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Integrated Marketing Communication

Client Brief and SOS Analysis for Apple iPlay

Submitted To

Prof. Rishi Dwesar

Submitted By

Shaunak Gosawami Shifa Sharma Shilpa Jacob Shilpi Rathore Shilpi Sarkar Shobhit Khanna Shrey Sagar

(10BSPHH010718) (10BSPHH010723) (10BSPHH010726) (10BSPHH010730) (10BSPHH010731) (10BSPHH010742) (10BSPHH010748)

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CLIENT BRIEF

Where are we now? (Background) Apple is a leading multinational that designs and markets consumer electronics, consumer software and personal computers. The product range includes iMac, MacBook, iPod, iPad, iPhone, iTunes, and various softwares and operating systems compatible with these devices. Apple outsources its manufacturing but maintains a strong hold of the production process and techniques to ensure quality so that the standards of Apple are maintained. It distributes its products through online portals, its own website, various retail channels and most importantly its own retail outlet named iStore where customer experience is a priority. Apples annual turnover is $100 billion and has a 10% market share in the operating system sector and a 28% share of the smart phone sector. Other products like iPod and iPad are also leaders in their respective segments. Apple stands tall in the technology industry with a very high brand value catering to the premium segment. It is known for its innovation and has been delivering high quality, aesthetically pleasing, functionally superior products ever since its inception. It also focuses on providing a clean and user friendly graphical user interface which makes it stand out from the competition. Where do we want to be? (Objectives) The companys objective would be to increase its annual turnover by 20% in the next 5 years i.e. from $100 billion to $120 billion annually. How do we get there? (Strategy) Apples current line of products is doing tremendously well in the market and we want to leverage our position in the consumer durables sector to diversify into another booming industry that is the Gaming industry. To provide an initiative to this move we are planning to launch a new product called the iPlay which essentially is a gaming console but like every Apple product, it is of a different kind. Our research has yielded results over the past couple of years and we have been able to develop a headset which can read the brain waves of a person and interpret his thinking to help him control the character that he plays in the game. This would be a totally new concept in the market and would revolutionize the way people play. Apples brand proposition and brand image not only need to be maintained with the launch of this new product but also need to be strengthened. The customer base of Apple thrives on expectations and new product anticipation which will be satiated with the launch of iPlay.

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What is to be said? (Message) The communication will essentially make the customer base aware and tell them about the launch of a new revolutionary gaming console called iPlay. The communication should also focus on the innovative new headset which comes with the console which maps brain waves and lets the gamers mind control the game instead of his limbs. The communication can also try to put across a message that now the physically disabled can also enjoy gaming. Whom are we talking to? (Target Audience) The target group for iPlay would primarily be consumers in the age group of 18-34 years who are active gamers and belong to the high income category. The technology-savvy people would also be targeted as it is a state-of-the-art innovative concept and hence these early adopters would result in initial sales and hence positive word-of-mouth on which further sales can take place. It will also target brand loyalists of Apple who will buy the iPlay not only because they are keen on gaming but are extremely brand conscious. They would buy it because it is an Apple product. We also intend to cause a high amount of consumer switch from Nintendo, Sony and Microsoft to Apple iPlay. How do we reach out to them? (The Medium) Since Apple has a very high brand equity, the first step would be to announce the launch well before the actual day through PR. This would create a huge buzz amongst the existing customer base as well as the technology freaks and instill a sense of curiosity in the minds of prospective customers. An enormous Advertising and TVC campaign would be launched along with the product. POS (Point-Of-Sale) : Apple iStores will also have creatives shouting out to the customers about the arrival of a new Apple product. Publicity : On the day of the launch, Steve Jobs himself would hold a press-conference to announce the launch and intimate customers about the features and product benefits. Internet and social media hype will be created around Facebook, Twitter and Google+. All in all, it would be a 360 degree marketing campaign encompassing all media forms to ensure high visibility and awareness for the target audience.

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SITUATION ANALYSIS

Situation Analysis is the first step of the SOSTAC model. Situation Analysis of any company tells about the current scenario of the company in the market. It defines and interprets the state of the environment of an organization. It gives information about the major strength or the competitive advantage of the company, the marketing strategies, the target market and its positioning. It also talks about the factors which may have an effect on the company. The situation analysis of Apple Inc.: (A) Performance: 1. Net Income*: The first step of analyzing the situation analysis of SOSTAC Model is to analyze the performance of the company. Here in the graph it can be seen the Apple Inc. has a continuous increase in its net income. The major reasons for the success of Apple Inc. are its differentiated strategy and innovation.

