Apple Inc iPhone - Marketing Activities - Business Plan Example

Apple Inc. iPhone Marketing Plan

Executive Market Plan Summary

iPhone is one of the major Apple products that generates the largest revenue to the corporation. It is a well-celebrated smartphone amongst the other competing products in the market. Indeed, this is the key product that came to turn around the performance of Apple in its entire life in the telecommunication industry. Steve Jobs came up with the idea of developing this and then commissioned the manufacturing company's engineers to explore the technology of touch screen. The iPhone product essentially targets consumers who want to communicate, store information and needs entertainment on the move. Based on this idea, Apple mainly targets professionals, corporate users, students, entrepreneurs, and healthcare practitioners with this product. Analytically, iPhone is a high-end product whose market segments still seems small in the global context. Ideally, very few people can access the internet, and a small proportion wants videos and other luxurious features, which come with the high prices. This is to say that, the smartphone market is still very small compared to the larger general global phone market. However, with the advancement in technology, the future market for the smartphones will significantly grow. This particular market plan tends to look at how the Apple Companycan intense its iPhone sales within the next twelve months and how to see its future growth in the market. Procedurally, the market plan will start with a SWOT analysis of the product to see its competitiveness in the market. Next, it would move to marketing mix marketing strategy, and it will then analyze the benefits of the plan including implementation procedures.

SWOT Analysis

Strengths

Weaknesses

• iPhone is an innovative product with unique patented touch screen that cannot be matched with any other smartphone present in the marketplace
• The phone is quite compatible with other Apple's products features such as the iTunes, the Apple TV and it allows for wireless connectivity with bigger screens. Thus, this makes this product unique amongst its competitors across the globe.
• The iPhone is an easy-to-use product with a screen friendly interface that makes operations extremely intuitive to the users. Consumers just love the efficiency of the phone.
• Apple is well known in the market so does its products. Many users worldwide recognize it.

• The product is extremely expensive to the low-income consumers, and they may not be able to purchase the product
• The Phone’s screen is quite sensitive and sometimes undergoes what is called the gorilla harm, which makes the screen surface to become rough as the consumer continues to use the product.
• The brand image is not quite attractive to the business group.

Opportunities

Threats

• Possibility of increase in demand in the future markets
• iPhone is upgradable through the installed software that makes it possible to upgrade the product to match the customers’ needs in the trending technological world.
• The Brand image makes it probably possible for Apple to partner with world phone companies to flood the market with iPhones.

• The downward pressure for lowering of the iPhone’s price is a threat. Other companies are selling their smartphones at little cheaper prices.
• There is anticipated increased level of competition in the market. Currently, it has become easy for most companies to create their smartphones and flood the market with them.
• Has a lot of challenge in expanding in the African and Asian market segments.
• The high acceptability of the Google's Android system.

Competition

There are several products that are directly competing iPhone in the global markets. Palm is one of the greatest competing products being one of the longest serving product in this industry for quite long (Ferrell, & Hartline, 2012). On the other hand, the Google offers such as the Android system indirectly competes for the iPhones' features. Subsequently, Samsung and other smaller developing companies are flooding the smartphone market competitively with the offering of Apple Corporation (Bharadwaj, Sawy, Pavlou, & Venkatraman, 2013).

Marketing Mix and Marketing Strategy

Marketing Objectives

Global market sales of smartphones have increased from 2008 to a total of 403 million units in the fourth quarter of 2015 (Gartner.com, 2016). Despite this massive growth, iPhone sales growth is still quite slow with an increment of about 1.4 %. The table below shows the worldwide smartphone sales for the 4th quarter 2015,

Source: (Gartner.com, 2016)

Figure: Graphical presentation of iPhone quarterly sales since 2007

Source: (Statista, 2016)

Based on this figures, it is of great need for this market plan to achieve the following;

• About 2% increase in global market share within the next twelve months.
• Increase consumption of iPhones across the globe.
• Create a strong brand image of iPhone to the smartphone consumers.

Target Market

Apple's marketing strategy has always been to target the high-income earners in the society. However, to improve its consumption, the company will now aim to target primarily the middle upper-income professionals and corporates that can afford to purchase this product (Brian, 2015). Ideally, this particular class of people needs portal devices that can help them coordinate their busy schedules, interact with a friend and communicate with the colleagues in the organization. The secondary target segment for this product shall constitute of college, high school and university students who are obsessed with the portable multifunction gadget (Sun, 2014).

Strategies

Product

Based on the current trends in the smartphone industry, Apple has to match the game with a well-branded iPhone that will counter-attack the provisions of other manufacturers in this industry. The multi-touch screen is the only way to go. The company should maintain some of the features of the products and upgrade them to match the higher expected experience to the consumers (Machado, Cant, & Seaborne, 2014).There are features that are quite critical for this product to grow further into the market. Specific features such as camera resolution have become a standard feature for consumers in the market (Thompson et al., 2013). While Samsung currently offers smartphones with up to 32-megapixel cameras, it would be significant for Apple to produce iPhones with high camera resolution powers that outmatch those of the competitors.

