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Executive summary
This report illustrates the marketing plan that Apple Incorporation will adopt in introducing and marketing a new product, viz. the iPhone 5s. The marketing plan outlines the iPhone’s strengths, weaknesses, opportunities, and threats. In the course of introducing the new product, Apple Incorporation intends to achieve a number of objectives within the first two years.
The objectives mainly relate to the market share and sales volume as illustrated by the first and the second year objectives. The issues that are likely to be encountered in the process of marketing the iPhone 5s are clearly illustrated.
Considering that iPhone 5s is a new product, the firm will adopt a comprehensive marketing strategy, which entails the adoption of product positioning and marketing mix in introducing the new product in the market. Moreover, the report also illustrates the marketing research, the budgets, and control and implementation strategies that will be adopted to ensure that the product is successfully introduced in the market.
iPhone 5s SWOT Analysis
From the competitive review, it is evident that the smartphone market is becoming very competitive. The industry’s competitiveness arises from the high rate at which firms in the industry are investing in research and development in an effort to come up with new mobile device technologies.
In a bid to succeed in the competitive business environment, it is essential for a firm’s management team to develop a comprehensive understanding of the internal and external business environments (Anandan, 2009).
Similarly, an organization should understand a product’s strengths, weaknesses, opportunities, and threats prior to introducing the product in the market to aid in determining whether the product has an opportunity of achieving future market success upon its introduction (Armstrong & Kotler, 2012).
Changes arising from the internal and external business environments have a significant impact on products’ competitiveness (Stevens et al., 2006).
The SWOT model can assist organizations in analyzing the internal and external business environments and their impact on the product, hence implementing the necessary adjustments (Armstrong & Kotler, 2012). Below is an analysis of the iPhone 5s strengths, weaknesses, opportunities, and threats.
Strengths
- Superior quality
Apple Incorporation will design and develop the iPhone 5s peculiarly in order to attract the targeted customers by integrating the concepts of innovation and creativity. The firm will ensure that the process of designing and manufacturing the iPhone 5s follows the set quality standards.
Moreover, the production team will ensure that unique features and product characteristics are integrated, which will contribute towards development of a unique customer experience.
Some of the features that will be taken into account in the process of manufacturing the iPhone 5s include features such as smarter multitasking, AirDrop, and control center. These features will provide customers with an opportunity to do diverse things in an easier, faster, and a more enjoyable manner.
- Effective marketing
The firm will ensure that customers understand the benefits that they can derive by purchasing the iPhone 5s. Thus, marketing professionals will be integrated in the process of introducing and marketing the iPhone 5s, which will play a fundamental role in creating sufficient and effective marketing awareness hence influencing the consumers’ to purchase the iPhone 5s.
- Brand identity, brand promise and product value
The iPhone 5s will contribute towards development of the firm’s brand identity. The iPhone 5s will enable the customers achieve the brand promise. The brand promise will be enhanced by the iPhone 5s quality, functioning, and design. iPhone 5s will remarkably improve the consumers’ social class and status.
Weaknesses
- High price
Apple Incorporation has set the price of the iPhone 5s at a relatively high price point compared to other smartphones offered by Blackberry, Android and Windows. Most critics argue that the firm is not justified to set the price of the iPhone 5s at &759.99.
In their consumption process, most consumers prefer to purchase competing products, which are of high quality but whose price is relatively low. The premium pricing strategy adopted by the firm in introducing the iPhone 5s limits the likelihood of the product penetrating a large market.
- Substitute products
iPhone 5s will face intense completion from other firms such as Nokia and Blackberry with are investing in development and production of smartphones, tablets, and personal computers. This competition will hinder the probability of the firm achieving the desired market share with regard to smartphone products.
- Lack of market awareness
Currently, the level of market awareness with regard to the iPhone 5s is limited. Only a small proportion of the market is aware of the new iPhone 5s. The firm intends to increase the level of market awareness with regard to the iPhone 5s by conducting a comprehensive marketing campaign.
Opportunities
- Market growth potential
The firm is likely to attain a high growth rate emanating from the rate at which consumers are integrating smartphones in their consumption patterns. One of the factors motivating the growth of the iPhone market relates to the view that smartphones are providing consumers with an opportunity to connect with friends and relative through various internet-based technologies such as social media.
Moreover, smartphones such as the iPhone 5s are enabling consumers to undertake online shopping. The prevailing market demand presents a unique opportunity the firm to expand its market share.
Another factor that will stimulate the growth of the iPhone 5s relates to the fact that the population for millennials, which are the firm’s core target customers will increase in the future. Therefore, the likelihood of the firm increasing its customer base and hence its sales revenues is high.
