iPhone 3GS Marketing Plan

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    iPhone 3G Marketing PlanPresented by Anum Ali

    May 04, 2011

    Subject Code: MRKT310

    Section: 7983

    Professor: Thomas Tanner

    1

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    2

    iPhone 3GApples 2nd iPhone: New and Improved!

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    2- Product Description

    3

    THREE LEVELS OF THE PRODUCT

    CORE CUSTOMER VALUEiPhone customers will be buying on-the-go connectivity, technology savvy style and

    trendiness

    ACTUAL PRODUCT

    Brand name: Apple Quality level: Excellent quality product

    Features: 3G Internet connectivity, fast processor, 3 megapixel digital camera, touch-screen, 3D graphics support, GPS navigation, Voice Control, multimedia (mp3) player,

    Personal Digital Assistant (PDA), powerful battery

    Design:4.5x2.4x0.48 slim and lightweight body, glossy finish, 2 colors (black & white)

    Packaging:Apples branded package with Apple logo stickers included

    AUGMENTED PRODUCT

    After-sale service:Warranty: 1 year limited warrantyreplacement within 90 days for hardware/software

    defects (Apple, n.d.)

    Product Support: Free activation service at purchase, hundreds of 3rd party applications

    (entertainment, educational, networking/communication) from Apples App Store,

    unlimited music downloads from iTunes store

    (Diaz, 2009)

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    2- Product Description

    PRODUCT TYPE: Specialty Product

    Customer buying behavior:Strong brand preference for Apple

    Price: Expensive product category

    $199 (8GB memory model)

    $299 (16GB memory model)

    Additional monthly mobile service charge Exclusive distribution: Apple and AT&T stores

    Carefully targeted promotionby Apple

    INTRODUCTION STAGE

    Low sales and negative profits at

    launch.

    First customers are the innovators

    No competitors of 3G technology

    (Kotler & Armstrong, 2010, p.279)MORE FOR LESS VALUEPROPOSITION

    A high quality smartphone with revolutionary

    features for a price lesser than high-end

    smartphone competitors.

    (Kotler & Armstrong, 2010, p.215)

    4

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    3- Current Marketing Situation

    (Kotler & Armstrong, 2010, p.193) (Apple, n.d.)TARGET MARKETS DESCRIPTION

    DEMOGRAPHIC MARKETAges 20+, 30+, 40s

    High Income group

    Occupation: Students,

    technical/corporate, Craftspeople

    (actors, models, designers)

    PSYCHOGRAPHIC MARKETSocial class: Upper middle, Lower

    Upper, Upper upper

    Personality: Trendy, Technology savvy,

    Curious, Elitist BEHAVIORAL MARKET

    Benefits Sought: Quality, Speed, Style,

    Innovation, Service

    User status: Potential users, Regular users

    (iPhone; previous model or other

    smartphone)

    Loyalty Status: Apple loyal Usage:

    Medium - Heavy

    GEOGRAPHIC MARKET

    USA, UK, Canada, Australia, and

    selected countries in Europe and Asia (22

    in total)CONCENTRATED (Niche)

    MARKETING

    Few major market segments are targetedfor a focused marketing strategy.

    (Baker, 1998)

    5

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    3- Current Marketing Situation

    (Kotler & Armstrong, 2010, p.152)CONSUMER BEHAVIORS

    Complex Buying Behavior : Potential

    Smartphone Users

    High involvement and significant perceived

    differences between smartphone brands:

    Apple, Blackberry, Nokia, etc.

    Dissonance Reducing : Regular Smartphone

    Users and Apple Loyal Customers

    High involvement and few perceived

    differences between smartphone brands.

    Apple Loyal customers would buy Apple

    readily

    Other smartphone users would know existing

    brands well

    6

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    4- Current Marketing Situation: Product Review

    (Diaz, 2009)

    MAIN FEATURES (STRENGTHS)

    Improvements to the old iPhone 3G Internet connectivity: 4x faster, on-the-go Internet old iPhone, unmatched among

    competitors

    3 megapixel camera: higher quality photos/videos

    GPS Navigation: geographic location, navigation control

    Increased battery life: more Internet and call time Customized applications: computer software customized for usage on the smartphone.

