Paper Outline
Introduction
Marketing communication
Case analysis of Apple Inc.
Role and characteristics of the marketing communications at Apple
Retail Stores
Teamwork in marketing communication
Achieving corporate and marketing goals through marketing communication
Marketing communication and support of brand value
Problems in marketing communication at Apple Inc.
Recommendations
Conclusion
Marketing Communication: Case Study Apple Inc.
Introduction
Marketing communication is the process of receiving and delivering information between all stakeholders in the market. It is related to marketing mix in that companies apply promotion element to get in touch with the market. The relationship between a company and customers is defined by the use of marketing communication. The competitiveness of a company is determined by the ability to communicate with customers. It is through marketing communication that companies identify the needs of customers, and this makes it possible to manufacture products which match the needs of the customers. With the increase in global competition, the need to identify the needs of customers has increased because companies need to capture as many customers as possible. This has been brought about by the intensified competition. Global trade has brought about the expansion of markets for products because countries have opened up their boundaries to allow other countries to trade in their markets (Pride & Ferrell 2012). In this paper, a case study of Apple Inc. will be discussed to link theories related to marketing communication with practical scenarios.
Marketing communication
A market is a place where buyers and sellers meet to exchange products. This may be a physical or a virtual location, which allows the two parties to exchange products, ideas, technologies and other aspects which are of benefit to all parties. The link between customers and producers is created by a market. Therefore, it is important to have good communication strategies so as to create good relationships among the different parties in the market. In the earlier years, countries adopted domestic marketing whereby producers and consumers could not cross the borders, but could only operate within the boundaries of the country. Today, a different scenario is being experienced because countries have adopted autarky trade where domestic market is open to international trade. This has increased the need for producers to improve communication strategy because of the challenges that come with the international markets (Pride & Ferrell 2011).
The process of communication involves two parties, with one party (sender) developing an idea that s/he desires another party (receiver) to understand. Therefore, the sender encodes the information in a form that the receiver will understand. The process of encoding is important because the ideas or message is placed in a form that allows it to be send through a media. After encoding, the sender takes the message through a media to convey the message to the recipient. It is important to avoid any disruptions that may cause distortion of the intended message. After receiving the message, the receiver encodes it so as to understand the intended message. This requires the receiver to provide a feedback to the sender to indicate that s/he has received and understood the message. The feedback will help the sender in determining whether the receiver interpreted the message as intended not. The whole process may take a short or a long time depending on the distance between the parties (Guffey & Almonte 2009).
The process of communication is applied in marketing such that the management acts as the centre of control in the system, while all other parties receive or send information through the management team. It is through marketing communication that the management identifies the needs of customers. The customers also understand the products of the company through marketing communication. The managers should develop better communication skills to link the different stakeholders in an organization. Failure to communicate effectively can cause conflicts among the different stakeholders in an organization (Guffey & Almonte 2009).
To ensure that effective communication prevails in the market, the management of a company must identify the behaviour of customers, workers and other stakeholders. This will help reduce conflicts which may arise due to poor communication. When people fail to interpret messages appropriately, they may not feel comfortable, and this may cause chaos especially when conflicts occur. Therefore, a company must understand the cultural background of the people involved in the communication. This will help deliver information according to the nature of recipients (Guffey, Rogin & Rhodes 2010).
Marketing communication helps identify the needs of customers and deliver the products which match the needs of the customers. In the modern market environments, it is important for companies to understand technologies so that they can deliver the appropriate products to the market. Technology has been applied in the development of communication systems which are compatible with the changing market environments. For example, the use of e-marketing, Enterprise Resource Planning, and other technologies has been adopted to improve communications with all stakeholders (Smith & Zook 2011).
Companies have been forced to conduct a lot of research pertaining markets. This has been applied to learn the needs of customers. Market research helps create better products and marketing systems, and to improve the products offered in the market. A professional approach to marketing communication has been encouraged to obtain fine details about consumers and competitors (Smith & Zook 2011).
Case analysis of Apple Inc.
Apple Inc. is a company that manufactures computer software, hardware and other electronics. The company was established by Steve Jobs, Steve Wozniak and Wayne Ronald. The history of the company dates back to 1976 when Jobs and Wozniak developed a small company in a garage. At the beginning, the company experienced a lot of challenges to penetrate the market. Products such as Macintosh, Apple Lisa and others were developed, but they did not get a good market share. In addition, there was stiff competition from other companies such as IBM, Microsoft and others. From the period between 1986 and 1993, Apple Inc. experienced tough market conditions. The products that the company offered to the market were too costly to manufacture. There was need to improve on the efficiency of production so that the products could be cheaper compared to those of competitors. Another challenge experienced during this period was that the company had leadership conflicts which made Steve Jobs resign as the CEO of the company to establish NeXt Inc. In addition, the company did not communicate properly with customers. In fact, the company manufactured products without researching on consumer needs (Schermerhorn 2011).