- Continuous product improvement
In its pursuit for competitive advantage, the firm should consider undertaking continuous improvement on the iPhone 5s. Moreover, the firm should also consider marketing the iPhone 5s to a new market niche.
For example, the firm should improve the iPhone 5s in such a manner that it will tap into new market segments. Some of the markets that the firm should target include business individuals. The iPhone should enable entrepreneurs to undertake different tasks.
- Improving the iPhone 5s compatibility
Apple Incorporation can increase its customer base by integrating Intel chip that will enable the iPhone 5s to be compatible with Windows OS. Moreover, the firm should strive to develop new and innovative software for the iPhone 5s, which will be compatible with other software.
Threats
- Technological change
Innovations with regard to mobile technology present a major threat to firms in the ICT industry. Occurrence of major technological change may have adverse effects on the iPhone 5s competitiveness.
For example, technological change will put intense pressure on Apple Inc. to develop and introduce new iPhone into the market in order to avoid the risk of obsolescence. Failure to keep up with the rate of technological change means that the firm will fail with regard to gaining adequate market share.
- Intense competition and substitute products
In the process of marketing the iPhone 5s, Apple Incorporation will face intense competition from various online music stores, for example Amazon. Apple also experiences competition from ICT giants such as Toshiba, HP, Nokia, Hewlett Packard, Dell, Microsoft, and HTC.
These companies have the capacity to introduce smartphones that can sufficiently rival the iPhone 5s. iPhone 5s is facing a major threat emanating from existence of substitute products for example the Samsung tablet. The Samsung tablet has multiple features; for example, one can call and access other tablet services.
- Global recession
Occurrence of a global recession may adversely affect the iPhone 5s sales volume. The recession may lead to a change in the consumers’ purchasing behavior. For example, during recession most consumers consider purchasing necessities to be a priority compared to luxuries. During such times, products such as smartphones are considered luxury (Estelami, 2010).
Objectives and issues
Apple Incorporation has formulated a set of objectives in marketing the iPhone 5s. The objectives relate to the first and the second year upon introducing the iPhone 5s.
First-year objectives
Within the first year of introducing the iPhone 5s, the firm intends to increase its iPhone market share with a margin of 10%. In a bid to achieve this goal, the firm intends to achieve a sales volume of approximately $759.9 million, which will enable the firm to achieve the predetermined breakeven point by setting the price of the iPhone 5s at $ 759.99.
Consequently, the firm targets to sell 1 million iPhone 5s within the first year. Moreover, the firm intends to have attained a market share of 25% in the domestic iPhone market.
Second-year objectives
During the 2nd year, Apple Incorporation projects that the introduction of the iPhone 5s will have improved the firm’s global market share with regard to smartphones with a margin of 10%.
This move will increase the firm’s market share for smartphones to 58.1%. Similarly, the firm’s marketing manager projects that the firm’s sales revenue will have increased with a margin of 35% hence enhancing its market dominance.
Issues
In the process of launching the iPhone 5s, Apples’ marketing manager is cognizant of the likely competition from Android, which is currently the strongest competitor to Apple’s smartphones. Apple is likely to produce a smartphone that will rival the iPhone 5s. in a bid to deal with this issue, Apple will ensure that the iPhone 5s has unique characteristics.
Moreover, the firm will ensure that the product features cannot be imitated easily. iPhone 5s will have a 64-bit architecture, which is the first smartphone to have such a feature. Apple will ensure that the iPhone 5s operating system is specifically built for a 64-bit smartphone and is compatible with other operating systems.
This aspect will provide customers with an opportunity to connect the iPhone 5s to other devices such as personal computers that operate on diverse operating software.
This feature will improve the likelihood of the iPhone 5s penetrating a wide market and to cope with the competition, the firm will undertake continuous improvement on the iPhone 5s in order to take into account the prevailing market changes, which will ensure that the iPhone is in line with the market trends.
Marketing strategy
The iPhone 5s marketing strategy will entail improving Apple’s smartphone products by introducing a product that is unique in the market hence appealing the customers’ preferences with regard to smartphones. The core target market for the iPhone 5s includes the millennials.
Decision to target this market segment arose from recognition of their consumption behavior. Millennials are characterized by unique attitudes and product preferences with regard to technology (Fifield, 2008). A study conducted by Boston Consulting Group shows that millennial consumers have a high affinity for technology (Ferrell et al., 2011).
Thus, they are technologically perceptive. Other characteristics that distinguish millennials from other customer groups include their need to connect and socialize through online and offline platforms. Moreover, their demand for fast, efficient and convenient products cannot be matched with other consumer groups.
