Now-a-days ‘ customer is a king’ so it is essential need to study and analysis the customer demands. In this world of competition, to lead the world market must study market position, needs of customer, budget of customer, product cycle, etc that affects the product and company time to time. This report has been designed to provide Apple iPhone 5 with a proper strategic plan for their Indian Operations within the smart phone industry. Apple iPhone is leading smart phone and is a globally recognized brand but now it is facing increasing competition from Samsung Galaxy products. Now Samsung Galaxy S3 has 1st position in Indian smart phone market. So to lead again the Indian smart phone market, Apple iPhone 5 will require implementing a best marketing strategy in order to make the company more locally responsive. A structure’s possible change has been suggested to aid the strategy implementation after a perfect marketing strategic plan. C: UsersSamsungDocumentsapple iphone 5apple logo. jpg
Fig1: Apple Logo
1. 1 Objectives
In this report, there are four main sections will used enable us to recommend a strategic direction to Apple iPhone 5, these are: To establish background information on Apple iPhone 5 current strategic positionTo investigate, analyses and evaluate the internal and external environment of Apple iPhone 5. To generate perfect strategic options that Apple iPhone 5 could adopt and derived directly from the external and internal analysis. To choose best option we recommend to Apple iPhone 5 and detail the implementation implications of that option. We use basic design school model of strategy formulation (” Example of Strategic Plan Model – Amazon Internal Analysis,” n. d.) To develop our strategy as illustrated below, C: UsersSamsungDocumentsdesign school model. gif
Fig2: Basic design school model of strategy information
Introduction & purpose
In this report I will study, analysis and evaluate the marketing concepts, marketing environment, business environment evaluation, marketing plan, blue ocean strategy, operational plan, man power and different stakeholders on marketing decisions for Apple iPhone 5 to regain number one position of it in Indian smartphone industry. Digital World leading American Multinational Corporation that designs develops and sells consumer hardware electronics and computer software products; named Apple Inc. with its estimate vales US$ 414 billion as of January 2013 (katherine, 2013). Iphone, ipad, ipod and macintosh computers are Apple’s best-known hardware products. The OS X and iOS operating systems, the Safari web browser, the iTunes media browser, and the iWork and iLife creativity and production suites are Apple software. Apple inc. is the most admired company in world from last 4 years (2008-2012) after in the United States in 2008. It has 390+ retail shops in 9 countries and an online store from where its hardware and software products sold worldwide (Jordan, 2012). The company having more than 75, 000 employees worldwide was incorporated in January 3, 1977 headquartered in Cupertino, California (Santiago, Ryan, Ed, & Jiahd, 2009). Apple Inc operates in aggressive competition in all products and services. The top competitors are Samsung (Galaxy S3), and Nokia. Apple had rewarded 1st place but now it vary between top 2 places, mainly due to its positive brand reputation, latest technology and the ability to pinpoint needs of consumers. The iPhone 5 invites consumers to a ” latest digital lifestyle”. Because iPhone 5 interface included digital services according needs and interests of user. The iPhone 5 giving to customers a new experience and digital life compared with other products.
1. 1. 2 Overview
TypePublicIndustryComputer hardware/softwareconsumer electronicdigital distributionFounded1 April, 1976Incorporated3 Janruary, 1977Founders Steve Jobs Steve Wozniak Ronald WayneHeadquarterApple Campus, 1 Infinite Loop, Cupertino, California, U. S. No. of locations394 (November, 2012)Area servedWorldwideKey peopleArthur D. Levinson (Chairman)Tim Cook (CEO)ProductsMac computers, iPhone, iPad, iPod, iTune and many other software products and servicesRevenueUS$ 156. 508 billion (2012)Operating incomeUS$ 55. 241 billion (2012)Net incomeUS$ 41. 733 billion (2012)Total assestsUS$ 176. 064 billion (2012)Employees72, 800 (2012)WebsiteApple. comLogoD: cmbaapple iphone 5apple logo. jpg
Table1: Overview of Apple Inc. (Apple Inc., 2012)
D: cmbaapple iphone 5iphone-5-vs-other-phones overview. jpg
Fig3: Specifications of iPhone 5, compared with other smartphones (” Is the iPhone 5 Worthy of the Number 5?,” 2012)
1. 2 Stakeholder Analysis
A person, group, organization, system or member who affects and can be affected by a firm’s actions may refer to Stakeholder e. g. Apple iPhone 5
Fig4: Various Stakeholders
1. 2. 1 Customers
The iPhone 5 has a diverse range of customers including government and corporate customers, individual and public bodies. 2 million people pre-ordered the iPhone 5. The iPhone 5 has 83 million retail visitors from April to June 2012 (arora, 2012). The iPhone 5 set new record, apple sold 5 million iPhone 5s in first 3 days (dominic, 2012, p. 5). C: UsersSamsungDocumentsapple iphone 5iPhone-Owner-demographic-profile. png
Fig5: Demographic Profile of iPhone customers (Singh, 2012)
1. 2. 2 Employees
There are 72, 800 full time permanent employees and 2, 900 full time temporary employees and 3, 300 contractors in Apple Inc. Apple have 42, 400 employees in retail division (Jordan, 2012).