Role and characteristics of the marketing communications at Apple
Apple has achieved success in the last years because it has applied enticing communications with customers; developed innovative products which match the needs of customers; and adopting other exceptional strategies. Apple started to achieve great success after developing products such as iPhone, iPod and iTunes among others. For the period between years 2003 and 2008, the company improved its share value 25 times. In 2003, the company’s shares were valued at $7.5, but in 2008, the value increased to $180. In 2008, the company had a market capitalization of $160 billion, while in 2010 the value was $210 billion (Vertygo Team 2011).
Apple Inc. applies simple and clear communication with its customers. For instance, the television advert “I am a Mac, I am a PC” is a simple ad which delivers the intended message to customers without complications. Apple Inc. has a unique way of communicating with all stakeholders, and this differentiates the company from its competitors. Apple uses a wide variety of product communication strategies, such as television ads, print media, online communications and others. The company has great products, and applies great communication strategies to entice customers. Apple has been effective in communication with customers and other market stakeholders (Vertygo Team 2011). Vertygo Team (2011) provides that “Apple communication is sober, intriguing, simple, clear, minimalist and clever. We begin our analysis starting with the well-known “I am a Mac, I am a PC” Tv video ads series” (para. 1).
Retail Stores
To improve communication with customers, Apple Inc. developed online retail stores in 1997. These stores allowed the company to promote its products through the internet. The company installed a system whereby customers could make orders, pay bills and request delivery of the purchased products. Apple Inc. introduced a communication channel whereby customers would provide feedbacks to the company concerning their satisfaction levels. In addition, the company could collect information concerning the changing consumer demands. Potential customers can assess the products of the company by visiting the retail stores (O’Grady 2009). The figure below shows a retail store of Apple Inc.
Source: Apple Website (2011)
Apple Inc. established many retail stores in the country and other regions. This increased the sales of the company because customers could purchase products more easily. The company could also communicate with customers about new products in the market. Through the online stores, the management could identify products which attract more customers. Therefore, the company started to develop better products. Product differentiation was applied as a strategy of improving the sale of brands of the company. Today, Apple Inc. has over 300 retail stores world-wide (Perrey & Spillecke 2011).
Apple Inc. has made many changes on its communication strategies to improve consumer loyalty. Initially, the company had been affected by poor communication, and this caused poor market sales. Apple Inc. developed better strategies of communicating with customers to deliver the required products. According to Hormby (2008), “during the mid-90s, Mac users were prone to dealing with poorly trained and ill-maintained Mac sections in big box computer and electronics stores. These environments did not foster customer loyalty, nor did they help differentiate the Mac user-experience from Windows” (para. 1). This scenario gave competitors a better market position to introduce their products successfully. However, the scenario today is totally different because the company has captured consumer loyalty. Apple Inc. has been able to attract more customers by communicating about its products (Hormby 2008).
Teamwork in marketing communication
To improve the participation of all stakeholders, Apple has embraced teamwork in all its activities. The company has united various stakeholders by encouraging teamwork among all members of the company. The teamwork strategy has been embraced by internal and external stakeholders. Through teamwork, the company gets information about customers, quality and level of satisfaction from the products of the company (Lamb, Hair & McDaniel 2012).
To improve marketing communication through teamwork, Apple has adopted leadership strategies to create opportunities for all stakeholders to share information effectively. Through leadership, the company has managed to achieve better strategies of operating its activities. The company has achieved great heights in communicating with customers because workers have a better link with customers. Through leadership, workers communicate freely with the management of the company (Dean n.d.). This has enhanced good relationships in the internal environment. It is from the good relationship that employees have with their management, that they have been able to develop better innovative products. Workers are supported by the management to produce products of high quality. In addition, through leadership, the company has encouraged good relationship with customers. Customers are free to express their feelings about the products and processes of the company (Lamb, Hair & McDaniel 2012).
It is also worth mentioning that Apple has management to serve markets with diversified cultural backgrounds. This has been achieved by embracing diversity in the organization. The company has employed workers from different cultural backgrounds. This has helped develop better communication strategies which are focused on the cultural aspects of each market segment. In addition, the company has been able to address the needs of all demographic consumer groups. The introduction of the iPhone, iTunes and other brands was focused on the young generation. These products achieved higher market demand from the young and middle aged people. The company also addresses the needs of the old, working class, corporate organizations and other consumer groups in the global markets (Lamb, Hair & McDaniel 2012).
