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Strategic Planning of Marketing Presented by: Management Rene de Olivieira Maria Fernanda Diaz Steven Mastrodomenico Source: Marcelo Sakai http://www.howardmodels.com/ Fernando Vicenzo Berto Table of Contents • Chapter 1 – Introduction and Brief History • Chapter 2 – Environmental Analysis • Chapter 3 – Analysis of the Company and Competitors • Chapter 4 – Establishing the Objectives • Chapter 5 – Strategies for Achieving the Goals • Chapter 6 – Decisions of Products, Services, Brands, and Packages • Chapter 7 – Decisions in Communication Table of Contents • Chapter 8 – Decisions of Channel in Distribution • Chapter 9 – Decisions in Sales Force • Chapter 10 – Decisions of Prices • Chapter 11 - Budget and Investment Analysis • Chapter 12 - Management and Control of Strategic Planning of Marketing Management • Bibliography Chapter 1 Introduction Source: http://www.appleipadapplications.org/apple-ipad-event/ 1.1 Apple’s Headquarter • Located in Silicon Valley, California since 1993 – The city for leading hub for high- tech innovation and development – Accounts for 1/3 of all of the venture capital investment in the United States • Has 6 buildings that total 850,000 square feet • One of the largest companies in the world • The most valuable technology company in the world, having surpassed Microsoft Source: http://www.hellocompany.org/page/70 1.2 Company’s History • April 1, 1976: – Steve Jobs and Steve Wozniak created Apple Computer • January 3, 1977: – The release of the Apple I, and incorporated the company • April 16 & 17, 1977: – Apple II had its first West Coast Computer Faire – Jobs introduced Apple II to a Japanese chemist named Toshio Mizushima, who became the first authorized Apple dealer in Japan. • December 12, 1980: – Apple launched the Initial Public Offering of its stock to the investing public • October 1983: – Macintosh 128k was announced to the press • 1999: – Apple introduced the Power Mac G4 Company’s History • 2001: – Apple introduced Mac OS X • May 2001: – Announced the opening of a line of Apple retail stores • October 2001: – Introduced its first iPod, portable digital audio player. • 2004: – Introduction of the iPod Video, then the iPod Classic, and eventually the iPod touch and iPhone • July 19, 2010: – Introduction of iPad • March 1, 2011: – Introduction of iPad 2 Timeline of Apple Products Source: http://en.wikipedia.org/wiki/Timeline_of_Apple_Inc._products 1.3 Expansion of Market Source: http://www.apple.com/retail/storelist/ Expansion of Market • Late 2003: – Apple opened its first Apple Store abroad, in Tokyo's Ginza district • August 2004: – Followed by a store in Osaka, Japan • November 2004: – Apple's first European store opened in London and is currently the largest store • 2005: – Opened stores in Nagoya, the Shibuya district of Tokyo, Fukuoka, and Sendai • April 2005: – Apple store introduced in the Bullring shopping center in Birmingham Expansion of Market • June 2005: – Opened its first store in Canada at the Yorkdal Shopping Center in North York, Toronto • July 2005: – Bluewater Shopping Center in Kent opened • Later on 2005: – Apple opened the Meadow hall Store in Sheffield and the Trafford Centre Store in Manchester (UK) • January 2006: – Recent additions in the London area include the Brent Cross Apple Store • 2006: – Continuation of opening stores in Japan in the city of Sapporo • September 2008: – Apple Store in Westfield in Shepherd's Bush 1.4 Driven Marketing Strategy • Launch of Apple 1983 – http://www.youtube.com/watch?v=lSiQA6KKyJo& playnext=1&list=PL89CED0D07364D761 • Launch of Iphone – http://www.youtube.com/watch?v=ftf4riVJyqw&f eature=BF&list=FLEVDcUVUZAN8&index=1 Source: http://www.koupoukis.gr/computer/apple/the-unofficial-steve-jobs-life-timeline-apple http://www.gsmarena.com/apple_iphone_3g-pictures-2424.php 1.5 Product Line MacBook iMac Mac mini Mac Pro Mac OS X iPod Shuffle iPod Nano iPod Classic iPod Touch Apple TV Source: iPhone iPad www.apple.com 1.6 Apple’s Manufacturer • Foxconn Technology Group – World's largest maker of electronic components • Hon Hai Precision Industry Co., Ltd. – Won the Apple franchise in China – Walled factory city of 270,000 employees Source: http://www.allnewsmac.com/2010/08/18/apples-major-manufacturer- in-china-foxconn-to-hire-400000-workers-next-year/ Software and design Apple USA Assembly Foxconn Taiwan TFT-LCD Screen Sanyo Epson, Sharp, Japan TMD Video processor chip Samsung Korea Touch screen overlay Balda Germany Bluetooth chip Cambridge Silicon Radio UK Chip Manufacturer TSMC, UMC Taiwan Baseband IC Infineon Technology Germany WIFI Chip Marvell USA Touch screen control Broadcom USA chip CMOS chip Micron USA NOR Flash ICs National Semi, Novatek US, TW Case, Mechanical parts Catcher, Foxconn Tech Taiwan Camera lens Largan Precision Taiwan Camera module Altus-Tech, Primax, Lite Taiwan on Battery Charger Delta Electronics Taiwan Timing Crystal TXC Taiwan Passive components Cyntec Taiwan Connector & cables Cheng Uei, Entery Taiwan Source: www.apple.com/iphone Chapter 2 ENVIRONMENTAL ANALYSIS Source: http://movingtosiliconvalley.wordpress.com/ 2.1 Geographical Structure for Apple Computer Source: www.apple.com 2.2 Apple’s Network & its Variables Flow of products, Services and marketing communications Flow of Information, Financial flow and orders PEST Provider’s Network Company Distribution Network Other companies of the F Design Authorized network Retailers I N.A. N Producers of Processors Wholesaler A Direct Sales L Producers of Chips apple.com Buying Logistic H.R L.A. Producers of Batteries Wholesaler Apple call center C Producers of the Screen O Europe N Producers of Connectors Marketing Wholesaler S Production Finance Own Stores U Cables Asia M Wholesaler Web Sales E Assemblers Competitors R Business Facilitators Supply Chain Marketing Channels Figure 2.1 2.3 Structure of Apple’s Model • Three broad industry categories: – Software Engineering – Hardware Manufacturing – Retail Source: http://pix-soft.com/Industries.html 2.3.1 Software Engineering • The core of the Apple genius • Set the technological pace for functionality and the end-user experience • Focuses its developmental skills on a target Source: http://www.theappleloop.com/Home/monograph.html 2.3.2 Hardware Manufacturing • Apple design and creativity attracts • Built-in functionality is greater • Interoperability with the Operating System is tighter and easier Source: http://www.devicenation.com/apple-iphone-4-still-not-being-recommended-by- consumer-reports/ 2.3.3 Retail • Direct Contact with Consumers by establishing Apple Stores – Assuring technology is introduced properly • Flashy, boutique-like, with trained staff and plenty of opportunity to touch, test and try Source: http://www.apple.com/retail/fifthavenue/ 2.4 Participation of Countries in the Market Source: http://www.itechcity.org/tag/apple-pc-market-share-graph 2.5 Apple Revenues Source: http://www.macworld.com/article/140162/2009/04/appleearnings.html 2.6 iPod Market Share Source: http://www.crunchgear.com/2007/10/12/apples-growth-leading-to-bad- customer-service/ 2.7 iPhone Market Share Source: http://www.socialmedianews.com.au/category/google/android 2.8 MacBook Market Share Source: http://www.ltjmanagement.com/post.cfm?PostID=8 2.9 Worldwide Total PC Shipments Source: http://www.fasterpony.com/apple-worlds-largest-pc-manufacturer-ipad/ 2.10 Brand Awareness Analysis Apple is well known for their innovative devices Source: http://www.scribd.com/doc/21275028/Apple-iPhone-Marketing-Plan 2.11 PEST Analysis Political & Legal SocioCultural • Legislative Policy • Tariff Barriers • Values and consumer • Influence of children in (Labor) • Regulation of Foreign habits the buying process • Technical Norms Trade • Fashion & media • Women in the labor • Political Interest • Power Unions • Lifestyles market • Tax Policy • Social mobility • Population in large cities • Exchange Policy • Consumer behavior • Demography • Protectionist Policy • Income distribution • Levels of education Economical Technological • Concentration of suppliers & shoppers • Level of investment of industries and universities in • Business Life Cycle research & development • Domestic & International Competition • Life cycle of products • Inflation, Interest, and Exchange Rate • Fluctuation in the costs of technology • Availability of Capital & Financing • Improvement & maintenance on the equipment • Economic Integration • New Solution to technology • Trading Blocs • Search of innovation Chart 2.3 2.12 Driver Change Political & Legal SocioCultural Impacts/ Actions Impacts/ Actions Opportunity Opportunity • Technical Norms • Adapt to new technical • Fashion, & media • Maintain the satisfaction of standards o Lifestyles consumers’ needs, with o Consumer behavior innovation • Legislative Policy (Labor) • Reinforce US union forces in • Influence of children in • Diversification of product line the Chinese labor the buying process • Reduced protectionist policies • Increase in China’s • Population in large cities • Availability of product importation, but take o Demography • Sustainable production advantage of low cost in and sustainability labels production with high quality • Communication that reaches standards the consumer directly • Levels of education • Educational communication to parents & children Chart 2.4 Driver Change Economical Technological Impacts/ Actions Impacts/ Actions Opportunity Opportunity • Concentration of suppliers • Productive alliances in • Level of investment of • Maintain the high intensity of the domestic & international industries and universities in investment on research & market research and development development in Silicon Valley. • Innovating new technology • Concentration of shoppers • Implement different • New Solution to technology that creates efficiency to the strategies for pricing consumers’ lives. • Personalization on the • Domestic & International • Joint actions with the products by adding value Competition government to increase o Economic Integration political support for o Trading Blocs export and import restrictions Chart 2.4 2.13 Consolidation Projects & Actions • Similarity of products at lower cost • Aggressive marketing with implementation of Marketing 3.0 • Ease of Imitation (Chinese products) • Product & service differentiation with innovation of value to Threats • Increase cost of labor, raw materials and equipment avoid competition by cost • Fluctuations in income and employment • Partnerships with suppliers to develop new materials and equipment • Technological New Age • Investment in communication channels being directly and • Laziness on the consumer like to depend on smart devices investment in Apple Retail Stores in South America to Oportunities • Increased income and consumption increased consumption • Women in the labor market • Reduction in cost because of existing technologies & • New searches must continue for the hunt of globalization new technologies with Silicon Valley and form new partnerships with universities like MIT for research centers suppliers Figure 2.2 2.14 Determinants of the Intensity of Competition Suppliers • Diverse market with high quality employees and lower cost production suppliers • Low bargaining power of suppliers of materials Competition from substitutes • The technogical market(computer, New Entrants Competition in the industry cell phone, and portable player) do not have replacement • Threat of imitation from the • Competition for price and quality, Chinese Market design, and brand strength • Substitution is among the model • Threat of similarity in the with new implementation or competition with lower cost • Differentiation in the design, consolidation colors, sizes, and models • High brand value in some products minimizes the substitution factors Buyer power • Price sensitivity (depending on line) Bargaining power of retail stores • Greater competition increases bargaining power of buyers. Figure 2.3 2.15 Process of Shopping Decision Processing Stage Occurring of the Ideas to Use Questions to Ask Stage Recognition of Need Necessity, fashion, and Strong and direct Frequency of purchase? to Buy positioning to a special advertising which Motives? social group impacts the consumers’ Seasonal? lives Brand Image & Awareness? Looking for Use of internal sources Improve external Attributes observed Information (Silicon Valley), external sources (party houses, during the choice? sources (social groups, campaigns, and media) blogs) Perception of the brand? Evaluation of Take account of the Innovation on the How to differentiate? Alternatives size, weight, comfort, comfortability & travel durability, quality, and usage of the consumer Reaching different price customers & market? Chart 2.5 Process of Shopping Decision Processing Stage Occurring of the Ideas to Use Questions to Ask Stage Shopping Decision Individual decision Enforce excellent Working attributes to making in the store, customer assistance influence the purchase based of comparison and set more Apple of the product instead with other brands that retail stores to of competing? offer similar product. emphasize to the customer the service Reaching directly to the being offered directly to consumers? them. Post-Purchase Create the fidelity of Customer service What is the Behavior the consumer and have assistance 24/7 level of satisfaction? him spread the brand International Warranty, loyalty. and Personal Training Where is there better service being offered? Chart 2.5 2.16 Analysis of Shopping Decision Process Processing Stage How is the Process Existing Opportunities Positioning to a social group, which is the Create the motive to select and Recognition of Need target market considering the consume more of your product line to Buy necessity, and what is in style. and service. Use of internal sources (Silicon Strengthen the brand in consumers' Looking for Valley), external sources (social groups, minds by creating a one-to-one Information blogs) relationship with the consumers,. Take account of the size, weight, comfort, Customers are looking for portable Evaluation of durability, quality, and price. devices that are beneficial for their Alternatives usage. Individual decision making in the Differentiate the product / brand, store, based on comparison with other from the communication to the Shopping Decision brands that offer similar product. point of sale. One must be innovative, creative by being animate and informative. Post-Purchase Create the fidelity of the consumer and Customers are in need of having Behavior have him spread the brand loyalty. brand loyalty. Seek into making the client feel part of the family. Chart 2.6 2.17 Collective Actions Collective Actions Collective Actions Collective Actions Collective Actions with Suppliers with channels with facilitators with competitors Participation in the Orientation & training Implement a policy Joining forces to tax design and production to technicians and of to reduce productio cuts, raising of the product with sales representative n cost. barriers to imports an comfortability and from the retail stores. d export subsidies innovative tools Regulation system Hold house parties, Alliances to reduce Market Research assuring the events, show transportation cost excellence & quality cases, and innovative and storage development on the welcoming at their products stores Chart 2.7 Chapter 3 ANALYSIS OF THE COMPANY AND COMPETITORS Source: www.apple.com www.blackberry.com www.microsfot.com 3.1 Customer Orientation Accomplished Activities Marketing Ranking 0 to 10 1. Listens and considers the needs and desires of the customers in a well 9 defined market segments. 2. Distributes marketing efforts in accordance with the profit of a 9 potential long-term targeted segments. 9 3. Creates winning bids for the target segment. 4. Evaluates continuously the company's image and customer satisfaction. 10 5. Collects and evaluates continuously ideas for new products and improving existing products and services to meet customer needs. 10 6. Influences all departments and employees of the company to consider 10 the customer in everything they think and practice. 7. Strives to offer the customers the "best solution". 10 8. Only make promises that they can deliver. 10 Ranking: Chart 3.1 0= Does not develop anything in relation to this activity 10= Employs many efforts in this activity Customer Orientation Accomplished Activities Marketing Ranking 0 to 10 9. Transmits the needs and customers' ideas to those responsible for product 9 development. 10. Serve the same customers for a long period of time. 10 11. Sets a high standard of time for customer service, able to answer their questions, address their complaints and solve their problems very 10 quickly and satisfactorily. 12. Disclose favorable news about the company and "damage control" of unfavorable. 9 13. Acts as an internal customer and an advocate of the public in order to improve the policies and practices of the company. 9 Ranking: Chart 3.1 0= Does not develop anything in relation to this activity 10= Employs many efforts in this activity Customer Orientation Accomplished Activities Research & Development Ranking 0 to 10 1. Be attentive to global innovations, through web and others. 10 2. Devotes time to meet with customers and hear their problems. 10 3. Accepts the involvement of marketing and production, among others, in each new project. 10 4. Tests and evaluates competitors' products. 10 5. Seeks to know the reactions of customers and asks for 9 suggestions. 6. Improves and enhances continuously, the product based 9 on market feedback. Ranking: Chart 3.1 0= Does not develop anything in relation to this activity 10= Employs many efforts in this activity Customer Orientation Accomplished Activities Shopping and Production Ranking 0 to 10 1. Stimulate innovation that continues in the suppliers, not letting them accommodate. 10 2. Proactively seeks the best suppliers, rather than choose only among those who seek 9 them. 3. Seeking to reduce transaction costs of long relationships duration with a smaller 10 number of reliable suppliers and high quality. 9 4. Does not make concessions on quality to save on price. 5. Invites customers to visit and learn about their company. 3 6. They are always striving to produce goods faster and / or a 7 lower cost. 7. Improve continuously the quality of the product, trying to 10 achieve a zero rate of defects. 8. Meet customer requirements "personalization, "when it 10 can be done profitably. Ranking: 0= Does not develop anything in relation to this activity Chart 3.1 10= Employs many efforts in this activity Customer Orientation Accomplished Activities Accounting & Finance Ranking 0 to 10 1. Prepare, periodically, reports of "profitability" by product market segment, 9 geographic areas (regions, sales territories), order size and individual clients. 