Steve Jobs and Steve Wozniak in 1977 incorporated Apple Computer Inc. with a net worth of US$250,000. Since then it has grown into modern Apple Inc. company with 50 000 employees globally and net worth of US$209,379 million in 2011. It has got the fifty sixth position in the list of the most admired 500 companies. Apple Inc. presents innovative products that have revolutionized the mobile communication markets: the revolution of iPod in 2000, iPhone in 2007, and recently, iPad in 2010. The company has become a leader in the industry of mobile communications. This paper offers some insight into business set of Apple Inc. that has been the most popular company for the last three years, according to the list of Fortune magazine. Apple Inc. operates in many spheres of consumer electronics, such as mobile communication devices, personal computers (PCs), digital music, and video devices. The mobile communication industry presents Apple Inc. with abundant opportunities of growth. It shifts towards the mobile era, increasing consumer digital lifestyle, and the emerging economies. However, global competition of consumer electronics is highly intense, taking into consideration the fact that competitors of Apple Inc. quickly respond to its product launches.
This paper investigates the company’s successful marketing communication strategies and also analyzes various consumer theories frameworks contributing to organization’s success. It also aims to highlight the values and the ways of life, as well as cultural and cross-country, cultural distinctions in consumers’ behavior.
Marketing Communication of iPhone
The marketing communication strategy of Apple Inc. is extremely accurate, simple, bright, and clear. With an ordinary and unambiguous apple icon, the company focuses on the advanced, innovative style of the products. Apple Inc. launched iPhone in June, 2007. The company advertized innovative style of iPhone for several months before its release. It has become one of the best means of communication within the last several years. Before the official launch of iPhone, the company ran five television commercials globally, promoting the new iPhone. The first commercial represents the new iPhone as a leap to the next step in comparison with the popular iPod. The promotional campaign presents all of the expanded features accessible in the iPod, and the campaign expanding further, “simply super and amazing, the iPod could never do this” (Marketing Apple, 2012).
The first five iPhone promotional commercials display innovation and convenience emphasizing on user friendliness of iPhone. User friendliness of iPhone explains the features of not only a mobile phone, or a single musical device, but a device that can perform other functions such as listening to music, view photos, watch videos, check e-mails, make conference calls, view maps, and browse the web. Apple Inc. does not only apply to television media for promoting marketing communication, but it puts efforts continuously to extract best advantage of their web site by placing videos. The company publishes press releases in one single document regularly. Apple Inc. often adopts these tactics creating a sensation and instigates the consumers’ needs. Potential consumers receive a variety of updated information analyzing company’s brief press releases.
Apple Inc. uses the law of social physics- news, such as abhors a vacuum and nature. People, who care about Apple products, will appreciate any rumor that comes across their way. Apple Inc. publicly denies the rumors on websites and fight for scraps of company’s plans. Its marketing department leaves no stone unturned in projecting true picture of the company. It costs much to procure such web advertizing.
The company’s official website does more than providing information about a product. The website offers tips and tricks for the usage of an iPhone and its applications. Almost the entire page displays images of iPhone apps, offers ”App of the week“. The site also incorporates sections “Top Apps” and ”Apps for Everything”. The site of Apple Inc. is a key marketing tool for the current iPhone consumers who have interests in acquiring iPhone. This promotion of Apps will create stronger source of income for Apple Inc. As customers always search for the most popular applications, they would most likely download these applications, instead of searching 25000 plus Apps to find one that satisfies their needs. In one of the recent television commercials of iPhone, “There is an application stored for you” is the new phrase that pays much attention to the applications available in the App Store (Marketing Apple, 2012).
Applications in each category from education to entertainment, games to business, productivity to social networking, finance to health, and fitness are available. These applications help to operate functions such as wireless connection, GPS, the accelerometer, and Multi-Touch. Apple Inc. confirms having 25000 + Apps available in the market. The focus on the large variation of Apps opens avenues to hit target audience and is beneficial for the company, as well as the customers.
Some of the commercials advertise “find calories in your lunch, snow on the mountains, exact location of your parked car, share of your bill for a table 5, find a taxi in the unfamiliar city”. These are some of those functions, which Apple Inc. has promoted through television advertizing. In other words, iPhone applications of Apple Inc. provide useful service that one can ever imagine (DeBono, 1991).
An Investigation of Consumer Buying Behavior
The complexity of the consumer buying pattern is proved by the amount of disciplines that study it. Microeconomics, marketing researches, philosophy, anthropology, sociology, and ethics explain motives of consumption.
