Advertising and Media in the Marketing Environment - Essay Example

MKT 251 Advertising and media in the marketing environment Table of Contents Executive Summary 4 Introduction 4 Situational Analysis 5 Environmental Analysis 5 Competition analysis Porter’s Five Forces 6 SWOT Analysis 7 Consumer Analysis 9 Segmentation 9 Targeting 10 Positioning 10 Advertising Objectives 10 Creative Strategies 11 Message Strategies 11 Execution Strategies 11 Media Strategies 12 Conclusion 12 References 13 Bibliography 14 Appendices 15 Executive Summary This paper is about the advertisement review and analysis of a product. The product is Ipad which is a creative technology innovation of the famous brand in this industry i.e. Apple Inc. The objective of this study is to apply different theories and models of advertising activities to and evaluate the effectiveness of the advertisement campaigns of Apple Ipad. Advertisement is the way of promotion a product and therefore, the marketing strategy of accompany is reflected by its advertisement. Companies develop marketing strategies by analysing environmental analysis and market competition analysis. After analysing the environmental factors, it has been identified that the usefulness of the products follows the necessity trend and technology advancement of the target audiences. Market competition analysis shows that though Apple operates in a competitive market but, its innovations are still makes substantial differences in terms of quality and benefits to the customers. Apple has been promoting its latest innovation Ipad through different advertisement campaigns named “we believe”, “we will never stop”, “we will always” etc. The company share different messages to target audiences through these adverts. But all are similar in terms of market segmentation, positioning and targeting. Therefore, there is little difference in the content of the advertisement but message is still the same. It tries to make the target customers aware about the unique benefits of the product through different representation. Introduction Apple Inc. was formerly named as Apple Computer Inc. It is an American multinational corporation which design and sell high technology electronic goods, personal computers and computer software. The company became worldwide popular because of its innovation in the product. Company’s best known products are the Macintosh line of computers, ipod, iphone and lastly the current ipad. The company was established on 1st April, 1976 in California and incorporated on 3rd January, 1977. The company removed the word ‘computer’ from its name from January 2007 and shifted from only computer business towards consumer electronics. By market capitalization, Apple Inc. is the largest public limited company in the world which beat ExxonMobil, Google and Microsoft by revenue and profit. Ipad is one of the best innovations of the company along with other innovations i.e. ipod, iphone, Macbook etc. Apple has been promoting this product through creative advertisement through different medium like print advert for newspapers, magazines etc and audio visual advertisements for television and internet. The company has been continuously trying to make the target identify the benefits and necessity of this electronic gadget through its advertisements. It also has been trying to create differentiation in terms of features and quality that other similar type of products of its competitors. Situational Analysis Environmental Analysis The Pest analysis deals with the current situation of an organization identifying the social, political, technological as well as economic influences (Silvius, n.d., p. 2). Political influences: It was reported in the year 2007, that 52% sales of the company were from outside the country of its origin. Apple has no influence on the political scenarios. If United States involves itself in any sorts of conflicts with those countries from where Apple avails the parts, the production process of the company will come under threat (Henry, 2008, p. 99-100). Economic influences: The products of Apple are viewed as luxury items and therefore if consumers do not have enough amounts of disposable incomes on their hands they will not opt for Apple products. If the global economy is experiencing depression and the income of the consumers do not change much with high inflation rates, the company will have to accrue inventories (Lashinsky, 2012). But Apple may emerge as a distinction as in spite of dollar losing value, the company was not under danger economically. Social influences: The globe in experiencing the benefits of globalization. The role of technology is important in the interaction of people worldwide. The globe cannot imagine the existence without the electronic devices. Apple rules the field of technology not only because of usage but also because of design and quality. Music industry has been a positive impact on the market for Apple. The piracy problem can be a threat but the governments of most countries view piracy as a punishable offense. Technological influences: The race for technology advancement creates competition in the market. The race towards technology up gradation is led by Apple. The company focuses on continuous technological innovations. The technological innovations make the life cycle of a certain product short. Apple lists on the top in investing in Research and development. Competition analysis Porter’s Five Forces The model is applied to analyze the possible outcomes as well as impede the threats for a concerned company. The risk of new entrants: