Apple Market Strategy
The core strategy of iPod will be based on value propositions and product differentiation is well developed. The main strengths of this strategy is clear identification of the product advantages and potential target audience. This strategy will result in a plan that can assist the company in selecting and positioning of the product. Product differentiation strategy will help to create entry barrier for other companies and creates a unique market proposition. This strategy makes sense because of a prod¬uct’s perceived uniqueness.
Differentiation should be achieved as a result of unique product attributes and effective marketing communications. In the case of iPod, product differentiation and brand loyalty increase for would-be industry entrants who would be required to make substantial investments in R;D or advertising (Crawford 2003). As with the selling philosophy and relationship strategy, iPod must include comprehension of the target market’s characteristics and the fact that pre¬vailing needs and wants may mandate products that are different than those offered in the home country.
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As the first marketing tactic element, differentiation should create a truly different and unique product for cus¬tomers. iPod not only has to be perceived differ-ently by customers (positioning), it has to be really differ¬ent in content, context, and infrastructure (differentiation). In addition to differentiation strategy, product positioning will help to establish trustworthiness, confidence, and competence for customers. If the iPod has those ele¬ments, customers will then have the “being” of the com¬pany within their minds. It is about earning customers’ trust to make them willingly follow iPod.
Because customers cannot be managed, they have to be led. In order to successfully lead customers, iPod has to have credibility. So posi¬tioning is not just about persuading and creating image in the consumers’ minds, it is about earning consumers’ trust and loyalty. Positioning strategy should support differentiation strategy in order to widen product potential market. It will help to occupy the consumers’ minds with unique offer¬ings and will lead the customers’ credibly. Financial Information Financial data shows that the iPod will be profitable and will receive high revenue a year (see Appendixes 1,2, 3).
In addition, it will be possible to open 100 stores in the next year, and 200 stores in two years after successful market activity. The appraisal of almost any investment project in the real world will involve the making of a great number of estimates. For example, the outlay required to undertake the project, its life, the annual cash inflows and out¬flows it will generate, the scrap value it will have, and even the correct rate of discount to reduce the cash flows to present values. Estimates will be made for all these factors and the project will then be appraised by calcu¬lating an expected net present value.
Balance sheet, break-even analysis, p& l show that European expansion will be successful for iPod. If this NPV is positive then the appraisal is in favor of acceptance. But, in terms of down-side risk, the decision maker is also interested in how sensitive the advice is to changes in the estimates made about the project. In other words, he is likely to be interested in the margin of error that there can be in the estimates made about the individual components of the project (i. e. , outlay, life, etc. ) before the advice that the appraisal gives (in this case to accept) becomes incorrect.
The advice to management is that the decision given by the NPV calculation s insensitive to changes in most of the estimated variables. However, if the revenues were the fall by 10% of their estimated value the original decision advice would turn out to be incorrect, Hence it may be worthwhile to re-examine the estimates of annual revenues to see if the company’s confidence in their accuracy can be improved. Break-even analysis suggests that the company will have to increase price level in 5% a year in order to remain competitive on the market.
Projected income for the next two years shows that iPod sales will not increase substantially, but Apple will sustain strong market position in Europe. In sum, the advantage of product originality will allow Apple iPod to create a strong international brand image. Brand loyalty will also be important factor in increasing the costs for customers of switching the products of new competitors. Using an international mar¬ket development strategy, Apple iPod will capture a larger share of a market for current products through market saturation and market pene¬tration.
Taking into consideration rapidly changing environment and customers expectations it is not enough to operate only on a national market. Global marketing will help Staples substantially increase the level of sales.
1. Apple iPod Success. (September 13, 2006). Retrieved 07June 2007, from http://www. readwriteweb. com/archives/apple_itv_success. php 2. Crawford C. Merle. (2003). New Products Management. Irwin-McGraw Hill. 7th edn. 3. Fill, C. (1999). Marketing Communication: Contexts, Contents, and Strategies 2 edn. Upper Saddle River, NJ: Prentice Hall.