Marketing Plan

Marketing Essays - Marketing Plan

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Introduction

In April 2007, US based Apple Inc. (Apple) was adjudged the world's most innovative company from among 50 companies, according to Business Week-Boston Consulting Group study. Apple occupied this position for the third consecutive year. Business Week wrote, "The iPod creator is a master of superb product, store, and experience design. It also named iPod the "Omnipresent Icon of Design". Commending Apple on iPod's marketing strategy, TII Innovation Journal said, "Today, innovation is about much more than new products. It is about reinventing business processes and building entirely new markets that meet untapped customer needs. Most important, as the Internet and globalization widen the pool of new ideas, it's about selecting and executing the right ideas and bringing them to market in record time." Apple had launched iPod, a portable digital music player, in October 2001. Since then, Apple had designed and sold different generations of iPod. IPod had created a market for almost 4000 iPod accessories. This market was also known as iPod ecosystem. IPod was launched as a part of Apple's digital hub strategy (Refer Exhibit I for details on Apple's Digital Hub Strategy). IPod was user-friendly and simple to use - features that people adored. The marketing and advertising exposure given to iPod was unprecedented.

By the year 2004, gained a clear market leadership status in the global digital music player industry. Apple undertook incessant advertising for iPod. The advertisements featuring silhouettes dancing to the beats of their iPods were seen everywhere -print, television, and billboards. In a very short time, Apple created an iconic image for iPod that attracted the young and the old alike. Apple's iPod, the portable digital player, was launched in October 2001. Soon, it became a major contributor to Apple's revenue. Apple launched the iTunes music store from where users can download songs and transfer them to their iPod. Subsequently, several new versions of the models were launched and gradually, iPod became the market leader in the portable digital player industry. However, several new players entered the market, making the competition more intense. It was facing competition from Microsoft, Sony, and Nokia, who were developing new devices with gaming, e-mail, and music video playing capabilities. Amidst such competition, the development of new products at Apple is guided by technological development and market forces. A new device like the iTunes compatible iPod, capable of downloading full-length movies in a wireless mode, is seen as a natural product extension guiding Apple's future.

Marketing Objectives

The various marketing objectives that will assist in the achievement in the overall product goal are:

to be the leading supplier of MP3 players in all markets in which the company operates
Increase in sales by 20%
Increase in revenue by 20%
Progressively increase market share by at least 15% within the year.
Expanding distribution to department stores by 10%
Increasing brand awareness to 60% of potential customers
to expand existing markets by 10% in the next quarter. A promotion campaign will be introduced to encourage present buyer to increase the use of the product.

Identify Target Market

Selecting target market

The primary aim of apple ipod to target young people who like music, games etc. Who wants to live in electronic world. The age of this kind of audience can be between 12 – 30. It is for both male and female. With its new feature of downloading books and literature, the parents may also see this product as an educational device so there is chance of targeting other segment of market. It should be for middle and high class people and easily available. It should be introduce in the market where there is desirability of the product. This is large enough to engender revenues and profits

Target Market Strategies

Apple Ipod has adopted the differentiated market for their products as its products are characterised in age, gender and desire for image. Apple ipod is used by young adults and teenagers and for both male and female.

Develop Marketing Strategies

Marketing Mix

Product

This product allows consumer’s to download not only their favourite music but also books and other literature which can be read and listened to. Additionally this Ipod can be used in your car and in other mobile settings.

Positioning – aimed at the middle to high class, therefore product will be positioned in department stores associated with prestige products. This will create a strong, clear and consistent image of the product in the consumer’s mind which is essential.

Branding – Apple Ipod will give consumer’s one year warranty to assure consumers of the quality of the product. Apart from the warranty it will follow 14 days return and exchange policy if it is in sellable condition. This will associate a level of quality with the brand and will not only increase brand loyalty and repeat services, but also sell products at a premium to competitors. After the sale it will provide excellence customer service. It not only helps the Apple ipod to attract the new customer but also help to retain the existing customers.

Packaging – Apple ipod’s packaging will have product identity so that it can be differentiated from its competitors and the packaging will be unique. For making this kind of packaging the cost effective method will be kept in mind and as a result of this it would be available in the market at reasonable price. It will help to attract the potential customers.

Price

Apple Ipod will use cost base method to derive its prices. They will add a 65% profit margin to the cost of the product to gain efficient revenue.

