Looking for Apple marketing plan example? Check this case study! It contains a detailed marketing plan for Apple iPhone Xi: market segmentation, budget, distributing strategy, advertising campaign, SWOT analysis, etc.
Apple Case Study: Executive Summary
Apple Incorporation is preparing to market its Smartphone product line named the iPhone Xi model in the maturing market. The Indian market is promising due to the continued economic growth despite the dominance of Samsung, Nokia and HTC Corporation.
The company can compete because the product offers unique features at an acceptable price. We are targeting certain market segments exploiting the opportunities created by the increasing demand for Smartphone with state-of-art features, entertainment, information storage capabilities and other new technologies.
The marketing aim is to achieve a 20 percent market share in the next five years and the financial aim is to increase profitability by 15 percent through increased sales. This will be accomplished via a marketing plan that has been well researched on and the opportunities and problems identified.
The marketing mix involves the 4Ps marketing strategies that we plan to use in positioning our product. The project will be steered by a specific organizational structure of experienced marketing and sales officers. The success will be measured through measurement controls and close monitoring of the implementation process. Nevertheless, we anticipate changes in the market trends and have come up with effective contingency plans.
Apple targets to be the leader in the development and utilization of technology. The company is a technology developer and uses the same to gain market share. By frequently introducing new products, it attracts the attention of consumers. The company takes advantage of this strategy by ensuring that its customers are informed of any development taking place in the market. Apple takes advantage of this opportunity and ensures that it makes profits out of it.
Apple Inc.: Company Background
Apple Retail Stores are operated by Apple Inc dealing in consumer and computers electronics. The company sells software, Smartphone, e-Book readers, Electronic music, Computers and other consumer electronics. Apple Inc was founded by Steve Jobs in 1977. Even though many products were developed under his watch including PowerBook G3 and iMac as well as online store, the company continues to rely on electronics and box computer to prevail in the market and make sales.
The company has been bringing out cut-price versions of its Smartphone. Looking even further out, the company is staking its future on new products that could take electronics and computing power ever deeper into the routine lives of consumers. By the time Jobs passed on, the company had advanced its technology into the market by ensuring that it integrated disruptive marketing into the computer platform.
Apple Marketing Analysis: Current Situation
Apple Inc. has experience in electronic market and is bound to enter into the already matured Smartphone market in India. Smartphone are increasingly becoming popular in the Indian market with the increasing economic growth. Forecasts suggest that the sales of Smartphone will grow by more than 30% in the next five years (Juniper Research 5). Market competition is therefore stiff despite the increasing demand for Smartphone.
Electronic industry is also strengthening while low prices are pushing down profitability. In fact, consumers are increasingly becoming more sensitive to technology integration, prices and state-of-art products than ever before. However, the Indian electronic market represents a large part of the economy with sales of over 15 million unit phones (Juniper Research 8). In order to gain a significant market share in the changing environment, Apple must differentiate its products while targeting specific segments of consumers.
Apple Market Segmentation
Apple market consumers are busy people who like to use Smartphone for communication, entertainment, information storage and exchange. The target segments in the marketing plan include professionals, students and entrepreneurs. These segments have different needs as illustrated in Table 1.
Table 1
Apple Product Review
Apple will be developing the Smartphone specifically tailored to the emerging needs of consumers in the Indian market. The offering will have all the famous features of a genuine Apple. Steinhardt emphasizes that product features determine the unique selling proposition (USP) of a business (235). Therefore, it will be necessary to ensure that the quality built in India is our actual unique selling proposition as well as a symbol of quality. The Apple Smartphone models will have a variety of features including:
- Touch screen options
- Voice recognition hands-free operation
- Digital music and cameras
- Wireless internet access and instant messaging
- Connectors for multiple applications
- In-built memory for information storage
- Global positioning system
- 3-G networks
- Linux operating system
The projected sales during the first year are 350,000 Smartphone with most of them occurring in the urban centers. In the following year, we plan to introduce two other models for the executives and low income (rural) consumers. The executive model will have features like global positioning and internet connections. The rural model will have features like reinforced coverings and fibered keypad.
Competitive Review
The growing technology in manufacturing and the price threats has made electronic firms to continually add new features and lower prices to Smartphone (Einhorn and Srivastava 38). The earlier establishment of strong brands and cheap cell phones by competitors such as the Chinese Mobile is a factor to consider. The major competitors are arranged in table 2 according to their market shares.
Table 2
Porter’s 5 Forces Analysis of Apple
In the recent years, the electronic industry has been disrupted by entrants who offer Smartphone at very low prices. When the company opened its doors into the Smartphone industry, it offered the consumers cutting edge technology that disrupted the electronic industry. The products changed the platform requiring competitors to change their marketing strategies in order to remain relevant in the industry. There is intense rivalry between Apple and the competitors. The Smartphone industry presents the company with competitive forces.
