IPhone Marketing Strategy

This report comments about the marketing strategy of iPhone. This explains the marketing mix, environment in which iPhone is introduced and segmentation, targeting and the positioning of iPhone. After discussing the strategy, the report concludes with few recommendations to iPhone which may improve the sales of the product.

I Phone was introduced on January 9, 2007 which is multimedia smartphones designed and marketed by Apple Inc. IPhone began with Steve Jobs(Apple CEO) direction that apple Inc. engineers investigate touch screen (Honan, 2007). There are four different models in iPhone, Original iPhone, iPhone3g, iPhone 3gs and the latest product is IPhone 4 which is latest launched in the market. It has changed the world of mobile because of their latest and unique technology.

Firstly it was only made available in US market after that it also available in other countries like a UK, Germany, Ireland, France and Austria. Because of their heavy and overwhelming demand, it is now available in almost all the part of the world.

Company background

FORMER YEARS OF APPLE

Apple was set on April 1, 1976(Investor relations, 2010) in order to sell Apple 1 computer kit which was framed by Steve Wozniak. Apple itself was established by three genius Steve Jobs, Stave Wozniak and Ronald Wayne. In the initial days apple was sold as motherboard with CPU ram and basic textual video chips which was lesser than any of the personal computer of today. The credit of creating the desktop publishing market goes to apple itself which was due to apple’s innovative and astonishing programmes, PageMaker and Laser Writer .in the period of between 1983 to 1996apple faced many hardships and unable to complete their set targets of selling digital cameras, portable audio player. But apple take over all the hard phase and sold 100 million units within 6 years which was remarkable

PRESENT STATUS

Apple computer incorporated is known as apple Inc. today. This renovated name was announces by Steve Jobs, the CEO and co- founder of apple in January 2007. Jobs also open up to view the long anticipated I phone, an amalgamation of enabled smart phone and the iPod in July 2006 an announcement has been made for the release of I phone 3g. This new version was a support for 3g networking as well it provides assistances GPS navigation. Most significantly Apple has proven to a conspicuous player in the world of consumer electronic industry.

The market environment

Micro Environment

SWOT ANALYSIS

Strengths

Weaknesses

Opportunities

Threats

Style/Brand

Sensors

Rich UI

User base

Hype

First mover

No UMTS

High price / high end

Limited distribution channels

Missing features

Unsafe for

corporate use?

Port existing apps

Migrate people to Apple

New social device

Distribute iTunes content

Similar devices

Highly developed market

A. Strengths

The strength of the iPhone is the highly and advanced technology features which make iPhone most powerful brand in the Phone market. IPhone is not only good in technology but also unique in look. IPhone has a touch screen technology because of their multi-touch screen it’s the largest selling product in the market.

Additionally, every network operators provide internet with the iPhone which make iPhone a computer phone product that is also strengths of the product. And because of its technology everyone can easily access the internet.

B. Weaknesses

Every new product has its own weakness. Several features of iPhone is not so much impressive and not a friendly user because of their high technology. The price of the phone is around 500 to 600 dollars which is very high in phone market for everyone. IPhone users also have complaint in the network and in some survey half of consumers are satisfied with their current mobile device. The main weakness of the Apple’s iPhone is choice of distribution channel which is limited to the Cingular and apple retailers. Questioned is that- IPhone fulfil corporate duties or is it just an entertainment system.

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C. Opportunities

People always demands a high technology and good looking phone which are fully uploaded with the application and mobile computing experience. The iPhone is the combination of the both powerful computing as well as entertainment. IPhone take a first step towards an Internet protocol-based network. It is very likely for the device fees and pay-per-view system to take flight, eliminating the month to month subscription fee.

D. Threats

There are some companies like Nokia, Samsung, and Sony which have their respective products which make a majority threats for the iPhone. True thing is these phones also run on the 3G network which put iPhone behind in the race. Despite of economic crisis, people are willing to pay higher prices for iPhone.

3.2. Macro Environment

Political:

In recent past, US presidential elections, Barack Obama launched an application for the iPhone. (Telegraph, 2008)

Even in the UK elections, Labour Party used iPhone applications to campaign the candidates.

(Difford, Jan 21st, 2010)

Economical:

Due to the impact of recession on the individual’s income, iPhone faced some drop in sales. But as Apple came up with the new iPhone4, despite of its high price, people were willing to spend on the phone as technology it brought in the market.

Social:

With its elegance, high price and hi-tech features iPhone has become a status symbol. Though it is more often seen as compared to other premium brands, it has maintained its status quo.

Technology

Apple technology is closed end technology. Developers and users have to stick to the framework provided by Apple technologies. Though it enhances the security and performance, it may limit the features and functionality innovation.

Due to the restrictions in the Development Tool Kit, developers have to wait for the new technologies to be released by Apple Inc.

