Strategic Marketing Plan for iPhone 4 - Essay Example

? STRATEGIC MARKETING PLAN: IPHONE 4 [Insert Ypur [Insert This report focuses on launching iPhone 4 in the growing market of the UK. Apple Corporation plans to launch iPhone 4 in the market of UK. As there are already global brands operative in the market, the company has to match its product with the international standards. This would need state-of-the art production facilities and recruiting quality engineers to show their quality with the manufacturing of the smart phone. The company already has its production facilities and required technology in order to launch the venture of iPhone 4. Based on its established brand equity, Apple Corporation has the opportunity to skim the market with high prices in the UK market. However, once the upper class market has been catered, iPhone 4 can head for the mass market with low prices. This will expand iPhone 4’s life cycle over a longer period of time till the product itself matures. This report contains a detailed analysis of all the marketing and operational aspects of launching Apple Corporation’s iPhone 4 in the UK markets. 1. Resource Analysis The tangible resources available for the introduction of smart phone include the production facilities of the company which already exist. Apple Corporation’s main strength is its ability to develop hardware and software systems which it has developed through extensive Research and Development (Apple.Inc). The quality, method and organization of the current production process are already available. The production requirements can be met by existing state-of-the-art facilities. The marketing management process remains the same and the same distribution channels though which our competitors sell their smart phones, will be used. The IT systems are already developed which makes it easy to integrate with our customers and suppliers. The intangible assets available include our Goodwill in the market. The reputation of delivering the objects on time is also important. The key commercial rights protected by patents and trademark will work as an asset for our company. However, introducing this new smart phone will increase our labor cost by ?10 per person as more workers will be needed. The R&D department will need more labor therefore it will be increased by 500 men working at the rate of ?10 per hour and there will be 30 more employees for managerial work. As the existing production facilities will be used, there is no need of extra physical capacity. However, to improve and modify our facilities, a financial injection of ?500,000 will be needed which we will raise through debts as raising through equity will increase our interest expense. (Deutschman; Useem). 2. SWOT Analysis (Apple) Strengths (ReportLinker.com; iphoners.com) Apple stands on a strong foundation of Innovation through which it will introduce iPhone 4 with unique positioning. Apple’s phones are meant to be user friendly and with this ease of use, the company differentiates itself from the competitors who produce more complex versions of PDAs. iPhone 4 would be a competitive product and will be launched in the market with competitive prices through its competitive advantage of cheap raw material availability. The brand itself has long been established and therefore, the market will be highly receptive to new brand extensions. Weaknesses (ReportLinker.com; iphoners.com) Touch screen phone usage causes a medical condition called Gorilla Arm, which is caused when one holds his/her hand at waist length and continuous usage of touch screen phones may cause such problems. The consumers may therefore feel discomfort while using touch phones. Opportunities (ReportLinker.com; iphoners.com) Smart phones have a growing consumer base which is a good sign for Apple’s business as the new iPhone 4 can anticipate higher turnover rate. All the other brands such as Nokia, Samsung and especially Blackberry are positioned towards the corporate sector. iPhone 4 will be targeted towards a different and a larger market which can be entertained with unique positioning into other markets. There is an increasing 3G network coverage in UK which directly increases the demand of hi-tech phones like Smart phones etc. Furthermore, Apple Corporation has alliances with industry leading corporations with mobile services and technologies which will reduce the overall contract price for its Smart phones. Threats (ReportLinker.com; iphoners.com) With time, companies which are currently skimming the markets with high prices would eventually climb down which will intensify the competition for Apple Corporation. There are cheaper alternatives to smart phones that are available in the market which is globally mass produced. There has been an economic slowdown across EU however, previous numbers show that the market of Smart phones is growing in spite of this turmoil. 