Marketing Strategy Of Apple’s Mobile Phones In Chinese Market And Its Implications For Domestic Mobile Phones To "Go Out"

In modern society, mobile phones have become the necessities in people’s daily life. With the development of technology and increasing of quality of life, consumers’demand for mobile phones is increasing. Mobile phones can meet consumers’entertainment demand, have mobile office functions and have large market worldwide. The upgrading speed of electronic products is very fast, especially for the mobile phones, which asks the mobile phone producers to follow the international trend to upgrade their technology and marketing strategy to produce the products which can better meet consumers’demand. Apple achieved great success in Chinese market because of its marketing strategy. Chinese mobile phone producers experienced a hard time in implementing "going out" strategy, because of the lack of innovation, poor quality of products, sales experiences etc. In recent years, some Chinese producers like Huawei, ZTE (Zhongxing Telecommunication Equipment Corporation) and Xiaomi have achieved preliminary development; however, they are still weak to compete with the international leading producers like Apple, Samsung etc. This paper analyzes the competition strengths of Apple’s mobile phones in Chinese market on the basis of4Ps(product, pricing, place, promotion) marketing theory and SWOT Analysis to provide further implications for Chinese mobile phone producers to improve international competitiveness.As giant in the mobile phone industry, since Apple launched its mobile phones in2007, each generation of its products had made consumers rush to purchase. From the aspect of innovation of technology, the birth of iPhone is of historic significance. Design of multiple-touch screen, Internet-access and closed operating system provide users with excellent using experience. The fashionable appearance and cool entertainment functions make iPhone popular among the young people. Including the idea of innovation, the marketing strategy it adopts is one factor contributing to the success of Apple. The mobile office function explored especially for the businessmen is also an element that makes iPhone popular in the worldwide range. Apple’s successful experience in implementing4Ps marketing strategy in product, pricing, distribution channels and promotion measures sets a good example for the other producers in the mobile phone industry. During the period of1999to2003, when Chinese mobile phone industry was at the stage of emerging, mobile phones had huge Chinese market where the penetration was low and supply was shorter than demand, and Chinese mobile phone industry developed soundly. However, since2003when foreign brands broke into Chinese market, the disadvantages of Chinese producers began to be revealed. Apple’s success achieved in China’s made Chinese mobile phone producers eager to learn from their experiences to improve their own international competitiveness. However, because of their ignorance of the quality of products and lack of sales experiences it was hard for them to compete with the foreign competitors. In recent years, Chinese producers are making breakthrough in the design of products, innovation of marketing strategy; however, they still need to develop to catch up with the foreign leading producers. What Chinese producers can do to break into global market is to formulate appropriate product, pricing, place and promotion marketing strategy to improve competitiveness.This paper can be divided into six parts.The first chapter is the introduction part which gives the introduction of the research background, significance, literature review and framework. With China’s entry into the World Trade Organization in2001and continuous development of economic globalization, more and more foreign mobile phone producers entered Chinese mobile phone market to compete with Chinese producers. Depending on their technology advantages and mature marketing strategies, these worldwide leading mobile phone producers brought huge impact to Chinese mobile phone industry. Apple’s mobile phone iPhone increased its market shares since it was launched in Chinese market with its innovation idea and rich marketing experience. The launch of each generation of iPhone has caused the phenomenon of people waiting in queue to purchase. Both of the classical model iPhone4s and newly-launched iPhone6have caused great attention among the consumers. In contrast to the world leading producers, Chinese producers have many problems, such as poor research and development force, lack of creation of distribution channels and promotion methods, and ignorance of brand building awareness. Given the problems above, Chinese mobile phone producers should learn the successful experience of Apple’s mobile phone products and learn marketing theories to "go out".In the second part, the paper introduces the relevant4Ps marketing theory and SWOT analysis. Marketing Mix of4Ps was proposed by McCarthy in his book Basic Marketing in1960. McCarthy introduced the Marketing Mix (sometimes called the "4Ps") as four controllable variables the company puts together to satisfy a target market:product, pricing, place (or distribution) and promotion. Products include more than just tangible goods. Broadly defined, products include physical objects, services, persons, places, organizations, ideas, or mixes of these entities. Pricing strategy demands the enterprises to work out attractive price to the consumers on the basis of cost. The enterprises have to find the balancing point of these prices to maximize their profits. Place refers to how the product gets to the customer. This third P has sometimes been called distribution, referring to the channel by which a product or service is sold, which geographic region or industry, to which segment (young adults, families, business people) etc. Place focuses on analyzing