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Researching Marketing Questions
Researching Marketing Questions
Andrea Markiewicz
MKT/571
July 9, 2018
John Schaefer
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Researching Marketing Questions
Memorandum
To: John Schaefer, Senior Vice President (SVP) of Marketing
From: Andrea Markiewicz, Marketing Analyst
Date: July 9, 2018
Subject: Marketing Report
Part 1
Research Marketing
This memorandum gives an insight into the business growth overview dataset. It
compares year to date (YTD) data from January to June of 2015 with information from January
to June of 2016. There is also quarter to date (QTD) data for April, May, and June of 2015 to
2016 and month to date (MTD) data from June 2015 to June 2016 (University of Phoenix, 2013).
The information has been interpreted to identify the main areas of importance regarding
increases or reductions, insights for continued growth, and trends. The business growth overview
dataset indicates several regions that illustrate a significant increase or decrease.
Major Areas of Increase or Decrease
Year to Date (YTD) Dataset- The global breakout revenue per day for 2015 was $96,976
while that of 2016 stood at $105,768, an increase of $8,792. There was also an increase in the
domestic and international markets (University of Phoenix, 2013). The domestic revenue per day
for 2015 was $85,181 while that of 2016 was $93,683, an increase of $8,502. Customer ranking
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Researching Marketing Questions
selling activities showed an improvement, with expansion and retention generating the highest
revenue of $7,634,424 and 3,026,592 respectively (University of Phoenix, 2013). There was
revenue growth in the customer class industries with commercial and municipal generating the
highest revenue. International and municipal customer class industries had the lowest sales and
gross profit averages per day. International customer class had a sales average per day of 1.8%
and a gross profit average per day of 2.3% while municipal customer class had a sales average
per day of 5.3% and a gross profit average per day of 3.9% (University of Phoenix, 2013). The
organization should implement a marketing strategy that can help them attract international
customers to generate foreign exchange revenue.
Quarter to Date (QTD) Dataset- In the quarter to date dataset for April, May, and June of
2015 and 2016 most areas indicate growth although some still have deficits. For instance, the
customer class industry of education shows a loss in gross profit of -3.8% whereas resellindustrial hygiene has a decline in sales and loss in gross profit of -8.4% and -14.2% respectively
(University of Phoenix, 2013). The data about top customers for Delta Appliance and Francios
and Sons are very alarming. In the case of Delta Appliance, there is a decline in sales of -21.0%
while Francios and Sons' sales declined by -7.0%. Check Gmbh generated the highest sales and
gross profit margin of 2835.2% and 3186.6% respectively (University of Phoenix, 2013).
Month to Date (MTD) Dataset- From June 2015 to June 2016 there was a relative balance
in the global breakout, customer class industries breakouts, and customer ranking activities. Most
of the customer data indicate minimal gains or losses. Top customers such as Delta Appliance,
Here4U, and Euro Ltd increased their sales by 5258.2%, 100.0%, and 126.6% respectively
(University of Phoenix, 2013).
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Researching Marketing Questions
Trends
Data trends indicate growth for the company as a whole. High volatility exists in the
company's top customer category and is highly evident in the month to date (MTD) data.
Although month to date data was less predictable, information appears to stabilize over the
quarter to date (QTD) and even further on the year to date (YTD) sheet. The trending top
customer data repeatedly indicates Fish Limited and ABC Corp as the leading generators of
revenue (University of Phoenix, 2013). The customer class commercial industry trends
categorize them as the class leader in revenue generation regardless of the period examined.
Insights and Additional Analysis
The organization should assess its current position and create a marketing strategy to help
it overcome the negative trends. Before setting marketing goals, it is important to reevaluate and
identify target customers to determine the approach the company can use to communicate with
them. After this has gotten achieved, the budget must be streamlined to ensure it can meet these
goals (Kotler & Keller, 2016). A timeline for executing and releasing the plan must be identified
to enhance the effectiveness of the strategy. The strategy should be reviewed on a regular basis
to ensure that it aligns with the company's goals and objectives.
Part 2
General Description of Apple Inc.
