Currently Apple Inc. is near its 40th birthday and is one of the largest and most well-known corporations of the world. The Apple brand is one of the most valuable brands of the world and the total worth of Apple amounts to over 750 Billion USD. Apple is a provider of equipment for mobile communication and media devices. Its products include hardware for communication, computing, entertainment equipment as well as media peripherals. Additionally Apple is also a purveyor of software support for the hardware including operating systems for mobile phones, computers, multimedia platforms and application software. From the diverse range of products Apple’s highly acclaimed products include the iPhone mobile devices, iPod the portable multimedia devices, iPad tablets, MacBook laptops, iMac computers, OS operating systems and iTunes music store. Apple’s immense growth and success is attributable to its highly innovative technology, a certain aesthetic appeal and also a strong business strategy. However Apple does not always undertake the best of opportunities nor does its management always make the best of decisions. One such situation was when Apple entered the tech savvy market of Japan in 2008.
Apple’s hallmark product iPhone was launched in 2008 globally. The hype for this product was so great that customers were lined up outside stores before the launch of the phone and in many locations entire stocks were sold out in a matter of hours if not days. Same was the case in Japan initially but unlike the rest of the world iPhone sales quickly dropped and Apple didn’t even achieve even half of its estimated sales. The problem was that Apple was using its 3G compatibility and touch operated screen as its strongest proposition. This was a problem because Japan is one of the technological centers of the world and the features of Apple were common place. Better phones were available in Japan as far as technology and features are concerned. The initial volume of iPhone sales was driven by the brand name of Apple but once people had experienced the iPhone they began realizing that Japanese phones offered much more and were less pricy so they began reverting back to existing brands other than Apple.
This situation was a setback for Apple but it did provide Apple with useful lessons in Marketing and Consumer. Firstly, this situation illustrates how vital market research is to the continued success of a product. Apple did a remarkable job as far as identifying a need in the rest of the world is concerned but its market research was lacking with regards to Japan. Japanese market was unique with respect to mobile phones because it is more advanced than most of the world and Japanese mobile companies already have a strong global presence. In order to enter such a market Apple should have compared its product with the existing ones and also taken into account the specific preferences and needs of the Japanese users. Apple apparently failed to do this and faced declining sales and failed to be a serious threat to the existing players in the Japanese market.
A key feature that was at the heart of Apple’s marketing strategy was its 3G compatibility and its touch operated interface. 3G compatibility was a very common feature in the Japanese mobile market so it wasn’t really a unique feature that the Japanese will prefer. Touch screen was also not a feature that grabbed the Japanese customer and made him or her loyal to the brand. In addition to the lack of lucrative features another turnoff was the higher price of iPhone. Japanese phones with comparable or even better features were available at lower prices and hence Japanese customers had no real incentive to purchase iPhone except for the prestige of Apple brand. The pattern of consumer behavior that was clearly observed in this case was that Japanese were a technology advanced nation who preferred more features and lesser price instead of the brand name.
Considering the particular consumer behavior of the Japanese market Apple should have entered the Japanese market with a different marketing mix strategy. The first attention demanding area is the product itself. Apple should have come up with advanced features that were rare in the Japanese market. 3G and touch screen weren’t enough to create a lasting impact on the Japanese market and hence some advanced software features or easier to interface should have been added for the Japanese market. The pricing was also not competitive for the Japanese market. In the rest of the world iPhone commands greater margins but the Japanese customers are more technologically savvy and their fascination with Apple’s product declined given the higher price differential. Furthermore the promotion should have focused on highlighting features that were unique to the iPhone or else it should have made the iPhone experience worthwhile in some other way.
Over all the marketing mix of Apple for its iPhone was deficient in many respects which shows a lack of market research and insufficient understanding of Japanese consumer behavior on Apple’s part.
The Walt Disney Company is a conglomerate of businesses operating in different industries. It has a global presence and has developed a high equity for the Disney brand. Walt Disney Company operates in Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive, giving it a diversified portfolio and varied expertise. Disney first established a family resort in Florida, USA and since then has expanded its business to Hawaii, France, Shanghai, Tokyo and Hong Kong. Disney is a company that has grown primarily because of the bond it has established with its target audience. Its interactions and attention towards children allows it to create a connection and resonance that persists for a long time and is passed on to the next generation of children. This depicts the Disney Company as a truly family friendly oriented company with entertainment and connection being its core competencies. Disneyland over the world also serve the same competencies and enhance the appeal and connection between the company and the public. However Disney faced some serious backlash when it showed environmental insensitivity while being too adaptive to the local traditions of Hong Kong.