There is also the threat from new entrants. The entrants present a threat to the existing market. It will require Apple to invest huge amounts of money to gain economies of scale to make the entry of new firms almost impossible. This will help the company to maintain its domination of the market through the new Smartphone. Any new company will have to integrate technological advancements in the software markets.
The threat of substitute products is a challenge that Apple faces. All the competitors have a huge range of computing designs developed for different types of users. This requires the company to be continually innovative and be conscious of the prices. The user will be left with the choice to decide whether their Smartphone are handheld computers or not.
The bargaining power of the buyer is also important for Apple to consider. The company focuses on developing differentiated products. This makes the products to be outstanding and the customers are offered products that suit individual tastes. This makes the customers to be less price-sensitive when buying products such as iPod, iPhone and Macintosh as it is difficult to find a product with same features and style.
Apple uses a huge variety of suppliers in the manufacturing of Smartphone and portable music players. This translates to less bargaining power by suppliers since it is not limited to a single supply of computer components. To illustrate this, Apple uses both ATI and NVIDIA for its video cards. This leaves the company with the choice of the supplier to go to.
Despite the intense competition, Apple can win a substantial market share and strengthen its brand image among the targeted market segments. The 3-G network system and touch interface is an important point of differentiation in the competition.
Offering a variety of Smartphone models is also a strong competitive edge to win a wide customer base (Hitt, Ireland and Hoskisson 121). In addition, the Apple brand is recognized across the world and can use this position to compete. The company will be required to emulate or exploit the strengths and weaknesses of the closest competitors as indicated in the competitor profile matrix (see appendix).
Channels & Logistic Review
Apple India distributes its products through a network of Smartphone dealers situated across the major cities. This distribution system has particularly enabled the company to offer its products in all parts of the country. The company is also enabled to lower the inventory costs as the final products are immediately transported to the dealers’ stores. Besides, the company offers its Smartphone from its stores across major cities.
However, the distribution system denies the sales executives a chance to learn the needs of consumers from the ground level which can enable the company to improve on the quality (Bohlander and Snell 16). Some of the dealers distribute products of other manufacturers which conflicts the use of our USP as a vehicle to increase the market share.
An effective distribution system is whereby the company opens its own distribution subsidiaries across the country. These will serve as the outlets for the awareness campaign as well as the shopping places for the local customers.
Apple SWOT Analysis
Apple has a number of influential strengths which can be utilized to develop its business in India, but the key weakness is the weak brand image. An opportunity arises in the increasing demand for Smartphone as a result of the growing economy (Research and Markets 1). The key pressure is the stiff competition from Smartphone manufacturers and the threat for low priced cell phones. The significant strengths, weaknesses, opportunities, and threats are summarized in table 4.
Table 3
Strengths
Apple can build on three important strengths:
- Strong brand portfolio: Apple Inc. has a wide range of cell phones that are recognized and respected across the world. The iPhone Xi in particular comprise of a variety of models designed according to the varying needs of the customers.
- Robust production capabilities: Being the largest manufacturer of Smartphone in the world, the firm suggests its powerful production capabilities. This is important in ensuring a balance in the demand and supply of the product.
- Strong focus on R&D: The active involvement in research and development can ensure that the firm differentiates its product through innovation. This strength is also imperative for enhanced quality as the Unique Selling Propositions.
Weaknesses
The late entry of Apple into the Indian market has resulted into the observation of some weaknesses in the firm. These are as discussed below:
- Sluggish performance: Apple Inc. is slow in performance within the Indian market as compared to other competitors. The focus of the firm has been on the large cities which deny them the opportunity to exploit the upcoming rural people.
- Weak brand image: As a result of the late entry, the brand image of Apple is very weak among the Indian consumers. This weakness can be very effective as the brand image is crucial in a competitive environment.
- Poor cash flows: During the growth stage in the product lifecycle, Apple Inc invested in a massive awareness campaign. This funding has caused an imbalance between the expenses and returns achieved from sales.
Opportunities
Apple can take the advantage of several market opportunities, including:
- Accelerating demand for Smartphone: The Indian economic explosion has resulted in increased income and hence the change of consumer behavior. Most of the low income earners who could not have afforded to buy a Smartphone have enough to do it now. Indeed, the average income is expected to increase continually in the next years.
- Increasing use of the internet: Apple can exploit this opportunity by combining the production capabilities with research and development. This demand is increasing yet very few manufacturers are responding to it.
- Continued economic growth: The Indian economy is expected to continue growing in the future and thus increased incomes and job opportunities (Ramesh 22). These will enable new consumers to enter the Smartphone market and expand the opportunities.
Threats
Apple faces three major threats:
- Stiff competition: The opportunities arising in Indian market have made Smartphone manufacturers to increase their activities in the country (Ramesh 24). This is leading to the continued increase of Smartphone supply including renowned brands.