From the point of view of economics the entrants will try to enter into a market if the short term prices are not equal to marginal costs. In case of Apple brand name always played a major role. Gaining market share for a new entrant in this sector is not easy. Competition among rivalries: The players in the market compete in the industry by aggressive pricing policies and innovative product designs. The market has barriers to entry. Dependence on a specific sector that poses huge risk on the part of the company as a downfall of the sector will bust the existing players. The buying power: The industry enjoys moderate demand and presence of lots of small buyers result in low bargaining power for the buyers. This implies buyers cannot force the companies to charge lower prices. In hardware market the consumption fluctuation is low and therefore Apple holds the power to control the market with their set prices. The supplier’s power: The bargaining power of the suppliers in this market is stringent and poses a threat to the participating firms. Apple and the entire market are under some sort of risk as the suppliers enjoy moderate bargaining power. Substitutes: The availability of substitutes in the market threatens Apple as consumers can shift their preferences towards other devices. Apple is aware of the situation and in spite of this it differentiates itself with their Mac range of computers and therefore their market is not as much affected as the market for other competitors when consumers shift their preferences. SWOT Analysis Strength: The organization has successfully manages to establish the footprints in terms of brand value among the consumers. The consumers expect high technology, sophisticated and entertaining devices from the company (KWHS, 2012). The brands have penetrated into the wider market. In terms of revenue and profit Apple Inc. beats Google and Microsoft, two mostly recognized brand in the world. Innovation and capability of improving and redesigning its product in diminutive period are the key strength of Apple (KWHS, 2012). Weakness: The products of the company are highly priced. They offer the products to a niche group of society. The products are available to a certain group at only premium price. Some of the consumers complain that the devices have complicated use of handling. Financial weakness of the company is that it is quite dependent on its inventory for paying short term credits or loans as current ratio of the company is less than 1 (RIC Centre, 2012, p. 2). Opportunity: The Company can concentrate only on controlling the quality of the offerings. The company excels in the arena of research and development but it is quality that is expected from the brands like Apple. Online selling of the products can be one opportunity. The company can expect higher investment opportunity in future as it has reported efficient asset performance in last four years (NASDAQ, 2012, p.1). Threat: The industry where the company operates is influenced by some major competitors like Samsung, Sony and others. The market share of windows operating system is enjoyed vastly by Microsoft. Macintosh is not close in this sector as competitor to Microsoft. The great innovation iBangle has been under scanner in many countries (McDaniel and Gitman, 2008, p. 334Competitors might affect its future return through similar kind of innovations (SRM University, p.15). Consumer Analysis Segmentation, targeting and positioning are the core and critical areas of marketing strategies. These strategies have developed through consumer behaviour analysis. Consumer behaviour is said to be dynamic, complex multidimensional and the marketing decision are based on the assumption of consumer behaviour. Consumer behaviour can be defined as reflection of consumer’s decisions in regards to consumption, acquisition and also dispositions of goods and services, experiences, activities and ideas mad by human decision unit. Thus consumer behaviour mean more than the feeling involved with the consumer on buying tangible products like automobiles or bath soaps. Marketing strategy is a plan to which the firms should adhere to so to have an upper hand over its competitors and plans to achieve the desired objectives. Segmentation Segmentation is necessary for business to perform as it helps the firm to differ its product from its competitors which gives rise to healthy competition. All consumers are not alike and thus different consumers have different types of needs and thus by segmentation the market place and by choosing the target market, companies will be able t provide all the benefits to its desired market segment. Once the target market has been identified along with the segment the company will be able to decide on the mode of advertising. Apple has segmented mainly the young generation for Ipad. The product has all the features that can fulfil the necessity trend of the young generations. We “will always with you” advertisement highlighted the book reading facility which attract the student generation for accessing e-books anytime anywhere. Targeting The target market of Apple Ipad is younger generation who need entertainment and studying at a time. This is the new trend of this segment of people and Apple has successfully targeted this segment across the world. Apart from young generations it also has targeted other segment who are highly attached to access of internet i.e. business professional. They can access Wi-Fi network through it anytime they need and accessing mail is a frequent activity of these people. Therefore, “we