Rushil

Surapaneni April 18th, 2017

UGBA 106 Assignment #4
2. Apples branding architecture serves as an example of a hybrid brand architecture. The branded house features the Apple brand
serving as the corporate brand as well as the master brand, or driver, itself. All products are associated with the Apple master
brand with the same logo and consistent visual identity, including similar color palettes, fonts, and layouts. The iMac, iPod,
iPhone, iPad, Apple TV, Apple Pay, and Apple Watch all serve as individual sub-brands that fall under the master brand. These
products all address similar customer segments across all geographic segments, but each individual product addresses separate
industries and has a slightly different mission from the other products. Similarities exist between the products in order to connect
them with one another and associate them with the greater Apple master brand with this going beyond the similarities in aesthetic
product design. These products are all connected through shared operating systems, communication platforms, and product
hardware, allowing for each product to fall under the scrutiny of the master brands branding standards and strategies.
This architecture offers several critical strategic branding advantages for Apple. It allows for the company to focus on
efficiently communicating with and targeting a few core segments, allowing the company to address the various needs of a similar
customer base. This enables the company to increase the external visibility of all its products with the corporate brand and
generate internal synergies across all products, encouraging brand-loyalty amongst consumers and increasing their share of the
wallet. Conversely, this architecture manages to maximize efficiencies within Apples distribution channel while minimizing risk
to the master brand if one of its sub-brand products fail. Overall, Apples branding strategy focuses on a strong branded house
while also developing strong sub-brands that drive meaningful strategic and financial contributions to the master brand.
In regards to its integrated product portfolio, Apples STP is derived from the strategic planning and implementation that define
its overall marketing strategy. Apples initial target segment focused specifically towards young people due to this segments
interest in music, price inelasticity, and willingness to adopt new technologies. To attain market share within this segment, Apple
positioned itself as being the premier premium brand that delivered innovative, high quality products. To support this STP, Apple
implemented a marketing mix around products that were aesthetically pleasing, intuitive, and trendy. To capture its market
segment, Apple provided multiple venues (place) for its customers through retail and online stores to create a convenient and
helpful experience for its customers. These products were priced to support Apples image of premium and quality and Apple
promoted this image of its portfolio through multiple mediums, whether it was through television advertisements (iPad Air), press
conferences (iPhone at Macworld Expo), digital media (Tumblr page for iPhone 5C), or as simple as word-of-mouth.
2. (Continued) The following table captures the roles of each product within Apples portfolio utilizing the BCG Matrix:
Old Role New Role
iMac Star: Originally introduced in 1998, it featured colorful Cash Cow: While sales may be stagnant or slowly declining,
translucent cases with a distinctive design. Also supported there is a loyal customer base that is unlikely to leave the brand
plug-and-play peripherals, such as printers, that were allowing Apple to continue to produce a considerable amount
designed for Window-based machines for the first time. of iMacs. In addition, Apples promotional efforts with the
The iMac was the primary reason why Apples sales iPhone, iPod, and iPad have enabled continued exposure to the
outpaced the industry average and the company posted a iMac brand in retail settings for consumers. However, elements
$309mm profit in 1998, reversing the $1bn loss in 1997. of this product are approaching the Dog category as the multi-
part desktop continues to fade away with the shift to portable
and mobile and competitors maintain a monopoly in the
desktop market, especially in the business market segment.
iPod Cash Cow: When first introduced, the iPod gave Apple a Dog: Sales have declined by over 70% since their peak in 2008.
competitive and revolutionary edge. It became the premier Apple has discontinued the iPod Classic and the overall product
MP3 player that created a new segment of loyal is in the declining phase. The reason behind this role change is
customers. It also gave Apple a reliable stream of funds to that the iPhone has all the capabilities of the iPod and more thus
develop new products resulting in less of a demand for iPods as iPhone and
smartphones cannibalized iPod sales.
iPhone Star: Was considered revolutionary to the mobile industry Cash Cow: Currently makes 55% of Apples total revenues, but
while cannibalizing iPod sales as users wanted a single has a low potential growth rate as new models of the iPhone are
device that served all their needs. not increasing the value to consumers too much. It has all the
capabilities of an iPod and more, contributing to cannibalizing
iPod sales, and is now often the first Apple product consumers
buy as demonstrated by its high market share.

