A Comparison of the Marketing Communication Strategies
Apple is an American Multinational Computers and Consumer Electronics company. Acer is a Taiwanese multinational computers corporation. Both enjoy considerable market share in the computer sales in the world. While Acer is placed fourth worldwide and 5th in United States, Apple has a very strong presence in US and has rapidly risen to third in the computer sales in the country. The reason for rapid growth has often been cited as due to strong marketing initiatives of the company. Integrated Marketing Communications strategy is an integral part of a good marketing plan. IMC aims at defining thet target market and the tools that the company uses to employ to effectively convey the message to them. Initiatives of Acer towards marketing and IMC have been found to be lacking in recent times and thus a study and comparison of the two company’s IMC shall help in coming up with a plan for Acer to do better in United States and similarly the rest of the world.
Introduction
The purpose of the report is to undergo a detailed analysis of the marketing strategies of the two companies and evaluate them on the effectiveness of each. The marketing communications plan of each of the two companies shall be looked into detail and the reasons for the success of each shall be weighed. We shall also look into the shortcomings of the marketing plan of the two companies, if any and recommendations to eliminate any such shortcomings in our company- Acer Inc shall be presented. The primary focus of the report is restricted to in the region of North America. It is here that Apple enjoys a mass following among the Americans and the new products of the company become instant objects of desire. Acer Inc. wishes to emulate a similar following among the Americans, as it constitutes to a very large percent of total PC unit sales in the world.
Apple Inc.
Apple Inc. is an American multinational corporation with the headquarters in California, in the city of Cupertino. The company started its operations out of a garage in California by the legendary Late Steve Jobs and his friends Steve Wozniak and Ronald Wayne (Linzmayer, 1999). The company started its operations as a manufacturer, designer and developer of computer software and hardware. The company began in the year 1976 as “Apple Computers” and in 2007 the word Computers was taken off from it to better reflect their shift of focus towards consumer electronics devices and software. Fortune had rated Apple as the most admired company in the year 2008 (CNN Money, 2008).
The company has although shifted its focus away from computers and laptops towards consumer electronics products like iPod, iPhone and iPad, the laptop and computer sales still contribute significantly towards its total profits. The Apple Inc. is widely regarded as a successful consumer electronics company and manufacturer of innovative hardware and software solutions. The laptops of Apple, popular by the name of Macbooks are very desirable and generate high interests in the personal computer and laptop market space.
Acer Inc.
Acer Inc is a multinational corporation with the headquarters in Xizhi, New Taipei City, Taiwan. Acer is currently the fourth largest PC maker (Gartner, 2012). The company Acer was found in 1976 as Multitech International by Stan Shih, his wife Caroline and five others. The change of name to Acer (Latin word for “sharp, acute, able and facile”) happened in 1987 and the following year the company went public (Slob, 2005). It was incorporated in Acer went public with its deconstruction in 1994 by Stan Shih into 21 business units (FundingUniverse, 2012).
Notebook sales of the company has constituted for a large majority of the revenue of the company. In the third quarter of 2004, notebook computers were Acer’s top revenue-contributing product, with 47 percent of total consolidated revenue (Slob, 2005).
Thus Acer is primarily a computer and associated peripherals manufacturing and retailing company, as it accounts to about 85-88% of Acer’s total core business. Among the computer manufacturing, the notebook is the largest selling product of Acer, and thus it is needless to point out the importance of the product for the company.
Integrated Market Communications
An Integrated Marketing Communications Plan is a comprehensive plan that contains information about when and how the company intends to use the various marketing communications. The plan also includes details of which media to be used when and for how long. Since the early 1990s, integrated marketing communication (IMC) has become the accepted practice in the marketing communications field (Kitchen, Brignell, Li, and Jones, 2004)
The Integrated Marketing communications Plan is a written document and can vary in length as per the level of detail that the organization wishes to include in it. It can be of just a set of organized hand-written documents for an individual managing a small firm or be a detailed and complex multi-page document for the promotion of a product from a major corporate house. However, irrespective of the size of the document, a sound IMC plan contains a set of six essential things. These are:
1. Targeting (The customers who are the primary group to focus on and the prospects)
2. SWOT Analysis
3. Objectives
4. Strategies and Tactics (Advertising, Sales Promotion, Public Relations and Personal Strategies)
5. Budget
6. Evaluation (Ouwersloot and Duncan, 2007, p. 118)
Schultz (1993) defines IMC as "a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communications disciplines (e.g., general advertising, direct response, sales promotion, and public relations) and combines these disciplines to provide clarity, consistency, and maximum communications impact." The definition points at the importance of identifying the unique nature of each of the communications disciplines in the communications planning (Lee and Park, 2007).