2. Prepare invoices appropriately to customer needs and answer their questions quickly 10 and courteously. 3. Understand and support the marketing investments (ex., institutional 10 advertising) that produces preference and customer loyalty in the long term. 4. Adequacy of the financial package of the financial needs of the customers. 8 5. Take quick decisions about the client's ability to meet its financial commitments. 6 Other employees that have contact with customers Ranking 0 to 10 Competitive, caring, cheerful, reliable and responsive. 10 Ranking: Chart 3.1 0= Does not develop anything in relation to this activity 10= Employs many efforts in this activity 3.2 Direct and Indirect Major Competitors Large companies with strong performance in domestic market • Microsoft (computer software & handheld operating system) • Hewlett Packard (computer manufacturer) • Sony (computer manufacturer) • Dell (computer manufacturer) • Blackberry (cell phone manufacturer) • HTC (cell phone manufacturer) • Samsung (cell phone manufacturer) • Nokia (cell phone manufacturer) Imitation Products Retailers • Chinesse portable players • Best Buy • Chinesse cell phones • Micro Center • Walmart • Radio Shack • Amazon 3.3 Information about the Competitor Survey Information on Competitor – Microsoft 1. Market 4. Communication 7. Finance Considered a monopolistic in the Increased communication Assets were valued at $41 billion in licensing of the software. in various media channels associated February 2011. with educational sponsorships, and 2. Buyers direct communication at the 8. Administration A very common computer software point of sales strengthening the Technological capacitated, innovative that is affordable to grand majority of company’s brands. and stable company, self-sufficient social status. productive, vertically integrated 5. Distribution Channel operations control and a motivated 3. Products, Services, Brands and Individually distributed where it can be team. High investments in research, Symbols bought online at Microsoft stores or any of and development. their online distributors, retail store, or Commercialization of computer Microsoft donation software with 5 divisions (Windows & Windows Live Division, Server and 6. Sales Force Tools, Online Services Division, Sales representatives, and distributors at Microsoft Business Division, and the online Microsoft store or retailer stores. Entertainment and Devices Division). Products has brand awareness since 1984 with continuous innovation. Brands: Windows and Office Chart 3.2 3.4 Description of Principal Competitors Microsoft Blackberry 80% of the Market Share Mayor Competitor in the Principal in computer software. cell phone Industry Characteristics Microsoft Original Research In Motion Ltd. Principal Supplier Equipment Manufacturer Principal Computer & Software Cell Phones Segment Figure 3.3 Description of Principal Competitors Microsoft Blackberry Sales representatives & Sales representatives & Sales Force & distributors worldwide. distributors worldwide. Compensation In 2002 formed a Innovation of strategic agreement Operating System with with High Tech blackberry messenger, Computer (HTC) a which enables the user Strategic smartphone to send & receive Movememnts manufacturer to messages through data distribute Windows plan. Mobile Operating system. Figure 3.3 3.5 Comparison between the Company and its Competitor Evaluation Factors Apple Microsoft Blackberry Quality 10 8 8 Style 10 8 8 Brands 10 10 10 Cost 7 10 8 Level of Price 7 9 8 Publicity 7 7 7 Personal Sales 10 7 9 Promotion 8 8 6 Advertisement 8 8 7 Channel of Distribution 10 10 10 Coverage of the Channels 10 10 10 Localization 10 10 10 Transportation System 8 8 8 Effectiveness 10 10 10 Efficiency 10 10 10 Capacity Utilization 9 9 9 TOTAL 144 142 138 Chart 3.3 3.6 Classification of Company’s Resources Relevant Evaluation of the Tangible Resources Key Indicators Characteristics Company Estimated every 20 days their • Equity 9 inventory is turned in to cash. • Cash Flow 9 Financial Resources This is a very high inventory • Tax Credit 6 turn over. Market value of fixed assets. 8 Has their production in China with low cost and now Depreciation of expanded their production also equipment. to Brazil. 9 Scale production of the Important Notes: factories. Physical Resources 9 Know how on software & Flexibilities of fixed assets. design plus chip. Size, location, hi-tech Use of strategic alliances in 9 equipment. production. 10 Chart 3.4 Classification of Company’s Resources Intangible Evaluation of the Relevant Characteristics Key Indicators Resources Company • Number of patents (563) 10 Intellectual property, portfolio of patents, Technological copyrights, trade secrets. Resources Research & Development in • Percentage of their Operating Income in R&D (34%) 10 Brand reputation among • Brand recognition 10 consumers. Company's reputation for • Brand value 10 relation to quantity and reliability of their • Percentage of repeating 9 products and services. purchases Reputation Reputation with providers, agencies • Objective measures of 9 government, banks and the performance products Community. comparative research on the reputation of the organization. Values, traditions and social norms • Organizational Climate 10 Culture Chart 3.4 Classification of Company’s Resources Evaluation of the Human Resource Relevant Characteristics Key Indicators Company Education, training and Educational qualifications, 10 experience of employees. technical and professional Skills available to the company. employees. Adaptability of employees Remuneration for the 10 and contribution to the flexibility of industry. organizational strategy. 2 Collaborative and social skills of offic Percentage of days RH ials determine the company's ability lost with the suspension of to transform human work or industrial disputes. resources in organizational 10 capabilities. Way they talk, admire and have affection for the company. Commitment and loyalty of officials determine the company's Employees with pay consistent ability to achieve and maintain a with the market 10 competitive advantage. Innovation of products, process and Advances in R&D. 10 Creativity form of work. Number of innovative launches 10 Chart 3.4 3.7 Analysis Critical Factors for Success Prerequisites for the success of the company Who does the client want? How does the company succeeds the competition? Analysis of Demand The clients are in search of high quality Analysis of Competitors product that offers comfortability matching the expectation of differentiation in design and style. Competitive advantage is very important where it involves innovation and differentiation on the products. Their is being high investment in R&D to match the consumers’ needs and create desire and needs to them. In addition, creating hi-tech, Critical Factors For Success designing product at an approachable price. •Innovation in design & raw materials •Differentiation in style & models •Value •Customer Service Excellence Figure 3.6 3.8 Comparison and Ponderation of Critical Factors of Success Critical Factors of Weight Apple Grade Microsoft Grade Blackberry Grade Sucess Quality 30 10 300 8 300 8 240 Design 20 10 200 8 160 8 160 Brand 15 10 150 10 150 10 150 Price 10 7 70 10 100 8 80 Distribution Channel 10 10 100 10 100 10 100 Post-Behavior 15 10 150 8 120 8 120 Total 100 970 970 930 850 Chart 3.5 3.9 Consolidation Actions & Projects Large Scale of Production Up-to-Date Technology with efficient 1. The prices of “Apple products” may Strong Points machinery not be reduced so much because Creative Design with well known brand their product represents quality and Top leader Research & Development efficiency with top rated customer Marketing 3.0 service. Excellent Post-Behavior 2. The United States customer service must offer bilingual service, it can Points to Improve not just offer english speaking service. Expand their market in Retail Stores 3. The Research & Development must especially Latin America expand their institution considering MIT and other centers in the world. Figure 3.7 Chapter 4 Establishing the Objectives Source: http://www.geekpedia.com/icon58_Ruler-Pencil-and-Paper.html 4.1 Objective of Strategic Planning of Marketing Management • Continue their leading innovation and designs in the markets consumer electronics, computer software, and personal computers. • Reaching the final consumer through a direct channel of communication, were the client is well informed & instructed on the beneficial usage of their product. • Expand their market expansion to South America on behalf of their retail stores at a strategic location. Objective of Strategic Planning of Marketing Management • Increase the market share of the U.S and U.K. aiming at a 7% in the computer market plus the PDA/Phone market at least 2% with the launch of iPhone 4 and iPad 2. • Extend on the Apple brand name and link to the established meaningful positioning. • Enlarge on Apples image of innovation, quality, and value. • Measure the awareness and response in order to make adjustments to the marketing campaigns as necessary. Objective of Strategic Planning of Marketing Management Criteria 2011 2012 2013 2014 Revenue $97,837.50 $ 111,966.02 $137,718.21 $192,805.48 NET PROFIT $23,121 .45 $31,117.04 $51.654.28 $87,812.27 Sales Margin 24% 28% 38% 46% Financial data in U.S. Dollars