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Apple iPhone Marketing Plan

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					                   Arab Academy for Science, Technology
                   and Maritime Transportation
                   MBA Group H




Apple iPhone Marketing Plan
Group Assignment
                             Ahmadullah El-Hadidy
                             Basem Gaber
                             Hany Abdulwahab
                             Kareem Raslan
                             Moustafa Hanafy
                             Tamer Yousif
                             Laxmikant Banjarey
Apple iPhone Marketing Plan
•   Executive Summery
•   Situational Analysis
•   SWOT Analysis
•   Marketing Objectives
•   Marketing Strategy
•   Implementation
•   Budget
•   Control
Apple iPhone Marketing Plan
                                                                                   •   Executive Summery

  Executive Summery
                                                                                   •   Situational Analysis
                                                                                   •   SWOT Analysis
                                                                                   •   Marketing Objectives
  The Past – Steve Jobs, Steve Wozniak and Ronald Wayne established Apple          •   Marketing Strategy
  on April 1, 1976 in order to sell the Apple 1 Computer Kit that was hand built   •   Marketing Research
  by Steve Wozniak. The Apple 1 was sold as a motherboard (with CPU, RAM           •   Implementation
  and basic textual video chips) – less than what is considered a personal         •   Budget
  computer today. Apple was responsible for creating the desktop publishing        •   Control
  market due to their innovative programmes, PageMaker and LaserWriter.
  Between 1983 and 1996 Apple experimented with a number of failed
  consumer target products including digital cameras, portable CD players,
  speakers, video consoles and TV appliances. Market share and stock prices
  decreased. In 2001, Apple introduced the iPod portable digital audio player.
  The product was phenomenally successful – over 100 million units were sold
  within 6 years.
Apple iPhone Marketing Plan
                                                                                •   Executive Summery

  Executive Summery
                                                                                •   Situational Analysis
                                                                                •   SWOT Analysis
                                                                                •   Marketing Objectives
  The Present – January 2007, Steve Jobs, the CEO and Co-Founder of Apple,      •   Marketing Strategy
  announces that Apple Computer Incorporated would now be known as Apple        •   Marketing Research
  Inc. He also reveals the long anticipated iPhone, a combination of an         •   Implementation
  Internet-enabled smartphone and the iPod. In June 2008, he announces that     •   Budget
  the iPhone 3G would be released in July 2008, this newer version added        •   Control
  support for 3G Networking and assisted GPS navigation, among other things.

  The Future – Apple plans on focusing on satisfying personal consumer
  demands rather than merely fulfilling a demographic requirement as well as,
  improving performance and stability rather than introducing new features
  when releasing new versions of any product.




                                                                                Think Different
Apple iPhone Marketing Plan
                                                                                    •   Executive Summery

  Executive Summery
                                                                                    •   Situational Analysis
                                                                                    •   SWOT Analysis
                                                                                    •   Marketing Objectives
 The iPhone targets consumers who need to store information and                     •   Marketing Strategy
 communicate or people who want entertainment on the go. Apples target              •   Marketing Research
 segments consist of professionals, students, corporate users, entrepreneurs,       •   Implementation
 and health care workers. Currently, the market for high-end phones like the        •   Budget
 Apple iPhone is small. Few people want Internet, video, and PDA features in        •   Control
 one device because of the high price. The smart phone market is still relatively
 small compared with general phone market. The market will rapidly increase in
 coming years due to lower prices and greater power.
Apple iPhone Marketing Plan
                                                                        •   Executive Summery

  Situational Analysis
                                                                        •   Situational Analysis
                                                                        •   SWOT Analysis
                                                                        •   Marketing Objectives
                                                                        •   Marketing Strategy
 Political Situation                                                    •   Marketing Research
 • Taxation is something that governments put and Apple should be       •   Implementation
   study this as country by country case to anticipate profitability,   •   Budget
   and pricing strategy.                                                •   Control
 • Importing laws in the world with GATT are in favor of trading.
 • Countries are very variable in stability of, so we should study
   each country case by case.



