Marketing Plan 1
Running head: MARKETING PLAN: APPLE, INC.
IMPORTANT: This marketing plan is FOR REFERENCE ONLY. It represents previous academic work of a fellow Excelsior College student. It is being provided to you as a potential resource to consider when developing your own marketing plan. Although the plan incorporated all identified elements of the assignment, it is NOT intended to limit or prohibit your usage of additional information or resources. Simply refer to this document as one example of a well-organized, data-driven, creative marketing plan.
M8A1 Marketing Plan: Final Plan
Apple, Inc.
John Smith
BUS 351 - Marketing Concepts and Application
Excelsior College
123 Broadway St., Albany, NY 12203
(123) 456-7890
Professor Mary E. Jones
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Executive Summary...... 4 Product...... 5 Product Life Cycle...... 6 Purpose ...... 7 Audience...... 7 Price ...... 8 Marketing Environment...... 9 Competitive Forces...... 9 Economic Forces...... 9 Political Forces ...... 9 Legal Forces...... 10 Technological Forces...... 10 Sociocultural Force...... 10 Marketing Objectives...... 11 Marketing Management...... 12 Marketing Mix...... 13 Product...... 13 Price...... 13 Place...... 13 Promotion...... 13 Market Segmentation...... 14 Target Market 1...... 15 Target Market 2...... 15
Target Market 3...... 15 Target Market 4...... 15
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SWOT Analysis...... 16 Strengths...... 17 Weaknesses...... 17 Opportunities...... 18 Threats ...... 18 Competitor Analysis ...... 20 Advertising Approach and Budget ...... 21 References...... 22
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Apple started off as a small computer company originally named “Apple Computer”. Apple Inc. is a technology company which designs, produces and sells goods for many smart technology products to include computers, tablets and the smartphone. Over time Apple has become a cult like brand that has millions of followers that are loyal to the brand. Apples products include the IPhone, IPad, Mac desktop and laptop computers as well as the IPod. The products work seamlessly together without any confusion of pairing them together. The main software that syncs off of these products is ITunes, which is also a revenue driver for the company by selling movies and music to the consumer. In 2007 Apple launched the first ever IPhone. The phone included the ability to listen to music and save the songs internally. Additionally, the ability to use the Internet was a major factor, which is why the IPhone was such an innovating product. The IPhone changed the way people live their lives in the modern technological world we live in today. The IPhone allows one to have everything that is needed in daily activities all compacted into one little device that can be held in the hand. A daily calendar, reminders, alarms, photos, music, GPS, maps and the Internet are all capabilities that capable with the use of an IPhone.
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For a number of years Apple Inc. was considered a computer company aiming at the “different and imaginative” customer. With the return of Steve Jobs as the CEO of the company things changed dramatically and brought the company to a whole new level. First, the company launched a new line of successful computers followed by a portable music player that changed the way we listen to music. Not long after the release of the portable music player (IPod), came the greatest creation of all time that was destined to ravel another market, the smartphone market. This handheld device was reveled on January 9, 2007 and was made available to purchase on June 29th of that same year. AT&T mobile communications was the first company to offer the IPhone with only their cell carrier. The IPhone is fully compatible with Apple computers and software as well as the online application. It also is one click ready for computers using Microsoft Operating System with the use of ITunes. ITunes users are enjoying calendar, emails and the document synchronization and also all sorts of applications, video and music content. The IPhone is a multitasking device that is able to meet the needs of many features all in one device.
Portable Mobile Digital Small Music = IPhone Phone Camera Computer Player
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Decline Introductory
Maturity Growth
Apples IPhone is currently in the growth stage of its product life cycle. Apples quarterly profits keep climbing and beating the expectations of the marketplace. Year over year, the IPhone continues to outpace its competitors and beat the streets expectations on the number of the products sold. Not only does the IPhone continue to beat on the numbers for products sold, it has just recently expanded its sales to more countries outside the United States. The IPhones biggest consumer in the 1st quarter of fiscal year 2015 was China. The recent deal with the Chinese has led Apple to almost double its revenue from the previous year. This is just the start for the IPhone to become the most successful smartphone every made. The IPhone will remain in the growth stage as long as the company keeps innovating the product. The design team at Apple is one of the best has always created products that the consumer wants. Once the product does not appeal to the consumer anymore, than it will move into the maturity stage. The IPhone has become a brand that people must own and with its repeat consumers it has the upper hand on many other smartphone makers. As long as Apple keeps innovating and listening to the consumer there is no reason for it to hit the maturity stage anytime soon.
