The purpose of the report is to demonstrate the various aspects of the marketing theory and practices. The report selects two well known companies IBM and Apple to do this study. The hardware range from IBM like the note book is selected and the Consumer electronic range like e Pod has been taken as the products for our research.
The report studies the various aspects like industrial background, company background, macro environmental and micro environmental forces, Strategic racketing and planning to Provide recommendations of other potential market segments. The report also analyses the market segmentation, target market, targeting strategies and positioning to find that presently IBM is focusing mainly on the small and medium business to market their note books and Apple has taken an undifferentiated targeting strategy for marketing its consumer electronics range.
In the report it is recommended to IBM to take an undifferentiated targeting strategy and for Apple to do some differentiated marketing. Table of contents 1. 0 Introduction 4 2. 0 Industry background 4 3. O Company background 5 4. 0 Strategic marketing and planning 6 5. 0 Macro environmental forces 7 7. 0 SOOT analysts 9 8. 0 Market segmentation 10 9. 0 Target markets 11 10. 0 Targeting strategy 12 1 1. 0 Positioning strategy 13 12. 0 Conclusion and Recommendations 13. 0 References 15 1. Introduction 13 The purpose of this report is to understand the marketing theories and practices by doing a comparison of the marketing approach of the two companies. The report tries to integrate the company activities and the marketing theory in order to demonstrate that how the key concepts of the marketing work. The criteria for electing both companies are that they should have a strong market profile and a strong web presence. We will conduct our study by selecting one product each from both the companies. We have selected IBM and Apple. Both the companies have a good profile in the market and are major market players.
IBM is a multinational firm based in U. S which is in consulting and technology. IBM is into the manufacturing and sales of computer software and hardware. Apple is also a U. S based multinational firm that deals in the designing and marketing of the personal computers, computer software and consumer electronics. We will now study both the companies’ activities to develop an understanding about the Marketing theories and practices. For this we will select one product each from both the companies, from IBM we will take the Hardware range like the IBM note books, and from Apple we will select the consumer electronics products like the Pod. . 0 Industry background limited to Just computer hard ware and software but anything that can render data, information in a visual format whatsoever it may be, through an multimedia distribution system, is now considered to be a part of the IT domain This sector is soused mainly on the high-tech or the advanced technology and includes computers and peripherals, telecommunications IT services, semiconductors, software development, home entertainment and biotechnology.
The companies operating in this industry continuously face the increasing competitive and strategic issues which emerge suddenly due to the rapid advancements that are happening in the technology worldwide. Within a matter of time the technologies become obsolete and useless. Every now and then a new technology is born. This not only creates threats but also forms opportunities for the innovators to grow. The industry is highly competitive and has vast potential to generate revenues. The forecast for the Technology industry growth for U. S is 7 percent for the year 2011.
The growth in the technology industry has enabled the U. S to become the largest nation of the world in terms of economy. The emergence of internet and internet based technologies has given rise to a number of new innovations and has increased the demand of the Technology products world wide. This has completely changed the scenario in the IT industry. IT and IT related products are no longer limited to only research and placement but now IT is a common house hold thing. The technology sector is a foremost sector for the growth-based investment (Hair 2000). . O Company background IBM was founded way back in 1911 by the name of Computing Tabulating Recording Corporation. This company was named International business machine in the year 1924. The company is ranked by Fortune as the 18th largest company of U. S and 7th most profitable firm in U. S in 2011. Globally the firm was ranked as the 31st largest company in the world by Forbes. The company has a history of many such achievements. The company has employees in 200 countries across the world. Automated teller machine (ATM) is one of the many inventions of MOM.
The company is into the business of manufacturing and sales of computer software and hardware. APPLE Inc was founded on April 1, 1976 and was known as Apple computers Inc till 2007. The company operates over 300 stores across 10 countries according to a data of 2010. Apple is one of the largest companies in the world based on the market capitalization. The company is the most valuable Technology firm in the world. The company has a range of hardware products like Macintosh line of computers. The company deals in the software products and consumer electronic products like phone, Pod and Pad.
