Marketing Plan in order to Increase the Sales of Apple iPhone - Case Study Example

Running Head: Apple Marketing Plan Name Course Instructor Date Table of Contents Table of Contents 2 1.0 Introduction 3 2.0 iPhone SWOT Analysis 4 2.1 Strengths 4 2.2 Weaknesses 5 2.3 Opportunities 5 2.4 Threats 6 3.0 Competitive Analysis & Competitive Advantage of Apple 6 4.0 Target Market Segments 8 4.1 Target Market 8 4.2 Target segments 8 5.0 Recommendations for Product, Price, Promotion and Distribution 9 6.0 Budget 11 7.0 Summary 11 8.0 References 13 1.0 Introduction In 1976, Steve Wozniak and Steve Jobs established apple and there relationship strengthened after Wozniak created building boxes to make free phone calls for long distance successfully and this was a huge invention at that time. They then developed an apple computer 1 and later a van and calculators sales boosted the company as a whole. They concentrated in selling computers to local people and this lay the foundation of the company. In 1978, the company grew in a big way throughout America through 100 dealers and they launched their new products like Macintosh and several sophisticated gadgets such as ipad, iPhone, iPad touch just to mention but a few. To date, the company had giant branches which are fully operational such as Apple USA, Apple Europe, Apple Pacific and Apple Products. Apple Inc is one of the most successful companies in the world with over 30 years of existence and has brought about a lot of changes in the computer industry. However, the issue of iPhone is marred by a lot of competition from the ever increasing competition in the Smartphone industry. The bigger question is what the company would do so that there can be increased allocations of the iPhones in order to maintain and improve the market position. Also how should Apple implement unique retail strategy which will in the long run affect the products decision making and what trends should be implemented so as to maintain a competitive advantage and most importantly increase the customer base (Sharma, Nick & Li Yuan, 2007). 2.0 iPhone SWOT Analysis In this section, focus is on the internal and external factors that affect the performance of the company (Panagiotou, 2003) 2.1 Strengths Innovative product- the touch screen is a very unique facility compared to other mobile products and also has all feature of other mobile products combined into an iPhone. Compatibility- the iPhone is very compatible and versatile and is capable of working will with all the other products of apple such as iTunes and most importantly is its compatibility with may other software products and is not limited on the far the upgrading can go. The new features that are compatible with Apple are limitless. Easy to use – The new innovative touch is a technology that is very easy to use bearing in mind that the touch feature on the iPhone is very different then other touch products and can easily be compared as compared to other products. Brand Image – Apple is a well known brand and is well know for its innovative products such as iPod and the Mac computer (Lloyd, 2001). Good Price – for just $500, there is the combined smart phone into the iPhone and all the latest features and is more easy and accessible that other smart phones in the market. The current price is good and valuable. 2.2 Weaknesses Corporate Brand Image – The apple brand is not as receptive towards business people. i.e. it does not have strong reputation such as the BlackBerry in the entire market. Price Variety – The iPhone has one set price and does not vary for other consumers in the market (Brennan & Yihong Xia, 2001). Using Touch features – a continued use of the iPhone is associated with uncomfortable mobility while using the iPhone and problem that has been referred to as ‘Gorilla arm’ 2.3 Opportunities Increased demand and Expansion into New Target Segment – Apple will continually target various markets that enjoy the use of an easy accessible phone. However, an idea of converting the iPad consumers into upgrading into the iPhone is a vital strategy in increasing the customer base. Upgrading – the new innovative technology can always be added to the gadget and the new feature continued updates into the latest technology an asset. New feature being upgradable is also a very important platform. Partnership – Apple can combine with other mobile phone companies and flood the market with iPhones and in the long run increase the customer base. On the other hand this will reduce the costs of marketing and will increase the revenue in the company. 