Relevance of Integrated Marketing Communication
Theoretically Underpinned Integrated Marketing Communications Plan of Apple Inc.
Relevance of Integrated Marketing Communications
The core of the contemporaneous business operations is that of achieving and consolidating a strong competitive position. This is necessary in order to reach the organizational goals. In addressing the matter of a strong competitive position on both local and international markets, economic agents employ a wide variety of strategic approaches. Some of their endeavours refer to the implementation of a pleasant, yet competitive and rewarding corporate culture, the motivation of the human resource and the increase of their , alongside with the continued efforts in increasing customer satisfaction. All these represent more modern approaches which come to complete the traditional efforts of increased quality of the products and services delivered.
Customer satisfaction is pivotal in reaching the overall organizational objectives simply because the clients are the ones who purchase the corporate products and services and ensure as such the company with revenues. In this order of ideas then, the marketing discipline has significantly grown in application and role throughout the past recent decades. Marketing teams within organizations strive to better identify the target market (generally through the processes of segmentation and targeting), get to know them better and maintain constant communications with them. Keeping this desiderate in mind, companies make full use of models such as Customer Relationship Management or Integrated Marketing Communications.
IMC represents a wide array of tools companies employ to communicate with customers and affect the behavior of the target market. It commences within the market, and then returns within the company to help integrate the newly acquired information about the audience. “IMC is the process of developing and implementing various forms of persuasive communication programs with customers and prospects over time. The goal of IMC is to influence or directly affect the behaviour of the selected audience. IMC considers all sources of brand or company contacts which a customer or prospect has with the product or service as potential delivery channels for future messages. Further, IMC makes use of all forms of communication which are relevant to the customer or prospect, and to which they might be receptive. In sum, the IMC process starts with the customer or prospect and then works back to determine and define the forms and methods through which persuasive communication methods should be developed” (Schultz, 1993).
2. Company Information
Apple Inc., formerly known as Apple Computer Inc., was founded in 1976 in California and it represents the ultimate epitome of corporate success. The agent is present across the entire globe, operating in some countries and in others only conducting retail operations. Apple Inc. employs an estimated 35,000 individuals and their net income for 2008 has been of $4.83 billion, revealing a constantly ascendant trend. Apple sells its products through more than 200 stores in the United States, United Kingdom, Japan, Canada, Italy, Australia, China, Switzerland and Germany. For the other countries, they use intermediaries. Apple also sells its most reputable brands (the Macintosh computers, iPods, iPhones or the Mac OS X operating system) via internet through their website (Website of Apple Inc., 2009)
The organization is built around a strong culture, embracing the needs of all categories of stakeholders. The central concept at the core of the Apple operations has been that of innovation. In their desire to produce revolutionary items, Apple Inc. has become the successful manufacturer of the globally renowned Mac books, iPods or the more recent and most popular iPhones. Other products manufactured by the a wide line of accessories and software applications, such as keyboards, mice, headphones, games or the creative software package. The primary goals of Apple is to satisfy the needs of their customers through innovative and creative products and services, with the ultimate objective of registering increased revenues.
Apple Inc.’s mission statement provides: “Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone” (Website of Apple Inc., 2009).
3. Environmental Analysis in Taiwan
Apple produces some of their components in Taiwan, but the country is not on the list of the nine countries where the store conducts direct retail operations. However, they do sell Apple products in Taiwan with the aid of intermediaries. The company’s agenda sees the introduction of the upgraded creativity software suite, namely the latest version of iLife, the iLife ’09. For a most fruitful completion of the Integrated Marketing Communications Plan, the organization has to conduct an analysis of the industry and environment in Taiwan.
Taiwan is the nineteenth largest economy of the globe in terms of measured GDP, with a gross domestic product for 2008 of an estimated $757.2 billion (Central Intelligence Agency, 2009). The economy is highly capitalized, characterized by massive privatization. This meant an increased amount of foreign investments.
The main import and export commodities of Taiwan’s international trade are the electronic and electrical products. Developed states have often found Taiwan a desirable location for their outsourced operations and this has led to developments in terms of employee skills, population living standards and customer expectations. For Apple, this means an increased competition within the industry and the need for a well developed strategic approach.
