Kaitlyn Igo

Overview

The company Apple has been a pioneer corporation that has revolutionized the way

Americans and people worldwide utilize technology.

According to a case study by John Aschcroft, Apple “has led to the sale of 575 million

digital devices and a market cap of $575 billion in just ten years. It has 585,000 apps in the App

store, producing 25 billion downloads since launch [a tool the company uses to] measure its

success” (Aschcroft 2).

One of its newer and highly successful products is the iPad. According to the case study,

the idea and launch of this product began in 2009 when analysts suggested Apple’s next

product cater to the video-game market. The case study says the company had already

experienced huge success with the launching of the iPod in 2001 and then the iPhone in 2007.

It was time for a innovative new product to emerge on the scene. Steve Jobs, the

founder of the company, recognized the gaming sector of the digital market was being

dominated by other large companies such as Sony. Instead of competing in that market, the

company introduced the iPad in April 2010.

Product

According to our text, “the actual product includes the specific features and styling of

the product, its quality, the brand name.”(Mueller 26).

Apple’s iPad has very specific attributes to make it the gadget with high quality along with a

stellar brand name. The iPad combines many different technological devices into one product.

It can be used for “the web, reading, sending email, enjoying photos, watching videos,

listening to music, playing games, reading e-books… [It has a] responsive high-resolution Multi

touch display [, which] lets users physically interact with applications and content. iPad is just

0.5 inches thick and weighs just 1.5 pounds; thinner and lighter than any laptop or netbook. [It]

includes 12 innovative apps, designed especially for the iPad and will run almost all of the over

140,000 apps in the App Store” (Aschcroft 11).

This technological device allows users to have a computer, a book, an iPod, a camera,

phone and a television all in one product to be taken with the user practically anywhere he or

she is going. Also, as the quote points out, the high resolution of the product allows for the user

to have a crisp view of whatever he or she is seeing on the screen. Arguably, the ipad

eliminates the need for someone to buy many individual-technological devices, but instead

combines them all in one product.

To be more specific, the iPad’s features include: a soft keyboard, the ability to import

photos from a Mac, PC or digital camera, see [the pictures] organized as albums and enjoy and

share them using iPad’s elephant slideshows. Watch movies, TV shows and You Tube all in HD,

or flip through pages of an e-book you downloaded from Apple’s iBook store while listening to

your music collection…. [It has] an ultra-wide 178 degree viewing angle” (Aschcroft 13).

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One of the overarching features about this product is that it intertwines the use of other

Apple products and devices that are or are not associated with the company, making it very

user-friendly.

For example, the quote says the user can import his or her photos using a PC or Mac,

one of the products is associated with Apple while the other one isn’t. Also the case study

points out, “iPad syncs with iTunes just like the iPhone and iPod touch using the standard Apple

30-pin to USB cable , so you can sync all your contacts , photos, music, movies, TV shows,

applications and more to your Mac or PC” (Aschcroft 13).

The versatility of the Apple products and in this case, the iPad makes it very appealing to

consumers because they don’t have to own strictly Apple products for an Apple product to be

applicable. Also the latest gadget purchased by the user still coincides with older versions of

Apple products. For example, as the quote points out, the iPhone coincides with the ipad.

This is appealing to a consumer because their dated technological tools are not obsolete

simply because something different makes a debut as the newest and must-have technological

devise. The user has more use for a new Apple product and is more likely to buy it because of

its versatility. This was an efficient and attractive marketing technique used by the company.

Appealing to Market Segments

According to an article titled Apple Ecosystem Incomparable, the writer coins this

marketing technique as “Apple’s Ecosystem.” The author says the ability for the company to

coincide with its competitors’ products and older inventions that the employees of Apple

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themselves produced while combining multiple technological tools into one device, makes the

company secure its lead in the marketplace.

The author explains why the company’s Apple-Ecosystem- marketing technique is so

successful. He uses the iPad as an example to show readers the success rate of the Apple

Ecosystem. “It has taken nearly 80 percent of tablet PC sales worldwide. [He continues his point

saying,] “Apple has put so much effort, integrating application developers, performers, music

companies, the media, publishers and its supply chain… Apple’s iTunes and I Cloud services

have served to expand its ecosystem, which in turn,’ has broadened consumers’ reliance on the

company” (Taipel 2011).

This quote proves that by the company intertwining a variety of playmakers into the

production of its products, huge success is achieved. For example, the media can be an opinion

leader in the public. By Apple incorporating this sector of the public sphere into its marketing

mix, positive feedback in the form of financial gains and large distribution worldwide is

accomplished.