Chart 4.2 Values in Millions Source: http://www.workitmom.com/bloggers/corneredoffice/category/like-talking-but-with-more- typing/page/3/?wpvar=1&wpvar=1 Chapter 5 Strategies for Achieving the Goals Source: http://www.psychologytoday.com/blog/dont-delay/200902/approaching-success- avoiding-the-undesired-does-goal-type-matter 5.1 Generic Business Strategies • The generic strategy implemented by Apple is Diversification • Focus on brand management and creation of a strong Brand Equity • The value creation is the main strength • The great quality and brand image makes customers less price sensitive • Thanks to innovation in their products, they have very few competitors at the same level 5.2 Matrix of Strategic Alternatives Leadership sought by the Advantages of this alternative strategy company today • Leadership based on innovation and • The strengthening of the brand allows differentiation entry into new markets. • Pioneers and leading brand • Innovation creates new needs for • Perceived value for customers: less price consumers and therefore wishes to obtain a sensitive, more quality interested product. • Best-known products (iPod, iPhone, Mac Book) • The added value perceived by customers is an excellent word of mouth (recommendation). What is the best alternative today ? Why the first alternative is not viable ? Apple must maintain their same philosophy of In this case, the first alternative is viable because being leaders in research & development to Apple is one of the top leaders in each of their maintain their leadership for their growth in the segments. In this case, they must be sustainable with market. In addition, penetrate strongly on the their strategies and keep growing. operating system for Mac. New alternative in 5 years Advantage of the future alternative • Acquisition of small competitors around the • Increase the market share world • More authorized retailer stores around the world • Better distribution channels Chart 5.2 5.3 Matrix of Segmentation T a Big r g e t Medium M a r Small k e t High Medium Low Return Figure 5.3 5.4 Options of Differentiation Type of Concept Ideas Strategies • Product innovation and product line Products/ Features of the products they do best in extension Quality terms of reliability, durability and performance • Using the best raw materials to ensure the best quality products • Attractive and distinguishable packages, Offer something really different and unique. that calls all customers attention Design Include: design, production, visual symbols and• Unique products with a distinct design brand identification • Brand identification based on product design An image is created for the product and are• Deliver the company’s image to consumers in a those differences in a product that does special way so that Apple is perceived as a Image not involve enhancing of performance in an company that gives technology, simplicity and intrinsic way innovation through all of its products Chart 5.4 Options of Differentiation Type of Concept Ideas Strategies • Intensify distribution and authorized It is the basis of a parallel differentiation of the retailers stores around the world product, a based support services.• Sales staff willing to help, well trained and Services Basis for reaching other substantial form of with personality that match the company’s differentiation: support and services profile (Ex. Attend using an Apple product) • Stands for demonstration of products. • Training sales staff in all the stores, where By hiring and training the people better so the products are sold, creating brand equity they are more qualified than their competitors. • Support and trained people for technological Talent events Management • Encourage sales staff to emphasize on the This way they improve the characteristics of brand when they are selling competence, courtesy, credibility, reliability, responsibility and communication. • Search for innovative and creative professionals Chart 5.4 5.5 Market Positioning Without a doubt Apple is … THE MARKET LEADER • Excellent offer WHY ? • Recognition • Superior distribution • Resources • Competition relatively weak Source: http://www.nqlogic.com/2010/01/ipa d-or-apples-ultimate-connected.html 5.6 Type of Growth Intensive Integrated Diversified Source: http://www.blahblahtech.com/2008/07/apples-benign-digital-dictatorship.html 5.6.1 Strategies for Growth Type of Strategy for How can it be achieved? Ideas growth • Stimulate current consumers to buy larger quantities • Increased the authorized retailer stores to Increased • Making communications and be closer to the customers disseminating the benefits of the • For those technology-lovers, show details participation in products of the innovation and benefits of the today's market • Attract consumers from products. • competitors • Increased advertising • Convert non-users into users • New markets for existing • International expansion products • Development of new products • New groups of potential customers in its area of • Strengthening the communication Developing operation channels and image abroad. new markets • Distribution channels in its • Allow testing experience when current markets • customers are in store • Expansion of operation to other regions Chart 5.6 Strategies for Growth Type of Strategy for How can it be achieved? Ideas growth • Greater diversification of models • New products for current markets • New accessories products. Ex: screen Product • Different models savers, computer bags, cases for cell Development • Different quality levels phone, and chargers • Innovations • New value association for the products (pioneers and environmental friendly) Concentric • Creation of a complete line of • New products or opportunities Diversification accessories for all products • Synergies in marketing and • Focus on a new market, segmented by technology with current products age. Ex: Kids (Future loyal buyers) • New and different products that • meet the same segment of • Development and Diversification of the Horizontal • current consumers variety of products, entering other markets Diversification • Products are not technologically • related to the current product • New line of television products lines Chart 5.6 Strategies for Growth Type of Strategy for How can be achieved? Ideas growth • Entry into new markets, especially of accessories products Conglomerate New businesses that are not • Business expansion taking advantage of related to its technology, Diversification the raw materials and know-how products and current markets • Design and produce their own package in an innovative way Vertical The company acquires a supplier as a • Acquire one of the suppliers factory on Integration going growth strategy China back • Expansion of authorized retailer stores • License around the world to the sale of Vertical Integration Acquisition of distributor as a strategy their products going Forward to go forward in the chain. • Create a “experimental store” where customers go and learn how to use the products • Purchase small competitors around the Horizontal Purchase of competitors world to create new factories and have Integration different place of productions Chart 5.6 5.7 Motives for Differentiation Reason to seek How it can be done, or what are Alternatives for obtaining a diversification the incentives in search of? benefits without diversification strategy • Attract the most qualified, creative, Management forward thinking and innovate • Focus on achieving higher Issues employees and executives, to give status and salary level them big challenges • Shareholders can diversify their • Diversification of product line portfolio of shares in other Risk Reduction • Diversification of market segments companies • Diversification of distribution channels • Resources may be cheaper in another source • Launching new products with • Search larger market scale and Profitability high returns (New business greater profitability attractiveness) Chart 5.7 Motives for Differentiation Reason to seek How it can be done, or what are Alternatives for obtaining a diversification the incentives in search of? benefits without diversification strategy • Contracts, Joint Ventures, Licensing, Strategic Alliances and Franchising can • Increase the purchase made by the Market power company provide these benefits • Opt for cooperative activities and associations • Contracts, Joint Ventures, Licensing, Strategic Alliances and • Share research costs (firms in Franchising can provide these other industries) Economy of scope • Share distribution centers benefits (improves negotiation channels) • Opt for cooperative activities and associations • Outsourcing of services that are Synergy between • Conduct joint strategic management not related to value-generating business units for all business units activities of the brand Chart 5.7 5.8 Matrix BCG iPod *MacBook iPhone iPad *Note: MacBook was one of the question mark of Apple, but thanks to investment it is now turning into a start Figure 5.4 Source: http://www.maxi-pedia.com/BCG+matrix+model 5.9 Matrix of Market Attractiveness COMPETITIVE POSITION High Medium Low Protect the position Invest to grow Grow selectively MARKET ATTRACTIVENESS iPod MacBook High Grow selectively Selectivity / Limited expansion or Medium iPhone Focus on profit deceleration iPad Protect and refocus Protect and refocus Abandon Low Figure 5.5 GR/McKinsey 5.10 Actions for Creating and Sustaining