Marketing planning is the analysis of the use of marketing resources to achieve corporate goals. The plan contains a list of tactical measures that can improve the position of the company in the intended sections of the market. (Baines, Fill, & Page, 2013). In this paper, several aspects of the marketing plan of the new iPhone, such as positioning, value proposition, issues analysis, and others, were analyzed to provide an overview of the company’s perspectives.
As stated by the SWOT and situational analysis, the organization has a number of issues that they need to consider. It is worth noting that one of the current problems is that the company can no longer rely on the Chinese market, which used to be one of their major marketing decisions. The fall of the Chinese currency exchange rate has led to the fact that the products have become more expensive as they are supplied in dollars.
At the same time, prices for Chinese smartphones, including Xiaomi and Lenovo, have not changed. The situation has allowed Chinese companies to take the leading position in smartphone shipments to the domestic market while Apple was experiencing losses. Moreover, the further depreciation of the Chinese currency could have a negative impact on the cost of components for the device (Baines et al., 2013).
The fall in sales of smartphones has forced manufacturers to reduce their forecasts for supply, although they have actively invested in production capacity in recent years. In particular, providers of large-size displays for the iPhone may face an oversupply of components and a serious drop in profits, which encouraged the suppliers to increase prices for the constituents in order to reduce risks.
However, the main problem of the company regarding the production of the iPhone is the lack of innovation that could convince investors of the stock market that the company has a long-term perspective. Moreover, the company was unable to achieve significant success with its Apple Music service, which is one of the major auxiliary items of iPhone. Despite the user-friendly interface and an extensive advertising campaign with the participation of famous singers, the application has already lost almost 50% of the domestic customers (Barnes & Blake, 2015). The strength of the brand is still high; nevertheless, the fluctuation in share prices was observed after almost every company presentation.
The new iPhone is believed to be the standard device update, including a couple of new features, a more powerful processor, and a camera with a higher resolution. iPhone has also lost the clarity of positioning since, at the moment, it is difficult to define whether the smartphone is designed for the mass audience or its primary target market is more specialized. Apart from that, the increasing competition from other companies is one of the most crucial issues the company needs to consider. In this regard, the company has to determine the positioning of the product on the market, identify key competitors and their advantage, and consider the image of the smartphone.
Further, the issue of the determination of the leading competitive market conditions depending on the intensity and importance of the competitive forces is increasing. From the point of view of direct competitors (companies offering identical or similar goods, the danger of such opponents is that customers can easily flop to these companies), they constitute the most serious competition. At present, the direct competitors are Google Inc., Samsung Electronics, Microsoft Corporation, and a number of corporations operating in the Asian market (Barnes & Blake, 2015). The indirect competitors are companies that offer products and services that can replace the iPhone.
These competitors operate in the market with the same or similar value proposition but offering a different product (Baines et al., 2013). In this regard, Apple should thoroughly analyze and implement the appropriate strategies. NVidia Corporation, Sony Corporation, LG Group, and Alcatel-Lucent represent indirect competitors. However, suppliers and partners have a significant beneficial impact on the company maintaining its credibility, financial condition, as well as inherently affecting the production process.
As mentioned above, the impact of consumers is reflected in the decrease in sales volume that happens due to inefficient or improper positioning; thus, resulting in a drop in demand for iPhones. In addition, there is a clear threat to the emergence of new competitors that belong to the same area of interest.
On the part of existing companies, there is quite a stiff competition as competing brands develop new techniques and equipment, and the new enterprise will have difficulty in entering the market without a significant investment, which is not realistic because of the current economic environment (Walters & Jackson, 2013). In terms of the macro environment, the analysis of the external powers is a necessary process that would allow taking control over the external factors that determine the possibility of the company’s growth or are a threat to it.
The threats associated with these factors constitute the social insecurity of the population, lack of favorable economic conditions that would allow customers to furnish a high level of social consumption, a high level of male mortality in the working age. In addition, the emergence of modern technologies and high-performance equipment, the availability of modern technology to competitors and threats associated with these factors are extremely important (Baines et al., 2013). For instance, the availability of unused technologically efficient capacity and skilled personnel, technological advancement, and others; give the competitors a possibility of using modern technology (including information) in order to take a more favorable position on the range of services and the level of costs.
The economic issues are the leading ones that the company may face. A significant slowdown in inflation, the increase in purchasing ability of the currency, the reduced purchasing power, and so on are the obstacles the organization is likely to face when trying to accomplish the charge. Moreover, it is essential to consider the factors such as the lack of investment activity for sustainable growth, reduction of the volume of profits, reduced profitability as a result of faster growth in comparison with the volumes of production costs, and higher prices for transportation, taxation imperfections (in particular, the abolition of tax exemptions on profits) (Wilson & Gilligan, 2012).
The company must consider a number of environmental issues as well, for example, the production of environmentally unclean goods and contamination. Further, the political factors and stability of the political situation are also crucial. These factors include the inadequate state policy in the field of investment, lack of state attention to supporting businesses in the sphere of information technologies, and the profile of the environmental condition. Thus, there is a number of issues that the organization is likely to face when accomplishing the charge; consequently, a detailed analysis of corporate goals and objectives is essential.