Apple Inc. is an American global high-tech organization whose headquarters are in
Cupertino, California. The firm develops, designs, provides services online to consumers, and
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Researching Marketing Questions
sells electronics and computer software. The company has been known to be a popular digital
ecosystem that’s been known to develop both electronic soft-wares and hard-wares. Apple is
unique when it comes to allowing customers to buy and share contents such as movies,
applications, and music. Its products include the iPhone, iPad, and Mac. It offers operating
system software such as macOS, iOS, and tvOS. Apple provides services such as iCloud, Apple
Pay, internet, and Apple Care (Apple Inc., 2016-2017). Apple is categorized as a public company
and comprises of many shareholders made up of mutual funds, private investors, and institutions.
From Apple's annual form 10-K reports in the year 2016 they had approximately 116,000 fulltime employees, and in the year 2017, that number had increased to 123,000 full-time
employees. When it comes to their net sales or revenue, in the year 2016, they obtained
$215,639,000 and in the year 2017 that value increased to $229,234,000 (Apple Inc., 20162017).
General Description of Apple’s Service
The following analysis will focus on the Apple Pay Service. It is a mobile payment
service that provides a secure, comfortable, and private way of making payments. This service
pulls an individual's debit card, credit card, and other delicate remittance information from the
Wallet app, allowing an individual to use an iPad, Apple Watch, or iPhone as a checkout billfold
(Betters & Grabham, 2018). It enables a user to pay for commodities in stores that accept
cashless payments and to pay for products within participating applications on suitable devices.
Apple Pay supports reward programs and store-issued debit and credit cards. The service
supports a majority of debit and credit card providers like American Express, Visa, and
MasterCard (Betters & Grabham, 2018).
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Researching Marketing Questions
References
Apple Inc. (2016). Annual Report Form 10-K. United States Securities and Exchange
Commission. Retrieved from
http://investor.apple.com/secfiling.cfm?filingid=1628280-16-20309&cik=320193
Apple Inc. (2017). Annual Report Form 10-K. Unites States Securities and Exchange
Commission. Retrieved from
http://investor.apple.com/secfiling.cfm?filingid=320193-17-70&cik=320193
Betters, E. & Grabham, D. (2018). What Is Apple Pay, How Does It Work, And How Do
You Set It Up? Pocket-Lint. Retrieved from https://www.pocketlint.com/phones/news/apple/130870-what-is-apple-pay-how-does-it-work-andwhich-banks-support-it
Kotler, P.T. & Keller, K.L. (2016). Marketing Management. (15th ed.). Pearson
Education, Inc. Retrieved from University of Phoenix Online eBook Database.
University of Phoenix. (2013). Week 1 Business Growth Overview. Retrieved from
University of Phoenix, MKT-571 Website.
1
Understanding Target Markets
Understanding Target Markets
Andrea Markiewicz
MKT/571
July 16, 2018
John Schaefer
2
Understanding Target Markets
Understanding Target Markets
Apple Inc. is a technology company whose operations span across various continents.
The company's activities get geared towards developing, designing, and selling products which
are unique (Kim, Park, Choi & et al., 2016). These items include electronics, services which are
available online, and computer software. Apple Inc.'s innovative endeavors enabled it to develop
a service that facilitates mobile payments. The utilization of Apple Pay Service by clients
ensures that the payments made are not only secure but that they can also be made comfortably
and in a manner that is private. The application is most useful to clients when used in stores
where cashless payments are permissible (Apple Inc., 2018). The research endeavors to evaluate
the opportunities currently available to the enterprise as well as future prospects. An examination
will also get conducted into the threats presently faced by Apple Inc. The market targeted by the
enterprise is to be analyzed to determine its specific features.
Research Marketing Plan
Current Opportunities- The application gets mostly preferred by individuals conducting
personal transactions. Individuals engaged in various forms of business activities also make use
of mobile payments. Moreover, the market that cannot only be exploited internationally or even
domestically continues to register an increase. Clients are continuously getting engaged in selling
related activities. Hence, money circulation depicts an improvement as their revenues continue
to indicate some growth (Burge, 2016).