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 Rushil Surapaneni April 18th, 2017
UGBA 106 Assignment #4
iPad Question Mark: Originally faced stiff competition from
notebooks that had the same capabilities but were cheaper,
but a third market was needed between phones and
computers.
Apple Dog: There exist logistical issues focusing on low-
TV resolution video downloads, lack of remote features like a
DVD drive and volume control, and low unit volume sales
with less than 1 million in total unit sales.
Apple Question Mark: Apple Pay faced the challenge of not
Pay being as widely available enough for people to abandon
their physical wallets at home. While there existed
significant growth potential due to the emergence of the
mobile payment market, Apple Pay faced the challenge of
establishing a foothold within the larger payments market.
Apple Question Mark: The wearable technology market is
Watch expanding rapidly, but Apple Watch faces the challenge of
proviing its usage value in addition to competing in a very
crowded market.
Star: 36% market share in the tablet market and 84 million
units were sold in its first 2.5 years, generating larger sales than
the entire lineup of any PC manufacturer. The iPad has
successfully generated a growing 3rd market between phones
and computers and is the market leader within the $30 billion
tablet industry.
Question Mark: While 20 million units were sold generating
$1 billion in revenue with plenty of potential, the product yields
thin margins combined with low prices in its growth phase.
Reasons behind this role change include Confusion in
distribution channels and logistics that have hurt sales in the
past, a lack of promotion and support to the extent of iOS
devices and no defining feature(s) that are better than
competitors.
Star: Combined with the growing mobile payment market,
Apple Pay managed to differentiate itself from competitors
through its simplicity and ease of use through integration with
the iPhone and Apple Watch. It became available for use at a
wide range of retailers from its inception and by December
2015, Apple Pay accounted for two-thirds of mobile payments
at participating retails. By early 2015, nearly 2 million
customers at Bank of American and Chase had added credit or
debit cards to their Apple Pay account.
The new role is unchanged as Apple Watch remains in the
entry-level stages of the product-life cycle in the text of the
case. Apple Watch remains a question mark as it must prove its
usefulness to consumers and faces the challenge of competing
in the densely saturated wearable technology market.

3. Marketing Mix for Apple Pay, iPod, iPad, and iPhone

Product
Apple With the growth of the mobile
Pay payment market, Apple Pay
differentiated itself through a
combination of security and
convenience. Its seamless
integration with the iPhone and
Apple Watch and ease-of-use
through TouchID made it
convenient as compared to
competitors. In addition,
TouchID and the fact retailers
would not receive consumers
credit card information while
conducting payments gave the
product a security edge in
comparison through paying
with the traditional credit card.
iPod The product differentiated
itself from competition through
its sleek design, easy user-
Price
For consumers, Apple Pay is
a free service offered through
the purchase of existing
Apple products such as an
iPhone, iPad, or Apple
Watch. For retailers, Apple
does not charge additional
fees for utilizing Apple Pay,
but does take 0.15% of every
Apple Pay transaction from
card-issuing banks. This
pricing strategy is meant to
attract consumers to the
unique value added services
offered by Apple hardware
products as well as develop
dependency and loyalty upon
Apple products for both
consumers and retailers.
The 1st Generation iPod was
priced at $399 due to its
breakthrough nature and
Place
For consumers, Apple Pay
can be found through their
devices such as the iPhone,
iPad, or Apple Watch. In
addition, Apple Pay can be
found and promoted
through any retail medium
Apple devices are sold
through or through the
vendors and banks that
accept it. For retailers,
Apple Pay can be found
and enabled through
possessing a contact
payment-capable point-of-
sale terminal.
Originally, the iPod was
sold through Apples retail
stores and third party
Promotion
Apple Pay has been
promoted through word-of-
mouth and integration with
new iPhones, iPads, and
Apple Watches. Its primary
form of promotion is through
its availability with vendors
and banks. With Apples
logo increasingly appearing
next to other card brands on
credit card terminals at
retailers, new consumers
become informed of the
option to utilize Apple Pay
as a method of payment and
original Apple Pay users will
increasingly utilize the
mobile payment option.
Original promotional
campaign was the iPod
people featuring black