Net Income of Apple Inc.


16000 14000 12000 10000 8000 6000 4000 2000 0 -2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2. Market Share: Apple has approximate 10% of market share in the OS market at end of year 2009 and has 28% of market share in the smart phones market as in 1st quarter of 2011.

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(B) Competitive Advantage: 1. Hardware and Software: Apple Inc. is the combination that provides well developed hardware as well as software to its customers. 2. Apple always focused on having innovation centric strategy, since its establishment in 1976 so as to provide better products to its customer than its competitors. 3. Apples retail stores and their unique ways of marketing keep them at an edge with its competitors. It delivers exceptional experience through superb user interfaces.

(C) Marketing Mix: 1. Product: Apple has variety of products high in technology and different designs in its basket. It is into portable computers, servers, Wi-Fi linked stations, accessories, iTunes, iPhone, iPods, peripheral products etc. This quarter the profits of Apple doubled and its revenue has increased to 82% due to high sale of iPhones and iPads. So it can be seen that Apple is mostly successful in the products it launches. There are 12 products of Apple which have been failed till date, but its success rate is better as every successful Apples product gives them lots of profit. 2. Place: The Company has its presence globally through its retail stores, direct sales force and online stores and third-party cellular network carriers, wholesalers, retailers, and value-added resellers. As on September 2010, the Apple had 317 retail stores in USA and 84 internationally. Apple has wide reach in most of the countries to provide its customers with Apples products. 3. Price: Apple is a premium price brand that does not compete on its prices. The prices of its products basically depend on the technology offered in each product. It applies the value based pricing model. 4. Promotion: Every product is been launched in the press conference by the Apples CEO Steve Jobs. It offers various promotional packages and one year warranty for the products. Various training centers are been located globally so as to provide assistance to the consumers. Apple always tries to link its products to the consumers lifestyles, innovation, passion, hopes, dreams etc. these advertisements plays large role to connect to its customers. It can be seen that the entire marketing mix of the company focuses on its innovation and customer centric approach.

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(D) Positioning: Apples product are innovative and expensive, it has positioned itself as a premium brand, targeted basically to less price sensitive customers-middle-upper income professional, college students. As a result the entire culture and internal activities are aligned as per these target groups so as to meet their latent needs. Innovation is the key and they believe in identifying the untapped markets which have enormous growth potential in the future. Hence, they come with technology that is not only ahead of its times, but is so unique that it manages to woo the customers time and again. Therefore, they target the premium, technology-savvy segment.

(E) External and Internal Factors which can affect the Company: 1. Political Factors: Apple has it presence globally it has to analyze the political conditions and the legal norms of the country for its existence. The major trading laws, environmental laws, foreign laws prevailing may also have an effect on the business. 2. Economic factor: Economic factors prevailing in the countries like the current downgrade in the U S economy may have an effect on the Apples sales. 3. Cheap Alternatives: Low-price, reverse-engineered products that are manufactured in developing economies within days of an Apple product launch provide a threat as they are made to look and feel like the actual product.

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OBJECTIVES

Companies Mission:The mission of Apple: 1. They have a sense of confidence among themselves that they are on the face of the earth to develop state-of-the-art, innovative products. 2. They believe to have simple and user friendly products. 3. They are focused on developing technology well ahead of the times. 4. Apple is very much conscious about the product launch and they always concentrate in the market where they can make considerable amount of contribution. 5. Rather than probing into a handful number of projects Apple is more into concentrating in few projects that are truly important and meaningful to them. 6. In order to have a competitive edge as regards to innovation they believe in collaboration and cross-pollination within their groups. 7. They never compromise on excellence in every group along with the self-honesty to admit the wrong if done and the courage to changes.