A significant number of clients indicate some preference for making their payments using
the applications available on their handsets owing to the convenience that they offer. The
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Understanding Target Markets
company has been able to penetrate various segments in the market. This activity ascertains that
multiple categories of clients can have access to handsets that would enable them to make their
payments. The benefits guaranteed to either of the parties engaged in transactions includes the
value available to clients over their lifetime. The requirement that clients should make payments
to intermediaries is among the provisions eliminated by Apple Pay Service (Apple Inc., 2018).
Potential Future Opportunities- The features incorporated into the methods utilized in
making mobile payments would increase the number of clients who may opt to make use of the
platform availed by Apple Inc. Hence, innovativeness would enable Apple Pay Service to attract
more consumers who would want to use it to ascertain that their payments are finalized (Kim,
Park Choi & et al., 2016). The implementation of programs meant to reward the loyalty of clients
would ensure that the outcomes evident are positive. Moreover, an improvement in the
infrastructure set up paves the way for the desired profits to get attained.
However, Apple Pay Service must ensure that the platform offering for the use of its
clients gets reinforced. Relying on artificial intelligence provides the impetus that would
ascertain that specific processes indicate an improvement. Also, improvements can get made to
the payment services offered by Apple Inc. to make it possible for clients to make use of the
application even when they would like to make offline payments. Apple Inc. can expand the
provision of its payment services outside America.
Current Threats- There are various threats to be anticipated for Apple Pay Service.
Customers can expect that a trail will be evident digitally relating to cash transfers or purchases
that might get made. The implication is that although they might clamor for privacy, it
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Understanding Target Markets
may not be guaranteed. Despite the numerous payments that users can be able to make using the
platform, security remains an issue that threatens Apple Inc.’s innovation (Gregson, 2016). In
some cases, the threats against Apple Pay Service manifest when clients get rendered incapable
of offsetting their dues owing some unwarranted interference with the platform available.
A breach of the systems utilized by Apple Pay Service could pave the way for a situation
in which the client's data gets used for clandestine activities. Majority of the fraudulent activities
taking place via online sources gets estimated at 72% (Experian, 2018). In most scenarios, theft
assumes the form of stolen identities. However, the trend that is currently evident is that
measures are being implemented to ascertain that the details offered by application users can
keenly get verified.
Apple Pay Service SWOT Analysis
Strengths
Weaknesses
•
The company is strong financially
•
•
Extensive partnership
focusing on the market domestically
•
The equity of the brand
available
Opportunities
•
•
Limited distribution of the services offered
Threats
Investment in research paving the way
•
Aggressive competition
for the adoption of EMV technology
•
Lack of privacy with payment trails
Technological dependency among clients
(Fig. 1: Smith, 2008-2018)
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Understanding Target Markets
The company has an extensive muscle financially that makes it possible for it to invest in
research as well as endeavors which are innovative. Moreover, clients are loyal to the brand
owing to the image that it has been able to develop. However, other companies such as Samsung
and Google have launched tough competition against the enterprise (Smith, 2008-2018).
Target Markets
Demographics- Most Americans prefer to make their purchases using cash or debit as
well as credit cards. However, millennials formulate the majority of the group who make use of
Apple Payment Service. Millennials refer to individuals whose birth occurred in the 1980's and
the 1990's. In some situations, the early 2000's is also considered (Tanner, Mitchell & Comeau,
2010). They prefer being hyper-connected. Also, most of them are often savvy technologically.
Their ages usually range from 18 to 36 years of age.
In most situations, the clients who are likely to make use of the Apple Pay Service enjoy
a live service with their families that can be deemed to be functional. Their families comprise of
individuals who are from different generations. In 1980, the median which gets established for
millennials was $35,845 (Josephson, 2018). In 2000, the amount indicated improvements to
$37,355 whereas $33,883 got obtained from the years 2009-2013 (Josephson, 2018). The
earnings that accrue to millennials are a merger in comparison to what can get attributed to baby
boomers. The education attained is often a significant determinant of the wages that the parties
involved can earn.