1. 2. 3 Suppliers
Apple has launches iPhone 5 in 390 retail stores in the end of fiscal 2012, and expects 30-35 new stores in 2013. Apple Inc. has more than 2000 suppliers and an online retail store worldwide to launch iPhone 5.
1. 2. 4 Shareholders
There are 15, 489, 000 volume of its shares with estimate value of $ 459. 99 per share (date as of 2/19/2013 12: 31 pm ET) in Apple Inc. Apple announces $ 2. 65 per share in January 2013 after iPhone launches in around 100 countries and release this on 14th February, 2013 after hitting record selling figures (” investor news,” n. d.).
Fig5: Apple Current Stock Value
1. 2. 5 Government
Apple iPhone 5 has worldwide customers so complying with laws and regulations of all countries and paying taxes. They follow the local government and public bodies’ rules to solve public issues. The smart phone’s regulation in India governed by ministry of corporate affairs, the ministry of health, ministry of shipping and income tax department of India.
1. 2. 6 NPO/NGO
Apple iPhone 5 collaborates with NPOs and NGOs on some areas such as human rights, environment, and social contribution so can take positive step with them.
1. 2. 7 Local Communities
Apple operates in 107 countries along with respecting different culture and customs of people in different regions. The iPhone 5 launches in around 100 countries up to 21st December, 2012.
1. 2. 8 Global Environment
Apple has an executive team for setting and implements environment policies. Apple well-known about the vast majority of greenhouse gas emissions (up to 98 %) come from the product life cycle. So iPhone 5 design and manufacture after considering these factors (” Apple and the environment,” n. d.). C: UsersSamsungDocuments
ecycle iphone 5. jpg
Fig6: Recycle circle
2. 0 Business Environment Evaluation
Business Environment Evaluation is a mixture of internal, external and customer analysis of the business organization e. g. Apple Inc, which is critical consulting process to indentify the current issues (” Business Environment Evaluation,” n. d.).
Fig7: Description of Business Environment Evaluation
2. 1 Country (India) Statistics
India is the largest democracy in the world with more than 1. 2 billion population. India is now world’s fourth-largest economic country in purchasing power parity terms. As decrease the investment, the slowdown in GDP growth is likely to continue. Poverty has been on the decline. According to official Indian government’s estimates, poverty declined from 37. 2% (2004-05) to 29. 8% (2009-10). Rural poverty declined by 8 % points from 41. 8% to 33. 8% and urban poverty declined by 4. 8 % points from 25. 7% to 20. 9. The government is now start investing in a set of initiatives to bring basic services/needs to the poor – in terms of elementary education, basic health care, rural roads, and rural connectivity, health insurance (” india overview,” n. d.).
C: UsersSamsungDocumentscountry data. PNG
Fig8: Indian GDP annual growth (” GDP growth (annual %),” n. d.)
C: UsersSamsungDocumentslending iphone. PNG
Fig9: Indian Lending Data (” india,” n. d.)
