Marketing Planning for Apple Inc - Case Study Example

?Marketing Plan Executive Summary New product development is the process of launching a new product in the market. New product development for a company has become a necessity more than being an option. Organizations are faced with increased intensity of competition within the industry. There is even competition from the outside players as well. Hence new product development is considered as an indispensable task for an organization in order to carry out its operations effectively in the market place. The company chosen based on the premise of the project is Apple Inc. has been chosen as the organization and the new product is Apple’s I-TV. The report will highlight the proposed feature of the latest product and the entire process to develop and launch it in the market. The report will also highlight the marketing strategy and also the expected returns from the product. Table of Contents Table of Contents 3 Introduction 4 New Product development Process 5 SWOT 6 Marketing Objectives of the company 7 Segmentation and Targeting 8 Marketing Strategy 9 Implementation & Factors affecting it 12 Budget 13 Marketing Control 13 Ethical Issues of Marketing 14 References 15 Bibliography 17 Self Evaluation 18 Introduction The history of Apple Inc. dates back to the early 1976 when the company was established by Steve Jobs, Ronald Wayne and Steve Wozniak. The company is presently headquartered at California, USA (Yahoo Finance, n.d.). Apple together with its subsidiaries develops and markets desktop computers, laptops, portable music players, mobile communication devices and several other digital gadgets. Devices such as I-pad, I- Phone, Mac OS, I-pod are some of the invigorating products of Apple. The company has a worldwide presence and employs at around 370 exclusive Apple stores. Apart from the hardware section, the company also has a strong presence in the field of software. The software segment includes operating systems such as Mac OS and other utility and productivity applications like Quick time player, I-work and logic studio among others (Apple Store, n.d.). The company mainly distributes its product through whole sellers, retailers and Apple owned exclusive stores. Hewlett Packard, Dell, Google and Research in Motion Limited are the direct competitors of the company (NASDAQ, 2012). However companies such as Lenovo, Compaq, Toshiba and Hitachi are also considered as the circumlocutory competitors of the company. The aim of the report is to develop a new product and successfully launch it in the market with a sound marketing strategy. The product is also supposed to provide high return on investment in its initial stages. Now going by the prevailing situation of Apple, the company is mainly famous for its innovative products. Therefore the product which has been chosen for the course of action is I-TV, an innovative television. I-TV: A brief overview The proposed product I-TV is an extension of Apple’s innovative product range. The product will also mark Apple’s presence in the Television industry and can certainly pose a big challenge for the established players. The projected features of the product of the product are:- 3D display Widescreen Strong Audio and Video output Look of Apple The most important feature and the Unique Selling Proposition of the product is that it will be capable of broadcasting all the digital channels of the world. As a result users can enjoy thousands of channels. New Product development Process Nowadays organizations are faced with increased level of competition within the industry (Monczka, 2000, p.1). There are even competitions from the foreign players as well as local players apart from the established domestic players. Hence it becomes necessary for an organization to undertake new product development in order to hold its land in the industry and perform its operations effectively in the market place. The new product development process starts from idea generation and continues till commercialization of the product (Boone & Kurtz, 2011, p.395). The stages are briefly described below:- Idea Generation – In this step various ideas about the product is generated such as suggestion from customers, brainstorming sessions, employees and from the research and development team of the company. Concept screening – Based on the overall purpose of the company, the generated ideas are screened accordingly. Only those proposals are kept which are in context with the objective of the company. Concept development and business analysis – Further screening takes place in this step. The primary areas of analysis in this stage include possible future sales, growth rate and issues related to the opportunities and threats. Product development – This is the stage where in reality the product gets its final physical form. All the necessary activities such as design, attributes and color of the product are carried out in this step. Test marketing – The function