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Understanding Target Markets
Psychographics- The millennials are fast becoming one of the most massive consumer
blocks. They have already shown themselves as big spenders in the economy. Millennials
usually believe in self-expression and uniqueness in interests, activities, and opinions. This
process ensures that the ideas brought into the workforce are not only new but also characterized
by a variation of the personalities that a workforce can avail. Social media gets used where
individuals endeavor to express themselves in the millennial generation age group (Wright &
Ettinger, 2006). The individuals categorized as millennials are continually coming up with new
ideas and making them work because they get exposed to a significant amount of information.
Millennials commonly get involved in many activities daily. First, with the development
of internet technology, millennials are highly connected to the internet activities. They use the
internet to make new friends, find online jobs, learning new things, and reflecting on their
professional success. Secondly, millennials like spending time with others outside their homes
and workplaces. Enjoying nature and other outdoor activities have helped the millennial
generation to increase their ability to relate to others (Wright & Ettinger, 2006). This process has
been one way used by the millennial generation to kill boredom, reduce levels of frustrations,
and a good time for meditation. Finally, the millennial generation like engaging in clubs, having
entertainments, and attending social events. Many care about how they look, and they enjoy
taking care of themselves. They, therefore, engage in frequent exercising activities and like
eating healthy.
Millennials usually have busy social life interests. They typically exhibit some new
shopping habits in malls and other big supermarkets. They tend to snack more compared to the
older generation. They are seldom alone. They usually get together for drinks, lunch, and other
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Understanding Target Markets
meals. Food is a significant component of their social lives. They love sharing information. Due
to the increased use of smartphones, they keep on texting with friends constantly in sharing
trending information. Through Facebook, Twitter, and other social sites they always share what
they care about and encourage others to share information. The millennial generation highly
depends on the opinions of others (Lingelbach, Patino & Pitta, 2012). They also depend more on
the consumer online reviews and blogs whenever they need information about particular
products.
This following generation is usually a brand influencer and can share opinions with other
people such as friends, family members, and the online community. The generation value
information and relationship and look out for brands that can help them connect with each other
(Lingelbach, Patino & Pitta, 2012). The opinions of the Millennials can influence the decision of
others and therefore likely to pass brand loyalties to other people. Through their creative visuals
and information, they can pass their creative expression and opinions about various products.
Explanation of Insights Gained from Inspection and Analysis
Demographic characteristics offer the possibility that the basic features which get
attributed to the market targeted will be understood. On the other hand, psychographic attributes
provide an in-depth understanding of the factors which facilitate the decisions that clients make
(Kotler & Keller, 2016). The factors analyzed help in the determination of the parties who are
most likely to make purchases and the underlying reasons.
The information obtained helps to ascertain that any of the marketing endeavors that
might get undertaken are effective. The identity assumed by clients will not only get
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Understanding Target Markets
underscored, but in the location in which they can get found. Evaluating the response(s) to the
messages offered for marketing becomes a possibility. The factors that provide the motivation
for the utilization of the applications provided can also be effectively understood.
Conclusion
It gets anticipated that the individuals who would depict a preference for making
payments through methods which are mobile are likely to increase over time. The benefits that
accrue to consumers outweigh the risks which might be involved. Moreover, understanding the
characteristics that relate to the clients targeted ensures that all the endeavors that might get
resorted to can yield the outcomes anticipated.
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Understanding Target Markets
References
Apple Inc. (2018). Apple Pay Support. Retrieved from https://support.apple.com/applepay
Burge, M. E. (2016). Apple Pay, Bitcoin, and Consumers: The ABCs of Future Public
Payments Law. Texas A&M University School of Law. 67, 1493-1549. Retrieved
from
https://scholarship.law.tamu.edu/cgi/viewcontent.cgi?article=1931&context=facsc
holar
Experian. (2018). The 2018 Global Fraud and Identity Report. Retrieved from
https://www.experian.com/assets/decision-analytics/reports/global-fraud-report2018.pdf
Gregson, M.L. (2016). Less Is Not More: The Need to Regulate Apple Pay. North
Carolina School Banking Institute Journal. 20, 311-337. Retrieved from
http://el2ne5ae7f.search.serialssolutions.com/?ctx_ver=Z39.882004&ctx_enc=info%3Aofi%2Fenc%3AUTF8&rfr_id=info%3Asid%2Fsummon.serialssolutions.com&rft_val_fmt=info%3Ao
fi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.atitle=Less+is+not
+more%3A+the+need+to+regulate+Apple+Pay&rft.jtitle=North+Carolina+Banki
ng+Institute&rft.au=Gregson%2C+Maxwell+L&rft.date=2016-0301&rft.pub=North+Carolina+Banking+Institute&rft.issn=1096-
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Understanding Target Markets
7249&rft.volume=20&rft.spage=311&rft.externalDocID=A450037457¶mdict=enUS
Josephson, A. (2018, May 21). The Average Salary of a Millennial. Smart Asset.