C: UsersSamsungDocumentsapple iphone 5age-distribution-indian-smartphone-market. png
Fig10: Smartphone user in India (Tech c, 2012)
CMR in its latest report Review 2Q 2012, has shared that January-June 2012, 102. 43 million units shipments done of mobile smart handsets. The total shipments of smartphones were 5. 50 million units for that period in India. As per the figures, Nokia tops the Indian smart mobile handset market with a market share of 22. 2 %, followed by Samsung at 13 %, and Micromax at the third position with 5. 5 %. With a 16. 9 percent growth rate, Feature phones emerged as popular segment in the country as smartphones accorded for 12. 2 %. Among the all players in the smartphone segment, Samsung Electronics specially Galaxy S3 smartphone emerged as a popular choice with 41. 6 % shipments, followed by Nokia at 19. 2 % and RIM with 12. 1 %. Samsung Electronics is estimated to have shipped nearby 18 million units of the Galaxy S3 in the period, as compared with the 26. 9 million units of iPhone 5 shipped by Apple. C: UsersSamsungDocumentsapple iphone 5india smartphone user. gif
Fig11: India Smartphone Market (data of mobiles company in terms of users, n. d.)
2. 1. 1 Brief description of the India
India is rich country in terms of religions, languages, and its cultures are unique and unparalleled. It has nourished the growth of its great civilization in history of the five thousand years. It is second largest populated country in the world and increasing with growth rate 1. 312%. C: UsersSamsungDocumentscountry stastics. PNG
Fig12: India Statistics (” india,” n. d.)
2. 1. 1. 1 Demographics by income and households
Household Income
Graph1: Demographics of iPhone by income and household (Singh, 2012)
2. 1. 1. 2 Map of north India where intent to set up my Business in India
C: UsersSamsungDocumentsapple iphone 5orth-india-map. gif
Fig13: Map of north India
North India is main part of India for my strategy plan for this report but this report analysis the whole Indian market for Apple iPhone 5.
2. 2 PEST
To analysis of the external macro environment through which business operates and that controlling business factors, refers PEST analysis. So it is important for market strategic planning, design and implementation of Apple iPhone 5.
Fig14: PEST Description
2. 2. 2. 1 Political
Fig15: Political analysis
2. 2. 2. 2 ECONOMICAL
Fig16: Economical Analysis
C: UsersSamsungDocumentsapple iphone 5sm india inflation. png
Fig17: Inflation rate for Smartphone in 2012 (Tech c, 2012)
2. 2. 2. 3 Social
Fig18: Social Analysis
C: UsersSamsungDocumentsapple iphone 5income distribution. gif
Fig19: Income Distribution in India (” income distribution,” n. d.)
C: UsersSamsungDocumentspoplation growth in india. PNG
Fig20: Chart of Indian population growth (” population growth rate,” n. d.)
2. 2. 2. 4 Technology
Fig21: Technology Analysis
C: UsersSamsungDocumentsapple iphone 5energy use and cost. png
Fig22: Energy cost of iPhone 5 compared with other electronic devices (Fischer, 2012)
2. 2. 3. 1 The opportunities that you can leverage off
There are so many opportunities for business that can leverage off in mobile industry in Indian market. There are millions user of iPhone and other smartphones who prefer to use daily used new applications. With increasing living standard of Indian people, they use smartphone for email and net accessing even more than USA smartphone users. So iPhone 5 is fastest web access smartphone that can take advantage of it by using strong tie up with wireless communication companies to provide fastest web accessing. The iPhone 5 also have opportunities to make extras benefits from its unique apps as Indian people being addicted of phone apps now a day.
2. 2. 3. 2 The threats that you need to be aware of
Apple iPhone is one of the top smartphone companies in the Indian market so has to aware about threats from local and foreign competitors. Its customers and suppliers can reduce margin by bargaining factor. Local customers are expat to take advantage of warranty time period to get new handset, so have to be plan for it. Change in government policies on tax and foreign companies is also a threat that need to be aware of.
2. 3 Porter 5 Forces
2. 3. 1 Use of the Porter 5 ForcesPorter 5 force is a quite simple but most powerful tool to know where power lies in business situation that helps to take fair advantage of the situation of strength, improve the weakness and avoid taking wrong steps.
