The iPhone 4S Life Cycle - Case Study Example

iPhone 4S By Student’s Name Code + Course Name Professor’s Name University Name City, State Date Table of Contents Table of Contents 2 Executive summary 3 Introduction 6 Product life cycle 6 Introducing the promotional mix 7 Advertising 7 Personal selling 8 Publicity and public relations 8 Sales promotion 8 Other promotional activities 8 The product development process 8 Idea accumulation 9 Business analysis 9 Development of the product 10 Product testing 10 Growth Stage 10 Shake Out Stage 11 Maturity Stage 12 Decline Stage 12 New Market Economy 13 Organisation Structures 13 Marketing Plans 14 Marketing metric 15 Marketing Audit 16 References 17 Executive summary The product is iPhone 4S. Strategic market planning takes on various guises. The content, complexity and structure of the plan will vary. However, plans have common elements – internal analysis, industry analysis, formulation of strategy, opportunity identification, marketing programs and implementation. Plans ought to address critical issues in a manner that is relevant to the firm. For instance, promoting decisive marketing initiatives within a limited period. Planning allows organizations to adapt to a changing business environment as well as offer a framework for resource allocation. Sound planning promotes a consistency of approach as well as facilitates integration of activity, communication, motivation and control of activities. Successful plans also address behavioural and organizational dimensions of the process. Typically, strategic planning is about the definition of marketing objectives and how these objectives intend to be attained after a certain time frame, for instance, three to five years, the objective might be best achieved. However, there is a lot of evidence that suggests that although many businesses have plans, they are used to control spending. Owing to the rate of environmental change in the past ten years there has been a growing cynicism regarding formal planning, many of its detractors argue that in a volatile environment there is little to be gained from planning. Plans often lack realism, creativity and lack flexibility. The important aspect of the planning process is that it forces the planning team to question assumptions, tests the rigor of the teams' thinking as well as offers opportunity to prepare the future. To plan well, the planning team ought to use the corporate, divisional or brand vision as a yardstick, and to view planning as a continuous learning process rather than as an exercise in control. Strategic marketing planning process involves the development of strategies that are based on the planning team assessment of the market as well as perceptions of managerial exceptions and organizational capability. Strategy and planning are over-worked and misunderstood words in the management lexicon. Introduction Just like many products coming from Apple, the iPhone is beautifully designed and intuitive to use. Apart from being a killer cell phone, iPhone 4S has a gorgeous widescreen video iPod, a convenient 8-megapixel camera/camcorder as well as a small, powerful internet communication device. With iPhone apps, the iPhone 4S becomes a PDA, a handheld gaming device, memory jogger, as well as an exercise assistant (Apple, 2013). iPhone 4S can do more than any other Smartphone in the market. The iPhone 4S can be used to view photos and interact with them using intuitive touchscreen gestures. One can pinch, rotate, zoom as well as email photos – through simple gestures. The phone lets the user interact with content like never before. For instance, new sites and web sites look and read like never before owing to the incredibly clear and crisp retina display. The user can flip through videos, stories, as well as pictures and even interact with the news. For the first time, it is possible to feel as if you are reading a book when you read content on an electronic gadget. Pages turn quickly or slowly – and one can see the page content when they are turned. iPhone 4S allows one to manage media library pretty well. The iTune app has a beautiful interface, which gives one a chance to choose music, organize playlist, watch video and much more. Product life cycle Each product in the market has a life cycle that can be divided into various stages. All the stages correspond to the revenue the product generates (Jooste, Strydom & Cant, 2009). The different stages of the life cycle include product development, introduction, growth and decline. Product life cycle can be as long as 100 years or may just last for a few months. The life cycle of two products may vary owing to the marketing activities related to the products. Companies deal with a range of products that in all likelihood will be following their own product cycle path as well as their own marketing mix (Cowper, 2006). According to Jooste, Strydom & Cant (2009), the marketing strategies vary during the life of a product and ought to be reassessed during each stage of the product cycle. Apart from being an instrumental tool in managing the market environment, the marketing mix offers an imperative control mechanism within the life cycle of iPhone 4S. The marketing mix together with the product life cycle