of test marketing is to portray the acceptability of the product in the market. This ensures a company has to bear least commercial risks in the market place. However the experiment is carried out on some selected parts of the market place to depict the probable sales (Beri, 2007, p.441). Commercialization – The final stage is to make the product available to the customers for the principal aim of sales and product promotion. This stage is sometimes called as product launching stage. SWOT SWOT analysis is an analysis tool which portrays the internal strengths and weakness of the company as well as external threats and opportunities of the company. Hence it is considered as an essential element which matches the company’s capabilities and resources to the environment where it operates along with its competitors (Richter & Pahl, 2009, p.1). The SWOT analysis of Apple Inc. is represented below in a tabular form:- Strengths Huge Brand name and large base of loyal customers. Long history and huge product differentiation. High quality and lighter products. The new product will widen the product range and can act as a strength Weakness Focuses more on the engineering department than the marketing department. Very costly products. Reported problems with battery Poor distribution channel Opportunities Further diversification of products. Focus on the marketing and distribution. New dedicated device such for social networking websites New product with affordable price so as to cater to more markets. I-TV will help to reach large audiences as TV is now a necessity. Threats Availability of substitutes. Large number of competitors. Rapid technological changes. Highly saturated market place. Marketing Objectives of the company Marketing objective is referred to as what the company desires to achieve through the different marketing activities (NSW Government, n.d.). Therefore Apple needs to consider several factors prior to the establishment of the marketing objectives. Consequently for I-TV the marketing objective must follow the SMART approach. The SMART approach stands for specific, measurable, achievable, realistic and time specific approach (Tbrelearning, n.d.). Hence the objective of the company in respect with I-TV is to achieve at least 15% market share in the Television industry within 2 years. Specific – Understanding the latest preferences of the customers and accurately focusing on each of the possible features of the product. Measurable – Since it is a newly launched product there is no market share for the product. However achievement of 15% market share is fixed as the base. Achievable – In order to achieve the goal the company Apple needs to have a set of technically sound persons and a strong sales team. Realistic – The objective is very much realistic and achievable as the company has all the necessary tools and resources. Time Specific – The target is to be achieved within two years and a monthly monitoring of the sales progress is to be undertaken. Sales tracking will also help to take preventive measures whenever the sales figure is found to be out of line. Segmentation and Targeting Market segmentation is the process of dividing the customers which exhibit similar needs. Since customers exhibit different kind of needs it becomes necessary for a company to segment the market and perform its operation effectively in the market place (Croft, 1994, p.1).There are various ways by which we can segment the market such as demographic segmentation, psychographic segmentation, geographic segmentation and behavioral segmentation (Pride, Hughes & Kapoor, 2011, p.343). Generally there are two strategies of segmentation namely concentration and differentiation strategy. Concentration strategy is to target one customer group and on the contrary differentiation strategy is about targeting two or more segments (Target marketing, n.d.). Now in the context of this project Apple should use differentiation strategy as there will be three segments of customers who will be targeted. A combination of Income level and age of the demographic segmentation will be used as the basis of division. This will basically serve the purpose of properly catering to the intended base of customers. The process of targeting comes after segmentation has been accomplished. A target market can be defined as the set of customers which has been targeted. Hence the company needs to be very careful while developing the marketing strategy. At the same time the success of marketing strategy will be utterly dependent upon the chosen target market. Hence the intended target customer for I-TV will be as follows:- 25-30 years old technology fanatic people. 30-40 years old higher income and middle income group. 