Marketing Mix

4.1. Product:

Apple gives a year’s warranty on the iPhone along with that the customer can avail an optional 3 year’s Apple care warranty. Apple iPhone will come in an alluring and candid packaging which will be as fruitful as other apple products are. Apple will be introducing exceptionally distinguished editions or versions of the iPhone in addition to the iPhone Beatles Edition to ceremonialism the anniversary of Sgt pepper. The company has chosen year 2008 for the freighting of an economical, less advanced iPhone with more upgraded and acquainted version designed for professionals.

The additional features will be:

Larger, removable disk storage capacity – support for USB memory sticks, digital camera memory cards, external hard drives.

Lower weight and thinness – should fit into a wallet or become the wallet (with features to act as a credit or debit card).

Significantly longer battery life – should play movies for twice as long; battery should be easily replaceable.

4G wirelesses – even faster, more incredible speeds than ever offered on this sort of device. This will leapfrog the competition.

GPS functionality – more precise information on location. Can link with software to add even more functionality.

Peer to peer wireless exchange – Zune has this. Let’s you easily share your music and pictures.

Improved camera – For more detailed pictures and high quality video conferencing.

(Maxwell, Lee, Suen, Hofmann 2007)

New product development

Apple has launched their 1st generation (iphone2G) which was hit in the market and top selling product in the third quarter of 2008. After enjoying the poll-position at the market IPhone released the upgraded version of the iPhone that was iPhone 3G but in that also some features are still missing but they cover all missing features in the latter version IPhone 3Gs. (Gadget advisor, 2008) But IPhone 3Gs is similar in look so it could not appeal customers to spend extra price. There are only minor changes in the looks but IPhone improve the quality in the software including camera. Later apple launched their IPhone4 which have all latest technology which customers need. The distinct differences in looks from iPhone 3GS made customers to consider buying new version with that extra price.

BRANDING STRATEGY

Apple has many Branding strategies:-

Apple is one of the brands which represent our lifestyle, creativity and desires. Apple is not only a company which comes with a passion and hopes for a user but also it provides a revive liberty. It is known for its given power to a user through its unbeatable technology.

Apple is saluted for its sophisticated designs. It helps a user in disentangling circuitous of life. It designs a product which is meant for common man. It works with human care and touch. Apple has an earnest connection with its user.(Marketing Minds, 2008)

4.2. Pricing:

When IPhone introduced in the market the price of the iPhone 3G was $599 despite that iPhone hit the market but after a few months, iPhone shake up there price from $599 to $399.(Marsal, February 17, 2009)The reason behind to reduce the price in just a few month is to cover the market. When iPhone launched in the market with their high image high price it’s not cover whole market because of their price.

The other reason behind to skimming the price of the product is that device which have a multi- touch screen and covers all advanced technology which customer not even use and there’s no competition in the market. So, they can easily do their skimming pricing easily.

4.3. Place

Apples’ strategy will be to launch or release of the product on the gigantic scale at all reputable and reliable major retailers worldwide. The massive rollout online, showrooms and in all the cell phone providers will add to the sale of the product. More and more customers will be able to avail the desired object.

The main focus of all Apple stores and the website will be on the iPhone. Appealing and alluring trendy displays will be used at the stores featuring iPhone to make it the Leader of the pack. In addition to this, the iPhone will be on display to masses a whole month before its worldwide release in all apple stores.

4.4. Promotion

Promotion is generally meant for increasing the sale of the product there are two types of Promotion

Pull promotion

Apple promotes iPhone on their website. Apple is known for the best designs and this is evident from their TV commercials. Apple also promotes iPhone at Cinema Theatres, News Papers, Magazines, Gadget Talks and Social Networking sites to name the few.

Apple keeps the customers updated about the new products and technology by sending news-letters via emails, texts and other means of communications.

Push promotion

Apple has marketed iPhone very heavily in past few years. Every time when a new product is about to launch, Apple CEO, Steve Jobs, reveals it his own keynote. Apple’s WWDC (World Wide Developers Conference) itself has become one of the key channels of promotion.

Sales promotion

Due to the overwhelming popularity of iPhone, almost every other company develops their products for iPhone. The apps which are released for iPhone from most of these organisations indirectly help Apple to promote their iPhone.

For past 3 years, Apple is releasing new version of iPhone. The strategy of coming up with new models which are distinctively different and better than the previous one, customers are always eager to know what’s Next? This strategy attracts more potential buyers to their website, which plays a major role in the promotion of iPhone.

The segmentation, Targeting and Positioning Strategies

5.1. Segmentation

The iPhone targets consumers who need to store information and communicate or people who want entertainment on the go, in nutshell a mini computer. Apple target user segments consisting of professionals, students, corporate-users, entrepreneurs, and health care workers. Few people want Internet, video, and PDA features in one device because of the high price. The only drawback of smartphone with the general phone is the high price of these devices. The market will rapidly increase in coming years due to the promised reduction in the prices and more broad categories of features like application which deal with day to day functions i.e. (cardio-apps).