Achieving corporate and marketing goals through marketing communication
Marketing communication has been used to achieve the goals set by Apple Inc. The goals of Apple Inc. are to develop differentiated and innovative products, and to capture customer loyalty in both local and international markets. To promote the mission of the company, a lot of market research has been conducted to acquire the best technologies. Apple has applied the use of technology to manufacture innovative products. The company was established to manufacture computer hardware and software. Through research on appropriate technologies, Apple has been able to develop electronic products. For example, the company has been able to penetrate the music industry by manufacturing iTunes, iPhones and other similar products. This strategy has improved the performance of the company and has created competitive strength to the company. Some of the major competitors of Apple Inc. are Microsoft, IBM and others. In the early 2000s, Apple Inc. was able to develop better products which created a competitive advantage to the company. Apple attained a better market position after adopting the strategy of innovation and use of technology to differentiate its products (Dahlen 2008).
Product differentiation has been applied to achieve new markets and to compete successfully with other companies in the market. Product differentiation has not only been applied in the production processes, but also in all other processes of the company including marketing communication. For example, the iPhone brand was differentiated to capture the attention of many customers in the communication industry. This product was introduced at a time when the industry had stiff competition from other products such as Blackberry Pearl, Motorola RAZR and others (Nelson & Quick 2011).
To increase the market share of products, Apple has communicated about iPhone’s excellent features. The product is said to be affordable, easy to use, email-enabled, has media player, compatible with PC and other features. The introduction of the iPhone encountered stiff competition from the Motorola and Blackberry among other products. However, effective marketing communication of Apple has made the iPhone product penetrate the market easily. The figure below shows a graph of the three products, and their respective factors of competition. It is evident from the figure that the iPhone has achieved a better market position despite the stiff competition. This was due to the effective communication strategy that the company has adopted (Nelson & Quick 2011).
Source: Apple Website (2011)
Consumer loyalty has been a major goal that Apple has aimed to achieve. Consumer loyalty is defined as the habit of consumers to rebuy the same product from the same company. To achieve high consumer loyalty, a company must satisfy the needs of its consumers. After consumers are satisfied, they develop a good image about the company. A company must communicate regularly with its customers to identify the level of satisfaction. Hence, market research should be an important process to promote the knowledge of a company on how to develop satisfying products. Apple has a high consumer loyalty in the local and global markets. This has been achieved by developing innovative products which satisfy the needs of the customers (Brooks 2010).
Marketing communication and support of brand values
In the modern market environment, consumers are seeking products from companies which have high levels of corporate social responsibility. This has forced companies to introduce CSR programs, and communicate such strategies to the customers. Companies with corporate social responsibility programs are highly valued by their customers because they improve the welfare of the society. CSR also encourages companies to safeguard and protect the environment (Spellman 2011).
Apple has embraced corporate social responsibility in its marketing communication strategy. To achieve high corporate social responsibility, the company has made partnership with suppliers to ensure that products are of good quality. Safe work conditions have been encouraged by the company to ensure all workers are protected. Workers are treated with a lot of dignity and respect. In addition, the company has maintained high environmental standards. Communication with suppliers has been improved. It is worth noting that marketing communication is important in achieving better CSR results. Therefore, communicating with all stakeholders helps improve the achievement of corporate social responsibility strategies (Atkins 2011).
To achieve CSR goals, all suppliers of the company have been required to adhere to Supplier Code of Conduct. Therefore, the probability of supplying inferior or substandard goods has been minimised by the company. This has helped the company improve on the quality of products offered to customers. A rigorous auditing process is done to all suppliers to ensure they provide the best products which are environment friendly. For example, onsite audits are done to all suppliers, corrective action plans are also approved by the company and implementation of such programs is verified. This has resulted into protection of workers, improvement of factory conditions, and creation of better facilities by suppliers. Compliance to the Supplier Code of Conduct is closely monitored to ensure suppliers do not deviate from the provisions of the company’s regulations. Employees are educated on their rights and they are trained on all available protections at the place of work (Apple Inc. 2011). It is also noted that, “supervisors and managers are also trained in effective management and communications, including anti-harassment, antidiscrimination, conflict resolution, and grievance procedures” (Apple Website 2011, para. 2).
It is a common concept at Apple Inc. that by improving the welfare of the communities, the company will achieve a better public image. To achieve acceptability among various consumer markets, the company has promoted CSR activities such as supporting poor families; providing academic opportunities to people through its research program; and supporting global warming campaigns by encouraging use of environment friendly products. Apple communicates effectively with its customers and other stakeholders by conducting CSR activities (Bradbury 2009).