Fig23: Porter 5 forces for iPhone 5
2. 3. 2 The Factors that will have an impact on business
1. Threats of SubstitutesFocus making superior quality productProReflect high performanceReflect non price competitorInsulated from intensive competitorsConsIncrease cost of productionPossible for losing market shareProduce own substituteProDrive up sales and maintain market shareCompete with competition2. Threat of new entrantsContinue using product differentiation strategyInvent new technology products constantlyR&D should find ways to cut costs3. Bargaining of Power of buyersFocus on niche marketProMove efficient and effectiveGenerate higher profits as customer satisfactions achievedConsNot much sales and profit generatedSuffer a great loss when market failureHighly compatible closed systemProMaintain its costMinimize the risk of competitorsRising profitsConsTake time come out patchCost satisfactionConstantly bear research cost4. Bargaining Power of SuppliersMove to Intel ProcessorProComing out amazing productsLower production cost and increase saleConsFight against other competitorsStrong vertical integrationProCoordinate activities in supply chainIncrease costumer exposureEnhance product quality and enjoy unparallel pricing powerConsBureaucratic cost increase5. Competitive RivalrySpend heavily on R&D departmentProHigh brand recognition and reputationExpand market shareSustain status as industry leadersEnhance probability
2. 4 SWOT
SWOT stands for strengths, weaknesses, opportunities and threatsIs important for to know today’s and tomorrow’s position of businessTo find out Apple’s position
2. 4. 1 SWOT Factors
D: cmbaapple iphone 5swot analysis. png
Fig24: SWOT Factors (” mobile marketing SWOT analysis and C2S,” n. d.)
2. 4. 1. 1 Strengths
For iPhone 5 produces its own softwareThe iTunes is a marvelous revenue sourcePrice area level of iPhone 5’s provide enough room to avoid price competitionThe iPhone 5 is easy to use due to its high appealing designSteeply growing marketLow-debt: easy to control financeThe iPhone 5 has good brand loyaltyAnnounce to launch with Intel processorHigh developed R&D department
2. 4. 1. 2 Weakness
Is negative element that could be improvedWeak relationship with market titan MicrosoftTechnological iPhone 5’s has extremely short lifecyclesLow presence in promotion other than products placements educational areas and publishingLess market share as compared to Microsoft i. e. competitor of Apple
2. 4. 1. 3 Opportunities
External factors that influence current and future position of Apple IncIncreasing online salesWith other companies, increasing bonds and partnershipsThe production of own software which are increasing on iPhone 5’sMost demanded and sold Apple products are iPhoneLarge and increasing population results in more future potential customers
2. 4. 1. 4 Threats
In the smartphone market Apple has very strong competition from Samsung, NokiaMusic piracy: free download instead of buying at iTunesThe long lasting economic recession, this affects Apple’s sale in the futureIts product expensiveness threatens Apple being undercut by low cost importsThe very high speed of technology development
2. 5 Strategic Groups
In this concept for strategic management, study and evaluate the price and customer satisfaction of entire group of companies within the mobile industry who operates in same business along with same strategy. Samsung, Apple, HTC, Micromax, Nokia, Spice, LG, Vodafone, Sony Ericson, RIM black berry and Motorola are all mobile companies in India.
2. 5. 1 Define and use of Strategic groups
High D: cmbaapple iphone 5okia logo. jpg D: cmbaapple iphone 5BBerry logo. jpg D: cmbaapple iphone 5apple logo. jpgPrice D: cmbaapple iphone 5Micromax_Logo. gif D: cmbaapple iphone 5samsung logo. jpgMedium D: cmbaapple iphone 5sony ericson logo. jpg D: cmbaapple iphone 5lg logo. jpg D: cmbaapple iphone 5htc logo. jpgD: cmbaapple iphone 5okia logo. jpgD: cmbaapple iphone 5spice logo. jpg D: cmbaapple iphone 5motorola logo. jpg D: cmbaapple iphone 5vodafone logo. jpg D: cmbaapple iphone 5Micromax_Logo. gif D: cmbaapple iphone 5okia logo. jpg
Low
Low Medium High
Customer Satisfaction
Chart2: Illustrative Price Vs Customer Satisfaction using Strategic group of industry
Apple iPhone already provide full customer satisfaction with highest price range. As price, Apple has two main competitors, HTC and Blackberry but they don’t provide 100% customer satisfaction. As Customer satisfaction Apple iPhone 5 is lacking behind the Samsung Galaxy S3 but Samsung Galaxy S3 is lacking in terms of price as compared to Iphone 5. But due to Apple iPhone 5’s high price and less supply, customers are moving to Samsung Galaxy S3. So Apple must either reduce price or improve supply. D: cmbaapple iphone 5mobile rating. PNG
Fig25: Overall rating of mobile companies (” 2012 U. S. Wireless Smartphone Customer Satisfaction Study and 2012 U. S. Wireless Traditional Mobile Phone Satisfaction Study,” 2012)
2. 6 Market Segmentation
Market segmentation refers as a marketing factor which helps the firms to identify the all portions of the market as they respond to different features and products. It is very important to perform better than competitor so market segmentation helps to understand and satisfy their customers. So for Apple iPhone 5, by segmenting a market is possible to identify particular customers with same needs, and then target them with products made accordingly their needs to fulfill said needs.
