Ch. 11 - Developing and Managing Products

Innovation is in Apple’s heart. For those of who that don’t know already, that “i” in every Apple’s product name stands for innovation. One of the biggest competitive advantage of Apple Inc. over its competitors has been their design. Apple’s Product Development Process may be one of the most successful design process ever implemented. Apple likes to keep secrets when it comes to product development. In Steve Jobs’ time at the company it was nearly impossible to find out about the internal workings of the business. Although, the growing interests of people in Apple’s new products has made it hard to keep secrets. Apple gives a lot of importance to their Designing process. Jony Ive, the British designer that is the Chief Design Officer (CDO) at Apple and his design team lead the company and they do not report to finance, manufacturing, etc. They are given free rein to set their own budgets and are given the ability to ignore manufacturing practicalities. At the heart of the design department, they have Industrial Design Studio, where only a select few Apple employees have access. The design team has their own reporting structures and report directly to the executive team. Apple’s Executive Team holds a regular Monday meeting to examine every single product that the company has in design phase at that point in time. One of the keys to Apple’s success is that they don’t work on hundreds of new products at once. Instead, resources are concentrated on a handful of projects that are expected to bear fruit rather than being diluted over many lesser projects.

Steve Jobs along with Apple's top executive in Design Studio

          Earlier this year, Apple came out with its iPhone 7. iPhone 7 is considered their one of the least innovative phone. But, still it had a good design and was able to generate enough sales. According to some reviewers, Apple seem to be too focused on Design and leaving out features included in phones. Many think that the next iPhone, their 10^th anniversary phone, would be one of the most advanced and the most innovative phone. Let’s hope for the best.

Ch. 8 - Segmenting and Targeting Markets

In 2014, when Apple realized that the market for “phablet phones” was increasing and the customers were opting out for its business rival Samsung. To address the demand, they released the new iPhone 6 in two variants. They increased the screen size of its base model and released another 5.5-inch screen variant to compete with Samsung for the target market. A year later, when they thought they were losing its own customer base, customers who preferred the traditional small-sized iPhone. Apple released new 4-inch iPhone, called iPhone SE, which look very much like iPhone 5 and 5s packed with the latest technologies including A9 processor, Apple Pay and a 12mp Camera.

Besides providing specific products for precise target market, Apple also uses strategies for segmenting the market such as Geographic segmentation. Apple’s use of Geographic Segmentation can be clearly evident from the uneven distribution of their retail stores. Domestically, Apple has 53 stores in California and 21 in New York. Out of 21 stores in New York, it has 7 stores in Manhattan. Here, we can clearly see Apple Inc. using income segmentation. California and New York are the states with some of the highest buying powers and Apple clearly don’t want to miss out on any of that dollar. On other hand, India with the world’s second largest population but relatively low buying power has no Apple Retail Store yet. Apple also uses psychographic segmentation, which appeals to our personalities, attitudes, motives, and lifestyles. Apple has always tried to promote themselves as lifestyle brand and has been successful to do so mainly among tween and teens.

Ch. 15- Marketing Communications

Apple has a comparative advantage over its competitors – it’s brand name. Apple has successfully set-up their brand as a luxury cellphone brand. Apple’s promotion strategy begins by introducing their new iProduct in front of a small group of people. Just like every other company, Apple Inc. strive for increase sales of their iProducts. Apple Inc. also uses AIDA (Attention, Interest, Desire, Action) concept in their promotional strategy.

Attention: As I said earlier, Apple start promoting their new iProduct by introducing it in an event, where they will explain how the product will help our daily life easy and also how the new product is better than older version. This keynote events are usually secretive, unless some insider leaks the information. Apple’s doesn’t directly promote on social media, but it asks various blogger and various Tech Reviewer to review its product and in process promote it to the world. Apple also uses traditional media very effectively to market their product. They promote their iProducts through commercials, magazines and newspaper ads and also situate billboards at some of the busiest locations.

Interest: For its iPhone 7, Apple created an Ad campaign called “practically magic”. In the series of Ads, Apple tried to demonstrate various exclusive features of iPhone 7 and 7 plus. They also conducted hands-on demonstration in Apple Retail Stores and also at four major phone-carriers’ stores.

Desire: For the new iPhone 7, creating desire in customer was Apple’s biggest issue. Since, iPhone 7 was considered very similar to iPhone 6 it was a challenge to sell it to customers. But, Apple was aware of the challenge beforehand and they started to advertise their new phone by comparing it to their older iPhone from the keynote event itself. Apple’s ad campaign “practically magic” also highlights this features, namely, the stereo speakers embedded in new iPhone, the water resistant feature, their new expressive iMessage feature and also the Dual Camera in iPhone 7 plus.

Action: Apple is still continuing to persuade its Target market to buy its iPhone 7 through lucrative Ads. They are also offering Apple Upgrade Program, where customer can get new iPhone every year for a small monthly fee. The four major phone-carriers are also offering some very good promotional offer. So far, Apple haven’t done good enough to meet its previous iPhone sales. Since, a lot of customers thought it wasn’t worth to buy a new iPhone, instead wait for the next iPhone, their 10^th anniversary iPhone, which is expected to have some very awesome features and an all-glass design.

Ch 10. Product Concept

Apple iPhone’s design is one of the main reason it has been able to take the cell phone industry by storm in such a small time span. Today, Apple is world’s second largest cell phone manufacturer. Apple’s iProduct can be called a shopping product, because it is "more expensive than a convenience product and found in few stores," but, yet Apple products enjoy the status of specialty products, thanks to Apple’s marketing team. Apple retail store plays a major role in portraying this image. They offer the boutique like experience on personal basis.

          Apple’s product mix consists of iPhone (cellphone), iPad (tablet), iPod (portable music players), MacBook (laptops), iMac (desktop computer) ,iWatch (smartwatch) and many more. It also sells headphones under the brand name of Beats and Airpods, the wireless Apple branded headphones which comes out later this year. Apple product mix components further breakdown into different sub category with few hardware tweaks and price difference. In 2014, Apple extended their iPhone line by including a 5.5-inch screen phones, providing an alternative for Samsung’s phablet phone lovers.

Most of the design success of iProducts can be credited to one person, Jonathan Ive. Ive is currently Apple’s Chief Design Officer (CDO). He is the designer of many of Apple's products, including the MacBook Pro, iMac, MacBook Air, Mac mini, iPod, iPod Touch, iPhone, iPad, iPad Mini, Apple Watch and iOS. He has also contributed towards Apple’s retail store designs, one of the famous one is the 5^th Avenue Store in NYC.  Ive is one of only four C-level executive at Apple along with CEO Tim Cook, CFO Luca Maestri and COO Jeff Williams.