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The purpose of the IPhone is to bring technology that must be used daily to the palm of the hand of its user. Being able to make a phone call than put in directions to where a user wants to go and have turn-by-turn directions is what the IPhone is for. Consolidating a calendar and a checkbook to just the slim design of the phone is what the IPhone was made for. Being able to send instant text messages or just even hit a button and have instant video access to someone across the country is the purpose of the IPhone. Being able to access social media anywhere in the world and see what your friends are doing is what the IPhone was made for. Having a personal assistant like SIRI, that reminds you when to do things is why the IPhone was created.
The audience for the IPhone is growing every day and expanding all over the world. When Apple builds a product, it’s not just a product to Apple’s audience. It is almost like purchasing a new car for some. Using an IPhone is a way of life for some people, it incorporates everything one needs on a daily basis from a clock to a calculator, and the IPhone has it all. Apple’s audience includes people from the age of 18-35 that includes the youth, students and young working professionals. An IPhone user looks for features such as stylish appearance, user-friendly technology, sensitive touch, numerous applications and the ability to use multimedia. The IPhone is rapidly growing popularity around the world and is no easier for people to afford with the new financing programs available.
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The IPhone has had many deferent ways to pay for the smartphone over the years. In the past, mobile carriers offered a subsidized price for many consumers that were willing to commit to a two-year contract. This would drastically reduce the price for the consumer to the range of $199 to $299 and up to $399 depending on the internal size of the memory in the phone. More carriers are getting away from the contracts due to consumer demand and now are offering the phones at full price but easy ways to finance them. Apple has recently introduced a new way to sell the IPhone to consumers through the IPhone upgrade program. With this program a consumer is able to get the latest IPhone every year and all phones come unlocked so they can choose the correct carrier. Additionally, when purchased through an Apple retail store or online, the phone will come with a one year Apple care warranty. If one was to purchase a phone outright the cost is displayed in the chart below. The left side shows the price in $100’s.
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0 Apple Samsung HTC LG
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The competition in the smartphone industry is very strong on a national and global level but somewhat weak in countries that are not as technological advanced. Sales figures for the industry as a whole are easy to obtain since the addition of the new size smartphones. Apple has avoided the priced-based competition by staying away from low-end markets where the price is the main differentiator. Apple never puts their phones on sale. The superior products that Apple creates supersede all other phone manufactures.
. Nationwide, many companies have reduced their overall promotion budgets as they face the need to cut expenses. However, most of these reductions have occurred in the budgets for mass media advertising (television, magazines, and newspapers). Additionally, economic growth worldwide is still in a recession careful planning must be in place. Potentiality the smartphone market is becoming somewhat saturated in the United States. However, our sales have been stronger than ever.
Taxation is something that governments put and Apple should use this as a country-by-country case to anticipate profitability and pricing strategy. Additionally, the laws are significantly different in other countries and we must be well aware of what the differences are.
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. In recent years, more attention has been placed on labor issues that occurred overseas in China. This is a major issue that we continue to monitor and will make sure that everyone is treated fair under workable conditions, Additionally, the ongoing patent issues with other smartphone makers has become an issue that may result in the payment of damages to another company. However, the patent payments are going both ways with our company receiving payment for infractions from other smartphone makers.
The level of technology is increasing in the world, which means we must keep innovating every product to our upmost potential. Internet usage is increasing for personal as well as business personnel, which is why we must keep upgrading internal components to keep up with the ever-changing world of technology. New technologies are being added every day to smartphones so we must have the latest and greatest products in order to compete in the marketplace. Additionally, medical products have recently become popular and are going to be the way of the future for hospitals and doctors to treat their patients.
Population growth has led to the expansion of the smartphone sector due to the high demand for cellphone usage. In our highly technological world, people are depending more from their smartphones and want more capabilities leaving them with everything they need in the palm of their hand. Additionally, the technological advances in the education sector have become a major market for Apples products.
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Apple Inc. is in the business of creating and producing the world’s greatest smartphones. Besides formulating a marketing-oriented and customer- focused mission statement, Apple should establish an objective to achieve cumulative growth in net profit of at least 50 percent over the next five years. At least half of this 50 percent growth should come from new business-to-business market that is being targeted. To accomplish its marketing objectives, Apple should develop benchmarks to measure progress. Regular reviews of these objectives will provide feedback and possible corrective actions on a timely basis. The major marketing objective is to gain a better understanding of the needs and satisfaction of current customers. Since Apple is benefiting from a 90 percent reorder rate, it must be satisfying its current customers. Apple could use the knowledge of its successes with current clients to market to new customers. To capitalize on its success with current clients, benchmarks should be established to learn how Apple can improve the products it now offers through knowledge of its clients’ needs and specific opportunities for new technology and product offerings. These benchmarks should be determined through marketing research and Apple’s marketing information system.
