Marketing Plan for iPhone - Case Study Example

Marketing Plan for iPhone Your Name Institution Date of Submission Table of Contents Table of Contents 2 1 Executive Summary 3 2 Situation Analysis 3 a)Company Background 3 b)Current Market Situation 4 3 Business Analysis 6 SWOT Analysis 6 a)Strengths 6 b)Weakness 6 c)Opportunities 7 d)Threats 8 4 Marketing 8 i)Market Summary 8 ii)Marketing Objectives 10 iii)Marketing Strategies and Tactics 10 iv)Attracting Target Market 12 5 Action Plan 14 6 Projected Profit and Loss Statement 16 7 Measuring and Control Marketing Performance 17 Conclusion 18 References 19 1 Executive Summary On the 29th of June, the year 2007, Steve Jobs unveiled a technology that was going to create a revolution in the mobile phones industry. This was the setting of a new pace. The release of the first iPhone meant a new beginning to mobile phone companies that had been dominating the market for long. They had to go back to the drawing board and reconsider their strategies. The iPhone is a unique chain of smart phones that is designed, developed and marketed by Apple Inc (Yoffie & Kim 2011, p.13). Unlike most smart phones, it runs on Apple’s own operating system, the iOS. This paper takes a deep analysis of the market situation of current iPhone, and goes ahead to lay down appropriate strategies that will be used to market the next iPhone. The paper will conduct a review of the current market, and even go further to check SWOT analysis of iPhone in the industry. It will then develop a strategic plan that will be used for marketing and introducing the next iPhone into the market, the iPhone VI. A variety of marketing techniques will be employed to ensure that the company does not only meet its marketing objectives, but that it will also achieve its broad visions. 2 Situation Analysis a) Company Background Apple was established on the 1st day of April, in the year 1976. Steve Jobs, Steve Wozniak and Ronald Wayne were the main brains behind the inception of this company. At this time, it was just selling Apple 1 computers, which had been engineered by one of the founders, Steve Wozniak (Grossman 2007, p. 4). In its initial stages, it excelled at designing and developing various programs that were very handy in the early days of the computer. They also ventured into producing digital cameras and portable music players. This turned out to be their largest source of income. However, they started facing hardships between the year 1983 and 1996 (Ning et al. 2011, p. 78). b) Current Market Situation The communication industry is one of the fastest evolving businesses in the entire world. From the early 80’s, manufacturers of communication devices have increased in their research towards the development of communication tools that will meet the demands of the market, and also provide additional non-communication benefits (Funk & Methe 2001, p. 591). Many mobile phones have mushroomed across the globe, because of the ever increasing demand for mobile phones. This has resulted into very stiff completion among different market players. Apple has been on the forefront of technological research in a bid to keep all other industry players at bay. In the past three years, the company has experience increased popularity because of its amazing products(Montgomerie & Roscoe 2013, p. 294). The demand for the iPhone is ever rising, and the company will not relent at anything apart from selling quality, and world class smart phones to the consumer. There is still a wide unexploited market out there and Apple is working towards winning over these unexploited areas. Some potential consumers have complained that they cannot afford iPhones because they are highly priced. The company is doing its best to handle this issue of pricing, so that it will not lock out many consumers. However, it is important o understand that the prices may not come so low because the company has to meet the cost of developing these quality phones, and make some profits too (Gupta & Prinzinger 2013, p. 219). 3 Business Analysis SWOT Analysis a) Strengths The brand “Apple,” is the height of iPhone’s strengths. The company has been keen to create a renowned brand that has sunk deeply into the hearts of many consumers. Over the years, iPhone has turned to be the most admired brand in the mobile phone industry (Mallin & Finkle 2011, p. 71). Its powerful technology, combined with its unique hardware design and shape makes it sail in a different boat from the rest. The material used to make iPhone is tough and can resist most scratches. The phone also has an iconic, sophisticated look that puts many other smartphones to complete shame. Unlike other touch screen mobile phones, apple has a highly efficient multi-touch screen that gives it an edge over the rest. The phone is very user friendly, and structured to perform many business, as well as casual activities. Security of the iPhone is a major strength that cannot be left out (Finkle & Mallin 2010, p. 53). b) Weakness