Retrieved from https://smartasset.com/retirement/the-average-salary-of-amillennial
Kim, Y., Park, Y. J., Choi, J. & et al. (2016). The Adoption of Mobile Payment Services
for “Fintech”. International Journal of Applied Engineering Research, 11(2),
1058-1061. Retrieved from
https://pdfs.semanticscholar.org/2c96/8789b918883f6f189943f325b44aa69c9b9c.
pdf
Kotler, P.T. & Keller, K.L. (2016). Marketing Management. (15th ed.). Pearson
Education, Inc. Retrieved from University of Phoenix Online eBook Database.
Lingelbach, D., Patino, A. & Pitta, D.A. (2012). The Emergence of Marketing in
Millennial New Ventures. Journal of Consumer Marketing. 29(2), 136-145.
Retrieved from https://www-emeraldinsightcom.contentproxy.phoenix.edu/doi/full/10.1108/07363761211206384
Smith, K. (2008-2018). Apple Pay ( SWOT Diagram). Creately. Retrieved from
https://creately.com/diagram/example/i87gfhpz/Apple
Tanner, L., Mitchell, R. & Comeau, P (2010). Who Are the Millennials? Defence
Research and Development Canada Centre for Operational Research & Analysis.
PP.1-61. Retrieved from http://cradpdf.drdcrddc.gc.ca/PDFS/unc104/p534334_A1b.pdf
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Understanding Target Markets
Wright, M. R. & Ettinger, L.F. (2006). Psychographic Characteristics of the Millennial
Generation: Developing A Market Segmentation for Use in the Wine Industry.
University of Oregon Applied Information Management. PP.1-59. Retrieved from
https://scholarsbank.uoregon.edu/xmlui/bitstream/handle/1794/7809/2006wright.pdf
1
Promotion and the Product Life Cycle
Promotion and the Product Life Cycle
Andrea Markiewicz
MKT/571
July 23, 2018
John Schaefer
2
Promotion and the Product Life Cycle
Promotion and the Product Life Cycle
When a company introduces a new product or service in a market, it undergoes four
distinct stages. The four steps are introduction, growth, maturity, and decline, known as a
product lifecycle. Just like any other product, the Apple Pay Service will undergo this sequence
of stages. Promotional efforts and marketing strategies are affected by these stages. Each step
comes with some changes in the marketing position of a product. Different marketing strategies
are used for each stage to prolong the product lifecycle.
Stages of the Product Lifecycle
New Product Introduction (NPI)-This stage is where a new product or service is made
available in the market or distributed for the first time (Anderson & Zeithaml, 1984). The
primary focus of this stage is to create a trail and awareness of a product or service. At this stage,
Apple must select a launch strategy that aligns with the planned product positioning. It should
use cost-plus pricing to recover the incurred costs (Guerreiro, Cornachione & Kassai, 2012). The
company should also do selective distribution at first and focus on the major distributors. Heavy
advertising and sales promotion are essential at this stage.
Product Growth Stage- At this stage, the product's sales begin to climb swiftly. In the
case of Apple Pay Service, this is the stage when the use of the service starts to increase
promptly. This process is the period when the company should focus on maximizing its share of
the market. Apple should focus on improving the features of the Apple Pay Service and should
also continue to promote the service to ensure increased profits.
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Promotion and the Product Life Cycle
Product Maturity Stage-For this stage, the growth of the product’s sales starts to slow
down when the market becomes saturated. The company’s goal should be to defend its share of
the market and to increase profit (Guerreiro, Cornachione & Kassai, 2012). To attain this, Apple
should modify the service features, the marketing mix, and the market. It should also rely on
promotion and advertisement.