20-25 years old young and innovation lovers. Marketing Strategy Marketing strategy can be defined as the process which allows a company to make effective use of its limited resources and to increase the overall sales (Isoc, n.d.). In other words marketing strategy is defined as plan which helps an organization to decide upon the marketing goals and the way to be incorporated in order to achieve it. The primary aim of a marketing strategy is to achieve a competitive advantage for the company and attaining the potential customers. Now in the context of the product i.e. I-TV and according to Apple’s infrastructure the marketing strategy is underlined below:- Product Strategy: - A product strategy plays a pivotal role towards the success of a company. It is also considered as the most important part of the entire marketing strategy of the company and thus gets a huge importance. A product dimensions is also an important aspect of marketing strategy (Moghaddam & Foroughi, 2012, p.20). Hence a sound product strategy epitomizes the path of success for a company. Apple has a wide range of product such as I-pad, I-phone, and I-pod, laptops, desktops and utility software. The company also develops and markets different kinds of operating system such as Mac OS. Now the new product which is to be launched in the market i.e. I-TV will help in the expansion of the product line. The product will also have the features of a regular TV and will also have features such as 3D viewing, looks of Apple and the best feature i.e. the user will be able to view all the digital channels of the world. The product will come as a set of inbuilt antenna and a dish which is to be installed for receiving the signals. The product will have 3 variants. The variants will be strictly based upon the area of display and the 3D feature. Apart from this all the features will remain same. Variant 1:- 22” display, no 3D viewing. Variant 2: 26” display, 3D viewing. Variant 3: 32” display, 3D viewing and additional feature of pre installed games. Pricing Strategy: - The pricing strategy of a company plays an indispensable role towards the acceptance of the product in the market. Pricing is important to tap new customers. In general the existing products of Apple are priced high and are targeted to higher income group. The stylish design and high features are some of the reasons for its premium pricing. However I-TV will be priced in a way such that it remains affordable to a mass customer. According to the target customers i.e. higher income group and middle income group the company has to go by value based pricing in order to ensure higher value than competitors. Penetration pricing strategy can be used to enter a market. Place Strategy: - Distribution strategy is the way by which a company transports its goods and services to the customers. Thus physical distribution is an integral part of marketing mix and the distribution channels which is chosen also plays a crucial role in making the product available for potential buyers. I-TV can be distributed by appointing distributors and stockiest at distant place. Since it is intended for middle income group as well, distribution needs to be intensive. Apart from retailing the company also needs to go for store operations. It is also recommended that the warehouses of the company must be built at such places where the timely delivery of the product is possible. In order to cut down the costs Apple must use its existing distributors. Promotion Strategy: - The promotional strategy of a company is the key towards its success. Promotional strategy is used to convey the messages of company towards the customers. However the principal aim is to notify the customers about the offerings of the company. Promotions needs to be done via innovative advertisements and should go in context with the product. Apart from the modern way of promotion such social media, viral advertisements and magazines, the product can be launched by hosting a large sporting event i.e. sponsorship. This will help to inform the world that Apple is coming with I-TV. The tagline can be used as I-TV ‘see the future today’. Figure 1 (Source: Geocomputation, 2000) Implementation & Factors affecting it In the implementation section the report will highlight the course of action that will be undertaken by Apple in successful launch of I-TV and post launch activities so as to fulfill the proposed objective. The post launching activities are intended for Return on Investment (ROI), feasibility of the advertisement and also the sales figure. Therefore the course of actions for implementing the plans is as follows:- 1. The first activity after the product is manufactured is to carry out a successful test market ion, where I-TV can be displayed at various stores. 2. Appointment of distributors at convenient places where timely delivery is possible. 