Marketing assignment on: Product marketing
Ques.1: Identify and explain the product classification.
In marketing, a product can be classified in various categories depending on its usage, features, nature and price etc. This process of classifying products is called product classification. The product that has been recently launched by Apple is the iPad. It has been classified as an advanced technical product which is a one stop solution for a consumer to manage their entertainment, work and work related requirements in a compact and trendy manner. Thus iPad has been classified as a product which is small, light in weight, portable and a stand alone product.
Ques.6: How the product is positioned?
While positioning the iPad, Apple is following the strategy of changing the rules of the game. They are looking at the strategy which blends computer and the iPods. Company is trying to make consumer dependent on the content and software exclusively designed by Apple along with a focus where aim is to work under an ecosystem strategy. Books, movies, music and games are being provided by Apple which is intended to reinforce their brand philosophy. iPad is being used by the company to engage and lock consumer in the content controlled, authorised and sold by Apple.
Ques.7: Market Segmentation of the product
Market segmentation can be defined as the process of defining and dividing the collective and identical users into addressable, targeted and inspirational audiences. These target audiences are further categorized on the basis of their demography, psychology and spending power. A company segments its market in order to develop strategies which help it to come out with the products which are complete, unified and harmonious. In this regard, Apple’s product strategy is a study in market segmentation. Versus merely trying to stuff a product, burrito-style, with as many different features as possible, they target specific user experiences, and build the product around that accordingly. Apple has segmented market for iPad broadly in three segments, they are – professionals, businessmen and young customers like students. Professionals and businessmen prefer devices which are portable and easily accessible. Another segment comprises of young consumers, more specifically students, who are more inclined towards innovative products with trendy designs and unlimited applications.
Target market
In order to achieve its organisational objectives, Apple has done an extensive market research program to have a crystal clear knowledge of global business environment (Barnet & Cavanagh, 2006). For iPad, Apple has focused on more than one segment to market and develop its brand image. The market that is being targeted by the Apple comprises of group of people with upper and middle level if income who look forward for gadgets that are revolutionary in nature so that they can improve their lifestyle.
Position map
Among many aspects of marketing a new product, its proper positioning is very vital and important one. A crystal clear understanding about the purpose of the product is quite essential not only for the marketer but also to the customer. For every product, a marketer has a vision, and it is very important the way a consumer defines a product or the picture that a product develops in the mind of the consumer is in accordance of that vision.
The screen of iPad is bigger than iPod and in comparison to laptop, it is much more portable. It also provide services of eBooks, thus it rivals the Amazon kindle as well. In the position map, Apple has tried to place iPad as an innovative product which is very technically advanced.
Ques.2: How does the environmental forces impact?
In the global markets, an analysis of environmental forces such as political, economical, socio-cultural and technological impacts the ability of the company to perform in an efficient and effective manner.
The impact of various environmental forces have been discussed in detail below:
Political Forces: These forces impacts the operational efficiency of a company when they have to perform in foreign markets. In case of Apple, the company is finding it difficult to achieve its organizational targets successfully in Asian countries. Another limitation which the company faces is due to increasing cases of suicide bombrate and terrorism. In addition factors such as rate of sales tax, duties on import and export also have major impact on the costing and profitability of the company.
Ques.4: How does economic forces impact?
Economical Forces: These forces has a direct impact on the company’s expansion plans and organizational growth. The recent economic slowdown globally has resulted in the shrinkage in the purchasing power on people. In addition, due to the slowdown there have been massive rise in the raw material prices which has ultimately lead to rise in price of products. Apple faces low demand due to the big economies collapsing and going under stabilization phase, which has forced countries to boost their economy by discouraging imports and encouraging exports
Ques.3: How does social forces impact?
Socio-Cultural Forces: In present time, in multinational companies, people belonging to various regions, backgrounds, experiences, values and cultures come together to work in order to get successful in their lives. Thus it becomes very crucial and challenging for a company to develop a positive and interpersonal relationships among their employees. Apple has focused upon the cultural values of its employees as well as customers to achieve positive long-term relationships through maintaining an organizational culture which is highly flexible and culturally diverse.
Ques.9: Propose 5 promotional tools
Sales, advertising, sales promotion, personal selling are some of the key elements comprising promotion. In introduction stage main aim of promotion activities is to introduce customers to the new product. Promotion cost is quite high at this stage. In growth stage, aim of promotion shifts from introduction of the product to creation of brand and during maturity stage aim of promotion is to fight competition. However, promotional expenditure is very low.
Generally a company follows a five step process while formulating its international marketing strategy. Assessing market, formulating strategies for product, price, place and promotion are the key decisions that a company takes when it is going international. Under market assessment, a company tries to figure out the needs of the customers in probable market and short list various countries where it can sell its product. For example a company who is into business of intoxicants will not prefer Indian market as the use of intoxicants by men and women is not supported morally in this country. Then there are numerous factors which a company consider when it takes decision of going global. First, the market size, whether the country a company is planning to enter has enough market for its product to make profits. In these case regulatory issues, infrastructure, channel of distribution all impacts the decision to go global. Apart from these factor, political situation, law and order, economic policies, industrial policies all holds substantial importance when a company plans to enter into new markets (Graham, 2004).