Following the same line of thoughts, most of the operations occurring in Taiwan are based on manufacturing. Most of the multinationals who opened stores in the region only handled the production operations in Taiwan, with marketing, design and other such functions being handled in their native countries. Therefore, the Taiwanese are generally “expert in engineering and efficient in production, but they are incompetent when it comes to product design and international marketing” (Hoffenberg Amsden and Wang, 1992).
The Taiwanese consumers are generally easy to understand: they require novelty; new elements attract their attention. However, the features of a product are insufficient to ensure its success. Distributors have to properly analyze the market and consolidate their brand and distribution channels. The national government has understood the marketing limitations of its producers and has offered various subsidies and financial incentives to support the development of the local manufacturers. This once again poses difficulties for Apple Inc., who does not enjoy the support of the Taiwanese federal authorities. However, it must be remembered that the Apple plants in Taiwan have created new job opportunities and have supported the development of communities.
Another feature of the Taiwanese marketing operations is given by the cultural element. The people place a great emphasis on human interaction, generally called kuan-hsi, which represents much more than networking. “Kuan-hsi is developed over a long time period. It reaches down into every aspect of Chinese society, influencing social, political, and commercial relations” (Caroll, 1991). This means that the operations of Apple will have to be sustainable, and trustworthy. If the company fails to satisfy the audience, it is likely that they will lose the trust of the Taiwanese consumers.
Despite the cultural nuances however, developing and implementing a marketing plan in Taiwan should not be extremely challenging, even more so when the contemporaneous context presents the foreign party with skilled and experienced assistance, as well as a lack of barriers, such as entry barriers, language barriers, bureaucracy or hidden and multifaceted legislation (Genzberger, 1994).
4. Integrated Marketing Communications Plan
The product to be distributed in Taiwan is part of Apple Inc.’s creativity software suite and is called iLife ’09, the latest and upgraded version of the previous iLife. It is composed of iPhoto, iMovie, iDVD, Garageband and iWeb. Basically, it supports the effective viewing and editing of digital information (pictures, films, music and internet pages). This latest version also contains a software application which allows users to learn how to play various instruments, as well as serves karaoke purposes. iLife ’09 is only operable on the latest version of Mac OS X v10.5 ‘Leopard.’ It integrates in the software suite in the meaning that the music, photographs or films edited with it are not compatible with Windows (Gruman, 2006).
The summarized presentation of iLife ’09 as according to the Apple Website states: “Upgrade to iLife ’09 and get the most out of the photos, movies, and music on your Mac with the latest versions of iPhoto, iMovie, GarageBand, iWeb, and iDVD. Organize and search your photos by faces and places. Make a movie in minutes or edit with precision. Learn to play piano and guitar or record your own music. Create a stunning website and publish it anywhere.”
The iLife ’09 is designed only for the users of the Macintosh computers and therefore the primary segmentation criterion is for the customers to be owners of a Mac book. Then, the potential buyers of iLife ’09 are generally characterized by their intense interest in technological developments, used mainly for leisure activities. In this order of ideas, they could be divided into it professionals and simple individuals who revealed a passion and hobby towards technological innovations. Ergo, the second segmentation criterion is that of professional or personal passion for technology.
As Brad Miser (2003) points out, the iLife is designed for both semi-professionals as well as hobbyist. Therefore, the third segmentation criterion is given by the individuals who either work, or are interested in the features available through iLife (view, organization and editing of films, music, photographs and webpages). This may be considered similar to the previous criterion, but it in fact is not as a technology fan may find no real use in the iLife ’09.
The objective of an integrated marketing communications plan is that of getting to know the customers better and ensuring that the products and services they are presented with offer them utility. The goals of IMC are marketing objectives, but they are related to the company’s overall desires. In this order of ideas, the IMC strives to satisfy the customer and the company strives to achieve increased revenues. The relationship between the two sets of objectives is given by the fact that satisfied customers become loyal customers, whose continued purchases ensure sustainable and increased organizational revenues.
Marketing Communications Mix
The IMC mix is based on the features of the general marketing mix, namely product, price, place and promotion.