    Reinstating the old strengths

    Glamorous design: the iconic, ever-popular, stylish design to preserve the look and feel

    Integrated music player, PDA, & Internet features

    Touchscreen: wide LCD with multi-touch sensors

    WEAKNESSES

    Restricted to one cellular carrier AT&Tlimited coverage

    Camera placed at the back of phone, difficulty in video conversation

    No Cut & Paste function 7(CGullWorld, 2008)

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    5- Current Marketing SituationTarget Market Needs & Corresponding Features/Benefits of iPhone 3G

    8(Kotler & Armstrong, 2008, p.A3) (Diaz, 2009)

    Target

    Segment

    Customer Need Corresponding Feature/Benefit

    Students Express style

    Communication/Social networking

    Share multimedia experiences e.g. photos,

    videos, chats

    Entertainment: games, etc.

    Ease of use and tracking the phone

    Glamorous design features

    Calling, 3G Internet connectivity

    3 megapixel camera, multimedia

    messaging (MMS), mp3 player

    Fast processor, 3D graphics support

    Touchscreen, GPS functionality

    Technical &

    Corporate

    people

    All-day communication

    On-the-go connectivity

    Hands-free communication

    Creating documents & presentations

    Planning and scheduling

    Increased battery life

    3G Internet connectivity

    Voice Control feature

    Touchscreen, Customized software

    applications

    Craftspeople

    (actors,

    designers,

    models)

    Express elitism

    Express style

    Communication

    Social networking with fans

    High price value

    Glamorous design features

    Calling, 3G Internet

    3G Internet, social networking

    apps.

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    6- Current Marketing Situation: Competitive Review

    iPhone 3GCompetitive Analysis

    Phones launched as competitors to old iPhone are strongest competitors

    9(PhoneScoop, n.d.)

    Competitor Model Features Price

    Nokia

    RIM

    Samsung

    Motorola

    N-series

    Blackberry Storm

    Instinct

    Android

    Internet-enabled, 5 megapixel

    camera, multimedia support

    Copycat touchscreen, 3.2megapixel camera, Wireless

    technology, PDA, GPS

    navigation, good battery life,

    2GB memory

    Copycat touchscreen, 2

    megapixel camera, wirelesstechnology, GPS, 32MB

    memory

    Copycat touchscreen, additional

    keyboard, wireless technology,

    digital camera

    $250 - $400

    $199 - $299with

    contract

    $250

    $250+

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    6- Current Marketing Situation: Competitive Review

    10(Welch-Abernathy, 2008) (Geller, 2008)

    CURRENT PRICING

    Target Costing: Cost of iPhone 3G based of

    the target price that customers are willing topay.

    In consideration of competitors prices, and

    to achieve high sales volume, an initial low

    price of $199 (with AT&T contract) is

    targeted

    AT&Ts subsidies allow the price cut Without contract the price is $599

    Segmented Pricing (product-form pricing)

    8 GB model: $199 (with AT&T contract)

    16 GB model: $299 (with AT&T contract)

    Competitive Position: MARKET CHALLENGERiPhone 3G is directly challenging the smartphone giant, Nokia, and attacking the

    followers, RIM, Samsung and Motorola. Its striving to capture market share!

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    7- Current Marketing Situation: Distribution Review

    11(AT&T, n.d.)

    EXCLUSIVE DISTRIBUTION STRATEGY

    iPhone 3G will be exclusively available at: Apple stores

    AT&T stores

    Apple website

    VERTICAL MARKETING SYSTEM

    Apples contract with AT&T a cellular service provider

    AT&T as iPhone 3Gs authorized distributor

    Subsidized costs per iPhone would be provided to Apple, by AT&T.

    Cell phone monthly packages designed for economy

    Apple would reserve creative rights of marketing and promotion

    AT&T professional sales force would be trained to communicate iPhones value

    proposition

    AT&T dealership stores would offer iPhone unlocking and activation services for free

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    8- Current Marketing Situation: Strengths/Weaknesses

    12(Brubaker, 2007.)

    STRENGTHS

    Loyal Apple and iPhone customer base secures large, profitable customers and areputation for innovation, high quality, and style

    International Manufacturing Partners for low-cost manufacturing and assembly

    Electronic components, physical design elements, computerized chips and circuits

    manufactured in various countries: Korea, China, Japan, Germany, Taiwan, and UK.