Product Decline Stage-When it comes to a stage of decline for a product, this is where a
product’s reduction in sales will result in loss of a profit (Kotler & Keller, 2016). Apple will
have to consider multiple or new distribution channels and improve upon there innovation,
technology, and quality of the Apple Pay Service feature to compete with there opponents in the
mobile phone industry, such as Samsung. Apple's activities in their service feature product,
distribution, and pricing will still proceed forward; however, promotional areas will continue to
chase a gain of the market share and tender incentives.
Metrics to Measure Efficiency of Marketing Activities
Some metrics that Apple can use to measure the success or failure of the marketing
activities include acceleration and pipeline growth, marketing contribution to the company’s
revenue, and brand awareness. In considering the acceleration and pipeline growth, Apple will
get answers to the following questions: How do the marketing activities assist the growth and
acceleration of the pipeline? How does the growth change from one period to the other? Also, it
is always good to pay attention to growth and acceleration because they go hand in hand for
better results (Martin & Towill, 2002).
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Promotion and the Product Life Cycle
Marketing contributions toward revenue can be used by Apple to evaluate the percentage
of the total company revenue. If the number is found to be higher, then the initiative will be more
effective. When the percentage of the total Apple revenue is higher, then the Apple Pay Service
is more effective as well. Likewise, understanding brand awareness is vital for Apple Pay
Services because the company has a longer sales cycle and generally, buyers do more research
before getting information from the company (Akkucuk & Esmaeili, 2016). Usually, the effects
of brand awareness are long-term but not the short-term. Effective marketing activities should
lead to increased revenue for the company, should lead to new prospects and keep the leads
moving, plus should boost the company's brand awareness (Lovelock, Patterson & Wirtz, 2015).
Media Methods
Media methods are in terms of a strategy that enables a company to highlight its product
or service. Today’s companies have a wide range of media methods to choose from. For Apple’s
print method strategy, they can use billboards to highlight the latest Apple products. Billboards
will enable the company to reach out to customers on the move. The billboard design can
showcase their innovative Apple products that includes the pay service feature used out in stores
without expressing too much dialogue that is simple and to the point.
For Apple’s non-print media strategy, they can utilize television to reach its customers.
Through television advertisements, it will reach many customers since many individuals own
and watch TV. Apple’s television campaign can showcase the unique and straightforward
benefits of what a user gets when using their Apple Pay Service feature out in the market. The
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Promotion and the Product Life Cycle
campaign will also correspond to Apple shopper’s interests, for example, using the Apple Pay
Service feature to purchase an Apple product at one of their retail stores.
Elements of Product and Promotion
Apple can drive the use of Apple Pay Service by promoting the service’s benefits to
potential users. The company can use a promotional mix to reach potential customers. Some
elements of a promotional mix that Apple will use are advertising execution, direct marketing,
and public relation strategies as discussed in detail below:
Advertising Execution- Advertising is a paid means of media communication through
which a company communicates to the users of a service or product (Lovelock, Patterson &
Wirtz, 2015). It includes newspapers, magazines, television announcements, trade journals,
billboards, and radio announcements among others. It is nonpersonal, and Apple can utilize both
billboard and television advertising when it comes to showcasing how their Apple Pay Service
feature is beneficial for a user's shopping interests on the go, especially when purchasing Apple
products.
Direct Marketing- Direct marketing is an advertising form that is targeted directly to the
potential customers. Marketing materials which are physical like letters, catalogs, and coupon
mailers are provided to the customers. These physical materials provide information to the
consumers about services and products. Apple can use direct marketing to promote the Apple
Pay Service feature that is part of their smartphone products, like the iPhones.
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Promotion and the Product Life Cycle
Public Relation Strategies- Public relation strategies refer to the activities used by
companies to generate publicity, to foster goodwill, and to create a positive image of a company
(Nour, Almahirah, Said & et al., 2014). This process gets done through hosting and sponsoring
special events and charitable campaigns. It is an element of the promotional mix that Apple can
use to create awareness and create a positive image with the intention of increasing the use of the
Apple Pay Service.