According to Cooper and Chennon (1998), economists were the first group of professionals offering the theory of consumer behavior. Maslow’s theory asserts that decisions on purchase grow out of rational and conscious economic calculations. The basic criticism of this theory is that cardinal measurements of the utility are unreal. It does not take into account other stimuli (for example, marketing, social factors), which influence behavior of the consumer to buy. Other influential theory is Maslow’s Hierarchy of Needs (Maslow, 1943) which provides pyramidic, figurative arrangement of requirements. The marketing experts use this theory in marketing to understand consumer requirements and desires. It becomes amusing to analyze needs of a consumer who buys a technological product, for example, musical player or a games hookup. The theory of Maslow has the share of criticism that asserts that it is not practical to classify needs of varying society.
One more useful base of needs is Needs-Opportunities-Abilities model based on the hypothesis that consumers buy the goods for what they can do for the quality of life. This theory is unique as it considers the requirements at the macro level (society) and the micro level (individual). Apparently, the comfort is one of the factors influencing needs that are connected directly with the user-friendly issue. Since motivation and behavioral control are likely to be opposite factors, it will be expedient to compare both of them.
Another theory of Hareide (1994) considers variables as necessary issues to improve live conditions of human development. Besides these theories, there are many books written on this theme, researching consumer behavior from the different points of view and different depths. Roy Wells Hill, P. J. Duo Plesis, Richard J. Varey, and Patrica Parrot have studied the issue of consumer behavior. Explaining the behavior of buyers and the basic concepts of philosophies, John O. Shaughnessy, offer simplistic view of consumer behavior, whereas The Marketing Book by Michael John Baker explains the same from the point of view of marketing. Understanding the Consumer by Isabelle Szmigin solves a problem of existence of the functionally driven marketing thinking in relation to the client (Valerie, 2001).
One of key discussions in this area is the question how consumer needs can be satisfied. A new wave of scientists says that products can be replaced by services. Service as an indicative product can have far-reaching consequences considering consumer buying behavior and convenience, as the factor which influences buying behavior.
Model of Consumer Behavior
Consumer behavior is a combination of issues from spheres of economy, psychology, and sociology. It is the analysis of when, how, what people purchase, and what instinct motivates them in purchasing. The purpose of analyzing consumer behavior is to acknowledge customers actions and their final decisions. The essence of this process is to ascertain what exactly buyer’s needs by studying behavioral, psychographic, and demographic variables.
These processes also evaluate the social influence of various categories, for example, friends, reference groups, family, and society as a whole. Below, a single chart shows the consumer behavior process by EKB model, conceived by Engel, Kollat, and Blackwell in 1969. This model explains Freid’s psychoanalytic theory and, the Maslow’s hierarchy of needs. This chart gives various stages of consumer behavior thereby offering a short description for each separate stage (Thomas, 1995).
Stages of Consumer Behavior
Problem recognition. This stage arises, when the difference occurs between consumer’s desirable and actual state. It happens due to the problem in recognition and can be influenced by new products, shortage of them, similar products, or dissatisfaction with existing products. Buyers often confront these distinctions and thus here starts the purchase process. Significantly, problem recognition is some motivation, meaning a peculiar characteristic that pushes the consumer to purchase.
Information search. Information takes place when buyers sort out a problem. They search for relevant information on the goods and services. This process can be considered as perception, a way by which buyers collects, select, and gather data to make considerable concepts. Buyers will then consider what advertizing messages for him/her will be susceptible. This becomes an electoral process of perception as buyers will interpret information that belongs to their own beliefs, experience, views, motives, culture and, of course, will consider the message that convince them.
Information evaluation. The buyer, after comparing each brand of a product will analyze psychological and functional advantages that each and every product offers. For this reason, it is necessary for companies to understand how to become a part of brands which a consumer considers. They should find out what benefits of their products can attract a buyer. The companies should consider also what criteria a buyer possesses in order to execute his demand.
Purchase decision. This final stage occurs, when a buyer finally decides that he will buy or not. The consumer might be apprehensive about his purchase decision due to several factors such as lack of confidence and state of confusion. Hence, it becomes the duty of the company to facilitate the purchase. The companies with pushing marketing strategies can act and transform purchase into sales by credit opportunities, introducing sales, flexible payment plan, offering prizes, and discounts. An ultimate goal is to satisfy the buyer and make purchase the most attractive for satisfaction of the consumer (Thomas, 1995).
Demands of the person or consumers are the basis of all modern marketing. Demands are the essence of the marketing concept. The key to survival of the company, profitability, and growth in conditions of a highly competitive market is its capacity to reveal and satisfy the consumers demand better and more quickly than competitioners.
Vogel (1997) defines the notion of motivation as the motive power within the limits of separate persons who induce them to action. It stimulates any operational emotion or desire and promptings to an action.
