Marketing Plan for iPhone 4S - Assignment Example

Starting anew venture or launching a new product in the market can be difficult; the activity requires examining and evaluating various marketing strategies to come up with one that best suits the market and the targeted group. Applying the wrong strategy may results in high costs and losses where the business is forced to pull out after the investment is already done. Various factors; economical, political, cultural, social, legal and physical environmental factors require consideration so as to determine the best way to launch a new product (Luther, 2011, p. 27). PC World Company in UK is set to launch a new iPhone 4S product in the UK market starting February 2012, the company has signed a trade partnership with Apple to market and sell the iPhone 4S product, which is a modification of the existing iPhone product by Apple. This marketing plan explores various aspects including analyzing the market situation and establishing the objectives and strategies necessary for launching and marketing the product in UK market (McDonald 2007, p. 57). iPhone 4S: Product features iPhone 4S has come with strong modifications than any other comparable device in the market, some of its new modifications include iCloud that enables one to store music, documents,, photos and others automatically and in an effortless way. The other key features include Siri, Camera, 1080P HD Video, FaceTime, Performance, Retina Display iOS, and other features (iPhone, 2011). The Siri acts as intelligent assistance helping one to get things done just by asking, one can talk to Siri just like the way one would talk to another person, for instance, one can ask something like ‘where is the closet ATM?’ Siri does not only understand what you say but it also conceptualizes what the person means, figures out the appropriate application to use in order to get the right answer and then answers. Siri also makes phone calls, schedules meetings, sends messages, checks the weather, and sets reminders. iPhone 4S is a dual core A5 chip, which is two times more powerful and about seven times faster graphics. These feature makes iPhone 4S responsive and quick when browsing the web, launching applications and when gaming. The iOS is the most advanced system of mobile operations and brings more than 200 other features with it including twitter integration, iMessage, and notification center. What will make iPhone 4S a great sale? iPhone 4S will recapture the Smartphone market share globally, although there is a rumor that iPhone 5 is about to be launched by Apple Inc, iPhone 4S has had a great acceptance by customers particularly in markets where the product has been introduced like U.S and Asia. There ways have been identified as key in driving iPhone 4S sales high, the first is the Siri buzz, which many teenagers particularly those in high school spend their spare time to joke. Students want and accept anything that would make them laugh; Siri has a great sense of humor. As students with iPhone 4S have fun, so do those without the device desire more to buy it to get the same experience (iPhone, 2011). This features have enabled marketers to realize their dream since the customers market the product by word of mouth as most teens want to make Siri not just a personal assistant but an intelligent friend that would always have with them. Another key feature that makes demand for iPhone 4S high is that the product is hard to get, there is scarcity marketing, Apple has remained the master of the products supply and demand from the marketing perspective, however consumers across the globe especially in UK are still anxiously waiting to purchase the product (Donnely et al 2009, p. 69). The day that Apple announced the launching of iPhone 4S, there was more than a million pre-orders from customers within a span of 24 hours. Apple topped 4 million sales in the first weekend after launching the product. However, a market overview conducted across UK in the last one-month show that most of stores in UK shows ‘product unavailable’ for the iPhone 4S version. Apple is therefore a master in scarcity marketing and this gives PC World the opportunity to market the product in UK. The other critical feature that makes iPhone 4S sell is its genius bar experience, which is motivates building of strong relationships making people’s lives better in addition to just selling the product (iPhone, 2011). iPhone 4S goes beyond customers’ wish list for their holidays to being retailers’ wish list. This will enable PC World to not only sell the product to customers but also use retailers who will be exited to sell it in their stores. In addition, being a product of a Fortune 500 Company (Apple Inc.), the consumers approaches the product with eco-tech insights and this also gives PC World an opportunity to apply eco-driven strategies to market the products. Background information about the company PC World was established by Vision technology group in 1991 in Croydon, UK , since its inception, expansion has been evident as more stores are opened in UK mainly through acquisitions. As mentioned by Callon (1996, p. 56), the company has been successful in