Price and quality interactions –

In this way, price creates perception of quality.
High price attract an image of quality
This will allow Apple Ipod to increase its market share

Promotion

By promoting the Apple Ipod this will satisfy the needs of the customer’s and business. Consumers will gain better understanding of the product and how it can satisfy their needs, but on the other hand will help Apple Ipod increase their profits and market shares.

Advertising - Apple Ipod will spotlight on a successful advertising campaign comprising of magazine and television advertisements focusing on

The target market (teenagers and young adults)
How often they want the target market to be exposed to the advertisement
When they want to reach their target market
Most cost efficient methods to fulfil the above

By doing this Apple Ipod will add value to their product by altering consumer perceptions

At the same time the important use of the Apple ipod will be introduced to the customers.

Below-the-line promotions – Apple Ipod will use a direct method to induce customers to purchase their product by offering any Ipod accessory per customer for half the value price with every purchase of a new Apple Ipod. This will allow the business to directly measure the success of the campaign by observing the sales rate of the promotional tool.

Place

Distribution channels – Apple Ipod will use indirect distribution where an intermediary organisation will be involved in the process. The intermediaries will provide functions such as:

Fragmenting bulk supplies of inventory
Give financial services to retailers
Increase ease of customer purchase

This will assist Apple Ipod as they can concentrate on other areas of the business

Transportation – Apple Ipod will lease trucks in order to transport the inventory to intermediaries. By leasing the trucks Apple Ipod will accumulate extra funds to utilize else were.

Warehousing – inventory will be kept in a warehouse close to the intermediaries which will minimise transport costs.

Implementing, Monitoring and Controlling

Apple Ipod Company will change because of the new added features to the product range. For its success, Apple Ipod Company must impose several key changes. Production needs to be on time and meet the quota demanded from wholesalers. It must also be efficient so as not to build inventory stocks and inventory prices. The marketing needs to be motivated and knowledgeable about the product. The forms of promotion such as advertising must be attracting and enticing to the target market to get the greatest amount of exposure possible for the product. This will ensure the success of the product in the stores. Distribution of the product must be efficient. This problem has already been taken care of with convenient transport routes to commercial areas and transport already being arranged.

Developing a Financial Forecast

To achieve a healthy and continuous growth in profit.

To attain a 15% increase in market shares within the annual and achieve positive
Growth in the sales of the PRODUCT!

Minimising distribution cost
financial forecast- marketing
2005 2006
Revenue $16,800 $16,800
Costs
Fixed costs $9,350 $0
Variable cost $6,670 $6,670
Total costs $16,020 $6,670
Net profit from marketing $780 $10,130
activities
return on marketing investments 5% 152%

Comparing actual and planned results

Financial forecasting - Apple Ipod predicted that there would be a 20% increase in their level of sales, but sales figures were lower than expected and showed a 10% increase in sales. It is suggested that Apple Ipod change their strategies to motivate further sales.

Market share – Apple Ipod predicted that there would be a 15% increase in market share, but this was due to external factors were there has been a large boost of competitors in the Mp3 industry threatening Apple Ipod’s market share.

Profitability - Apple Ipod predicted that there would be a 20% increase in revenue, but sales figures were lower than expected and showed a 10% increase in revenue. It is suggested that Apple Ipod change their strategies to motivate further sales.

Revising the marketing strategies

After 6 months have elapsed we have found that you need to change your marketing Mix strategies to fix the above problems.

As mentioned above Apple Ipod received a decrease in sales, it isv suggested that Apple Ipod change one of your marketing strategies to solve this problem. Apple Ipod should introduce a public relations scheme to improve the relationship between the company and their markets. Rather than advertising which is aimed at improving the public image of Apple Ipod, public relations are aimed at increasing a business’s sales.

In order for Apple Ipod to gain competitive advantage andv increase market share you must readjust your marketing strategies. It is advised that Apple Ipod add an extra feature to their current product. A new innovative feature you may consider is cordless earphones that send the sound via Bluetooth technology. This will differentiate your product from current competitors and will result in an increase in market share.

Recommendations

Diversify supplier base for critical components like flash memory, LCD panels, backlight LEDs, micro disks
Keep a close watch on the subscription model and explore launching a similar service as complement in the future
Tone down the rhetoric against music industry content providers
Add an FM tuner to Nano and video iPod