3. Rigorous promotion needs to be done as it is intended towards average income group as well. 4. The most important activity is to track the sales, return on investment and a strong database for customer relationship management. Budget A budget can be defined as the financial plan and a listing of incomes and expanses of the company. The budget of the company is formulated below:- Expenses Year 1 budget Year 2 budget Total Budget Advertisement $100,000 $100,000 $200,000 Product development $200,000 $200,000 $400,000 Distribution cost $15,000 $20,000 $35,000 Total $315,000 $320,000 $635,000 Marketing Control Marketing control is the process by which a company manages the course of action in order to reach the projected objectives. In the context of the project Apple can uptake certain measures for controlling the marketing activities. Setting up of sales target for the sales personnel. Different marketing task to be allocated to the marketing department which is to be completed within a stipulated time frame. Time scheduling for every activity. Ethical Issues of Marketing The ethical issues in marketing are related to the moral values behind the course of actions and the operational tasks. The major area related to the ethics is mainly the promotional aspect. The companies sometime make use of unethical contents in the advertisement so as to promote the product. References Apple Store, No Date. Mac Software. [Online] Available at: [Accessed 13 June 2012]. Beri, 2007. Marketing Research. New Delhi: Tata McGraw-Hill Education. Boone, L. E., & Kurtz, D. L., 2011. Contemporary Business. New Jersey: John Wiley & Sons. Croft, M. J., 1994. Market Segmentation: A Step-By-Step Guide to Profitable New Business. London: Routledge. Geocomputation, 2000. Integrating rank correlation techniques with GIS for marketing analysis. [Online] Available at: [Accessed 13 June 2012]. Isoc, No Date. E-Commerce for Development: Challenges and Opportunities. [Online] Available at: < http://www.isoc.org/inet99/proceedings/1g/1g_2.htm> [Accessed 13 June 2012]. Moghaddam, F. M., & Foroughi, A., 2012. The Influence of Marketing Strategy Elements on Market Share of Firms. [Online] Available at: < http://fundamentaljournals.org/ijfpss/downloads/12-Moghaddam%20150212.pdf> [Accessed 13 June 2012]. Monczka, R. M., 2000. New Product Development: Strategies for Supplier Integration. Wisconsin: ASQ Quality Press. NASDAQ, 2012. AAPL Competitors. [Online] Available at: [Accessed 13 June 2012]. NSW Government, No Date. What is Marketing. [Online] Available at: < http://toolkit.smallbiz.nsw.gov.au/part/1/1/3> [Accessed 13 June 2012]. Pride, W. M., Hughes, R. J., & Kapoor, J. R., 2011. Business. Connecticut: Cengage Learning. Richter, A., & Pahl, N. (2009). SWOT Analysis- Idea, Methodology and a Practical Approach. Munich: GRIN Verlag. Target marketing, No Date. Segmentation & Other Selection Strategies. [Ppt]. Available at: [Accessed 13 June 2012]. Tbrelearning, No Date. 17 Best Tools and Apps for Building New Habits and Goals. [Online] Available at: < http://www.tbrelearning.org/apps/17-best-tools-and-apps-building-new-habits-and-goals> [Accessed 13 June 2012]. Yahoo Finance, No Date. Apple Inc. [Online] Available at: [Accessed 13 June 2012]. Bibliography Carvalho, R. Z., 1999. Marketing. Sao Paolo: NBL Editora. Haberer, J., 2010. Disneyland International Marketing Mix: International Marketing Mix of Disneyland Hong Kong. Munich: GRIN Verlag. Mercer, D., 1998. Marketing Strategy: The Challenge of the External Environment. California: SAGE. Mills, G., 2002. Retail Pricing Strategies & Market Power. Australia: Melbourne Univ. Publishing. Nash, E. L., 2000. Direct Marketing: Strategy, Planning, Execution. New York: McGraw-Hill Professional. Self Evaluation The project was about formulating a marketing plan for a new product. In this context I have chosen Apple I TV as the new product. Since Apple mostly develops innovative products, therefore in this study also an innovative product is considered. In this report I have formulated some of the essential elements of a marketing strategy such as market segmentation, targeting and positioning. Apart from that I have also created a marketing mix for the product. In the entire process I was mainly focused on the stages of new product development and its pricing strategy. There are many learning outcomes of the project. I have learned how to segment a market and based on that how the segment can be targeted. I have also learned how a company can position itself into the minds of the consumers. Most importantly I have also learned to develop a marketing mix for a new product development. However still I am in the process of learning. I have also assessed some weaknesses and strengths of myself such as I had to make certain assumptions in the whole process, in that case I should have assessed the real scenario. I also found myself to be in a hurry before the submission of the project, therefore in this respect I need to schedule the future projects more appropriately. This can also be regarded as a future scope of development. However I also found my strength lies in the analysis of data, where I have successfully analyzed and formulated a marketing plan for Apple I TV. Therefore on a whole I need to develop certain areas which will help to conduct my future projects more proficiently. Read More