Executive Summary

The assignment is based over iPhone innovation in the light of integrated marketing
communication COSTAC framework. First of all we will introduce the organization of iphone4
then iphone4 and innovation.
INTRODUCTION TO ORGANIZATION:

Apple is a U.S company, that produces consumer electronics and computer software products.
The company best known hardware products include the Macintosh computers, the iPod and the
iPhone. Apple software includes the Mac OS X operating system, iTunes media browser, the
iLife suite of multimedia software and the creativity.The company operates more than 250
branches in nine countries and an online store where hardware and software products are sold.
SHORT INTRODUCTION:

Founded Cupertino, California, United States of America (April 1, 1976) such as

Apple Computer, Inc.
Founder(s) Steve Jobs, Steve Wozniak, Ronald Wayne
Headquarters: Infinite Loop, Cupertino, California, USA
Public type NASDAQ: AAPL, LSE: 0HDZ, FWB: APC
No: of Locations: 251 (Q1 FY 2009)
Area are: Worldwide, United States, Britain, Canada, Japan, Australia, India, Italy,
Germany and China.
Industry: Computer Hardware,
                               Computer software
                               Consumer Electronics,
                               Digital Distribution.
Products:
Mac (Pro, iMac Mini • • MacBook, Air, Pro • Xserve)  iPhone, iPod
(Shuffle, Nan, Classic, Touch) Apple TV, Cinema Display, AirPort,
 Time Capsule Mac OS X (Server • iPhone OS), iLife, iWork

Profit : ▲ £ 2.22 billion in 2010

Website: Apple.com

INTRODUCTION TO IPHONE INNVATIONS AND DIFFUSION

The term innovation means a new way to do something. It may refer to incremental, radical, and
revolutionary changes in thinking, products, processes or organizations. A distinction is typically
made between invention, an idea made manifest, and innovation, ideas applied successfully
(Mckeowm 2008). Apple launched iphone in January 2007. The original 2.5G iPhone combined
with a quad-band GSM and EDGE mobile phone with features hand-held Device found, runs a
stripped down version of Apple's Mac OS X (iPhone OS), and with different Mac OS X
applications like Safari and Mail. It also contains web-based and dashboard applications like
Google Maps and Weather. The iPhone has a 3.5-inch (89 mm) touch-screen display, Bluetooth
and Wi-Fi. On 5th February 2008, Apple updated the original iPhone, 16 GB of memory,
addition to the 8 GB and 4 GB models. On 9 June 2008, at WWDC 2008 announced that Steve
Jobs the iPhone 3G would be Available on 11 in July, 2008. This version adds support for 3G
networks, Assisted-GPS navigation. The price cut to £ 130.55 for 8GB version and £ 196.15 for
16GB version, which was in black and white . On 24 April 2009 exceeded the one billion App
Store downloads. At 8 Jun 2010 Apple launched iPhone 4. Apple has detailed the new version
of the iPhone 4, announced at 24th June 2010.

www.bit-tech.net/news/hardware/2010/...iphone-4-release-date/1
Diffusion of innovations

The iphone diffusion-curve derives from an assumption that new product e.g. iphone4 is likely to
have "product life", i.e. a start-up phase, a rapid increase in revenue and eventual decline. In fact
the great majority of innovations never get off the bottom of the curve, and never produce
normal returns. The Apple will typically be working on new innovations that will ultimately
replace older ones. Successive diffusion -curves will come along to replace older ones and
continue to drive growth upwards. In the figure above the first curve shows a current technology.
The second shows an emerging technology that current yields lower growth but will eventually
overtake current technology and lead to even greater levels of growth. The length of life will
depend on many factors which we discussed above.

Apple’s popular buzz marketing expertise for revolutionary products such as iPod, iPod
Nano and iPod Touch should be directed towards communicating the dynamic smartphone.
(CAE Weblog: Apple iPhone Promotion, n.d.)

COSTAC Model:

Provides a useful framework of the key components for illustrating Marketing

communication plans. The launching of iphone4 in UK will face a lot of problems in the
competitive market. For the successfulness launching the organization will require the marketing
communication plans, that are:

C = Context analysis (Where are we now?)

O = Objective Setting (What do we want to achieve?)

S = Strategy development (How do we get there?)

T = Tactics (Details for achieving strategy)

A = Action (Implementation – putting the plan to work)

C = Control (Measurement of organizational performance against organizational objectives)

CONTEXT ANALYSIS

This analysis will help to Apple for better understanding of its environment and provides a sound
basis for establishing communication objectives. Now we will discuss the iphone4 launching in
the light of following elements of context analysis.