Cathey and Schumann (1996) had identified three important aspects of IMC. They are the integration of messages and media, audience-orientation, and assessment of impact. Through their findings, they emphasized the importance of coordination of messages and media to create the most positive communications experiences for the consumers who are in different stages in the buying process.
Target Marketing is the process of deciding upon a group of customers that the company decides upon as their primary group to focus on and likewise aim its marketing efforts towards. The end goal is to sell its merchandise to that specific profile of buyers. The targeting is not limited to being aimed at primary customers only and also defines the other secondary group and similarly defines the type of marketing activities targeting them. Malski (2006) identified Target marketing as the first step towards creating a powerful marketing message. Romaniuk (2012) had identified as many as five steps to ensure that the targeting achieves the objectives of the IMC. They are:
1. Making Target Market Definitions Evidence-Based
2. Include as Many People as Possible in Your Target Market
3. Avoid the Heavy-Buyer Trap
4. Buy Media on Audience Numbers Reached Rather than Indices
5. Don’t Sacrifice Reach for Engagement (Romaniuk, 2012)
The SWOT analysis tool is used to assess the strength, weakness, opportunity and threats that the firm faces. This tool provides a focused analysis on how the firm is managing the external challenges and using the opportunities (Zaheer, 1995).
We shall be making use of the knowledge of Integrated marking communications to evaluate the strategies employed by the two companies. Among the six essential things as outlined by Ouwersloot and Duncan (2007), the most important aspects for the current discussion have been identified as the Targeting, SWOT Analysis, objectives and Tactics and Strategies. The Tactics and strategies need special attention as they would reveal the channels of promotion that is used by the two companies.
Market Review
We shall now look into the methods and techniques used by each of the two companies in promotion of their products.
Apple Inc. Analysis
The Apple Inc. has been very effective in terms of marketing a product. This suggests that the marketing communications strategy at Apple Inc. is particularly effective in conveying the message that the company wishes to convey. As noted earlier, the company has been voted as the most admired in the year 2008. A lot of credit to this goes to the marketing communications strategy in addition to the high competency of the products it manufactures. As noted by Karlgaard (2012), in order to be successful, a company needs to be equally competent in both the hard factors (operations, costs, supply chain etc.) and soft factors (product design and branding).
It is to be noted that in terms of computer and laptop sales, the presence of Apple is more or less limited to that in United States of America. The company is currently the third largest PC vendor in the United States of America (Gartner, 2012). It rose from the being number 5 in 2008 to its current position and registered a strong growth of 20.7 per cent growth over 4Q11- 4Q10 when every other PC manufacturers share had declined (Gartner, 2012). The success of Apple has a lot to do with its marketing strategy. We shall now look into the strategy in a bit more detail.
Target Market of Apple Inc.
The Apple Inc. targets its products radically different from other companies. According to Assay (2010), it targets people rather than targeting specific markets. The Apple Inc. also very famously avoids the use of focus groups that all the other companies implement to decide upon the product features that the target market would like to see (Feria, 2011). Thus by avoiding a focus group the company aims its products at a larger group of people than narrowing it down to a select few. The company primarily aims at convincing people to adapt its products, in our case the laptop and the desktop computers as a part of their lifestyle.
SWOT Analysis
Strengths of Apple: The Apple Inc. enjoys a strong brand image that provides a distinct edge over its competitors (DATAMONITOR, 2011). This enables Apple Inc. to command a premium for its computer and software and create significant demand for its products.
