Promotion and the Product Life Cycle
Running head: BUSINESS GROWTH OVERVIEW 0
Business Growth Overview
Virgie Tatmon
MKT/571
March 20, 2017
Professor Roberto Ancis
Business Growth Overview
Part 1
Major areas of increase and decrease
The company has experienced increased sales in Europe and Japan in 2014. In the fourth quarter, revenues in Japan rose by 3% while in Europe, the revenues grew by 10%. Unlike the above two regions, China and the America’s experienced a decline in revenue by 30% and 7% respectively. In terms of product performance, Mac had the sharpest drop of 17% followed by iPhone at 13%.
Following success in 2013, the company increased production units of the Mac and iPad, which failed to sellout in 2014 resulting in a loss for the corporation. Going by the trends, the company should consider reducing production of these two products. This will greatly reduce production costs. The company can also consider stimulating the market to spur more sales for the iPhones by using a scarcity strategy. Fearing to miss out, people would respond by making instant purchases, which would translate to increased revenues.
Evident trends
Revenue has substantially declined in the fourth quarter of 2014 compared to revenues from the third quarter of the same financial year. This can be attributed to the significant decline in the Mac and iPhone sales. During the same quarter, sales of the iPad increased by 6%. Another notable trend is the increase in revenues from services offered by the company. Revenue earned from these services increased by 24%. There is also a notable decline in revenues from other products in the fourth quarter compared with the third quarter. Specifically, there was a 22% drop.
Insights for motivating marketing strategies
In a competitive environment, rapidly growing entities and those experiencing stagnation are differentiated by an entity’s ability to generate demand as well as attract new clients. It is therefore important for the company to devise ways to improve its brand positioning in the market. Therefore, the company should consider using integrated digital marketing techniques that incorporate more aspects such as market automation and lead generation (Grant, 2016).
Apple Inc. should also enhance its research on consumerism to identify prevalent consumer preferences. This would help the company to produce products that meet customer tastes and preferences. Such products actually attract more customer goodwill and spurring increased sales. The company can use innovative strategies to increase efficiency of the production process (Grant, 2016).
According to Grant (2016), this will help the company reduce production costs and improve sustainability of its products. The company can also solicit feedback from customers about its products and then incorporate this feedback in the products (Grant, 2016). Apple Inc. has experienced success by making unique products. The company can continue with this strategy to strengthen its strong brand presence. To aid in this, the company should conduct a comprehensive market research to enable the company to assess various market aspects such as consumer preferences, financial capability of target consumers and possible competitor actions among others (Heracleous, 2013).
Additional analysis
Considering the fact that revenues are declining in its major markets’ Apple Inc. should consider focusing on stimulating emerging markets in Africa and South America. The company has not penetrated these markets well and if exploited they can greatly add to the company’s revenues. To ward off competition, the company can improve the quality of its products to ensure they are superior to those of their rivals such as Samsung (Heracleous, 2013).
Part 2
I have also selected Apple Inc. for this analysis. Ronald Wayne, Steve Wozniak, and Steve Jobs established Apple Inc. on April 1, 1976. The company has its headquarters in Cipertino, California (Heracleous, 2013). I have selected the company’s main brand, the iPhone for this analysis. In 2013, Apple sold 150.26 million iPhone devices and sales increased in 2014 where the company sold 169.22 million units. Apple Inc. employs 92,600 employees in permanent basis and 4,400 on temporary basis. The company’s website is www.appple.com. It’s primary SIC Code is 3571 – Electronic Computers while is primary NAICS Code is 334111 – Electronic Computer Manufacturing. I have used 2013 and 2014 reports for this analysis.
The iPhone is currently the company’s major product and accounts for the highest revenues. The major competitor of the Apple iPhone is the Samsung’s Galaxy S Smartphone. Apple uses innovation and extensive market differentiation, which has helped the company create a unique brand positioning. High quality of the iPhone also contributes to the strong brand identity, which helps the company to attract more customers. North America and Europe are the major markets for the iPhone. The company posted a 12% increase in sales of the iPhone in 2014 compared to 2013. The company should focus on expanding its market in Africa and South America to increase sales. By the third quarter of 2016, the iPhone had a 12.5% market share in the Smartphone sector.
Reference
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Heracleous, L. (2013). Quantum strategy at Apple Inc. Organizational Dynamics, 42(2), 92-99.
http://images.apple.com/newsroom/pdfs/Q4FY16ConsolidatedFinancialStatements.pdf
http://images.apple.com/newsroom/pdfs/Q4FY16DataSummary.pdf
http://investor.apple.com/secfiling.cfm?filingid=1193125-14-383437