1.Business context

The business context or market context is important to be grateful for business environment in
which the firm operates. Here the Apple will concentrate over the trading condition. Considering
the vast explosion of iPhones in such a short period, it is natural that all of those who want an
iPhone4 would expand its use to business as well own. And there is no joy to carry around a
Blackberry and iPhone4, either in the pocket. All this does is extra pressure on the belt. It's no
wonder that the iPhone's usability in a business context is a raging debate now. This is still a
secondary question, because the fact remains that present and future users demands for iPhone,
for business use. Hence the iphone4 can be survive in the trading condition with its competitors
in UK market.

2. Customer context

This context will help to Apple to judge the consumer behavior and consumer decision making
for iphone4 in the market.

o Buyer or consumer behavior.

The behavior that consumers display in searching for, purchasing, using, evaluating, and
disposing of products and services that they expect will satisfy their needs. iPhone
"phenomenon" than perhaps any other single piece of technology. It might seem like another
blog would be just another one on the mound. But the iPhone 4 is a perfect example of
technology that its mark on consumer behavior. A recent article in the LA Times discusses the
overwhelming accessibility of information for iPhone4 users. The article examines in particular
the possibility that this access could become a social responsibility - the phone can "change in
seconds, a light-hearted entertainment in the pursuit of truth."
o Consumer decision-making processes

The ability to see what the consumer trusts about something to think before he is paying money -
the most powerful aspect of the iPhone 4. A student aims from the Atlanta area, and says the
phone is a "great opportunity for people has opened to check on a particular product, be it a pair
of jeans, a computer or car, with her colleagues(Jared Kelley-Hudgins). Jared thinks he's the new
iPhone, especially for the anticipated 3G feature, which would, if introduced to the Internet
access outside of Wi-Fi networks up to 10 times faster than speed EDGE networks. So
considering the technological quality, speed, appearance (iphone4 is a consistent band and
simple instruction to use), safety (because iphone4 has updated equipment for any official,
entertainment, printing etc use), value and loyalty( it is a professional device, low price than
value, and best service ability, i-e 97% people are happy to use the iphone).
3. Internal context

Apple’s will commitment to internal quality improvement programs would build high customer
equity in terms of value, brand and relationship. Management will be collaborative
understanding of the customer’s value creation process to provide and deliver customer value.

The voice of the consumer would be heard; with the marketing team acting as a watchdog, and
value would be delivered through a premium quality product; built-to precise specifications and
quality standards, delivered through exclusive quality means. (Kotler & Armstrong, pg. 680,681)

Marketing functions / departments and their activities should be coordinated for vertical
integration and holistic marketing management. The iPhone4 team will work product
development and internal / external relations management. The iphone4 team should be
Marketing Manager, Operations Manager, designers, hardware engineers, software engineers,
product managers and business development manager. So the iphone4 team will communicate
messages to influence the way in which they deal and respond to external audiences.

4. External context

The external environment consists largely of uncontrollable factors but which can

significantly affect the organization’s marketing communication activities. Such factors include
(PESTLE):

 Political situation
• Taxation is something that government of UK and Apple should put this as a case study
from country to country in anticipation of a profit, and pricing strategy.
• Import of laws in the world with the GATT in favor of trade.

 Economic factors
• The real world economic growth is in need of a major recession also affected UK economy
, so the Apple will care in the process of editing. Because the potentiality of market is declining,
but it is higher than any other in the telecom sector.
  Social factors.

IPhone4 will improve as the "Start social brand community networking and the
provision of communications for the scope of the professional routine and quality of life,
i-e blogging, micro-blogging, photo-sharing, web-journalism, network gaming, etc.
Showing lists of restaurants and menus available nearest to the buyer, Email and
Messenger, Google Earth and Urban serveing.
(Millennial Marketing: Jello & Betty Crocker get iPhone Apps: Who’s next?, n.d.)

 Technological factors.
The real challenges for iphone4 are the state of the art in the real world, the level of
awareness and Internet usage for the individual and industrial aspect of the world are rising,
landlines performance and development efforts, new technologies in mobile phones are
increasing, future plans for the technological link between cities, universities,
hospitals and other institutions are increasing and can be connected to mobile phones. The level
of using e-technology (on-line bidding, billing, complaints, blogging etc) is high and trendy.
 Legal factors:

Apple has hold over the UK technological market, but it should be must to ensure
creative copyright for external application, i-e the developer's software is not duplicated.