The company has formed a good reputation in the consumer electronics industry and has been successful in developing a loyal consumer base around the world especially in the U. S. All the business leaders have an understanding regarding the role that is played by an articulate, intelligent and well defined marketing strategy and planning in achieving the corporate goals and profit. Fighting competition, adapting business models and industry changes forms the important aspects in the Strategic marketing and planning.
Both IBM and Apple have a strong strategic hierarchy. IBM has a strong inherent business expertise not only in the Technology sector but also across all major sectors which covers more than a dozen industries. Growth and innovation forms part of the Strategic marketing and planning . IBM has world’s leading management consulting services that collaborate with the other parts of MOM, including the hardware Group. Apple also has a very strong record in the Strategic marketing and planning for its business.
In the recent years Apple has been very successful in formulating successful marketing strategies by forming an excellent ambitions of innovative products like the Pod, Phone which have unique style and design. Apple has been successful because of the innovative marketing and enticing communications with the customers. Apple has achieved unprecedented success in launching its Phone owing to its Strategic marketing and planning. This demonstrate that each of these companies have a strategic hierarchy (Davis & Broodier, 2009). 5. Macro environmental forces The macro level environmental forces for any industry can be broadly classified as the political and legal, social, economical and technological. When we analyze the information technology industry on this basis we find that with the growth of the technology nearly all the political systems of the world are becoming open to the spread and development of this industry. Especially in the emerging economies like China, India and other developing nations the governments have provided many incentives for the growth and this a growing trend worldwide.
The IT revolution has spread beyond the cultural barriers and with the advent of internet all the cultures have accepted the role of IT based products in their lives (Warrenton, Stayed & Weightier, 2007). The upsurge in the world economy is contributed to the advancements in the IT sector. Many leading companies of the world are the Technology companies like MOM, APPLE, and MICROSOFT etc. As the world economy is in recession the IT sector is also suffering from its effect. The economic environment has a direct relation with the economic development and growth.
Technology is the base of this industry and any company that lags behind in innovation and the latest development cannot survive. The impact of the changing technology is profound and technologies changes very rapidly in this industry (Gumminess, 2007). The micro environment factors are costumers, employees, competitors and suppliers etc. These factors form the micro environment for any industry. The technology industry is a highly competitive industry with a large number of big players like Microsoft, Dell, HP, IBM and Sony etc operate in this sector. This makes the Technology a highly competitive industry.
The customers are also diverse and have different needs. The needs of the customer change accordingly to the technological advancements and the companies need to continuously innovate to satisfy their needs. Employee recruitment, training and retention are other micro environmental factors that the companies in this sector have to look into. The industry is highly technical therefore recruiting, training and retaining becomes very essential. Companies in the technology sectors pay a lot of attention to the employee relations and spend a lot in designing programs for better employee relations.
Suppliers are also essential element in the technology industry as they have to be chosen in such a way that the company can get the cheap and high quality raw materials in order to get the intense competition in the sector (Weary & Maybe, 2003). 7. 0 SOOT analysts Let us now carry out an SOOT analysis for each company based on our analysis about the industry and the company. 7. 1 . IBM Strengths: the company has long history of innovation in developing technology and many inventions are attributed to MOM. This is a major strength of the company.
The strategic marketing and planning through outsourcing and accusations are also the strengths of the company. Weakness: as the company does a lot of research and innovation this increases its costs. The costs of the company have also raised due to mom of the acquisition issues. These high costs in comparison to the other competitors are the weakness of the organization. Opportunities: The rising demand of the IT related products like computer hardware is an opportunity for the company. Threat: Costly products and the rising competition from HP, Dell, and Accentuate pose a threat to the company (Gross, 2000). . 2. Apple Strengths: The successful launch of the Pod music player has not only increased the sales but has also influenced the customers to get experience of Apple’s other products like the notebooks and operating system. The products from Apple have a strong design which appeals the people. Weakness: the main weakness of the Apple products is that they are costly and the operating systems support limited software’s. Opportunities: as the demand for the online music is increasing the company can market tunes and Pod to attract more customers.
