Implications of enabling technologies for Apple Inc.

Table of Contents

1. Introduction

2. The Role of the Internet for E-businesses & Marketers
2.1 Opportunities & Advantages of Enabling Technologies
2.1.1 Interactivity
2.1.2 Intelligence
2.1.3 Individualisation
2.1.4 Integration
2.1.5 Industry Restructuring
2.1.6 Independence of Location
2.2 Threats & Challenges of Enabling Technologies

3. Internet Marketing Strategy
3.1 Online Competitive Advantage
3.2. The E-marketing Mix
3.2.1 Product
3.2.2 Place
3.2.3 Promotion
3.3. The Internet & Pricing

4. Critical Evaluation of Apple Inc.’s Web Site
4.1 Strengths
4.2 Weaknesses & Proposed Improvements

5. Conclusion

6. References

7. Bibliographies

Table of Figures

Figure 1. Apple Inc.’s Feedback Service Feature

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

Figure 3: Apple Inc.’s iPod Print Advertisement

Figure 4: Apple Inc.’s Customer Service Helpline

Figure 5: Apple Inc.’s Customer Support Section

Figure 6: Apple Inc.’s iTunes Music Download

Figure 7: Apple Inc.’s iTunes Music Player Download

Figure 8: Apple Inc.’s Software Updates

Figure 9: Apple Inc.’s Online Discount Incentives

Figure 10: The Vicious Circle of Technology & Competitive Advantage

Figure 11: Apple Inc.’s Computer Product Segmentation 2007

Figure 12: Apple Inc.’s Computer Product Segmentation 1997

Figure 13: Comparison Between Apple Inc.’s Web Site in the UK & Iceland (Customer Support Section)

Figure 14: Competitive Advantage & Customer Orientation

Figure 15: Apple Inc.’s & Adobe Company’s Online Relationship

Figure 16: Apple Inc.’s & Nike’s Product Relationship

Figure 17: Apple Inc.’s Podcast Download Technology

Figure 18: Apple Inc.’s iTunes Affiliation Programme

Figure 19: Apple Inc.’s Developer Connection Programme

Figure 20: Apple Inc.’s “Track Your Order” Feature

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

Figure 22: Apple Inc.’s Special Deals for Schools

Figure 23: Apple Inc.’s Special Deals For Universities

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

Figure 25: Apple Inc.’s MacBook & Printer Bundle

Figure 26: Apple Inc.’s Web Site Navigation

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

Figure 28: Apple Inc.’s Web Site Layout

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

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

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

Figure 32: Apple Inc.’s Complex Web Site Content

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 e-businesses and e-marketers includes critical opportunities and challenges when applying technologies to their businesses operations.

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

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(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.

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

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(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.

Figure 3: Apple Inc.’s iPod Print Advertisement

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

Figure 4: Apple Inc.’s Customer Service Helpline

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

Figure 5: Apple Inc.’s Customer Support Section

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(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 physically present in those markets due to the delivery of digitalised products, e.g. music downloads (Figure 6), music player (Figure 7) or software updates (Figure 8).

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Figure 6: Apple Inc.’s iTunes Music Download

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

Figure 7: Apple Inc.’s iTunes Music Player Download

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

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Figure 8: Apple Inc.’s Software Updates

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

However, there are existing challenges and disadvantages whilst enabling these technologies. In particular, they do not necessarily change “the elements and challenges associated with international marketing processes” but does change the nature and scope of international marketing strategies and “the solutions that are developed” (Doole and Lowe, 2004, p.404).

2.2 Threats & Challenges of Enabling Technologies

According to Sultan and Rohn (2004), cited in Tiago et al. (2007), “a few years back, enterprises questioned the role of the Internet in business performance, but today they cannot live without it, or outside it” (p.138). Nevertheless, although the Internet provides major advantages in international marketing and business operations, it still encounters disadvantages and its application can be a vast challenge for marketers. International e-businesses are facing challenges regarding the cultural background of the customers, as according to Doole and Lowe (2004), customers in “low context cultures are likely to embrace the Internet much more readily than those in high context cultures” (p.424). In addition, the Internet marketing strategy shall integrate all aspects of the traditional marketing strategy in order to deliver a unified and conformed picture of their marketing communications and brand values. Otherwise, despite the undoubted potential of e-marketing, the whole marketing approach will not meet customers’ expectations. Global Internet strategies should consider different infrastructural developments and environments that are existent in several countries and lengthy web site loading procedures might put customers off, especially those without broadband connections. Poor web site performance or design and slow order fulfilment can alienate customers from doing business with an organisation (Doole and Lowe, 2004). Therefore, a company has to set the focal point on providing adequate and reliable services for their customers throughout the whole online experience. As an increasing number of organisations are virtually present combined with proactive user behaviour, businesses have to ensure targeting the right audience with their communications campaign, virtually and physically, in order to overcome the Internet clutter. Adding value online is a prerequisite for companies to enable customers to experience something they cannot encounter offline. Due to this fact, organisations have to ensure they provide this value, otherwise the online presence will not stand out in the crowd. Furthermore, most online purchases require credit card information and thus “it is in the supplier’s (and customer’s) interest that the transaction is as safe and secure as possible”, according to Molenaar (2002, p.71), in order not to dissatisfy the purchaser. Another conflict that might occur while applying the Internet purely as a sales medium is that some buyers need an incentive to purchase online, e.g. Apple Inc.’s online discount (Figure 9). Businesses which simply copy their physical product range to their web site might force a buying conflict in which the customer does not know why he/she should buy online and so do not meet the needs and wants of the customer (Molenaar, 2002).

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