 Environmental factors.

As part of the green revolution, green applications should be designed, will be

customers with creative solutions (green tips) for a green and healthy living. e.g. advises them to
"Compost PET-waste," or "no water the Sidewalk", etc.

(Annex 1.1 iPhone Application Green)

5. Stakeholder context.

Apple will use this situation for profile strategies, because it is very important to understand the
issues surrounding the range of stakeholders to be communicated. The Apple will focus over
Investors, Financial institutions, Trade associations, Government role regulations, pressure
groups. So these are involved in the promotion process of iphone4.
SMART OBJECTIVES OF IPHONE

The objectives of Apple in order to achieve its goals. The objectives can show the clear path
towards the target. Although this concept is not new, but people still confuse it with other
concepts such as objective, strategy etc. The term SMART stands for specific, measurable,
achievable, realistic and timely bound to clearly define the long-term objectives.
The iphone4 marketing objectives are to make an aggressive buy achievable objective for the
first and second years of the market:
1st year Objectives - Apple will present a 2-percent share of UK mobile phone market with the
aim of testing by individual sales volume.
2nd year objectives – should be related to a share of 10 percent to reach sales.

• Addition to Apple's image of innovation, quality and value.

• Measure the awareness and response in order to make adjustments to marketing
campaigns as necessary.

• Extension to the Apple brand and link to the established meaningful positioning.

Target Market:
• Differentiate the other PDA's iPhone4 on the market.
• The primary goals of the customer with average incomes of the top professional of
their busy schedules to coordinate and communicate with Colleagues, friends and family.
• Secondary objectives are consumer high school, college and graduate students who
need a portable multifunction device.
• Primary goal is business partnership with:
• Large mobile phone provider, AT & T, Verizon, Sprint and Cellular One.
• Large enterprise software companies, where information is critical to the
ultimate consumer.
• Secondary business objective is medium to medium-sized businesses that help
managers and employees to stay in communication or access to the critical data you want to go.
• Market segment of companies with from £6,54 - £32,000,000 in annual sales.

Segmentation:
  Demographic Variables for iPhone: Intellectual users with purchasing.
o AGE
Young users (16yrs-25yrs), Middle aged users
o INCOME
High income
 OCCUPATION
Professionals, Corporate users/entrepreneurs, Medical users and Students
(Launching iPhone: Apple’s entry into the Mobile Phone Market |Marketing Case Studies|, n.d.)

POSITIONING
With the of sing product differentiation, positioning, iPhone4 will be adaptable, practical, value-
added equipment for personal and professional use. It will focus on the expediency of having a
full device for communication, but also pictures, music, video, and Internet access.
• The iPhone4 will be encouraged as a profession and stylish.
From the past experience of iphone status:
The market share was 10% in the U.K. smartphone market over a course of two years.
So the objective of iphone4 for UK will be:
• A large consumer shares of several sub-markets could be conquered for the first Apple-timer in
the mobile phone market.
• It would be for the needs and desires of the targeted customers.
• Capturing multiple market segments through a single marketing strategy would save the cost of
customized marketing and preferential terms for individual segments.
To satisfy the needs and wants of smartphone customers and guarantee satisfaction through
value delivery.
It would provide a market breakdown to identify potential smartphone users.
To manage a successful, focused launch without budgetary wastages
It would help sort out consumer groups of interest from broad segments of various age-income
combinations of the cellular phones market. Hence, limits wastage of resources.
(Kotler & Armstrong,2002, p.246).
The SMART criteria should not only to the general communication strategy, but also to the
setting of targets in the promotional mix. This means that enables the SMART principle, these
objectives are set for advertising, sales promotion, personal selling, public relations and direct
marketing.

Strategy Development for iphone4:

The Apple will focus this part of the communication process, to examine the strategy and
communicate the right balance between the need of consumers, traders and other stakeholders.
There are three approaches that Apple can use as a basis for their communication strategies and
these are generally regarded as the 3Ps of marketing communication.

Pull communication strategies as a B2C strategy:

Apple will create advertising activities to the end users or buyers in an attempt to provide
iphone4 from the agents to consumers; in turn they will demand the product directly from the
Apple and thus pull the iphone4 by the channel demand.
The advertising objective is to create a rule and to maintain heightened awareness to build
attitudes and provoke motivation within the group of buyers. Pull strategies encourage the end-
users to demand the product from the distributors, thereby pulling the product through the
distribution network.
 (Kate Notes)

Iphone is advertising through Television Commercials (TVCs), Celebrity testimonials.

