Analysis Of The Effectivenes Of The Use Of Marketing Mix In Market Positioning On The Example Of Apple’s IPod
Nowadays we can see there is too much product in the market which make consumer have many choices. With great technology growth in this era of globalisation people become pickier on technology system and they are very alert with updated system and application in order to have the latest version. Many product had go troughs many challenge to stay compete in the market and had experience many kind of hard path in their journey. Hence, there are many product cannot survive to compete with other brand or product in the market due to many phase of problem in business. To understand more about product that cannot survive in the market we should look to product life cycle of those products.
roduct life cycle (PLC) describes the life of a product in the market with respect to business/commercial costs and sales measures. It proceeds through multiple phases, involves many professional disciplines and requires a multitude of skills, tools and processes. PLC management makes the following three assumptions which is products have a limited life and thus every product has a life cycle, product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller and products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage.
When we want to identify the market positioning strategy of product life cycle, we also need to understand the use of marketing mix in every stage of the life cycle. The use of a marketing mix is an excellent way to help ensure that putting the right product in the right place. The marketing mix is a crucial tool to help understand what the product or service can offer and how to plan for a successful product offering. The marketing mix is most commonly executed through the 4 P’s of marketing which is price, product, promotion, and place. By using marketing plan we will be more focus to identify demographics of the target customers, market positioning and pricing, the plan for product distribution and special offers or incentives.
In this investigation of item life cycle base on 4 Ps promoting blend these four factors help the firm in settling on key choices vital for the smooth running of any item. I look toward on Apple Inc. item which had experience four phase of item life cycle. Apple Inc. is an American multinational innovation organization headquartered in Cupertino, California, that plans, creates, and offers shopper hardware, PC programming, and online administrations. iPod were first acquainted with in 2001 and has since developed into a perceived social image. iPod is a line of compact and advanced music players, iPods can fill in as outer information stockpiling gadgets. Mac's iTunes programming can be utilized to exchange music, photographs, recordings, diversions, contact data, email settings, Web bookmarks, and logbooks, to the gadgets supporting these highlights from PCs utilizing certain adaptations of Apple Macintosh and Microsoft Windows working frameworks. Clients can convey their whole music gathering and more in their pockets. In spite of the fact that Apple Computer as of now had an immense after of faithful costumers, the iPod has made another age of Apple aficionados that basically can't get enough of the iPod and the majority of the iPod connections that have since created.
Firstly, we will understand the first stage in the product life cycle which is introduction stage. This introduction stage is characterized by a low growth rate of sales as the product is newly launched and consumers may not know much about it. Base on my observation, new comer in industry usually incurs losses rather than profits during this phase. Especially if the product is new on the market, users may not be aware of its true potential, necessitating widespread information and advertising campaigns through various media. Moreover, the firm seeks to build product awareness and develop a marketing plan for the product. Bill Jobs announced it as a Mac-compatible product with a 5 GB hard drive that put "1, 000 songs in your pocket. This announce attract the customer and future buyers attention to waiting and wonder about the new product from Apple In. Product branding and quality level is established, and intellectual property protection such as patents and trademarks are obtained. Apple Inc. researched the trademark and found that it was already in use. Joseph N. Grasso of New Jersey had originally listed an "iPod" trademark with the U. S. Patent and Trademark Office (USPTO) in July 2000 for Internet kiosks. The first iPod kiosks had been demonstrated to the public in New Jersey in March 1998, and commercial use began in January 2000, but had apparently been discontinued by 2001. The trademark was registered by the USPTO in November 2003, and Grasso assigned it to Apple Computer, Inc. in 2005.
