International Marketing of Apple in China

This research concerns international marketing of Apple for I Pad product in China.

This examination is divided in three parts. First is environmentally friendly scanning of the brand. First we propose a demonstration of the business. Secondly, we've presented a strategic medical diagnosis with a preview of the quest, success key factors. The primary tool in this part is the SWOT evaluation. It allowed witnessing what exactly are the advantages and key opportunities of the company.

The second part possessed for aim to evaluate the opportunities of the marketplace because of a SLEPT and analyze of your competition.

The third and last part had for main goal to use the strategy because of the marketing mixture. Therefore, we developed the strategies we recommended with an overview of the new Chanel of circulation plan.

The market of new technology is one of the main since the start of the century. It is the market that has known the most crucial development. Apple is very interesting as a topic because it's a brand which has a big effect on our life. The corporation has created spectacular invention that has change just how of utilization as the I Pad.

It seems interesting to understand why Apple is so important. We discover that Apple won't be one of the most crucial companies on earth if its co-founder and CEO Steve Jobs weren't in order. He's at the foundation of each innovation of the company and regulates all aspect along the way.

Apple is concentrating on a tactical country with China. Apple succeeded to implant itself for IPhones or Ipod device but it is always the same issue. Apple has to face many competition with the counterfeiting. Actually, a preexisting product with the I Ped prevails already in China and it is making troubles to Apple as a result of difference of price.

In the record, we are going to present first the business with an external and internal diagnosis. In a second step, we will analyze the Chinese market with the opportunities to capture thanks to an analysis of the competition. Finally, we will establish the marketing mix of I Pad in China.

Apple, a corporation in regular innovation

This first step is made to be able to investigate the exterior and inner environment. The primary aim is to extract from this analyze tactical elements. After presenting the business Apple, we are going to carry out a SWOT evaluation.

Presentation of the group Apple

Historic

Apple is a multinational American company coping with the new solutions of information and communication. It was created in 1976 by Steve Careers and Steve Wozniak. The business is based in California in Cupertino.

The trip of Apple started with the first models (Apple 1) which got for main aim to be the first specific computer created to make accessible all informatics applications to everyone. It had been successful and in outcome Apple hadn't the ability to satisfy all the orders. This is one way they saw the potential of this type of product. They made a decision to invest all their economies and launched the Apple II that was the trend in the computer universe.

Some statistics about Apple

Number of employees: 35000

Capital: $153 billion

Sales turnover in '09 2009: 25 billion

Net result in 2009: 3, 28 billion

Hierarchy:

Hierarchy modified from http://www. theofficialboard. fr/organigramme/apple

In the hierarchy of Apple, we can observe that Steve Careers has the key role in the success storyline of his company because he is managing every step. Both persons with the primary importance in the business are Steve Careers and Tim Make. They control all the worthiness chain.

In order to comprehend how environment of the business is working, we will create an external examination and define its major strengths.

The main business of Apple is producing and commercializing products of new technologies of information and communication.

Strategic activities areas: The Apple's group regroups 5 strategic activities areas

Desktops and laptops personal computers (MacBook, IMac, IBook)

MP3 and their accessories (Ipod device)

Software: Iwork collection

Music online (Itunes)

Smartphones (IPhone)

Tablets (I-Pad): this is the new product and the strategy consists to position this product as "Superstar" product in front of the image of Apple.

The second step of technique consists in inspecting the competition's position and the potential of the business.

Keys factor of success: By the end of this first diagnostic, we can say that the key factors of success are development and customer relationship while it is coping with the universe of pcs.

A good brand image: The Apple's brand image is already at a well higher level. The organization is recognized all around the world for the grade of its products, its after-sales service and mainly its supervisor Steve Jobs.

Be at the top of the technology: Apple is always one of the first companies to kick off new and innovative products (IPhone, Ipod touch and IPad just lately).

A good path (Steve Careers) and a good team: Apple's CEO reaches the foundation of his company's success because of his way to lead the company and share his ideals.