Their population is expected to increase around the world. Apple projects that introducing the iPhone 5s will enable the firm exploit the market opportunity from this consumer group.
Positioning statement
In a bid to market the iPhone 5s successfully amongst the millennials, Apple will ensure that the iPhone 5s is positioned as a unique mobile technology device. Consequently, the iPhone 5s will be positioned using the slogan ‘Think Different’, which will aid in shaping the consumers’ perception regarding the new smartphone.
Marketing mix strategies
Product strategy
iPhone 5s will be effectively designed and developed by integrating all the features outlined in the product review section. In the course of designing and manufacturing the iPhone 5s, Apple will be guided by three main values, which include craziness, difference, and change.
Consequently, the firm has ensured that iPhone 5s is of high quality and adds value to the customers’ life. The iPhone 5s characteristics, which include smarter multitasking, control centre and airdrop, will lead to the development of a unique experience amongst the millennials. Thus, customers will be in a position to perform tasks more effectively, efficiently and in an enjoyable manner.
In addition to quality, effectiveness and efficiency, Apple will also integrate the elements of style and security in marketing the iPhone 5s. The iPhone 5s will be designed in such a way that it depicts style and cannot be easily hacked.
Thus, the consumers’ social status and privacy will be guaranteed hence leading to the development of a feeling of ‘being different’ amongst the target consumers.
Moreover, Apple Inc. will ensure that iPhone 5s is compatible with different applications hence increasing its utilization by diverse customer groups such as students and business professionals. These qualities will play a fundamental role in influencing the consumers’ perception regarding the new smartphone.
Pricing strategy
Effective pricing is fundamental in organizations marketing practices. In most cases, consumers review product prices before making a purchase decision (Kumar, 2007). The price set enables an organization to communicate the value of the product being offered.
In the course of introducing iPhone 5s, Apple Incorporation will adopt different strategies. One the strategies that the firm will consider includes the value based pricing. The firm will set the price of the iPhone 5s based on the value that it creates to the consumers’ life.
The decision to integrate value-based pricing in introducing iPhone 5s arises from the view that the new product is more powerful compared to other iPhones in the market.
Apple will also integrate competition-based pricing strategy. Considering the intense competition in the smartphone industry, Apple will take care not to position the iPhone 5s as a lower-cost alternative. Thus, the firm will base the price of the iPhone 5s by considering the price set by its competitors.
From the competitors review, Apple will set the price of the iPhone 5s at $ 759.99. Therefore, the firm will set the price of the iPhone at a premium. The premium pricing strategy will enable Apple to establish the iPhone 5s as a high-end product. Consequently, consumers will be able to associate the iPhone 5s with value.
Marketing communication
Apple appreciates the contribution of effective marketing communication in achieving competitiveness. The industry is very competitive because of the high rate at which competing firms such as Samsung, Android, Blackberry, and Microsoft are investing in new product development.
The firms are concentrating on the mobile device technologies. Despite the high degree of industry rivalry, Apple Incorporation projects that the iPhone 5s will successfully penetrate the market. However, the firm’s competitiveness will depend on the effectiveness with which the firm creates sufficient market awareness regarding the new product.
In the process of introducing the iPhone 5s in the market, Apple will adopt the concept of Integrated Marketing Communication. Diverse methods of marketing communication, which include public relations, personal selling, and advertising will be used.
Advertising; with regard to advertising, the firm will adopt both traditional and emerging marketing communication mediums. Some of the traditional advertising mediums to be used include television, print media such as magazines and newspapers and outdoor advertising using billboards.
In addition to the above mainstream mediums, the firm will also integrate outdoor advertising. Apple will enter a contract with reputable outdoor advertising companies whose billboards are effectively and strategically located.
A catchy slogan ‘think different’ will be used in the advertising banners in an effort to influence the consumers’ decision-making process. The firm’s marketing manager is of the opinion that using billboards will sufficiently create awareness to a large number of customers in the local market.
Online and mobile marketing; in its pursuit to create sufficient market awareness with regard to the iPhone 5s, the firm will integrate emerging social networks.
The firm will post information regarding iPhone 5s on different social media platforms to create an opportunity for customers to experience the product benefits virtually. Examples of internet-based networks that the firm will adopt include Blogs, Wikis, Flickr, Twitter, Facebook, Tout and You Tube.
Posting the iPhone 5s description on social media will make sure that a large number of customers are aware of the product information. Moreover, the online community, which has arisen from increased utilization of social media in socialization, will enhance the rate at which the target customers share the iPhone 5s product features and qualities. Thus, social media will lead to the development of a viral effect.
