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iPhone marketing plan

Discussion in 'General Discussion' started by Alex, May 22, 2007. Page 2 of 3< Prev 1 2 3 Next >

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iphoneiphoneNew Member

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The real Apple Plan: Give some things, Keep some. Then give some more, keep some Then Come with new model, again give some keep some....

iphoneiphone, Oct 1, 2008 #11

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ipresourceNew Member
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iphoneiphone said:

The real Apple Plan: Give some things, Keep some. Then give some more, keep some Then Come with new model, again give some keep some....

Not to be critical but didn't you forget to add a "collect some" somewhere in there??

ipresource, Dec 16, 2008 #12

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markdreganNew Member

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iPhone 3GS Marketing Plan: Entering China The below is a marketing plan for the iPhone 3GS entering the Chinese market. Quite a complex issue for Apple. iPhone 3GS: China Marketing Plan

markdregan, Jun 17, 2009 #13

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markdreganNew Member

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Full Text iPhone 3GS: International Marketing Plan (China) The full text pdf can be found here: http://www.scribd.com/doc/16520745/iPhone-3GS-International-MarketingPlan-China Along with references, charts & images. ---------------------------------1. Executive Summary Apples ability to enter the Chinese mobile market are of crucial importance to the companies future success. Traditionally, Apple has not been very successful in this market due to social, economic and cultural differences. The Chinese government are known for their authoritarian control over both consumers and businesses; a position that Apple are not comfortable with. The following report outlines the core strengths and weaknesses of Apple when entering the Chinese market whilst paying attention to their competitors in an environment where intellectual property is not respected. Finally, a marketing plan is proposed that will successfully position Apple in the market.

2. Introduction Apple Inc. designs, manufactures, and markets personal computers, portable digital music players, and mobile communication devices and sells a variety of related software, services, peripherals, and networking solutions. Apples most successful product to date has been the iPod which has sold over 163 million units to date. As the market for digital music players has become saturated, Apple have developed a break through smart phone called the iPhone. Although many doubted Apples ability to gain market share in an increasingly competitive and complex market, they have succeeded in selling over 21.17 million units in only 2 years. In comparison, it took Apple 3.75 years to sell that many iPods (See Fig 9). Relatively speaking, the iPhone is far more important to Apple than the iPod. The iPhone addressable market is considerably larger than that of the iPod. Although traditional mobile phone sales still dominate the market, a clear shift is under way. Mobile phone sales for the first quarter of 2009 totalled 269.1 million, a drop of 9.4% over the same period last year. Smart phone sales for the first quarter of 2009 were 36.4 million, representing a 12.7% increase over the first quarter of 20081. The iPhone is available in 88 different countries throughout the world, representing an addressable market of 760 million users2. However, Apple have been unsuccessful in bringing the iPhone to China. Negotiations regarding the matter have broken down with both China Mobile and China Unicom; the only two mobile service providers in the country. As of February 2009, China Mobile and China Unicaom have a collective subscription base of 565 million users; equalling 74% of the iPhones current addressable market. The following report will outline the marketing plan for Apple to enter into the Chinese market. 3.*Situation Analysis 3.1 Stakeholders Apples strategy of adopting exclusive partners has enabled them to aggressively negotiate with carriers in each country. Traditionally, the carriers hold all the cards and the mobile manufacturers are at their mercy. This could not be more true in China where there exist only two mobile carriers; China Mobile & China Unicom. China Mobile are benefiting from a near monopoly in the mobile market with a subscription base of 450 million and revenues of $48.79 billion for fiscal year ending December 2007. An alternative partner for Apple would be China Unicom, which has a smaller subscription base of 130 million. However, there are several reasons why this would be an unwise decision. China Unicom have been struggling against China Mobile in recent years. Appendix 1 shows the divergence in performance between China Mobile and China Unicom. In response to decreasing revenues, China Unicom have adopted an alternative strategy of becoming a "worldleading broadband communications and information service provider3. This change in strategy represents a significant risk for Apple in choosing China Unicom as their exclusive partner. There also exist technical challenges in choosing China Unicom as they use a wireless technology known as CDMA. The iPhone uses GSM technology hence partnering with China Unicom would force Apple to build a second versions of the iPhone; a decision that would be misaligned to its strategy of hardware & software standardisation. Hence, China Mobile would be the most appropriate exclusive partner for Apple. There are many synergies between the two companies that would be mutually beneficial. Apple have designed the worlds most popular smart phone whilst China Mobile have the worlds largest subscription base and strengthening control over the worlds largest mobile market; China. 3.4 Environment Analysis