Competitive Advantage Ways of creating How to create and sustain that advantage in your business? competitive advantage • Combine the experience curve with company’s technology to increased productivity Take advantage of the • Using more contact with clients experience curve • Create Brand Awareness Create network • Great events when launching a new product externality • Associate products with important people of the technology world • Promote the brand as a pioneer, focusing on innovation Create reputation • Improve sales staff and distribution channels Create legal • Search for new products with patents • Register product designs, brands, logos, and software restrictions • Maintain good relationships with suppliers and long-term relationships Create superior • Association with others to ensure a presence in distribution channels approach • Greater control of suppliers Create economies • Focus heavily on product innovation creating barriers to entry for new competitors of scale • Show customers how simple is to use your product and how complicated is the one Create customer of your competitor. switching costs • Show your strengths Chart 5.8 Chapter 6 Decisions of Products, Services, Brands and Packages Source: www.apple.com 6.1 Product Decisions • Apple’s benefit of why consumer should choose their product: ― Apple position its products in high standard quality with innovating design and functions ― Offers international warranty with renewal of gap coverage ― Provides consumers with personalized technical support 6.2 Product Analysis Performance Satisfaction Features Initiates innovating products with efficient functions Characteristics High quality processor , high speed network, sustainable battery life and the best software applications for consumers. Reliability 100% international warranty covering hardware & software and personalized technical support Comfortability Light weight product that fits in a small bag and pocket devices. Durability Lifetime products with extended warranty for any defects. Services Personalized technical support in repairing the device or teaching the consumer how to operate the device. Design Innovating pocket devices that is very appealing to the consumers as a luxury product. Perception of Quality Creation of brand image of being a sophisticated brand with the best quality standards in design and function Source: Garvin (1987) 6.3 Decisions on the Product Line • Apple covers the sectors: – Portable Computer & Desktop – Portable Music Device – Portable Mobile Phone – Television • Strategy over the products – Satisfies consumers’ needs and desires and also creating new necessity to the consumers 6.3.1 Analysis of the Products’ Line Product Volume(u) Sales Gross margin Gross profit 5 Macbook 8.000.000 $ 2.400.000.000,00 20% $ 480.000.000,00 6 Imac 10.000.000 $ 5.000.000.000,00 25% $ 1.250.000.000,00 4 Mac mini 1.500.000 $ 75.000.000,00 20% $ 15.000.000,00 3 Mac pro 1.000.000 $ 50.000.000,00 20% $ 10.000.000,00 1 Mac OS X 1.000.000 $ 40.000.000,00 15% $ 6.000.000,00 2 Ipod Shuffle 3.000.000 $ 90.000.000,00 17% $ 15.300.000,00 9 Ipod Nano 7.000.000 $ 350.000.000,00 28% $ 98.000.000,00 7 Ipod Classic 4.000.000 $ 240.000.000,00 25% $ 60.000.000,00 8 Ipod touch 5.000.000 $ 200.000.000,00 27% $ 54.000.000,00 10 Apple TV 1.000.000 $ 100.000.000,00 30% $ 30.000.000,00 12 Iphone 16.500.000 $ 2.475.000.000,00 35% $ 866.250.000,00 11 Ipad 10.500.000 $ 2.100.000.000,00 30% $ 630.000.000,00 TOTAL 68.500.000 $ 13.120.000.000,00 $ 3.514.550.000,00 Figure 6.1 6.3.2 Analysis of the Products’ Line II ABC Curve - Volume Figure 6.2 Analysis of the Products’ Line II ABC Curve - Sales Figure 6.2 Analysis of Product Line II ABC Curve – Gross Profit Figure 6.2 6.4 Product Comparison 20.000.000 11 15.000.000 10.000.000 2 12; 10.500.000 Volume 1 7 5.000.000 9 8 6 3 4 5 10 0 -2 0 2 4 6 8 10 12 14 -5.000.000 Margem Figure 6.3 6.5 Products’ Life Cycle S a l e s V o l u m e Period Introduction Growth Maturity Decline Figure 6.4 Source: http://www.apple.com 6.6 Development of New Products • Increase Apple’s product line by developing an “interactive television” with Internet access and alongside features of accessories: printers, keyboards, speakers, headphone Products Market Size Contribution Access Number of Investment Total Margin Channels Competitors Needed Television 8 5 6 8 9 74 Printer 5 4 9 8 6 69 Mouse 3 1 7 6 2 42 Keyboard 2 1 7 5 2 39.5 Headphone 3 2 7 4 2 41 Speaker 4 2 7 4 2 43 Weight 2 2 3 15 2 Source: Marcos Fava Neves 6.6.1 Apple’s Launch in 2011 iMac Line • The product now features next generation processors, faster graphics and the Thunderbolt port • Offers quad-core Intel Core i5 processors or optional Core i7 processors • Faster AMD Radeon HD graphics processors and a new built-in FaceTime HD camera for video calls iPad 2 • High speed network with new expandable flash memory • All new-design with a third of an inch thick, down from a half, and a barely-noticeable smidge shorter and narrower • Built in camera offers HD video recording at 720p, up to 30 frames per second, with 960x720/72dpi 6.7 Principal Brand Decisions Decision about the Brand Action from Apple Trademark use Apple has created the name brand for their electronic devices with the image of high quality standard and legal protection on their genuine operating system. Brand Sponsorship Does not use brand sponsorship. Name Used Global Brand Brand Strategy Apple uses the strategy to extend product lines and the introduction of new versions of their products. Brand Repositioning High quality standard products and always innovating new functions every six months Chart 6.1 6.8 Amplitude of Packaging and Ideas Dimensions Function Improvement Points Primary Functions • Contain Innovating design that is attracting to • Protect the consumer but also protective for • Transport the device. Technological • Product Preservation Investigate for packaging alternatives, • Conditioning System since the main raw material used in • New Material making plastic comes from oil. Marketing • Attractive to the consumer Reduce their cost in packaging raw • Transmit Information materials to reduce their pollution. • Override the pricing obstacle Sociocultural • Culture expression through More participation in social the development of responsibility activities like foundation countries for education and homeless people. Environment • Urban waste Showing that the company is concerned • Recycling about the recycling of the packaging of their products. Chart 6.2 6.9 Collective Actions for the Brands Products, Services, & Packaging Actions Ideas for Apple The same structure for packaging Partnering with a company development specialized in packing to reduce their cost. Sharing Infrastructure services Partnering with a company in the same sector to offer effective service in the distribution channel Chart 6.3 Chapter 7 Decisions in Communication Source: http://rockiesmarketing.com/marketing-education/differences-in- effectiveness-of-direct-marketing-and-marketing-via-mass-media 7.1 Apple’s Development of Communication • Satisfying the consumers’ need, but instantly creating the desire for the product • Strategies for Communication — Built in Advertisement — Brand Awareness — Brand Positioning 7.2 Identification of Target Audience and Communication Actions Target Priority Objectives of message Message Tools Audience Children Average Arouse desire for the children to ask Apple also Built in their parents to purchase the item for does not Advertisement in them. grow up by cartoons, movies itself, Apple and TV series. is for kids, also. Youth High Show that the day is easier and more Be Tuned all Internet shopping, fun with the products. Day with social network friends, and pages, built in the social advertisement in network. movies and commercials. Chart 7.1 Identification of Target Audience and Communication Actions Target Priority Objectives of message Message Tools Audience Adults High Facilitates the work activities. Time is costful, use Advertising in media it wisely. businesses and billboards. Seniors Low Show the children and grandchildren Maintain Advertising in prime are using communication time with all family members and enjoy your day Chart 7.1 7.3 Objective of Communication • Reaching each product line to its target audience • Associating the brand image of high quality products • Increasing demand at least for their products through the consumer's desire • Associate the brand with high technology 7.4 Principal Communication Tools Sales Direct Advertisement Public Relations Personal Sales Promotion Marketing • TV • Internet • Contests • Events for • Presentation • Electronic • Commercials • Fair shows product • Lobbying sales • Movies • Exhibitions Presentation • Exhibitions • Catalogs Chart 7.4 7.5 Tools for Sales Promotion Focused for Focused for Sales Focused for Focused for Final Intermediates Force Industrial Market Consumer • Rebates • Contests • Catalogs • Rewards • Anticipated • Catalogs • Fair shows • Contests purchase • Rewards • Seminars • Fidelity Program • Special Offers • House Parties • Indirect Discounts • Exhibitions • Contests Chart 7.5 7.6 Methods for Communication Budget Method Possible Advantages Possible Disadvantages Ignores the role of promotion on sales volume. Available Resources Simplicity Hampers the long-term planning Expenses are related to the turnover. Circular reasoning Percentage of Sales Relationship