IPhone Marketing and Strategy - Case Study Example

HERE HERE YOUR HERE HERE iPhone Marketing and Strategy iPhone Marketing Strategy The iPhone, itself, is the largestreason that the company was able to create such a large buzz when the phone was released. It was innovative and no other product like it had ever been released on the market. The company believed that the product was so innovative that it should not let complicated advertising stand in the way of promoting the iPhone (ICFAI, 3). The company used a demo strategy online which showed users what they could expect with the new iPhone, which created a sort of viral marketing phenomenon where word of the new iPhone was spread across the Internet. It had even been called the “Jesus phone” because technology users believed that it was so highly revolutionary in concept (ICFAI, 2). Relying on fan communications across the web, also, created the buzz necessary for the iPhone to have a successful release (ICFAI, 9). This was accomplished by being strategic about releasing communications from the company regarding the iPhone so that people would stay excited about it and speculate on its many features and benefits. The company also strategically left a six month gap between the announcement of the product and its actual launch date. This served to fuel even more fire in the consumer and the buzz spread to make the iPhone a very successful launch. All of this strategy pre-launch was designed to build excitement, which clearly worked. Because of the buzz and product’s innovative concept, people believed it would make them look cool to line up days in advance to be one of the first to have an iPhone (ICFAI, 10). However, pre-launch, the company also used the six month period to let others give the firm free publicity. Thousands of printed articles were written in this time period as well as sites which publicized the iPhone receiving millions of browser hits (ICFAI, 10). This delay strategy allowed the company to spend much less money on promotional activities by relying on the free publicity offered by the many different print and online buzz-generators. This is a strategic focus in marketing to prevent spending over-budget in advertising and allow these funds to be utilized in other business areas for new product development or any other number of business/marketing activities. Having more funds available by not extending them to the marketing budget could create internal improvements or give the marketing team more flexibility in designing the marketing literature which was distributed during pre-launch activities. It is simply good business to monitor and reduce costs whenever possible. The advantages of the launch and pre-launch strategies at Apple have been discussed, however there are several disadvantages to this strategy. First, the company must make sure that the product is actually going to live up to the consumers’ expectations regarding functionality, design and quality. With this much hype, customers are going to expect a superior product, especially if they have waited in lines to receive it. This puts tremendous stress on the business leadership as they must be considered with satisfying multiple dimensions of consumer behavior and buying preferences with the launch of the product. If it does not live up to the buzz and it provides any type of hassles to the user, future sales of the product could easily be affected. The future reputation of Apple as an innovator, also, could be in jeopardy with a launch performed in this method, if the product winds up leaving negative consumer sentiment and perception. Apple built a strong profile of leadership, innovation and creativity during the long pre-launch time period which also built up consumer expectations regarding the product. If customers are dissatisfied even to a small degree, the whole marketing campaign might be perceived as a wide variety of buzz about nothing at all. This would likely make the consumer not trust future promotional messages from the company or they would start demanding lower prices become attached to Apple or iPhone products for perceived deception and trying to sell a product which is not top quality. This represents the danger of creating buzz in this size and over such a long period of time prior to launch. A company relies on its reputation for long-term competitiveness and strategic marketing advantage, therefore any negative perception about the Apple company or the iPhone brand should be addressed. Another disadvantage to this strategy is that it does not give the company much control over the content of the free publicity. For example, among the thousands of print articles there were likely critiques and other professional opinion. When launching a product like this, and not controlling the content of the promotional materials, it allows external parties to potentially damage the brand. Among the company’s statistics regarding the iPhone, it could be possible that some potential buyers, at the time of the launch, had not bought the product because of something read. Without a promotional piece of literature to refute the claim, Apple might have lost a customer in the process, perhaps long-term. A further disadvantage in launching the iPhone in this method was that it might have limited market visibility for the product by partnering with AT&T (ICFAI, 11). This is a good argument because AT&T did not have as many subscribers as some of their other competition which did not make AT&T a logical strategic choice to partner with. This gave some potential customers, who were likely excited about having an iPhone and the service necessary to operate it, no chance to get a phone without further signing up with a new service and payment to AT&T. This likely made many potential customers angry which could damage iPhone sales or future sales for perceptions of disloyalty to their unique buyer needs. Customers should have a choice in choosing service providers which are most comfortable for their own pricing and lifestyle needs. By eliminating service provider options at the time of launch, Apple ran the risk of customers who simply would not buy the product based on previous bad experiences or negative perceptions about AT&T. When creating a partnered strategy like this, it is important to consider the brand strength and reputation of the partnered entity and make sure that it will not cause any short- or long-term damage to Apple or iPhone reputation in the process. It does not appear that leadership at Apple considered this aspect when launching the new iPhone. Limiting consumer options is never a good business practice. Launching the product in this fashion also gave Apple fewer opportunities for future sales. With the buzz so strong and with the iPhone having so many fans, the company ran the risk of having an initial explosion of sales and then a sharp decline, which would reduce the product life cycle of the iPhone. For example, if many users bought the product at launch and found any defects, these defects would surely be communicated across the same buzz channels as the initial launch buzz occurred (Internet, mobile, texting, etc.). This would create less interest in the iPhone, with many people likely waiting for a second version to be created or for the first to be adapted with new software to make it more functional. If the initial buyers who waited in line communicate any problems with the software, which is bound