Corporate resources: Marketing
Apple designs, manufactures and markets personal computers and related software, peripherals and personal computing and communicating solutions. How can Marketing and Sales achieve a competitive advantage and add value in the value chain?
For example, customers are attracted to Apple’s Macintosh computers for a variety of reasons, including the reduced amount of training resulting from the Macintosh Computer's intuitive ease of use, advanced graphics capabilities, industrial design Features of the Company’s hardware products, and ability of Macintosh computers to network and communicate with other computer systems and environments. These attributes need to be addressed by the marketing department and communicated to potential customers. The key success factor is to create value by igniting people's imagination and create a favourable impression of the products by means of brand positioning, advertising, and promotion.
Apple’s marketing strategy is to put its costomers first: “Apple creates, manufactures, and markets computing products so people can use them to make their lives better. Apple strives to understand our customers’ needs, to provide customers with the tools and skills to enhance their use of Apple products, and to be courteous and instructive.”
At Apple creativity, innovation, and customer responsiveness are seen as highest principles therefore clearly formulating them as biggest responsibilities in their marketing policies. This view of conducting business goes hand in hand with their mission statement 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. So as one can obviously understand the marketing goals of the company are coherent with the overall objectives of Apple.
As Steve Jobs took over Apple 1997 as CEO, a lot of people doubted that he will succeed to turnaround the company and return it to profitability. But once again he proved the others wrong. His eager goal and objective for Apple was to transform the niche PC maker into a high-end consumer-electronics and services company, being less dependent on its sales of computers and laptops. Currently 80% of revenues are generated in this area.
So this radical change in corporate strategy meant that marketing strategies had also to change and adapt to this new strategy. He reorganised the department by centralising the responsibilities in company wide groups, so that communication and effectiveness can be increased.
Along with its new focus on software and services as the introduction of iMovies in 1999 and the iTunes music online store in 2001 demonstrate impressively, the invention of the iPod, an MP3 player, marked the first product that wasn't tethered to the Mac. This paradigm shift in overall corporate strategy was naturally accompanied by huge marketing expenses. In its third quarter of 2003, this ended June 30, Apple earned $428 million in gross profit, a 27.7% margin on sales of $1.55 billion, but it spent $419 million on operating expenses, leaving it with an operating margin of just 0.6% (marketing accounted for $193 million).
Apple's gross margins are the envy of the industry. But below the line, they give it all back. Apple pours money into R&D and selling, general, and administrative expenses. They have expensive retail locations and high-end advertising. In other words it's a Cadillac operation. The dedication to high-end marketing leaves the company with very little choice in regards to increasing operating margins. Steve Jobs already assured that he won’t cut costs through decrease in marketing expenses but will focus on increasing profits and revenues. The huge marketing budget can be justified through its unique position as hip brand – the cult of cool – it has spent billions building this image. On...
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