| IPhone 6 In The Us Market |
Overview
Over the years, Apple has grown from near bankruptcy to become one of the world’s most valuable technology companies (Yoffie & Russano 2012). This is a position the company has held for many years, only relinquishing it to Alphabet, Google’s parent company (Brown 2016). With a market capitalization of $537.7 billion, Apple is currently the second most valuable technology company after Alphabet’s $550 billion market capitalization (Brown 2016). Regardless of this, the Apple brand remains one of the strongest brands in the world, with the iPhone 6s being one of the company’s bestselling phones.
The iPhone 6s is an iteration of Apple’s previous iPhone 6 released in 2014. The 6s as has been the tradition of Apple, brought new features to the iPhone lineup including an improved touch screen, which Apple has dubbed 3D Touch. The 4.7-inch screen phone, while maintaining the same physical design as its predecessor (iPhone 6) brought more advanced features to the iPhone line. Launched in 2015, iPhone 6s and its sister 6s Plus, are Apple’s latest products in the smartphone market.
In selling its products, Apple has a wide target market and audience. It is the more reason the company has different products, all targeting different markets and audiences. However, with its “Digital Hub” marketing strategy, the company looks to sells all its products to the same target market and audience, with the hope of a halo effect, where customers of say iPhone 6s would be interested in other Apple products (Yoffie & Russano 2012). Apple’s target market and audience range from creative professionals, to teenagers, college students and adults. Institutions and corporations also form part of the company’s target market, especially under the new leadership of Tim Cook, Steve Jobs’ successor (Lashinsky 2015). To attract its target market and audience, the company makes its products stand out through simplicity, easy-to-use user interface and sleek designs, most of which many companies have copied.
Business Orientation
The return of Steve Jobs at the helm of Apple in 1997 marked a change in the company’s business strategy towards customer/market-oriented (Yoffie & Russano 2012). According to Wang (2015), market orientation is a great driver in innovation: a factor that has proven true with the bulk of Apple’s products, the iPhone being one of them. Mazumdar (2013) intimates that while there are many factors that contribute to the failure of new products, failure to meet the needs of the target audience/market ranks as the first. This, therefore, means that most of the products that eventually become successful meet the customer’s needs.
iPhone 6s’ customer orientation is perhaps most visible through the features that it brought to its customers. Among these was the larger screen, continuing with its predecessor’s 4.7-inch screen, which had been a cry of many of iPhone customers. Thus, while companies such as Samsung, HTC, LG and Huawei, among others had phones with screens up to 6 inches, the iPhone had conservatively maintained its 4-inch screen. The move to 4.7-inch screen for the iPhone 6 and 6s, and 5.5-inch screen for the 6 and 6s Plus were all heeding to the customers’ cry over the need for larger screens.
According to Mazumdar (2013), a customer-oriented business orientation considers both the benefits and sacrifice components of any new product, thereby conveying a stellar sense of worth of the product. It is for this reasons that while the iPhone 6s’ price is higher than that of its competitors, it still manages to make far more sales than its cheaper rivals do. The success of the iPhone brand and Apple as a brand in general, is because of an increasingly value-conscious customer base. These customers are thus not swayed by the “best” products or low prices of products, but by the “careful assessment of the benefits they obtain in exchange of the costs they incur to acquire and consume the product” (Mazumdar 2013, p. 29). Therefore, regardless of its higher internal specifications such as higher resolution screen, higher RAM, expandable memory, higher megapixel camera, higher pixel density and removable battery, Samsung flagship phone Galaxy 65 sold much less than the iPhone 6s (Gilbert 2015). While the global shipment of Samsung’s range of phones (Galaxy Note, Galaxy S series, Galaxy J series and many more) stood at 84 million units against iPhone’s 48 million units, the iPhone showed a 22.4 percent growth (Gilbert 2015).
CRM Constituencies
Although there is currently no agreement on a universal definition of customer relationship management (CRM), there is consistency in the fact that it involves the relationship between a company/organization and its customers. One of the definitions of CRM states, “CRM is the process of managing all aspects of interaction a company has with its customers, including prospecting, sales and service. CRM applications attempt to provide insight into and improve the company/customer relationship by combining all these views of customer interaction into one picture” (Buttle 2009, p. 4). From this definition, therefore, CRM looks to build a relationship between the customer and the organization, as well as creating a customer-centric culture whose focus and dedication is on winning and keeping customers. A company can only achieve such a feat through the creation of and delivery of superior value to its customers (Buttle 2004; 2009; Jain 2005).