    In-house Manufacturing Partners: Apple Inc.s Mac software developing houses to build

    the operating system and application software

    Authorized Distribution and Services Network of Apple Stores

    Contract with AT&T wireless service providerprovides access to AT&T consumer base

    3G Technology is a unique competitive edge to win consumers with high Internet speed

    WEAKNESSES

    Strict Hardware/Software Control: Only Apple devices can work with an Apple gadget,

    software needs to be custom-built; incrementing price and complexity

    Network & Coverage Limits: Single cellular service provider contracted

    (AT&T, n.d.) (Mueller, 2010)

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    9- Current Marketing Situation: Opportunities/Threats

    13(Mueller, 2010)

    OPPORTUNITIES

    Demographic: Carefully targeted demographic segments (slide 4) present highpotential demand

    Economic: Mediocre and affluent income groups (slide 4), immune to

    inflation, will buy readily

    Technological: Advanced communication and computer technologies e.g. 3G,

    GPS, etc. contribute to successful development and functioning of iPhone 3G Cultural: Members of the smartphone culture would readily welcome a new

    phone. Style conscious, and elitist consumers would be attracted.

    THREATS

    Competitors copycat models and low-priced phones

    Wider network coverage on other smartphones:

    work with multiple service providers

    Cheaper mobile service rates:

    smartphones with other service providers enjoy cheaper service rates

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    10- Objectives and Issues

    14(Brubaker, 2007.) (AT&T, n.d.) (Mueller, 2010)

    FIRST-YEAR OBJECTIVES To capture 10% market share for iPhone 3G in the

    US smartphone market.

    To encourage old iPhone users to switch to 3G

    To satisfy the needs and wants of smartphonecustomers and guarantee satisfaction through value

    delivery. To manage a successful, focused launch without

    budgetary wastages

    ISSUES:

    Old iPhone users may not

    perceive anything newabout iPhone 3G

    Customers loyal to otherbrands such as Nokia, orRIM Blackberry may notbuy an Apple product

    Customers may notswitch their cellularservice to AT&T to usean iPhone 3G

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    11- Overall Marketing Strategy: Positioning

    15(Kotler & Armstrong, 2010, p.213-215)

    POSITIONING STATEMENTTo the trendy youth and sophisticated

    professionals; who need on-the-go connectivity

    and a stylish expressionism, Apples iPhone is a

    stylish, high-speed (3G) wireless smartphone that

    combines the Internet, a music player, and a

    personal digital assistant (PDA) in one device.

    Overall Positioning Strategy:

    Product Differentiation strategy has

    been used with 3G technology as themain USP.

    COMPETITIVE ADVANTAGES

    The most distinctive, superior, and

    profitable product features areselected as a competitive advantage:

    Apple image and brand name

    Stylish look and feel

    High speed wireless Internet

    (new 3G technology) Unique touchscreen

    Third party apps

    Integrated music player, Internet,

    and PDA

    Lower price $199 on AT&T

    contract

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    11- Overall Marketing Strategy: Positioning

    16(Kotler & Armstrong, 2010, p.213-215)

    WHY THE POSITIONING STRATEGY IS IDEAL?

    The chosen competitive advantages justify the More for Less Value Proposition. They are:

    Important: Applesbrand name and image of a technology innovator is a highly valued

    benefit for customers Distinctive: Competitors do not provide an LCD touchscreen

    Superior: Competitor Internet enabled phones are not fast. 3G technology is superior

    speed

    Communicable: Stylish lookand feel

    Affordable: $199 contracted price is affordable to the mediocre market Profitable: Integrated music player, Internet and PDA. Customers would buy an

    integrated device rather than individual ones

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    12- Marketing Mix Strategy: Product

    17(Kotler & Armstrong, 2010, p.213-215)

    PRODUCT RECOMMENDATIONS FOR iPHONE 3G

    Features & Benefits (Eliminating weaknesses identified in Slide 6, and adding more value) Contracting with at least one more cellular service provider for wider coverage

    Integrating a camera in the frontal body for videoconferencing ease

    Improving the camera resolution for higher photo/video quality

    Improvement in touchscreen: cut & paste function for working with documents

    Continuously improvingprocessor and Internet speed to offset copycats (e.g. developing4G and a better processor)

    Suggested Line Extension

    More colors; other than black and

    white, to provide more choices for

    trendy customers

    New iPhone models with improved

    features and technology

    Suggested Brand

    Extension

    Introduce a new

    product category ofiPhone accessories i.e.

    skins, phone cases,

    charms, and etc.

