Apple marketing management assessment 2

1.     What is happening to market size, growth, geographical distribution and profits?

Apple INC has a large number of different markets for different products. In general the market size is still very large and Apple still holds that largest market size in the phone and tablet industry. As the operating system of apple, iOS, has many application producers, the phone is beneficial to almost the entire world. Therefore, the market size potential of Apple Inc. is limitless.

According to , the tablet market size of apple is not growing as rapidly as expected. The sales did not reach the expected figures meaning that the campaign may not have been successful. This makes the company question the future of tablets or if there is a bigger opportunity available.

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When looking at the above figure, it can be understood that apple was once the only provider of tablet products. Over the course of 2 years, Apple went from 100% market share, to about 33% of the market share. The growth however of the company is still growing however the rate of growth may not be as rapid. In 09’ Apple reached its biggest growth of more than 107% unit growth in one year, however in recent years, the unit growth rate has dropped to about 20%.

In recent studies by , it was understood that the number of people that were eager to buy the tablets from apple were much higher compared to other brands. This shows that the company brand and image is still growing stronger, however the price of the products may be a large factor which influences the final choice for the market.

According to , Apple’s geographic distribution has increased significantly over the past few years. The number of apple stores to have been built in the last few years is very high. Just is 2013, more than 20 Apple stores were built in new populated areas around the world. The Apple Inc. wishes to broaden its global distribution and allow the product to be available in most areas of the world. As of May 2013, Apple has over 410 stores located in most of the populated areas of the world.

The profit of Apple will be affect by a number of factors including revenue, COGS, expenses etc. therefore, the profits of the company may not express the true growth and strength of the company. Firstly in 2009, when Apple became one of the strongest companies in the world with the release of iphone 4 and ipad, the gross profit was 16.85 billion in reference to . In 2011, the gross profit increased to 44.5 billion. 2012 and 2013 had a gross profit of 68 billion and 63.5 billion respectively. This meant that though the profits generate is still incredibly strong, the profit decreased, meaning that there were expectations that were missed. When looking at the figures of the revenue, COGS, and expenses, it is obvious that each factor is increasing, however COGS and expenses increased more than the revenue, causing a decrease in profitability.

2.     What are the major market segments? What are their expected rates of growth? Which are high opportunity and low opportunity segments?

According to , there are a lot of market segments that can gain benefits from apple products. The first segment that is targeted is the medium to high level segment of the market. This segment contains the people that can most likely afford the Apple electronics. This segmentation strategy is obvious by the higher price that Apple offers compared to other competitors. By offering a higher price, it also implies that you are getting better quality and more features.

Apple however has recently tried to target the less wealthy by offering an alternative to the usual premium price and quality. The iPhone 5s was the premium product that offers the top notch experience for the consumers however is also quite expensive. Apple released the iPhone 5c at the same time which was a similar model, however offers a plastic cover, slower processor, no fingerprint scanner, lower resolution and display quality etc, however you pay much less for this model. This shows that apple is trying to segment the market and create products that are suited for specific market segments; however this was not very effective.

The main 2 segments that Apple tries to target are the students and workers. Students benefit greatly from Apple products is as increases information accessibility, and also promotes active education on the go, . Workers also get a great advantage with apple products as it can be used to perform tasks on the go, communicate more effectively and also create emails, documents and files easily. Both these segments are the main target markets and take the majority of the market share.

Expect rates of growth are hard to tell because Apple is quite discrete about organisational information. Apple however has recently stated that its growth expectations were not met in the recent tablet release of late 2013. It was obvious however that Apple was expecting a much larger profit for 2013, as it was lower than 2012. This was because Apple spent a lot of money on COGS and expenses that the profits dropped. Apple was planning to make more revenue from the tablet release and new iPhone 5s/c however the revenue were not as high as expected, .

The high opportunity segments that apple can target are the high income level segment, educated and technological segment, 18-40 year old etc, are all high opportunity segments. The main specifications of a high opportunity segment is one that would benefit greatly from the Apple products and has the income and desire to purchase the product.

The low opportunity segments are the medium income level segment, young children and kids or elderly people because these people would be attracted to the product, however do not have the income or power to purchase the product. These people are either attracted to the products or have the money to purchase the products,…