Research of motivation is significant in all processes, since it initiates a drive in person to perceive indispensability and follow the certain policy of actions to execute this demand. Each person has demands which should be executed. Scientists distinguish primary demands, secondary, wants, and goals. Demands are congenital, physiological, biogenic types of basic needs of food, air, water, clothes, and habitation. Secondary demands are psychological, psychogenic types of demands, which people learn in reply to interoperability with direct association, as culture, environment, society, etc. Wants differ from needs by having a desirable effect. Scientists treat goals as objectives of desire which should be executed.
In case of non fulfillment of demand, it will create a condition of intensity in minds of consumers. This state will stimulate the consumer to accept behavior which will help to lower intensity and behavioral character of people accepts the perception, belief, mentality, and reasoning.
Dynamic nature of motivation. Needs and their performance are a basis of motivation. Both internal and the external factors are to be responsible for variations of demands and motivations.
A full-scale satisfaction of needs is not always possible. Fulfillment of certain needs give rise to multiple needs. Some time because of personal, financial, social and cultural restrictions, people cannot carry out some needs, desires, and objectives. Refusal of an indispensability of performance can lead to the occurrence of the following states:
1. Rationalization – a person tries to justify a situation and justifications itself,
2. Aggression – a person becomes angry, disappointed and resorts to unsocial actions,
3. Regress – people try to settle a situation without a special indispensability, as to try something another,
4. The conclusion – a person tries to separate from itself an idea on it.
Theories of Motivation: Maslow’s Theory of Need Hierarchy
Dr. Abraham Maslow has stated widely accepted theory of human motivation on the basis of concept of universal hierarchy of human demands. It defines five basic levels of demands of a person, what level of demand is important from lower demand (biogenic) to higher demand (psychogenic). The theory states that people should satisfy the demand from lower level to the highest level of demand. The lowest level is a level of unsatisfied demands. At this level an individual inspires motivational behavior. According to this theory, ”discontent“ motivates instead of ”satisfaction” (Miles, 1994).
Experts in marketing should know how to satisfy a demand, at what level, by studying an indispensability of hierarchy.
Behavior of Buyers in the Decision-making Process
A figure below shows that clients go through five stages of decision-making process in any purchase.
This model has substantial value for implementing marketing decisions in Apple Inc. It forces the Apple Inc. to consider all processes of purchase. Instead of simply deciding on a purchase (when it may be too late for business to influence a choice) the Model assumes that clients pass through all stages in each purchase. However, considering routine of purchases, clients often pass or turn back at some of the stages. Nevertheless, model is particularly beneficial, when business reaches understanding, that any purchase requires some reflections and discussions. Process of purchase begins with an indispensability of recognition (Miles, 1994).
At the given stage, the buyer accepts problems or indispensability. Customers respond to marketing stimuli. Clients intend to decide what volume of the information they need. They do purchases considering the level of necessity, availability of products or service that satisfy their needs (Vogel, 1997).
A client can receive information from several sources: personal sources (family, friends, neighbors, etc.), commercial sources (advertising, sellers, retail commerce, dealers, packing, and a point-in-sale of displays), state sources (newspapers, radio, TV, consumer organizations and forums, specialized magazines), empirical sources (processing, studying).
The utility of a product and influence of these sources of the information will depend on a product and a client. Researches show that clients appreciate and respect own sources more than commercial sources. The challenge for Apple Inc. is to explore which information sources are beneficial to hit their target markets.
Apple Inc. is leading the market of iPhone and iPod globally. It has achieved the status of number one company from the moment of its inception. The company has offered a variety of products and hopes to continue this tendency in the future. In order to sustain the leadership and competitive edge that company enjoys, its advertizing and promotional strategies need thorough overhauling.
The majority of people associate Apple Inc. with hardware products and few recognize that the Apple Inc. also renders software services. Apple Inc. has to break this allegory and convince the consumers of its reliability. The present marketing communication strategies to promote iPhone are not sufficient as competition is becoming intense day by day. User friendliness is gaining importance these days. All mobile phone companies are trying to incorporate improved functions to attract customers. Intense competition has led to inter war among competitors to capture the market share with better designed promotional strategies of user friendliness. It becomes necessary for Apple Inc. to emphasize on user friendliness of the product so that customers can understand and use all applications without any difficulty. Still there are many aspects of iPhone necessary to explain to uncovered market. Spreading their network more vigorously in developing economies will be the best international strategy for Apple Inc. before their competitors take them over. The established base of the Apple Inc. continues to grow. They have found a route to bring the repeated revenue from their existing clients through the sale of their applications. Fortunately for Apple Inc., another source of revenue through the sale of applications will continue throughout the life cycle of a product.