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Because Apple’s current and future products require extensive customization to match clients’ needs, it is necessary to organize the marketing function by customer groups. This will allow Apple to focus its marketing efforts exclusively on the needs and specifications of each target customer segment. Apple’s marketing efforts will be organized around the following customer groups: (1) Business organizations, business-to-business group (2) Education (3) Medical Industry. Each group will be headed by a sales manager who will report to the marketing director each group is responsible for the marketing of Apple’s products within that customer segment. In addition, each group will have full decision-making authority. Frontline salespeople will be empowered to make decisions that will better satisfy Apple’s clients. These changes in marketing organization will enable Apple to be more creative and flexible in meeting customers’ needs. Finally, this new marketing organization will give Apple a better opportunity to monitor the activities of competitors being able to stay current with the high demand products. In the past, Apple was behind its competition with smaller screen smartphones that could have resulted in the loss of market share. However, it was identified and fixed with little or no loss of consumers.
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1. . Apple markets not only the best quality of smartphones but also the echo system in which all of the products seamlessly work together. Apple’s ability has always been to meet or exceed customer expectations consistently, respond to customers’ demands, and create the most unique product in the marketplace. Apples design team creates the sleekest and the most technological advanced products the world has seen. Apples IPhone always meets the satisfaction of customer value. Additionally, there is a full year warranty along with the option to extend to a three year Apple care warranty. 2. . Apple provides the highest quality product customized to its clients’ needs. The value of this product is reflected in its premium price. Apple should be sensitive to the price elasticity of its product and overall consumer demand. Additionally, due to recent loss of subsidizing the IPhone, Apple needs to figure out a new way for its consumers to afford the product. 3. Apple uses direct marketing. Since its product is compact, lightweight, and nonperishable, it can be shipped from a central location direct to the client via United Parcel Service, FedEx, or the U.S. Postal Service. The fact that Apple can ship to multiple locations for each customer is an asset in selling its products. 4. . Since most of Apples customers reorder each year, the bulk of promotional expenditures should focus on new product offerings through television and web advertising. Any remaining promotional dollars could be directed towards special offers.
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By focusing on commitment to service and quality, Apple has effectively implemented a strategy in a somewhat diverse marketplace. Its ability to differentiate its product has contributed to excellent annual returns. Apples target market consists of many business professionals. Additionally, parents, teachers and women are another primary targets. Apples most profitable product is a smartphone that syncs with the Mac computer, which can be tailored to meet consumer’s needs by being able to create playlists and pick what music will be stored on the phone. Consumers use this to their advantage by being able to use many applications that will allow them to operate many computer-based programs on their smartphones. The IPhone began as an ancillary product to Apple’s commercial computer business. However, due to the proliferation of PCs and the growth in technology, the IPhone soon became more profitable for Apple than its desktop computers. Apple has maintained a long-term relationship with smaller companies that produce components who have added capabilities to the IPhone. Apple’s staff focuses on the further innovation, development and marketing of the IPhone.
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Those who make more than $150k as a household are primary targets. 1 out of every 2 households at this income level has at least one iPhone. Example: Many business professionals and people in their mid-1920s to mid-1930s who have disposable income are able to afford the IPhone.
Medical and professional business-to-business market with extensive customer networks, such as banks, medical services, or financial planners. Example: With the creation of the new medical health applications of the IPhone, medical institutions can now have all of the patient information stored in one place no matter what medical facility they visit.
Parents are a target consumer because the iPhone can be used as an educational tool thanks to apps that teach phonics, reading, and math. Example: Many parents are using applications that are made to help children learn basic skills.
College students as well as middle age consumers that have disposable income. Consumers in this demographic have the need to have a stylish, yet effective smartphone as well as the brand name to go along with it. Example: College students that need a smartphone that can help with the basic necessities of everyday life if a student.