breaking barriers between technology and people, the company has been selling Dell PCs and other products in the UK, Italy, Spain, and Ireland markets. PC World has been ranked the best retailer in 2008 awards for laptop mobile computing, the company has a sustainable and profitable channel business model that has been instrumental in continuing the company’s growth. PC World also has a multi-brand approach that effectively integrates it with other brands in the worldwide market such as Packard Bell, eMachines, and Gateway (PC World Retailer). PC World strives to design and provide products that are environmental friendly, with collaboration of suppliers in the market; the company has established green supply chain. In relation to brand promotion, PC World has been recognized as a worldwide partner in the Olympic Movement such as the London 2012 Olympics and Vancouver 2010 Olympics. In its more than 30 years of history in the market, PC World has had a far-reaching business strategy that focuses on R&D, marketing development and profitability, these strategies have played a great role in enabling the company prepare for future challenges. The company has employed more than 8,000 people globally with estimated revenue generation of US$ 19.9 billion. Corporate objectives PC World focuses on promoting management style that promotes individual growth, applying IT concepts to enhance innovative operations management, building partnership with like-minded firms in UK, US and Europe to enhance their competitive strength. Since the year 2008, PC World has been enhancing its worldwide presence through a new and innovative multi-brand strategy. With successful completion of mergers of Packard Bell and Gateway, PC World has further focused on strengthening its global footprint by use of multi-rand strategy and by solid partnerships (PC World Retailer). The company aims at becoming a global leader of notebook making as well as mobile device market. As part of the company’s bold steps in expanding its presence in Europe and widening its brand portfolio, PC World is taking bold steps by launching a product of Apple in its stores in UK, PC World has entered in a business partnership with Apple to launch and market iPhone 4S in UK. The product is a modification of the Apple’s iPhone and is believed to enhance PC World’s competitiveness in UK. Market overview UK market has been in the past dominated by Google’s Android platform that has made great sale in smartphone, with the introduction of iPhone 4S, the product is estimated to whop a market share of 42.8% from smartphone, 35% of UK smartphone market is taken by Google’s Android. According to a research done by Research In Motion Company, about 75 of the customers already owning the previous iPhone versions have expressed desire to buy any modified version of iPhone and this implies that PC World is likely to make huge sales volume by introducing iPhone 4S in its stores. UK is one of the saturated PC markets; major competitors include Acer, Gateway, Sun Microsystems, Skata, and many others. As mentioned by Bradley (2011), market trend is rapidly moving towards mobile applications; customers in UK are embracing digital products greatly while companies are now adopting mobile advertising platforms as a way of reaching customers, for this reason, companies that trading in the growing sophisticated mobile devices like iPhone 4S are becoming a moving target for customers. There is a shift in customers’ shopping behavior whereby mobile shoppers have increased. Bradley (2011) argued that nearly half of UK customers are mobile shoppers. There is also a trend of rapid growth in mobile marketing among businesses and as this kind of marketing evolves, customers and businesses are likely to seek for the most effective tools for mobile marketing which iPhone 4S sufficiently fits (Kotler 1997, p. 62). SWOT analysis Strengths Adoption of advanced technologies among companies trading in mobile phone devices is central to the company’s performance (Westwood 2011, p. 29). In the context of PC world, the company has set a trend of rapid adoption of emerging technologies and for this reason, customers often visit their stores for any advanced mobile device, this gives PC world a strong competitive advantage in marketing iPhone 4S (iPhone, 2011). PC World has recently opened several stores across UK and this will enable the company to enhance its market coverage when distributing and selling iPhone 4S device across the market. The company offers customer-oriented laptops, PCs and Peripherals in addition, the offer advice and services to consumers on how to use the devices they sell. PC World has had a strong marketing and management control that is characterized by unique store layout, staff uniforms, and image rebranding programme. PC world various advertisements that have been central in promoting its brand in the UK market, this implies that the company has the capacity to market the iPhone 4S brand in the market. Weaknesses PC World has had several criticisms following its failure to comply with statutory requirements as stated by Sale of Goods act and is accused of promoting products with incorrect