Channel conflict at Apple

Presented by: Shikhar Saxena PGDM-Marketing (2012-2014)

HOW IT ALL STARTED??

Apple was founded on 1st April 1976 and incorporated on 3rd January 1977. The Apple I , its first offering was better then other machines because: It was priced lower than other computers available at the time. Had fewer parts, & Was marketed to only individuals with an interest in computers and electronic.

In its opening year the sale revenue was about USD 774,000 an impressive start.

HOW THE APPLE GREW

PRODUCTS LAUNCH FEATURES RESPONSE

APPLE I
1977 MOStek 6502 processor. TV as display unit. Big Hit APPLE II MOStek 6502 processor. Color Graphics. 1977 Audio cassette drive for (Upgraded in storage with 4 KB RAM 1978) Later upgraded with floppy disk drive & 48 KB RAM in 1978. Text & Graphics 128 KB RAM Updated System Software

Raked in about US $ 139 million within first 3 yrs. of its launch.

APPLE III 1980

LISA Type: Businesses Machines Launched: 1983 MACINTOSH

Innovative features like: Hand held mouse GUI

Primarily owing to high cost. Personal Users

1984

128 KB Memory 32-bit processor Mac OS that could run on all apple computers. Internet MAC Designed primarily for new users. Low Cost. 10 GB storage 1.8 Hard Drive iPOD shuffle had flash memory.

Big Corporations

iMAC SERIES

iMAC iMAC G5

-1998 -2004

iMAC Mini -2005 iPOD & iTUNES 2001 followed by iTunes in 2003 & iPOD shuffle in 2005

Reasons for apple opening its own retail stores

Increase market share
More control over sale of its products Highly competitive PC market

Better buying experience

Ambience and presentation of products

Building customer base and loyalty

Better understanding of customer needs Problem assessment (Genius Bar) Brand awareness

Apple store

Channel conflict resolution

Concerns of Resellers
Prices were low at apple retail stores predatory practices(discounts) Difficulty in procurements of new apple products Apple shipped new models to its own stores first Apple salesmen used to convince customers to buy only from apple stores. Faulty product return policy Customer data from resellers was used by Apple to approach them directly

Price Variation
Chart Title
1117

iBook

966

eMac

2173

PowerMac G4 Apple retail stores Independent Resellers

1287

Powerbook 12 inch

Minimun Advertised Price (US$)

2092

Titanium

1547

iMac
0 500 1000 1500 2000 2500 3000

Apples Policies towards resellers

Since a major chunk of their revenue came from its own stores it definitely gave preference to them Removal of middlemen to get more profits and build a bigger customer base

Conflict Resolution
Reseller Customer experience Discounts and freebies Adequate stock of accessories Better product presentation and promotion Apple Ensure Adequate inventory level Discounts offered should be identical

Warranty and product return policy should be changed

Discriminatory policies should be changed in revised agreement

Better training to salespersons to resolve customer doubts