2.4 Threats Competition – there is an increase in competition in the market today. The amount of smart phones in the market in higher for their making has been simplified by technology. More companies are flooding the market and are working around the patent that Apple has currently. Difficulty Expanding into Asia Markets – in the Asian market, the interest for iPhones is very low. They prefer other products other than iPhones. This is mostly attributed to the fact that iPhone does not support UMTS which is a telecommunication standard in Europe and Asia 3.0 Competitive Analysis & Competitive Advantage of Apple There has been stiff competition between Apple and the main competitors Samsung which have even landed the two companies in battles in courts (Decker, 2011). Samsung enjoys a strong customer base from professionals and business realms whereas Apple just attracts many average users. Samsung also has a very good reputation when it comes to electronics and most importantly about phones. Apple on the other hand is new to smart phone business, but has a strong electronic history and reputation; its sales and market share of the smart phone business are growing rapidly. Apple tends to target its phones to people who seek for media and also has stronger foundation and capital to support after sale services. The prices for Samsung products and those of Apple are very close, but Apple is far much willing to drop iPhone prices so that there can be an increase in sales and market dominion and on the other hand increase the customer base. Samsung business is based on an Android powered device called Touchwiz, a 3.0 version this Android platform and TouchWiz has diverse difference and enhancements when compared to iPhone OS like the option to add widgets. However, many users prefer the simplicity and minimalism of the iPhone OS. This is due to the fact that the latest iPhone OS has multitasking capabilities. This puts Apple at a better competitive platform over all the competitors but most importantly, the arch rival Samsung. The lower tier competitors like Nokia, Rim, LG, Motorola Mobility and Sony Erricsson are have set the ground for competition but they are don’t have the resources and internal controls to make business, design, channel or technological moves which are enough to challenge Apple iPhone and therefore Apple is well position to make a killing in the market share and customer base. Apple has gained a very competitive advantage on the launch of the iPhone. This is because its features make it a popular product which highly regarded by its users. iPhones are a total communication devices with PC like capabilities, access to music, video and the web. For other manufacture to get a catch in then market, they need to develop a gadget that does not match an iphone. This brings about the competitive advantage, touch screen capabilities, internet access, large memory and designs are all associated with iPhones and for other manufactures to come up with something that surpasses this will require research and much funds. All these features give Apple iPhone a competitive advantage that can not be copied (Dedrick, Kraemer & Linden, 2011). 4.0 Target Market Segments 4.1 Target Market Apples primary customer target is the middle upper income professionals who need a portable device to coordinate the busy schedules and communicate with family, friends and colleagues. Then the other customer targets are the high school, college and graduate students who need one portable multifunction device. Mainly, this will be a replacement of iPods and cell phones. The targeted people can enjoy advantages such as recording, updating, accessing and exchanging information without carrying many gadgets. In other words iPhone target consumers are those people who store information, reduce paper work, wireless access and entertainment is their priorities. 4.2 Target segments Professionals - they have the facility to record information such as E-mail, instant messaging so that the go by their daily businesses can be facilitated with ease. Students – iPod, internet facility, video, TV and PDA are available in the iPhone and it is an attraction to students and graduates. Corporate users – iPhone have facilities to take notes and keep records and available of much software. Entrepreneurs - They need to have services to convene their business work and so Apple iPhone gives them facilities like calendar and address book to check their appointments and contacts and easily communicate with their manager and employees. 