The firm’s marketing manager is also of the opinion that utilizing mobile devices and online marketing platforms will enable the firm develop a strong relationship with the customers (Pride & Ferrell, 2006).
This move will contribute towards development of a strong level of customer loyalty. According to Shin (2013), developing a strong customer relationship is critical in nurturing a high level of customer loyalty
Apple Incorporation will also create product awareness by posting the iPhones 5s description on its official website. The firm will ensure that its official website page is effectively designed in order to provide customers with an opportunity to navigate easily through the site.
Public relations; in the process of launching the iPhone 5s, the firm will contract renowned celebrities to endorse the iPhone 5s. Some of the celebrities that the firm will contract include Zooey Deschanel and Samuel L. Jackson.
The firm’s marketing manager is of the opinion that celebrity endorsement will remarkably improve the iPhone 5s market penetration. Decision to integrate celebrity endorsement arises from the view that consumers especially millennials are significantly influenced by the consumption behavior of renowned celebrities. Thus, the likelihood of the target consumers purchasing the iPhone 5s is high.
Sales promotion; in an effort to attract a large number of customers, Apple Incorporation will conduct a sales promotion campaign. The campaign will involve conducting a competition through various mediums. The participants will have an opportunity to win an iPhone 5s.
Apple projects that the sales promotion will enable the firm to develop a strong relationship with potential customers. Moreover, the sales promotion will enable the firm to attract new customer groups, as the customers will have firsthand experience on the quality and features of the iPhone 5s.
Distribution strategy
Based on the information provided in the channels and logistic review section, iPhone 5s will be distributed based on a selective distribution strategy. This strategy was adopted because of the high quality of the iPhone 5s. Moreover, the firm intended to have control over the iPhone 5s distribution channels.
In an effort to ensure that iPhone 5s is easily accessible in the market, Apple will utilize both direct and indirect channels of distribution. With regard to indirect distribution, the firm will enter a contract with renowned and well-established global retail firms, which include Target, Wal-Mart, and Bestbuy.
The firm will also distribute the iPhone 5s through its retail stores located different parts of the world. Moreover, the firm will also distribute the iPhone 5s through major shopping malls such as Carrier store, AT&T, T-Mobile, Sprint and Verizon.
The firm will also distribute the iPhone 5s through its website, apple.com and other well-established online platforms, which include eBay.com, iTunes, and Amazon.com.
Marketing research
In a bid to ensure that the iPhone 5s is sufficiently competitive, Apple Incorporation will conduct a comprehensive marketing research.
The marketing research will focus on two main variables, which include the consumer and the competitor. Primary market research will be used in an effort to gather first hand information on the prevailing market conditions with regard to consumption of smartphones (Saunders et al., 2009).
Consumer market research
Apple Incorporation will undertake a primary market research by evaluating the various demographic factors that influence the consumers’ to purchase the iPhone 5s. Some of the variables that the firm will evaluate in include the consumer’s age, occupation, and level of income to aid in understanding the consumers purchasing behavior and product preferences.
Other issues that will be evaluated in the marketing research include the consumers’ perception with regard to various iPhone brands and the level of satisfaction amongst customers by consuming the iPhone 5s.
The firm intends to conduct the market research continuously in order to undertake improvement on the iPhone 5s successfully. The consumer marketing research will be undertaken by adopting the concept of crowd sourcing. The firm will implement effective database software that will enable the firm gather information regarding the consumers’ product preferences.
Competitor market research
Prior to introducing the iPhone 5s, Apple will undertake a comprehensive competitor market research. The research will focus on the major competitors who include Android, Blackberry and Windows and the respective competitive strategies adopted.
Through the competitor market research, the firm will identify the possible gaps, strengths and weaknesses of the rival smartphone products offered by the competing firms. Thus, the firm will gain insight on how it can improve the iPhone 5s.
Budgets
A substantial cost is incurred in the process of marketing a particular product (Saee, 2007). Therefore, firms marketing managers are required to ensure that their firms have the financial capacity to cater for the marketing budget efficiently.
In a bid to market the iPhone 5s successfully, Apple has set aside $ 1 million in its marketing budget. The firm expects to utilize this money in conducting marketing research and marketing communication for a period of three years. The chart below illustrates the iPhone 5s marketing budget.
Action program
In a bid to market the iPhone 5s successfully, Apple Incorporation will undertake the following activities within a period of six months.
November 2013 – Apple Incorporation will conduct a comprehensive competitor and consumer market research. The research will seek to understand the prevailing trend with regard to consumption of smartphones. On the other hand, the consumer market research will be aimed at evaluating the consumers’ perception and opinion on the iPhone 5s.