Billboards and banners:
Malls: visited by the youth, Office buildings for corporate users, Underground Metro stations
for corporate users and youth.
Online Podcasts:
YouTube is a platform for successful advertising. iphone also use marketing blogs, etc.
(iPhone marketing plan - Apple iPhone forums, 2010)

Push communication strategies as a B2B strategy:

The Apple uses these promotional activities or messages to the channel intermediaries
(commercial channels), as distributors, wholesalers, agents, distributors and retailers, which in
turn pass on such promotional activities are targeted for the end users e.g. you can buy iphone4
with carphone warehouse with the connection of O2, Vodafone and Orange.
(http://www.carphonewarehouse.com/mobiles/pay-monthly/apple-iphone4)

Often with a push policy promotes iphone4 to the next channel member, with this member again
of production to the next level in the channel and so on. This strategy should facilitate the trade-
channel members of the sales of consumer products because the products are moving to the
consumers.

(Kate Walsh notes)

A push often uses mainly promotional mix tools i-e:

• Personal selling, as in business to business marketing.

The personal selling may focus initially on developing a relationship with a prospective buyer,
but ultimately, always trying to "close the sale to end." It is an effective way to manage personal
customer relationships.

• Sales promotion techniques such as discount for bulk orders, dealer competitions for the best
sales figures and so on. Hence for the sales promotion iphone Joint tariffs with the folloing
connection available at UK to optimize costs for consumer.
(http://www.carphonewarehouse.com/mobiles/pay-monthly/apple-iphone3gs)
If Apple Inc. uses both the pull and push strategy in their communication with the business
men and direct to the customers for iphone4 and provide accessibility to customers with other
connection, upgrade facility etc, then the product will be promote very well. And iphone4 will be
like the king position in the market.
PROFILE COMMUNICATION STRATEGY

The Apple can be use this strategy to create a positive public image of the iphone4 in the minds
of parties. The task or objective is to provide a suitable project corporate identity, to build and
maintain a solid reputation for the iphone4.
Marketing communications tools used in profile strategies include mostly:

• Public relations:

Apple will generate public relation techniques such as press releases, press conferences, facility
visits etc, to provide the test units to AT&T’s high end subscribers (Entrepreneurs, IT
professionals, etc).

iPhone Updates Subscription institutions in Apple Stores on a button and entering contact
information on a promotion machine. Creative method "Spread the Word" competition with
consumers. Apple also sign contract for free Wi-Fi to public. And for customer attraction has
done customer Appreciation Day for every 6 months.

• Sponsorship of community based projects such as Tesco’s computers for schools initiative.
Apple exclusively is sponsoring is about 15,000 Subscribers up to 66% from last year
opportunity to weekly e-newsletter. But due the innovative product(iphone4) in the responsibility
of Apple is more than before, because the phone is new and it want publicity in the market, for
this purpose Apple will Sponsoring for target consumers in specific exhibitions, function, etc for
which they are demanding.
TACTICS

Tactics help in the success of an organization’s marketing communication strategy.

Marketing communication tactics includes the adoption and application of the 3Ms .

1. Mix (choice of communication mix)

2. Media (broadcast, print, new, outdoor and mobile media)

3. Message: (information-based messages)

MARKETING COMMUNICATIONS MIX

This relates to which of the following marketing communications tools the firm uses to achieve
its stated strategy:

1.Advertising 2. Sales promotions 3. Direct marketing 4. Public Relations 5. Sponsorship 6.

Personal selling.

MARKETING COMMUNICATIONS MEDIA

This relates to which of the following marketing communications media the firm uses in its
advertising efforts: 1. Broadcast media – television, radio 2. Print media – newspapers,

magazines 3. Outdoor media – poster, billboards 4. Mobile media – buses, taxis 5. New media
– Internet, SMS.

MARKETING COMMUNICATIONS MESSAGES

Marketing communications messages tells to the messages that organization broadcast in their
promotional activities.There are generally two types of marketing communication messages
namely:
 1.INFORMATION-BASED MESSAGES

• Factual: The benefits are presented using reasoned, factual arguments, for example nicotine
patches.

• Slice of life: Allow the target customer to identify with the characters and a common problem.
Brand X is then perceived as a suitable solution, for example washing powders.

