Name: Theo Hiotis Subject: Establish & Adjust the Marketing Mix Teacher: Robert Taylor Time: Friday 9: 30am till 12: 30am Major Assignment: Written Report Weighting: 35%



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Apple iPhone 4


Apple iPhone 4

file:iphone 4.jpg

Name: Theo Hiotis
Subject: Establish & Adjust the Marketing Mix
Teacher: Robert Taylor
Time: Friday 9:30am till 12:30am
Major Assignment: Written Report
Weighting: 35%


Product –

The Apple iPhone 4 is a Smartphone developed by the renowned American company Apple Inc. The iPhone 4 is the fourth generation of the iPhone series created by Apple. The main purpose of the iPhone is to integrate three amazing products in to one to allow it to be functional this includes the phone, a portable mp3 player and a device to allow surfing the internet and receiving emails possible on a small compact portable device. Its main strengths is through the success of the previous iPhone versions including the iPhone 3G and 3GS, the iPhone 4 incorporates movies, music, books, games, internet and email access along with telephone calling, messaging and video calling. The iPhone also uses an application created by Apple called the Appstore, This is vital into the planning and marketing of Apples iPhone and various ads have been categorised to the App Store. The App Store features over two hundred thousand app’s created by 3rd party developers which includes, Games, Utilities and other apps for other essential aspects such as productivity.

The Apple iPhone uses the iOS developed by the company which is also used in the company’s other products including, iPod and iPad. The most noticeable difference from other iPhone models and the iPhone 4 is the significantly new design which features Guerrilla glass on the touch interface as it is strong and the main issue with older iPhone models was the increased amount of screen cracking on the phone this also features a stainless steel frame which also acts as the devices antenna. The iPhone 4 also features the Apples own A4 processor which is found in other products created by Apple, The a4 processor is the processor used in the iPhone 4 which allows for the phone to be significantly faster than any other model. It also features a high resolution retina display and a 960x640 pixel resolution. Another significant difference is the use of the front and back camera, this offers customers to be able to do video calling to other users of the iPhone 4, and also there is a flash on the back side of the phone allowing for precision photos being taken with the 5 megapixel camera. The interface on the iPhone is controlled primarily through the users finger tips with a multi touch sensitive to contact made by the finger. The Apple iPhone Multi touch interface is different to other company’s multi touch smart phones as the interface only accounts for heat sensitive touch which allows precision placing and uses this is one main reason this iPhone has become popular and subjective to other smart phones.

The iPhone 4 was announced on June 7 2010 by Steve Jobs (Apple CEO) and was announced to be released on June 24 2010 to various countries including United States, United Kingdom, France, Germany and Japan. The iPhone 4 was then released on July 30th in other countries such as Australia. The iPhone targets customers who need to store information and communicate or people who want constant entertainment on the go. Apples target segments consists of professionals, students, corporate users and entrepreneurs the product caters to every one of these people’s needs this versatility created by Apple allows for the phone to be a large success in Europe, United Kingdom, America and Australia.



Place –

The iPhone holds a significant place on the market, In order to get an iPhone you can buy them through Apple shops directly or from a carrier; the carrier offers the phone on a plan where you pay each month a certain amount for the phone and for the plan that you are on. Vodafone, Optus, Three and Telstra are the main carriers for the iPhone and each cellular carrier has devised methods of ideas for different perspectives on plans that the user can go on in order to purchase the iPhone. If the customer does not want to go on a plan with one of the major phone carriers in Australia another way to attain an iPhone is too buy one outright directly from Apple. This can be achieved by going to an Apple store or to the Apple online store on the internet and purchasing the iPhone for a fixed one off cost.



Promotion –

Apple has a history of announcing products very close to the day that they are to be released and available for retail sale. The iPhone 4 hype has been buzzing for a long time since the ideas and speculations of people had thought of the new iPhone and since Gizmodo purchased “the iPhone 4” prototype that had been found by someone that had reported that the iPhone 4 had been lost by an Apple employee this created a strong buzz relating to the iPhone 4 release and was not confirmed by apple until 2 months of the prototype being found. This created a significant buzz for the iPhone 4’s release and allowed a popular amount of promotion before the iPhone 4 had even been announced by Apple. Another way of promotion for the iPhone by Apple is through the Apple stores which are situated in shopping centres and other places of interests around the world. This is essential in the promotion of the iPhone as it allows the store to dedicate themselves to the iPhone product and to providing product demonstrations. This gives customers a hand on look before purchasing the iPhone. All stores and all Apple related websites will have eye catching displays featuring the iPhone to make the iPhone stand out from other products.