Among the most important of Apple’s constituencies with interest in CRM are customers and partners of the technology company. The two (customers and partners) are interested in CRM given that CRM has a major influence on customer experience. Moreover, CRM influences customer satisfaction and suppliers’ loyalty (Buttle 2009). Customers in this case will require better customer service as a prerequisite to their loyalty to the company and its products, a factor that also applies to the company’s suppliers.
The second CRM constituency interested in Apple’s CRM is the CRM software vendors. Within the CRM software vending industry, Oracle, Microsoft, StayinFront among others are the biggest names in the CRM software industry (Buttle 2009). These companies are interested in Apple’s CRM not only to sell their software, but also to monitor the effectiveness of the software for improvements during any upgrades. Additionally, their interest in Apple’s CRM is to ensure that the customers do not infringe on the license agreements, in addition to training workers at Apple for effective usage of the software.
In the absence of native CRM software integration, clients can opt for CRM through Software as a Service package. Companies that offer such services are CRM application service providers (ASPs), who are also Apple’s CRM constituencies (Buttle 2009). Among the most notable ASPs, include salesforce.com, Entellium, RightNow and NetSuite (Buttle 2009). Apart from selling the service to Apple, ASPs interest in Apple’s CRM include ensuring that the service works, challenges to the client and finding ways of improving the service for the customers.
CRM hardware and infrastructure vendors are another constituency interested in Apple’s CRM. According to Buttle (2009), these vendors provide the technological base for the implementation of CRM. The vendors sell important implements such as servers, computers, devices, call center devices and telephony systems (Buttle 2009). Their interest here therefore is more than winning Apple as a customer: they would want to install and ensure that the hardware works to the satisfaction of the client.
Finally, management consultants are another constituency with interest in Apple’s CRM. Consultants are important as they “offer clients a diverse range of CRM-related capabilities such as strategy, business, application and technical consulting” (Buttle 2009, p. 39). Even more is that the consultancies are important in helping companies through the implementation of CRM including the integration of CRM into the clients’ system, choice of vendors, development of implementation plans and project management (Buttle 2009). Among the major management consultancies include, Accenture, McKinsey and Bearing Point among others. The interest of such companies in Apple is to provide the consultation on the planning, implementation and review of CRM.
Customer Satisfaction, Loyalty and Business Performance
In a research, Tung (2010) sets to investigate the impact of customer satisfaction on customer loyalty and overall business performance among mobile services industry in China. The research employs the American Customer Satisfaction Model, with a modification in the model in gauging usefulness and ease of use of the mobile services in China, and their effect on customer satisfaction (Tung 2010). The research findings indicate that perceived value, usefulness, quality, ease of use and expectation all have a positive value on customer satisfaction. Additionally, the study finding also discovered that customer satisfaction has a positive impact on customer loyalty (Tung 2010). Perhaps the most important discovery of the paper is the fact that customer complaints negatively affect customer loyalty, while customer satisfaction negative affects customer complaints (Tung 2010). The resultant effect is better business performance for customer satisfaction and loyalty.
Lakanie and Mojarrad’s research on the antecedents and consequences of brand prestige in the smartphone industry investigate customers’ perception of brand prestige, getting product satisfaction and eventually building brand loyalty based on their perception of the brand. The study discovers that brand-related stimuli help in the creation of brand prestige and satisfaction, with eventual development of brand loyalty. The result is the continued use of the product, reference of others to the product, which eventually leads to better business performance (Lakanie & Mojarrad 2015). The paper then suggests the need for the smartphone manufacturers to “dedicate marketing expenditure with the goal of inducing consumers’ sensory experiences and consumers’ intellectual responses from the smartphone brand” (Lakanie & Mojarrad 2015, p. 34).
The findings from Tung (2010) emphasize on the need to create value as a step towards customer satisfaction and loyalty. Additionally, with the discovery in the relationship between customer satisfaction and brand loyalty, it is important for Apple to ensure that its products to indeed meet the customers’ expectations. This way, customers are satisfied and enhance their loyalty to the brand. For Lakanie and Mojarrad, companies should spend more in inducing brand prestige among customers; this is a lesson Apple should learn, and by so learning continue on its campaign to create prestige in its brand.