Promotional Strategy adopted by Apple
While making promotional strategies for iPad, the key focus should be word of mouth and point of purchase where their focus should be that consumer first try the product on their own and then get encouraged to buy the same. They should also undertake an extensive advertising of the product on television and other sources of media in order to get the consumers’ response. Just to highlight the innovative features of their product, they should adopt innovative route of advertising.
A company has to market/communicate to everyone in its marketplace, and has to be active in creating and defining the discourse around that product
it still has a powerful grip on the high tech media because of its long tradition of nurturing relationships with them, and it has fanatically devoted users who are powerful influencers in their own right.
Ques.8: Explain Which pricing strategy would you recommend to the company?
Profit margin for a company is the basis for taking decisions regarding the price. Generally during introduction stage prices are high to recoup the development cost in the minimum possible time. Prices are reduced in growth stage to capture the maximum market share. In order to wipe out competitors, prices are generally reduced and in decline stage prices are lowered substantially to clear the inventory.
Apple should keep a premium pricing strategy for iPad as they have positioned the product as a superior one in comparison to products offered by its rivals. They should highlight the benefits that iPad provide while justifying why they are charging premium for the product. This will make consumer think that iPad is a product which is highly reliable and will make their life much more fast and efficient. Apple has created their pricing strategy in a manner that they are charging the premium for the innovation they have put in the product
Place
Key elements that helps in taking decisions regarding the place are market to be covered, distribution channel and logistic services. During introduction stage, company is quite selective and scattered. In growth stage distribution becomes intensive. Company tries to explore new markets and distribution channel in order to capture maximum market share. In decline stage, channels that are not profitable are phased out.
Ques.13:Explain the product cycle of the product.
Product Life Cycle
A product can be defined as anything that satisfies need of a customer. It can be a good or a service. A product undergoes many stages; all these stages jointly form a cycle which is known as product life cycle.
Ques.14: Identify and explain the 3 ways the product managers manage the product through the product’s life cycle.
Four Stages in Product Life Cycle
Introduction Stage: In this stage, a product is introduced in the market. A company incurs high cost in the research and development of the product. In addition marketing costs are also quite high because of promotional activities. A distribution channel is also created for the product at this stage only. Sales of the product remains low in this stage because customers do not know about the benefits of the same. Thus, the chances for a company to make profits at this stage are very rare. Performance of the product is very crucial at this stage as it forms the basis for the management’s decision to continue the product or end it.
Growth Stage: At this stage revenue growth is rapid since more and more customers come to know about the product and its benefits. At this stage, a product experiences profit growth as well. Economies of scale, enhanced pricing and familiarity among buyers leads to increased profitability. Generally companies try to grow their market share of the product at this stage because the risks associated with the product are minimal at this stage.
Maturity Stage: The most common and competitive stage for any product is the maturity stage. Though the profitability is maximum during this stage but the growth in sales is low due to high competition and decreasing market share. During this stage, marketing and financing activities of a company are at their peak. Generally company restrict themselves from making any kind of modifications or changes in the product during this stage.
Decline Stage: With the change in customers’ taste and technology the sales for a product starts declining. At this stage a product should be managed very carefully and great care should be taken while doing the same.If possible one should make efforts to bring down the cost of production by looking for raw material of lower cost, getting it outsourced where production is relatively cheap. Company can also follow the strategy of introducing the product in the market where they can sell them at lowered prices. Care should be taken to control the amount of stocks of the product. Ultimately, depending on whether the product remains profitable, a company may decide to end the product.
Why Is The Product And Services Suited For Interactive Marketing
Apple has always managed to gain the first mover advantage owing to its world class innovation and design. The research and development department at Apple has managed to innovate new products and such designs that no competitor in the market has. This has eventually made it the market leader and added to its brand equity over the period. Apple has also ensured that the products are of superior quality and durable; perfect value for money. Setting Apple as an example, it is important for any player in the market to ensure that any new and innovative product if of good quality and long durability. This is important since consumers are more conscious while investing into new innovative products as they also take the risks associated with the failure of the product.
Ques.10: Describe why consumers shop and buy online
Following are some key reasons why people go for online shopping:
Low Prices: The most prominent and attractive feature that attract people to go for online shopping is low prices of the products sold through net. Plus sites also ensure best quality of services which again attract buyers towards online shopping portals.
Convenience of shopping: In present days, doing things as per the convenience has become very important for people. Through e-commerce people can order product of their choce anytime and anywhere. They need not to get ready and go out for shopping. Professionals who are always short of time finds online shopping very convenient.
Comparisons can be made easily: Consumer can compare various features like price, features, looks, added benefits, company etc easily and quickly on online shopping.
Time Saving: In the busy life of today time has become the most scare resource. One finds it very difficult to take out time to visit shops in order to search for a product of their choice. Thus present generations prefers online shopping as it helps them in saving upon time.
Ques.5: State & Explain the competitive market it belongs to.
A competitive market is the one where there are large number of buyers and sellers and not a single one can influence the price or any other aspects related to the product market. Apple has introduced all those features in iPad which are there in notebook and laptops. The traditional war between Microsoft and Apple has always been about personal computers–more accurately operating systems–and which platform is superior. There has been a traditional war between Microsoft and Apple as far as personal computer market is concerned. But this time competitors like Sony, Samsung, Motorola and Dell has also joined the war as they are also very well established player in the technology market.
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