 Economical Situation
 • Economical growth world wide is in a big recession which need
   careful manipulation
 • Potentiality of the market is decreasing but it is higher than any
   others in the Telecom sector.
Apple iPhone Marketing Plan
                                                                         •   Executive Summery

  Situational Analysis
                                                                         •   Situational Analysis
                                                                         •   SWOT Analysis
                                                                         •   Marketing Objectives
                                                                         •   Marketing Strategy
 Socio-Cultural Situation                                                •   Marketing Research
  • Population growth leading to expansion of the sector needs for       •   Implementation
    cell phones.                                                         •   Budget
  • People depend more an more on mobile communication                   •   Control
    everywhere.
  • There is educational growth in the world.
  • Culture’s perception of the technological devices is positive
    worldwide.
  • Literacy & illiteracy level is not affecting using cell phones but
    affecting high technological cell phones, this fact needs to be
    considered.
  • Acceptance of imported products in some countries are less if
    there is local provider
  • There are different social views that may affect product should
    be considered (e.g.: Boycotting American products in the
    Islamic world)
Apple iPhone Marketing Plan
                                                                      •   Executive Summery

  Situational Analysis
                                                                      •   Situational Analysis
                                                                      •   SWOT Analysis
                                                                      •   Marketing Objectives
                                                                      •   Marketing Strategy
 Technological Situation                                              •   Marketing Research
 • Level of technology in the world is increasing.                    •   Implementation
 • Internet level of awareness & usage for individuals & industrial   •   Budget
   aspect are increasing worldwide                                    •   Control
 • Fixed phone lines capacity and development attempts.
 • New technologies in the cell phones are increasing.
 • Future plans for technological linkage between cities,
   universities, colleges, hospitals and other institutes are
   increasing and can be connected to cell phones
 • Level of usage of the E- Technology (online bidding, billing,
   complaints, blogging etc) are high and trendy.
Apple iPhone Marketing Plan
                                                                      •   Executive Summery

  Situational Analysis
                                                                      •   Situational Analysis
                                                                      •   SWOT Analysis
                                                                      •   Marketing Objectives
                                                                      •   Marketing Strategy
                                                                      •   Marketing Research
  Competition Situation                                               •   Implementation
  • There are 19260 cell phone producer in the world, but there are   •   Budget
    more than 15 big companies competing at the world level Market.   •   Control
Apple iPhone Marketing Plan
                                                                   •   Executive Summery

  Situational Analysis
                                                                   •   Situational Analysis
                                                                   •   SWOT Analysis
                                                                   •   Marketing Objectives
                                                                   •   Marketing Strategy
                                                                   •   Marketing Research
  Environmental Situation                                          •   Implementation
  • The global concern of the Global Warming issue & other         •   Budget
    pollution effects concerning the packaging material and        •   Control
    radiation of the cell phones
  • The demand of the international environmental approvals is a
    must (if there is any)




  Sales Situation
  Cell phones industries are one of the most
  profitable industries everywhere and the
  Market is increasing
Apple iPhone Marketing Plan
                                                                       •   Executive Summery

  S/O Analysis
                                                                       •   Situational Analysis
                                                                       •   SWOT Analysis
                                                                       •   Marketing Objectives
                                                                       •   Marketing Strategy
 Strengths                                                             •   Marketing Research
 Innovative – The iPhone has an innovative touch screen. It also has   •   Implementation
 many functions of other mobile products all in one device             •   Budget
                                                                       •   Control
 Compatibility –The phone will work with iTunes and with other
 Mac/Apple products and OS software tools which means limitless
 potential for upgradeability.

 Ease-of-Use – The all-new touch screen interface recognizes multi
 finger gestures, just as the human hand normally behaves.
Apple iPhone Marketing Plan
                                                                        •   Executive Summery

  S/O Analysis
                                                                        •   Situational Analysis
                                                                        •   SWOT Analysis
                                                                        •   Marketing Objectives
                                                                        •   Marketing Strategy
  Strengths                                                             •   Marketing Research
    Brand awareness – Apple is well known for cool essential            •   Implementation
    gadgets like the iPods along great technological innovations like   •   Budget
    the original Macintosh.                                             •   Control
Apple iPhone Marketing Plan
                                                                 •   Executive Summery

  S/O Analysis
                                                                 •   Situational Analysis
                                                                 •   SWOT Analysis
                                                                 •   Marketing Objectives
                                                                 •   Marketing Strategy
  Strengths                                                      •   Marketing Research
    Price – iPhone would be sold at a reasonable price for its   •   Implementation
    value.                                                       •   Budget
                                                                 •   Control

    Quality – Scratch resistant screen – durable and light
    metallic finish - software suite resistance to computer
    viruses.
Apple iPhone Marketing Plan
                                                                       •   Executive Summery

  S/O Analysis
                                                                       •   Situational Analysis
                                                                       •   SWOT Analysis
                                                                       •   Marketing Objectives
                                                                       •   Marketing Strategy
 Opportunities                                                         •   Marketing Research
 Increasing demand and expansion to a new target segment –             •   Implementation
 As technology advances and smart phones get cheaper Apple will        •   Budget
 attract consumers and get iPod users to upgrade to iPhones.           •   Control