The Chinese market has the largest number of mobile subscription users in the world and is growing at over 20% per annum. Considering that the population of China is 1.3 billion and mobile penetration is only 35%, this represents a significant growth opportunity for Apple4. 3.4.1 Political & Legal Environment The Chinese government retain tight control over the mobile industry in China. The two providers of mobile services -China Mobile & China Unicom - are state owned and highly influenced by government policy. Apple must be cautions in entering this market as the Chinese government exercise authoritarian control over both Chinese citizens and companies. For instance, it is likely that Apple will have to disable the WiFi functionality on the iPhone in order to comply with the Communist Party's strict Internet control and censorship rules5. 3.4.2 Economic Environment The economy of the People's Republic of China is the second largest in the world after that of the United States with a GDP of $7.8 trillion (2008) when measured on a purchasing power parity (PPP) basis. China has been the fastest-growing major nation for the past quarter of a century with an average annual GDP growth rate above 10%6. 3.4.3 Social & Cultural Factors Gross and disposable income has increased rapidly over the past 10 years, and is expected to grow until 2015. Statistical figures indicate that the Engel coefficient7 has been decreasing since the early 1980s. The figures imply that both urban and rural population has a level of welfare which allows them to spend a significant share of their income on non basic survival requirements (Edfalk, 2006). 3.4.4 Technical Environment China Mobile alone has a population coverage rate of 98% on its 2G network. However, China Mobile do not yet have a functioning 3G network in operation. For best results, the iPhone should be used on a 3G network. Internet speeds on a 2G network are slow and result in reduced customer satisfaction. China Mobile intend on having 70% 3G coverage by the end of 20098. 3.5 SWOT Analysis 3.5.1 Strengths 3.5.1.1 Technical Innovation and 100% Control Apple are renowned for their attention to detail and their ability to innovate at the cutting edge of technology. Apples tight control over every aspect of the iPhone development gives them a distinct advantage over their competitors. The mobile market is a highly dynamic market that changes at a rapid pace. Apples tight control over both software and hardware design enables them to rapidly innovate and create seamlessly integrated products. In comparison, Google and Microsoft have adopted the strategy of developing software for 3rd party manufacturers such as Samsung & LG. The result is that Microsoft and Google are slow to develop breakthrough mobile technologies as they have to focus on integrating with multiple types of handsets. These handsets all sport different types of hardware that needs to be considered when developing applications; a situation that Apple does not have to consider. 3.5.1.2 Software Development Experience Perhaps one of Apples most significant strengths is their experience in software development. Since 1984, Apple have pioneered some of the most advanced technologies in modern computing. As the iPhone is essentially a portable computer, Apples deep industry experience in software development

