they make high quality items that their competition would find hard to … To resolve these dilemmas, there must be an appropriate organization structure. helps companies build products customers love and be happy doing it. The increased competition has divided the demand among different players in the market. The product differentiation process may be as simple as redesigning of packaging to introducing a brand new functional feature in a product. Having a policy of experimentation and a tolerance for failure resolves the commitment to market vision dilemma. The different factors on which the process is implemented include: Features - Your product has unique features. however, with the advent of Android and the windows phone the company is losing its competitive advantage as these new companies provide the same features as an Apple product but at a much lower price and due to this Apple risks becoming restricted to be known as a high end niche company. When differentiating a product from others, it does not necessarily have to be completely different or new. Maintaining Brand Reputation & Loyalty The need to continuously develop and implement new differentiation strategies to sustain competitive advantage d) B) the next 5 years will be crucial is deciding Apple’s fate as a smartphone company and see how they decide to compete with Android and Windows. Leaders such as Apple use outside data to fuel creating insight vs. endless analysis. One of the most respected books on Product Differentiation is Differentiate or Die by Jack Trout with Steve Rivkin. This is important as Apple dominated this market by a majority share of 63% over 37%. As a result, the company has power over prices through product differentiation, innovative advertising, ensured brand loyalty, and hype around new product launches. It can be useful because they then have a chance to compete against bigger companies. Apple was established on April 1st, 1976 by Steve … Apple licensing Mac OS X to third-party computer manufacturers will not happen in the foreseeable future. A product or service can be differentiated on the basis of performance, features, brand symbols, social factors, timing, location, quality, experience and price. This article will provide 1) a general overview of differentiation strategies and then 2) study examples of differentiation strategies used by: a) Virgin Airlines, b) Etsy, c) Walmart, d) Apple, and e) Nike.. GENERAL OVERVIEW OF DIFFERENTIATION. Five leadership roles will facilitate the innovation process: Institutional Leader, Critic, Entrepreneur, Sponsor, and Mentor. In many industries, the barrier to entry has dropped significantly in recent years. Product differentiation is the process of distinguishing a product or service from others. The mentor coaches, counsels, and advises. The critic challenges investments, goals, and progress. An example of product differentiation is with the series of Apple products such as the I Phone, Mac Air laptop, and the I Pad. There’s also the services such as Itunes and Apple store which sell apps and music on the go. There are five well-known levels of differentiations. ... Apple's iPhone and Google Pixel which operate on skimming price strategy. the main differences that Apple provides is that :-. It released a highly stable operating system in 1999, and updates following 1999. they can afford to set a higher price than that of their competitors as the products continue to be of great quality and have a long lasting life and the consumers know this. which is consumers from the upper middle class to the high class spectrum of society. There are four primary organizing dilemmas when considering product differentiation as a strategy. never introducing a price ceiling with any Apple product that’s actually being launched in the market. Products. Philip W. Schiller, VP of Worldwide Product Marketing for Apple, stated, “iPod is going to change the way people listen to music.” He was right. Operating system. This marked the beginning of Apple’s new strategy of making the Mac the hub for the “digital lifestyle”. 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Apple Business Strategy Pt 2 Strategic Alliances, Apple’s Business Strategy Pt 1: Product Differentiation, 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Corporate Entrepreneur. Apple had issues within its organization. Amidst such competition, the development of new products at Apple, is guided by technological development and market forces. http://www.businessinsider.com.au/price-of-apple-watch-is-insanely-smart-2015-3, http://www.supplychain247.com/article/is_apples_supply_chain_really_the_no._1_a_case_study, http://joshuacollins-media.deviantart.com/art/Apple-Logo-Wallpaper-124545557. Apple Differentiation Strategy Essay Sample Differentiation is a strategy which marketing organisations practice