 Upgradeable – iPhone software allows new exciting features to be
 brought in which take advantage of the touch screen ability. Future
 versions will also be hardware upgradeable.
Apple iPhone Marketing Plan
                                                                      •   Executive Summery

  S/O Analysis
                                                                      •   Situational Analysis
                                                                      •   SWOT Analysis
                                                                      •   Marketing Objectives
                                                                      •   Marketing Strategy
 Opportunities                                                        •   Marketing Research
 Partnerships – Apple can collaborate with many powerful global       •   Implementation
 mobile phone companies to flood the market with iPhones, which       •   Budget
 reduces costs in marketing and increases revenue through long-term   •   Control
 agreement deals.
Apple iPhone Marketing Plan
                                                                                                                     •   Executive Summery

  W/T Analysis
                                                                                                                     •   Situational Analysis
                                                                                                                     •   SWOT Analysis
                                                                                                                     •   Marketing Objectives
                                                                                                                     •   Marketing Strategy
 Weaknesses                                                                                                          •   Marketing Research
 Image – The Apple brand is not targeted towards business people                                                     •   Implementation
 and does not have a reputation as being compatible with the corporate                                               •   Budget
 world.                                                                                                              •   Control

 Price – Apple does not yet offer lower priced models for more cost
 conscious consumers.

 User Interface – Touch screen interfaces suffer from the problem of
 “gorilla arm”*


 * Gorilla arm is a side-effect that humans face when using touch screens for long times as humans are not built
 to hold their arms at waist or head-height, making small and precise motions. After a short period of time, cramp
 may begin to set in, and arm movement becomes painful and clumsy. This is now considered a classic
 cautionary tale to human-factors designers.
Apple iPhone Marketing Plan
                                                                           •   Executive Summery

  W/T Analysis
                                                                           •   Situational Analysis
                                                                           •   SWOT Analysis
                                                                           •   Marketing Objectives
                                                                           •   Marketing Strategy
 Threats                                                                   •   Marketing Research
 Increased competition – Smart phones are easier to make now               •   Implementation
 more than ever. More companies may enter the market, and                  •   Budget
 competitors or even Apple contractors can maneuver around patents to      •   Control
 create similar devices.

 Downward pricing pressure – The iPhone is marketed as a high-
 end phone, but phone prices are almost certainly going to fall when
 other companies undercut the price of iPhones.

 Difficulty expanding into Asian market – There is less hype and
 interest in Asia since smart phones are better known and already widely
 used.
Apple iPhone Marketing Plan
                                                                           •   Executive Summery

  W/T Analysis
                                                                           •   Situational Analysis
                                                                           •   SWOT Analysis
                                                                           •   Marketing Objectives
                                                                           •   Marketing Strategy
 Threats                                                                   •   Marketing Research
 Competition (Palm) - Palm has the longest history in PDA market           •   Implementation
 and has experience-developing software for mobile devices. It is also a   •   Budget
 well-known brand for businesspeople. Existing software is well            •   Control
 established and compatible with many products for this market. The
 market is familiar with Palm products; significant switching costs are
 involved in going to an iPhone. Palm can add many similar
 capabilities to their products that match the iPhone and expand to a
 wider market through lower cost and higher-power products.
Apple iPhone Marketing Plan
                                                                      •   Executive Summery

     Marketing Objectives
                                                                      •   Situational Analysis
                                                                      •   SWOT Analysis
                                                                      •   Marketing Objectives
                                                                      •   Marketing Strategy
 •   Set an aggressive buy achievable objective for the first and     •   Marketing Research
                                                                      •   Implementation
     second years of market :
                                                                      •   Budget
           1. First-year Objectives - We are aiming for a 2 percent
                                                                      •   Control
               share of the U.S and U.K. PDA/Phone market through
               unit sales volume of 445,000.
           2. Second-year Objectives - are to achieve a 10 percent
               share based on sales.

 •   Extend on the Apple brand name and link to the established
     meaningful positioning.

 •   Extend on Apples image of innovation, quality, and value.

 •   Measure the awareness and response in order to make
     adjustments to the marketing campaigns as necessary.
Apple iPhone Marketing Plan
                                                                         •   Executive Summery

  Marketing Objectives
                                                                         •   Situational Analysis
                                                                         •   SWOT Analysis
                                                                         •   Marketing Objectives
  Target Market                                                          •   Marketing Strategy
                                                                         •   Marketing Research
                                                                         •   Implementation
  •   Differentiate the iPhone from other PDA’s on the market.           •   Budget
                                                                         •   Control
  •   Primary customer targets is the middle-upper income
      professional to coordinate their busy schedules and communicate
      with colleagues, friends and family.