On the other hand, its internet communicator feature should be retained (Chan, Pun, & Selden 2013). With the advancement in technology, this is where most organizations and consumers are destined. The iPhone’s design which is tailored for internet use makes it quite convenient to the technology lovers who have become inseparable to convenience and use of technology in everything they do (Montgomery, & Roscoe, 2013).Subsequently, its OS X system should not be scrapped but customized to meet the changing needs of clients in the industry. As it is known, OS X is a very stable and an elegant operating system that makes Apple products unique amongst other products (Rosenbloom, 2011). Leveraging the feature could make it more acceptable amongst today's perceiving consumers. Synchronization of iPhone with iTunes, Address Book, and iCal can further do the magic in this Market.More importantly, Apple shall offer a year full warranty with an optional four-year care warranty for the iPhone brand (Stokes, 2015). It will be packaged in a tasteful box that cares for the environment and matches designs of professionals and students in mind.

Place

It is one of the key features in any marketing plan (Boone & Kurtz, 2013). While it may be significant that Apple already has a stronger relationship with its distributional channels across the globe, it is important for the company to further improve its global chains of distribution. Use of distributors such as the AT&T and the major phone distributors, for instance, Verizon will be quite fruitful (Fitzgerald & Wakabayashi, 2014). On the other hand, the company will consider partnering with global chain retailers and phone distributors to make the iPhone product readily available to the consumers. The Apple website, as well as its store, will be dedicated to selling the iPhone brand alongside its various provider channel partners (Son, Lee, & Kim, 2015). Eye-catching and attractive displays will be made in the online retail stores to make the product more promiscuous to the target consumers.

Price

The Apple's success relies on its pricing strategy. The corporation's prices have been that high targeting the high-income earners and the high social class of people (Malik, 2013). However, with the current situation in the telecommunication industry, time has come that the company must consider reducing the prices. The company, therefore, plans to reduce the cost of production to lower the prices of iPhone by almost quarter to make it more competitive in the market (Blakeman, 2014). The company plans to set price as low as 349 dollars for the 4gb model and 399 dollars for the 8gb models. The company will also offer the special limited editions of iPhones upon roll out.

Promotion

The company plans to use more complex new approaches to market this product. It will use the e-marketing tool to reach the larger global market and other promotional campaigns to promote iPhone to its target audience (Shin, Lee, Lee, Jin, & Xu, 2013). Social media networks are key to promoting this product. In fact, the television ads and the internet will be used to penetrate the market for this particular product (Seabrooke & Wigan, 2014). In all these, the company wants to integrate revolutionary communication with audio and visual experience aimed towards attracting the consumers.

Positioning

iPhone will be positioned in this industry using the differentiation strategy (Reinhard, 2015). The product will be positioned as a convenient, versatile and value added gadget that promotes personal and professional use (Shea, 2015). Ideally, the focus is on convenience need for a having a multifunction device that one can use to photograph, listen to music, browse the internet and communicate with others.

Projected Financial Benefits

At the current standings in the market, the break-even is assumed at a wholesale revenue of about $ 500 per unit of every iPhone sold. This carries a variable cost of $ 250 per unit and approximately a fixed cost of $ 50 million annually. Based on this calculation the break-even is equal to 200,000 units sold. However, at the proposed price, the company will manage to break even as much as the sales volume surpasses the 200,000 units (Apple 2016). With the recommended price of about $ 350 a mark-up of about 40% is expected. Sales can approximately improve by 60% decreasing the fixed costs to manageable levels. This is expected to increase profits significantly in the long run. The greater sales is an ideology introduced to help consolidate and improve iPhone’s market share in the global markets.

Management of the Portfolio

To manage and uphold the brand portfolio discussed in the plan is quite important (Cohen, 2005). Apple will give workers an additional 5 dollars for every quality and non-rejected iPhone sold. This will motivate them only to produce quality phones needed by the consumers thereby building a stronger relationship with the customers. The plan is to closely monitor quality and satisfaction of clients with the products (Cravens &Piercy 2006). On the other hand, a preinstalled Apple Customer Service Bar in the iPhone will allow the customers to reach the customer service 24 hours a day. Thus, this is to help customers request for technical support to resolve the challenges that they may face with the iPhone product (Armstrong, Adam, Denize, & Kotler, 2014).However, in the case of slow growth of the product in the market, the marketers will spontaneously rebate the iPhone product to customers who have or possess other Apple products. Then, they will channel their synergy and effort in attracting customers to other Apple products and services.