between cost of Does not consider market promotion, selling price and profit opportunities per unit Reputation, resources, Peace of mind According to competition opportunities and objectives that will not "lose ground" are different • Allows the exercise It is more complex because •Allows to think and create Objective Vs. Task it requires making the • Force to record data whole process •create business intelligence Chart 7.6 Note: The method applied by Apple to determine the communication budget is Objective Vs. Task. A great way to develop it strategies 7.6.1 Layout of Communication Budget Jan. - March April - June July – Sept. Oct. – Dec. Total 2011 2011 2011 2011 Advertisement $200.000.000 $200.000.000 $200.000.000 $200.000.000 $800.000.000 Sales $100.000.000 $100.000.000 $100.000.000 $100.000.000 $400.000.000 Promotion Public $100.000.000 $100.500.000 $100.500.000 $100.500.000 $401.500.000 Relations Personal Sales $100.000.000 $100.000.000 $100.000.000 $100.000.000 $400.000.000 Direct $25.000.000 $25.000.000 $25.000.000 $25.000.000 $100.000.000 Marketing Grand Total $525.000.000 $525.000.000 $525.000.000 $525.000.000 $2.101.500.000 Figure 7.2 7.7 Opportunities for Collectives Actions Action Opportunity for Apple Joint Advertisement Create key alliances with mobile operators for the packaging of mobile services. Joint Sales Promotion In key retail stores and even their own retail stores, certain time of year give out a limited buy one and get one free bundle. Joint Participation in Fair Shows Smart alliances with businesses like banks, and insurance companies to continue the progression of built in advertisements. Chart 7.7 Chapter 8 Decisions of Channel Distribution Source: http://www.cultofmac.com/the-best-little-apple-store-in-texas/7493 8.1 Understanding the Flow of Marketing and Channel Distribution Producers & Physical Distribution Network Physical Processors Possession Possession Design Authorized Property Retailers Property NA Wholesaler Producers of processors Promotion Promotion FINAL Direct Sales Producers of Chips Negotiation Negotiation CONSUMERS apple.com LA Wholesaler Producers of Batteries Information Information Apple call center Industrials Producers of the Screen Financing Financing Home Europe Producers of Connectors Risk Wholesaler Own Stores Risk Cables Order Order Asia Wholesaler Web Sales Payment Assemblers Payment Service Service A Company First Intermediate Second Intermediate Final Consumer or User Wholesalers around the world Retailers Home Sites of sales Industrial Own stores “The captain of the channel” • Pioneers & followers of • Innovation • Strong Relationship trends • Direct Sales • Satisfaction Figure 8.1 8.2 Impacts on Distribution Channels Trends Implications for channels Possible actions Difficulty of the exportation Be aware of possible behavioral Political & Legal process changes Difficulty of production process Creation of factories in emerging Economical countries. Example: Brazil Lose competitiveness with Creation of factories difficult access to different SocioCultural markets Lose competitiveness with Creating partnerships with difficult access to products and universities, and invest in Technological services new technology Chart 8.2 8.3 Environmental Analysis Focus: Identification of impacts of networks for current channels 8.4 Objectives of the Company with Distribution Channels • Apple Store (Direct Sales): – High profit margin in its own distribution channel. • Retailers: – It works as a direct place where customers have great sensory experience and knowledge of the products. • Shopping Center: – They will have to invest in services and entertainment, things that motivate people to leave home and go buy. • Other distribution channels: – They must add value to their services and specialize in order to achieve expected sales. 8.5 Analysis of the Consumers’ needs related to Distribution Channels Excellent! Now I can buy Apple What do you think about the products with more security and Apple Online Store in Brazil? with an accessible price The price is still high! I do not buy any Apple products, until they go 8% 11% down 42% Normal, but I do not use it 15% Good, but I prefer to buy in other web 24% sites. It is more economic I am just going to buy here, to be able to personalize my iPod with free laser engraving Source: http://www.ipodschool.com 8.6 Selection’s criteria for Distribution Channels’ Members Selection Criteria Apple Store – Direct Sales Financial Conditions Guarantees and safe credits because it belongs to the brand Sales Staff Specialized, trained and prepared Sales Performance Turnover USD $ 3 billion (20% of sales) Product Lines Every product lines are exclusive Reputation Reflect the brands’ personality Market Coverage Restricted in some localities and countries, but it is rising Attitudes Ability to persuade due to the differentiation their products Size Restricted to the ability of sales Experience Differentiation by sensory and emotional experience Managerial factors Even with high operating costs, Apple continues to invest Support services Strictly organized and directed Market Information Available at Apple stores Structure At strategic points of sale Coordination Direct marketing oriented to service’s innovation Control Total control. Retail margins Chart 8.3 8.7 Activities for Build Contracts Products + Services + Communication Apple Company Intermediaries Final Consumer • Produce • Deliver to consumers • Buys regularity • Delivers to • Add information • Communicate with intermediates material others consumers • Discloses the Brand • Communicate the Activities name main attributes of the • Define distribution products to final policies consumers • Prepare contracts • Give terms of • Payments of the • Evaluate and give payments purchases credits and terms of • Review the policies of Transactions payments the commercial actions • Development of • Provides distribution • Keep contact with the trainings structure company • Promotional actions • Areas and • Demonstrate • Establish the targets establishing sales expectations Relationship markets and areas goals • Suggest the company to • Implement Actions known people • Take advantage of the promotional actions Information + Orders + Payments Figure 8.2 8.8 Managment of Distribution Channel Case: Mobimax • "Apple chose us because we are specialize in serving the retail, and also we are the only channel partner specializing in automotive. Also, because there is a great synergy between our products with those from Apple and the excellent results achieved recently in the partnership Mobimax,” said the General Director of Mobimax, Mario W.Okuno. Source: http://www.conectecomunicacao.com.br 8.9 Collectives Actions in Distribution • Initially, this strategy Mobimax invested around £ 1.5 million to distribute approximately 150 points of sale throughout the country. • It is expected to be marketed more than 1,500 pieces per month. • The Mobimax has outsourced all of the storage and logistics to meet quickly and securely across Brazil. Source: http://www.conectecomunicacao.com.br 8.10 Network Approach in Distribution Channels Reasons to use the network approach and Ideas collective actions in distribution channels Apple could turn more attractive the distribution channels offering Strengthening the channels of a single company complementary products such as screen protectors, and covers Certain brands targeted at large retail stores can be distributed along with the Gains from economies of scale to better competition. exploit the assets of the distribution function Distribution to stores and brands with higher value should be individually. Apple can meet its channels to achieve brand awareness events in conjunction with companies in different segments. Joint events Ex: New Product Launching Chart 8.8 Chart 8.8 Chapter 9 Decisions in Sales Force Source: http://llmiqvyn.blogspot.com/2011/05/effectiveness-at-work.html 9.1 Apple’s Business Strategy of Marketing and Sales Force • Apple’s overall strategy is directed towards product differentiation and innovation. • Sole focus on the target market of medium-high class. • Recommendation in relation to the sales force: – Hiring quality staff – Special dedication to the evaluation & performance of the staff – Expertise in operations and opportunities associated with the target market 9.2 Porter’s Strategy and Implication for Sales Force applied in Apple Strategy Implication in the Sales Forces Cost • Market participation in • Reducing Cost middle and high class • High turnover of sales Differentiation • Personalized service with one • Exclusive Training to one attention • Special Reward Program • One of a kind brand with • Excellent pay in exchange for high quality standards, high quality sales effort attractive designs and appealing functions Niche • Selected target market • Expertise in positioning represents 20% of Apple’s themselves as price and market sales leaders Chart 9.1 9.3 Establishing the Segments and Focus on the Performance S Apple’s Positioning a l e H s I G H O p Key Accounts Breaking Beliefs p o L r O t W u “Keep them Happy” “Leave the door open” n i t y High Customer Participation Low Customer Participation CLIENTE CLIENTE Figure 9.1 9.4 Analysis of the Performance of Apple’s Product Source: http://pt.wikinoticia.com 9.5 Efficiency and Effectiveness in the Communication Methods Low Cost per Publicity exposure by customer Institutional Efficiency Navigation Effectiveness High Sales per exposure by customer Figure 9.3 9.5.1 Analysis of the Communication Method Source: http://reflexoesdigitais.com.br 9.6 Principal Decisions and Description of Apple’s sales Decisions of the Organization Description of the Decision • Currently, each representative has goals, and for every goal met 1. Determination of sales there is a reward. Apple needs to continue this system to maintain quotas their sales quota high. 2. Analysis of representative • The sales function is internal in order to continue assuring personal versus employed salesman. training and one-to-one attention for the customers . 