Introduction
Many decisions must be made to ensure that the services provided are always competitive and in demand. In marketing, they concern with four main areas: assortment and pricing policy, distribution and sales, advertising, and communication. In developing its unique marketing combination, Apple Incorporation takes a premium branding approach. It involves capitalizing on and ensuring that all elements of the 4Ps maintain a strong and competitive image.
The 4Ps of Apple Incorporation and Its Key Problem
Concerning products, the Mac line contains desktops and laptops for miscellaneous market pieces. The iPad, iPod, iPhone, and Apple Watch are additional portable gadgets with identical characteristics. The product streak also retains tunes, videos, textbooks, and games. With Apple TV and Software, such as mobile apps, among other developments, the corporation functions in the digital scope allocation industry (Asdi and Putra, 2020, p. 125). Furthermore, the company’s 4Ps incorporate cloud-based developments that permit clients to keep and access their information and utilize the software as a benefit.
The second element involves choosing the proper places through which the enterprise spreads its outgrowths. For example, the Apple Store employs material shops or convenience ones that market the corporation’s products. Applications, tunes, films, and other digital ranges are available online in the App Store or iTunes. Including these channels, the marketing combination enables optimizing the global market space. In addition, Apple has qualified dealers in its allocation system. The corporation also has contracts with diverse telecommunications companies, they present devices incorporated into some of their telecommunications parcels.
By appealing to the 4P advertising element, the company emphasizes its premium label impression and outstanding quality. Apple possesses promotion on Google’s digital publicity web and tech report websites. In addition, among the 4Ps, this element contains deals with fanfares, which generally take place at Apple Stores outlets and licensed resellers. Furthermore, the enterprise utilizes public links to optimize its corporate vision (Verma, 2006, p. 3). For example, press releases, Apple Events, leaks regarding unknown product characteristics, and exclusive interrogations are carefully conducted to maximize favorable hype.
Thus, it can be concluded that all three elements of the 4 Ps are practical. At the same time, the pricing policy is one of the most decisive competitive factors. It is the most severe and worrying problematic point for both the corporation owners and the buyers. Analysis of the financial and economic condition of the company’s pricing policy allows identifying its weaknesses, among which is drop-in profitability (Verma, 2006, p. 4). The assessment of the impact of the company’s competitiveness on the level of efficiency also shows that shortcomings in the pricing policy have led to the fact that the level of use of Apple technology, especially in some regions, is much lower than the corresponding global average indicator.
There is a joyous moment because Apple has developed quite an effective strategy, artificially forcing its competitors to sell their products at an outdated exchange rate, given that market conditions have changed dramatically. At the same time, such a strategy has a very tangible effect on Apple’s overall income and the growing number of dissatisfied consumers. Despite the growth in profits, the product’s profitability is falling significantly, which is a cause for serious concern. It is essential to note the economic difficulties in China. The presence of many competitors has already forced Apple to reduce the price of the iPhone and offer branded schemes for the purchase of smartphones in installments, and exchange used devices for used devices new with a surcharge. These managed to improve the situation a bit, but it is still a problem on a global level.
Apple also adheres to a policy of sharply increasing the price of new devices compared to the previous generation’s technology. Therefore, many of its new products are inaccessible to the vast majority of the world population – they are not ready to give, for example, an amount commensurate with the cost of the apartment for the new Mac Pro (Verma, 2006, p.7). The company has also eliminated from its lineup devices of budget and middle segments. Year after year, Apple releases more and more expensive devices targeted not at broad masses of users but narrow niches of professionals in different spheres.
According to experts, the blame for Apple each time producing more expensive and less affordable products for most people lies directly with users. The company will continue to raise prices until some appreciate its products and are willing to buy them at any cost. However, the number of such people has begun to decline rapidly, as seen in the iPhone XS, XS Max, and XR smartphones released in 2018 (Asdi and Putra, 2020, p. 124). All three devices failed in sales solely because they were overpriced compared to Android competitors, and Apple even had to reduce their production volumes repeatedly. In addition, the drop-in smartphone sales forced it to classify the relevant statistics not only from the world community but also from its shareholders.
Strategies
Often a premium product with a significant market share faces a new wave of competition, winning over customers because of low prices. Apple’s first strategy to encourage customers to buy their products should be to create a lower-priced version of the phones (for example). In this way, it would allow the company not only to target middle and high class of buyers but also to capture even the low rank (Asdi and Putra, 2020, p. 127). In this case, most clients of brands like Samsung, and Xiaomi will become customers of Apple products.
The following technique is discounted for wholesale customers, which will eventually lead to greater affordability for retail customers. Currently, Apple gives its resellers only small wholesale discounts on computers and mobile devices. The exact figures are kept a closely guarded secret by a confidential agreement, but the difference between the purchase and retail prices is minimal. Under these conditions, resellers who expect to make a decent profit simply cannot offer serious discounts to buyers. Thus, high prices contribute to revenue still, but profitability is falling (Asdi and Putra, 2020, p. 129). Accordingly, people try to find alternatives with similar indicators. Therefore, providing discounts to reputable stores will help the final customers to buy Apple technology at a low cost. As a consequence, the profitability of the company’s products will increase.
It is significant to mention that today the company has changed its strategy for competing products. Thus, customers receive only the primary gadget for a high price, and accessories, such as a phone charger, need to be brought separately. As a consequence, the total value of Apple products becomes even higher and requires additional resources to operate fully. It is meant to emphasize that this is a new launch strategy for the company because the most necessary accessories were previously included in the product’s initial expense. Therefore, the company needs to return to the former accessory pricing policy.
In the context of the effectiveness of Apple’s pricing strategy, it should be noted that MacBooks have not been very popular with customers recently. This is because the operating software for them is higher than the overall price segment. At the same time, all the essential special programs for work or entertainment are paid. Thus, it turns out that buyers at a very high-cost buy only the mechanism without the filling necessary for operation. Accordingly, to use all the advantages of MacBooks, one is required to buy applications or to make a monthly subscription (Asdi and Putra, 2020, p. 130). Thus, users are forced to make monthly payments even after purchasing the device. Hence, buyers choose laptops and computers from other brands more often at a lower price and without additional expenses. Accordingly, Apple needs to change its policy to either reduce the cost of additional programs or make the main programs free of charge.
Ideal Strategy
The ideal method for Apple is to reduce the overall cost of goods by decreasing the price of paid subscriptions and expanding free apps. This technique will increase basic sales by lowering the general maintenance of the products. The motivation for selecting this instrument is that competitors’ policies in this area are more acceptable to customers, so they choose their goods. At the same time, fully equipping products with the necessary accessories will enable the business to meet the expectations of potential buyers. Such a strategy is designed to solve the problem of greater loyalty of users of gadgets to competitors.
Conclusion
Hence, the company’s use of 4Ps management is disadvantaged in forming the pricing strategy. Accordingly, most customers are dissatisfied that the cost segment is being raised and additional fees are being introduced for services. Thus, they try to choose a gadget among Apple’s competitors. For the company to maintain its position in the market, it is necessary to introduce new strategies that will reduce the overall value of servicing its devices.
Reference List
Asdi, A. and Putra, A. (2020) ‘The effect of marketing mix (4P) on buying decision: Empirical study on brand of Samsung smartphone product’, Point of View Research Management, 1(4), pp. 121-130.
Verma, M. (2006) ‘Is Apple managing its 4 Ps effectively?’, IBS Research Center, 1-18.