Implications of enabling technologies for Apple Inc.

Table of Contents

Table of  Figures  2

1.  Introduction  3

2.  The Role of the Internet for E-businesses Marketers  3

2.1  Opportunities Advantages of Enabling Technologies  4

2.1.1  Interactivity  4

2.1.2  Intelligence  4

2.1.3  Individualisation  5

2.1.4  Integration  6

2.1.5  Industry Restructuring  8

2.1.6  Independence of Location  8

2.2  Threats Challenges of Enabling Technologies  10

3.  Internet Marketing Strategy  13

3.1  Online Competitive Advantage  16

3.2.  The E-marketing Mix  20

3.2.1  Product  20

3.2.2  Place  21

3.2.3  Promotion  22

3.3.  The Internet Pricing  24

4.  Critical Evaluation of Apple Inc s Web Site  28

4.1  Strengths  28

4.2  Weaknesses Proposed Improvements  32

5.  Conclusion  32

6.  References  34

7.  Bibliographies  37

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Table of Figures

  Figure 1 Apple Inc s Feedback Service Feature  5

  Figure 2: Apple Inc s Customised My Account Feature  6

  Figure 3: Apple Inc s iPod Print Advertisement  7

  Figure 4: Apple Inc s Customer Service Helpline  7

  Figure 5: Apple Inc s Customer Support Section  8

  Figure 6: Apple Inc s iTunes Music Download  9

  Figure 7: Apple Inc s iTunes Music Player Download  9

  Figure 8: Apple Inc s Software Updates  10

  Figure 9: Apple Inc s Online Discount Incentives  12

  Figure 10: The Vicious Circle of Technology Competitive Advantage  13

  Figure 11: Apple Inc s Computer Product Segmentation 2007  14

  Figure 12: Apple Inc s Computer Product Segmentation 1997  14

  Figure 13: Comparison Between Apple Inc s Web Site in the UK Iceland (Customer  

  Support Section)  15

  Figure 14: Competitive Advantage Customer Orientation  16

  Figure 15: Apple Inc s Adobe Company s Online Relationship  17

  Figure 16: Apple Inc s Nike s Product Relationship  17

  Figure 17: Apple Inc s Podcast Download Technology  18

  Figure 18: Apple Inc s iTunes Affiliation Programme  19

  Figure 19: Apple Inc s Developer Connection Programme  19

  Figure 20: Apple Inc s Track Your Order Feature  22

  Figure 21: Apple Inc s Banner Advertisement on Product Related Web Sites  23

  Figure 22: Apple Inc s Special Deals for Schools  25

  Figure 23: Apple Inc s Special Deals For Universities  26

  Figure 24: Apple Inc s Special Volume Discount Offers (iPod)  26

  Figure 25: Apple Inc s MacBook Printer Bundle  27

  Figure 26: Apple Inc s Web Site Navigation  28

  Figure 27: Apple Inc s Interactivity Feature (TV Ads)  29

  Figure 28: Apple Inc s Web Site Layout  30

  Figure 29: Apple Inc s Specific Target Audience Layout (Students)  30

  Figure 30: Apple Inc s Specific Target Audience Layout (Businesses)  31

  Figure 31: Apple Inc s Call-of Action Feature (iPod)  31

  Figure 32: Apple Inc s Complex Web Site Content  32

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1. Introduction

This report critically examines the implications of enabling technologies that will have an impact on the marketing strategies of businesses. As technology, such as the Internet, provides new opportunities and challenges for marketers while aligning a customer-focused strategy, this medium is becoming crucial in today’s dynamic business environment in order to maintain competitive. This report analyses the role of the Internet for marketers followed by an examination of opportunities and threats to global businesses from enabling technologies. Furthermore, a detailed examination of strategic approaches will be given, focusing on the e-marketing mix and pricing strategies in order to highlight the increased pressures for organisations when applying new media formats. Apple Inc. will be indicative as an example for important aspects throughout the report, in order to clarify and visualise the execution of new media formats by Apple Inc., followed by a critical evaluation of their web site with a focus on strengths, weaknesses and proposed improvements.

2. The Role of the Internet for E-businesses & Marketers

According to Doole and Lowe (2004), the IT and communications technologies are growing at a tremendous velocity and have a major impact on the way global business is done. In particular the Internet facilitates the integration of different technologies. Nowadays, technology is a vital influence and underlines the choice of implementation strategies of the international marketing mix and furthermore, “enables the more effective control of a firm’s diverse international activities” (Doole and Lowe, 2004, p.403). The Internet has had, and still has, a vast effect on international trade, as physical geographic boundaries are abrogated due to the increasing number of broadband penetrations and access to technologies. According to Internet World Stats (2007), 37.6m users are currently utilising the Internet in the UK, which is 62.3 per cent of the total UK population. Globally 1.1bn Internet users, equivalent to 16.9 per cent of the world’s population, exploit the Internet that identifies a global growth rate of 208.7 per cent since the year 2000. This highlights that this medium is crucial to marketing in order to stay competitive in today’s business dynamism. The role of the Internet for ebusinesses and e-marketers includes critical opportunities and challenges when applying technologies to their businesses operations.

