Immediately after college dropouts Steve Jobs and Steve Wozniak founded Apple in April 1976, the duo initially sold some 200 circuit boards that they produced inside an unused garage. They subsequently introduced the 8-bit fully functional home computer Apple II in 1977 and it eventually became one of the first highly successful commercially produced microcomputers in the market.
But the company did not rest alone with designing and manufacturing computers. Apple expanded its product portfolio and successfully emerged as an innovative and influential multinational technology company. The introduction of iPod in 2001 and the online music and app store iTunes have revolutionised the music industry through the promotion of digital music. These two products created and supported an emerging ecosystem for selling and purchasing music via the Internet. The company was also instrumental for ushering in the era of smartphones and tablet computers with the introduction of iPhone in 2007 and iPad in 2010. These two consumer electronic devices have reimagined the way manufacturers develop and produce mobile devices.
Understanding the success of revered and culturally iconic products such as the iPod and the iPhone nonetheless requires an appreciation of the overall marketing strategy of Apple. After all, this prudently and intricately crafted strategy has played a critical role in hurling its brand and products toward an unprecedented level of popularity and approval.
Establishing the competitive advantage of Apple through product strategy
Jobs left Apple in 1985 and around this time, the Apple II and Macintosh series of home computers were pitted against PC computers from IBM. The competition was tough and Apple was at the losing end. The company struggled with maintaining sales and it finally succumbed to defeat as Windows-based personal computers from Microsoft gained a stronghold in the market.
The poor performance of Apple stemmed from its poor product strategy. Apparently, the company was producing and selling an array of computer products that were redundant and confusing. When Jobs returned in 1996 to lead the company, his first order of business was to discard all unprofitable products and realign the product strategy based on the concept of simplicity and premium user experience.
Today, product strategy is at the core of the marketing strategy of Apple. Furthermore, it has become the competitive advantage of the company and its flagship products to include the MacBook, iPod, iTunes, iPhone, and iPad. One of the reasons why these products have become successful is that they are user friendly and highly intuitive compared with their competitors. They are also unassuming because of their simple and uniform built and design.
Of course, despite this simplicity, these products provide a premium user experience through innovative features and design considerations. It is important to remember that these products were not original. There were already ultrathin laptops long before Apple introduced the MacBook Air. Portable media devices had existed prior to the popularity of iPod. Moreover, there was already a market for smartphones and personal digital assistants before the iPhone and iPad revolutionised mobile computing and the consumer electronics industry. However, these products have outcompeted their predecessors and some of their counterparts because they provided an innovative and unique overall product usability and consumer experience.
Apple employs a retroactive and proactive approach as part of its product strategy. Essentially, the company develops its products based on the existing products of competitors but it improves them by removing undesirable qualities and integrating differentiating features. The results are products that appear new and innovative but are still familiar or recognisable.
Creating and sustaining brand loyalty through complimentary products
The extensive but controlled product portfolio of Apple creates a uniform and unique product usability and consumer experience. An iPod or an iPhone would be incomplete if not paired with an iTunes or the App Store. The sleek metal-based aesthetics of a MacBook also signals a sense of uniformity when used alongside the iPhone. The user interface of these consumer electronic devices also employs the same functional and design principles centred on simplicity thereby creating a strong sense of familiarity.
It is also important to note that a particular user of different Apple devices can take advantage of this homogeneity through the Apple ID. This all-access account allows users to manage their digital identity, files, and device preferences across different devices thereby allowing seamless transition.
Apple products create a halo effect. Because each product complements another product, consumers would usually choose to stick with the Apple brand rather than buying different products from different manufacturers and create a hodgepodge of varying product and consumer experience. Considering the fact that the company has a large pool of loyal consumers, they tend to buy all products under the Apple brand. This halo effect coupled with deep brand loyalty complements the sales performance of each Apple product.
The development and promotion of complimentary products and services are undeniably part of the marketing strategy of Apple. With iconic and relevant products coupled with industry tenure and established branding, the company now enjoys legions of loyal consumers that comparable to fandoms of popular celebrity.
Maintaining brand image through premium pricing strategy
The products of Apple are relatively expensive when compared with similar products from competitors. An iPhone can be twice or thrice more expensive than the flagship Android smartphones of other manufacturers. The same is also true for MacBook Pro and MacBook air. One MacBook laptop can even buy three to five Windows-based laptops from OEMs.
But premium pricing is also part of the marketing strategy of Apple. This high price point or premium pricing strategy has helped the company promote and maintain a favourable perception among its loyal buyers. After all, there are consumers who believe that expensive products enjoy an exceptional reputation or represent exceptional quality and distinction. Thereby, Apple products are positioned as superior over their competitors through this pricing strategy.
It is also important to consider the fact that luxury has a psychological association with premium pricing. Undeniably, Apple products are luxury goods because of their high price points and consumers of luxury good are willing to pay extra in order to maintain a sense of indulgence or a status symbol.
Of course, there are reasons to believe that Apple is not merely exploiting their existing consumer base or its target luxury market. As mentioned, part of its product strategy is to provide a premium user experience and one of the ways the company does this is through its product design considerations. Take note of the iPhone as an example. Unlike other Android smartphones with lower built quality due to its plastic components, Apple has designed and built its product using premium materials to include glass and aluminum.
The unique marketing and advertising situation of the iPhone
Despite its record-breaking sales performance and a high level of popularity, there are no extensive marketing strategy for the iPhone apart from product and pricing strategies and publicities coursed through tradeshows and media relations.
It is worth noting that there is minimal advertising budget for the iPhone. Apple has never advertised this product through print and broadcast media, although it occasionally produces contents for online and social media distribution. For traditional media, consumers are still exposed to advertising messages related to the iPhone delivered through different traditional mediums simply because they are created and paid by network carriers.
Whenever a new iteration to the iPhone series arrives, network carriers are eager to announce to their existing consumer base and target market that they are already offering the product under several service plans. Although it seems they are doing Apple a favour, these carriers are actually marketing themselves using the iPhone as bait, thereby luring customers or the target market toward their respective mobile and data services.
However, these network carriers are not free from restrictions. Apple has maintained stringent branding guidelines that essentially dictate the manner in which carriers develop and implement their advertisements. The company does this to maintain and protect its brand and promote uniformity in its established marketing message. iPhone ads virtually look the same even though they came from different advertisers.
This unique marketing and advertising situation of the iPhone demonstrates the effectiveness of the overall marketing strategy of Apple that moreover, centres on product and pricing strategies. The product is highly valuable because of its popularity and if network carriers want to capitalise on its success, they need to advertise that they have it.