enabled them to slingshot past competitors in a highly competitive market. Apple realised that the one of the main drivers of sales would be the variety of applications available for the iPhone. Apple used their software development experience to develop a powerful Software Development Kit (SDK) that enabled software developers around the world to create native applications for the iPhone. The App store has been a phenomenal success, with over 50,000 application submitted and over 1 Billion downloads in just 9 months. The CEO of Tapulous (one of the largest iPhone developers) said that ...right now I don't see any reason to move beyond developing for the App Store. In fact, I see us increasingly putting all our eggs in the App Store basket.9 A race has begun amongst Nokia, Microsoft, RIM, Palm and Apple, to capture developer resources and enable them to create powerful engaging application for their devices. Apple have managed to gain significant advantage over its competitors in a race that may define who wins the battle of the smart phone market. 3.5.1.3 High switching costs iTunes has become the de-facto music management application for the PC of Mac. As iTunes does not integrate with non-Apple products, there are significant switching costs associated with buying a non-Apple phone and transferring your music onto it. 3.5.1.4 Strong Relationships with 3rd Party Manufactures Apple uses 3rd party manufacturers to create the iPhone. Apple has developed strong relationships with companies such as Foxconn over the years. As a specialist manufacturer of high quality electronic devices, Apples relationship with Foxconn builds on their list of strengths. 3.5.1.5 Upgradability Unlike traditional phones whos software cannot be upgraded, the iPhones software can be updated to the latest version months after its purchase. In addition to this, the user can add apps to their iPhone through the App Store. Hence, the iPhone actually becomes more valuable to the user as it gets older. This is in stark contrast to traditional phones that remain the same throughout their life time. 3.5.2 Weakness 3.5.2.1 Apples Weak Brand in China Apple have benefited from their world renowned brand when launching the iPhone in the USA and Europe. However, Apple does not have the same brand strength in China. The iPod has only an 8% market share in China compared to a 71% market share the USA. Additionally, the Mac computer has less than a 1% market share in China compared to a 13.8% market share in the USA10. Apple have relied on their loyal user base when launching the iPhone in the USA and Europe. This strategy is not going to be possible in China. Hence, Apple must ensure that the iPhone appeals to users beyond the Apple fanatics. 3.5.3 Opportunities 3.5.3.1 iPhone as a Gaming Platform According to empirical research by OReilly Radar, 22.5% of apps in the App Store are games. This is not unsurprising as the iPhone has all the ingredients of being an incredible gaming device. Its touch screen controls, digital compass, GPS & accelerometer enable 3rd party developers to create highly immersive games that have not been seen before in the handheld gaming industry. Hence, Apple is not only positioning itself to capture a significant portion of the mobile phone market, but to become a significant player in the handheld gaming industry too.

The handheld gaming market is an intensely competitive $7.2 billion industry11 that is dominated by Sony (PSP) & Nintendo (DS). Apple has the potential of winning a large portion of this market due to the iPhones unique features and the App Store. The App Store has enabled independent developers to easily create games with limited budgets whilst reaching millions of customers around the world. By empowering the developer community with the App Store, Apple have presented Sony and Nintendo with a very serious threat; an array of high quality low priced games. 3.5.3.2 In App Purchasing The latest release of the iPhone enables developers to charge its users for digital content within the app itself. This may not seem like a break through opportunity for Apple, however it is very significant. Apple stores the credit card details of its customers and charges developers 30% commission on all transactions. For example, the massively successful game called The Sims enables users to purchase virtual clothes and accessories in a virtual world on the iPhone. Although this may seem daft, the existence of In App Purchasing will revolutionise gaming as we transition away from generic to unique gaming experiences. 3.5.3.3 Multi Touch Trackpad as an Input Method for Pin-Ying Chinese have long suffered from poor input methods for Pin-Ying (The character set of Mandarin). The iPhone software keyboard is adaptable, allowing you to switch between more than 40 international layouts. The iPhone also features sophisticated character recognition software that lets you draw a Chinese character with your finger and tap to choose the matching result12. 3.5.3.3 iPhone as a Hub Although the iPhone has only been in existence for just over 2 years, the iPhones core strategy has shifted considerably in this time period. Initially, the iPhone was marketed as a device. The Apple marketing division focused on the iPhones unique features such as multi-touch. The second version of the iPhone was marketed as an application platform. Advertising slogans such as 25,000 apps. And counting focused on the App Store as its main source of differentiation. The next wave of the iPhone will be as a digital hub. The new iPhone software enables developers to integrate the iPhone with 3rd party devices. For example, an iPhone accessory called DiabetesLog enables diabetics to check and record their blood sugar levels directly on their iPhone. Enabling this level of integration with the iPhone will open up a vast range of additional markets. 3.5.4 Threats 3.5.4.1 Competition from Microsoft, RIM, Palm, Nokia & Google The smart phone market is growing a a rapid rate. As barriers to entry decrease, expect new entrants to pose significant challenges to Apple. Google have adopted a game changing strategy of developing smart phone software, and allowing smart phone manufacturers to use it for free. Such disruptive strategies need to be carefully followed. 3.5.4.2 iPhone Clones & Copyright in China Given that China have dubious copyright laws, Apple cannot rely on its intellectual property as a source of competitive advantage. Instead, they need to develop strong brand recognition and convince consumers that the iPhone is far superior to the iPhone clones. One particular clone is called the HiPhone, and is virtually indistinguishable to the iPhone. The presence of these clones in the market are a threat to Apple on several fronts. They reduce Apples revenue, put downward pressure on Apples pricing strategy and significantly damage Apples brand reputation.