Environmental scanning

The PESTEL examination is also one tool of the environment analysis
Politic

Worldwide instability

Trade difficulties

Economic

Economic instability

Unemployment, not continuous revenues

Inflation

Social

Increase of the population

High demand on the low-cost products

Increase of NTIC

Changes of usage modes (Web)

Periods of consumption

Technologic

High creativity with IPad

High R&D

Ecologic

Laws on the cover of environment

Energy's consumption

Legal

Norms of security on products

Relative Market ShareBoston Matrix: The classification of activities about the typology allows getting a artificial image of stock portfolio. The goal is to take decisions in terms of politic, purchases

QUESTION MARKS

STARS

I-PAD

Market Expansion Rate

CASH COWS

DOGS

We can notice first the positive factors maximizing Apple's results. The Ipod touch is the product the main for Apple in conditions of success. Its growth is still important and the release of the new Ipods gives the chance to stay a "Star product".

The second Apple's "Star product" is the Iphone which includes revolutionized mobile Smartphone's world. It has known a real growth with a high market talk about unless the occurrence of competitors. The amount of sold Iphones will again increase thanks to the starting to other operators. Involving Itunes, it is something situated in both "Star" and "Question tag" because unless the fact that there surely is a regular growth, it is accessible many opponents and substitutes as downloading. The MacBook is a "cash cow".

The most important question is: where is positioned the I-Pad. As we said previously, it is a star product which is taking the control on the other products. Why? It's mostly due with an ambitious communication plan as we see on Tv set. This media can be used aggressively. It means that about every 10 minutes advertising, we will have one advertising for the i-Pad.

SWOT examination:

STRENGHTS

WEAKNESSES

Strong notoriety

High budget R&D

High level of innovation

Products varied (corresponding to 5 senses")

Apple's customers loyalty

Music store (Itunes)

High price

Competition very important (Microsoft, Dell, IBM, HP)

Imitations

Major shops in USA

OPPORTUNITIES

THREATS

Strong potential of buyers

New form of utilization (NTIC)

Opportunity to start stores in many countries

Economic situation

Launch of Glass windows 7

New entrant "Google" (Smartphone)

High prices can be considered a hazard in the future

Thanks to this prognosis, we can say that Apple can insist upon its talents as development, notoriety and its CEO Steve Jobs to capture the opportunities and also to be the leader. The only thing which can transform the position of Apple in a terrible way is the health of Steve Jobs. We can ask the question if the business will be still competitive without him.

The i-Pad

This is the new product of Apple so that as for each trend of the business; Steve Jobs is proceeding to the introduction of the product. He has this impact on people that this product is a success before its unveiling. Steve Jobs regarded as a visionary is the main element factor of success of Apple. The success of the product represents the same as 20 million I Phones screens in mere 6 months.

I-Pad is maybe the most decisive product in the strategy of Apple. Apple decided a technique on the future. Each product completing one sense, I-Pad was the merchandise which will bring all senses in only one product. That is why additionally it is important that the merchandise must be present in all countries and mainly in China which just became the next biggest market of the world and which brings an enormous potential. The problem is to discover a way to advertise such a product face to the strong competition and counterfeiting problem present in China.

China, the hugest worldwide market face to a strong competition

Analysis of the Chinese language market

China represents the largest inhabitants of the world with 1, 4 billion people. This country is so huge that people have to give attention to few places.

Beijing which is the historical capital of China has a society of 14 million inhabitants.

But on an economical factor, Beijing is behind both leaders, Shanghai and Hong-Kong.

Source:http://www. chine-informations. com/photos/carte-de-chine_9X1109X1. html

SLEPT Analysis

Political

Corruption & counterfeiting are present

Signed the Kyoto protocol in 2002

Member of the WTO

Economic

Largest population of the world (more than 1 billion)

Just became the next world economy

Exportations in growth

High qualified personnel & employees for low costs

Social

Problems of environmental issues (storm)

Issue of poverty, areas handled by unemployment

Technological

A market with local competitors having an enormous level of advancement & development of technology

Legal

Laws with restrictions regarding foreign companies investing in China

Tablet's market and competition

Global market

The competition is high in conditions of competitors. Actually, many companies are getting into this market as Android, Microsoft, and Blackberry to compete Apple. Even as we can see upon this table, Apple gets over 95% market shares in the global tablet market. This proves the positioning of the I-Pad as a celebrity product for the business.