Every strong man has a weakness. Apple too has its own dimness. First, the company has had a poor distribution channel. Despite the high demand for iPhone, which has been seen in the recent years, the company still maintains Cingular and apple retailers as the major distributors of iPhone (Helft 2011, p. 21). These distributors are few, and only placed in major cities around the world. This makes it hard for most people to access the phone, even when they can afford it comfortably. Some people have also complained of the price. The prices of iPhone seem to be rising steadily with each new phone that is produced (Lehman & Haslam 2013, p. 246). This limits their market to only the affluent class of society. The fact that Apple Inc releases only one iPhone per year could be a challenge. Competitors of iPhone are very flexible and can release tens of diversified new phones in a year. This gives them a better opportunity to meet different market needs. c) Opportunities Apple is market leader and a big winner in the industry. It has buried all the fame of blackberry, and has also managed to keep most android phones out of the boardroom. The biggest opportunities that exist for the iPhone lie within their current large pool of a fan base. Research indicates that more than 80% of the current users of iPhone are not likely to move to android phones (Kane & Sherr 2011). They are always anticipating for the next release in the series so that they can upgrade their handsets. The current world is hungry for technology and class. IPhone gives you all that. The phone makes use of complex technologies that enable the user to perform even more activities than some computers do. The combination of computing and entertainment in one product also makes their product highly desired in the market. This gives them a chance to conduct aggressive marketing, and set strategic distribution channels to attract new customers (Cusumano 2008, p. 23). d) Threats The iPhone has many competitors to make them worried. Several competitors are coming up both in the areas of software and hardware. This means that the company must always be on its toes to design unique products, which will give it a competitive edge over current and future competitors (Yoffie & Kim 2011, p. 15). The word, “Samsung” is a big threat to iPhone. The Samsung galaxy SIII was released to compete with iPhone 4s. Samsung S4 and the note III have also given iPhone a hard time in the market. Other companies like Sony, Huawei, Nokia, and HTC have also come up strongly in the recent past. 4 Marketing i) Market Summary iPhone mainly targets consumers who need a communication device, which has good storage capabilities, and amazing entertainment features. Most iPhone customers also love it for its fast internet connectivity (Kane & Sherr 2011). The market is composed of students healthcare workers, business people and different other classes of corporate users. The market for iPhone is still small, compared to the total phone market. However, the company is working on developing powerful products that will be price friendly so that the market share can be increased. The table below gives a detailed market summary. Target Group Needs of the Group Corresponding Features Professionals Monitor their work on the go Record and analyze information on the go Instant messaging capabilities, E-mail, and ability to create and edit documents. Health Care Workers Get easy access to new healthcare information. Record and edit data on the go Wireless access to address book, calendar and medical records. Students Perform academic tasks without having to walk with many heavy gadgets Ability to create and edit documents, and fast internet to assist in research and easy communication Corporate Users Input, access and manage important information on the go. Access to applications, which are useful for record keeping and provide easy information management. Entrepreneurs Input, access and organize business contacts on the go. Research on new ideas on the go. Wireless access to digital diary and the business address book. ii) Marketing Objectives The marketing objectives have been divided into two segments. Each segment will be achieved within a year. These objectives will hence take a maximum of two years to be achieved. Objective One- To win current market share of the US/UK smartphone market by an increased 8% within a year. Objective Two- To win over an extra 12% of the US/UK smartphone market (Montgomerie & Roscoe 2013, p. 297). iii) Marketing Strategies and Tactics Positioning The iPhone VI will be positioned in the market as a versatile business phone that still takes care of the entertainment needs. It will hence appear as a convenient phone that can handle all your problems and eliminate the need to walk around with many cumbersome gadgets (Montgomerie & Roscoe 2013, p. 299). Distribution The only way to achieve the objectives of an increased market share is by setting up a good distribution channel that will