Also the quote points out because Apple has created such versatility in its products, the

consumer has become dependent on the brand. A consumer feeling the need for a product

guarantees that the individual will continue to buy Apple products; consolidating its lead

position for technological tools.

According to the case study, Apple caters to four primary consumers: business, creative

professionals, education and high-end consumers. The company changed how it marketed to

these segments of people when it recognized a shift in technological use.

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For example, “in the year 2000, some 75% of sales were to traditional business and professional

markets. By 2011, the situation had reversed with almost 75% of sales in the consumer

markets. The drive for the consumer digital device had been secured; more than 500 million

devices sold the measure” (Aschcroft 5).

This shift to personalized devices for the individual user is how Apple markets the

majority of its products, including the iPad. According to a study done by Mintel, not only do

people want personalized tablets, they want multiple ones in their home. For example, “in just

three years on the market, household tablet ownership has reached 30% of internet users…

44% of tablet users have already acquired a second tablet… Ownership of multiple tablets is

heading toward the norm, rather than the exception… multiple tablets positioned in various

locations that all members of the household can use, in addition to tablets owned solely for

personal use” (Mintel 7). The trend toward many personalized tablets in one home is apparent.

Gone are the days of the single family computer. Now almost every member within a

household has a computer.

According to the same report, “half of all tablet owners have an iPad, twice the

penetration of any competitor” (Mintel 1). This quote proves that due to Apple’s unique

marketing strategies such as, the Apple Ecosystem, it comfortably has the top spot for

technological devices, especially in this case of the iPad.

Appealing to the General Market.

According to the previously mentioned report, “in just three years since the launch of the

iPad, personal tablet ownership has climbed to 30% of internet users. More than half of all

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internet users from households with incomes above $100K have a tablet in their household,

including 59 percent of respondents from the highest income bracket…” (Mintel 3). A chart

from Mintel’s executive summary reveals that when all tablet owners were combined in the

18+ category] 50 percent owned an iPad. The competitor in second place was Kindle, with only

maintaining only a 24 percent market share.

This quote arguably proves that the iPad along with the sale of tablets accrued a huge

popularity when it entered the market. The use and sale of the tablet has spiked.

Despite, this fact, Apple clearly has not lost its competitive edge over time. As seen by

the chart, its number one rival competitor Kindle, in regards to selling a tablet does not come

close to the quantity of sales of the iPad.

Clearly tablet users, in general, come from upper-middle class or wealthy homes. This is

a key fact about the general market that can help justify Apple’s pricing strategy when

marketing the iPad. According to a report from Mintel about Apple’s marketing strategies, the

reading stresses the company’s use of a simplistic, visual style in its advertising when

addressing the general market.

For example, “it uses a white background with the device in the center of the screen and

focusing on the vanity shots of its products. [When the company advertises specifically for the

iPad], people are shown using the iPad, the ads often depict a person’s figure performing

various tasks. For the iPad, Apple’s main marketing message focuses on the iPad’s wide range

of capabilities, as well as its crisp display and fast speeds. Ads convey the idea that an iPad can

do almost anything, anywhere” (Mintel 1).

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Although Apple’s general market mostly consists of wealthier, better educated citizens

who have an above average income status, simplicity is still the key component when

advertising Apple products. The author of this report makes a point of saying the company

purposefully does not bombard its targeted market with technological terms, instead it relies

on the visuals in the ads to do the explaining.

This proves that even if a company’s general audience is primarily privileged individuals,

the company appeals to many socioeconomic groups with a direct approach in advertising

through visuals and plain language. This point can be clearly proven by Apple’s worldwide

success.

According to the same report, another method the company uses to appeal to its general

market is the release of commercials on a regular basis that coincide with a current pop culture

event or the holiday season. For example, the reading says “around Oscar time, Apple

launched an iPad ad showing how consumers edit films and watch movies on the device. The

images were accompanied by upbeat music and fast changing text that would land on a word

related to what the iPad was doing. The quick moving images represents the iPad’s speed, and

the extensive lists of words shows everything the iPad can do”(Mintel 1).

Clearly, Apple is appealing to a younger audience in this ad because of the music and fast-

changing words. However, one could make the argument that the Oscars and generally all pop

culture are appreciated by people of all ages. Although the socioeconomic bracket for the iPad

is narrow, the age group of the general market is vast.

