Apples App Store Sees Record Sales - Article Summary and Discussion Paper Example

Hall G. Jan 6, 2017. Apple's App Store sees record sales. Silicon Valley Business Journal [online] Available at http://www.bizjournals.com/sanjose/news/2017/01/06/apples-app-store-sees-record-sales.html [Accessed 10 Jan. 2017].

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Article Summary

The improvement in the sales of an application by the tech giant; Apple in 2016 has become prominent and evident. In December 2016, the company recorded the highest grossing month with the App Store generating three billion dollars in revenues (Hall, 2017). As an indication of performance and high content marketing, the company reduced the overreliance rate on the production of iPhone 7 with the production reducing significantly 10% at the end of the year, 2016. About 30 billion dollars get spent by the company on the applications hence to ensure proper returns to the enterprise; diversification of revenue sources gets an important consideration.

The Apple Company recorded a year over year surge in in revenues by 40% in revenues in 2016. According to the companys website, the application developers receive 70% of the sales while the company gets a 30% average (Hall, 2017). The current performance of the business becomes attributed to the continuously best marketing strategies used by the tech giant. According to Phillip Schiller, 2016 became a record-shattering year for the App Store based on worldwide marketing. However, all sales in the application store ensure a percentage boost in the sale of flagship products including iPhones, iPods and MacBook produced by the company.

Discussion

Applications used by people all over the world vary depending on the geographical location, whether the person is using an android or apple phone (based on the phones model) and customer preferences (Lutovac, et al., 2016, p. 45). This idea creates a consolidation of user preferences depending on their favorite applications at that particular point in time. Therefore, for most companies and individual programmers, there is the need to stand out in sales and marketing strategies applied. According to a BI Intelligence report, the need for diversification regarding application marketing strategy most phone production companies and app store owners including Android and iPhone becomes necessary to ensure diversification of revenues while encouraging a sustained user community (Koole, et al., 2017, p. 211).

The marketing strategy used by Apple Inc. provides that a competitive advantage of the phone and its applications through product strategy (Schlegelmilch, 2016, p. 222). At the beginning of the establishment of the company, some pre-established ones including IBM and Microsoft had become available with the company suffering defeat from the Microsoft based computers that gained a strong market strategy (Schlegelmilch, 2016, p. 235). This performance becomes evident as a result of poor product strategy used by the firm, at the cost of selling redundant and poorly modeled computers.

With Jobs return in 1996, he ensured that all expensive products in the company got discarded and aligned regarding simplicity and improved user experience (Payne & Frow, 2017, p. 1). This advancement included providing a premium app store products and iTunes platform. In todays market, the core marketing strategy in the company is through product strategy (Grant, 2016). This approach has become evident in increased sales recorded in the first three-quarters of 2016 in which sales increased (Schlegelmilch, 2016, p. 235). The flagship products including, MacBook, iPad and iPod provides a competitive advantage to the company regarding marketing (Piercy, 2016). However, the premium user experience achieved by innovative design considerations and features overshadows the simplicity approach that became the trend when Steve Jobs arrived in the company in 1996 (Payne & Frow, 2017, p. 1). Based on their refined products, it is important to note that many devices existed long before the production of ultrathin computers such as MacBook Air; hence it is not the first in the market (Castro, 2016).

The revolutionary products from Apple improve the consumer electronics industry hence the increased demand for the products all the world. This fact shows a clear indication of how the company products have become in a position to surpass its predecessors in the field of technology due to the provision of proper innovative products and uniqueness in the overall product usability and a general consumer experience (Payne & Frow, 2017, p. 1). Therefore, the company employs the concepts of proactive and retroactive approach a means of its product strategy. In these concepts, the company develops its products based on the competitors products with improvements realized to remove the undesirable characteristics of the product produced. This concept gets referred to like the game theory. Apple Inc. identifies the constraints through which other products in the have effects on the consumers and improving on possible factors of the company procedures of production (Grant, 2016).