Product the iLine would be sold under the Apple brand name its stated functionality is that allowing the editing, organization and viewing of digital content the software application is a powerful tool, yet its user friendly interface makes it easy to use the product has a high quality, guaranteed by the Apple brand it comes packed in a coloured cart book, revealing the features of the product, as well as contact information on Apple Inc.
A the box contains a DVD with the “iPhoto ’09, iMovie ’09, GarageBand ’09, iWeb ’09, iDVD, and QuickTime 7.5.5” (Website of Apple Inc., 2009) the accessories include printed and electronic documentation, in order to make its usage further easy it offers one year warranty
Promotion the company would use a pull promotional strategy, by which they would raise the interest of the consumers and attract them towards the product promotions would mainly consist of discount sales, by which iLife ’09 would be available at a lower price the company could also offer additional services, such as extended warranty or accessories (including discount prices for headsets) the company would maintain constant communications with the audience in order to identify new demands or unsatisfied needs advertisements would be simultaneously present on multiple media channels commercials would be aired during prime time television and radio shows, street banners and fliers, as well as interviews in specialized magazines or the World Wide Web
Price the promotional retail price of the iLife in the United States is of $79.00 (Website of Apple Inc., 2009) this price should be increased in order to generate sustainable revenues it should also be increased in accordance with the costs of international distribution the suggested retail price on the Taiwanese market would be of $100.00 per piece the company would implement a variable pricing strategy, which sees that a modification in the costs of manufacturing, distribution, marketing and so on, materializes in a direct modification of the retail price of the iLife
Apple does not currently operate its own retail facility in Taiwan and would therefore have to use intermediaries
Apple does however run manufacturing operations in Taiwan and could opt for the iLife ’09 to be sold by the manufacturing plants also, the taiwanese customers could order their iLife ’09 online; the shipping costs would not be offered by the manufacturer
Justification and Discussion
The usage of Integrated Marketing Communications is likely to retrieve beneficial outcomes as it supports the organization reach its overall goals through the achievement of intermediate goals. In this order of ideas, IMC increases customer satisfaction, which in turn generates corporate revenues. The product decisions are backed by their ability to position the iLife as an attractive software application, with the ability to attract customers. The pricing and distribution solutions help Apple Inc. By offering it better abilities to protect itself against the risks incurred by international trade. Finally, the promotional decisions are useful as they offer an increased broadness of product details, which will also raise the interest of consumers.
Integration will be achieved through the implementation of the IMC principles at all organizational levels and at all stages of the marketing process. Through this, attention will be constantly placed on customer relations and increased customer satisfaction.
Timeframe and Estimated Budget
The implementation of the strategic course of action would commence by conducting market research, to then continue with the development of the advertisements, based on the information retrieved at the previous stages. The commercials would be aired and the promotional sales would commence. Finally, the promotions would cease and the company would begin selling the iLife at its suggested retail price (or at an adjusted price). The marketing plan will be implemented throughout the course of eight weeks, as revealed by the succinct Gantt chart below (the final column of the chart is an addition to the traditional Gantt chart and represents the percentage of each task in the overall budget):
iLife in Taiwan
Development of advertisements
Airing of Advertisements
Sales at real price
The dynamic and highly competitive environment of today’s forces economic agents to engage in multifaceted operations that increases their chances of success. A primary target of these operations is the customer, and recent academic studies reveal that marketing operations should be integrated at all organizational levels. The Integrated Marketing Communications serve this purpose and they could be implemented by Apple in the launch of their upgraded iLife ’09 in Taiwan.
In identifying the target market, three criteria of segmentation should be used: the owning of a Mac book, professional or personal interest in technology and interest in the appliances of iLife. In this order of ideas then, the Taiwanese target market upon which the marketing strategies will be implemented is formed from Mac book owners, passionate by technology and which retrieve utility out of using iPhoto, iMovie, GarageBand, iWeb, and iDVD.
In terms of marketing mix, Apple Inc. should focus on positioning the product so that it reveals its benefits and attracts the customers. The pricing and distribution strategies ensure a protection against the risks incurred by international operations. Finally, the promotions allow customers to become acquainted with the iLife and raise their interest.
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