By marketing the iPhone to select markets, Apple has been able to provide a device that meets or exceeds the market’s needs. In this deliverable, Team A Consultants, have been asked to provide a new marketing plan to embrace social media to increase sales. Apple targets certain groups and seems okay with not trying to dominate the entire cell phone industry. By using websites like Facebook, Twitter, Snapchat, and LinkedIn, Apple can reach college students, adults, and like-minded professionals. All of these websites listed above already provide a B2B model for advertising to include in-depth analysis of the market being reached through social media advertising. By targeting college students, like-minded professionals, and a general adult group, Apple can ensure sales by providing products that meet their needs. Apple also constructs their product launches with a great product life cycle to maximize revenue and profits. By announcing a new product 6 months prior to launch, and then keeping a product into the height of its maturity, Apple can guarantee higher revenues.
Project Deliverable Plan
In one form or another, we have all heard about Apple and their products. Apple cell phone, the iPhone has been their most successful product to date. By marketing the iPhone to select markets, Apple has been able to provide a device that meets or exceeds the market’s needs. In this deliverable, Team A Consultants, have been asked to provide a new marketing plan to embrace social media to increase sales. We will include a Customer Profile Report, or our understanding of the iPhone position in the market. We will also create a Brand position and evaluate the product life cycle for the iPhone. iPhone Customer Profile
Users of the iPhone range from business users to media fanatics, all using the phone in many different ways. Apple targets certain groups and seems okay with not trying to dominate the cell phone industry. What is surprising is that Apple only holds 1/7th of the cell phone market today (Edwards, 2015). With that said, Apple has become the financial leader compared to Microsoft and Google in terms of net worth. SWOT Analysis
Small market share
Apple could provide a known antivirus software, even if it means providing it to make the consumer feel more secure. Currently, Apple offers minimal amount of protection Opportunities
Social Media advertising
New technology can be incorporated
Growing revenues could mean more spending on R&D and future products Threats
Growing Android and Windows market share
If a growing threat of software viruses, adware, spam ware could lead to a mistrust of Apple products Recently Apple has launched the iWatch, an accessory to the iPhone and a decorative piece for the consumer. The iWatch sold out on the first day, which will lead to a successful second quarter for 2015. Apple has many competitors in the cell phone industry to include LG, Samsung, Nokia, Pantech, and Motorola. Even with the enormous amount of competitors not only at the cell phone level but also in computers, laptops, media players, and tablets, Apple continues to increase revenues and profits quarter and quarter. Even though Apple is obviously doing well, we feel that Apple has an opportunity to increase marketing and advertising through an expanded social media campaign. Product Positioning Strategy
Product positioning is a way for companies to communicate their product to the consumer. A product positioning statement will appeal to the consumers’ needs and desires, and will tell them why they need or want a particular product and should be tailored to each specific target market. Apple’s iPhone has several target markets. Teenagers, College Students, Professionals, and Adults. Apple’s position to teenagers should appeal to their desire to be seen as a unique, empowered individual as well as their need to stay connected through social media and music. Product Image is also an important factor when marketing to this age group. For teenagers brand is everything. Focusing on the exclusivity of the Apple iPhone with its various ways to enjoy music and stay connected will appeal to this group (Goodstein, 2007). College student will share some of the same wants and desires as teenagers. Product image, and being able to stay connected through social media and music are also important to this age group.
College students are experiencing their first taste of adulthood as they leave the nest and go off to campuses or apartments for the first time. They need things to make this transition easier as well as tools to help them through their college coursework. Apple can appeal to this groups needs by placing strong emphasis on the iPhone’s ease of use and the multitude of iPhone specific apps useful for this age group. Professionals are loyal to their brands, and there are many for them to choose from. Samsung, Blackberry, and Windows Phones are all popular with this group. Apple will need to focus on what sets the iPhone apart from these brands and why their product is superior. They should also appeal to this group’s need for reliable products with excellent customer service. Professionals use their mobile phones to conduct business on the go.