2. 6. 1 Wallet Size
Product
Single professional’s income (in US $)iPhone 5 – 16 GBUS $ 649iPhone 5 – 32 GBUS $ 749iPhone 5 – 64 GBUS $ 849Price2000 +11 million25 million6 million1500 – < 20005 million12 million1 million1000 - < 15006 million11 million2 million500- < 10008 million5 million1 million < 5004 million2 million1 million
Table2: Illustrative Wallet size for iPhone 5 accordingly Single professional aged 25-34 yrs old
3. 0 Marketing Plan
3. 1 Definition of Marketing Plan
‘The management process responsible for all three main steps i. e. identifying, anticipating and satisfying customer requirements profitably’, is called ” Marketing” states by the Chartered Institute of Marketing.
3. 1. 1 Marketing Mix: 4Ps
Fig26: The marketing mix-4Ps
3. 1. 1. 1 Product
The iPhone 5 has wider screen, lower weight, thin and will have a full year warranty. It supports to 2G and 3G technology with inbuilt 16/32/64 GB memory. The iPhone 5 is best internet full screen browsing ever on a smart phone (Syed, 2009). C: UsersSamsungDocumentsiphone 5 pic. jpg
Fig27: iPhone 5
3. 1. 1. 2 Price
Company uses many different methods and policies to fix amount of products and service given by the corporation, called Price depend on finite quantity, weight or any other parameter of a good or service. The iPhone 5 with 16 GB of storage is worth of US $ 649. 99, with 32 GB storage is of US $ 749. 99 and US $ 849. 99 for a 64GB (aresyeah, 2012). Its feature makes it higher selling product and it is $ 100 costly from Samsung S3 only due to its price sensitivity i. e. high share value share revenue. CompanyAppleSamsungHTCBlack BerryModeliPhone 5S 3HTC EVO 4 LTEZ 10PriceUS $ 649US $ 549US $ 729US $ 743
Table3: Comparison price between iPhone, Samsung, HTC and Blackberry
3. 1. 1. 3 Promotion
A great product does not guarantee for its best sale, customers should be aware about product, its specifications, and its benefits. For this promotion is used. The important factors are:
Fig28: Promotion strategy
The promotion, which is least involved in iPhone 5 marketing strategy, is the price reduction of $500 if sign the contract with wireless service provider like AT&T. C: UsersSamsungDocumentsiphone 5 promotion. jpg
Fig29: Promotion of iPhone 5
3. 1. 1. 4 Place
Place, where customers can get products and services provided by company. The iPhone 5 uses two places of distribution, one is order online and other is long wait outside the Apple retail store. The first place gives the vast majority of people to get the iPhone 5 from their home without walking out of their doors. C: UsersSamsungDocumentsapple retail shop. jpg
Fig30: Apple retail shop
C: UsersSamsungDocumentsapple store. jpg
Fig31: Online Apple store
3. 2 Expected Impact
3. 2. 1 Price Sensitivity of iPhone 5
3. 3 Impact of Product
3. 3. 1 VRIN analysis
Display sizeMemoryResolutionWeightAppsOperating SystemCamera32 GB64 GBValuableD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgRareD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgImperfectly imitableD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5cross. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5cross. jpgD: cmbaapple iphone 5cross. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5cross. jpgNon SubstitutabilityD: cmbaapple iphone 5cross. jpgD: cmbaapple iphone 5cross. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5cross. jpgD: cmbaapple iphone 5cross. jpgD: cmbaapple iphone 5cross. jpgD: cmbaapple iphone 5ick. jpgD: cmbaapple iphone 5cross. jpg
Table4: Illustrative VRIN analysis for iPhone 5
3. 4 Impact of Place
3. 4. 1 Advantages and disadvantages of Business location for iPhone 5
3. 5 Impact of Promotion
3. 5. 1 Different Promotion methods
Blue Ocean Strategy
4. 1 Use of Blue Ocean Strategy
Create uncontested market spaceMake the competition irrelevantCreate and demand new demandBreak the value/cost trade-offAlign the whole system of a company’s activities in pursuit of differentiation and low cost