The application of technology in communication with customers, workers and other stakeholders has been facilitated by the strategy of online business communication. Apple uses strategies such as enterprise resources planning to link all its stakeholders and to provide better solutions to emerging issues in the market. Through the ERP program, the company can monitor the activities of the customers, employees, shareholders and other parties of interest. The company can predict the consumer behaviour by monitoring the feedback information provided by employees, customers and other stakeholders. Through the program, Apple has been able to identify the specific needs of the customers and incorporate the needs to the product design. As such, the company has been able to manufacture tailor-made products which match the needs of the customers. This has improved the satisfaction levels of the customers. This is one of the strategies that the company has applied to achieve consumer loyalty in the global markets (Fortner & Fackler 2011).
Problems in marketing communication at Apple Inc.
Even though Apple is praised for its excellent marketing communication strategies, the management has failed in some instances. An example of such a scenario is when the management provided false information about the health status of Steve Jobs, the former president of the company. It was alleged that Steve Jobs suffered from a minor illness such as stomach disorder or nutrition imbalances. By miscommunicating about the health status of Steve Jobs, the company committed a legal offence. In conjunction with SEC requirements, a public company must disclose all material information about its activities. Initially, the company claimed that Steve suffered from nutritional imbalance, but the fact was that liver transplant had been done. There is a big difference between liver transplant and the claimed nutritional imbalance. Steve Jobs and the management of the company had a legal obligation to disclose all material facts about the health status of Steve. However, the company failed in providing “full and far disclosure” to the stakeholders (Warren, Reeve & Duchac 2012).
Steve Jobs wanted to keep his health status a secret, and he did not want to communicate this issue to all stakeholders. When the management learnt that he suffered a terminal disease, they failed to inform the stakeholders about the problems facing Steve Jobs. It was feared that communicating the health status of Steve Jobs to stakeholders would affect the performance of the company. This is because it was thought that investors would not wish to buy shares of the company. It was also feared that the existing shareholders would withdraw their shares from the company. The truth was that Steve Jobs was suffering from pancreatic cancer, and this was the disease that he succumbed to (Warren, Reeve & Duchac 2012).
The problem has been criticized by many people on ethical backgrounds. As a public company, there is need to provide disclosure of all material information of the company. The management had an obligation to provide accurate information about the problems facing the former CEO. The management of the company failed to communicate all material information to the stakeholders and this affected the decision of the investors. It is feared that the company may face legal action from the shareholders of the company for failing to provide material information to its stakeholders (Warren, Reeve & Duchac 2012).
Recommendations
To improve marketing communication systems at Apple, the management should make clarifications on the problems facing the company. This means that the management should provide clear information about the illness that Steve Jobs suffered. This will help win the trust of the stakeholders. In addition, strict rules should be implemented to ensure that the management, presidents, directors and any other top official of the company provide accurate information affecting the company. False information should not be released to the public because this will affect the trust that customers have to the company. This can be achieved by amending the rules and regulations of the company to avoid similar incidences happening.
It is also important for the company to continuously conduct research on the changes in consumer behaviour. This will be achieved by getting in touch with the customers to get adequate information about the changing needs. Appropriate information about changes in the company should be communicated to all stakeholders to improve knowledge on the aspects affecting the company. Better technologies should be researched to help capture information about the global market needs. With the expansion of the global markets, many things change and this creates the need to have sufficient and effective methods of communication with all stakeholders.
The culture of the company should be improved to accommodate the needs of different people in the global markets. There are many cultures in the global markets and there is need to address their needs. With the existence of different cultures in the global markets, the company will be required to employ diversified workforce. This will help address cultural differences because employees will be able to understand the cultural needs of each cultural group in the market. This strategy will help develop market communication strategies which match the cultural aspects of different consumers in the market.
Conclusion
Marketing communications has achieved popularity in modern business environments, and companies are applying it to improve their performance in the local and global market environments. It is through marketing communications that companies deliver information to customers concerning the products offered to the market; the values of the company; and all other aspects that are important to the customers and other stakeholders. Apple Inc. has been successful in applying marketing communication to achieve competitiveness in the turbulent economic environments. The computer industry has been experiencing stiff competition, but Apple Inc. has managed to maintain a high level of competition. This is because the company has applied better strategies of communicating with its customers. The major focus of the company is to achieve high consumer loyalty by developing innovative and differentiated products. This has been achieved by conducting research on consumer needs and developing products which match the needs of consumers.
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