Market Planning Assignment:

iPhone K

Group 2: Carly Jones, Hyunsoo Kim, Ina Koelle, Sarah Hirschmann, and Tyler Darke

BUS 306-01 Fundamentals of MarketingDecember 10, 2013

Agenda1 Market Needs2 Product and Software

Introduction3 Product Position4 Competition5 Target Market and

Segmentation6 Value Proposition7 Finances8 Conclusion and Questions

1976

1976 - 1998

1998 - 2000

2001 - 2007

2007 - Present

Market Needs• Simple solution to parental controls• Ease of use

• Quality, child-appropriate phone• Desirable to children

• Access for children to smartphone features and benefits

• 46.6% of children in the U.S. own a smartphone• Expected to increase to 70.4% by 2016

iPhone K

• Plastic exterior, steel frame interior

• Liquid repellent nano-coating

• Configurations• 16 GB• 32 GB

K

iOS 7K

• Limited internet• Restricted email• Restricted song, app, and video purchase• Monitored or restricted messaging• Incoming and outgoing call restrictions• GPS monitoring

Product Position

• High-end smartphone for children

• Peace of mind for concerned parents

• Bridge between limited-technology

children’s phones and current smartphones

Competition• Kajeet• Software only• Limited to Sprint

phones

• Firefly• Very limited features• Two color options• Not appealing to

children

Target Market

• Parents of children ages 5 – 12

• Mid to high income levels

• Early-adopters

Market Segments

• Geographics• Urban areas

surrounding major cities• Early-adopters• Existing Apple store

locations

Market Segments• Demographics• Parents ages 25 – 50• Likely to have children

ages 5 – 12• Mid to high income levels

• Behavior / Psychographics• Concerned parents• 71% likely to set parental

controls• Dissatisfied with current

options

8%9%

13%

20%

51%

Likelihood of Parents to set Parental Controls on a 5-12 year-old Child's

SmartphoneExtremely UnlikelyUnlikelyNeutralLikelyExtremely Likely

Marketing Mix

• Pricing• Distribution• Apple stores, online,

other licensed retailers

• Marketing Communications• Television commercials,

billboards, social media, mobile service providers

Model No Contract

2-year Contrac

t16 GB $499 $9932 GB $599 $199

Value Proposition• Apple product

• Broad range of features

• Safest children’s phone on the market

• Shares appearance of iPhone 5C

Price

Benefits

More The same Less

More More for more More for the same More for less

The same     The same for

less

Less     Less for much less

Financial Plan

Expense Year 1 Year 2 Year 3

Advertisements $70,000,000 $78,984,439 $103,891,252

Marketing Travel $20,000,000 $22,566,983 $29,683,215

Promotions $40,000,000 $45,133,965 $59,366,430

Distribution $30,000,000 $33,850,474 $44,524,822

Total $160,000,000 $180,535,860 $237,465,719

Cost Break DownVariable Costs Price per Unit

Materials $174 Manufacturing $60 Transportation $13

Storage $20Total per Unit $267

Fixed Costs Price per Quarter Machinery $300,000

Maintenance $10,000 Rent $190,000

Administrative $50,000Total per Quarter $550,000

Break-Even

- 100,000 200,000 300,000 400,000 500,000 600,000 $-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

Break-Even AnalysisSales Variable Cost Fixed Total Costs BE Units = 174,784

Units Sold Quarterly

Qua

rter

ly R

even

ue

Conclusion

• iPhone K - technologically advanced children’s phone

• Perfect for concerned parents

• Superior to competition

• Key Learnings

K

References• Apple retail stores, united states. (2013). Apple. Retrieved December 5, 2013, from:

http://www.apple.com/retail/storelist/

• Brown, R. (September 4, 2012). The cost of making an iPhone. Investopedia. Retrieved December 1, 2013 from: http:// www.investopedia.com/financial-edge/0912/the-cost-of-making-an-iphone.aspx

• Elmer-DeWitt, P. (October 28, 2009). Apple's 2009 ad budget: Half a billion. CNN Money. Retrieved November 30, 2013 from: http://tech.fortune.cnn.com/2009/10/28/apples-2009-ad-budget-half-a-billion/

• Hodgkins, K. (September 24, 2013). IHS: iPhone 5s component tally reaches $199, iPhone 5c costs $173. Tuaw. Retrieved December 1, 2013 from: http://www.tuaw.com/2013/09/24/ihs-iphone-5s-component-tally-reaches-199- iphone-5c-costs-17/

• iPhone. (2013). Apple. Retrieved October 13, 2013 from: http://www.apple.com/iphone/compare/Median age for u.s. counties map, statistics. (2013). Governing. Retrieved December 5, 2013,from:

http://www.governing.com/gov-data/ census/median-age-county-population-map.html

• Median age for u.s. counties map, statistics. (2013). Governing. Retrieved December 5, 2013,from: http://www.governing.com/ gov-data/census/median-age-county-population-map.html

• Zact. (May 13,2013). Zact mobile report: navigating children's smartphone use. PR Newswire. Retrieved October 10, 2013, from: http://www.prnewswire.com/news-releases/zact-mobile-report--navigating-childrens-smartphone-

use-215817311.html

Questions

iPhone K