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•-High prices •- Brand Loyalty •- Incompability •- Leading innovator Issues •- Strong financials •- Seasonal demand •- Brand reputation •-IPhone restrictions •- Fast •- Little Variety shipping/stores •- Product defect •- Strong advertising S W
•-High Demand O T •-Global Growth •-Leader in •-Android technology •- Samsung •-Accessories market •- Lack of innovation •-Growth of App's •- Strong dollar •-Patent infringements •- Brand losing its damages reputation
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1. Apple’s IPhone product has a sustained customer loyalty combined with expanding closed ecosystem that allows all product to seamlessly work together to enhance all of Apples products. 2. Apple is a leading innovator in mobile device technology. Apple constantly innovates the technology sector with the newest and most effective products to date. 3. Strong financial performance. Recently the company broke the $200 billion mark with increasing revenue year over year. Additionally, the company has zero debt. 4. Apple has an exceptional brand reputation that is well known around the world as well as through the smartphone industry. 5. Even with the capability to order IPhones over the Internet, Apple also has many retail stores that offer the consumer a chance to get the hands on experience. Additionally, the unique look and feel of the store makes a consumer really experience the products. 6. Strong marketing and advertising teams. Apples simple advertising makes the IPhone more appealing and classy. The commercials and product packing are usually really simple portraying that the product is simple to use.
1. High price. Apples IPhones are on the upper side of the price range when it comes to smartphones. Although, the phones are made of the highest quality products, some people do not always have disposable income of that level. 2. Incompatibility with different OS. IOS and OS X are quite different from other OS and uses software that is unlike the software used in Microsoft OS. Due to such differences, both in
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software and hardware, users often choose to stay with their accustomed software and hardware. 3. The seasonal nature of the product line creates bottlenecks in productivity and cash flow, places excessive stress on personnel, and strains the facilities. 4. Both the product line and the client base lack diversification. Dependence on current reorder rates could breed complacency, invite competition, or create a
1. Overwhelming demand for the current and past models of the IPhone. Year over year, the sales numbers are being surpassed with the release of the new model 2. Overseas countries are still behind the curve when it comes to smartphones. Some countries do not even have smartphones. Apple has a huge opportunity to enter this market. By 2017, India will overtake the United States in smartphone sales. 3. A leader in the smartphone industry. Whenever Apple launches a new smartphone it is always a national event. The release is always on every news channel and financial channel. This is a free advertisement for Apple on the day of release. 4. The accessory market is another way for Apple to bring in revenue. With a purchase of such a high priced smartphone one is going to want to protect it at all costs.
1. Apple is not the only smartphone maker in the market, which can threaten the company if others make a better product. Samsung, a leader in the smartphone market, produces outstanding smartphones.
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2. The operating system that Apple uses to run the IPhone lacks some compatibility standard that are common for everyday use. 3. Other company’s operating systems have better integration with popular applications like Google Maps. Apple will need to get full cooperation with other applications makers to streamline the operating system of the IPhone. 4. If Apple is unable to innovate year over year they are going to lose market share to other smartphone makers in the market. Apple has a reputation of making the best smartphones in the market and if unable to continue, Apple will lose it biggest revenue driver.
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When it comes to the smartphone industry there is no doubt that Apple leads the way in innovation as well as sales. With its newest product the IPhone 6S and 6S plus, Apple has taken market share from everyone including its biggest rival Samsung. Samsung has become a powerhouse in the smartphone industry and has up until recently, been in the number one spot. However, that has all changed with the release of the IPhone 6 and 6 plus. Both new IPhones come with a larger screen, which is what the consumer wanted.
Smartphone Sales FY14
Apple Samsung Blackberry windows
The last quarter of 2014, Apple led the smartphone market in the United States by capturing 48% of the market share. In second place was Samsung with 38% followed by Windows in third place. In 2013 Samsung was the market leader in the industry that is why it is Apples most competitive company in the smartphone industry.
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With the introduction of the IPhone into the business-to-business market, Apple is surely to maintain it number one spot on the smartphone sales market.
Apples advertising budget is very low when it comes to advertising the IPhone. What Apple does is have other business advertise the IPhone for them. Because the IPhone is the best-selling smartphone year after year, other mobile companies like AT&T and Verizon do most of the advertising for them. We will continue to run our ads and make them simplistic as we always do. The goal here is to show the consumer that the IPhone is simple to use and everyone is able to use it not matter what age they are. The break-even analysis assumes wholesale revenue of $500 per unit variable cost of $250 per unit and est. fixed cost of $50 million. Based on these assumptions the break-even calculation is $50 million divided by $500 minus $250 equals 200,000 units sold. Break-even calculations indicate that Apple will become profitable after the sales exceed 200K. After the first year Apple will make a profit of 1.25 billion minus 50 million in fixed costs. It is predicted that sales volume will increase at least 60% 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.