iphone 3gs marketing plan
TRANSCRIPT
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iPhone 3G Marketing PlanPresented by Anum Ali
May 04, 2011
Subject Code: MRKT310
Section: 7983
Professor: Thomas Tanner
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iPhone 3GApples 2nd iPhone: New and Improved!
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2- Product Description
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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)
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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)
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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
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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
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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/
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