(Maxwell, Lee, Suen, Hofmann, 2007)

5.2. Target markets:

Apple’s marketing strategy is to differentiate the iPhone from other smart phones available in the market. They mainly target the customers in the middle-upper income that need one portable device to coordinate their busy schedules and communicate with colleagues, friends and family. Their secondary targets are high school, college and graduate students who need one portable multifunction device.

Their primary business target is to collaborate with mobile network service providers like Vodafone, O2, Orange, T-Mobile and with large enterprise software firms where information is critical to the end user. Their secondary business target is mid-to mid-size corporations that want to help managers and employees stay in communication or access critical data on the go. This market segment will consist of companies with $10-$50 million in annual sales. These are entrepreneurs and small business owner who need an all-in-one device for work and play. (Maxwell, Lee, Suen, Hofmann. 2007)

5.3. Positioning:

IPhone is fully loaded technology, convenient in use, advance in apps. It means for all costumers’ be it corporate users or causals. IPhone is one device which carries all the communication application beside that music video pictures and internet access also available. IPhone is not only for the experts but also for entertainment. It positions itself clearly distinct from other phones up above with some of the exclusives handsets such as Samsung Galaxy, HTC Desire and Sony XPeria. IPhone is considered as the pride product which makes you feel like belonging to a specific social class.

Conclusions and Recommendations:

Apple Inc. is very strong in the promotion and the place. IPhone is massively marketed using online and retail promotions. In first few years, apple smashed the whole market of the mobile phone. Apple is in continuous efforts to lower the prices of the device to target as many possible potential buyers.

One of the major reasons which make users reluctant to buy the Apple products, in general, is the strategy of keeping their technology closed and intact, and not allowing the developers to explore the horizons to the next level.

If Apple can stretch the iPhone product line in both ways, such as releasing the device with lower prices with the process optimisation and increased efficiency as well as coming up with the new models in the upper segment of the product range to target the corporates and professionals, then it will ensure that the company grows in terms of user base and revenues.

Apple can also consider filling the product line with the new developments in the current product mix by adding variations such as new version with 64 or more Gigs memory, smarter and powerful camera lens technology etc.

Apple strives for the innovation and new technology; the product range Apple currently offers consists of many high end products such as iPhone, iMac, iPad and others. Apple advertises its products massively using push and pull promotion strategies. With the innovation, the promotion and place become one of the key platforms to market the product to the targeted segment.

To conclude, Apple is positioned as “High quality = High price”. If the company can perform at par with the striking new technology, high class design and stability, company has a bright future in coming years. With its remarkable marketing strategy going in hand with the powerful innovation and pioneering technology, there are lot of opportunities and market segments, in which Apple can penetrate and secure the pole-position.

Referencing

Colleen Maxwell, Bryan Lee, Anthony Suen, James Hofmann. (2007).iPhone marketing Phone. [WWW]

Retrieved From http://www.iphoners.com/threads/iphone-marketing-plan.141/#post-1184 accessed on 04/12/2010

Difford.T, 2010 The Uk’s Labour Party Kicks off Digital Election Campaign with an iPhone App[WWW]

Retrieved From http://thenextweb.com/uk/2010/01/21/uks-labour-party-kicks-digital-election-campaign-iphone-app/ accessed on 03/12/2010

Gadget. (2008). Gadget Advisor: Apple iPhone 2G (1st Generation) and 3G (2nd Generation) Compared[WWW]

Retrieved From http://www.gadgetadvisor.com/gadgets/apple-iphone-2g-1st-generation-and-3g-2nd-generation-compared accessed on 01/12/2010

Honan, M. 2007 Apple unveils iPhone[WWW]

Retrieved from http:// www.macworld.com/article/54769/2007/01/iphone.html; accessed on 02/12/2010)

Apple (2010) Investor Relations [WWW] Retrieved From http://phx.corporate-ir.net/phoenix.zhtml?c=107357&p=irol-faq#corpinfo1 accessed on 05/12/2010

Katie Marsal (February 17, 2009) Apple execs rethinking iPhone pricing strategy for 2009[WWW]

Retrieved From http://www.appleinsider.com/articles/09/02/17/apple_execs_rethinking_iphone_pricing_strategy_for_2009.html accessed on 04/12/2010

Marketing Minds (2008) Apple’s Branding Strategy[WWW]

Retrieved From http://www.marketingminds.com.au/branding/apple_branding_strategy.html accessed on 30/11/2010

Telegraph, 2008 Barack Obama brings election campaign to apple iPhone[WWW]

Retrieved from http://www.telegraph.co.uk/technology/3358721/Barack-obama-brings-election-campaign-to-Apple-iphone.html accessed on 03/12/2010