated to writing business software for the Apple Mac. New versions of Microsoft Office for Apple Mac still come out approximately 2 years before similar functionality is placed in the next version of Microsoft Office for the Windows operating system.

Over the next few years it seems likely that Apple will re-focus on the Corporate marketplace: Apple has announced that "Snow Leopard" (the next version of the Apple Mac operating system, due in 2009) will include features allowing Mac computers to fully support Microsoft Exchange. This will enable corporate IT departments to support business users who wish to use Apple Macs for their main email clients.

Also, Microsoft continues to bring out advanced versions of Microsoft Office for Apple Mac, and - very significantly - in mid-2008 Apple announced a software upgrade for the iPhone which allows iPhones to be fully supported by Microsoft Exchange email servers. Corporate IT departments can now include iPhones as email clients.

Apple's strategy seems clear: to use the popularity of the iPhone to break back into large corporations, and ultimately have Apple Macs on the desks of large businesses (or more probably - in the laptop bags of middle and senior managers in most large businesses. The Macbook Air is also clearly aimed at this type of market).

As we say; no one in Apple will currently admit to such ambitions, but this is clearly where Apple's branding strategy is headed.
Apple's Original Apple Macintosh Marketing Strategy

Stanford University has published contemporary records and original documents of the marketing strategy for the Apple Macintosh launch in 1984, including the original Apple marketing strategy and the Apple Macintosh product introduction plan written by Regis McKenna.
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Last edited by netrashetty; March 3rd, 2011 at 02:43 PM..
   
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