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 Rushil Surapaneni April 18th, 2017
UGBA 106 Assignment #4
friendly interface, and iTunes.
The iTunes store enabled
Apple users to purchase songs
in an online marketplace,
giving users easy access to all
music and allowing songs to be
easily transferable to an iPod.
The product evolved in the
years following its initial
launch through the
development of new models
and improvements in memory,
ease of usage, better display
screens, and color choices.
iPad The product created a new
category device whose
lightweight, wireless, and
touchscreen-control
capabilities resonated well with
consumers. The iPad was able
to achieve large-scale adoption
and usage through Apples
brand equity and ecosystem,
but also connected and
intertwined hardware,
software, and applications in a
more seamless way unlike
before with other device.
iPhone The iPhone transformed the
mobile phone industry as it
combined the features of the
iPod Touch with those of a
mobile phone and Internet
communications device all at
once. It was consistent with
Apples product line through
leveraging simplicity, causing
users to find the product
intuitive to use. The addition of
the App Store also
distinguished the product from
its competitors as the App
Stores nature as an ingredient
brand allowed consumers to
see the iPhone beyond that of a
phone or MP3 device.
premium quality. As years
went by and new generations
came out, Apple lowered the
prices of its older products
with each new launch. In
regards to iTunes, each song
in the store was $0.99, but
once Apple realized the iPod
was no longer drawing new
customers in, it began to
charge $1.29 for hit singles
and selected classic tracks.
The latest generation iPad is
priced from $499 to $829,
much higher than
competitors, but once again
reaffirming the premium
brand image and quality of
Apple and its products.
The iPhone is priced quite
high, with an average selling
price of $687, compared to a
$300 ASP for its
competitors. It possesses the
same pricing model as the
iPod, where when a new
model is released, older
model would decrease
significantly in price. The
high price for this premium
product does generate higher
profit margins, as Apple
possessed 93% of the
handset industrys profits
with only 8.3% in unit
market share as of 2014.
consumer electronics
outlets like Best Buy and
Circuit City. Towards the
later years, they sold a lot
more heavily in their retail
stores, as their store
footprint increased, their
online store and third party
online retailers such as
Amazon.
Sold by Apple retail stores,
wireless carriers, and other
retail and online stores.
These Apple stores and
outlets are located in
premium locations only
with contemporary interior
designs necessary to
maintain loyal customers
and attract prospective
customers to the iPad.
Unlike its competitors who
locked in their phones with
certain carriers, Apple
allowed multiple carriers
to sell the iPhone. The
Apple store could sell
unlocked versions of the value of the product that
phone where users got to
bring it to any carrier they
preferred. With this
strategy, iPhones were
mostly distributed through
carriers like AT&T,
Verizon, and Sprint in
addition to unlocked through carrier handed ads
versions through retail and
online stores.
silhouettes dancing to music
on a solid color background.
Utilized this campaign in all
forms of promotion from TV
advertisements to
partnerships to make ads
relatable to most
demographics and appeal to
emotion. Managed to
promote the iPod as a
necessity, not a luxury item,
and after early promotional
success that warped the
publics expectation of an
MP3 player to that of an
iPod, all Apple had to do was
come out with new models
that remained relatively
similar in design.
The iPad was promoted in a
similar fashion as the iPhone
with TV ads, online ads, and
word-of-mouth through
blogs and the news media.
Initial campaign was that it
was the tablet to replace
pencil and paper, but after
consumer feedback
expressing that the iPad was
less than what the iPhone
already offered, Apple
changed both the product
and its campaign to highlight
the multi-functional yet
thinner and sleeker version
of the new iPad.
Apple promoted the product
through the Internet in Your
Pocket campaign,
highlighting the full web-
browsing capabilities in
addition to the quality and
differentiated it from its
competitors.. Apple
promoted the product on its
website, printed media, TV
ads, outdoor media, and
social media. Additionally,
the iPhone was promoted
and independent review
websites.