or misleading information. Pc World has also been accused of overcharging for overcharging customers for repairs and prevailing incompetence among technicians from various stores. The company has had criticism arising from their products price disparities. These criticism if not taken care of can reduce PC World’s capacity to market the ne iPhone 4S in UK effectively, for instance, customers’ perception that staff of at PC World are incompetent in terms of communication skills and knowledge can heavily affect customers loyalty and this challenges PC World to invest heavily in developing its staff (Bradley, 2011). Opportunities iPhone being a unique product with high quality features, the product offers PC World a promising market since most customers in UK have consumed iPhone products are therefore likely to accept any modification of the product. The Company has invested in e-learning courses that are focused on developing staff, customers, and suppliers in the various retail shops and stores and equipping them with relevant skills and qualifications particularly on customer service and communication. Introducing iPhone 4S at a time when customers shopping behavior are changing and customers are becoming mobile shoppers offers the company an opportunity for huge sales as people embraces the high quality mobile device that will enable them to shop through their mobiles with ease (Bradley, 2011). Threats One of the potential threats facing PC World is that the company does not have a very wide network of stores as compared to companies like Acer, which are well established in UK with several retail stores across the country. If the companies approach Apple for equal business deal that will result in stiff competition in the market and PC World might be unable to meet its targeted sales value and revenue. For this reason, PC is challenged to market the product as fast as possible so that it will cover the market sufficiently before competition is stiff as other companies enter the same market with equal products (Bradley, 2011). PEST analysis for the UK PC market In terms of political factors, changes in government policies will have a great impact on UK PC market; the recent proposals to extend EU’s membership will render easy access to the UK market (Brooksbank 2002, p. 33). Legislation concerning minimum wage that has recently been passed will affect PC market especially firms like PC World that are known to be paying poorly, minimum wage has risen with about 3.50 – 4.10 dollars and trade unions are still fighting to take it higher than that. Economic factors include changes in exchange rates, interest rates and technology have greatly influenced the profitability of firms in the PC market, only those firms that are continually innovating their products and business processes are likely to retain their profitability. Socially, the largest of UK’s population consuming PC products comprise of the youth particularly high school teenagers; this means that PC World must target the specified group in its marketing strategy (Bradley, 2011). Consumers have also changed their shopping behaviors and most of them are shopping through their mobile phones, provision of iPhone 4S offers PC World a good opportunity to take advantage of the changing customers’ shopping behavior. Technologically, the market has greatly seen application of advanced technologies by strong competitors like Acer, Sun Microsystems, and others. PC World has been well placed in adopting the emerging technologies and this has placed the company well in the marketing and production of Pc products and mobile phone devices. Marketing mix As mentioned by Papantoniou (1992, p. 127), marketing mix comprise of four P’s including product, price, promotion and place. Place refers to making the services and products physically available through selling and the physical distribution channels. PC World will use its retailer shops and stores to distribute iPhone 4S. Promotion refers to ways used to improve sales including advertising, mass media communication and others. Product and price assume their literal meanings (Pride &Ferrell 2008, p. 44). The ability of PC World to assemble the various marketing mix elements determines the effectiveness of the possible strategies put in place marketing mix decisions are heavily determined by the marketing strategies put in place. Porter’s five forces As mentioned by Cheverton (2004, p. 80), Porter provided powerful tool for market analysis and for understanding competitive forces in business. According to Michael Porter’s, there are five forces that determines how a business operates namely the new entrants’ threat, suppliers’ bargaining power, buyers bargaining power, threat of possible substitutes and competitor rivalry. New entrant threat refers to the ease of new market entrants entering the market, UK PC market is highly capitalized through heavy investments in technologies, and this makes it difficult for potential entrants to enter the market. Suppliers bargaining power is realized through consolidation and mergers, provision of unique and high value services. Apple Inc has enormous power to influence the supply chain being