Threats: increasing competition with the other IT companies such as Microsoft, Dell, HP, IBM and Sony (Sibilant 2008). Marketing segmentation is essential for the designing a positioning of the products to the customers. IBM has designed and applied a strategy related to routes to raked that was formulated by an observation of the buying behavior of the clients and was in tune with their economic value as customers. This adoption of the RTFM simplification strategy made the approach of IBM to be consumer centric rather than the product centric approach to the market segmentation.
Market segmentation is now done based on the understanding of the market place rather than the size and growth of the market. IBM in order to increase the business, is focusing more on the segments, like the constituency groups and the small and medium businesses (Culled & Isakson 2000). Apple has also tried to reach the consumer segments that it has not previously reached by its consumer electronics products. Apple has launched these products to create an appealing and relevant brand image in the minds of the customers in the consumer electronic segments which are not the traditional market segments on which Apple has earlier focused.
This approach has enabled the company to expand its customer base. The Pod halo effect was an attempt by the company to attract the new groups of the customers which they thought will become new segments where they can also create an interest for the Apple’s computer reduces also. This has worked out or not is a question but it has definitely created a new market segment for the company and has increased sales and revenues (Kettle, 9. 0 Target markets IBM is now targeting the small and the medium business for its note book segment.
IBM has recently launched a new range of computer systems which are specially designed to meet both the performance and price requirements of the education and small business markets. (Christian, 2004). As the IBM is facing stiff competition and the company is trying to tactically use the product features in order to expand its business in these markets. The Vim’s Personal Computing division has introduced several new Net Vista desktop models and Thinking notebook, which features Intel Pentium 4 processors and contain many IBM e-business solutions like the advanced security, application management and wireless networking (Fishbone. Zen 2005). Apple has launched its consumer electronics products like the Pod in order to target that market which is not much interested in its high profile technical product range that is used by professional users like researchers (David & James, 2008). The consumer electronics product range is aimed to capture the larger and general raked segment like students, professionals etc so that company can penetrate those segments which are till now away from their products.
This approach is based on the philosophy that this will draw the attention of these new segments to the other products of the company that they don’t use (Bennett, 2009). The undifferentiated targeting strategy is based on targeting all the segments in the market, the concentrated marketing is for a particular segment and differentiated marketing means to target two or more different market segments and designing a different strategy for each. As both the products are different from each other therefore the targeting strategy for both the companies is different (Shank & Orangutans, 2003).
IBM has used the concentrated marketing by providing enhanced product features at a lower price to target the market segment of the small and the medium business in which the company has a long term commitment. The company has recently introduced some products in the note book range with advanced features in order to provide more value for money to the customers in the educational and small and the medium business segments (Engel, Blackwell & Koalas, 2008). Apple has used undifferentiated marketing and tried to broaden its customer base by introducing the consumer electronic products.
The company has targeted a broader general consumer electronic segment by using a combination of good hardware with a grand style, better software, good performance a user friendly interface with a good e-business service (Stephen & Robert, 2004). 1 1. 0 Positioning strategy Positioning is a process by which the organizations try to create the image or the identity of the product in the minds of the target segments. It is very essential to roommate a positioning strategy in order to create a positive image of the products. There are various positioning strategies which are used by the organizations to market their products.
Some of these strategies are positioning by attributes or features, positioning by price, positioning by the use, and positioning by product class. IBM we can see has used the positioning by attributes as the strategy to position the note book range as it has added new features to its range. Apple on the other hand has used positioning by the use and the product class (Don & Hide, 2004). Now looking into the whole scenario and the analysis of the industry, company, and macro environmental and micro environmental forces some recommendations can be made to both the companies regarding the other potential market segments.
The IBM has concentrated and had showed long term commitment to the small and the medium business and should now take an undifferentiated approach to reach out to a broader customer base by trying to introduce the note book range to the general Costumers as we have seen that more and more people are now open to IT with the rising popularity of the IT related products like note book. IBM should try to reduce the costs of its products. For Apple it is suggested that it can create some segments in the consumer electronic products.
They should try to create a high class segment and lower middle class. The upper class doesn’t mind paying more or a product that is a different class and the middle class looks at economy.