3. Specialization or structuring • Sales force is divided by product line; therefore, the seller is well the sales force trained in his area. 4. Definition of the number of • Stipulated according to the markets’ demand. sellers 5. Definition and alignment • Based in leading the growth of projections of the regional market of sales territory is reviewed periodically. 6. Establishment of hierarchical • The hierachy level of sales managament must be veritcal to levels and extent control of maintian effective communication and supervision control. sales management 7. The role of regional sales • Assure the control and sales is being kept. manager Chart 9.2 9.7 Steps for Developing the Plan for Quotas and Incentives Expected key activities: pre-sales, sales Employed Sales Representatives: Representative must be well and after sales inform of their specialized product to sale, In addition, the reprsentative must perform follow-up on the customers. How to Employed Sales Representatives: Periodically training with turn these activities into performance? evaluation to maintain a close relationship. What is the estimated target for Employed Sales Representatives: Maintain the sales quota high on the existing product and increase the sales on the 2011 each index? apples’ devices. How can we Employed Sales Representatives: Emphasizing the training and relate the quota plan and goals with the rewards program with the incentives of increase commision on incentives? the selling of the apple’s devices. Figure 9.4 9.8 Analysis of Apple’s Sales Representatives Department • Apple has created a business environment that is not usual: – Plenty open space for career growth • Channel Sales • Enterprise Sales • Education Sales • Telesales • Systems Engineering • Online Store • Education Marketing – Open minds for innovation – Sales representatives have the luxury of selling products that practically sell themselves 9.9 Analysis of Apple’s Human Resource Department • Responsible for recruiting and developing the best and brightest employees in every division • Supporting them throughout their careers with intensive training programs. • Keeps their team members happy so that they can keep Apple one step ahead of the competition. • Important Note: – Apple would be nothing without its wonderfully dedicated, diverse, and talented staff. 9.10 Remuneration and Incentive Plan Components Objectives in the Remuneration Plan Sales Contest Rewards for achivements in sales expecation. Payment Incentives Store discount on apples’ products Salary & Commissions according to the experience and overall performance the commission per product sold would be determined. Benefits Health Insurance, Dental Plan, Social Security Plan, discounts for vacation, participation in apples’ events and seminars. Chart 9.6 9.9 Collective Action in the Administration of Sales Force Action Proposed Idea for Apple Third party companies specialized in the human resource Increase interaction in sector to give seminars in improving the sales the training campus envirnoment and business atmosphere. In international expansion, permit third party recruiting Non-competing for international representatives in Apple’s retail stores companies share the that are abroad. This permits to ease the cultural barrier enforcement of training and to increase the chances of success in the market and reducing risks. Chart 9.9 Chapter 10 Decisions of Prices Source: http://embracingyourlife.wordpress.com/ 10.1 Apple’s Price Objective • Maximization of sales growth with its high market participation • Focus on quality for profit maximization 1st Trimester of 2011 Sales(appliances/smartphones) Billing Apple $18,6 millions USD $ 11,9 billions USD Nokia $108,5 millions USD $ 9,4 billions USD Source: http://www.zippycart.com/ecommerce-news/2221-ecommerce-growth- strong-projected-to-hit-279-billion-by-2015.html/graph-going-up 10.2 Establishing Price Objectives • Maximizing Sales Growth: – This market segment is not price sensitive – Consumer demands, high quality standard product – Apple satisfies the demand with innovative designing and best of all features that “drops the consumers’ mouth” – Apple’s strategy, increases the sales volume by and are price leader with their innovation • This sets them as high market participation, and enormous profits in the long term Establishing Price Objectives • Maximizing Profits: – Take into account the market demand and products costs • The market is not as price sensitive • The market is a developed market for the company; were, the products sell themselves • Apple has the opportunity to maximize their profits by being price leaders 10.3 Factors of Price’s Sensibility Does Apple Ideas Factors to reduce the price sensitivity apply it? The product is unique: unique value Yes Buyers are less aware of the existence of substitutes Yes Buyers can not compare the quality of substitutes Yes Continue The expense in relation to total income is working small Yes in Apple’s way: be The final benefit of the product is great Yes innovative The product cost is shared with third parties Yes and different. The product is used in conjunction with assets previously bought Yes The product has more quality, prestige and exclusivity: Price & Quality Yes Buyers can not store the product N.A. Chart 10.1 10.4 Impacts in the Demand’s Elasticity Factors Ideas and actions for Apple Apple’s products should be shown as unique and incomparable Substitutes or based on the innovation, quality and differentiation. Apple’s competitors products are pioneers in the technological market. The high price of Apple’s product should be explain with a focus Perception of on the concept that Apple is the best brand for those kind of higher price products Customers will need to be satisfied and always surprise by new Change in products of Apple. The company must give them great variety of purchasing habits size, colors, memory capacity and applications Justification of All increases on price must be explain as an advanced level on the price increase quality and functions of the products Chart 10.2 10.5 Price Decision According to Competitors Perceived value of the Intensity of Competition product Low High Monopoly or differentiated Monopolistic High Oligopoly Competition Pure or perfect Low Undifferentiated oligopoly competition Chart 10.3 Thanks to Apples’ innovation, it became a differentiated oligopoly, where some competitors are placed and were the decision of one company of the sector influenced the decisions of the others. Apple is the leader and it has a great perceived value of the products 10.6 Methods for Price Determination The most accurate methods that could be used by Apple are: Methods Advantages Disadvantages It allow the easily changes on price, according to costs. This is very important to Frequently variations of Markup company because the staff have great price realized by customers knowledge of products cost. In special seasons the prices go up. Apple could assure the return they want. It ignores the price Price of the target They could determine the break-even point elasticity and the return of the business. competitors price Customers perceptions are relevant to Price of Difficulties to estimate the determine price. perceived value real perceived value Large profit margins. Chart 10.4 10.7 Strategy to Adapt the Price Strategy How Apple applies it Differential Price Each product has its price depending on the function ability, features which creates a brand perspective. Discounts Being price leader with high quality standard product, and consumers being not price sensitive. There are no discounts, and there is no need since there is a high inventory turn over. Geographical Price Apples’ price is standard worldwide since their products are segmented to middle and high class being not sensitive to the price. Promotional Price This is set seasonal to incentive sales growth and usually with a bundle. For instance, a purchase of a MacBook and granted a iPod shuffle. Chart 10.5 10.8 Apple’s Performance with its Price Strategy in the market Source: http://www.macrumors.com/2011/06/08/apple-tops-list-of-largest- semiconductor-buyers-in-2010/ 10.9 Initiatives and Responses to Changes in Prices Initiative to reduce price • Apple is price leader in the market • However, there are many competitors in the generic sector and there is economic recession Strategy • Sacrifice a small margin of sales profit • Reduce a small fraction of cost production by taking advantage of globalization Response from the Consumer • Will appreciate the reduction and increase their purchases Source: http://www.macquirelatory.com/Freemasonry%20Truth.htm 10.10 Perspectives of Network and Collective Action in Prices Actions Ideas for Apple Increase the value perceived