The company’s robust financial performance also provides a sound platform for strong investor relationship and enables future growth due to readily available capital (DATAMONITOR, 2011). The company's total revenue increased to $65,225 million in FY2010 from $19,315 million in 2006, representing a compounded annual growth rate (CAGR) of 36% (DATAMONITOR, 2011).
Focus on R&D also enables it to remain innovative and consolidate its market position. The company's R&D expenditure was $1,782 million and $1,333 million in FY2010 and 2009 respectively (DATAMONITOR, 2011). The company spends a considerable amount of the money on developing its existing Mac line of personal computers and the Mac OS X.
Weakness: Recent Patent infringement lawsuits have shown Apple inc. in poor light. Also a few product recalls have added cost of warranty and other expenses.
Opportunities: The rise in its market share presents an opportunity to market its PC’s in novel ways. Mobile advertising market presents a significant opportunity for future growth (DATAMONITOR, 2011). The Apple Inc bought Quattro wireless in 2010 to launch its own advertising platform called iAd. The iAds combine the emotion of TV advertising with the interactivity of Internet advertising, giving advertisers a dynamic and powerful new way to bring motion and emotion to mobile users (DATAMONITOR, 2011).
Threat: A high level of competition exists in the laptop and computers market. The competitors of Apple include HP, Dell, Acer and Lenovo. Rapid changes in technology present a great threat for the company to remain competitive in its pricing and features and performance characteristics.
Objectives
The communication objective of Apple Inc. is precise and well thought out. The company markets its products more than just pieces of technology and as a lifestyle. It wants every user to try Apple products. It includes convincing the new users to try their products and hold on to the ones using it through constant innovation. The company also tries to leverage the use of laptop- iMacs and its OS the OSX among the rapidly rising population of iPhone and iPad users. Burrows (2008) noted that the demand for OSX and Macs rose among the office workers who used iPods and iPhones as their personal multimedia devices or smartphones. This system to utilize other products to promote their computers is perhaps unique and unmatched by any other company.
The iStore
Perhaps one of the most powerful tools in conveying to its users the brand of Apple is the iStore. The concept was pioneered by Steve jobs himself and aimed at providing the visitors to the store a unique and fulfilling experience while showcasing the various products of Apple.
The communications strategy in these stores was also unique in many senses. The milky white color scheme together with the glass, stainless steel and wood tried to convey the neatness and simplicity behind the designs of Apple products. The stores were placed in high rent market and were very expensive. It was the first time a computer and Consumer Electronics Company had entered the retail market in such a way.
Steve Jobs hired Ron Johnston to run Apple retail (Useem, 2007). He designed mini-iStores that were specifically designed to tell the advantages of Macs over the windows PC (Useem, 2007). The stores were also so designed to let the user feel the products and aimed at everyone, not just the select few that followed Macs like a cult (Useem, 2007).
Get a Mac Advertisement Campaign
In April 2006, the first of the ‘Get a Mac” ads were released on TV. A sum of $486 million was spent on ‘Get a Mac’ (Blakely, 2008). These featured Justin Long as a cool young guy that personified the Mac and John Hodgman as a middle-aged nerd representing PC. The campaign was first launched in US and similar campaigns were later emulated in other countries. The idea of these negative campaigns was to highlight how much better the Macs were when compared to a Windows PC. The ad campaigns focused of the drawbacks of a PC like susceptibility to virus and spyware, problems in upgrading to Vista OS as it was expensive and the OS itself was cumbersome and the Windows OS being not fun enough (Benoit and Delbert, 2010). These advertisements were very successful in conveying the message and even won several awards for advertisements.
The Series of ‘Get a Mac’ Ads through 2006-2009
Other Promotional Tools
Apple is not very aggressive when it comes to pricing and many a times commands a premium pricing for its products (GLG, 2008). This might hurt it in times when a rival product with competitive pricing is launched. The case of Samsung Galaxy SIII overtaking iPhone to become the largest selling smartphone is just the case in point (Funaro, 2012).
