Both iPhones and Android represent two broad categories of smartphones that dominate the market. Android remains the dominant mobile operating system between the two for the simplest reason that it is a free and open-source software that is available to other manufacturers. The iOS remains an exclusive operating system for Apple devices.
Nevertheless, 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 from newer entrants such as Xiaomi, the iPhone remains a prime competitor. This comes from the established reputation of Apple.
It is also worth mentioning that iPhone is also dominant in several geographic markets such as the North American and European markets. Understanding the success of this iconic product requires an appreciation of the strategies of Apple. This particular article dives into the specific marketing strategy for iPhone using the Marketing Mix model.
An Analysis of the Marketing Strategy for iPhone Using the Marketing Mix Model
1. Product: The Product Development Strategy
Product strategy is central to the marketing strategy for iPhone. Apple has been allocating a substantial amount of resources for research and development to ensure that the iPhone remains as current and as innovative as possible. It is its top-selling product after all. Each iteration of this device brings in a slew of hardware and software improvements.
An updated version of the iPhone appears each year since the product line was introduced in 2007. This short product lifecycle enables Apple to keep up with the ever-evolving market trends due to technological advancements and changing consumer preferences. An annual refresh also helps renew consumer interest and encourages repeat sales.
The variations of the product are also limited. Manufacturers of Android smartphones tend to flood the market with different varieties of a particular product line. Apple limits the iPhone to at least four variants. This aids in consumer decision-making while also allowing the company to streamline the customer experience and optimize its marketing strategy.
Apple has maintained a sizeable but controlled product portfolio through a product ecosystem that promotes a unique and uniform experience. It is important to note that the iPhone and other Apple products such as the iPad, the Mac and the macOS operating system, the Apple Watch, and software products and other services complement one another.
The introduction of complementary products within the Apple product ecosystem creates a halo effect in which consumers prefer purchasing different products from the same brand due to convenience. Purchasing and using different products from different manufacturers or brands create a hodgepodge of unoptimized and confusing consumer experiences.
2. Price: Understanding the Pricing Strategy
Several observers have criticized Apple due to the high price of the iPhone. A single iPhone is equivalent to two to three mid-range Android smartphones or at least two mid-range Windows desktop or laptop computers. It is natural to assume that a more expensive product can be less desirable but premium pricing is integral to the marketing strategy for the iPhone
The specific premium pricing strategy for the iPhone reinforces its product positioning and the overall Apple branding. The high price tag creates positive perceptions or favorable assumptions about product quality. This is rationalized further through innovative product features and benefits and a minimalistic but refined design philosophy.
Apple has succeeded in appealing to consumers who would not mind spending more on a premium smartphone. It even has a legion of devoted customers who would still choose an iPhone even though inexpensive alternatives exist. The entire customer base is composed of individuals from the muddle to upper socioeconomic segments.
The same pricing strategy provides Apple with higher profit margins. The cost of manufacturing a particular iPhone and other costs associated with research and development activities and marketing account for about 30 to 40 percent of its retail price. This means that the company earns between 60 and 70 percent in profit for each iPhone sold.
3. Place: Distribution Strategy for iPhone
The distribution strategy for the iPhone follows an intensive mass distribution approach in which Apple partners with primary intermediaries while also allowing distribution through secondary intermediaries from different geographic markets. An important goal of the marketing strategy for the iPhone is to ensure that the product is available across the world.
It is worth mentioning that the use of primary intermediaries and secondary intermediaries represents a pull strategy and push strategy in distribution. The former involves building and maintaining a relationship with authorized distributors while the latter involves promoting the products directly to consumers to pressure distributors to stock and resell.
Part of the primary intermediaries are authorized distributors and network carriers. These authorized distributors are required to follow a branding guideline that focuses on improving the retail experience of customers. The network carriers make iPhones both accessible and purchasable through subscription plans and flexible purchase terms.
The distribution strategy for the iPhone also includes maintaining channels for providing customer support and after-sales services. Authorized distributors perform these services. The global network of authorized distributors makes Apple products both accessible and serviceable. This increases the appeal of the iPhone over Android phones.
4. Promotion: Advertising and Promoting the iPhone
Apple does advertising. However, unlike other large consumer-oriented companies and direct competitors, it spends less on traditional advertising. Most advertisements for iPhone appear on online channels such as search engines and social media platforms. Several advertisements appearing on broadcast, print, and outdoors do not come from Apple.
The high demand for this product encourages primary intermediaries to run advertisements across the most suitable mediums. These distributors also pursue other promotional activities that include more specific sales promotion tactics such as limited sales or special discounts, exclusive perks, product bundling and freebies, and flexible purchase options.
Apple has a strong brand that places it in a unique marketing situation that enables it to promote its products with minimal expenditures on advertisements and other forms of promotions. The promotional strategy for the iPhone centers more on building and maintaining public relations and staging events for product launches and product announcements.
Each Apple event attracts the attention of media organizations and reporters, online influencers, tech enthusiasts, and the public. There are also special events held for software developers under the annual Worldwide Developers Conference series. Each event is supplemented with media releases and digital marketing activities to maximize mileage.
A particular Apple event dedicated to an upcoming new generation of the iPhone receives coverage from the mainstream media and online influencers. Even the dates prior to this event create buzz. The announcements made during the event and the scheduled pre-selling and release dates sustain the hype through product reviews and online discourse.
Important Lessons and Takeaways from the Marketing Strategy for iPhone
The overall marketing strategy for the iPhone is straightforward. It places product strategy at the center. Hence, from a well-developed product, all other elements of its marketing mix come into the picture. These include a premium pricing strategy that aims to reinforce the premium branding of the product, an intensive mass distribution strategy to make it as accessible as possible, and a cost-effective promotion strategy that banks on the established brand image and market appeal of Apple. The entire marketing mix of the iPhone is coherent.