to gain a competitive advantage over its competitors. They outline four steps to follow to achieve differentiation: 1. The problem with this strategy is that Apple can charge a premium price as long as they maintain a competitive advantage over their competition. Thank you for reaching out to us! These are product, services, personnel, channel and image differentiation. The cost of product differentiation acts as a barrier to entry, thus reducing the threat of new entrants. There is also a strong vertical integration of software, hardware and services which makes Apple have a very competitive and functional ecosystem that it operates in. Apple Inc. is an American corporation that designs and manufactures computer hardware, software and other consumer electronics. Until then, feel free to read more about MWS, explore how we can assist you further. Businesses use the marketing strategy of product differentiation to distinguish their own products from those of their competitors. Guest: Andrea Olson, Founder & CEO Prag’madik, Author of No Disruptions - The N… In 2003, Apple released the iLife package, containing improved versions of iDVD, iMovie, iPhoto, and iTunes. It is a radical approach to learning and training engaging the HR, the line managers and the whole workforce. As a side effect, these industries have seen substantial increases in competitive products. Positioning and Differentiation of the Apple brand. Performance - Your product outperforms the competition. Now, getting back to the prices of Apple products, their Ipads range from US$500 to US$600, their Iphones range from US$400 to US$500 and their Ipods range from US$200 to US$300. In 1997, when Apple was seeking a CEO acceptable to Jobs, Jean-Louis Gassée (then-CEO of Be, ex-Products President at Apple) commented, “Right now the job is so difficult, it would require a bisexual, blond Japanese who is 25 years old and has 15 years’ experience!” Charles Haggerty, then-CEO of Western Digital, said, “Apple is a company that still has opportunity written all over it. Apple tries to prevent its rivals from developing lower cost and lower priced items that have the same features as their products. ( Log Out /  If there are fewer firms differentiating than the number required for perfect competition dynamics, the strategy is rare. Apple had one of its critical points in history in 1999 when it introduced the iBook. [CDATA[//>>>> G3 iMac, Consumer Segment >>>>> PowerBook iBook. this ceiling could result in Apple having to cut down on prices when it comes to the long run. The Competitive Advantage of the company.. What makes the Company “Strong” in the Market. This is essentially a form of product differentiation but it is more precisely service differentiation. Product differentiation One example of differentiation strategy is Apple Inc.: Businesses use the marketing strategy of product differentiation to distinguish their products from those of their competitors. Although you want your business to excel in all things, it has been proven time and time again that specialization is the key to success. The primary economic value of product differentiation comes from reducing environmental threats. The strategies proposed depend on:. MiniWorkshopSeries offers solutions to 2 main sets of demographics – the corporate sector and the entrepreneurs. The entrepreneur manages the innovative unit(s). Apple Macbook Pro. In 2003, Apple released the world’s fastest PC (Mac G5), which had dual 2.0GHz PowerPC G5 processors. Those that are relevant to Apple are product features, product mix, links with other firms, and reputation. Aha! The end users or the participants experiencing the products and services are the trainers and the workforce. Their strategy for pricing and marketing is that of differentiation. the success of the Iphone is a clear cut example of Apple making it difficult for other competitors to imitate their products and setting a lower price. Apple owns its chip manufacturers, it sells its products in retail stores that are owned by Apple, and its software controls are really strict. Those that are relevant to Apple are product features, product mix, links with other firms, and reputation. Example: Apple — Differentiation Strategy. CELEB ENDORSEMENTS: Enhancing brand image or ruining it? Anti-Features - … Create a free website or blog at WordPress.com. How Apple Inc. positions from the competitors like Samsung, Nokia and Huawei comes through their ability to deliver exceptional experience through superb user interfaces. ( Log Out /  Apple continued its digital lifestyle strategy by launching iTunes Music Store online in 2003, obtaining cooperation from “The Big 5” Music companies—BMG, EMI, Sony Entertainment, Universal, Warner. Apple is a multinational technology company (you may have heard of them ;)) that produces super popular products like the iPhone and MacBook Pro laptops. Blog Topic 2: Segmentation, Targeting and Positioning, Blog Topic 4: Product, Brand and New Product, Blog Topic 5: Pricing Considerations and Approaches, Blog Topic 6: Integrated Marketing Communications, Blog Topic 7: Place (Distribution and Logistics). Firstly, Apple has a very strong vertical integration. Start by figuring out what your customers want, or what they’re trying to achieve. In 2003, Apple released the world’s fastest PC (Mac G5), which had dual 2.0GHz PowerPC G5 processors. The company headquarters is in Cupertino, California, CEO and co-founder is Steve Jobs and the company boasts of 284 retail locations spanning 10 different countries. 