- Pressures for low cost products: Indian consumers have become more sensitive to cost than ever before. This has made the industry to respond with cheap products that in return significantly lower profitability. While Apple has been focusing on quality, other competitors from China have successfully implemented cost effective strategies in the market.
- Internet Security regulations: The issue of cybercrime has led to major changes in security regulations. Smartphone being one of the key contributors to this crime are particularly vulnerable to regulation changes.
Marketing Plan for Apple iPhone Xi
We have set aggressive, measurable, and achievable short-term objectives for the following strategic year and long-term objectives for the next five years.
Apple Marketing Objectives
We are aiming for a 7 percent growth in the market share through increased brand awareness and customer loyalty.
We are also aiming for a 20 percent capture of the market share in five years time.
Financial Objectives
Our aim is to have 15 percent profitability by increasing the sales from 200,000 units to 350,000 units of Smartphone.
We aim to have an increase in revenue by 30 percent from selling Smartphone in India alone.
Issues
Among the major issues we face in the marketing of Smartphone is the lack of a strong brand name in India. The multi-brand strategy used by the company during the growth stage had many disadvantages. The strategy can only be profitable if the company has achieved a dominant market share (Papantoniou 144).
Many Smartphones hail from the same Android family and share same hardware competing one another in the market. Consequently, the products obtain a very small market share and are marginally profitable. Under such a strategy, the company cannot develop a dominant brand identity across its products. It cannot attain the economies of scale and is therefore required to invest heavily on promoting the new Smartphone singly (Gelder 185).
Marketing Strategy
The marketing strategy can be referred to as the process that allows firms to focus their limited resources on the greatest opportunities to reach a sustainable competitive advantage and augment sales or profitability (Ferrell & Hartline 119). Apple marketing strategy is founded on the positioning of Smartphone differentiation.
The primary consumer targets are the professionals and students who need a state-of-art, convenient, secure and internet-enabled Smartphone. The secondary consumer target is the rural population who need a quality but state-of-art Smartphone. Demographically, the segment is described by the age between 18 to 45 years.
The only business target we have is the entrepreneur or small business owners. These are people who need to convey and store information frequently through cost effective means. Their tastes for phones are Smartphones that can allow internet access and other small functions like calculations. These consumers also use the phone for other purposes other than for business. The phone is also a family phone and ease of use is particularly important to this market segment.
Positioning
Via Smartphone differentiation, the iPhone Xi will be placed as the most suitable, cost efficient, value-increased, and technological phone for proficient and personal use. The marketing strategy will underline on ease of use, integrating touch interface, internet-enabling, Linux operating system as well as the GPRS which considerably differentiates the Apple Smartphone.
Product strategy
The Smartphone models will include all the features described in the product review part and differentiated according to the differing needs of the target markets. The Smartphone iPhone Xi will be offered with a one-year warranty. All the models will be produced with an emphasis on the Apple quality mark. An important part in our product strategy is to strengthen the Apple brand image. The brand and logo will be displayed in all Smartphone models and reinforced in the marketing campaign.
Pricing Strategy of Apple iPhone Xi
The Smartphone iPhone Xi will be offered between 200 and 800 dollars estimated price per unit phone depending on the model. This is a lowered price from the earlier price of 1,000 dollars since the product introduction in 2010. As we expand the product line, we expect to reduce the price per unit phone.
The pricing strategy is aimed at attracting the emerging consumers as a result of the economic boom and taking a market share from the major competitors. The combination of the pricing strategy and the mark of quality will have a contribution in wining customer loyalty and repeated purchases (Zeidler 63).
Distribution Strategy of Apple iPhone Xi
Our distribution strategy is to open distribution subsidiaries in the market and sell the products directly to consumers. Our stores must be spread throughout the country and especially in particular areas where the target consumers and businesses are concentrated. The new channel of distribution will be enhanced through continued mini-campaigns across the region served by the specific subsidiary.
During the initial months, we will continue using Apple agents as the implementation process picks up. Subramanian observes how the Indian population is becoming more and more sensitive to information technology and we expect to open an online store to exploit the opportunity created by online shoppers (15). We will offer special trade terms for customer who purchases for a second and third time.
Promotion Strategy
For the Smartphone promotion, we will implement two different strategies. We will appoint DDB Mudra Group and use the print media aggressively to advertise the new Smartphone models. We will also build brand awareness by focusing on the greatest and latest advertising campaigns meant specifically to Smartphone iPhone Xi and implement a communication adaptation strategy (Kaynak 153).
We will create a turnaround communication campaign by utilizing print, electronic media and OOH installations prior to the launching of the new Smartphone models. Through the integrated marketing strategy, we expect to create much anticipation about the iPhone Xi and increase brand awareness in the market.