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    PRICING RECOMMENDATIONS FOR iPHONE 3G

    Value Added Pricing Strategy Recommendation Product improvements (mentioned in previous slide) can add value to iPhone 3G

    iPhone 3G with value added features can be priced higher

    Apple, iPhone fans, and other high income group users would willingly pay a premium

    Sales would remain stable, might even grow

    Price Skimming Strategy for $599 iPhone 3G without AT&T contract

    iPhone 3G is currently for $599 without AT&T contract and needs to be activated for a fee

    The premium price can be lowered in future i.e. in an year

    Revenue can be generated from mediocre income groups, and lower

    13- Marketing Mix Strategy: Price

    18(Kotler & Armstrong, 2010, p.213-215)

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    14- Marketing Mix Strategy: Distribution (Place)

    19(Kotler & Armstrong, 2010, p.213-215)

    DISTRIBUTION STRATEGY RECOMMENDATIONS FOR iPHONE 3G

    Recommended strategy: Selective Distribution

    Selling through other selective electronics stores e.g. Best Buy

    Selling through possible one more cellular services providers e.g. Verizon

    Advantages:

    More cellular network coverage through Verizon

    Access to Verizons customer base

    Growth of delivery and sales network

    More sales force and services

    http://images.google.com/imgres?imgurl=http://www.couponsaver.org/blog_images/shop-smart-with-best-buy-coupon-codes-04.jpg&imgrefurl=http://www.couponsaver.org/home-improvement-coupons-codes.html&usg=__U19H7kGZPkDD6iMbe-x8dOiHFbs=&h=500&w=500&sz=62&hl=en&start=8&tbnid=l6KTgHaPnsztYM:&tbnh=130&tbnw=130&prev=/images%3Fq%3Dbest%2Bbuy%26gbv%3D2%26hl%3Den
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    15- Marketing Mix Strategy: Marketing Communications

    (Promotion)

    20(Kotler & Armstrong, 2010, p.213-215)

    COMMUNICATION OBJECTIVES

    Designed for target markets in various buyer-readiness stages,

    following the AIDA Model (Attention/Awareness, Interest, Desire,

    Action)

    To grabAttentionof Potential users at the Awareness stage

    To provokeAction; of buying iPhone 3G, in Existing iPhone

    users who are already at a stage ofConvictioni.e. they believe

    iPhone is the best cellphone. They need to be pushed towards the

    Action stage through attractive offerings

    To developInterestof Other smartphone users to develop their

    Likingtowards iPhone 3G; theyre already at the Knowledge

    stage

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    PROMOTION TOOLS

    ADVERTISING

    TV Advertisements: TV ads

    Display media: Billboards, banners

    Online media: podcasts on Apple website

    PUBLIC RELATIONS

    Pre-launch introductory conference: an

    public address to fans by CEO, Steve Jobs

    Launch ceremony at Apple stores

    SALES PROMOTION

    Promoting the low cost advantage

    Low-cost mobile packages with AT&T

    Early buyers discount

    15- Marketing Mix Strategy: Marketing Communications

    (Promotion)

    21(Kotler & Armstrong, 2010, p.213-215)

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    THE 3G REVOLUTIONCreative Social

    Networking

    iPhone 3G applications can be used to connect

    creative social heads

    Celebrity testimonials can be recorded regarding

    iPhone and social connectivity

    Celebrities like actors, designers, singers, etc. can

    connect to fans via applications built for the purpose

    16The Big Creative Idea

    22

    Businesses like Starbucks Coffee

    Company can connect to customers and

    share experiences, allow purchasesthrough iPhone Apps

    Applications can connect creative writers,

    artists, designers, and etc. based on

    common interests

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    17 - Footnotes Diaz, J. (2009). iPhone 3GS Complete Feature Guide. Retrieved from:

    http://gizmodo.com/#!5283099/iphone-3gs-complete-feature-guide

    Apple. (n.d.). iPhone 3G Warranty. Retrieved fromhttp://www.apple.com/legal/warranty/iphone/3g.html

    Kotler, P. & Armstrong, G. (2010). Principles of Marketing. Upper Saddle River: NJ: Prentice Hall,

    p.215

    Kotler, P. & Armstrong, G. (2010). Principles of Marketing. Upper Saddle River: NJ: Prentice Hall,

    p.279

    PriceRunner. (n.d.).Blackberry Mobile Phones. Retrieved fromhttp://www.pricerunner.co.uk/cl/1/Mobile-Phones?man_id=6145