Techniques for Acquiring New Customers
While there are many ways of acquiring new customers, Apple’s techniques are specific targeting only the customers the company wants to acquire. Among these is targeting a specific market segment. Thus, while some companies hope to wow the crowd with their products, Apple has the creative professional, students and teenagers in mind, who are specific about their products and what they want their product to do or look like. The company therefore designs and produces its products with these users in mind.
Apple additionally uses engaging campaigns in its advertisement. By the creation of original campaigns that resonate with the customers and appeal to their desires, Apple has been able to acquire more customers. In its “Think Different” campaigns, Apple juxtaposed a PC user and a Mac user. While the Mac user seemed confident, well groomed and organized, the PC user was disorganized and had no idea where the world was headed. Such an emotional campaign appeals to the human conscience, helping the company acquire more customers.
Customer Retention Strategies
The true value of customer satisfaction in a product is measured by customer retention. Therefore, to retain customers, organizations must go beyond their normal product offering to the creation of value that entices customers to remain loyal to the product or company (Jeng & Bailey 2012). Apple in one of the companies in the world with the highest brand loyalty, with many of the company’s customers buying more than one of the products the company offers (Pinson & Brosdahl 2014). Apple has employed a number of strategies to develop this cult-like following and retain its customers.
According to Pinson and Brosdahl (2014), Apple’s success in retaining its customers stem from the company’s own store, where only Apple products are sold. This way, the sale representatives well versed in the intricacies of Apple products can exhaustively inform customers of the product features. Moreover, this exclusive club gives the customers prestige, knowing that the company does care for them.
The Apple ecosystem is another of Apple’s customer retention strategy. Apple’s iOS and Mac OS are all part of the exclusive closed Apple ecosystem. The system is largely incompatible with other non-Apple products giving other non-Apple products an unfair disadvantage in trying to communicate with the Apple products. While it propagates the exclusivity, it encases the customers within the ecosystem making it difficult for them to leave.
Apple additionally makes products that deliver in every aspect advertised. Pinson and Brosdahl (2014), inform that the creation of product that deliver according to their advertised specification helps to build brand loyalty. Mascarenhas, Oswald and Bernacchi (2006) contend that Apple provides customer with total customer experience by ensuring that the product is simple and beautiful in design, yet powerful and intuitive in performance.
Strong customer support is yet another of Apple’s strongest suits and customer retention strategy. According to Mascarenhas, Oswald and Bernacchi (2006), Apple backs all its products with a strong customer support. Thus, while the crafting of the products is in such a way that the product rarely fails, the company ensures that customers have a strong and responsive customer support that adds to the value and attraction of the customers to the company.
Apple’s Marketing Mix
A marketing mix is a combination of an organization’s strategies leveled to ensure the success of the business venture. Marketing mix, therefore, largely refer to the strategies employed by a company in brand promotion (Goi 2009). The seven Ps of the marketing mix include product, price, place, promotion, people, process and physical evidence.
As the most important element product refers to the good the organization has for the market. Apple’s iPhone 6s, in this case, is the product on offing. The phone has created value for the customer through its packaging, outlook, functioning and the support the company has for the product. Moreover, iPhone 6s has Apple’s signature brand and quality; ensuring customers get value for their money (Goi 2009).
Apple charges premium price for the iPhone 6s. Visibly, the iPhone costs more than its competitors’ offerings. However, most consumers buy the iPhone given the value that they find from the phone. Mazumdar (2013) intimates that current value-conscious customers are ready to pay the premium prize for value. This is what Apple gives to its consumers, where they see value even as it charges premium prices regardless of the better specifications and cheaper prices in other smartphones.
The exclusive retail stores as well as exclusive distribution through wireless careers are Apple’s sole places for purchase of the iPhone and other company products. This exclusivity offers customers the chance to try the company’s products, talk to sales representatives who are knowledgeable in the products. The exclusivity creates value in the customers as well as in the products the customers purchase.