offers the background for development of a marketing strategy. The most important fact to consider is that the different elements in the marketing mix are interdependent. The product life cycle notion is just a mere planning instrument. Marketing as well as the sales pattern will always differ depending on the prevailing market environment as well as strategies being used by the competitors, iPhone 4S competitors are Samsung, Huawei, HTC and Nokia. Introducing the promotional mix During this stage, selling comes into its own. The promotional mix used to sell a service or product consists of the following four main elements personal selling, advertising publicity and sales promotion. Direct marketing can also be included among the components of the mix. Advertising Advertising is the paid promotion of the product through the media and it covers much ground. There are several methods of product advertisement in the case of iPhone 4S, for instance, road-side billboard, bus-side, classified advertisement in a trade journal, 30-second commercial advertisement, double-page spread in a magazine. Advertising is instrumental in building awareness of the product, tick off brand loyalty, and enlighten the consumers about the service or product. Personal selling Personal selling implies personal interaction between the seller and the buyer. In most cases, personal selling is regarded as the most expensive way of communicating with clients. Nonetheless, personal selling is a unique way of maintaining customer relationships as well as building new ones. Publicity and public relations Publicity and public relations are planned and sustained effort to develop and maintain mutual understanding between an organization and the public. This strategy involves product launches, magazine articles and promotional events. Sales promotion This involves activities geared at achieving short-term gain, for instance, temporary increase in sales or increase awareness of new products in the market. This may involve product presenters in supermarkets giving shoppers freshly cooked sausage, inclusion of an extra battery on sale of iPhone 4S. Other promotional activities Promotional mix can also include trade shows, direct marketing, sponsorship, exhibitions and use of the internet. Elements of the promotional mix ought to be integrated to achieve cost effectiveness. The product development process The following four stages are important in tackling product development. Idea accumulation This is the first stage in the new product development process and involves increasing the pool of ideas under consideration. New products begin with ideas, products have a number of sources, for instance, suggestions or request from customers, competitors' products and advertising, sales, engineering, privately owned patents and government owned patents. Business analysis This is the second step in new product development. New products ought to be studied carefully in relation to a number of financial considerations. Revenues and costs are estimated and analysed with methods such as break-even analysis. An idea that shows that cannot be profitable is dropped at this stage. There are four main factors hat ought to be put into consideration when conducting business analysis. (i) Product relationship to the existing product line There are some firms that add different products to their product mix, for instance, iPhone 4S is among the products produced by Apple. Any product that is added in the market ought to be consistent with the existing product mix. For instance, iPhone 4S may have been designed to fill a gap in Apple's product line. If the product that has been introduced is new, it ought to have a family relationship with the existing products. Otherwise, the product may require drastic as well as costly changes during the manufacturing process, distribution channels, and type of promotion as well as methods of personal selling. In this case, iPhone 4S is to some extent related to the existing Apple’s products. (ii) Cost of development and introduction Adding new products in the market comes with the cost of introduction and development. Much capital outlays may be required, including expenditures for development and design, market research so as to determine the market potential, sales promotion and advertising, patents, as well as additional equipment. It might take more than one year before profits are realized when the product is introduced in the market. (iii) Available facilities and personnel Introducing a new product is more appealing if the personnel as well as the required equipment are available. (iv) Competition and market acceptance Competition for a new product ought not to be too severe. The rule of thumb is to introduce a product that is different from existing products. Development of the product After a new product has been introduced in the market, a plan should be sketched out. This plan helps with branding, packaging as well as other support efforts. After a number of components have been evaluated, the new product may be judged and a decision is made accordingly. Product testing This is the last step during the product development process. Upon testing the product can be produced can be proved acceptable. Growth