At the point of pricing, it may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs. The iTunes Store is an online media store run by Apple and accessed through iTunes. Customers have to purchase audio files used the AAC format with added encryption, based on the Fair Play DRM system. Up to five authorized computers and an unlimited number of iPods could play the files. Burning the files with iTunes as an audio CD, then re-importing would create music files without the DRM. The DRM could also be removed using third-party software. However, in a deal with Apple, EMI began selling DRM-free, higher-quality songs on the iTunes Stores, in a category called "iTunes Plus. Next, promotion at this point we look forward to aim at innovators and early adopters. To build product awareness and to educate potential consumers about the product it mostly come from marketing communications strategy. Apple had used a variety of advertising campaigns to promote its iPod portable digital media player. Apple had invest a lot for iPod promotion campaigns include television commercials, print ads, posters in public places, and wrap advertising campaigns. These advertising techniques are from the experience of advertising Apple's other ads before these and it succeed for iPod. The very first advertisement for iPod, are compatible with Macs featured a man in his room grooving to his digital music collection on his Apple iBook. In scope of distribution or placing in introduction stage is selective until consumers show acceptance of the product brand. Apple is a well-known brand in United State their brand already has good image and one of trustful brand. When Apple introduce iPod they already have idea where to place their product and acknowledge their target market. Plus, informative television advertising was used to demonstrate the product’s usage and emphasise the benefit of listening to music.
Secondly, we move forward to see the growth of iPod life cycle, growth stage is the period which the product had been acceptance among consumers and people are aware with their new product, the industry and general public also notice with their new technology in the market. During this stage, the innovation becomes accepted in the market, and as a result sales and revenues start to increase. Hence, profits begin to be generated, though the break-even point is likely to remain unreached for a significant time even until the next stage, depending on the cost and revenue structures. Furthermore, Apple Inc. needs to build their brand preference and increase market share. The beginning of distribution is expanded further when their demand has starts to rise little by little and people trust their product and brand. Promotion is increased beyond the initially high levels, and word-of mouth advertising really helpful in the promotion strategy which gives big potential customers hearing about the product. People are become more confidence with this product and that attract customer to give a try on this product plus Apple Inc. make their customer love their product and choose to use the product regularly. Hence, their loyal customer become increasing from time to time. From the perspective of item in advertising blend, item quality is kept up and extra highlights and bolster administrations might be included. In spite of the dispatch of the iTunes Music Store in 2003 and equipment movements fuelling the production of second and third era iPods, obviously, we can see it when Apple was confronting developing rivalry that focused its highlights and size. In the meantime other organization like Archos propelled the principal gadget to show the two pictures and video with its Jukebox Multimedia player, and Creative's littler player MuVo line was additionally extremely fruitful. It influences the showcasing to wind up more fitness and Apple need to turn out with more development innovation.
The MP3 player had turned into the quickest developing shopper electronic item at any point presented and was quickly picking up market acknowledgment. The 'pioneer' showcase was achieving immersion, so an extended product offering was getting to be urgent. Therefore, Apple looked to widen its market bid in 2004 with the dispatch of the iPod Mini and this turned out to be very prevalent with young people and ladies because of its scope of hues, littler size and lessened cost. As run of the mill of the development organize, iPod Nano, Shuffle and Touch item expansions were propelled to fight off rivalry from 'me-too items' including any semblance of Samsung, with its YP-P2 touchscreen MP3 player, and Microsoft's Zune.
Pricing at this stage is about maintained as the firm enjoys increasing demand with little competition. The iPod Mini, Nano and Touch dominated the portable music player industry. From this I can say that Apple Inc. had control their price in a very good way until it turn to be on the top of market. Hence, people more interested in buying their product compare to other brand.
