Apple technology
Apple has, over the years, emerged to be among the leading technology companies around the world. Most importantly, its growth has been characterized by the development of an organizational culture that plays a crucial role in continued success. Today Apple boasts of a long list of features that define its brand and provide guidelines for all of its business decisions. One of the vital defining features of the Apple brand is creativity. Creativity is a major aspect of apple’s corporate culture, which ensures that the company produces highly competitive products and services in the market. Creativity can be seen in the continuous improvement in the design and features of iPad, iPhone, and Macs. With creativity, every decision seeks to maintain the company’s capacity to satisfy customers’ preferences and expectations. Close to creativity is innovation whereby performance and product development processes are industry’s best. With rapid innovation through continuous training and employee development, the company is always associated with the introduction of new products that are not only attractive but also those that attract significant profits. Furthermore, Apple is associated with top-notch excellence. Apart from excellent products, the company maintains a highly motivated and excellent workforce that plays a huge role in product design and development, which is among the company’s major growth strategies. All of these features have established apple Inc. as a unique and highly recognizable brand.
Corporate mission
Apple’s corporate mission is to bring the best user experiences to its customers around the world through the provision of its services, software, and hardware. An increase in the investment in Apple TV will open more opportunities to improve user experience. Apple, through its vision, seeks to produce excellent products all the time, although Apple TV lags behind Apple’s other portfolios (MacDailyNews, 2019). As a result, the management and the organization should focus today on how to ensure it grows to be a competitive service as its other portfolios, such as the iPhone, which had a market share of 45.1 percent at the end of 2018 (O’Dea, 2020). Apple TV allows the company to air its own content that is often associated with the affluent population of the United States and around the world. The TV streaming service is growing every year, and with the growing popularity of the Apple brand, this service has significant potential to grow in the future.
Apple can market its Apple TV both internally and externally. Internally, Apple has to identify all of its employees who do not have apple TV subscriptions. After identification, it then has to sell to them at the lowest possible price. While Apple will have an opportunity to increase sales through internal marketing, it also gives employees a chance to have a taste of what they produce. Such a strategy compels employees to find ways through which they can improve the TV services as they can experience their services from the customer’s point of view. Furthermore, such a strategy might also improve employee motivation as well as experience high job satisfaction as the company confirms to them that they are a valuable partner in its new service portfolio. Most importantly, employees, in this case, might be a significant player by marketing the product to the world through experience.
Externally, apple can market its apple TV through commercial ads. Ads are an effective way of communicating the product to the world, as they are often simple and to the point. Such advertisements should similarly focus on the critical features of the products, including the streaming of Apple’s original movies. Another way of the external promotion will be the use of yearly keynote speeches. Annual keynote speeches make up one of the biggest components of the promotion activities of the company. Through yearly keynote speeches, the company can communicate the major features of the Apple TV that now make up a huge portion of its brand and image. Since a significant population of iPhone and iPad customers are not even aware of apple TV, the use of yearly keynote speeches for promotion will provide an opportunity for the company to keep its fans interested as well as offer more information on its Apple TV products.
One of the outstanding features of Apple TV is the low subscription fees. The market has always known that Apple sells its products at premium prices. However, with a monthly subscription fee of $4.99 against its biggest rival, Netflix, which charges its cheapest plan at $9. This way, Apple has established itself as a cost leader in the market and differentiates itself from competitors such as Netflix through lower prices. With price differentiation, apple TV is at a higher chance of being competitive in the future as most customers view it as affordable.
I think Apple is an effective brand and will successfully improve the market share for Apple TV. Most importantly, apple, as one of the biggest premium brands, forms stronger connections with customers, which encourages them to keep purchasing its products. Apple is effective in nurturing connections with customers in the long term. One of the reasons for apple’s strong connections is that customers often feel that its products will substantially improve their lives. Through the company’s innovation and creativity in product design and development, it has established itself as a favorite among customers around the world. This way, I think apple is an effective brand that can successfully push its Apple TV services to the top of the competition.
Section Three: Defining Product or Service Need
The Apple TV subscription service targets quite a broader range of customers from around the world. Most importantly, this product suits the ages between 22 and 39, who often find time to watch movies. For gender, apple TV targets both men and women for its original TV series and films. Regarding income, Apple TV is a service that targets both medium and high-income individuals. This group of customers has enough income to spend on recreational activities. Furthermore, TV subscription service targets the urban, young population that is also open to changes. Regarding behavior, apple has a long history of connecting with consumers in the long term. As a result, apple TV targets hard-core loyalists who have a strong connection with the brand. With this group of customers, there are minimal chances for them to switch to other brands and therefore guarantee apple long-term revenue streams.
What unsatisfied need
The introduction of the Apple TV seeks to meet the urgent need for TV streaming services among its loyal customers. Apple products often have a halo effect on the market. The creativity put in both design and development usually results in connection with customers. Apple already provides a majority of technological products and services, including Macs, iPad, and iPhone. TV subscription services have not been widely explored. As a result, apple TV seeks to fill this gap among apple brand loyalists.