distribution channels, cultivating detailers and building selling network. Considering the market factor, consumers’purchasing habit and marketing strategy, the enterprises should build selling channels suitable for their own conditions. Promotion is the function of informing, persuading and influencing the consumer’s purchase decision. The enterprises adopt various and influential promotion strategy to transmit products’functions, characters and image to the consumers and inspire their purchase behavior. SWOT analysis (alternatively SWOT matrix) is a structured planning method used to evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a business venture. It can be divided into two parts; the first part is the analysis on the internal situation of the enterprises and concludes the strengths and weaknesses. It also studies on the external environment and analyzes the opportunities and threats. By doing SWOT analysis, the enterprises focus the resources and action on the aspects that they have strengths and opportunities to achieve sound and fast development.The third chapter analyzes the developing process of Apple’s iPhone series products briefly and focuses on analyzing Apple’s successful implementation of4Ps marketing theory and SWOT analysis of iPhone in Chinese mobile phone market. Apple implements4Ps marketing theory successfully. From the aspect of product, Apple pursues innovation and adopts product differentiation strategy aiming at providing consumers with unique using experience with multiple touch wide screen design and system innovation. From aspect of place, it adopts combination strategy of multiple distribution channels, including direct-sale store, cooperating with dealers and telecom operators. By adopting word-of-mouth and viral marketing strategy, Apple expands its influence rapidly with the help of its fans. By analyzing the4Ps marketing strategy adopted by Apple’s iPhone series products in combination of the method of SWOT analysis, this paper analyzes the strengths, weaknesses, opportunities and threats of iPhone. Apple has obvious strengths in product, pricing, place and promotion, and it provides basis for the fast development of Apple in recent years.The forth chapter introduces the development history and exporting status of Chinese mobile phone industry, and analyzes the strengths, weaknesses, opportunities and threats Chinese mobile phone producers face in the process of "going out". In recent years, some Chinese producers, such as Huawei, ZTE and Xiaomi are increasing their market share by developing technology and innovating marketing strategies. The strengths of the Chinese mobile phone industry are low price advantages, removal of restrictions to entry and financial support to enterprises to improve R&D force. However, at the same time, Chinese producers also have disadvantages, such as lack of core technology, brand missing and low quality of products, which expand poor image to the public. What’s more, foreign mobile phone producers are changing competing strategies and expanding market share with their low and middle-end products depending on their technology advantages and earning profit with their high-end products, which bring new challenge to the Chinese mobile phone producers that adopt low price marketing strategy to "go out". However, Chinese mobile phone enterprises should grab development opportunities to expand market share with the developing of new mobile phone markets in Asia and Africa and improvement of technology. In addition, this paper points out the problems China’s mobile phone producers have with their4Ps marketing strategy by comparing with the4Ps marketing strategy Apple adopting in Chinese market. The fifth chapter gives suggestions for Chinese mobile phone producers to improve international competitiveness by studying from Apple’s successful marketing strategies. The success of Apple’s mobile phone products can be contributed to several aspects, including innovation consciousness, customer-orientation awareness and brand building. Chinese mobile phone industry is relatively weak in the aspects of product innovation, service level, and brand building. They should learn from Apple’s4Ps marketing strategy to improve brand image, explore foreign market in depth, reinforce research and development power, and innovate distribution channels. Chinese mobile phone producers should improve product quality, adopt differentiation strategy, care retail segment to improve brand image. At the same time, they should pay attention to explore the foreign market in depth by setting branches in the foreign market, focusing on emerging new market, innovating marketing strategies and adopting different marketing strategies in different markets. Chinese mobile phone producers should pay attention to focus on the research of core chips and main components, reinforce software exploring, and strengthen research management to provide consumers with better user experience. Finally, Chinese producers should pay attention to the distribution channels’building to break into the global market.The sixth chapter is the conclusion which analyzes the successful marketing strategies adopted by Apple’s mobile phone products on the basis of4Ps marketing theory. At the same time, it studies the development status and does SWOT analysis on Chinese mobile phone industry. On the basis of analysis, the paper proposes recommendations for Chinese mobile phone producers:improving product quality, developing professional promoting skills of the sales person and focusing on quality differentiation to avoid homogeneous competition. Meanwhile, Chinese mobile phone producers should focus on exploring the foreign market in depth to avoid entry barriers by building branches in the local market and focusing on emerging market to increase foreign market share. They should also enrich distribution channels; strengthen their research and development force etc.