believe” advert has message to them regarding the prestigious innovation of the company. Positioning The brand value Apple is much higher than other brand in this industry. This is because of unique innovation of technology of the company which has created substantial difference in the industry. Therefore, Apple has been using major strength of the brand as demand driver for its goods by positioning the in target customers’ mind as having world’s most innovative in their hand. The company position this brand as it seek to serve the target consumers by providing a complete package of technology for all types of requirements starting from entertainment to accessing internet to reading books and many more. “We will always” says that Ipad will be always with the users to fulfil their most of the daily needs. “We believe” says that the company has a strong believe in continuous innovation through which it is recognized word wide. Advertising Objectives Key objectives of advertisement are to focus on motivation, attitude, perception and risk. “We believe” advert try to motivate the customers to access the product and enjoy the technology i.e. different from other brands in the market. It also stimulate the emotion of the customers regarding desire for using a innovative product from a prestigious brand like Apple who is famous and recognized for its technology advanced through the product development and product differentiation. Creative Strategies Message Strategies Two most popular advert of Ipad “we believe” and “we will always” aim to communicate the dignified identity of the product. Through applying AIDA model of advertisement in these two advertisements of IPad, it can be said that the unique features and benefits of the product has been clearly displayed through this advertisement. Message of the company regarding uniqueness of the product benefits are identified by the target audiences of these advertisement campaigns. These ad commercials have focused on the capabilities of the product rather than describing its hardware configuration like other brands. The benefits are the key drivers than the specifications as consumers are attracted by these more. Therefore, message of these adverts are very clear to the audience regarding unique benefits of the product which can stimulate the sentiment of desire of the target audiences. Execution Strategies “We believe” and “We will always” are two confidential approach of the company which indicates its strengths in technology advancement through its product. The stories of these ads show how delightfully and magical capabilities of this product can fulfil different needs of customers. These adverts also say company’s determination regarding serving the priority and potential customers by considering the continuous change in necessity and desire of people. These advertisements clearly show the integrated mix of necessity and desire of people regarding having a powerful device that can be efficient in most their needs. Media Strategies Apple has chosen both TV and internet as a major two medium of advertisement though cost are comparatively high than print medium. To show all the key capabilities of the product the company has only focused on the audio visual adverts as ads through print medium cannot show the actual features of a product. Conclusion Though three most popular advertisements of Apple Ipad 2 i.e. “we believe”, “we will always” and “we will never stop” have little difference in content but all shows similar message to the customers very clearly. These campaigns are very effective and efficient regarding sharing the message of the company to the customers and also effective target the target customers for this product. Objective of advertisement campaign are satisfied with these ads and therefore, these campaigns are successful. References Henry, A. 2008. Understanding Strategic Management. Oxford University Press. UK. KWHS. 2012. Strengths, Weaknesses, Opportunities, Threats: The SWOT Analysis. [Online]. Available at: http://kwhs.wharton.upenn.edu/2012/03/strengths-weaknesses-opportunities-threats-the-swot-analysis/. [Accessed on November 26, 2012]. Lashinsky, A. 2012. Inside Apple: How Americas Most Admired--and Secretive--Company Really Works. Grand Central Publishing. NASDAQ. 2012. AAPL Company Description. [Online]. Available at: http://www.nasdaq.com/symbol/aapl. [Accessed on November 26, 2012]. RIC Centre. 2012. SWOT analysis and PEST analysis. [Pdf]. Available at: http://riccentre.ca/wp-content/uploads/2012/01/Session-1-Takeaways-Guidlines.pdf. [Accessed on November 26, 2012]. Silvius, G. 2012. What is PEST Analysis? {Pdf]. Available at: http://www.gilbertsilvius.nl/Handout%20PEST%20Analysis.pdf. [Accessed on November 26, 2012]. SRM University. 2008. Apple ibangle marketing plan. [Pdf]. Available at: http://www.srmuniv.ac.in/downloads/apple-ibangle-marketing-plan.pdf. [Accessed on November 26, 2012]. Bibliography Belch, G. E., 2003. Advertising And Promotion. 6/E. Tata McGraw-Hill Education. Blythe, J., 2008. Consumer Behavior. USA: Cengage Learning EMEA. Hoyer, W. D. & Macinnis, D. J., 2008. Consumer Behavior. USA: Cengage Learning. Schiffman, L. G., 1998. Consumer Behavior. Pearson Education India. Appendices Links for the audio visual advertisements of Apple Ipad: http://www.adweek.com/news/advertising-branding/ad-day-apple-ipad-2-133645 http://www.cultofmac.com/88916/apple-launches-new-ipad-2-ad-we-believe/ http://appleinsider.com/articles/11/04/03/apple_steps_up_ipad_2_campaign_to_push_functionality_over_hardware_specifications.html Read More