Business Objectives:Apple deals with innovative products. Apple is always inclined to have been into new business models as compared to their competitors. As the business mission clearly suggests that they follow the blue ocean strategy in which they venture into untapped markets with high growth potential. Hence, we chose to launch this product iPlay. The main reason of launching this product is the considerable growth in entertainment and gaming sector in the coming years. In line with their innovative nature iPlay is completely different from the gaming products which competitors have launched earlier. It uses brain waves mapping technology to read the

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mind of the gamer and let him have control of the game with his mind. This technology is totally new and can be used for a variety of purposes in other industries. Eg: Lie detection, psychiatry, etc. So Apple will also get a first movers advantage. Besides this Apple iPhone and iTouch are not ideal gaming devices. They are also made for calling, Web-access and e-mail. So launching a product which is solely been inclined to gaming will cause a revolution not only in the gaming industry but also the way people think. It is anticipated that the launch of iPlay will not only attract a new customer base, but also compel a lot of people to switch from their major competitors like Nintendo and Sony. The objective would be to capture atleast 20% of the gaming console sector in the coming 2 years. On a broader note, the companys objective would be to increase its annual turnover by 20% in the next 5 years i.e. from $100 billion to $120 billion annually.

Marketing Objective:Marketing objective of a new product launch basically deals with the formulation of strategic marketing plans in order to position the product in the desired manner. Firstly it takes care about the implementation of corporate level strategy, secondly, key marketing decisions regarding which market to address, distribution channels, brand recall etc. In our case as corporate level strategy Apple is always into new innovation so this product fuel into this part of the company. We first want to launch the product in the U.S and Asian countries that too in the major metropolitan cities. The marketing objective also deals with the analysis of the customer segment on which it is catering into. Being highly technology oriented, this gaming product is mainly targeted to cater the needs of niche market and priced as a premium product. The product would also be used to create awareness about the physically disabled in its marketing campaign. The product would be provided to handicapped people on 50% discounted rates. Marketing objective also consists of analyzing the competitors in this industry. In the gaming industry major competitor of Apple are Nintendo, Sony and Microsoft. All this three competitors are mainly targeting the mass market and another advantage is that no one among them has still moved into this type of gaming console.

Marketing Communication Objectives:- The three tools for reaching the target customers consist of TV commercials, PR (Media Hype), and the actual casing and packaging the product. A high quality 30secs commercial ad is estimated to cost $100000 to $350000 dollars. Casing and packaging redesign costs are unknown but estimated to be relatively

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small when spread over the number of units being produced. The ads will be basically portraying the message that it is the state of the art of gaming console which will change the way gaming is looked upon forever. The major communication objective is to create hype around the product launch as customers eagerly wait for the next Apple product launch. Apple usually receives mass bookings for its product even before the product is actually made available in the market. The product packaging will also provide a differentiation image of this console.

The SMART test for Objective:Specific with numbers:- We are planning to capture a market share of 20% within 2 years and and on a broader note, Apple to increase its annual turnover by 20% in next 5 years. Measurable:- Mainly sales are used to measure the success of the product but here along with sales we are also taking into consideration the brand recognition and awareness. Besides we also need the answers to the questions regarding what the consumers learned about the product which will give Apple the feedback of measuring the effectiveness of the Ad. Actionable:- Being a well known and established brand it is obvious that Apple has a huge distribution network, very high technically strong domain along with expertise and a huge potential market for this type of gaming console. So Apple can launch this product in a much significant and profitable manner. Reasonable:- Apparently if we look into the market structure of gaming industry then to attain a market share of 20% cant be that difficult for the company. Timed:- As we have just in an idea to launch the product we have to go for market analysis and a considerable amount of primary and secondary data collection for this. Besides this the product engineering will also take a considerable amount of time. So launching of the product will take at near about 1-1.5 years.

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STRATEGY

Segmentation for iPlay:


Geographic: Focus will be majorly on metropolitan and tier one cities

Demographic: Age: iPlay will focus mainly on an age group of 18-34yrs which is the segment that is actively into gaming. Income: focus will be on the upper-middle class of the society which has an increasingly high disposable income and is willing to spend it on such entertainment experiences. Psychographic: Lifestyle: iPlay targets a segment of people who have taken gaming as a hobby or pastime and spend a few hours regularly indulging in it. It focuses on those who are tech savvy, always on the look out for new experiences and willing to spend time and energy for the same. Behavioral: Usage Rate: Focus is mainly on medium to heavy users. Casual as well as hard core gamers using other gaming products like Nintendo or Sony gaming consoles. We will also look at potential users who are brand loyalists and will buy it because it is an Apple product and thus in turn may become active gamers. It is a high involvement product in terms of buying behavior as well as usuage.