Source:http://blogs. computerworld. com/17273/apples_ipad_carves_95_tablet_market_competition_is_dust

Apple got already applied a technique different from its other products. The expense of $499 is recognized as an inexpensive for such something. However the other competitors are providing tablets for lower costs. For instance, Samsung which is the key competitor with the technology Android acquired launched its Samsung Tabs which was low in term of price to become more competitive regarding the Apple's product. In fact, the price was founded at $250. Challengers as Samsung are producing their products at lower costs thanks a lot for example to a screen at a lesser quality than I-Pad.

We can assess also the previsions until 2012 to see if Apple will increase or not its market talk about in its new market of tablets. With so many competitors entering the marketplace it'll be difficult to keep the position of leader and additionally to keep such market share.

We can examine the advancement in conditions of shipments which signify the development of the market share.

Source: http://www. isuppli. com/Display-Materials-and-Systems/News/Pages/Apple-Set-to-Dominate-Tablet-Market-Through. aspx

We can easily see that Apple will eventually lose about 5% market share in 2 years face to the increase of opponents but will still maintain a concrete benefits face to them. The competitive advantages that will maintain Apple as a leader is the completing factor of Apple's products. In fact, a person who has recently an Apple product will more easily choose the I-Pad. We are able to compare the situation of the I-Pad with the I-Phone because they have the same profile of development. Face to many competitors at the beginning they take benefit from the differentiation that others tried out to "duplicate". In addition, the rarity component of Apple's screens "multitouch" is making barriers to other companies such as Dell, Samsung or Archos to remain competitive Apple in the same category.

PORTER 5 forces:

Competitive intensity

New entrants Suppliers power

Customers

States

Barriers power

Substitutes

Competitive power 4, 5/5: The computer industry is aware of an extremely high competitive power. There are way too many competition as Microsoft, Dell and IBM.

New entrants 2/5: The marketplace seems closed due to the huge need of investment to go into.

Suppliers' electricity 4/10: It really is average because the business needs many components but Apple remains a main customer.

Customers' vitality 4/5: Customers' vitality is vital because there are many products in this market.

Substitutes 3, 5/5: There are numerous substitutes to new solutions. But the strength of Apple is to differentiate itself and the top class.

State obstacles 2/5: The pressure of Claims is important about the government

Chinese market

China's market is very specific because this is the most difficult market to attain for Apple. Associated with that all the merchandise are created already in the country. They have less level of quality but are doing the same functions. It's the case for all the products of Apple. It can be for the I-Phone or the I-Pod. Same products can be found in China. You can find counterfeiting of course but not only, there are products representing the same uses with the same design. Really the only difference is the quality and the "brand quality".

Issues

In China, discussions are more challenging regarding different issues

First, Chinese operators are mostly manipulated by the government and like for the I Mobile phone, they need it for the I Pad.

The 3G solution is new in China and it must be permitting for using I Pad technology.

Competitors

Video video games: Combination of big screen makes the I Pad a fantastic console. The competition in this sector are Sony with the PSP and Nintendo with the DS which have an advantage in conditions of ergonomic because they are building for video gaming.

Books: Thanks to its iBooks app, I Pad can benefit from this advantages to compete also the sector of literature.

Netbooks: That is also a recently available innovation with the small laptops for low cost and Apple has directly reacted to handle these types of computers.

The China huge danger:

The main competition for the I Pad is the "I Ped", its Chinese language backup. The china's market has no more proof to provide in conditions of counterfeiting. They are the best in this sector. The main problem is the purchase price. The purchase price is uncompetitive for Apple. In fact, such a same product is available already for a price of about $100. Apple just began to sell the I Pad in China. The primary difference is that the products run on another technology with Google and Android.

Marketing Arrange for the I Pad in China

Objectives of getting into Chinese market

Apple will reap the benefits of a launch of I Pad in China. Being within China allows first to reach the largest people of the world.

Secondly, this is a way to be there in both main places with Shanghai and Beijing. These cities are the most industrialized of the country. Moreover, they may have an enormous purchase electric power. The goals will be

Reach a fresh record of turnover.

Complete their offer with the other Apple's products

Increase their loyalty

Reach the Chinese language middle and top class

Marketing Combine 4 P's

To differentiate itself from other tablets, it is necessary to develop a marketing mix

Product: I Pad have many functions. That is a complementing offer which regroups each function of the previous products. As we've seen just recently, the display screen is bigger than the competition and it is made up by the hugest quality "multitouch" technology. The merchandise have to be imported because there are way too many counterfeiting issues in the country.