Stage A characteristic of a successful new product is the gradual rise in its sales curve during a market development stage. During this stage, potential competitors who have been watching the product develop during the first stage jump into the fray. Some of the competitors come into the market with carbon copies of the original product. However, some of the competitors make the design and functional improvements. At this stage, product and brand differentiation develops. The original producer faces a number of new problems when his competitors fight for customers in the market. In the case of the iPhone, competitors are Samsung and Huawei who produce dirty cheap Smartphones. Instead of looking for ways of getting new customers to buy the product, the originator is faced with a compelling problem of getting the customers their preferred brand. Generally, this prompts adjustments in the marketing methods and strategies. Competitors’ presence in the market dictates and limits what can be tried easily – testing the best price or best distribution channel. When more consumers accept the product, it becomes easy to open new distribution channels as well as retail outlets. Filling of distribution channels increases factory sales compared to store sales. This creates an overestimated impression of profit opportunity that in turn attracts other competitors. The new competitors will charge lower prices because of the advanced technology, shortcuts in production, as well as the need to accept lower margins so that they an distribute their products. All these factors move the industry to the point of new stage competition. During this stage, emphasis shifts from primary demand promotion to aggressive brand advertisement as well as communication of the differences between brands. Distribution is the determinant of success. Manufacturers scramble to get dealers and distributors as well as building permanent relationships. A strong market position cannot be established without adequate distribution. Shake Out Stage This is also referred to as the cost phase; here the product experiences barriers to entry, where the already established firms in the industry perfect their cost-effective productions methods thus minimizing the cost of production. On the other hand, new companies struggle to keep up with the immense market pressure. Due to this, companies with less financial capacities are likely to be driven out of the industry while the established and dominant companies continue to produce high-end products through innovation. This stage is characterized with mergers and acquisitions thus making the industry more consolidated. Maturity Stage The maturity stage is characterized by saturation of the market. This implies that many consumer companies that are sales prospects will be using or owning the product (Reid & Bojani, 2009). Sales grow at the level with the market demand. At this stage, there are no more new distribution channels to be filled. Price competition intensifies. Competition prompts adjustments in product, customer service, promotional practices as well as claims made to the product. Characteristically, the market maturity stage prompts the producer to concentrate on maintaining his distribution channels, maintain shelf space and ensure distribution that is more intensive. At this stage, distributors and retailers are reduced to being ordered-takers and merchandise-displays. This stage calls for effective competition. The originator is forced to appeal the customers based on marginal product differences or price or both. In this case, Apple is the originator of smartphones. This stage can be passed through fast or can persist, however in a gradual but steady per pita decline. Decline Stage The product enters decline stage when the market maturity tapers off. Most of the products cannot stand the competitive environment. When demand drops, the overcapacity that was clear in the previous stage, maturity stage becomes endemic. Some managers believe that they can stand in such an environment with good management. The managers employ aggressive depressive methods, propose buyouts or mergers and engage activities that make troublesome their competitors so that they can withdraw from the competitive market. Few companies can survive in such a storm. Prices and margin decreases, few companies can produce in such an environment (Cowper, 2006). New Market Economy This is an economy whereby decisions about production, investment and distribution are solely based on demand and supply and the price of goods is determined through a free price system. Presently, there has been a drastic shift since the emergence of digital technology (Cheruku, 2010). Digital technology has enhanced ways in which business is conducted and has increased customer satisfaction. iPhone 4S sales can be increased through digital technology, for instance, the internet can be used to market iPhone 4S or even act as a sales point. For instance, sites such as eBay can be instrumental in ensuring the achievement of this goal. Organisation Structures Organizational structure is the typical arrangement of a number of things, for instance, lines of communication, authority, rights and duties of the organization. The arrangement helps