December 2013 – launching the iPhone 5s marketing campaign. This goal will be achieved by conducting an event. The event will be hosted in the company’s headquarters. During the event, the firm will ensure that the iPhone 5s features are explained to the potential customers.
January 2014: enhancing the iPhone 5s marketing campaign through social media and online platforms. The campaign will be launched on different social media platforms. The campaign will be aimed at entrenching the role of the iPhone 5s in making the consumers’ different.
February 2014 – introducing a mobile application that will enhance the firm’s’ capability to undertake direct marketing to customers.
March 2014 – entering an advertisement contract with renowned celebrities to endorse the iPhone 5s
April 2014 – assessing whether the iPhone 5s sales volume has been achieved
Control and implementation
The firm’s management team will pay attention to the iPhone 5s marketing strategies in order to identify any deviations. The firm has firm has formulated effective controlling and implementation strategy. The control and implementation program will enable the firm to be successful in its marketing processes.
The firm’s marketing department will be charged with the responsibility of implementing the iPhone 5s marketing plan. The firm will assign the role of implanting the marketing plan to professionals. A high level of integrity will be maintained in the marketing process.
Moreover, Apple’s marketing department will ensure that the process of implementing the marketing plan is aligned with the firm’s corporate values and principles. Thus, adequate level of collaboration between the various departments will be ensured.
A number of milestones will be taken into account. First, the firm’s marketing department will evaluate the change in the firm’s market share, sales revenue and level of profitability emanating from introducing the iPhone 5s. One of the ways through which the firm will evaluate in determining its market share is the change in its customer base.
By evaluating the trend in the firm’s financial performance, Apple Incorporation will be in a position to determine whether the strategies adopted in marketing the iPhone 5s are effective in enhancing the firm’s competitive advantage. Any deviations from the set objectives will be adjusted accordingly.
Upon introducing iPhone 5s, Apple incorporation will undertake a number of promotional events. The chart below illustrates a summary of the promotional activities that the firm will undertake and the associated financial cost.
Apple Incorporation is of the opinion that introducing the new iPhone 5s will enhance its competitive advantage. However, the firm’s management team is aware that changes emanating from the external business environment may affect its competitive edge adversely. In a bid to deal with this challenge, the firm will undertake continuous industry analysis.
The analysis will provide the firm with insight on the prevailing market trends. Some of the issues that will be evaluated include the level of market awareness with regard to the iPhone 5s, the level of customer satisfaction achieved by consuming the iPhone 5s.
Evaluating these aspects will give the firm insight on its effectiveness in influencing the consumers’ purchase behavior with regard to smartphones. Therefore, Apple will be in a position to engage in effective continuous product innovation.
Apple Incorporation can effectively develop its competitiveness by ensuring that the iPhone 5s is effectively introduced into the market. In order to achieve this goal, Apple Incorporation will ensure that a continuous evaluation of the iPhone 5s marketing plan is conducted.
This move will aid in identifying possible gaps and deviations from the set objectives (Sandhusen, 2008). In a bid to enhance the success of the iPhone 5s, Apple will ensure that it understands the consumers’ buying process and the factors that influence their decision to purchase smartphones.
Reference List
Anandan, C. (2009). Product management. New Delhi, India: Tata McGraw-Hill.
Armstrong, G., & Kotler, P. (2012). Marketing; An introduction. New York, NY: Pearson Education.
Estelami, H. (2010). Marketing turnarounds: a guide to surviving downturns and rediscovering growth. Indianapolis, IN: Dog Ear Publishers.
Ferrell, O., Michael, S., &Hartline, M. (2011). Marketing strategy. Mason, OH: Cengage Learning.
Fifield, P. (2008). Marketing strategy master class. Oxford, UK: Butterworth- Heinemann.
Kumar, S. (2007). Marketing and branding: the Indian scenario. New Delhi, India: Dorling Kindersley.
Pride, W., & Ferrell, O. (2006). Marketing: concepts and strategies. Boston, MA: Houghton.
Saee, J. (2007). Contemporary corporate strategy: global perspective. Upper Saddle River, NJ: Routledge.
Sandhusen, R. (2008). Marketing. Hauppauge, NY: Barron’s Educational Series.
Saunders, M., Lewis, P., & Thornhill, A. (2009). Research methods for business. Upper Saddle River, NJ: Routledge.
Shin, K. (2013). The executor of integrated marketing communications strategy: Marcom’s manager’s working model. New York, NY: SpringBriefs.
Stevens, R., Loudon, D., & Wrenn, B. (2006). Marketing planning guide. New York, NY: Prentice Hall.
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