to occur, it could seriously jeopardize future sales of the original version until a second is developed. If any defects were identified in the first version, then it will become more costly in terms of promotion to make consumers have faith in Apple again. In this situation, it might have been more beneficial for Apple to have a more structured launch without such a broad delay to keep the product selling along a regular, product life cycle chart and expectation. Scrapping the product too early after its release would require costly changes to internal manufacturing process if it only lived, for example, one year on the retail shelves before becoming obsolete or unwanted. This does not add value to the business’ long-term strategies. Pre-launch data indicated that many mobile phone users in the UK were interested in buying an iPhone even before they ever had a good look at the product and its functionality. This is key to determining whether to enter a new market or wait until demand exists in the future. This indicates that there is a market willing and able to buy iPhones in Europe, giving the company a focus to start international marketing efforts in this area. At first, the company was concerned that it would have a difficult time outperforming European competition. However, Apple did not rely on its product innovation and the fact that no other product on the market could compare to this new concept when considering international marketing strategies. Even though Europe is a mature market with high mobile competition, iPhone is clearly unique in both design and function. The company can utilize a stronger promotional presence in Europe, adding a little more to the existing marketing budget, to have control over the promotional process and send the correct messages to the European buyer. Through research efforts, Apple can learn about the buying behaviors and personality aspects of their buying culture (which they likely already do because of their long existence in foreign markets). Once identified, promotion which creates a lifestyle connection, prior to actually releasing the product in Europe, can create a different kind of buzz which links European life with the iPhone philosophy. iPhone can be positioned in any variety of ways from quality to function in order to build high sales in European countries. Positioning strategies for Apple’s European release could include quality and lifestyle. Quality should be reinforced by identifying not only the product’s innovative features, but also how it can benefit the European user. Highlight its application in promotional literature for European buyers which shows the product in use in a local pub or in a humorous academic university situation involving an instructor or another student in the classroom. This will illustrate the iPhone as a functional and intelligent piece of technology which is well-suited for the European consumer needs. Additionally, various representatives from the United States can take a public relations tour through major European cities which have been identified as potential market areas. Cities such as London, Stockholm, or Paris (among countless others) can have representatives in large market areas who allow the local consumers to test and enjoy the iPhone experience. This hands-on approach to marketing is relatively low-cost. The highest cost is in travel arrangements and coordination efforts with local authorities. However, this would distinguish the iPhone as a European brand name as well, instantly creating connection with lifestyle and user needs. It would also be an opportunity for members of the company staff to become familiarized with different cultures and business representatives to diversify the strength of the company’s organizational staff. These promotional tours could be conducted with various incentives as well, which often entice consumers to buy products or check out their benefits. Win an iPhone strategies or various partnered strategies with AT&T such as free mobile service with the purchase of an iPhone, on a limited basis, could build further excitement in Europe. Incentive marketing and also developing international relationships with various Apple representatives would be a win-win strategy for Europe and for Apple as well. In Asia, there is growing use of the Internet, making this a developing region. Many people who would not have been market opportunities many years ago are now able to buy products and have infrastructures developed to allow for good distribution. Even though it is emerging, this gives Apple great opportunity for creating connection with Asian consumers as well. Various online promotional literature sent to residents to familiarize them with the iPhone brand, perhaps focusing on their quality transition from underdeveloped to a world player, can create a consumer connection based on respect or tradition. This would give Apple a great deal of influence pre-launch in Asian countries and create demand where none might exist today. This would make Apple an innovator in marketing in international areas. Lifestyle branding efforts should also be set-up in Asia, by identifying through marketing research what drives buying behavior in these areas. It might be that there is a growing economic gap between the poor and the wealthy in countries like China or Pakistan, therefore the iPhone can be positioned as a luxury item to the upscale consumer and as a lifestyle necessity for the less-wealthy buyer. By positioning the iPhone as something that the less-wealthy consumer cannot live without, it might drives sales in an area where no opportunity ever existed. This would also give Apple the opportunity to create customized, regional literature which shows the iPhone in use during public trading or in the kitchen environment. This might also create a sense of personal satisfaction for the Asian buyer who is excited that they are now being recognized as important global citizens and can take part in global consumer trade. This is quality public relations opportunities for Apple and an opportunity to sell more iPhones in the process. Those Asian consumers who strongly believe in the importance of having new technologies and the latest gadgets could also benefit from a positioning strategy which makes the iPod appear superior to competition. Emphasizing aspects of design or its colorful displays would make this appear to be a luxury communications product and delight the wealthy Asian buyer. Conclusion The launch of the new iPhone created successful revenues for Apple, however the firm’s approach to the product created significant opportunities for improvement. Apple did not appear to consider the risks of creating widespread buzz in the iPhone launch, leading to potential missed opportunities. However, despite any problems with the product’s launch, Apple was able to provide consumers with a quality communications product and fulfill profit expectations. The iPhone is well-positioned for international market entry so long as the company maintains the appropriate research knowledge to understand what drives international buying and product selection behaviors. The key to successful marketing in this region is to introduce the iPhone brand to new markets in order to create connection with the local communities. Works Cited ICFAI. “Launching iPhone: Apple’s Entry into the Mobile Phone Market”. Center for Management Research. Case Study 508-014-1. Read More