As the fourth element, promotion refers to sales and advertising side of marketing. Promotion announces the presence of a product to the customers. With about $1 billion spent in marketing, Apple pushes the value of its products using film and music stars in its advertisements. Such promotion creates value for the consumers knowing their favorite stars also use Apple products. Apple additionally uses product placement in film and television series as a means of pushing the value of its products.
People is the next element. This refers to the customers and employees involved in the daily running of the business. One of Apple’s strong points is its penchant for hiring people focused on the customer. Additionally, the company trains its employees at the Apple Campus, to ensure that the employees are inculcated in the company’ customer-oriented culture (Lashinsky 2011). This way, the products manufactured are customer oriented, ensuring that customers find value in the company’s products.
Process is another element, which refers to the intricacies in the production of the product to the final finished product. Customers are increasingly interested in the production process to ensure that it is environment friendly and that the product is not a result of the use of child labor or sweatshop tactics. Apple has been on the forefront of instituting changes in its production company’s (Foxxcon) labor relation by advocating for better working conditions in the Chinese manufacturing facility.
Last in Apple’s marketing mix is physical evidence. This is an important element as it offers the opportunity for growth and building of brand loyalty. Physical evidence not only creates value but also helps in making an unfamiliar product familiar to the customer. Product placement, branding and advertising have been among Apple’s strategies of providing physical evidence. Moreover, the company’s stores and partnership with wireless careers have provided value and physical evidence on the existence of the company’s products.
Service Recovery
From the release of the first iPhone in 2007, Apple enjoyed favorable media coverage. However, the launched of the iPhone 4 in 2010, while a success in sales had problems with reception (Gross 2012). Many users had complained of poor reception and dropped calls on the iPhone 4, especially when the phone was held in a particular. Many blogs had called this the “antennagate,” with others referring to the call-dropping feature as the “death grip” (Gross 2012). So serious was the problem that the company faced a class-action suit over the antenna problem.
Apple had at first responded with silence over the issue, however, Jobs, the then CEO released a statement to the effect that there was indeed a problem with the antenna. The statement additionally advised users on how to hold their phones while picking calls. Later, the company offered customers free cases over a three-month period, with the rubber case greatly reducing the antenna problem (Gross 2012).
Apple’s statement, advice and cases were well taken by the customers. This did not however stop the class-action suit against the company on the antenna problem. The company finally settled the suit, with an offer of $15 to consumers as settlement for the antenna problem (Gross 2012). The company later released the iPhone 4S, which did not have any antenna problem.
4 I’s of Customer Engagement
Customer engagement is an important element of organization; it helps to open communication channels between the company and the customers. In the age of the web and social media, customer engagement may be both exciting and trying for an organization. Handling customer engagement well helps to build the brand and engage the customers. This offers the opportunity for customers to give ideas that may go a long way in building the company. Poor customer engagement on the other hand, can be catastrophic to the company.
Customer engagement follows a distinct framework. The 4I’s framework includes four elements. These are involvement, interaction, intimacy and influence. Involvement refers to the availability of a person at the touch point. This is especially important in the social media where customers demand and expect engagement. Interaction on the other hand, refers to the action taken by the individual at the touch point. Thus, it does not suffice to have a person at the touch point, but the individual must be able to take some action. Next is engagement, which refers to the fondness of the customer to the brand. Such fondness because of the engagement the individual has had with the brand naturally leads to influence, which is the probability of the customer becoming a brand ambassador by advocating for the brand.
Although social media has become ubiquitous in the corporate world, Apple has virtually no social media presence apart from a YouTube channel and LinkedIn, which the company uses to display its videos and hiring respectively (Bercovici 2014). Thus, Apple has remained averse to social media, perhaps as a measure in continuing its operational secrecy and engaging customers only on a one-on-one level through its retail stores.
Apple’s CRM Success
Apple’s CRM is one of the best in the corporate world. This success stems from Apple’s CRM strategy wherein it collects customer information with the aim of improving its products and services according to customer use and preferences. The company collects information from consumers through filling out of forms during purchase of products, surveys, while surfing the web on the product and using cookies on the company website. The company additionally captures customer information while signing up for the Apple Id.
Through this information, the company can research different markets and analyze different market segments. This information is important in engaging customers through targeted advertising campaigns. The information is also vital for passing out information on new product, software updates and product delivery when customers order online. Ideally, the information collected from customers aims at developing products that cater fully to the needs of the customer
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