Conclusion
The Apple Pay Service will undergo a sequence of product lifecycle stages. Each stage
has its challenges and opportunities. For Apple Pay Service to succeed in the market, the
company needs to set strategies for each stage to prolong the lifecycle of the service. The
efficiency of the marketing activities should be measured from time to time to ensure the set
strategies are working towards the achievement of the set goals. A promotional mix can be used
to reach the distribution channels and customers to enhance the use of the application.
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Promotion and the Product Life Cycle
References
Akkucuk, U., & Esmaeili, J. (2016). The Impact of Brands on Consumer Buying
Behavior: An Empirical Study on Smartphone Buyers. International Journal of
Research in Business and Social Science, 5(4), 1-16. Retrieved from
https://search-proquest-com.contentproxy.phoenix.edu/docview/1833924330?pqorigsite=summon&accountid=35812
Anderson, C. R., & Zeithaml, C. P. (1984). Stage of the Product Life Cycle, Business
Strategy, and Business Performance. Academy of Management Journal (Pre1986), 27(1), 5. Retrieved from https://search-proquestcom.contentproxy.phoenix.edu/docview/229540145/fulltextPDF/5C9FA6979A96
4BD8PQ/1?accountid=35812
Guerreiro, R., Cornachione, E. B., & Kassai, C. R. (2012). Determining the 'Plus' In CostPlus Pricing: A Time-Based Management Approach. Journal of Applied
Management Accounting Research, 10(1), 1-15. Retrieved from https://searchproquest-com.contentproxy.phoenix.edu/docview/1034602168?pqorigsite=summon&accountid=35812
Kotler, P.T. & Keller, K.L. (2016). Marketing Management (15 th ed.). Pearson
Education, Inc. Retrieved from University of Phoenix Online eBook
Database.
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Promotion and the Product Life Cycle
Lovelock, C.H., Patterson, P. & Wirtz, J. (2015). Services Marketing (6 th ed.), 1-498.
Pearson Australia. Retrieved from
https://books.google.co.ke/books?hl=en&lr=&id=BqyaBQAAQBAJ&oi=fnd
&pg=PP1&dq=Lovelock,+C.,+%26+Patterson,+P.+(2015).+Services+marketi
ng.+Pearson+Australia&ots=eIvOLLCXJe&sig=2upc5XXlKiTH7r0u6nYPtj3
4mDc&redir_esc=y#v=onepage&q=Lovelock%2C%20C.%2C%20%26%20Pa
tterson%2C%20P.%20(2015).%20Services%20marketing.%20Pearson%20Au
stralia&f=false
Martin Christopher, Denis R. Towill, (2002) "Developing Market Specific Supply
Chain Strategies", The International Journal of Logistics Management, Vol.
13 Issue: 1, pp.1-14. Retrieved from https://www-emeraldinsightcom.contentproxy.phoenix.edu/doi/pdfplus/10.1108/09574090210806324
Nour, M.I., Almahirah, M.S., Said, S.M. & et al. (2014). The Impact of Promotional Mix
Elements on Consumers Purchasing Decisions. International Business and
Management. 8(2), 143-151. Retrieved from
http://www.cscanada.net/index.php/ibm/article/view/4800/pdf_54
1
Price and Channel Strategy
Price and Channel Strategy
Andrea Markiewicz
MKT/571
July 30, 2018
John Schaefer
2
Price and Channel Strategy
Price and Channel Strategy
The Apple Pay Service is engineered to help clients to make various payments at their
comfort zones. It is user-friendly and assists in the elimination of intermediaries whose services
are often costly for most clients (Apple Inc., 2018). The commodity is in the introductory level
of its life cycle and is still being used locally in the United States. Through an active promotion,
distribution, and pricing strategy, it will be able to spread globally and command a more
significant proportion of the market. This report outlines some of the pricing and distribution
strategies that can be used by Apple Corporation to ensure that the product attracts the kind of
profitability it should draw.