• Demonstration: Show that audience how the product solves a problem, for example floor
cleaners before and after use.

• Comparative: Through comparison, it is possible to achieve improved status and superiority,

for example credit and charge cards.

2.EMOTION-BASED MESSAGES

• Fear: The suggestion of physical danger or social rejection might be eased through the use of
the brand, for example cigarette smoking.

• Humor: Attention and mood can be maintained by relaxing the target audience, for example
Batchelor’s Super Noodles.

• Animation: For low interest products / services, animation can attract attention and convey
complex products in a novel manner, for example Ford Focus.

• Sex: Used primarily to attract attention and to be salient.

• Music: Provides campaign continuity and a degree of differentiation through recognition, for
example Ford Cougar, Peugeot 406.

The Apple use tactics for customer attraction. The customer was from two different sources to
create differentiation raised by competitors and delivering the goods with value added service
message or an application. • PR • Blogs - Opinion & Specialized Pre-Launch Strategy • Sneak
Peaks sites on R & D Info • Buzz & Viral Marketing • Apple.com • Printed media launch
strategy • TV Outdoor Media Social Media • Advertising • Carrier Handeld Apple.com Post
launch strategy • Independent review sites • Online Ads • Digital Campaigning Paind Digital
Marketing Strategy Break Up Email Marketing Social Media Display Ads Advertising Blogs
Access to care • Hosting iPhone Apps iPhone apps iTunes Purchase section for free as you can
see, you can watch Apple has almost all digital channels in 2007 to 2010, and makes economic
sense used in order for the hosting to use their communicative message consumers and target
audience.

ACTION

Action means applying the organization’s marketing communication strategies and tactics so
that organizational communication objectives can be achieved. For this purpose the basic activity
i-e Set the marketing communications budget should be must consider.

• The Apple break-even analysis assumes the wholesale sales of $ 328.34 per unit,
variable cost of $ 164.17 per unit and fixed costs est of $ 32,830,000. Based on these
assumptions, the break-even calculation is 32,830,000 pound divided $ 328.34 minus $
164.17 equal 200,000 units sold.
• Break-even calculations show that Apple will exceed the sales volume for profitable
200k. After the first year, Apple is a profit of 0.82 billion minus 32.83 million fixed
costs.
• Recommended price is $ 229.84. The markup is 40 percent.
• It is predicted that sales will increase by at least 60 percent from this change, which will
reduce the impact of fixed costs and to improve opportunities for our production scale,
increase, further Improvement in profits in the long term.
The Apple is currently in the process of shake-out, which is first and foremost by the
fact that they occupied a large, loyal group of stable customers. In foreign markets the
apple’s advantage in this area primarily because of its establishment strong branding and
it is now in a position to use, this area of stable profitability to support the domestic
electronic Wars. The promotions for the eliminated products will stop something to exist
and some of this money may be used to create new products in the development stage.
Potentially, there will be money spent to continue the advertising of the remaining
product line.
Product Lifecycle:

Apple

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So this is necessory for iphone to give more stress over 3Ms. i-e 1. Mix (choice of
communication mix), 2. Media (broadcast, print, new, outdoor and mobile media),3. Message:
(information-based messages).

CONTROL

Once the marketing plan begins to be implemented, the manager is monitoring and control that
what is going on? Monitoring means checking that everything is on schedule. Control means
corrective measures as soon as possible if things do not work as planned. There are many
methods or techniques to control the organization, marketing communications and will include
the following:
 CONTROL METHODS

• Sales control: This technique involves measuring whether actual sales match the
organization’s sales objectives.

• Profitability control: This involves determining whether actual profits match the
organization’s profit objectives.

• Brand awareness control: This involves carrying out brand recall tests in order to determine if
people are aware of the brand.

• Benchmarking: This implies measuring the firm’s performance as compared with the market
leader in its industry.

To plan the strategy the board of Apple presenting information and make a proposal for further

marketing efforts. The board will discuss with management, internal audit, and the independent

auditors of the Company's internal controls and discuss with the internal auditors the results of

the internal audit program. The board shall examine and discuss the Company disclosure controls

and procedures, and the quarterly evaluation of these controls and procedures by the Chief

Executive Officer and Chief Financial Officer. The board examines issues related to transactions

with the person, before each meeting they meet in private with any person, based on their own

proposal to the information they have learned. The final proposal sent before Apple is the result

of that meeting.