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According to a 2013 Infographic overview about what types of people own tablets and

how iPad compares to its competitors, the pictures show 21 percent of tablet owners are

between the ages of 18 to 24. Twenty two percent are between the ages of 25 to 34. Twenty

percent are between the ages of 35 to 44 and 19 percent are between the ages of 45 to 54. The

point made here is that there is 36-year-age gap between the youngest and oldest person most

likely to own a tablet. Obviously by incorporating pop culture via media, the ipad’s popularity is

widespread. After the last age group, the disparity between each age groups drops by several

percentage points instead of just one.

Like most companies, Apple greatly takes advantage of the holiday season when

appealing to all its market segments. According to the same reading, in 2012 it utilized it to

promote the iPad and the iPad mini. “The regular iPad shows a young girl playing ‘I’ll be Home

for Christmas on her ukulele, while her grandfather watches via a chat function from the iPad

mini. The ad shows the iPad and the mini can connect families who are far apart. The

commercial suggests iPads are perfect holiday gifts for any member of the family, no matter

their age..’” (Mintel 1).

This ad shows a couple marketing techniques Apple uses that were discussed earlier. First

the ad shows how the regular-size iPad, aka, older version still works with the most recent

version of the product. Second, it appeals to wide-age bracket for product. Therefore, the

commercial sending the underlying message to viewers that the product is so user-friendly that

even the very young and very old can figure it out. Advertising any tablet during the holiday

season is a necessity.

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According to the Infographic overview, “roughly half of all adult tablet penetration was

created via a gift with 15 percent of respondents having received a tablet as a gift. Kid and teen

ownership of tablets is likely to have been derived by a higher percentage of gift purchases still”

(Mintel overview). The importance of the holiday season or having advertisements that

promote gift giving is further emphasized in Mintel’s executive summary.

“On average, gift buyers have purchased three tablets for other people as presents. This

small group of gift givers (just 5% of the total internet sample) is driving half of tablet sales. Gift

givers are more likely to be aged 18 to 54 and from households above 75K in annual income”

(Mintel 3).

Once again, these quotes stress iPad or tablet owners in general are financially well off

and the age range of owners varies greatly. More importantly though, it shows the immense

profitability that is gained during the holiday season. The failure to advertise during this time of

year or promote gift giving, in general, could result in large financial losses for any of the tablet-

making companies, including Apple.

Niche Market

There has been no mention in the research of a specific multicultural market that Apple is

targeting in its market, however, there is an apparent niche market the company is assisting

with its products; education. Apple helps this sector of its market through licensing. According

to our text this when “a company offers a licensee…to trademark or patent, the use of a

manufacturing process, technical advice or marketing skills, in exchange for the rights to know-

how provided by the licensor…”(Muller 44).

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In this case, Apple is offering the iPad to schools and universities, showing them how to use the

product to its fullest potential to assist with students’ academic performance.

According to an article from ProQuest, “Apple is revamping the way in which it offers

licenses for apps with its volume purchase plan, effectively creating an App store for education

institutions. Schools and colleges can now buy a bunch of licenses and then allocate them to

students and teachers using their mobile device management software. After giving their

personal Apple ID to their educational institution, the student user can download the apps

whenever they like. Alternatively, the apps can be installed automatically on the student’s

machine by the institution’s MDM software…The institution can revoke and re-assign the

student’s license whenever the need arises. The licensing change also applies to Mac apps…and

iBooks. So now a student can be automatically issued with books” (ProQuest 2013).

Apple is changing the way students and teachers interact with each other and the course

material at all levels of learning. Clearly, the company thinks this is a good business

opportunity. It also is beneficial to the students because their dependency on technology can

now be utilized in a productive way that enhances their learning instead of technology

distracting them from it. Teachers and professors are now offered a new teaching mediums

that strays away from the traditional classroom setting, which the tech-savvy students might

find more enjoyable and remain engaged.

The article continues to explain how Apple’s products will enrich the classroom setting.

“Teachers and students will easily share photos, videos or documents between devices using a

new AirDrop feature. It uses Wi-Fi and Bluetooth to accomplish this task and it also encrypts the

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file for security purposes. So a teacher can share a document in class and a student can edit the

document and pass it back to the teacher. The feature can be a new form of handing out and

collecting class tests…. Access to these institution-issued apps will be a single sign-on…[To avoid

a distraction issue in the classroom,] teachers will be able to lock iOS devices into one specific

app for the duration of the class…[Education boards in certain parts of the country have taken

the steps to ensure Apple’s devices will be used for the upcoming school year.] the Los Angeles

Board of Education put in an order for $30m worth of iPads, which will be rolled out to 640,000

students by 2014… 31,000 iPads will be given this autumn, ready for the 2013/14 school year.