3.6 Competitor Analysis << See: http://www.scribd.com/doc/16520745/iPhone-3GS-InternationalMarketing-Plan-China>> 4. Market Segmentation The iPhone has appealed to a broad range of market segments throughout the USA and Europe. According to market research by Solutions Research Group, the general trend amongst consumers can be represented as follows: << See: http://www.scribd.com/doc/16520745/iPhone-3GS-InternationalMarketing-Plan-China>> Based on successful targeting in international markets, the iPhone will be targeted at the following segments: Target Segment Consumer Need Corresponding Feature/Benefit Price Sensitivity % Sales Professionals Stay in touch while on the go. Record information while on the go. Email, instant messaging & phone. Replace the need of laptop to check emails. 4/10 35% Students Perform multiple functions without carrying multiple gadgets. Style and individuality. iPod, phone, video, TV shows, internet & PDA. Apple branding as fashion statement. 9/10 20% Corporate Users Input & Access to critical data on the go. Access to corporate exchange server. In house applications developed for mission critical activities. 3/10 25% Entrepreneurs Access to contacts, appointments and other essential information. Wireless access to calendar and address book information. Access to the internet for rapid research. 5/10 15% Medical Users Update, access and exchange medical information. Wireless access to patient information. Remote monitoring of patients. Calendar and Address book information. 6/10 5% Weighted Average: 5/10 100% 5. Selected Marketing Strategy Apple have historically adopted a price skimming strategy when entering new markets, however the environment and circumstances surrounding the Chinese are entirely different to that of any previous market Apple have entered. Firstly, Apple do not have a strong brand within China, as cheap digital music players and laptops are very popular. Secondly, iPhone clones are gaining popularity and damaging Apples brand and competitive position by placing downward pressure on their pricing strategy. Finally, smart phones are relatively common in China and hence the wow factor will not be as evident amongst Chinese consumers. 5.1 Product I recommend that Apple make a select few changes to the iPhone. Firstly, I recommend that they disable the WiFi antenna on the iPhone as it would be against the Internet control and censorship rules. In a country like China, it is vital that you are not seen as a disruptive presence. As mobile phones are seen as a fashion item rather than a functional device, I recommend that the iPhone be made available in a range of colours. Alternatively, Apple could enable the backside cover of the iPhone to be replaced; a trend which is very popular amongst the Chinese. In an attempt to further differentiate the iPhone from its competitors, the iPhone software should enable the user to input Chinese characters by drawing on the multi-touch screen. As this process has historically been very difficult for Chinese, it should act as a useful promotional tool. I would recommend that all other features on the iPhone be kept the exact same. Apple has always adopted a standardised worldwide product policy. If the Chinese iPhone were to sport significantly improved features, it may lead