2. MWS product matrix is as follows: : Corporate Entrepreneur, Licensed Trainer >>>> Essential Professional, Trainers Kit >>>>>>>> Basic/Plus Plus/Extended, Licensing >>>>>>>>> Licensing Options Partner Programs. ( Log Out /  Companies face questions regarding the quality, features and price of a product, therefore, it is very important that marketing managers develop a wining product offering by addressing the five product levels, which are potential product, augmented product, expected product, and basic product. The only person who’s qualified to run this company was crucified 2,000 years ago.” Since Jobs took over as CEO in 1997, Apple seems to have resolved the innovation dilemmas, evidenced by their numerous innovations. Existence and survival of BMW among the top fleet cluster. Then Apple introduced the iPod, central to the “digital lifestyle” strategy. lets talk about some of these advantages shall we? This move allowed Apple to have a desktop and a portable computer in both the professional and the consumer segments. Product differentiation is a viable strategy, especially if the company exploits the conceptual distinctions for product differentiation. There is economic value in product differentiation, especially in the case of monopolistic competition. If suppliers increase their prices, a company with a differentiated product can pass that cost to its customers, thus reducing the threat of suppliers. Tech giants Apple have been selling their line of products such as the Iphone, the Ipad and the Ipod for about a decade now. And they are willing to pay a premium price for it. Ideas, suggestions, and examples abound in this podcast episode of Manufacturing Marketing Matters. Visit http://www.miniworkshopseries.com now to find out more. Time will tell whether that happens. This post examines how companies and leaders differentiate themselves.Differentiation is the tap root of sustainable competitive advantage & innovation. Define the context and the competition. Let’s look at some recent examples in the section below. Their strategy for pricing and marketing is that of differentiation. For small companies, this can be great. Another factor, which of course is considered a part of the product, is Apple’s unique operating system. But you’d need to recruit God to get it done.” Michael Murphy, then-editor of California Technology Stock Letter, stated, “Apple desperately needs a great day-to-day manager, visionary, leader and politician. Apple continued their innovative streak with advancements in flat-panel LCDs for desktops in 2002 and improved notebooks in 2003. In 2001, Apple hit another important historical point by launching iTunes. Change ), You are commenting using your Google account. Examples of Product Differentiation. To continue a product differentiation strategy, Apple must continue its appropriate management of innovation dilemmas and maintain the five leadership roles that facilitate the innovation process. A U-Form organization resolves the inter-functional collaboration dilemma if there are product development and product management teams. Later, Apple introduced the easy-to-use iMac in 1998, and updates following 1998. Some of the most prominent examples include Apple’s iPhone, Sony’s PlayStation, or Toyota’s Corolla car. ... marketing-examples-strategies-de finition.html [4.] 5.5 Versioning at Apple Because Apple had such a strong brand and was very successful, they were able to secure part of the ongoing revenue stream that AT&T received as a wireless carrier. Product differentiation is a mark eting strategy whereby . Differentiation - taking it to the next level It is widely understood that new product development entails significant costs. Challenges a) b) c) Is it possible to increase profit margins while maintaining product differentiation strategy ? Before examining the differentiation strategies of different companies, it is helpful to understand the concept of differentiation. Consumer electronics of their competitors to third-party computer manufacturers will not happen in the market pioneered... 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