by the • Continue the innovating designs and customer efficient applications. • Increase the bundle package of products and services. o Offer Buy one get one free o Buy extended warranty and receive one year more Reduced the Price Sensibility • Fidelity Program • International Warranty • Personalized Technical Support • One of a kind Product o Difficult to substitute Reduction of Cost • Expand the production overseas Chart 10.6 Chapter 11 Budget and Investment Analysis Source: http://edvaldocorreablog.blogspot.com/2010/09/orcamento-de-obras-sem- segredos-simples.html 11.1 Features of the Budget 1. Long-term Goal • Sales forecast 2.Plan of long-term results • Budget in communication 3. Short-term plan detailed •Feasibility studies for according to different levels implementation of new channels, relevant liability products and product line extension 4. System of periodic reports • Planning and production control performance for various levels of responsibility Source: Tung, 1994 11.2 Marketing Budget and Sales Forecast Sales Ipod – 9.1 million U.S. $ 24 billion End of June / 2011 Ipad 2 – 5 million Mac – 3,89 million Source: http://oglobo.globo.com/tecnologia/mat/2011/04/15/demanda-pelo- iphone-eleva-previsao-de-vendas-da-apple-diz-analista-924247487.asp 11.3 Prevision Budget of Marketing and Sales 2011 2012 2013 2014 Sales Average $ 12.500.000.000 $ 12.500.000.000 $ 12.500.000.000 $ 12.500.000.000 Prevision Sales Mac Book $ 2.400.000.000 $ 3.120.000.000 $ 3.744.000.000 $ 4.680.000.000 Imac $ 5.000.000.000 $ 6.500.000.000 $ 7.800.000.000 $ 9.750.000.000 Mac mini $ 75.000.000 $ 97.500.000 $ 117.000.000 $ 146.250.000 Mac Pro $ 50.000.000 $ 65.000.000 $ 78.000.000 $ 97.500.000 Mac OS X $ 40.000.000 $ 52.000.000 $ 62.400.000 $ 78.000.000 Ipod shuffle $ 90.000.000 $ 117.000.000 $ 140.400.000 $ 175.500.000 Ipod Nano $ 350.000.000 $ 455.000.000 $ 546.000.000 $ 682.500.000 Ipod Classic $ 240.000.000 $ 312.000.000 $ 374.400.000 $ 468.000.000 Ipod Touch $ 200.000.000 $ 260.000.000 $ 312.000.000 $ 390.000.000 Apple TV $ 100.000.000 $ 130.000.000 $ 156.000.000 $ 195.000.000 Iphone $ 2.475.000.000 $ 3.217.500.000 $ 3.861.000.000 $ 4.826.250.000 Ipad $ 2.100.000.000 $ 2.730.000.000 $ 3.276.000.000 $ 4.095.000.000 Total Prevision $ 13.120.000.000 $ 17.056.000.000 $ 20.467.200.000 $ 25.584.000.000 Incremental Sales $ 620.000.000 $ 4.556.000.000 $ 7.967.200.000 $ 13.084.000.000 Incremental Profit (24% of sales) $ 148.800.000 $ 1.093.440.000 $ 1.912.128.000 $ 3.140.160.000 Table 11.1 11.3.1 Budget of Strategic Planning of Marketing Managment Product Plan Enviromental Packages $ 1.312.000,00 $ 1.000.000,00 $ 500.000,00 $ 600.000,00 Launch of New Products $ 100.000.000,00 $ 100.000.000,00 $ 100.000.000,00 $ 100.000.000,00 Product Innovation $ 400.000.000,00 $ 200.000.000,00 $ 400.000.000,00 $ 200.000.000,00 Total Product Plan $ 501.312.000,00 $ 301.000.000,00 $ 500.500.000,00 $ 300.600.000,00 Communication Plan Advertisement $ 800.000.000,00 $ 1.040.000.000,00 $ 1.248.000.000,00 $ 1.560.000.000,00 Sales Promotion $ 400.000.000,00 $ 520.000.000,00 $ 624.000.000,00 $ 780.000.000,00 Public Relations $ 401.500.000,00 $ 521.950.000,00 $ 626.340.000,00 $ 782.925.000,00 Personal Sales $ 400.000.000,00 $ 520.000.000,00 $ 624.000.000,00 $ 780.000.000,00 Direct Marketing $ 100.000.000,00 $ 130.000.000,00 $ 156.000.000,00 $ 195.000.000,00 Total Communication Plan $ 2.101.500.000,00 $ 2.731.950.000,00 $ 3.278.340.000,00 $ 4.097.925.000,00 Table 11.1 11.3.1 Budget of Strategic Planning of Marketing Management Distribution Plan Investment in Global Network $ 30.000.000,00 $ 39.000.000,00 $ 46.800.000,00 $ 58.500.000,00 Just in Time System $ 400.000.000,00 $ 520.000.000,00 $ 624.000.000,00 $ 780.000.000,00 Expansion of Apple Stores $ 50.000.000,00 $ 65.000.000,00 $ 78.000.000,00 $ 97.500.000,00 Return Plan with Distributors (1% of Total Previsions) $ 131.200.000,00 $ 170.560.000,00 $ 204.672.000,00 $ 255.840.000,00 Total Distribution Plan $ 611.200.000,00 $ 794.560.000,00 $ 953.472.000,00 $ 1.191.840.000,00 Sales Force Plan Incentives to Sales (1% of Total Provisions) $ 131.200.000,00 $ 131.200.000,00 $ 131.200.000,00 $ 131.200.000,00 Trainig $ 50.000.000,00 $ 50.000.000,00 $ 50.000.000,00 $ 50.000.000,00 Total Sales Force Plan $ 181.200.000,00 $ 181.200.000,00 $ 181.200.000,00 $ 181.200.000,00 Total Budget PGEM $ 3.395.212.000,00 $ 4.008.710.000,00 $ 4.913.512.000,00 $ 5.771.565.000,00 Table 11.1 11.4 Justification of Budget •The budget reflects the expected growth of Apple, according to the sales expectancy that the company has invested during the previous periods. •The results are always compared with the net income. 11.5 NPV – Net Present Value Cash Flow 2010 2011 2012 2013 2014 (in $USD) 0 6.000.000.000 7.800.000.000 10.140.000.000 13.689.000.000 NPV = USD$21.019.936.877 Requiered performance = 24% per year Figure 11.1 11.6 IRR – Internal Return Rate Cash flow 2010 2011 2012 2013 2014 (in $USD) -10.000.000.000 6.000.000.000 7.800.000.000 10.140.000.000 13.689. 000.000 NPV = USD$21.019.936.877 IRR = 69,46% Figure 11.2 Chapter 12 Control and Management of Strategic Planning of Market Management Source: http://www.sprucebugs.com/BusinessPlanning.htm 12.1 Important Issues for Implementation of Strategies Element Distribute Planning and rewards Specific Task and • Evaluate every trimester, the sales agent incentives that are strongly linked performance Management of Marketing to the objectives and strategy Invite all employers for a business evaluation meeting to incentive all employees to be aware of the companies progression. Top employees and sales agent s’ be given a bonus. Keep exercising their strategic • Main the intensity level of investment in research & leadership development First, resulting in more innovation in product line for remodeling their products every year. This leads for Apple continue being leaders in their competition. Chart 12.1 12.2 The Transformation Plan in Project Management Project A Create new line of products (Interactive Television) B Brand Expansion (computer and electronic accesories) C Improve Packaging (Ecological raw materials) D Expand Apple Retail Stores in US and Worldwide Market E Creating and expanding a network of franchises F Investment in social responsability G Reduction in production cost H Joint Action with other companies Figure 12.1 12.2.1 Tools for Project Prioritization Urgency (Need for Importance (The Project/Actions speedy Impact Result of AxB implementation) Apple) A 4 8 32 points B 6 6 36 points C 9 8 72 points D 10 10 100 points E 8 10 80 points F 7 8 56 points G 8 9 72 points H 6 9 54 points Chart 12.2 12.2.2 Fundamental Topics in Project Management Details of the Developed Plan Coordinator and The regional manager must continue the effective management control for each region Team assuring that the strategies are being complied. • Maintain the high quality standard of brand recognition of their products Objectives • Expand the scope and range of products and target markets • Reduce costs through partnerships with other companies and expansion worldwide • Testing the acceptance of new products • Check the performance of new packaging Scope • Check the performance of its own stores and franchised stores • Check the return on investments in communications Result Improve market share participation. Expected It is already implemented and must continue the progression Cronogram Market Share: increase a 15% participation in 2012 Control Points Quality: Maintain the high quality standards Cost: reduce the production cost in packaging at least 7% by 2013 Costs: R & D, packaging, logistics, training, expanding own stores, advertisement, direct Budgets market Must be perspective with the economic situation and take advantage of the production Contingency Plan cost in the developing countries. Chart 12.3 12.2.3 Timeline of Strategic Projects Activity 2011 2012 2013 2014 A x x B x x x x C x x x x D x x x x E x x x x F x x x x G x x H x x I x x Figure 12.2 12.2.4 Inter-relationship between Projects Activity A B C D E F G H A 0 x x x B x 0 x x x x C x x 0 x x x D 0 x E x 0 x F x x 0 G x x 0 H x x x x 0 Chart 12.4 12.2.5 Control Project Management Project Responsible Period (years) A Director of R&D 2 B Director of R&D 2 C Director of R&D 2 D Regional Director, CEO 4 E Regional Director, CEO 4 F Regional Director, CEO 4 G Director of Production, 4 CEO H Regional Director, CEO 4 Chart 12.5 Bibliography • Apple . Web. 01 April 2011. http://www.apple.com/. • "Apple Reports First Quarter Results." Apple. Apple Inc., 25 January 2010. Web. 01 April 2011. http://www.apple.com/pr/library/2010/01/25results.html. • Blackberry. Web. 01 April 2011. http://www.blackberry.com/. • Microsoft. Web. 01 April 2011. http://www.microsoft.com/. • "MSN Money." Money Central. Microsoft, 01 April 2011. Web. 01 April 2011. http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?lstStatement=Income&symb ol=US%3aAAPL&stmtView=Ann. • Consilvio, Steve. "Monograph on the Apple Business Model." The Apple Loop. 2003. Web. 10 April 2011. <http://www.theappleloop.com/Home/monograph.html>. • Fava Neves, Marcos. Planejamento e Gestão Estratégica de Marketing. 1st. São Paulo: Editora Atlas S.A., 2005. 17-207. Print. • Rosenman, Stephen. "It's All About Apple's R&D."Seeking Alpha (2008):. Web. 01 April 2011. http://seekingalpha.com/article/69148-it-s-all-about-apple-s-r-d.
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