3. Strategic Marketing Objectives The brand positioning will be gauged by carrying out a marketing research in a sample of 4 geographical zones namely Northampshire, London, Edinburgh and Manchester; to see whether the brand has accurately been perceived by the target market of youngsters. If not, then the brand will be repositioned at its early stage by revamping the advertisements and all the marketing communication channels such as hoardings, streamers, newspaper ads etc. Currently, 44% of the market share is governed by Nokia, 19% by RIM, 17% by Apple, 9% by HTC and 5% by Samsung. (Info Grok.com). Apple Corporation aims to achieve 30% share by the end of 2013 through unique positioning in the market which is not catered by corporate brands like HTC, BlackBerry etc. 3.1. Core Strategy: The overall market for smart phone has shown a tremendous growth of 70% (marketingcharts.com) which is a clear indicator that there is a strong potential in the market after the first year of iPhone 4’s launching. Moreover, with its distinctive Unique Selling Preposition, Apple will be able to target a larger market which is still untapped as no brand has exclusively targeted the youth other than Apple. The corporation is blessed with money, machinery used to manufacture high quality smart phones and most importantly, strong brand equity in the market. Labor will be increased by 500 men working at the average rate of ?10 per hour. Apple Corporation aims to increase the customer satisfaction at the rate of 12% every year by providing quality smart phones and obtaining feedback through online surveys. 4. Competitive Market Position Strategies 4.1. Segmentation In UK, England has the highest number of mobile ownership with 85%, compared to 81% in Scotland, 82% in Wales and 85% in Ireland. (stakeholders.ofcom.org.uk). 55% males use mobile phones in UK compared to 45% females. Distribution of mobile phones users according to age; 29% are 16-24 years old, 30% are 25-34 years old, 30% are 35-50 years old and 11% are above 50 years of age. (unanimis.co.uk). UK’s average monthly spending on mobile by an individual is ?23. (stakeholders.ofcom.org.uk). 79% of UK’s population uses a mobile phone for texting, compared to 57% who use for voice mail and 52% to use to take/store photos. (stakeholders.ofcom.org.uk). Smart phone usage based on income in UK is characterized by 4% with income lesser than ?15,000, 13% with income ranging ?15,000 - ?35,000, 12% with income ranging ?35,000 - ?50,000, 20% with income ranging ?50,000 - ?75,000, 17% with income ranging ?75,000 - ?100,000 and 34% with income greater than ?100,000. (blog.neilson.com). 49% of small business owners use smart phones. (areatrade.co.uk). The lifestyle of people using mobile phones in UK indicates that the mid to low tier adaption of smart phones in UK is 76%, while the high-tier adaption is 60%. (newstatesman.com). Apple should target youth as they can influence the decision of purchasing for their parents. This is because parents believe in the myth that the new generation children know more about technology compared to them. Moreover, smart phones are mostly used by corporate personnel and most brands in the market target these high-end users (newstatesman.com). Apple will have a different approach as it will aim to introduce iPhone 4 with more market offerings to exploit the benefits of a larger market of youth. 4.2. Targeting Apple’s focus will be on the age group of 16-24 with an annual income of more than ?15,000 (13% of smart phone users) in England as they are the ones who apart from using the mobile phones also influence others to buy the one they like. Parents buy mobile phones as suggested by their teenage kids as parents believe they know more about technology and their choice will be more suitable. Apple must target this market because there is a gap in the market as the selected segment is not targeted by any brand in the UK. This reason is further elaborated in the heading below. 4.3. Positioning including Perpetual Map The young people of urban and sub-urban areas can be targeted if Apple focuses primarily on methods that can attract youth. As they are more engaged with socializing, Apple will show video conference advertisements for them to know how convenient it is using Smart Phones. Apple’s ease-of-use and numerous market offerings will be iPhone 4’s Unique Selling Proposition. As young ones move a lot with friends, Apple will also show how easy it is to handle wherever a person goes for a hang out with friends and fellow peers. It will be better for iPhone 4 as smart phones of other companies are of greater weight which is not easy to carry in a casual way. This will be helpful as younger ones try to live in a casual way. This leaves a large room for Apple Corporation to tap in to the youth market that prefers various options such as wi-fi, numerous web-applications etc. iPhone 4 will be positioned with the Point of Parity of being a high quality smart phone with all the features and the Point of Difference would be that iPhone 4 will be loaded with more features than ever before and will be easy to use at the same time, hence the gap of this market in the Deep Blue Ocean of smart phone brands will enable Apple Corporation to be competitive in the presence of global giants. This perceptual map is based on assumptions after analyzing the data given in (newstatesman.com; ReportLinker.com; iphoners.com). 