Both iPhones and Android phones currently dominate the smartphone market. Between the two, Android remains the dominant mobile operating system for the simplest reason that it is a free and an open-source software that can be readily used by manufacturers. iOS remains an exclusive operating system for Apple devices.
However, despite the consistent introduction of newer and innovative Android phones, coupled with the persistent marketing initiatives from established manufacturers such as Samsung and novel strategies by new entrants such as Xiaomi and Vivo, iPhone remains a prime competitor.
Understanding the success of this iconic product requires an understanding of the strategies employed by Apple. Nonetheless, this article explores and discusses the marketing strategy for iPhone using the marketing mix model introduced by E. Jerome McCarthy.
Exploring the Marketing Mix of iPhone
1. Product: The Product Development Strategy
Product strategy is central to the marketing strategy for iPhone. Apple has continuously invested resources in research and development to ensure that the iPhone remains as current and as innovative as possible. Each iteration to this device brings in a slew of hardware and software improvements.
Since its first introduction in 2007, an updated version of the iPhone appears every one to two years. This short product lifecycle enables Apple to keep up with the fast-evolving market trends driven by technology, industry drifts, and consumer demands. Furthermore, this short lifecycle also helps renew consumer interest.
Limiting variety is another aspect of the product strategy for iPhone. Unlike other manufacturers that flood the market with different varieties of smartphones, Apple has limited iPhone variants into two to three, thus limiting consumer choice. Doing so allows the company to simplify the customer experience while also slimming down processes and strategies aimed at supporting and boosting the sales of iPhone.
Apple has also maintained a sizeable but controlled product portfolio that promotes uniform and unique usability and consumer experience. iPhone and other Apple products such as the iPad or the Mac line of macOS desktop and laptop computers, and even software products such as the iTunes and Messages complement one another.
Complementary products create a halo effect in which certain consumers prefer buying products from a single manufacturer due to convenience. After all, buying and using different products from different manufacturers create a hodgepodge of diverse and confusing product and consumer experience.
2. Price: Understanding the Pricing Strategy
Several observers have criticized Apple for attaching a high price tag on iPhone. Note that this price is enough to buy two to three mid-range Android smartphones or even two mid-level Windows laptop computers. While it is natural to assume that an expensive product would perform poorly in the market when compared against affordable alternatives, premium pricing is integral to the marketing strategy for iPhone.
The specific premium pricing strategy for the iPhone reinforces its brand positioning and marketing messages by creating positive perceptions or favorable assumptions that collectively suggest product superiority and exceptional quality. Note that other Apple products are expensive as well.
Customers of premium or luxury products are typically limited to the upper-class socioeconomic market segment. Apple has undoubtedly succeeded in appealing to consumers who would not mind paying a premium for an iPhone. More than this, however, the company has actually enjoyed a large consumer base comprising of consumers from middle to upper socioeconomic market segments because of its established brand reputation built from its effective marketing and business strategies.
Remember that premium pricing also provides Apple with higher profit margins. The costs associated with manufacturing an iPhone, in addition to the costs related to research and development, marketing, and other operations expenses collectively account for 30 to 40 percent of its retail price. This means that the company earns 60 to 70 percent in profit for each iPhone sold.
3. Place: Distribution Strategy for iPhone
The distribution strategy for iPhone generally follows an intensive mass distribution approach in which Apple not only partners with primary intermediaries but also allows distribution by third-party retailers from key geographic markets. Thus, part of the marketing strategy for iPhone involves ensuring global product availability.
Primary intermediaries or distributors include network carriers and official Apple distributors. Network carriers make iPhones not only accessible but also relatively purchasable, albeit not necessarily affordable. Through subscription plans or contract terms, consumers can buy iPhones on an installment basis or flexible payment terms.
The distribution strategy for iPhone also includes developing and maintaining global channels for providing customer support and after-sales services. Official distributors carry out these functions. Because Apple has created a worldwide network of official distributors, iPhones are not only available but also serviceable. After sales service is one of the critical reasons why iPhones are preferred over Android smartphones.
4. Promotion: Advertising and PR Strategy for iPhone
Apple does advertising. However, unlike other multinational conglomerates and direct competitors, the company spends considerably less on traditional ads and marketing, as well as digital marketing activities. Most ads made for iPhone typically appear on online platforms.
Some of the ads appearing primarily on broadcast and print mediums are actually made and paid by network carriers or official Apple distributors. These primary intermediaries also pursue other promotional strategies to include specific sales promotion tactics such as sales discount, perks and privileges, and special offers, as well as after-sales services such as warrantees and customer support.
Remember that the established reputation of Apple has enabled it to employ a specific marketing strategy for iPhone that requires minimal expenditures on ads and other promotions. The only remarkable grand promotional strategy for iPhone involves building and maintaining public relations through the hosting of trade and corporate events for product launch and announcements or previews.
These Apple events have been regularly attended by members of the mainstream media, independent journalists and bloggers, tech enthusiasts and online influencers, and other stakeholders from across the globe. Note that the company even runs regular events for software developers under its World Wide Developers Conference series.
Staging these events is more cost-effective than spending heavily on traditional marketing and advertising. These events enjoy massive coverage from mainstream media and online tech influencers. Even the dates before these events create media buzz and public hype. Furthermore, because specific product announcements for the iPhone are followed by pre-selling and actual product launch, coverage persists until the media can produce and publish product reviews.
Coupled with its public reputation as a prominent tech company, the relationship built and maintained by Apple with the media and other stakeholders allows it to enjoy cost-effective extensive publicity for iPhone.
Conclusion: The Marketing Strategy for iPhone
The overall marketing strategy for iPhone is considerably straightforward. Like any other tech companies involved in the design and manufacturing of innovative consumer electronics devices, a considerable attention is directed toward product strategy. Innovative features and the corresponding benefits that come from using the product allow Apple to develop and implement all other aspects of the marketing mix, specifically the premium pricing strategy, intensive mass distribution strategy, and minimal promotional strategy for iPhone.