All Apple stores will have the iPhone on display months before its release this is designed to lure customers into apple stores and see the whole range of products that Apple has to offer. Apple will integrate the message of revolutionary communications through various formats such as audio and visual through all media advertisements. The iPhone promotion through media campaigns will be based on the iPods ground breaking image. Apple had also created an ad featuring parts of the first apple ad ever invented and was featured in 1984 super bowl this was done primarily to create a buzz about the new apple product that is being sold. Advertising is also appears on a regular basis to maintain general public awareness and communication of the differentiation messages to several targeted groups. Apple has also promoted the iPhone 4 through the use of relevant YouTube ad’s allowing viewers to see the iPhone and have various demonstrations of the iPhone being used. The Apple website also has ad campaigns circulating the growing buzz of the iPhone 4. The main slogan for the new iPhone 4 used by Apple was “this changes everything again” This was used by apple in order to create a strong idea to customers that it is still the same iPhone as past models including the 3G and 3GS but a new and improved version, This was carried out on various carrier marketing plans and was featured on many magazines and websites including the homepages of both Vodafone and Optus.

(This is an example of the iPhone 4 promotion ad on the Optus website)

Price –

The iPhone 4 comes in two types relative to how much flash memory each one holds, This includes the iPhone 4 16gb with a price of $859 AUD or the iPhone 32gb with a price of $999 AUD, meanwhile Apple still sells the older modelled iPhone models on their website and throughout their stores for a fraction of the price. There is many different offers for the iPhone 4 and many different plan types created by different carrier company’s, The most popular plan for the iPhone 4 is optus’s 59 dollar per month plan which gives you unlimited calls to Optus users, 550 dollars worth of calls to other carrier users, unlimited text and 2gb of data uses this is done on the basis of signing up for an agreement of a minimum of two years. Apple has estimated 1.7 million iPhone 4’s to have been sold in the first 3 days of their release around the world along with 600,000 pre orders. The prices of the iPhone have changed as to when they first came out this was done by Apple in order to ensure a strong percentage of market share in the shortest amount of time possible. Apple also has intended to release much different limited edition type of iPhones for specific uses like corporate and recreational use.



SWOT Analysis

The following SWOT analysis looks at iPhone product from Apple INC which is operating in Smartphone industry. The analysis shows iPhones Strengths, Weaknesses, Opportunities and Threats.



Strengths - of a business or organisation are positive elements, something they do well and is under their control.

Innovation – The iPhone is a technologically advanced smart phone featuring an technologically advanced touch screen which has not been able to be matched by any other mobile product till this day. IPhone 4 has many other functions of other mobile products in one easy to use device.

Compatibility – The phone works with iTunes and other Mac and Apple related products such as the new Apple TV allowing for wireless connectivity on a person’s TV screen which offers limitless potential. The iPhone 4 also allows software updates when one becomes available through iTunes this allows for users to stay up to date with the current technologies. The iPhone 4 series is complete as well with only 2 models being released.

Reputation Of Brand – Apple is a well known figure in the world of technology, mainly built upon the success of the brands iPod along with the highly regarded Apple iMac computers.

Price – The price of the iPhone 4 starting at $719.00 for the 16 GB is reasonable for its value. Having a much cheaper price than any other smart phone currently on the market offering many different features and benefits to its users.

Quality Products– The iPhone 4 has one of the strongest glass able to be put into a phone with a touch interface this is called Guerrilla glass. This also offers a stainless steel case around the phone and a metallic finish that allows the iPhone to be durable to light. The iPhone is also resistant to computer viruses



Weaknesses - company or organisation are things that need to be improved or perform better, which are under their control.

