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There is much overlap between overall strategic objective and the marketing plan of an organization. Marketing plan keeps eye at consumer needs and organization’s ability to satisfy them and these factors direct the company’s overall strategic plan. If company fail to throw appropriate marketing strategy, the ultimate goal of profit maximization and expansion of business will be in hard condition. Organization should build suitable marketing plan which helps to achieve company’s overall strategic objectives.
This study is based on world’s leading electronic and software based company Apple Inc. which was funded by Steve Jobs and Steve Wozniak in 1976 and is known as computer giant. It designs, manufactures and markets personal computers, mobile communication devices, and portable digital music and video players and sell variety of related software services peripherals and networking solutions. It is also known as innovative company and it has demonstrated that innovation can lead to market dominance. It operates it business with the motto ‘think different’. Apple offers a range of electronic and software product and services such as PC, Mac Book, iPhone, iPad, Apple TV, iTunes, Mac OS X, iLife, iWork, Safari and enormous range of applications worldwide through online store, direct sales force, third party sales, whole sellers, resellers, value added resellers and digital content and applications through the iTunes store to satisfy the desires of modern consumer. In this context apple has introduced another innovative product iPhone4 smart phone and marketing plan of iPhone4 is the main focus of this study.
This study has got five separate sections. The first part is introductory part which identifies and justifies the objectives of the study. The second part explores how the marketing plan supports the strategic objectives of the Apple, third part explains how Apple construct it marketing plan, forth section discusses how Apple promotes the marketing plan to support its strategic objectives. The last section is about the conclusion and summary findings which are developed from the discussion and analysis and recommendations for further improvement.
Explaining the strategy of the organization impacting on the marketing plan.
Each and every organization stands with business plan to set its overall direction for the company for their existence and this plan sets out how the company is to achieve its strategic aims and objectives. The strategic aims and objectives of a business inform and shape its business plan and an essential part of the overall business plan is the marketing plan. Thus the marketing plan is guided by strategic objective of the business and there should be alignment between the strategic objectives and marketing plan to meet the ultimate goals of an organization (e.g. profit or sales growth). The relationship between strategic objectives and the marketing plan is clarified by following diagram.
Business aims & objectives
Product & services & their position in market
Market data including size trends & competition
Business aims & objectives
Financial information including budgets
Figure: Key element of business plan
In context of Apple, it committed to offer the range of best possible innovative technological product and services and put that technology in the hand of as many people as possible. Apple leading towards market dominance through its innovation and Apple has already demonstrated it by offering innovative products like iPod, iPhone, iPad. Apple is also committed to protect the environment, health and safety of employees, customers and the global communities where it operates and recognize that by integrating sound environmental health and safety management practices into all aspects of its business. Apple can offer innovative technological products and services while conserving and enhancing recourses for future generations. Apple is leading towards market leader through its effective marketing plan. Apple’s marketing plan is directed by its strategic planning. In this context Jobber’s six planning question helps to apple to align strategic objectives and marketing plan. The six questions are as follows.
Where are we now?
How did we get here?
Where are we heading?
Where we would like to be?
How do we get there?
Are we on course?
These are the key planning question not only for the marketing plan but for the other plan as well. If any organization wishes to construct effective marketing plan to meet strategic objectives they should address these questions. The first three questions can be addressed by the help of business mission, market audit, SWOT analysis. It gives the concrete shape of marketing plan.
The first question emphasis the current position of the company like market share, competition. Apple has dominance market share with its core competencies innovation.
The second question focuses on an analysis of significant events that had a bearing on the achievement and shortcoming identifies earlier. Apple get this position by the help of innovation and with the motto of ‘think different’
Third question point out the direction of the business in future. By the help of market audit and SWOT analysis a business can set the direction. Apple is leading towards market dominance.
Fourth question is talk about the objectives or vision of the business. Apple wishes to be a market leader.
The fifth question focuses on the course of action which is going to be done in order to achieve the final goal. Apple wishes to meet its objectives by the help of core strategy, marketing mix decision, organization and implementation of marketing plan.
Final question emphasis the continuous controlling mechanism whether we are in right track or not if not and what may be the next step to walk on right course.
In order to address jobber’s first three planning question and to build effective marketing plan a business must conduct market audit. Market audit concern with systematic examination of a business’s marketing environment, objectives, strategies and activities with the view to identify strategic issues, problems and opportunities. It is the cornerstone of the marketing planning process. It keeps eye on environmental forces which may affect the marketing plan: internal and external factor.
Internal factor is also known as micro factor which are in hand of a business which mainly focus on the five different factors: Operating results (sales, market share, profit margin and cost), Strategic issue analysis (marketing objectives, market segmentation, competitive advantages, core competencies, positioning, portfolio analysis), marketing mix effectiveness (product, price, promotion, distribution) marketing structure (marketing organization, marketing training, internal communication), marketing system (marketing information system, marketing planning system and marketing control system).