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Targeting for iPlay:


The target group for iPlay would primarily be consumers in the age group of 18-34 years who are active gamers and belong to the high income category. It will also target brand loyalists of Apple who will buy the iPlay not only because they are keen on gaming but are extremely brand conscious. They would buy it because it is an Apple product.

Positioning for iPlay:


Hard Core Gamers: For the hard core gamers we position iPlay as a whole new gaming experience focusing on the advanced technology it uses that differentiates it from other competitors in the market. Casual Gamers: For those who take gaming as a hobby we position it as a different experience. It stays a class apart from other gaming consoles in the market which is mostly played on the same format on gaming consoles. Brand Loyalists: For brand loyalists we will leverage on the brand value that Apple always focuses upon in marketing any of its other products. For them it will be an addition to the many other products of Apple that they already use. So this will include those customers who are not active gamers but have the potential of becoming one considering the affinity to the brand.

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TACTICS

Target Audience:
They primarily belong to the age group of 18-34 yrs, have high disposable incomes, are tech savvy, have taken up gaming as a hobby and are willing to spend time and money on it. They can also be hard core gamers who are constantly on the look out for new gaming experiences. Brand loyalists of Apple who will buy the product simply because its Apple even though they are not active gamers is another section of the target group.

Communication Message:
The message conveyed across all marketing communication tools will be focusing on the new experience the product will bring in and the innovation that comes along with any Apple product. This message is aptly conveyed through the statement: Motion games are out. Mind games are in. All communication tools that will be used will be consistent in the message it delivers.

COMMUNICATION TOOLS - THE RATIONALE BEHIND USING THEM


The marketing communication tools that are used will be a blend of what Apple has been doing so far for its other products and a few new strategies that have been specially devised for iPlay. Official Launch by Steve Jobs All Apple products are revealed to the world by Steve Jobs himself. His iconic image and charisma has always translated itself into a brand building technique for Apple. The official launch of iPlay will also be no different. We will try to cash in as much as possible on this aspect, tapping into the sentiments of Apples brand loyalists. Demo kiosks in malls

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Demo kiosks will be set up in metropolitan (tier 1 cities).This will ensure high visibility and maximum reach to the target audience. The target group is in the age group of 1834yrs and has relatively high disposable incomes. Malls in metropolitan cities will definitely be one of the most sought after shopping destinations for this group. These kiosks will attract high amount of attention as it will also give an opportunity to the customers to touch and feel the product, interact with the sales force and understand the features of the product. Print ads in newspapers and magazines. Magazines that are read widely by the target group. This includes lifestyle, technology (gadgets), sports magazines. Within the target audience the age group of 24-34 yrs can be focused more by these technology and lifestyle magazines as they will be in the early years of their professional life and eager to splurge on the things that they are interested in. TVC TV commercials in channels that are widely watched by the target group in prime time (e.g. sports, movie, music channels). Here the commercials will be aired in time slots that attract maximum viewership like in between football league matches, cricket matches etc. Tech reviews in channels and magazines Technical reviews conducted by television channels and magazines like Gadget Watch in NDTV, opinions of critics taken by these channels and magazines. Here the intention is to create awareness and visibility of the product, trying to gain the attention of the opinion leaders. This will target the tech savvy audience who keep a close watch on these media and the opinion thus formed has a major impact on their buying behavior. Sponsorships Sponsoring major national and international gaming events. This will specially focus on hard core gamers who are always on the look out for high end gaming experiences and constantly challenging the ordinary. This can be an effective tool to reach out to them. Viral marketing This can be done through the internet, focusing on the websites that are surfed most often by the target group like social networking sites, online purchase sites, blogs on such products etc. Viral marketing can be effective in terms of reaching out to a large audience within a short span of time and creating a buzz.

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Apple i-store The Apple i-store will track the entire process of the launch and sale of iPlay. Before the launch the i-store will start putting up eye catchy display boards, video clippings will be played within the store and the whole ambience will be created that shouts of the message-Motion games are out. Mind games are in! The i-store will have pre-booking facilities, lucky draw offers for iPlay on purchase of other Apple products etc.