You can regroup all 5 senses on this product which is the aim of Apple. You may internet, music, videos, photographs, e-mail Additionally, the applications which stand for strength of Apple are equivalent to I Phone's ones. It means that both products are complementary which Apple in addition has to attain its already devoted customers. Furthermore, this is an international product so the language will not affect at all the use.

As below, you can see an example of a product life cycle to show that I Pad is forget about in benefits step but in growth step. It is due to emergence in many countries as China which represents the next biggest world market and the target to attain is one of the most crucial for a business to succeed.

Price: The strategy of the price is the most decisive aspect because it is difficult to dispatch to China. In fact, there is an 8% tax and the price of transport to take concern to Hong Kong. The product is sold for $600 because of its basic model. This price should reduce next months to cope to the North american & Western model.

This is the standards Apple must concentrate on. I Ped competition is sold only for $150 and Apple must insist upon the differentiation factor and they can trust their image. The purchase price which should be applied is equivalent to just about everywhere $499 for the essential model.

Place: I Pad need to be sold in the same places than the other products. This means in recognized Apple stores. But in China it isn't possible so they also have to be there in the largest retail stores of the marketplace. Strategy of Apple is also to consciously don't produce enough companies to show that the demand is higher than expected. It will encourage the marketplace consumption.

Promotion: The major event which communicates on I Pad is the press convention. This is strength of Apple with Steve Careers. All enthusiasts of Apple are following such events because of him. Everybody is here when Steve Careers launch a new product. What's simple for I Pad is that they need to follow the same advertisement promotions than I Pod or I Phones ones. As we see in France, Apple has to apply an competitive communication on Television multimedia in China. That is a country which is more and more equipped and which really is a "fanatic" of IT products. Apple using its image of #1 1 is differentiating itself and it'll have for sure an impact on Chinese people. It really is exactly the same case than for the IPhone. Counterfeiting products were launched but what's taking place today? The I Mobile is successful in China also.

Another successful element for Apple is to produce Buzz businesses. A campaign premiered which contains a girl in bikini with an I Pad getting together with people in the street and conversing for Apple. It really is sort of "glamour marketing". The images were printed and many commentary were made online and this was successful for the business.

3 V's analyze of Apple

Valued customers: Who to serve? Apple is targeting same loyal individuals and individuals interested by all market segments touched by Apple with this products, video games, catalogs, internet, and mainly netbooks.

Value proposition: What to offer? The aim is to give you a tablet regrouping all needs and the 5 senses in a single product.

Value network: How to deliver? They deliver their products with recognized stores based in China. These stores correspond to the image of the brand to draw in the largest area of the goal. The other way of delivering their products is the net. They use the e-shop which is already used by all companies.

Conclusion

This review we made had for main aim to find alternatives for reaching the Chinese market. Actually, Apple needs a new business plan to create new strategies. Because of a strategic prognosis, we established the key strengths and weaknesses.

Apple will have a whole lot of troubles when Steve Careers will never be implied ever again in the company. We are not sure Apple will continue to have good results without him. We've seen that Steve Careers is everything for Apple.

This business plan is responded to by three. These three parts allowed concluding on the primary strategies with a marketing mix to use.

Apple is positioned also over a Blue Sea Strategy with its Itunes program and its own first idea of computer changing the marketplace of PC's and now by reaching the tablet market place.

We can ponder if these strategies will achieve success in order to attain the aims. Apple desires to keep their position of innovator on the market but it become harder to innovate continually. Apple has to give attention to their differentiation and diversification strategies which can be building the competitive advantage of the brand to contend counterfeiting and low cost opponents in China.

Recommendations

The first advice is to increase their differentiation strategy. Apple conducted a Blue Ocean strategy often by stepping into the PC's market with Macintosh. Subsequently, they got into the musical market because of Itunes. They need to continue to distinguish themselves and it comes from the meetings. Steve Jobs has an extremely special talent to promote the products and the brand to the Medias. They'll make the succession in a much better way if managers as Tim Make and Phil Schiller will have increasingly more time for speaking through these conferences. They also have to make competitive communication via Television ads.

They also have to insist on the factor of complementary products between I Phone - Ipod touch and I Pad that other tablets didn't procure.

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