deliver the new phone to all parts of the world that have a potential for giving iPhone a good customer base. All Apple stores and websites will focus on marketing the iPhone VI and educating the public about it. Eye catching advertisements and displays will be used strategically to create a high demand for the phone. New distributors will also be contracted with the task of marketing the iPhone VI in their local areas. Each one of them will be a given a monthly target to ensure the goals sales goals are met. Bonuses will be awarded to distributors that meet certain set targets. This will fuel them to work hard and sell as many phones as they can (Gupta & Prinzinger 2013, p. 219). Product In order to make it even more attractive, the iPhone VI will come with a two year warranty, and another optional five year care warranty. The product will be developed using state of the art hardware, and will be very sleek, and appealing to the eye, just like other Apple products have always been. The following are some of the products that will increase the marketing weight of the product: The product will be feather weight light. It will be very thin, at 6.7mm Make your payments via NFC and TouchID Larger screen than previous iPhone versions The battery life will be great too, 11 hours of video and 50 hours of audio playback. Better Camera, hence improved picture quality Pricing Pricing will be a very important factor in trying to achieve the objectives of this company. In the survey results, it was clear that one of the major reasons why some people have not bought iPhones, despite the fact that they love them, is price. In that case, the company will set reasonable prices, to try and lure more potential customers into the iPhone club. The phone will be released in different prices, according to the storage capacity. However, the price will be very reasonable, in comparison to its features and capabilities. iv) Attracting Target Market In a bid to attract a good portion of the target market, Apple will conduct survey for different age groups of the preferred market, to collect information regarding the features that they desire on the iPhone. The company will then deploy different strategies that will put a mark between the iPhone VI and other PDA’s in the current market. This will be a great step towards increasing the superiority of brand iPhone. This will put the iPhone in its own class, and will likely attract a larger market, since people will associate it with class (Gupta & Prinzinger 2013, p. 216). The upper middle class society is one of the major markets that iPhone VI will target. This is the class of people that is in need of a portable device with the abilities to handle their tasks, and help coordinate their busy schedules from wherever they are. High school students, college and university students are the secondary target of the iPhone VI. The company will establish new partnership with major distributors like Verizon and Amazon, in order to increase the accessibility of the product to the target market (Arruda-Filho & Lennon 2011, p. 530). Various stores will also be allowed to stock the new iPhone so that many people will be able to access it, whenever they need to purchase it. All partnerships will only be made with companies that have a minimum annual sale of $10 million. The marketing department will employ different marketing aids to create awareness and demand for the iPhone VI. First, online campaigns will be conducted to create awareness of the product, and raise curiosity in the minds of the market. Free samples will be given through the online campaign, in anticipation that many people will get the urge to buy it on release, especially after witnessing the functionalities of the free samples. This time round, the phone will be launched in a different way from the previous versions of the iPhone. On the day of launching the phone, a big event will be conducted in a major nation, across all continents. This will not only signify the introduction of the iPhone VI in all these continents, but it will also give the company a chance to interact with different sets of consumers at ground level. Heavy advertising will be conducted prior to and after launching the phone. Billboards and TV commercials will be very handy. 