4.4. Marketing Mix 4.4.1. Product The name of the brand will be ‘iPhone 4’. The phone style will be touch screen with a display resolution 960 x 640. The screen size will be 3.5 inches. The depth, height and width will be 0.37 inches, 4.5 inches and 2.31 inches respectively. (Apple.com). The weight of iPhone 4 will be 4.8oz. The quality features will include 3 way calling, call hold, call timer, call waiting and caller ID. There will also be additional features like Wi-Fi, Operating System, GPS, Bluetooth, Standby Time, mobile and web-applications, integration with desktop and iPads, gyro – accelerometer with advanced motion sensing ability, HD video recording and editing and many more with a one year warranty. The retina display will provide a stunning picture on the smart phone while the battery life will only last to one complete day on a single charge. The video calling capabilities will make it very attractive. It will be packaged in a very attractive box with all the accessories, that is, the data cable, USB connector, charger, battery, hands free headphones and a user manual. It will be available within different memory sizes for the convenience of the customers. The sizes will be of 16GB and 32GB. (This information is based on Apple iphones extracted from Apple.com). 4.4.2. Price The price of a 16GB Apple Corporation will be ?500 and the price of a 32GB Apple Corporation will be ?600. Apple iPhone 4 will select the market skimming pricing. With these skimming prices, Apple hopes to get the best chunk out of the lucrative market before going on the mass markets to maximize its revenue as sales are expected to be higher in England. Payment is supposed to be made in advance through our website and the customer will receive the product through delivery within 24 hours. Moreover, as far as special discounts and promotions are concerned, the company can afford markdown of 20% once every quarter of the years 2011 to 2013. Credit facilities will only be extended to independent retailers and not the end customers who may have an option of installments available up to the discretion of the channel they are selecting. For example, if independent retailers choose to run installment options or mobile operator companies may advance contracts which may require the customers to avail credit. However, these companies will be liable on their own as Apple Corporation would be selling to the companies. 4.4.3. Promotion IPhone 4’s advertising will be through Above The Line electronic media channels as most people give time to television even after all the technology introduced. Apple will also go on Below The Line promotional campaigns and place billboards on different places, send brochures to different schools and universities and also make pamphlets to promote its product in the country. Since the product will be launched in Spring 2011, the promotional campaigns will be designed according to special occasions such as Easter (which falls in April) and later, during the months of May onwards, the campaign will also feature special summer promotions/discounts and yearly seasonal discounts will follow in the winter and summer a year after the launch of IPHONE 4. The promotional schemes at the end of the year will be such that if a person who books his Apple Corporation on the Boxing Day of 2011, he/she will receive a 20 percent discount. The initial promotional campaign will be that a when a person who purchases iPhone 4 within two months after its launch will receive a 10 percent discount. Apart from that, the company will also take Corporate Social Responsibility events twice a year to create long-term profitable relations with the society. These events would be in the form of Sponsoring academic events, extending aid to the homeless, sponsoring schools and medical services for the less fortunate etc. 4.4.4. Place The market will be covered by directly sending our Brand Ambassadors to areas where there are frequent gathers of young people. These will include pubs and bars. The product will be manufactured in Liverpool and will be transferred throughout the United Kingdom through wholesalers and retailers. Liverpool is an ideal place as it forms a link with Wales, Scotland and Ireland because of its port and transportation to the rest of England will also be easy because of its excellent infrastructure. Apple’s authorized dealerships will be outsourced throughout England and these dealers will be supported by the wholesaler on individual basis to make sure that operations are carried out in a proper way. 5.5 Contingency Plans: IPhone 4 will be launched exclusively in the market for youngsters with marketing offerings more than any other brand is offering. BlackBerry, which is one of the closest competitors of Apple, is positioned as a corporate brand. With iPhone 4’s move to the youngsters’ market with added market offerings, BlackBerry may also launch a brand extension along with a campaign to refute iPhone 4’s marketing endeavors. Besides this, another brand may come up with low priced editions of smart phones for the youth which would likely damage iPhone 4’s position in the market. Therefore, Apple must initially play on its brand equity and price itself at a premium which will be used to skim the market. As soon as the competitors launch retaliatory campaigns, Apple must then move its iPhone 4 to the mid tier market as there will already be the demand of this premium brand. 