The devices will be preloaded with ‘educational curriculum designed to enhance instruction, so

the intention is not to replace the teachers with iPads alone. They will be using Pearson’s

common core system of courses, which will consolidate Pearson’s claim to be the world’s

largest education company” (ProQuest 2013).

It seems the future is here. Apple and the iPad have brought the term ‘interaction” to a

whole new level in the classroom. The company has already addressed the majority of issues

that could arise by putting this high-level technology in the classroom.

The important thing to recognize about using the iPad and other Apple products in the

classroom is the company and the school system is using technology to enrich students’

experience in the academic setting. Instead of viewing technology as something of a distraction

that students try to sneak into the classroom, teachers can engage their students by embracing

the same technology. The students are learning within a comfort zone that their generation has

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grown up with for years. This in turn, could increase a student’s concentration and academic

performance overall.

Distribution

According to the case study, Apple’s distribution strategy is multi-channel marketing. This

means they use a variety of outlets to sell their products. To be more specific, “the company

sells its products worldwide through its retail stores, online stores, its direct sales force and

third-party wholesalers, resellers, and value-added resellers… Third party; own retail, online

stores include iTunes, the apps store and the ibooks store… [As mentioned earlier,] the

company sells to consumer, small and mid-size businesses, education, enterprise, government

and creative customers” (Aschcroft 5).

As seen by the quote, versatility in Apple’s distribution process has been its key to

success. It has few limits on how it chooses to get its products familiar to the public.

One notable aspect of Apple’s distribution process is how the company chooses market

segments that show promise for the company. For example, by distributing its products to

educational institutions, Apple is getting vast exposure in the public, showing them the ample

benefits of its products while also continuing to maintain a positive reputation.

It defines an ingenious approach in maintaining a positive image to the public and

simultaneously enhanceing children’s educational experiences at all levels of learning. The

company’s methods of distribution and the segments they choose to market their products

reveals well-thought out marketing and public relations strategy efforts.

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The success of Apple’s distribution, marketing and public relations strategies can be seen

in the statement “by 2011,… has over 360 own retail stores, a strong online store and the

incredibly successful iTunes store and apps store,585,000 apps available leading to 25 billion

apps downloaded”(Aschcroft 21). These statistics show how effective the marketing and public

relations teams are for this company. They clearly have well-planned out strategies to keep

improving Apple’s products, sales and public image.

Pricing

According to the text, “typical pricing objectives include profit maximization, return on

investment and return on investment and increases on total sales volume or market share”

(Mueller 57). The iPad has clearly accomplished all aspects of pricing objectives. Profitability

and the amount of iPads sold worldwide are impressive.

According to the case study “Apple has so much confidence in the product offer, they are

never afraid to premium price. It’s a good way of testing demand to establish the supply chain.

Prices are more easily reduced following a product introduction than increased” (Aschcroft 13).

When a company like Apple has experienced so much success with its products in the

form of sales and consumer trust, it can afford to market its products at expensive rates,

knowing consumers will be willing to pay the price for the high-quality product.

The same source says that when the iPad was originally introduced on the market, it was

priced at $499. Personally, one of the reason’s Apple can market a product at this price is not

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just because of its high quality and consumer trust, but also because the company introduces

mini versions of its products to consumers.

Like mentioned earlier, Apple came out with the iPad mini, an even more portable, user-

friendly product than the original one; making it more appealing to consumers. Therefore,

people are willing to pay premium price for a dependable product with multiple uses.

In a report done by Mintel about the sale of the iPad and other tablets, the selling trends

of the product will follow Apple’s pricing strategy; be sold at top price then slowly decrease the

price while the amount of items sold increases. For example, according to the report, in 2010

when the iPad first came out and then tablets from other companies followed, profitability,

overall, was about $6 billion. By 2017, it’s anticipated profitability will reach $16.5 billion. In

contrast, the average price of the tablet dropped on average, $50 from 2010 then $100 from

2011, and $66 more dollars the following year.

The conclusion can be drawn that if this trend continues it will not be just high-end

consumers that will be able to purchase the iPad and other tablets, but also middle and

possibly, working class people. Decreasing the price is certainly not hurting the profitability for

Apple or other companies. In fact, the charts prove profitability is increasing as the price

decreases.

Competitors

According to the Infographic Overview, Apple has the lead in selling the iPad with 50

percent of tablet owners having this product. The competitors to follow respectively have large

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disparity between Apple and other tablet makers, which include: Kindle, Galaxy, Nook, Nexus

and Microsoft Surface.