Targeted Selection – The iPhone 4 has not been targets towards business people which most other forms of smart phones such as blackberries have. This is done through ads which explain in great detail about different types of apps available on the iPhone ads like this has earned the iPhone a bad reputation in being compatible with the corporate world.

Stock Problems – When Released in Australia the demand for iPhone 4 was so high it was sold out everywhere in first 3 hours of being released. Customers now need to wait 3 weeks before being able to purchase iPhones due to the demand.

Price- Apple does not allow for the iPhone being available in different price categories where some can be more technologically advanced than others.



Opportunities - external changes, trends or needs that could enhance the business or organisation’s strategic position, or which could be of a benefit to them

Segmentation – Apple will continue to target the business productivity marker and who wants an all in one computing solution. Apple will also encourage iPod users to upgrade to the iPhone.

Partnerships – Apple has a constant collaboration with mobile phone carriers such as Optus and Vodafone, This allows for Apple to fill the market with their phones but also minimize expenses as other companies are paying for the phone to be marketed towards their company.

Upgrades – Software can be upgraded and updated which allows for constant new features to be brought to the iPhone this is essential as it reduces costs in advertisement and marketing but allows for an increase in revenue.



Threats - which may restrict damage or put areas of the business or organisation at risk. They are factors which are outside of the company's control.

Increased competition – Smart phones are easily reachable by mobile phone companies and are easier to make than ever before. More companies may enter the market this can be done through staff of Apple branching off and creating a similar device but for a cheaper price.

Changing consumer Patterns – Consumers idea of Apple may change in the future offering customers not to buy Apple products.

Technology – In the future another brand may have a breakthrough technology leaving the iPhone 4 to be outdated very quickly and will give customers a bad perception of the brand.

Pricing Problems – The iPhone 4 is marketed as a high end phone. When Apple decides to change the price to a cheaper value in order to increase the market share of iPhones in the world consumers may think that they are a cheap product.

Asian Market –The Asian market is difficult to expand into as there are many different brands circulating the Asian market that are better known.



Competitor SWOT Analysis

Samsung Galaxy - (Direct Threat)



Strengths

Experience – Samsung has a long history in the Asian Mobile phone market. Samsung has also has had many experiences in developing new mobile phone software. This could allow innovative designs in new product offerings.

Business Branding – Samsung is a well known brand for business people through sponsorship of various events and also creating other technologically advanced devices such as TV’s. Existing products are well established and compatible in the market.

Weaknesses

Samsung Mobile Profile – The Samsung Company is not known widely for groundbreaking innovation in touch screen mobile phones. The Samsungs closest competitor to the iPhone is the Samsung galaxy which offers an easier user friendly interface.

The Handset– the Samsung galaxy offers a large multi touch screen easily viewing the screen. Users complain that the screen is not sensitive as the iPhone and also the phone does not offer as many apps as the Apple Appstore does.

Opportunities

Similarity – The Samsung galaxy can add many similar capabilities to their products that much the use of the iPhone and expand it to a wider market allowing for lower cost with higher power products.



Threats

Increasing competition – An increase in competition such as apple will make the Samsung galaxy market difficult to be established in as Apple is maintaining a strong market share.



IPhone 4 Targeted Selection

The iPhone is an exceptional device as many different demographics can be targets as the iPhone allows for many different features and an endless amount of possibilities. The targeted selections of the company Apple are corporate users, Students, Entrepreneurs, Workers. Currently the need for high end phones have become increasingly demanding and the release of the iPhone allows for constant updates in order to stay in touch with the latest technology and releases. The market for smart phones will greatly increase in the coming years due to lower prices of the products offering much more power in terms of technology.



Targeted Demographic

Demographic Need

Benefit for use of iPhone

Professionals

  • Stay in touch whilst moving

  • Record relevant information

  • Access Emails

  • Phone capabilities

  • Email and instant messenger

  • Applications found in the Appstore.

Students



  • Stay in touch with friend’s family whilst on the go.