5 Action Plan Action Who will be in charge Date Comments Design and development of TV commercials and advertising aids Chief designer 18th-22nd Sept, 2014 Identification of an event’s ground in every continent, which will be used to launch iPhone 6 Project’s director 15th -30th Sept, 2014 Rolling out TV commercials and other ads Marketing director 26th -28th Sept, 2014 Launch of intensive internet campaign Head of internet marketing 27th Sept, 2014 Identify potential distributors to help increase the distribution channel Distribution leader 15th -25th Sept, 2014 Vetting of Potential Distributors Head of Sales department 27th -30th Sept 2014 Award Contracts to Distributors that merit Distribution leader 3rd Oct, 2014 Distribute stock in preparation for the launch Distribution leader 6th – 10th Oct, 2014 Set up event locations in preparation for the official launch Project director 2nd – 7th Oct, 2014 Inspection of planned activities Marketing Head 9th-11th Oct,2014 Presentation of budget/cost of planning Chief accountant 9th Oct, 2014 Approval and disbursement of funds Head of Finance 11th Oct, 2014 Official Launch of iPhone 6 Marketing Head 14th Oct, 2014 6 Projected Profit and Loss Statement It is expected that the company will be able to sale 5million units in the first year, averaging to 3billion US dollars. After 12 months, the company will have gathered a net profit of 1.975 billion dollars. This means that it will have spent 1.025 billion US dollars on other costs. To get the break even point, the cost will be divided by the price of the phone. A single phone will be sold at an average of 600 US dollars. This means the company will break even after selling 1,708,334 units. 7 Measuring and Control Marketing Performance It is essential to keep records and track of the marketing performance. A control and motivation method will also be implemented so that the company can achieve its set objectives. Control and Implementation Strategies and Processes Workers will undergo vigorous training from time to time, so that they can be well aligned to meet their targets. Each employee who exceeds his annual target will be given a bonus of $3000 at the end of the year. This is intended to motivate workers so that they will remain focused throughout the year. Each iPhone will also have a special number that will be used in reference to it. This will enable the customers to call the headquarters and get assisted whenever they have a problem with their gadget (Wilson & Fenlon 2012). If the sales will be slower than expected, the company will push the sales by offering rebates of iPhone. Customers who have any other apple product whose cost is at least the same or more than the cost of the iPhone 6 will receive rebates of this new phone. This will create a strong synergy among consumers, and will not only boost the sales of the iPhone 6, but it will also fuel the purchase of other products, in anticipation of receiving rebates. The marketing directorate will develop different strategies for each section of the international market. Localized methods will be used to get the attention of more customers across the world. Advertisements will be designed to relate to the consumer’s environments. This will make them easily relate with the iPhone, and hence will not have a problem owning one. They will feel its part of their society. The CEO of the company will be ultimate spokesman of iPhone 6. However, several agencies will be contracted to implement the advertising strategies that will be selected. Monthly board meetings will be organized at the end of each month. This will enable the company’s strategic team to keep track of the performance of iPhone 6 in the market. The CEO will also be presented with a report after every two weeks, regarding the performance of the product. Conclusion Apple will continue to study different market needs, and amass information on what can be done to improve customer service delivery. The marketing team will ensure it involves diverse sets of customers in this research so that their needs can be adequately met. The launch of iPhone 6 will mark a great achievement. It's expected to create a stronger brand name for the company. IPhone 6 is a world class smart phone that will set new standards in the industry, and send competitors back to their boardrooms. The technique that will be us to roll out the phone will be one of its kind. This is something that has never happened in any part of the world; it will stir up a huge demand for this new product, all over across the globe. Apple will always seek new and innovative ways of doing things, so that their customers will constantly have an edge over users of products iPhone's competitors. References Arruda-Filho, E.J.M. & Lennon, M.M., 2011. How iPhone innovators changed their consumption in iDay2: Hedonic post or brand devotion. International Journal of Information Management, 31, pp.524–532. Cusumano, M., 2008. Technology Strategy and Management: The Puzzle of Apple. Communications of the ACM, 51, pp.22–24. Finkle, T.A.. & Mallin, M.L.., 2010. Steve Jobs and Apple, Inc. Journal of the International Academy for Case Studies, 16, pp.49–57. 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Owning the consumer-Getting to the core of the Apple business model. Accounting Forum, 37, pp.290–299. Ning, Y., Fu, H. & Zheng, W., 2011. Business model dynamics: A case study of Apple Inc. 2011 IEEE 18th International Conference on Industrial Engineering and Engineering Management, Part 1, pp.77–80. Wilson, T. V & Fenlon, W., 2012. HowStuffWorks “How the iPhone Works.” HowStuffWorks. Yoffie, D.B. & Kim, R., 2011. Apple Inc. in 2010. Harvard Business School, 9-710-467, pp.1–25.  Read More