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2.1 Opportunities & Advantages of Enabling Technologies E-marketing provides a chance for business operations to be executed in a global marketplace, as it offers “an alternative route to market to traditional distribution channels” (Doole and Lowe, 2004, p.409). According to McDonald and Wilson (1999), cited in Chaffey et al. (2003), the paradigm shift between traditional and new media marketing approaches is inherently identified by six determinants.

2.1.1 Interactivity

As the customer or other stakeholder is initiating the contact by getting proactive, the company can and shall provide the individual with a huge information supply “without human interventions” (Sheth and Sharma, 2005, p.612), because according to Bickerton et al. (2001) the customer is in control. Furthermore, the personal needs and wants of the customer “can be addressed and taken into account in future dialogues” (Chaffey et al., 2003, p.29) by encouraging a two-way communications loop. Interactivity is of vital importance, as it offers the customer an interesting and constantly changing basis for their Internet experience and curiosity.

2.1.2 Intelligence

According to McDonald and Wilson (1999), cited in Chaffey et al. (2003), “the Internet can be used as a relatively low-cost method of collecting marketing research” (p.29) especially about customers’ or stakeholders’ perceptions of tangible and intangible goods, or marketing and channel management effectiveness. For instance, Apple Inc. is able to profile their customers on the basis of information received in questionnaires or feedback features (Figure 1). This information can be used to enhance their products and services on- and offline and furthermore, assists in determining customer satisfaction. Marketing research intelligence can also be applied in tracking where the customers click on a particular web site using a “transaction log file” (p.29). This technology enables businesses “to respond in real time to buyer behaviour” (p.29), i.e. the customers.

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Figure 1. Apple Inc.’s Feedback Service Feature

(Source: Adapted from www.apple.com/uk/, 2007)

2.1.3 Individualisation

The individual marketing communications message can be tailored to the needs and wants of the customer as opposed to “traditional media where the same message tends to be broadcast to everyone” (Chaffey et al., 2003, p.29). This is an important aspect in achieving a customer relationship on a one-to-one basis, and setting up key accounts while categorising the customers in order to provide them with specifically tailored deals. This is particular important in satisfying specific personal needs and experiences which can be created “by customizing information for individual customers” (Sheth and Sharma, 2005, p.613), e.g. “My Account” feature of Apple Inc. where personalised product information will be displayed according to prior purchases (Figure 2). Furthermore, the degree of customisation can be “controlled either by the firm or by the customer” (Mohammed et al., 2003, p.16) in order to provide to optimal two-way communications flow.

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Figure 2: Apple Inc.’s Customised “My Account” Feature

(Source: Adapted from www.apple.com/uk/, 2007)

2.1.4 Integration

Integration provides a crucial attribute in communicating on virtual and physical media formats, as this determines the optimal mix of a company’s marketing communications. The Internet can be used, according to Chaffey et al. (2003), as a “direct-response tool, enabling customers to respond to offers and promotions publicised in other media” (p.31) such as television or newspaper (Figure 3). Furthermore, the Internet can support the buying decision by offering phone numbers to receive product information or assistance in placing an order, e.g. Apple Inc.’s customer service helpline (Figure 4) and customer support section (Figure 5). Integration of on- and offline marketing communications can be used to track purchases done and hence, help to enhance the whole service landscape for customers or stakeholders. Furthermore, the Internet provides communication improvements to all stakeholders in contrast to the traditional media, as instant communication is possible via to email or electronic data interchanges.

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Figure 3: Apple Inc.’s iPod Print Advertisement

(Source: Adapted from www.creativeclub.co.uk/, 2007)

Figure 4: Apple Inc.’s Customer Service Helpline

(Source: Adapted from www.apple.com/uk/, 2007)

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Figure 5: Apple Inc.’s Customer Support Section

(Source: Adapted from www.apple.com/uk/, 2007)

2.1.5 Industry Restructuring

According to Chaffey et al. (2003) “disintermediation and reintermediation are key concepts of industry restructuring” (p.32) as new networking systems for managing the supply and value chain can be developed. As the business environment virtually and physically gets more intense and dynamic, information exchange and efficiency improvements are vital in order to sustain competitive and, more crucially lower costs while, according to Sheth and Sharma (2005), “the primary advantage of e-marketing is reducing costs and enhancing reach” (p.612) to supplier, retailers and customers. Bypassing existing channels of distribution is particularly important for a channel management in order to deliver value to the customers, such as free delivery from efficient distribution management. Thus, the Internet becomes very important in considering a company’s representation of intermediaries (Chaffey et al., 2003).

2.1.6 Independence of Location

According to Sheth and Sharma (2005), the e-marketing approach allows reaching customer, independent of location, to be accessible which might not be possible without applying this technology. The Internet makes it possible to enter international markets without being

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