Marketing Research for Apple iPhone Xi
Through extensive market research, we are identifying the needs, specific features and expectations that our market segments value. The primary research is through surveys, market tests, and focus groups that will be carried out in all potential market areas (Churchill and Lacobucci 63).
We will also determine and analyze the customers’ perception toward other competing brands. The secondary market research will involve brand awareness research and customer satisfaction studies. Feedback from our primary research will help us develop the Smartphone models. Through brand awareness research, we will be able to determine the efficiency and effectiveness of our marketing campaign.
Marketing Organisation
L. K. Gupta, the marketing officer in Apple India stores will be responsible for all the marketing activities. Figure below shows the organization chart of the marketing organization. Apple has appointed DDB Mudra Group to handle the sales campaigns, promotions, and public relations efforts.
Organizational chart
L. K. Gupta: Responsible for all marketing activities
Ashutosh Dixit: Manages the sales activities
Tarun Jha: Manages the advertising activities
John Chacko: Manages promotion activities
Dija Meresh: Analyzes the regional sales feedbacks
Jave Neeraji: Analyzes the advertisement feedbacks
Hussain Khalif: Analyzes promotional feedbacks
Marketing Plan for Apple iPhone Xi: the Key Actions
The implementation of the marketing plan for Smartphone iPhone Xi will start on January. The following are the marketing mix tactics that will be used in the one year plan that we expect to achieve our objectives.
From January to April we will start leasing premises for our new distribution subsidiaries across the major cities along with educating our distribution agents for the product launch in August. There will be an extensive research within the concerned region on the best suited position of the distribution channels. There will be a review on the perceptions of consumers regarding the place and suggestions from business experts on the best way to situate the store outlets.
An extensive training of the responsible staff members will take place on April. The training will concentrate on the new marketing tactics and good public relations. The staff members will have the opportunity to understand the marketing trends and patterns in their respective regions. They will also be trained on the use of new technologies to facilitate the delivery of the products.
From April to June, we will engage in an introductory promotion campaign and generate excitement for the coming product launch. We will display the product at the major Smartphone shows and provide models to product reviewers and opinion leaders as part of the public relation plan. The trained staff will be situated at the major subsidiaries to explain the features and benefits of the new Apple Smartphone models.
From July to September we will begin an integrated campaign targeting the market segments of interest to us. The campaign will demonstrate the unique features of the iPhone Xi and the extended functions relating to each market segment. Through the campaign, we will show our explanatory design that meets the needs of the consumers. This will be followed by the launching of the product in August where we will hold a sales contest offering discounts and lowered prices for the first purchasers.
September to December, we will appoint DDB Mudra Group to initiate a national awareness campaign. This campaign will integrate different types of media such as TV and online adverts. The advertising group will invite any influential effort like inviting famous sportsmen to add a comment on the adverts.
December will involve an evaluation of the campaign effectiveness. Apple analyst will collect the feedbacks and sales data, analyse, and determine the impact of the marketing campaign. The various campaign activities are represented in the chart below:
D=duration in months
Budget
The one-year sales revenue for the iPhone Xi is projected at 175 million dollars, with an average price of 500 dollars per unit phone for a volume of 350,000 unit sales. The variable cost per unit phone is estimated to be 300 dollars. We expect a loss of 20 million dollars on the Smartphone model during the first year.
The brake-even analysis of iPhone Xi assumes revenue of 800 dollars per unit sales and a variable cost of 300 dollars per unit. The fixed cost estimated for the first year is 50 million dollars. Therefore the break-even point can be determined as follows:
50,000,000/ (800-300) =250,000 units.
These calculations indicate that the Smartphone will become profitable after the sale volume exceeds 250,000 units.
Controls
The success of the marketing plan will be measured through customer feedbacks records and sales data. We will have comment and suggestion boxes within all our stores where the customers can post their suggestions. Every transaction whether successful or not will also be put into record.
We will monitor the customer response to the awareness campaign and their satisfaction after purchases. This will help us to foresee the perceptions of the consumers on the quality of the iPhone Xi and correct any problem that might occur. We will also monitor monthly sales and expenses per every segment in order to identify any deviation from the plan.
Contingency Plan
Like many other growing economies, the Indian economy is vulnerable to unpredictable changes. Additionally, the economic trends in other parts of the world can also leverage the anticipated growth of the Indian economy. As a result, the Smartphone market is also vulnerable to the changes.
The fact is that the changes can either benefit the iPhone Xi product line or disadvantage it. In case of a beneficial change, we have will invest highly in R&D in order to expand the product line and increase the market share. In case of a change that might affect the business negatively, we will distribute our investments to other sectors and reduce the impact.
Appendix
Competitor profile matrix
Works Cited
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Zeidler, Christian. Mobile Support in Customer Loyalty Management. Berlin: Gabler Verlag, 2009. Print.