The Disneyland Hong Kong was scheduled to be inaugurated in Sept 2005 but even before its doors had opened controversy began to take root. The problem was with the proposed shark fin soup to be served at wedding held at the Disneyland. Weddings and wedding receptions are an important part of the business function of Disneyland and contribute significantly to the revenues. Furthermore serving shark fin soup was in line with Chinese traditions and Disney was adapting to the local tastes and preferences. But Westerners had issues with this dish because of environmental concerns. They raised concerns that if sharks are going to be hunted and butchered at such a rate they will soon become endangered. Strong protests were launched by different environmental and specie conservation societies and groups. Disney officials defended their position and took the stance that they were being culturally sensitive and going by ‘when in Rome, do as the Romans do’. They proposed that they will do their part in raising awareness regarding the detrimental effects of shark consumption and will also encourage people to order something different but shark fin soup will remain on the menu.
This incident shows a business situation where a global company is being responsive to its particular audience. Disney shows thorough cultural knowledge and awareness of tastes on its part. The shark fin soup is considered a delicacy among the Chinese and is a costly dish. It is also customary for exotic dishes to be served at Chinese weddings and Disneyland being a highly customer-centric enterprise was catering to the preferences of its clientele. It was important for the image and revenues of the company that its offerings and menu should be in line with the local tastes and Disney accomplished that. The problem lay in the fact that Disney was being more concerned about its own reputation and financials rather than the long term effects and environmental consequences. In the recent times our environment has been subjected to devastating issues and concern over our planet’s and its inhabitant’s futures is increasing. The presence of each specie contributes in the maintenance of the ecological balance and if the balance is disturbed it can have extensive and far reaching effects for the society. This concern led to the opposition of Disney’s menu and its decision to persist with the soup. This made the situation difficult for Disney because locals were also turning against the decisions of Disney. This meant that the target market itself was resentful and viewed Disney as environmentally unconcerned and too occupied with its revenues and image. This negative publicity means that the decision of Disney backfired and it put itself in a situation where it could suffer financial as well as reputational loss.
What this situation shows from the consumer behavior point of view is the importance of educating the consumers. Consumers have needs but these needs are not always well-informed or consciously conceived. An individual consumer hardly thinks of his or her choices causing significant effect on the environment or the larger population but the corporation serving these individual consumers is very well aware of the effects and has a moral responsibility of educating the consumers. The least a company can do is that it can stop providing the opportunity to consumers where they cause harm to the environment for fellow humans through their actions.
Overall one can say that it is very important for companies to be aware of the market that they are entering. They need to modify their product or service offering according to the specific tastes and preferences of the local population. The pricing and promotion should also be done in line with the local market dynamics and delivering a competitive edge is very important for the success of a product. But on the other hand if a company is too subservient to the local demands it can still have negative effects for the company. The company also needs to pay attention to the societal, environmental and long term implications of its decisions and business strategy. If it needs to sacrifice a few clients in the beginning because of environmental concerns it will ultimately regain them because of the good will generated by the company’s decisions.
Works Cited
Bradsher, K. (2005, 06 17). Disneyland in China Offers a Soup and Lands in a Stew. Retrieved 04 26, 2015, from The New York Times: http://www.nytimes.com/2005/06/17/business/worldbusiness/17shark.html?pagewanted=all&_r=0
Kane, Y. I. (2008, 09 15). Apple's Latest iPhone Sees Slow Japan Sales. Retrieved 04 26, 2015, from Wall Street Journal: http://www.wsj.com/articles/SB122143317323034023
Thomson Reuters. (2015). Profile: Apple Inc (AAPL.O). Retrieved 04 26, 2015, from Reuters: http://www.reuters.com/finance/stocks/companyProfile?symbol=AAPL.O
Thomson Reuters. (2015). Profile: Walt Disney Co (DIS.N). Retrieved 04 26, 2015, from Reuters: http://www.reuters.com/finance/stocks/companyProfile?symbol=DIS.N
