Marketing Audit of Apple Inc Essay

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Apple Inc. Marketing Audit

Apple Inc. is an American multinational company specializing in producing and marketing of innovative electronic brands that include iPad, iPhone, Apple watch, Mac, and iOS. Globally, Apple is the second largest IT (information technology) company with annual revenue of $227.5 Billion at the end of 2015 fiscal year. Apart from its superior financial assets, the company also enjoys high brand loyalties for all its products. Apple also records the unparalleled market success in iTunes software and digital music players. At present, Apple distributes and market its products through online and retail stores that assist the company generating the annual profits of more than $53 billion at the end of 2015 fiscal year. Despite the company financial success, Apple is still facing stiff competitions in the market environments since the company operates in both developed and developing countries. In the United States, and European countries, many electronic companies are in fierce competitions with Apple, and at present, Apple faces stiff competitions with large and multinational electronic producers that include Samsung, Dell, Microsoft, HP, Lenovo, LG, Google, Nokia and IBM. (O'Grady, 2009).

Arguably, a competitive environment, which the company is operating makes Apple intensify in a high-tech product development to be at the top in the competitive market environment. Comparably, HP and Dell are ahead of Apple in portable and desktop computers in the United States and globally. Moreover, Apple is facing fierce competition with heavyweight computer manufacturers such as Lenovo, Acer, and Asus. In 2015, Apple computer was at the 5th position with reference to global marker shares. (Conn, 2016). Faced with these competitions, Apple needs to recapture the market shares to record profitable market shares in computer and other Apple brands.

The objective of this report uses the critical thinking skills for marketing audit of Apple Inc. Specifically, the report scans both external and internal environments that Apple operates, and provide recommendations that can assist the marketing department in improving the effectiveness of its current marketing strategies.

Analysis of External and Internal Environments

This paper relies on secondary sources from various published research papers to analyze both the external and internal environments using the macro environment audit, task environment audit, marketing function audit, and strategy audit. (Vana, & Cerna, 2012).

Macro Environment Audit

Apple is influenced by the macro environment that influences the economic, political, technological and social environment that the company operates, and the PESTE model has been identified as the best model to enumerate the external environments that influence Apple marketing operation.

Demographic

An advanced in technological development has made billions of people across the globe to have access to the internet, and a dramatic increase in people access to the internet has led to a growth in a demand for laptop, computer, tablets, electronic books and cell phones. According to 2012 census, the United States population was estimated 314,440,891, and over 110 million people in the United States owned smartphones. Moreover, consumers between 18 and 34 used mobile phones to access the internet in 2014 and presumed to increase year-by-year. Additionally, the tablet users reached 89.5 million in 2015 more than 35.6% increase between 2014 and 2015. The number of young people having access to mobile phones is increasing. In 2010, 6 out 10 children aged between 3 and 7 years of age had access to the internet at home and increase by more than 50% year after year.

Overview of gender ratio shows that 51% of male consumers use smartphones and 49% female consumer use smartphones. Additionally, 39% of people aged between 18 and 34 used smartphones compared to 48% aged between 35 and 54 compared with 13% of consumer above 55. (EMarketer,2016) According to E-Marketer, (2016) forecast, over 2 billion of world population will use the smartphone showing an increase of 12.6% between 2015 and 2016. By December 2016, over 2.15 billion people, one-quarter of the world population, will have access to smartphone and China tops the figure with 624.7 million smartphone users. Followed by the United States with 198.5 million users. (E-Marketer,2016). By 2018, over 2.5 billion people will have smartphone globally. The demographic statistics of the smartphone users in the United States and across the globe shows that Apple will continue to enjoy market advantages with an increase in a demand for smartphones across all ages.

Political Conditions

Apple's major operation is in the United States, which is a country with a stable political environment.

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The political environment that the company operates is conducive for Apple operations. Since Apple operates globally, the company still have to abide by the rules and regulations of the countries that it is operating. For example, the U.S. government decision on corporate tax is currently affecting Apple's operation. Presently, the U.S. corporate tax is 40% compared to the UK whose its corporate tax is 20%. (KPMG, 2016). Arguably, a government decision on income tax can have an effect on people disposable income, thus, current government's decisions on corporate and income taxes are having an impact on the Apple's business operations. (Lei, & Slocum, 2010).

In recent years, U.S. and European governments are making laws enhancing product safety, and pollution control. Moreover, some governments in the emerging countries are making laws to control prices of the goods and services sold in their countries. Thus, these regulations are affecting the marketing operations of Apple because the company is forced to design high quality and safe products to all consumers to abide by the product safety regulations. Failure to follow these rules and regulations will make the company facing the lawsuits. For example, Apple has faced series of lawsuits that are damaging the reputation of the company. In the last few years, Apple has been involved in various patent lawsuits and legal cases putting pressures on the company's financial conditions. "In April 2012, the U.S. Department of Justice (DOJ) filed a civil antitrust action against the company and five major book publishers in the U.S. District Court for the Southern District of New York, alleging a violation of the Sherman Act." (World Market Intelligent, 2015 p 24).

Economic: Apple's marketing operations is in the United States, Europe, and Asia. Comparably, the U.S. has the largest economy in the world. Apart from having largest GDP (gross domestic product), the per capita income of American residents is one of the highest in the world. Thus, Apple is taking the advantages of the U.S. economic growth to enjoy market advantages. At the end of the 2014 fiscal year, Apple recorded 37.7% of its market shares from the United States. Apple also operates in Europe, Asia-Pacific, and Japan. In2 015, Apple recorded more than 23% market shares in Europe and 21.26% in Asia-Pacific. The increase in the Standard of living of European residents and people in Asia has assisted the company to record superior market advantages from these regions. At the end of the 2015 fiscal years, Apple realized more than $68.9 billion is sales from the United States. In China alone, the company recorded over $30.6 billion revenue.

Technological

The United States is the most developed country in the world. Since Apple designs its entire product in the United States, the company is having access to superior technology to design and develop its products. Presently, the United States is experiencing a rapid computerization of microprocessor revolution that is transforming the strategy businesses are conducting research and do market research. The technological revolution coupled with rapid access to the internet has transformed the strategy firms do business. The U.S. superior technological environment has assisted Apple to design its entire value chain which includes raw material procurement, warehouse design, and business logistics with latest technologies. Moreover, the new technological development has helped Apple to use the internet to launch B2C (Business-to-Consumer) and B2B (Business-to-Business) to gain competitive market advantages. In the last few years, Apple is taking the advantages of the advances in information and communication technology to intensify in the R&D (research and development) to launch the innovative product. For example, the company R&D expenses were approximate $3.4 billion in 2012 and increased to more than $8 billion in 2015. Moreover, the technological development makes Apple have access to cheaper accessories to design and manufactures products for all age categories.

Cultural

Thornton, Domingo, and Urbano (2011) identify cultural factors influencing a business practice as preference and attitudes of people towards a product. People attitude towards Apple's products is impressive because the company targets both low and high-end customers when marketing its products. To satisfy the customer tastes, the company designs artistically products offering the customers greater color choices, and elegant looking product to attract consumers who consider the aesthetic factors in choosing their products. The trend in the cultural factors for the product's choice has forced Apple to design its products.....

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