to the creation of grey markets in areas outside of China; a scenario that may upset Apples international partners. 5.2 Price The existence of iPhone clones has undermined Apples pricing strategy. If Apple adopt a price skimming strategy, their bottom line will be negatively affected as consumers find it difficult to differentiate between near identical iPhone clones. Due to grey markets, the iPhone is available in China for approximately 4000 RMB. Copycat iPhones such as the HiPhone are available for half this price. Apple must be careful to price the product so that it is perceived as a premium product without driving potential customers to purchase iPhone replicas. In addition to these factors, Apple must consider its overall iPhone strategy when pricing the iPhone in China. As discussed earlier, the race has begun amongst Nokia, RIM, Palm, Microsoft and Google, to capture developer resources as applications will be one on the key driving forces behind future iPhone sales. Establishing a first mover advantage in this race is vital. Hence, I recommend Apple aggressively price the iPhone within China in order to establish a large user base for Chinese application developers to target. Capturing developer resources is at the heart of the iPhones long term strategy. Considering the price sensitivity of the target markets and the above information, I recommend a price point of 3500 RMB for an 8GB iPhone whilst pricing the 16GB iPhone at 4500 RMB. 5.3 Distribution (Place) Choice of distribution within China is an extremely important decision. Apple have traditionally maintained a tight control over the marketing and distribution channels of its products. However, they will need to alter this strategy when entering China. Apple has just one self owned store in Beijing, hence they will need to find appropriate retail partners. I recommend that they partner with the company, Bust Buy (China), of which they have an established relationship built in the USA. Additionally, I would recommend that they partner with China Mobiles largest partner as this will offer the best market reach. Apple should initially focus on the 3 major cities of Shanghai, Beijing and Hong Kong; as a large portion mid-high income earners are located in these regions. In addition to this, customer will be able to order the iPhone from Apples online store. As this channel offers financial benefits to Apple, they will entice customer with a free laser engraving. 5.4 Promotion Building hype around the launch of the iPhone will be difficult in China, as customer are well accustomed to smart phones and technology such as the iPhone. Attracting the attention of the media will require more than just a simple product announcement. Apple must market the iPhone as something entirely new an innovative; of which the Chinese have never seen. I recommend focusing on a select few killer features that will demonstrate to the Chinese consumers that the iPhone a new wave of mobile technology. By focusing on iPhone applications, Apple can immediately differentiate itself from the iPhone clones which are unable to run iPhone applications. Furthermore, demonstration the iPhones Pin-Ying character recognition technology will further differentiate the iPhone from its competitors. Finally, I recommend that Apple market the iPhone as a gaming platform as casual gaming is incredibly popular in China. In relation to Advertising & Public Relations, I recommend that Apple adopts a holistic control method such that advertising spend is greatest when publicity is lowest. Similarly, advertising budgets should be reduced when PR is high. By adopting this strategy, Apple will appear to be constantly in the press and

will make it very difficult for competitors to capture consumer attention. 6.*Conclusion Entering the highly competitive mobile market is clearly a complex problem. Apple must consider the political differences when choosing an exclusive partner. In China, nothing is certain as the government always have the final say. Marketing the iPhone in China will require adaptation by Apple on a number of fronts. They cannot rely on their loyal user base to drive initial sale. They must find a way to appeal to the Chinese culture. Fundamentally, the Chinese are different to Europeans and Americans. They use their mobile in different ways. Apple must focus on the iPhones unique features that will resonate with Chinese consumers. Furthermore, Apple need to market the iPhone as an application platform so as to differentiate itself from copycat competitors. The importance of gaining access to the Chinese market goes beyond revenue generation for Apple. The iPhone is a fantastic product that will help build strong brand recognition and undoubtedly lead to future sales of additional Apple products; such as computers, iPods and software. As Apple have experienced in other countries, the halo effect of the iPhone is a powerful means of driving future sales & creating brand loyalty.

markdregan, Jun 18, 2009 #14

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marc23New Member

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Videos that demonstrate the iPhone app you are marketing are extremely effective. An example of a professional iPhone video can be seen at rsvpvideo.com/demos-internet.htm

marc23, Sep 14, 2009 #15

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martincooper91New Member

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23

great job keep it up that is so informative. thanks for the post

martincooper91, Sep 14, 2009 #16

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garykirsten63New Member

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199

The marketing plan looks interesting. Great post. You showed everything in details. Keep up the good work.

garykirsten63, Sep 26, 2009 #17

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faidzNew Member

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10

nice info.. thanks!

faidz, Oct 5, 2009 #18

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garykirsten63New Member

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199

Dude, you have done a tremendous job. I would like to thank you from the bottom of my heart. You marketing plan has got all the points that is necessary for any product. Keep up the good work.

garykirsten63, Oct 11, 2009 #19

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garykirsten63New Member

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199

That's a very good job man. I am really surprised to see their plan. Your analysis were also interesting to read. The threats you specified were very important. Hope apple would be more conscious about those.

garykirsten63, Nov 25, 2009 #20

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