  • Having functions without carrying multiple devices

  • Accessing social networking sites



Corporate Users

  • Allow to access and modify data on the go

  • Applications on the Appstore and also accessing emails

Workers

  • iPhone offers an inbuilt calendar and also apps from the Appstore

The brand Apple is attempting to differenciate the iPhone 4 from other products on the market such as the new Samsung Galaxy or the Blackberry series phones. One primary consumer targeted by Apple is the middle and upper income earners that need a portable device for various things such as Email, Internet, Mp3 Player and most importantly a phone. The second way Apple targets their market for the iPhone is for high school, college and graduated students who use their phone for many functions these include Mp3 players, Phone capabilities, social networking and gaming. This is acheived through the iPhone by allowing the appstore to create endless amount of apps based on the period and the demand by customers for their products. Apple is targeting 4 main age group categories for the iPhone these include 15-20 years, 20-25 years- 25-45 years and 45 years and up. This is the main reason why Apple has been so succesfull in their product series of the iPhone it is a mix of strong marketing selection and the capabilities of the iPhone.

Reasons for buying the iPhone 4

This Survey conducted by Openheimer have revealed that many of the iPhone 4 purchases have not been because they need a new phone but mainly because the need of the new iPhone to stay up to date with the current features and trends. This is a good source of information for Apple as it shows that the iPhone smart phone is very popular and in high demand in the market place. This shows that the iPhone marketing techniques and planning by their targeted selection has achieved dominance and success in the smart phone market.

This is another survey created by Fortune Tech indicated the popularity of the iPhone 4 amongst buyers. A large 77% of people who bought the iPhone 4 previously had an iPhone being either the iPhone first generation, 3GS or 3GS. These types of statistics is impressive for Apple as it shows the growing popularity of the popular Smartphone as many people who have had another version will continue to buy future versions. The closest brand competing with the iPhone 4 when showing customers old phone was the Blackberry this comes as an essential factor for Apple as Blackberry phones are highly regarding amongst corporate workers and the percentages of people resisting the blackberry for the iPhone ensures that Apple have entered a new market that they have desperately been attempting to achieve.

Sales Diagram

This diagram found on ITproportal.com Suggests the iPhone 4 sales compared to other popular products on their first 3 days of sale. These include other popular iPhones iPod’s and the iPad, Play station 2, Nintendo DS and a popular Nokia mobile phone. The iPhone 4 strongly exceeds every other product. The closest two products to the iPhone 4 is other iPhone models the 3G and 3GS. This shows Apples continued dominance of the Market share through the release of the popular smart phone the iPhone 4. Other products such as Play station 2 only had 157,000 sales in the first 3 days of going sale, this figure does not even equate to a tenth of the demand received by the release of the iPhone 4 sales.


http://i50.tinypic.com/33xahkk.jpg

Push / Pull Diagram

Pull


Push

This diagram described the work a manufacturer of the iPhone needs to perform in order to get the customer to purchase the product. This may involve setting up various distribution patterns and idea’s. The pull strategy refers to the customer seeking the iPhone product and retailers placing the existing product due to consumer demand. This requires a highly visible brand awareness strategy but if used correctly can be maximised in order to gain profits.



References

Internet

Digital Daily - John Paczkowski – IPhones Desire Drive - 12/10/2010

http://digitaldaily.allthingsd.com/20100625/iphone-4-buyers-driven-by-desire-not-need/

Blancer - SWOT – Analyse your market – 12/10/2010

http://blancer.com/tutorials/marketing/81849/the-effective-marketing-plan-swot-analyse-your-market/

Rama – The Apple iPhone Marketing Mix Perspective – 11/10/2010

http://www.ama-rochester.org/blogorama/2007/07/the-apple-iphon.html

Steven Levy – At Last the iPhone – First look at the most eagerly anticipated Gizmo ever – 10/10/2010

http://www.msnbc.msn.com/id/19444948/site/newsweek/

Edward C Baig Apple iPhone isn’t perfect but its worthy of the hype – 11/10/2010

http://www.usatoday.com/tech/columnist/edwardbaig/2007-06-26-iphone-review_N.htm

Desire Athrow – iPhone 4 sales compared to other popular products – 12/10/2010

http://www.itproportal.com/portal/news/article/2010/6/29/chart-iphone-4-sales-compared-other-popular-products/

Theo Hiotis



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