    Kotler, P. & Armstrong, G. (2010). Principles of Marketing. Upper Saddle River: NJ: Prentice Hall,

    p.193

    Apple. (n.d.).Apple Introduces the new iPhone 3G. Retrieved from

    http://www.apple.com/pr/library/2008/06/09iphone.html

    Baker, M.J. (1998). Concentrated Marketing Strategy. Retrieved fromhttp://www.westburnpublishers.com/marketing-dictionary/c/concentrated-marketing-strategy.aspx

    CGullWorld. (2008). The 3G iPhone: Strengths and Weaknesses. Retrieved from

    http://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.html

    Kotler, P. & Armstrong, G. (2010). Principles of Marketing. Upper Saddle River: NJ: Prentice Hall,

    p.A3

    23

    http://gizmodo.com/http://www.apple.com/legal/warranty/iphone/3g.htmlhttp://www.pricerunner.co.uk/cl/1/Mobile-Phones?man_id=6145http://www.apple.com/pr/library/2008/06/09iphone.htmlhttp://www.westburnpublishers.com/marketing-dictionary/c/concentrated-marketing-strategy.aspxhttp://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.htmlhttp://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.htmlhttp://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.htmlhttp://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.htmlhttp://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.htmlhttp://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.htmlhttp://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.htmlhttp://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.htmlhttp://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.htmlhttp://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.htmlhttp://cgullworld.blogspot.com/2008/06/3g-iphone-strengths-and-weaknesses.htmlhttp://www.westburnpublishers.com/marketing-dictionary/c/concentrated-marketing-strategy.aspxhttp://www.westburnpublishers.com/marketing-dictionary/c/concentrated-marketing-strategy.aspxhttp://www.westburnpublishers.com/marketing-dictionary/c/concentrated-marketing-strategy.aspxhttp://www.westburnpublishers.com/marketing-dictionary/c/concentrated-marketing-strategy.aspxhttp://www.westburnpublishers.com/marketing-dictionary/c/concentrated-marketing-strategy.aspxhttp://www.westburnpublishers.com/marketing-dictionary/c/concentrated-marketing-strategy.aspxhttp://www.westburnpublishers.com/marketing-dictionary/c/concentrated-marketing-strategy.aspxhttp://www.westburnpublishers.com/marketing-dictionary/c/concentrated-marketing-strategy.aspxhttp://www.apple.com/pr/library/2008/06/09iphone.htmlhttp://www.pricerunner.co.uk/cl/1/Mobile-Phones?man_id=6145http://www.pricerunner.co.uk/cl/1/Mobile-Phones?man_id=6145http://www.pricerunner.co.uk/cl/1/Mobile-Phones?man_id=6145http://www.apple.com/legal/warranty/iphone/3g.htmlhttp://gizmodo.com/http://gizmodo.com/http://gizmodo.com/http://gizmodo.com/http://gizmodo.com/http://gizmodo.com/http://gizmodo.com/http://gizmodo.com/http://gizmodo.com/
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    17 - Footnotes AT&T. (n.d.).AT&T Company Information. Retrieved from http://www.att.com/gen/investor-

    relations?pid=5711

    Brukbaker, R. (2007). iPhone: Made in Shenzhen, Assembled by Foxconn. Retrieved fromhttp://www.allroadsleadtochina.com/2007/08/15/iphone-made-in-shenzhen/

    Mueller, J. (2010).Apple: Strengths, Weaknesses, Opportunities, Threats.Retrieved from

    http://www.fool.com/investing/general/2010/06/07/apple-strengths-weaknesses-opportunities-

    threats.aspx

    Kotler, P. & Armstrong, G. (2010). Principles of Marketing. Upper Saddle River: NJ: Prentice Hall,

    p.213-215 Welch-Abernathy, D.D. (2008).My Take of iPhone 3G versus Nokia Nseries. Retrieved from

    http://phoneboy.com/2453/my-take-on-iphone-3g-versus-nokia-nseries

    Geller, J. S. (2008).BlackBerry Bold vs. iPhone 3G. Retrieved from

    http://www.bgr.com/2008/07/16/blackberry-bold-vs-iphone-3g-yeah-we-definitely-went-there/

    PhoneScoop. (n.d.) Cell phone reviews, info, news, community, and deals. Retrieved from

    http://www.phonescoop.com/

    24

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