Distribution channels are added as demand increases and customers accept the product. In addition to the arrival of Apple Stores to the UK in 2004, distribution channels were further expanded beyond electrical stores to include supermarkets such as Tesco (in 2005). Promotion is aimed at a broader audience. Apple’s commitment to the iPod range was demonstrated in devoting 60% of total advertising spend to product line, in support of the memorable silhouette figures TV, print and outdoor campaign helping Apple to a mammoth 72. 7% MP3 player market share in 2007Thirdly, during the maturity stage, sales will peak as the product reaches market saturation, and competition will grow increasingly fierce. At this stage, sales growth has started to slow down, and the product has already reached widespread acceptance in the market, in relative terms. Moreover, during this stage, sales will peak. Certain company will want to prolong this phase so as to avoid decline, and this desire leads to new innovation and features in order to continue to compete with the competition which, by now, has become very established advanced and fierce. Competitor products will begin to cut deeply into the company’s market position and market share. However, despite this, sales continue to grow in the early part of the maturity phase. But, these sales will peak and ultimately decline. Demand for the product ultimately decreases due to competition and market saturation, as well as new technologies and changes in consumer tastes. At maturity, the strong growth in sales diminishes. Competition may appear withsimilar product. The primary objective at this point is to defend market share whilemaximizing profit.
Product features may be enhanced to differentiate the product from that ofcompetitors. We can see that when Apple’s innovators were challenged to keep it relevant while the market began to offer competing products. It was then that Apple turned its focus to key differentiators and redefining their products. Hence, for pricing may be lower because of the new competition. By 2008, the iPod can be said to have reached maturity with global sales peaking at 54. 8m units. To expand sales and compete in mature markets, Michael Porter’s three key strategies for achieving a competitive advantage are a useful reference which is cost leadership, differentiation and focus. Apple offers a fine example of successful differentiation.
Distribution becomes more intensive and incentives may be offered to encourage preference over competing products. Advancement accentuates item separation. The iPod turned into a colossal achievement, yet like any item, with the dispatch of the "I am a Mac" battle, Apple planned to offer their items, as well as to offer the Mac lifestyle. TV spots delineated Justin Long as a hip, sharp Mac, while John Hodgeman depicted his firm and ungainly PC partner. The crusade characterized Mac clients among humankind and actually offered life to the key differentiators of Apple's weapons store of creative items. By separating themselves from comparative gadgets on the Market, Mac made it's not any more exceptional item totally new once more. A run of the mill include toward the start of the development organize is shakeout of firms neglecting to effectively execute one of Michael Porter's nonexclusive procedures, as exemplified the exit of Microsoft's Zune in 2011.
Fourthly, decline stage of the product life cycle is the one when the products are consider fail due to the low or negative growth rate in sales. Next, we can see the company profitability will fall, eventually to the point where it is no longer profitable to produce, and production will stop. As the product competitor has increase it will affect the brand and it will make variety of product choice and it will have product domination in the market. And it becomes increasingly difficult for the company in question to maintain its level of sales. Consumer tastes also change, as do new technologies which may make the product become more competitive.
In addition, when sales decline, the firm has several options which are maintain the product, adding new features and finding new uses or target market. Besides that, company can try to reduce costs and continue to offer it, possibly to a loyal niche segment. After that company also can try to discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product this are few affective way to save the product. The marketing mix decisions in the decline phase will depend on the selected strategy. In view of product, Apple Inc. had come out with new product which is more interesting and provided with latest technology. iPod usefulness has been overshadowed by iPhones and iPads. The price of iPod is affordable but customers just need to add on a little bit and they can have a better technology and latest product with more great features. So for sure customer will choose to have iPhone or iPad rather than iPod. Next, when look to the product placing, Apple is an international brand so their product placing very huge but they introduce new product which is more useful and complete so people will choose the better on. And for promotion, Apple had slow down the promotion and campaign on iPod and put more attention to iPhone. This will make their advertising cost more save and transfer it to other product promotion which can gain more profit and strengthen their brand in industry.
In a nutshell, from my observation the use of marketing mix in develop market positioning is really useful because from that we can see what should be done at every stage of product life cycle. Besides that, Apple Inc. had took the best action towards iPod when they agree to came out with new product. Their step had save them from need to face product failure or lower down their brand in technology industry plus now their brand is one of the trusted brand on become one of top brand in worldwide.