The public relation strategy of Apple is still superior though. All Apple launch events generate a very high media interest. They achieve it through carefully selecting the launch events and preventing an Apple event burnout. The example of it is the company choosing to launch its OS X Mountain Lion without a big campaign like the one for OS X Lion (Friedman, 2012). The MacWorld magazine also acts as an effective tool for propaganda. Finally the slogan “think different” in many ways sums up the strategy of Apple- it encourages out of box thinking philosophy and wants the users to experience something that is innovative, thoughtful and not generic and fitting it.
Acer Inc. Analysis
The marketing communications efforts of Acer are very different from Apple Inc and very conventional in many senses. The presence of Acer in America is still relatively weak with it being placed 5th in unit shipments and registered a -11.4 growth in 4Q11-4Q10 (Gartner, 2012). This is in spite of the fact that Acer has a multi-brand strategy in place in America that came with its acquisition of Gateway, Packard Bell and eMachines (Mesbah, 2008). Acer only now has decided to intensify its focus on marketing to increase its presence in US with the hiring of Michael Birkin as Chief Marketing Officer (O’Reilly, 2012).
Target Market
The Target market of Acer is well defined. It offers different lines of products to different consumers across market segments. The Acer offers good value for money PC’s while Gateway was targeted at enthusiastic and young crowd while Packard Bell were expensive high end products with intense good looks (Coneally, 2008).
SWOT Analysis
The Strengths of Acer are in its Dominant Market position in Europe and Asia, its value positioning and competitive pricing and a diverse portfolio of offerings (DATAMONITOR, 2011a). The threats to it include inventory management issues in Europe and lack of R&D in product development. The Opportunities in emerging markets and SMEB segment is huge to speed up growth. The threat for the company comes from low margins and declining worldwide sale of computers (DATAMONITOR, 2011a).
Marketing Communication Initiatives
There are a few initiatives in marketing communication that the company has undertaken in recent times. The Slogan of Acer is “Explore Beyond Limits”. The company wishes to convey to the customers that with a Acer PC, one can do much more than what they perceive as limits.
Acer was the chief technology sponsor for the London Olympic Games. After the games, it the offered big discounts to schools and education sector on PC’s used during the games (Scroxton, 2012). The partnership with schools for Acer is not new and it had also tried it in US in 2010 (Woyke, 2010).
In 2012, Acer launched viral campaign called Bake it (Charles, 2012). It had Keifer Sutherland in his Jack Bauer avatar and trying to bake his own cup cakes. The print ads were seen as very effective in delivering the message but the TV spots were seen as weak as they were a bit too
long ((Charles, 2012). Charles (2012) rated the TV spots at 6/10.
The company also showcased unique entertainment experience in the London 2012 Olympic Park as a part of partner showcases for the games.
Critical Analysis and Conclusions
It is easy to tell that the marketing communications strategy of Apple is way more elaborate than that of Acer. Apple very well knows its target- it is practically everyone. Apple makes products that are innovative and through expert use of marketing channels and communications, targets it to a specific user. Apple OS X and Macbooks are presented as being instruments for creativity, fun and innovation. It caters to cool and young and encourages everyone to adopt a similar lifestyle by using their products. The central message of all marketing communication for iMacs is how different and better from PC they are. They highlight all the good things in its product while also throwing light on the shortcomings of the PC.
Acer however has a marketing communication that is segmented across the different types of consumers based on the level of spending. It has the cheap and affordable line in Acer Aspire series, the Gateway are for the fun loving youth and Packard bell systems are high end and stunning looking machines.
The value offering of Acer are its largest selling units but operate on very thin margins. Acer needs to understand that the American consumer looking to buy a computer or laptop is more concerned with the overall experience than the price he/she would have to pay. The lack of good stores like that of Apple hinders in showcasing the variety of offerings of Acer. The marketing campaigns are also not aggressive in conveying the message and vision of the company. Apple score major points in this region. Also the ability to leverage its other product customers like iPod and IPad into buying iMacs is truly remarkable. Acer shall do well to emulate such plans of Apple to regain its market share in United States.
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