They need to know their product will not fail. If they do experience problems, they need to feel secure in the fact that Apple will provide the very best, fastest customer service. With this group, Apple’s brand position should focus on superior product, superior service, and reliability. Average adults are working, active individuals who use their phones for everything. From staying connected with friends and family, shopping for groceries, entertaining their children, and finding their way from place to place, their phone is an integral part of their daily lives. Apple can capture this diversity by highlighting how the iPhone can be used from sunrise to sunset in every part of the consumer’s life. This group cares about family, social responsibility, work, and play. Apple should appeal to this group with a heartfelt message that weaves these issues into every aspect of the user’s life through use of the iPhone.
After mentioning Apple’s current target market, we can now explain how a social media campaign will left the current Apple market share to new heights. By incorporating these techniques into new social media advertising, Apple can reach an untapped portion of the market. By using websites like Facebook, Twitter, Snapchat, and LinkedIn, Apple can reach college students, adults, and like-minded professionals. All of these websites listed above already provide a B2B model for advertising to include in-depth analysis of the market being reached through social media advertising. Financially, Apple is growing but as Android and Windows continue to shrink the cell phone market share of Apple, Apple will need to market towards more individuals using new methods such as social media in order to convert them away from Android and Windows to the iOS platform. Product Life Cycle
A company’s positioning and differentiation strategy must change as the product, market, and competitors change over the product life cycle (Kotler, P., & Keller, K., 2011). Introduction: It is during this stage a company spends time conducting research and developing their new product or service to consumers. Steve Jobs announced the first iPhone at the beginning of 2007. The new iPhone debuted at $499 for 4GB and $599 for the 8GB. With this intensive price, the consumer was introduced to web browsing, web search, email, touch screen, iTunes, and other apps in one device. Apple announces their new products roughly 6 months in advance, giving specifications and features. This allows the consumer to do the research on competitors but also allows Apple to advertise and research target markets prior to launch. Growth: The first 1000 days of the launch of the new iPhone Apple profits of 34 million units. Sales increased 73% from 73 million units to 125 million units in one full finance year.
The company has expanded its product overseas to China, change the colors of the iPhone (5c) and introduced two new sizes in last year launch of the iPhone 6 and 6+. The growth phase for the iPhone lasts around nine to twelve months. Apple does this because sales are high until the next iPhone is available which is normally 12 months after the last launch. Apple is continuously gaining consumers and as each new product is available, more and more switch to the iPhone and other Apple products such as the iWatch. Maturity: iPhone’s revenue in the second quarter of 2014 was over $26 million. At the end of the first quarter of 2015, that number is expected to double to over $40 million. Apple however, does not just stop selling a phone once a newer version is available. Apple will continue to manufacture an older model for typically an additional 12 months after the launch of a newer product. This allows the consumer to purchase an older model for cheaper, which still raises Apple’s revenue.
Units in thousands, revenue in millions (Apple Inc., 2015)
Decline: There is no expectancy of the iPhone declining within the next year because of its new launch of the Apple watch, which requires the iPhone 5s, or higher. Apple eventually stops manufacturing older models as new technology is available and continuing to maintain operations and manufacture older models costs more than maintaining the operations of producing newer models. For example, the original iPhone was no longer available after the launch of the iPhone 3G. Each model after that was available for 12+ months after the launch of a newer product. Conclusion
As Apple continues to research their target market and watching the trends and desire of that market, Apple changes their focus to deliver a product that meets or exceeds those needs and desires. Apple’s product life cycle is efficiently crafted to maximize revenue by leaving older models and products available for purchase. Apple also cleverly constructs their advertisements to their target audience to reach the maximum amount of their target market. Over the last ten years, Apple has grown their revenue over 35% and their free cash flow over 50% (“Apple, Inc.”, 2015).
Apple Inc. (2015). Q2 2015 Unaudited Summary Data. Retrieved from https://www.apple.com/pr/pdf/q2fy15datasum.pdf Apple, Inc.. (2015). Retrieved from http://www.gurufocus.com/financials/AAPL&affid=45223 Edwards, J. (2015). The iPhone 6 Had Better Be Amazing And Cheap, Because Apple Is Losing The War To Android Read more: http://www.businessinsider.com/iphone-v-android-market-share-2014-5#ixzz3YoonFpp6. Retrieved from http://www.businessinsider.com/iphone-v-android-market-share-2014-5