Despite the decrease in price in Apple’s iPad over the years, consumers still have to pay

the premium price for the tablet. It is this aspect of the product that competitors of the

company are honing in on to try and get consumers to buy their product instead.

For example, in Mintel’s report about Apple and its competitors’ marketing strategies

when trying to sell tablets, the report says, “Amazon [which sells the Kindle] often highlights

how it offers the exact same quality and performance as other products… most notably, the

iPad, a fact Amazon likes to emphasize” (Mintel 9).

The message from Kindle in this quote is trying to appeal to the consumers’ sensibility;

don’t pay more for a product that can be bought elsewhere for cheaper and as Amazon claims,

for the same exact quality. However, despite this marketing message used by Amazon and

other companies, Kindle only accounts, as mentioned earlier, for 24 percent overall tablet sells,

compared to Apple’s 50 percent.

According to the Infographic Overview, Galaxy sells 14 percent of tablets, Nook sells 10

percent, Nexus sells seven percent and Microsoft Surface sells 4 percent. Despite other

companies’ attacks on Apple’s ipad’s expensive price, it still has a comfortable lead in its tablet

sales.

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Promotional Tools

Television advertising has been discussed earlier, but there are other promotional tools

Apple uses to make its product known to consumers. For example, most of the videos found on

YouTube are tutorials on how the iPad works and how the consumer can utilize the product to

its fullest potential.

There are in generally three to four videos that make up one tutorial. Twitter provides

much of the same guidance for the consumer on how to utilize the iPad. The site has a products

page, which breaks down the uses of the iPad into different sections using buzz words such as,

“expand your experience”, “search faster, better”, “share more simply”, “discover something

new.” Apple’s in-store advertising techniques cater to the holidays, the idea that the product

can do anything and targets the education sector of the market.

For example, Google Images first in-store ad shows the iPad with an image of a heart on

it. The text says “there is more than one way to say I love you. Give iPad or iPad mini.” Because

of the red heart, this ad gives a clue that its timeliness is geared to Valentine’s Day, but

arguably, it could be used for any holiday.

The next in-store ad on Google Images shows the iPad displaying pictures of a rocket

going to the moon and a submarine going deep in the sea. Once again, sending the message to

the consumer that the product can be taken anywhere and do anything, almost as if it were

invincible in water and space.

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The last ad on Google Images shows a picture of the iPad with a picture of Steve Jobs

displayed on its screen and off to the side in text it says “the iPad has been a real game changer

in Education. No technology has impacted how the teachers teach and students learn more

quickly and more profoundly. With iPad, the possibilities are endless.” This ad is once more,

showing the various uses of the iPad while appealing to a major niche market; education.

On the iPad Facebook page it has an “About” section telling the reader about the history

of the product, its general features and uses. It has a picture of the iPad and at the bottom of it

says currently 8,483,862 people like this topic. The Facebook page shows the viewer how many

of their own friends have “liked” the iPad page. Toward the bottom it shows pictures of people

using the product and related pages.

Conclusion

Apple’s marketing techniques to advertise the iPad have proven to be an incredible

successful. The product has changed the way people are able to accomplish various tasks all on

one device. It is exciting to think what the next version of the Apple product will be and what

new innovating must-have tech product will be the next rage. How fast will the retail stores and

online businesses keep up with the consumer demand? Apple has proven over and again that it

does not disappoint the heightened anticipation.

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Works Cited

“Apple has launched a raft of initiatives to lure the education sector” Naish, Richard Bizmedia

Ltd. Sep 2013. ABI/INFORM via ProQuest accessed October 2013

“Apple Ecosystem Incomparable” Tsmc, Chairman Asia Pulse Pty Ltd. Oct. 11 2011.

ABN/INFORM via ProQuest accessed October 2013

Ashcroft, John, PhD BSc. “Apple from the iPod to the iPad. A case study in corporate strategy.”

CBIM, FRSA. Second Edition 2012. http://www.johnashcroft.co.uk accessed 0ctober 2013.

Mueller, Barbara. “Dynamics of International Advertising. Theoretical and Practical

Perspectives. (2011 Peter Lang Publishing Inc. NY, NY).

Tablets-US-July 2013: Marketing Strategies. Mintel. Accessed October 2013.

Tablets-US-July 2013: Infographic Overview. Mintel. Accessed October 2013.

Tablets-US-July 2013: Executive Summary. Mintel. Accessed October 2013.

Tablets-US-July 2013: Market Size. Mintel. Accessed October 2013.

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