  •   Secondary consumer targets are high school, college and graduate
      students who need one portable multifunction device.

  •   Primary business target is to partner with :
           • large cell phone service providers, AT&T, Verizon,
               Sprint and Cellular One
           • large enterprise software firms where information is
               critical to the end user.
Apple iPhone Marketing Plan
                                                                                •   Executive Summery
  Marketing Objectives                                                          •
                                                                                •
                                                                                    Situational Analysis
                                                                                    SWOT Analysis
  Target Market (cont.)                                                         •
                                                                                •
                                                                                    Marketing Objectives
                                                                                    Marketing Strategy
                                                                                •   Marketing Research
  •   Secondary business target is mid-to mid-size corporations that            •   Implementation
      want to help managers and employees stay in communication or              •   Budget
      access critical data on the go.                                           •   Control

  •   Market segment will consist of companies with $10-$50 million in
      annual sales.

  Positioning
  •   Using product differentiation, positioning the iPhone as the versatile,
      convenient, value-added device for personal and professional use.

  •   Focus on the convenience of having one device for communication,
      but also music, pictures, and video, and full Internet access.

  •   The iPhone will be promoted as both professional and hip.
      .
Apple iPhone Marketing Plan
                                                                         •   Executive Summary

  Marketing Mix Strategy
                                                                         •   Situational Analysis
                                                                         •   SWOT Analysis
                                                                         •   Marketing Objectives
                                                                         •   Marketing Strategy
 Product                                                                 •   Marketing Research
 •Full year warranty along with an optional three-year Apple Care        •   Implementation
 warranty                                                                •   Budget
                                                                         •   Control
 •Same taste as all other Apple products

 •Special edition version to be launched (including the iPhone Beatles
 edition celebrating their 40th anniversary)

 •Launching a cheaper version in 2008 with less
 advanced features along with a more
 advanced version for professional use

 •Adding the following features to the iphone
 (large disk storage capacity, lower weight,
 thinner device, long battery life, 4G wireless,
 GPS and improved camera)
Apple iPhone Marketing Plan
                                                                       •   Executive Summary

  Marketing Mix Strategy
                                                                       •   Situational Analysis
                                                                       •   SWOT Analysis
                                                                       •   Marketing Objectives
                                                                       •   Marketing Strategy
 Price                                                                 •   Marketing Research
 •Set the base model at a cheap price of $349                          •   Implementation
                                                                       •   Budget
 •A more advanced model for $399                                       •   Control

 •Special limited edition Beatles iPhone for special prices

 •Generally lower our prices to ensure we establish market dominance
 in as short of time as possible
Apple iPhone Marketing Plan
                                                                       •   Executive Summary

  Marketing Mix Strategy
                                                                       •   Situational Analysis
                                                                       •   SWOT Analysis
                                                                       •   Marketing Objectives
                                                                       •   Marketing Strategy
 Place                                                                 •   Marketing Research
 •Massive rollout worldwide at all reputable major retailers           •   Implementation
                                                                       •   Budget
 •Massive rollout Online, Showrooms and in all cell phone providers    •   Control

 •All Apple Stores the Apple website will dedicate themselves to the
 iPhone

 •Eye catching displays will be found at all physical
 stores featuring the iPhone to make the product
 stand out from the pack

 •Apple Stores will have the iPhone on display a full
  month before its worldwide release
Apple iPhone Marketing Plan
                                                                     •   Executive Summary

  Marketing Mix Strategy
                                                                     •   Situational Analysis
                                                                     •   SWOT Analysis
                                                                     •   Marketing Objectives
                                                                     •   Marketing Strategy
 Promotion                                                           •   Marketing Research
 •Integrate Apple message of revolutionary communications and        •   Implementation
 audio/visual experience together in all media advertisements        •   Budget
                                                                     •   Control
 •Differentiate the iPhone against others is the touch screen
 functionality

 •Emphasize Apple brand prominently and associate the
 iPhone with the iPod’s groundbreaking lineage

 •Original but tasteful advertisements at the same time

 •A massive TV campaign is planned before launching the iPhone
 featuring a soon to be legendary ad to be the talk of the country

 •Advertising will be appearing on a regular basis to
 maintain general public awareness
Apple iPhone Marketing Plan
                                                                         •   Executive Summary

  Marketing Research                                                     •
                                                                         •
                                                                             Situational Analysis
                                                                             SWOT Analysis
                                                                         •   Marketing Objectives
 •Four age groups will be targeted: 15-20 years, 20-25 years, 25-45      •   Marketing Strategy
 years, and 45 years and up                                              •   Marketing Research
                                                                         •   Implementation
 •High School and College aged people will demonstrate social uses       •   Budget
                                                                         •   Control
 •The 25-45 years group will be used to determine business application
 and social/personal use