There is a direct interrelation between the distribution channel chosen by a business and
the price setting. A distribution channel consists of many intermediaries that usually results in a
company realizing lower profits from its sales. However, if the intermediaries get removed
through direct sales, a business will always maximize their earnings and even have the capacity
to supply the products and services at a reduced price that is affordable to the clients (Jinhoo,
Bojanic & Warnick, 2008). For Apple’s case, the distribution channel is a direct one and
involves no intermediaries since it is the company selling the services directly to clients who buy
their phones. Therefore, the focus should be on the price settings and the distribution strategy.
Distribution Strategy
Since the product is in its introductory stage in the life cycle, it should first focus on local
distribution before considering expanding its wings globally. The higher proportion of the
market is composed of millennials, individuals born between the 1980s and the 1990s with
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Price and Channel Strategy
some in the 2000s. This is an information-hungry generation that prefers efficiency over
anything else. The use of mobile phones has become quite popular in this generation, and almost
everyone owns a mobile phone. Every mobile phone bought in the United States should contain
the Apple Pay Service application. Through the marketing strategy involving the marketing mix,
awareness will get created so that the clients know how to use the service and how helpful it can
be (Flavián & Guinalíu, 2005).
Once the product has been launched successfully in the domestic market, it will now be
time to spread globally. This process will need effective advertisement and promotion. Apple's
distribution channels will primarily work in distributing this product. However, the use of online
distribution services like Amazon and Alibaba will help the product to reach out to other parts of
the world (CB Insights, 2018). Apple can utilize the services of these distributors to supply the
mobile phones which contain the Apple Pay Service. Many people will, therefore, get access to
these services.
Exclusive Distribution Channel
For this service to reach the intended customers all over the world, the distribution
channel should be one that can reach the customers wherever they are. An exclusive distribution
channel involves assigning the distribution services to trusted retailers or distribution outlets (Li
& Dant, 1997). This activity will be those who sell apple mobile phones. This process requires
that the service accepts internationally recognized payment methods that are well known. The
service can be engineered to meet the specific payment needs in different countries or regions. It
can incorporate local payment methods that are not popular globally. An example is M-PESA
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Price and Channel Strategy
which gets used in most countries in the East African region. This will make it convenient for
individuals in this region to use those services (Vodafone Group Services Limited, 2017).
Dynamic Pricing Strategies
The pricing for this service will involve the charges the users will incur when making
payments using the Apple Pay Service. The best marketing strategy to use is a dynamic strategy
which can change depending on the prevailing market conditions. Customarily, the different
marketing strategies available are generally used to achieve various aims. One is defending the
existing market which requires a business to maintain standard pricing that keeps the current
market (Ellickson, Misra & Nair, 2012). However, the Apple Pay Service is a new product that is
just making its way into the market. This means more than one pricing strategy will have to get
used so that it achieves the intended profitability by making it reasonably affordable to the
customers (Ellickson, Misra & Nair, 2012).
Some of the factors that must get considered when choosing a marketing strategy include
the level of competition that exists in the market. Competition is one of the threats that the
company will face according to a SWOT analysis. Overcoming the competition will involve
identifying the pricing strategies that competitors such as Google are using so that the application
can gain a comparative advantage over the other companies. In the beginning, the prices should
be at least lower than the prevailing market prices (MaRS Discovery District, 2014).
Conclusion
The Apple Pay Service is still in the introduction stage of product development. The
distribution is even localized, hence, the strategy applied is not that complex. Once it scales its
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Price and Channel Strategy
operations, it will be essential for the distribution channels to be scaled up. Finally, the pricing
strategy should be a flexible one that can accommodate any potential changes that might arise
from the market dynamics.
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Price and Channel Strategy
References
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CB Insights. (2018). Amazon and Alibaba Have Already Conquered Online Retail.
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Ellickson, P. B., Misra, S., & Nair, H. S. (2012). Repositioning Dynamics and Pricing
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Price and Channel Strategy
https://www-emeraldinsightcom.contentproxy.phoenix.edu/doi/full/10.1108/09590550510600843
Jinhoo, K., Bojanic, D.C. & Warnick, R.B. (2008). Price Bundling and Travel Product
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Price, Place and Promotion. Retrieved from https://www.marsdd.com/marslibrary/the-marketing-mix-in-marketing-strategy-product-price-place-andpromotion/
Vodafone Group Services Limited. (2017) M-Pesa The World’s Most Successful Money
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