With a majority of apple customers interested in often looking out for new apple products, they utilize both email and news press releases to learn of new information to meet the TV subscription needs. Email marketing is one of the common methods used by apple to reach its customers. As a result, loyal Apple customers are likely to learn about new products through their emails where apple communicates on new products.
The buying situation, in this case, straight rebuy. Considering that Apple TV offers a subscription service, the buying situation is a straight rebuy, as buyers have to keep ordering services on a routine basis. As a result, the main task of the marketer is ensuing the first purchase, which guarantees the company of continuous routine purchases.
Why your chosen target market is the best choice
One of the major characteristics of apple TV target customers is that their age ranges between 22 and 39. Individuals within the ages of 18-29 are binge-watchers. This group further watches TV several times a week due to minimal financial requirements and less stressful families. As a result, this target market would guarantee Apple Inc. recurrent incomes and have a higher probability of developing a stronger connection with the brand in the long term. Young viewers have also been known to stay up longer during the night to watch more TV programs, including series and movies. Furthermore, the pricing of the Apple TV subscription, which is among the industry’s lowest despite its strong brand name, makes it more affordable to the younger generations.
Furthermore, Apple TV targets the urban young population. With monthly subscription fees of $4.99, the young urban populations can easily afford this without the need for parental help. The young urban population has a long history of being glued to TV screens compared to their counterparts from the countryside. Although the current apple TV subscription cost is low, maintaining the customer base of both medium and high-income earners is vital for apple’s growth strategies in the future. The introduction of more premium options for apple TV requires individuals with a stable source of income and those who can spend on recreation. Furthermore, due to the premium prices of apple products and services, it is easier to maintain this consumer segment and turn them into loyalists.
Section Six: Pricing
Fixed costs
The major fixed costs apple is more likely to incur in its apple TV project is management salaries and rent. On the other hand, variable costs include the marketing costs of the service. Most importantly, Apple will need to hire an additional team of both management and employees to handle the new roles associated with ensuring quality services to customers. This new team of employees will come at a cost in terms of wages and salaries. Furthermore, considering that this type of service entails hiring new actors for a majority of future projects who must also be paid, the company should be prepared to spend a significant amount of its budget on wages and salaries. To compete with such industry giants as Netflix, the company will need to employ 8600, which was the number of employees at Netflix in 2019 (Statista, 2019). More so, based on the industry’s best, that is, Netflix, which pays an average annual salary of $104, 398, Apple TV will have to offer better wages to attract the best in the industry (PayScale, 2020). Usually, creative employees are in higher demand than the average ones. Such creative employees are also productive and would provide apple TV an opportunity to compete for the best in the industry. As a result, the company might need to offer slightly over $116000 as an average annual salary.
Considering that the Apple TV will need facilities to operate from, rent is another major fixed cost the company will incur. Renting properties for both content production and management might cost the company an estimated $107 million annually when compared with Netflix.
Apple TV will also incur marketing costs high as about $900 million to reach out to the same or surpass the number of customers of such companies as Netflix. Marketing costs include the costs of personnel involved in promotional activities as well as those of commercial ads on both social media platforms and traditional media.
As noted above, Apple TV offers the lowest subscription costs when compared to its closest competitors. Apple TV charges $4.99 monthly. On the other hand, Netflix charges $9, Hulu $5.99, Amazon Prime $12.99, and Disney Plus $6.99 (Tedder, 2019). There are numerous reasons for the low subscription fees by apple. One of them is that Apple produces its own original content without the involvement of third parties. As a result, its production cost is much lower than its competitors who have to spend millions of dollars on buying rights from third-party content, which makes production, and content expensive.
Another important reason for the low pricing by apple is that the services are at times sold as a supplement for other TV streaming services. Selling services on apple TV earns apple Inc. more income that makes it possible to lower its prices. As opposed to its competitors such as Netflix and Hulu, apple further specializes in the sale of hardware, making the low pricing a marketing tactic. The low pricing has the potential to sway subscribers to buy other Apple devices such as iPhones when there is a need to upgrade hardware in the future. Apple TV will also be available on other devices provided by the company to ensure users get the most out of its products and services. As a result, the apple TV services could also be an essential lock-in mechanism to keep customer loyalty.
I think customers are willing to pay more than $5, considering the smaller range of TV series and programs featured on Apple TV. The company has not adequately invested in content creation and not as a major source of revenue for the company. Notably, the apple TV idea is more of an opportunity the company recently established. However, with an increase in investments in content, I am sure the target market will be willing to pay over $12, considering that apple offers premium products.
I think premium pricing is the most appropriate pricing strategy for apple TV. Apple has, for long been associated with providing the best products in terms of design and quality. In the technology industry, Apple Inc. is a 5-star company and its products and services attract premium prices. Furthermore, such premium pricing will give consumers the perception of apple TV offering the highest quality in the market. With premium, pricing apple TV will seem more buzz-worthy and desirable than other less expensive options in the market.