 •The 45 years and above will give us a plan to market to more senior
 well-refined group
Apple iPhone Marketing Plan
                                                                           •   Executive Summary

  Marketing Research
                                                                           •   Situational Analysis
                                                                           •   SWOT Analysis
                                                                           •   Marketing Objectives
 •This research will be done through surveys (via email campaign           •   Marketing Strategy
 through portals such as, iTunes and other on-line application             •   Marketing Research
 developed for the iPhone) and interviews (in Apple stores) with the       •   Implementation
                                                                           •   Budget
 same age groups listed before
                                                                           •   Control
 •To bring the iPhone to the front of the business world it is important
 to research different ways to grow the 15-25 year old group into
 business uses of the product

 •Brand awareness will be an important tool in taking the Apple brand
 from "social cool" to "business cool".
Apple iPhone Marketing Plan
                                                                        •   Executive Summary

  Marketing Research
                                                                        •   Situational Analysis
                                                                        •   SWOT Analysis
                                                                        •   Marketing Objectives
 •We will ask for feedback on iPhone features, and implement those      •   Marketing Strategy
 changes most important to the end user in the next generation iPhone   •   Marketing Research
                                                                        •   Implementation
                                                                        •   Budget
 •We will allow users themselves to design their own ideal iPhone on-
                                                                        •   Control
 line and use any useful ideas to further refine future iPhone models

 •We will continuously scour the Apple fan websites to understand
 what the Mac faithful are saying, as they are our best customers.
Apple iPhone Marketing Plan
                                                                     •   Executive Summery

  Implementation
                                                                     •   Situational Analysis
                                                                     •   SWOT Analysis
                                                                     •   Marketing Objectives
                                                                     •   Marketing Strategy
 Compensation system                                                 •   Marketing Research
 •workers $5 incentive pay for every non reject phone they produce   •   Implementation
 •$10 per phone six sigma quality program                            •   Budget
 •each worker $5000 each year for best practice training             •   Control


 use control measures to closely monitor
 quality and customer service satisfaction

 consumers can contact the main headquarters
 about any possible technical problems – by using
 Apple Customer Service Bar and a customer service phone number
 stored in the phone book
Apple iPhone Marketing Plan
                                                                         •   Executive Summery

  Implementation
                                                                         •   Situational Analysis
                                                                         •   SWOT Analysis
                                                                         •   Marketing Objectives
                                                                         •   Marketing Strategy
 In case of slow sales                                                   •   Marketing Research
 •Offer iPhone to customers who have purchased other Apple products      •   Implementation
 $10 per phone six sigma quality program, which will lead to:            •   Budget
                                                                         •   Control
       •demonstrate the product for consumers, it will promote synergy
       and lure buyers.

       •develop deep relationships with two very different segments:
       those who have it and those who aspire
Apple iPhone Marketing Plan
                                                                              •   Executive Summary

  Budget
                                                                              •   Situational Analysis
                                                                              •   SWOT Analysis
                                                                              •   Marketing Objectives
  •Our break-even analysis assumes wholesale revenue of $500 per unit
                                                                              •   Marketing Strategy
  variable cost of $250 per unit and est. fixed cost of $50 million. Based    •   Marketing Research
  on these assumptions the break-even calculation is $50 million              •   Implementation
  divided by $500 minus $250 equals 200,000 units sold.                       •   Budget
                                                                              •   Control
  •Break-even calculations indicate that Apple will become profitable
  after the sales volume exceeds 200k. After the first year Apple will
  make a profit of 1.25 billion minus 50 million in fixed costs.

  •Recommended price is $350. The markup is 40 percent.

  •It is predicted that sales volume will increase at least 60 percent from
  this change; this will decrease the impact of fixed costs and improve
  opportunities to increase our production scale, which will further
  improve profits in the long run
Apple iPhone Marketing Plan
                                                                           •   Executive Summery

  Control
                                                                           •   Situational Analysis
                                                                           •   SWOT Analysis
                                                                           •   Marketing Objectives
                                                                           •   Marketing Strategy
 To plan our strategy we will meet monthly with the board of Apple,        •   Marketing Research
 present our information, and make a proposal for continued marketing      •   Implementation
                                                                           •   Budget
 efforts. Before each meeting our team will meet in private, with each
                                                                           •   Control
 person presenting their own proposal based on the information they
 have learned. After the initial proposals, we will vote on the best one
 or come to a compromise. The final proposal sent before Apple is the
 result of that meeting.