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The multinational technology company headquartered in California is engaged in developing, designing, and selling customer electronics, computer, software etc. Around the globe, the organization under the stewardship of Steve Jobs has developed as one of the most imaginative and inventive various of various devises. Apple Inc. has used on its inventive and imaginative gadgets just as well as ideal launching of products in different markets over the previous years. As the market has been changing with such a quick rate, the competition between two organizations contending in a similar industry has additionally begun to develop in an alternate manner.
Over the past few years, the company has spent a significant time in developing and designing their distribution channels, trying to focus on all of their buyer segment, developing and launching their products and engaging more customers. When we talk about distribution channel, Apple uses a direct as well as indirect approach. (Kunter, 2012).
Even though the company has a very solid distribution network, it faces a lot of challenges also-
· Different Cost Structures- The first challenge that Apple has been continuously facing through their multi-channel distribution is that the cost structure of every channel is different. The cost structure for a particular product that Apple launches differentiated from its retail outlet structure, this is basically because on online platform, the cost structure is variable, the more the number of orders received the more will be the workforce engaged in delivering, packaging etc.
Apple has always been dealing with the issue of providing customer services, since it has decided to reach out the customers through various channels, the number of issues arising from various platforms has also increased over the years. Apple has basically addressed this issue by hiring reliable and suitable representatives’ various parts of the country. One of the best ways to ensure that the customers are getting world-class support is by constructing a world class team.
Now talking about the challenges faced from Grey Market, Apple has decided to address this issue through a very innovative way. Talking about a recent launch, iPhone 8, the company basically decided to launch its product in India just as week after it was launched globally, this strategy impacted the grey marketers in a major way.
Addressing the issue of competitors, the company has always kept it a fact to deliver regularly through its innovative strategies and ideas. Taking into consideration that how customers in India are price conscious, Apple basically believes that even the cost of its recent launch iPhone X was around 80,000-90,000, it would be acknowledged. Highlight one more fact that Apple uses is that it also focuses on another side of differentiation which majorly helps it to stand out from its competitors. While the company centres around the top of the line smart phone and set it at a top-notch value, it occasionally also introduces a lower and a much cheaper version of the high-end smartphones. For instance, their recent launch iPhone SE2.
Talking about the last challenge which the company faces i.e. different cost structure across different channels, there was not much information regarding how the company has addressed this issue. However, according to me, a suggestion which I would like to give to the company would be that they should basically decide on a price that can remain standard across different channels. Since, wrong, or inadequate pricing across different channels would not only affect the company’s customer base but will also lead them to lose on their customer loyalty aspect.
As mentioned above, the company has been dealing with several challenges over the past years through their distribution channels. With the idea, of introducing a much lower and a much cheaper version of the high-end smartphones, has helped them to increase their profitability. Even with a high pricing the company can extract a higher revenue as compared to other companies in competition leading them to in making higher profit margins.
Talking about the strategy which Apple used to deal with grey marketers, benefited the company in a major way during the launch iPhone 8. Its idea selling iPhone8 and 8plus in India, just a week after its global launch, impacted the grey marketers in a major way as there was a significant reduction in the pre-bookings for the phone. (Mukherjee & Malviya, 2017). This also impacted the price which was set by the grey marketers for iPhone 8 as it got reduced by 8,000-12,000.
Apple has always kept customer service as a statement for their business. The company’s APPLE (Approach, Probe to understand, Present a solution, Listen and End), strategy has increased the company’s retention as well as conversion rate over the years. However, according to survey conducted, iPhone loyalty rate got reduced by 15% in 2019, as unhappy customers have started to switch other companies which offer the same features at lower price and better customer service. (Malinga, 2019).
Apple has always been providing with well-constructed, uniquely designed products to its customer. The company has invested heavily in its research and development sector to provide their customers with latest options to make their purchases and their applications for existing product lines, depending on customer preferences. Earlier customer used to visit company’s retail outlets to buy a particular product but due to emergence of e-commerce the whole dynamic has changed. Customers now prefer to make their purchases through online services and that has led to the problem of inconsistent price structure across different channels.
With the emergence of technology in various sectors, company’s have now started coming up with new innovations and ideas in order to gain a competitive edge over its competitors. They often try to provide their customers with new incentives through their respective distribution channels in order to drive more customer engagement.
Now, as I mentioned above, more the distribution channels more will be expected customer services. Customer expectations basically increases as a company grows, now since Apple has made its presence on various e-commerce firms like Amazon, Flipkart, Paytm Mall (recently) (Mukherjee, 2019), the company needs to render services equally on every platform. However, I feel, technology has offered many solutions to the issue of customer service faced by Apple. First of all, it increases the speed of customer interaction. Many customers now don’t have to wait on call to speak with a representative. Instead, the live chat facility of Apple, allows them to convey their issues in a more convenient and faster way.
However, in the issue of grey markets, technology hasn’t really played a major role in providing a solution or in creating challenges. However, since the company has decided to utilise its innovative ideas which can differentiate their product or service in a such a way that the grey market products cannot offer only. Because of this, Apple has seen a major decrease in the percentage selling of iPhones through unauthorised sellers after the launch of Apple 8and 8plus.
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