Goals and Objectives
The company needs to define clearly a set of goals and objectives to regulate the problems described in the analysis of issues. Apple needs to identify the product goals taking into account the desires, needs, and views of the iPhone buyers, which are also essential when formulating the goals for the pricing. It is necessary to clearly define how the company will attract new customers and retain the customer loyalty as well as identify the criterion why buyers will choose iPhone instead of competitors’ option, for instance: the price, the number of functions, or something else would guide the customers through a variety of options to choose Apple’s gadget (Wilson & Gilligan, 2012).
It goes without saying that the company’s main objective should be considering the customer complaints and correcting the errors that were present in previous versions of the iPhone that made the clients reluctant to use the iPhone.
The goal for the iPhone sales includes such objectives as potential sales correlation with the past performance or the general expectations of customers. It is necessary to identify industry-wide challenges and consider ways to overcome them. For instance, by analyzing the methods to overcome the existing price barrier. Further, one of the most important objectives is to determine the profit target; it will be necessary to calculate the potential profit for the next year based on the expected cost and refer to the reinvestment of the net profit on marketing activities. In addition, one of the problems was the misbalance of quality and price.
The organization will benefit from the ability to justify the price thinking at the same time as a perspective buyer. In terms of numbers, the overall goal of the company is to achieve 5% of the market compared to numbers related to US smartphone purchasing of the previous years (Barnes & Blake, 2015).
It should be noted that the adequate description of goals would ensure identifying the target audience and competitors, which used to be one of the issues in the international market given the saturation of the market with various offers (Farrell, 2015). During the analysis, the focus should be paid to key areas such as sales performance or additional functions. The analysis will evidence that if the volume of sales falls, the lack of price flexibility is present.
As discussed earlier, the section of the business environment of the marketing plan contains information about the customer data (for instance, demographic information and other). Companies need to have a clear idea of their target market in order to organize targeted advertising campaigns appropriate to the age, sex, and other aspects. Thus, they will be able to utilize marketing tools more intelligently, and campaigns will be addressed to the desired category of customers (Farrell, 2015).
In addition, companies need to describe the category of people that ensure sales. It is necessary to determine the magnitude of the demand for the smartphone and the people that make up the group of consumers (for example, adolescents, young adults, children, men). It will determine the market trend and allow remaining relevant and to keep in touch with customers.
The analysis of the target market is the most crucial aspect of a marketing plan. The definition of the target market and a description of how the smartphone will meet the needs of customers to a greater extent than the competitors’ one will help to define customers’ expectations. It is also important to identify the market segment that will benefit from the use of the updated smartphone and to determine the ways the company will sell it to this particular targeted audience (Farrell, 2015). Possible sales can be predicted by working closely with the target audience and attracting new customers through a variety of strategies and approaches. Different strategies can be implemented at once or gradually – firstly to form the target audience, and then to cover the rest of the market.
The young adults represent the primary target market. The second category of the target audience is well-off people. Such consumers are difficult to hold, and an integrated environment was developed to support the device. At present, the main pros for using an iPhone are versatility, excellent design, high-quality goods, and the coordination between the constituents and supplementary. The ideal customer has a spectrum of disposable income and owns other goods produced by Apple. The first category of the target market appreciates the design, prestige, and ease of use while the second category opts for the convenience. In terms of numbers, the updated iPhone is to attract 10% more clients compared to the number of users of the previous version (Barnes & Blake, 2015).
Apple is an image company whose advertising is succinct. Their advertisements allow enough visibility though do not overflow. From a consumer perspective, this is the best way to position the product in the desired segment. However, the positioning of the new iPhone has become blurred, and the company should think its positioning strategy through. In general, the core of effective product positioning is in four main conditions (Wilson & Gilligan, 2012).
First, it is a distinct realization of the target market and buyers sought by the company. Second, it is determining the benefit for the target client, which will guide the positioning. Third, defining a powerful side of the company that will be the basis for positioning. Fourth, it is the plainness and lucidity of positioning for the aimed sector to be communicated through corresponding means.
However, although iPhone producers have a problem with positioning, its business model is focused on maximizing the value for the consumer segments (business model is built primarily on the creation of innovative, high-quality product and an additional added value/ cost). Whereby the specific customer segments will be able to enjoy all the benefits of their product fully and only secondarily, to minimize costs in order to increase the company’s profits).
Primarily, Apple’s important marketing goal was to spread the influence of its brand and reach significance in the smartphone market. Apple has put up strongly in the iPhone trading, and the main objective was to bring iPhone brand as a symbol of innovation, quality, and value. The basis of the marketing strategy was to identify iPhone from other smartphones in the market. Among consumers, the following target segments were chosen: firstly, the people with middle and high-income who needed a tool to support their daily activities and work; secondly the undergraduate and graduate students who were in need of a portable multifunctional device.
The company has positioned the device as a multi-purpose tool that would meet the needs of versatile customers in terms of demographics and functionality. However, the analysis showed that the performance of the company fell due to the high market rivalry, unstable conditions in the international market, and exaggerated promises of the company that did not meet the expectations of customers. The company should consider all these aspects when issuing the updated smartphone or the perspective will remain negative.
Baines, P., Fill, C., & Page, K. (2013). Essentials of marketing. Oxford, UK: OUP Oxford.
Barnes, C., & Blake, H. (2015). Value propositions to sales propositions. Philadelphia, PA: Kogan Page Limited.
Farrell, C. (2015). Global marketing. Thousand Oaks, CA: SAGE.
Walters, S., & Jackson, K. (2013). Breakthrough branding. Chicago, IL: American Library Association.
Wilson, R., & Gilligan, C. (2012). Strategic marketing management. New York, NY: Routledge.