The Apple Watch is a line of smartwatches that was released by Apple to incorporate health-oriented capabilities and telecommunication services. This was a ground-breaking product and its incorporation into Apple products meant that it was, and still is, only compatible with iOS features. Since its release in 2015, there have been eight versions of the products, with each series better than the last.
As of December 2020, there are more than 100 million wearers of the Apple Watch. With each series being better than the last, Apple has shown massive growth in the Smartwatch share market. Its customer retention, as is common with Apple products, has also been impressive. Let’s explore various marketing strategies and competitive advantages of Apple, specifically so, its Smart Watch product.
Apple’s Strategy for Smart Watch
Apple’s marketing strategy for the Apple Watch is as old as time and was established by McCarthy (1964) – product, price, place, and promotion. Apple, however, uses these three Ps to penetrate the market in a manner and flair that very few companies can accomplish.
The Product – The Apple Watch
The Apple Watch presents much better value due to the integration of Apple hardware and software environments. Besides that, it exploits a design unique to Apple, ease of use, personalization, and simplicity of the basic products. Apple also utilizes the presence of more accessories to meet other needs that can be integrated with all Apple products, including the watch.
Apple is not known for its cheapness, but rather for penetrating the market at a price that is higher than its competitors. The company uses this price skimming strategy to emphasize the differentiation it offers as a technological company with the Smart Watch. Due to the features offered, customers find value for their money, no matter how high it may be.
The Place – Apple Stores
With a clear focus on differentiation, Apple ensures that its stores are the main direct channel, and it locates its stores in strategic places like malls in major cities. The architectural designs in Apple stores are unique and true to the brand, with glass stairs or glass facades. Buying an apple watch within the store is accorded its kind of luxury, with unique customer service and attention to the operations of the watch.
The Promotional Strategies
In addition to the strategic placement of its stores, Apple promotes its products through specialized platforms like billboards and magazines. One very unique promotion strategy Apple uses is the placement of its products in certain popular American shows. Another clever promotion strategy is the use of Super Bowl Commercials where Apple openly demonstrates its differentiation, and the impact it has on the consumers’ opinions and behaviors.
What is Apple’s Smartwatch Market Share?
Despite the unique and successful marketing strategies that Apple has applied to its products, it does not top the list of the premium smartwatch segment. The apple watch is still considered the unchallenged smartwatch market leader and has maintained its dominance of the market with a 36.1% share.
However, despite leading in market penetration in the premium sector, Garmin has the largest share overall of smartwatches over $500. This is due to the added advantage of solar charging, rugged designs, and TOPO mapping that Garmin offers particularly to hikers.
Understanding Apple’s Target Market
The impact that the Apple Watch has had on the global market is undisputed. A large percentage of growth in this segment is associated with the trend of accessorizing smart devices, including the watch. Apple has a specific target audience and includes customers aged between 20 and 45.
These consumers are often high earners, given that the price skimming strategy for the company is penetrating the market at a higher price. The watch is both functional and stylish and has various price ranges to accommodate its target consumer.
How Apple uses Digital Marketing Strategies
Since the beginning of 2020, social media and mobile advertising have barely made 10% of the total ad placement for Apple products. The majority of the ads appear on YouTube, Twitter, and other entertainment-oriented websites. Often, there is more emphasis placed on a particular product online when there is a new product launch.
This is often the case when Apple is hoping to spark an interest or a buzz among interested buyers. An example is the $6.6 million advertisements that were run on YouTube to promote the Apple Watch as the company’s latest gadget.
During these digital campaigns, Apple often showcases that it knows its consumers – they are savvy value data privacy, and are suckers for modern convenience. These advertising habits have worked for the company since 2018 which spent over $168 million on the promotion of its new products.
Apple’s Competitive Advantages with its Watch
As different companies continue to elevate their technological and marketing strategies, Apple must keep up with its competitive advantages over its rivals. Given the emergence of new technology in all sectors, Apple needs to come up with better strategies other than its technological prowess.