in determining how power, roles and responsibilities are assigned, coordinated, controlled, as well as how information trickles down in different levels of management. The organizational structure is comprised of activities such as allocation, supervision and coordination directed towards the attainment of organizational objectives and goals (Cowper, 2006). Organization structure is used to arrange a company's resources with the tasks involved. In 1998, Apple completed its restructuring plan that started in 1996 (Alkhafaji, 2001). The plan was aimed at reducing its cost structure, improve its competitive edge as well as restore sustainable profitability. Apple has created spinouts of some of its operations. It benefited from this strategy by extending its scope as well as strength of spinning-out. Marketing Plans According to Lashinsky (2012), iPhone 4S was launched in 2011 at Apple’s Cupertino campus. Its sale exceeded its predecessor with more than one million sales. iPhone 4S had a good reception. It was succeeded by iPhone 5, nonetheless, its production continues although it is sold at a lower price point. Strengths Apple the manufacture of iPhone 4S is an established market brand and is recognized worldwide. The company is diversified into production of its products, the product range from phone, computers, laptops and tablets among others (Bove, 2011). Apple has an efficient distribution system that is designed to deliver the products from the manufacturing plant and warehouse to retail stores and customers' houses directly (Lashinsky, 2012). Weaknesses Ever since iPhone 4S was introduced a number of issues have been reported by a number of media organizations such as Boy Genius Report, The Guardian, CNN and PC world. A number of the reported problems include; battery problems, static noise during calls, yellow-tinted screens and no audio on outgoing calls (Bove, 2011). Opportunities Apple is diversified into production of its products, for instance, one year after iPhone 4S had been introduced, iPhone 5S was introduced. It also has a wide market internationally (Lashinsky, 2012). Threats iPhone 4S faces stiff competition from companies such as Samsung, Nokia, HTC and Huawei others. Its competitors have products that sell at a throw away price compared to Apple products. Other Apple products are also facing stiff competition (Hitt, Ireland & Hoskisson, 2011). Marketing metric Organizations do not reach their goal since they cannot allocate time to develop objectives and realistic strategies. Unified voice The mission and vision ought to unite the organization. There are some organizations that publish their mission and vision statement on their newsletter or display on their websites. Companies explain the mission and vision statement to its member so that they can speak with one tongue. The mission as well as a vision statement binds the company together in attaining its goals (Cole, 2012). In this scenario everyone in the company will be working together to attain the corporate goal. Communicating with staff Should not only the organization set objectives but also communicate with the staff (Kimball & Lussier, 2009). The objectives ought to be communicated to the staff that will help in the achievement of the objectives. Better still, staff ought to be integrated when setting objectives (Cole, 2012). SMART objectives The objectives should have a specific aim, objective should be quantifiable, the objective should be achievable, the objective should be realistic, the objective should have a particular time frame (Kimball & Lussier, 2009). iPhone 4S has the above stated SMART objectives. Marketing Audit The objectives of marketing audit are to evaluate the current processes of value delivery in an organization as well as its capabilities and resources to do so efficiently, effectively and distinctively. Therefore, marketing audit considers all the processes in the value chain, which are involved in delivering to the customer value of the organization to the customer. Market analysis ought to evaluate the marketing function and ought to show areas that should be improved. As stated before, iPhone 4S has a number of limitations, for instance, low battery life. This will be addressed by increasing the life span of the battery. References Alkhafaji, A. (2001). Corporate transformation and restructuring: A strategic approach. Weestport: Greenwood Publishing. Apple. (2013). Home. Available at www.apple.com Bove, T. (2011). iPod and iTunes for dummies. New York: John Wiley & Sons. Cheruku, D. (2010). Satellite communication. New Delhi: I.K. International Pvt Ltd. Cole, K. (2012). Leadership for dummies. New York: John Wiley & Sons. Cowper, J. (2006). Sales and marketing for small businesses. Sydney: Pascal Press. Hitt, M., Ireland, D & Hoskisson, R. (2011). Strategic management: Concepts and case: Competitiveness and globalization. Belmont: Cengage Learning. Jooste, C. Strydom, J & Cant, M. (2009). Marketing management. Cape Town: Juta and Company Ltd. Lashinsky, A. (2012). Apple. Spectrum: Unieboek. Lussier, R & Kimball, D. (2009). Applied sport management skills. Windsor: Human Kinetics. Reid, R & Bojanic , D. (2009). Hospitality marketing management. New York: John Wiley & Sons. Read More