the manufacturer of the iPhone 4S brand. Customers’ bargaining power increase through amalgamation, in the UK PC market, consumers have the choice over what to consumer as determined by their wallets. Cheverton (2004, p. 1) added that threat from substitutes increase because of new technologies, low cost alternatives or simpler solutions. In the context of iPhone 4S, the product has no close substitutes until probably, Apple launches the iPhone 5, since this is expected to be a more modified model of iPhone. Competitive rivalry increases where there is no or exists little difference between the market players. PC market in U.K. is highly diversified in terms of firms offering variety of goods with varying features, strengths and capabilities and this reduces the threat of competitors rivalries, it will take quite a great effort for any company to offer what PC World is offering as iPhone 4S (Belch& Belch 2007, p. 43). Marketing assumptions Drawing from the SWOT analysis conducted, this plan assumes that industrial overcapacity in UK PC market will raise from current 103% to about 115% as new firms enter the market (McDonald & Wilson, 2011, p. 45). Price completion is also assumed to rise and this might force PC World to review prices of iPhone 4S downward by 10%. Marketing objectives and strategies As suggested by McDonald and Wilson (2011, p. 46), marketing objectives must be measurable, in the context of PC World, the general marketing objective is to launch the iPhone 4S product in the company’s UK market, this is a case of a new product in the existing market. The objectives of introducing iPhone 4S product are to increase PC World’s sales volume, market share, percentage outlets’ penetration, and profitability. Marketing strategies refer to the means of attaining objectives and they mainly focus on the price place, promotion, and product (lamb et al 2010, p. 26). Alternative plans and mixes PC World’s marketing mix In terms of place, PC will focus on providing a modified mobile device (iPhone 4S), brand positioning it in the UK market and packaging it in a way to attract customers. Pricing policies used will follow the market segments established mainly the youth and teenagers. Various retail stores and shops will be used in distributing the product while advertising, public relations, sales promotions, direct mail, and exhibitions will be used to promote the product (McDonald & Wilson, 2011, p.46). PC world will intensify its advertising through its monthly magazine. Customer referral program PC World will use different methods to market the new product in the UK market. One such method is customer referral program whereby every time a customer refers another customer, they will earn one point and a referral of up to 15 customers, one will get a new iPhone 4S. To support this program, PC World will invest heavily in ensuring excellent customer service and strong customer relationship. E marketing Another strategy of marketing to be used by PC World will be use of e marketing. The company will open an ecommerce website with the new product well displayed in its features, user instructions, related advantages, prices, and information on its availability in the various stores across UK (Hamper & Baugh 1990, p. 24). The website will also be used to promote PC World’s products and the products will be categorized into two, the existing PC products, and the newly launched products. This is aimed at increasing sales even for the already existing products (McDonald 1992, p. 19). Promotional programme PC World will also include several media advertisements to enhance awareness; different media channels will run these adverts at varying times of the day. The company will use a marketing agent referred to as consumer led solutions who will create the commercial shows to be used by media channels to advertise the new product. The company will also use weekly business magazines and newspapers to advertise, it will also use free offers to promote the product. Budgeting, measurement, review, and control The budget in the appendices will be used in implementing the activities of the plan; the budget indicates money allocated and the time of reviewing the activities over the year. The company will strictly follow the budget and where adjustments are required, the management and the marketing lead will discuss the issues and make necessary adjustments (Forsyth 2005, p. 21). As per company’s controls, marketing director will approve the outlined marketing expenditures before the budget is authorized (McDonald & Wilson, 2011, p.47). PC World will use the existing sales force to market the product, the Consumer Led Solutions Company will be in charge of designing creative adverts that will be used by the media channels to create the product awareness. Conclusion This marketing plan is about marketing a new product that is launched by PC World in the UK market. The product launched is iPhone 4S, which is a product of Apple Company from U.S. PC World is not therefore the manufacturer but is rather outsourcing the product from Apple and marketing it in U.K. market, which is its biggest PC market. The marketing plan provides marketing