Official website and direct mailing The official website of apple has a section dedicated to iPlay. It is designed in such a way so as to create a buzz about the product well before launch. Space for customers to post their views and pre-booking facilities will be available on the website. Mailers will be sent to current users of Apple products informing them about the launch of iPlay. The mailers will also have an invite to the launch of the product by Steve Jobs. The website and mailers will specially target brand loyalists of Apple.

Retail Outlets Like other Apple products displays of the new iPlay will be made in all major retail electronic stores like Croma, e Zone etc. Before the actual launch there will be creative visual aids that are put up in these stores selling Apple products. This again will help capture the attention of the target audience.

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ACTION PLAN

TV Advertisements: Placing advertisements on TV channels throughout the week for 5 weeks is estimated at rupees 1.25 Crores. Time Schedule and Duration of the communication on TV is as follows: TV Channel STAR Movies Ten Sports MTV HBO [V] STAR Sports Mon-Thur (Prime Time) 19:00- 21:00 32,130 32,130 32,000 32,130 32,000 32,130 Fri- Sun (Day Time) 07:00 - 17:00 3,600 3,600 3,500 3,600 3,500 3,600
For further details please refer to the excel sheet attached

The total Ad budget for TV ads for a 30 second Ad three times a day per channel for 5 weeks (4 weeks before and 1 week after the launch) is estimated at approximately Rs. 1.12 crores. Sponsorship Events: Sponsorship events for various national and international level gaming events that feature hardcore gamers is estimated at Rs. 42 lakh. Outdoor: Featuring the product at top retail outlets that are Reliance stores and Chroma stores throughout the country is expected to be at another Rs. 28 lakh. Magazines: The total Ad spent for placing our advertisements in leading Magazines is Rs. 14 lakh. Advertisements will be placed in three magazines that are: Chip, Gadgets&Gizmos, and Exhibit.

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Total Ad Spent: Communication Tool TV Ads Sponsorship Events Trade Shows Magazines Newspaper Viral Marketing Outdoor PR Total Budget Expected Cost Rs. 1,12,00,000 Rs. 42,00,000 Rs. 22,40,000 Rs. 14,00,000 Rs. 14,00,000 Rs. 28,00,000 Rs. 28,00,000 Rs. 19,60,000 Rs. 2,80,00,000

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CONTROL

Control, keeping track of the progress This stage focuses on the measuring the effect of actions taken to communicate the end users about the product or service. In this process the company analyses whether the objective they set are attained or the company is on right path to achieve them or to identify the major areas for deviances in the actual or desired performance. It helps in identifying the gap between the end user perception and the communication mix. So control stage of SOSTAC Model plays a very important role of identifying the gap between the objective established and objective reached by the company. Their can be two types of testing involved two check the effectiveness of the communication mix: Pretesting Post testing

Pretesting: 1. In this stage Apple could have a concept check with which they may know the consumer responses on a particular campaign of the iPlay by conducting a focus group interview of the target market sample that is individuals in age group of 18-34 years to see the effect of campaign and the product on these individuals. 2. Apple may also use Dummy advertising vehicle for testing the effectiveness of the magazines advertisement. Post Testing: 1. The visits on the website: The easiest way of identifying the reach of the advertisements is by the increased number of visitors on Apples website after the launch of the product. As every time the new product is being launched it is showcased on the website of the company. 2. As the product will be having a facebook page the number of likes and dislikes also throws some light on the customers preference about the game console.

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3. Another method of gathering the data or knowledge about consumer perception towards the iPlay can be by sending the mails to the existing apples customer and asking them about their views about the iPlay. 4. We can also use recognition test that helps in knowing the perception of the iPlay with that to its competitors like Nintendo, Sony etc. 5. Single Source tracking method: We can also use single source tracking method in which the cable operators participate in the research to identify the reach of the advertisements. 6. Ad tracking can also be used which includes personal interviews, phone surveys, emails to measure the awareness recall, interest and attitude of the consumers. Above are some of the measures which may be used to measure the performance of iPlay in the market. These measurements help to identify the gap between the where the company planned to reach and where it has actually reached on a certain specific time frame. This control mechanism would help Apple to analyze the gap and can change the communication mix accordingly as to attain the objective.

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