5. Implementation Plan: As mentioned in the Gantt chart, iPhone 4 will be launched in the market of UK during the spring of 2011. Prior to launch, research will be conducted to see where the brand is most likely to generate the highest revenue. After that, the brand will be launched preceded and followed by strong marketing activities country wide. Alongside Apple’s marketing endeavors, Sales figures will be monitored at the end to every year to see whether the business is meeting its targets or not. Moreover, the sales force will also be closely monitored by the Area and Territory Sales Managers who will come under the Marketing department. These Sales Managers will ensure that the sales representatives are meeting the above mentioned monthly targets which will be broken down to daily and weekly numbers. Moreover, the marketing activities will also be monitored and resulting effects in the sales figures will be recorded to gauge the mileage of the activity. Secondly, new promotional campaigns, both ATL and BTL and sales promotions would have to be launched if there is a reaction from the competition. To execute this, the marketing team will be given the responsibility to design, plan, manage, execute and control the marketing campaigns. 6. Conclusion and Recommendations It can be deduced from all the demographics mentioned throughout the course of this paper, that there are strong prospects for iPhone 4 to be launched in the market as the market for Smart Phones has registered 70% growth (comscore.com/press_events). Moreover, the entire competitors target the corporate sector, which leaves a large market ignored (newstatesman.com). The analysis made in the report points towards a direction that Apple Corporation is in a strong position to launch iPhone 4 in the UK market as it is in its growing phase. Moreover, iPhone 4’s competitive positioning will enable to penetrate in the said market and would challenge global giants who are still in the process of skimming the market with its high prices. As Kenneth Crow, 2008, states that if a product is being used by beta customers, testimonials and case studies should be prepared. Similarly, when launching the new smart phones, Apple Corporation must request for testimonials from the customers for it to know what they think about their product and this enable us to take immediate decisions. Mike Cliffe Jones, 2009, states that if you cater everyone when marketing in an attempt of mass marketing, you won’t be able to sell anything. This is to learn for Apple Corporation to market its product by making segmenting and target a segment for which the company wants to depict the product is made. Apart from that, all the marketing activities must be customer focused and must be closely monitored to see whether the correct image of the brand is being created in the minds of the customer (Keller, 2008). For this, Apple Corporation needs to check its positioning at the initial level of its launching to know whether the brand is going in the right direction and that the marketing and branding activities are translating into profitable growth. Peter Drucker states in his book that any company which does not take a risk will not be able to generate high returns. Launching a venture in an environment which is already governed by global giants who have the competitive advantage of operating globally and are able to exploit the benefits offered by globalization is risky. However, even large corporations like Apple Corporation can face tough competition from small local firms which can take a huge chunk of the market which is ignored by these large firms away from right under the latter corporations’ noses. IPhone 4’s failure to see the huge potential present with the youth market will eventually lead it to failure because sooner or later, any new firm let alone its own competitors would come up with their own innovation and may choose to cater the same segment which would give them a competitive edge and hence, devastating for Apple Corporation (Haar et al, 2008). Besides that, being a new venture, Apple Corporation must ensure that a strong system of Information Technology is integrated into its operations because the latter has important implications in the processes and innovations in businesses (Webb et al. 2008). 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