5.0 Recommendations for Product, Price, Promotion and Distribution Apple iPhone need to be taken to the market with an aim of increasing more customers. Using the 4C’s developed by Robert Lauterborn for instance can help in strategizing in taking more customer base (Beeler & Amanda, 2000): Place is Convenience Price is Cost to the user Promotion is Communication Products are Customer solutions If by using the 4C’s is going to enhance increased customer base and value, then Apple should make the place where they are going to market should be convenience to customer who are trying to buy Apple iPhone though the prices of the iPhone is quite in the marketing place also should be rich means convenience (Aaker & Robert, 2001). Apple should on the other hand think about the cost. This is because even if the target is for stable income customers , the price should be achievable by the customer and therefore it should be minimized (Jaworski, Kohli & Sahay, 2000). The next C is about value communication which means that promotion of Apple should have good communication with the target customers by using proper promotion tools. There should be tools in the website that allow visitors to locate the nearby certified Apple products consultants in the US and other international locations, and finally the iPhone should satisfy all the needs and wants of the customers so as to harness many more customers (Rao et al, 2004). Most smart phones are targeted to the business people but the Apple brand is not. There is therefore a need to expand customers by modifying some features so as it can suit even the business people. Secondly, Apple does not offer lower priced models for more cost conscious customers. In this case the recommendation is cost reduction of producing iPhones so as they can be able to increase can catch the middle earning population. IPods are already in the market (Wingfield, 2006). If Apple would target those people who value entertainment, then it can strategize in convincing the customers already using the iPods to upgrade t iPhones. This will increase the iPhones customer base (Linden, Dedrick & Kraemer, 2011). Finally, Apple should focus on partnerships with other powerful global mobile phone companies so that they can flood the market with this product this will act as a catchment strategy to reach very many new customers at a very short time and effectively. This will reduce the cost in marketing and increase revenue through long term agreement deals (kotler & keller, 2006). 6.0 Budget Amount Allocated in $ Advertising 15,400.00 Publicity/Public Relation 7,800.00 Sales Incentives 9,000.00 Product Design Services 30,000.00 Other Marketing Services and Expenditures 11,500.00 Brand support 10,000.00 Acquisition/Partnership Cost 20,000.00 Sales Promotional, Trade Shows, Exhibitions 17,000.00 Total 120,700.00 When this is implemented, it is projected that the company will have a 90% increase in the customer base. Meaning that, there will be an increase in the number of customers willing to be Apple iPhone users and in the long run mean that there will be an increase of revenue in an amount not less that 45%. 7.0 Summary With the implementation of the mentioned measure, Apple will be able to succeed in increasing the customer base of the product, iPhone. First, by targeting business people are a better catch for they have the capacity and a sophisticated phone may help them plan the life. Moreover a trend where lower leveled people try to have phones which are suing higher end people is a good opportunity to iPhone market increasing the customer base. iPhone is has unique services but currently it targets the high end society. Reducing the price of the product will affect the initial market for it will make it available and affordable to a wider range of customers. 8.0 References Aaker, D., Robert J., (2001), “The Value Relevance of Brand Attitude in High-Technology Categories,” Journal of Marketing Research, 38, 485-493. Beeler, Amanda (2000) ”Virtual ads grab more attention from marketers” (Advertising Age, vol. 71, iss. 23, p. 93) Brennan, Michael J., Yihong Xia (2001), “Assessing Asset Pricing Anomalies,” Review of Financial Studies, 14(4), 905–942. Jaworski, B,. J., Kohli, A.K., & Sahay, A. (2000). Market Driven Versus Driving markets, Journal of the Academic of Marketing Science, 6(2), 45-54. Dedrick, J., Kraemer, K.L., Linden, G. (2011) “The Distribution of Value in the Mobile Phone Supply Chain.” Telecommunications Policy 35(6): 505-521 Decker, Susan (2011). “Apple escalates Samsung fight with ITC case.“ Bloomberg News. http://www.bloomberg.com/news/2011-07-06/apple-increases-legal-battle-against-samsung-with-itc-case-1-.html kotler P, keller k.L (2006). markerting management. 12th ed. India: Dorling Kindersley. 24, 224. Lloyd, S 2001, Brand power, Business Review Weekly, 29(29 November), 49-54. Linden, G., Dedrick, J., Kraemer, K.L. (2011). “Innovation and Job Creation in a Global Economy: The Case of Apple’s iPod.” Journal of International Commerce and Economics, 3(1), 223-239. Panagiotou, G. (2003), Bringing SWOT into focus, Business Strategy Review, 14(2), 8-10. Rao, V., R., Manoj, K., Agarwal, Denise D., (2004), “How Is Manifest Branding Strategy Related to the Intangible Value of a Corporation?,” Journal of Marketing, 68(4), 126 141. Sharma, A., Nick Wingfield, Li Yuan. (2007) “How Steve Jobs Played Hardball In iPhone Birth,” Wall Street Journal, p. A1. Wingfield, N., (2006), “'Boot Camp' May Boost Sales of Apple's Macs,” Wall Street Journal, 6 April, 247(80), B1B4. Read More