The approach by the firm allows them to integrate new features into the products produced hence the unique user experience. The products, therefore, become new, familiar and innovative to the end consumers. The company, therefore, applies the Maslows Hierarchy of needs to realize the potential market. Apple identifies the needs of the customers based on the available needs and recognizes the level of self-actualization after all the needs get met hence a wider market gets realized (Liu, et al., 2017, p. 224). In a bid to achieve a better marketing approach, the theory of 7Ps of marketing mix must be applied. This involves factors such as price, process, place, promotion, physical evidence, product and people (Liu, et al., 2017, p. 226). The company majors in a majority of the elements including a development that allows the network carriers and other social media platforms to advertise for them are extensively allowing a decreased cost in advertisement costs as later mentioned in this discussion.

The product portfolio of the company creates uniqueness in the product usability and thereby improving the customer experience (Koole, et al., 2017, p. 215). An iPhone or an iPod becomes complete to the consumer when inbuilt products such as the iTunes and the App Store. In a recent statistics released by the Version Daily website, the aesthetics of a MacBook gets complemented by the sense of uniformity with an iPhone hence the urge of a user to buy one in case they own another. The user interface of the consumer electronics produced by the company applies same design and practical principles all centered on the sense of similarity.

The Apple ID homogeneity among the users of the products becomes vital regarding how the access to individual accounts gets accessed by the users (Rogers & Lee, 2016, p. 40). Therefore, management of digital identity, device preferences and files allow for seamless transition between these devices. This experience creates a halo effect in which the products complement each other (Koole, et al., 2017, p. 220). In this sense, the consumer would stick to buying Apple products compared to the buying another product. The halo effect in turn, therefore, creates a brand loyalty effect hence increasing the sales performance of Apple products including applications sold via the App Store. Therefore, the development of the complementary products by the company is a form of marketing strategy applied by Apple (Rogers & Lee, 2016, p. 40). The company through this method enjoys a surge in customer loyalty based on its established branding. This ensures the theory of extended self. The theory explains how the identity of product shapes the perception of the buyer. This method is related to the consistency. Apple product homogeneity ensures an improved consistency among these major products in the market produced by the company.

A premium marketing strategy can get achieved through the maintenance of brand image. In general, the cost of Apple products is expensive compared to their Android counterparts. The same applies to the MacBook Pro, or Air is expensive compared to the price of the Windows computers or laptops. The premium pricing is a method of marketing strategy by Apple. This concept promotes and maintains a good and favorable perception among loyal customers. A common belief among these clients is that expensive products come with exceptional distinction and quality. As a consideration among many consumers, Apple products get considered as superior products over their competitors based on the pricing strategy. The sense of luxury has a psychological effect hence Apple products get referred to as luxury goods due to their high prices (Hugman, 2017, p. 82). Hence a status symbol becomes associated with this comfort and financial freedom. For example, unlike other Android phones, iPhone has inbuilt products using premium materials including glass and aluminum. The psychological method of choosing the market demand becomes based on the concept of flow. This explains how optimal subjective experience ensures an increased output in the market (Hugman, 2017, p. 84).

Despite the improved sales performance by the company and the popularity it experiences, the company requires publicities through media relations and trade shows (Roma, & Ragaglia, 2016, p. 175). According to statistics, there is a reduced advertisement cost for the iPhone. This method of publication used by the company involved in the process excludes print and broadcast media. However, at times the company produces advertises on social media and online distribution. In the case of an iteration of the iPhone, series is released, the network carriers take their parts in advertisements based on the different plans offered to acquire the new product (Roma, & Ragaglia, 2016, p. 179). The company, therefore, achieves a larger market through carrier network providers who appear to do this for the Apple products at any particular time.

This method realizes a unique marketing method that the company uses. The iPhone ads seem to same regardless of the advertisement platform utilized by the network carriers. The different marketing procedure provides an important platform demonstrating the effectiveness of this approach in the overall marketing technique applied by the company centered on the pricing and product marketing strategies. The popularity of a product released by Apple Inc. improves the popularity of the carrier networks that advertise them, hence the uniqueness in the advertising technique.