ideas, objectives, alternative plans, marketing mix, and strategies that PC World could use to market the new product in U.K. market. Product and market analysis has been done through SWOT analysis and PEST analysis. The plan also has given the corporate objectives for PC World and aligned those objectives with the marketing objectives and strategies to be used in marketing the new product in UK market (iPhone, 2011). The main objectives of PC World are to strengthen the company’s competitive strength. To align this corporate objective with marketing objectives, the plan has aimed at increasing sales volume, market share, and profitability, which will strengthen the company’s competitiveness in the market. The main objective of this marketing plan was to introduce iPhone 4S in UK through PC World. iPhone 4S being a product of Apple, this means that PC World has to liaise with Apple to get the product and market it in U.K. The plan consists of measurable objectives as mentioned; these include increasing sales volume, market share, percentage outlets’ penetration, and profitability for PC World. The marketing plan shows the most appropriate marketing mix, which include price, place, product, and promotion mix that PC World should adopt in order to market iPhone 4S in U.K. market. Other companies that are planning to launch new products in existing markets or in new markets can also use this marketing plan (Reed 2006, p. 32). The marketing plan applies e-commerce, customer referral program and other promotional activities to market the product, it also comprises of an estimated budget to be followed in implementation as well as relevant controls by the company (Stapleton & Thomas 1998, p. 289).   References Belch, E & Belch, M (2007), Advertising and promotion: an integrated marketing communications perspective, New York, McGraw-Hill Irwin Bradley, T (Feb, 2011), What Mobile Marketing Trends Mean for You. Retrieved from: http://www.pcworld.com/businesscenter/article/219169/what_mobile_marketing_trends_mean_for_you.html Brooksbank, R (2002), Hot marketing, cool profits: 200 proven sales and marketing ideas to grow ... London, McGraw-Hill Professional. Callon, J (1996), Competitive advantage through information technology, London, McGraw-Hill International. Cheverton, P (2004), Key marketing skills: strategies, tools, and techniques for marketing success, Philadelphia, Kogan Page Publishers Donnely, R, Harrison, G & Megicks, P (2009), CIM Course book: The Marketing Planning Process, London, Butterworth-Heinemann. Forsyth, P (2005), Marketing on a Tight Budget: An Action Guide to Low Cost Business Growth, Philadelphia, Kogan Page Publishers. Hamper, R & Baugh, L (1990), Strategic Market Planning, London, McGraw-Hill Professional. iPhone (2011), Picking up where amazing left. Retrieved from: http://www.apple.com/iphone/features/ Kotler, P (1997), Marketing Management: Analysis, Planning, Implementation and Control. 9th Edition, London, Prentice Hall. Lamb, C, Hair, J & McDaniel, C (2010), MKTG4 2010, London, Cengage Learning. Luther, W (2011), The Marketing Plan: How to Prepare and Implement It, New York, AMACOM Div American Mgmt Assn. McDonald, M (1992), Strategic Marketing Planning: A State-of-the-Art Review, Marketing Intelligence and Planning, Vol.10, No. 4, pp. 4-22, McDonald, M (2007), Marketing plans: how to prepare them, how to use them, London, Butterworth-Heinemann. McDonald, M & Wilson, H (2011), Marketing Plans: How to Prepare Them, How to Use Them, New Jersey, John Wiley and Sons Papantoniou, P (1992), Marketing: The Complete Awakening, London, Pass Publications. Parmerlee, D & American Marketing Association (2000), Auditing markets, products, and marketing plans, London, McGraw-Hill Professional PC World Retailer. Retrieved from; http://en.wikipedia.org/wiki/PC_World_%28retailer%29 Pride, W &Ferrell, O (2008), Marketing, London, Cengage Learning. Reed, P (2006), Strategic Marketing Planning, Australia, Cengage Learning. Stapleton, J & Thomas, M (1998), How to prepare a marketing plan: a guide to reaching the consumer market, New, Delhi, Gower Publishing, Ltd.  Westwood, J (2011), How to Write a Marketing Plan: Carry Out a Marketing Audit; Establish ... Philadelphia, Kogan Page Publisher.   Appendix Budgeting Activity Money allocated Time of review Advertising and other promotional activities $230,000 Reviewed after every month using sales volume as the key performance indicator Website development $140,000 Progress reviewed after every 3 months Customer referral program $20,000 Reviewed after every three months Other miscellaneous expenses $3,000 Reviewed on monthly basis Financials PC World estimates that production costs will be low since the product is outsourced from Apple in America. Capital for start up of the new product operations is estimated to be $5000,000 much of which will go to purchasing the product from Apple, PC World has also agreed with Apple to take products on credit and pay after they are sold. Given the vigorous marketing activities, the company estimates sales of 100,000 units to be made and assuming a price of $99, this implies that about $9,900,000 will be generated on daily basis. Read More