External factor are not in business hand so business itself should change to make effective planning. External factor contains macro environment (PESTEL factor) which are economic factor (inflation, interest rate, unemployment), social and cultural (age distribution, lifestyle change, values and attributes), technological factor (new products and process technologies, materials) political and legal factor (monopoly control, new laws, regulations) ecological factor (conversion, pollution, energy).
In order to construct effective marketing plan Apple should consider market audit because without considering these factor apple can not meet its strategic objectives. After analysing these factor apple can get present background data on the market, product, competition and distribution.
Identifying the components part of marketing plan of Apple.
SWOT analysis the strategic technique to evaluate the strategic position of a business by identifying its strength, weakness, opportunity and threats. It helps to address the planning question where are we now? How did we get here? Where we are heading? Once SWOT analysis is done an idea can be developed to how to turn weakness into strength and threats into opportunity, it helps to construct effective marketing plan.
In context of apple iPhone 4, the price is high, it can not afford by middle income level people and the treats may be the increased competition which pressure apple to reduce the price because there are other strong competitors as well who produce less priced smart phone and it also difficult to expand in Asian market because without internet server iPhone cannot be operated. So this SWOT analysis helps to Apple how to turn these weaknesses into strength and treats into opportunity in order to construct the marketing plan and these factor helps to build the shape of marketing plan.
Once market audit and SWOT analysis has been done it leads to set marketing objectives. Marketing objective keeps eye on two types of objective: strategic trust and strategic objective. It addresses the planning question: where we would like to be?
Strategic trust defines the future direction of a business. By the help of Ansoff of Matrix a business can develop strategic trust which product to sell in which market.
Figure: Ansoff Matrix
According to Ansoff Matrix there are four strategic alternatives which are market penetration, market development, production development and diversification. Among these four alternatives the Apple has selected a product development alternative and decided to sell new product (iPhone 4) in the existing market.
Another part of marketing objective is the strategic objective which deals with the process of planning at the product level. There are four types of alternative: build, hold, harvest and divest. To analyse appropriate alternative, there are various no of product planning portfolio tools such as BCG matrix, General Electric Market Alternatives-Competitive Position Model, Shell Directional Policy Matrix. Even though, this study is going to keep eyes on BCG matrix.
Figure: BCG Matrix
The iPhone is new product and it has low market share but high market growth so it contain to the question mark. This represents high demand due to low market share. So for the new product, the strategic objective will inevitably be to build sales and market share. The important point to keep in mind at this stage is that building sales and market share is only the sensible strategic objective of iPhone 4.
Overall, strategic trust and strategic objective characterize where the business and its product intended to go in future.
After setting marketing objective a business must determine the means of achieving them. Core strategy focuses on how the objectives can be accomplished and it contains three key elements: target market, competitive advantage and competitor target. Core strategy helps gives the answer of the planning question how do we get there? iPhone’s primary customer targets is the middle-upper income professional that need one portable device to coordinate their busy schedules and communicate with colleagues, friends and family and secondary consumer targets are high school, college and graduate students who need one portable multifunction device.
Identifying issues of risk within a marketing plan of Apple
Constructing a marketing plan is not an easy process and it is not out of risk factor which may lead to failure if marketing planner unable to address potential problems effectively and Apple is not also escaped from potential problem which may be:
Political behaviour: Typically, marketing planning is a resource allocation process by manager. In this allocation process the power base, career opportunities and salaries may bring conflict.
Perception of planning: There are different people involve in this planning with different perception and they wishes to apply their perception to construct the plan which may be the cause of conflict.
Reward system: The reward system of business emphasize only short term reward. Managers may overweight the short term focuses rather than long term focuses and the marketing plan not only concern with short. Basically, it is concerned with long term which thing may be underweighted by manager and marketing plan is treated as the secondary focus.
Cultural clashes: Cultural clash is another potential problem associated with marketing plan because in a business we can get different culture which may be the reason of conflict like as the business may plan by making incremental decision and strategic planning may challenge the status quo.
Lack of knowledge and skills: In planning process, the manager may not has the sufficient knowledge in terms of market segmentation, competitive advantages and the nature of strategic objective and lack of skills in terms of analysing competitive situation and defining core strategy which may lead to failure.
Lack of information: The systematic marketing planning system needs accurate information inputs in terms of market share, size and growth rates. These are basic inputs into the marketing audit which may unavailable.
In order to construct the effective marketing plan marketing manager should overcome from these problems. To overcome from potential problems leading to risk, apple can use Jobber’s formulation of remedies which are as follows:
Senior management must support the middle management and coordinate with them and must be committed to the planning process.
To address cultural clashes, there should be match between planning process and the culture of the business.
The reward system should focus on long term objective rather than focusing on the short term.
There should be clear communication system in both ways top to down or bottom to top.
Management can conduct training program to marketing personnel in order to provide knowledge and skills about to perform the planning job.
2.1 Identifying the levels of importance of each component of the plan.
The marketing mix is the set of marketing tools which a business blends to achieve the marketing goals in a defined target market. Effective marketing mix decision ensure that a business is marketing the right product to the right person in the right place and at the right time which is the key success factor of the marketing plan. It helps to gain competitive advantages with considering market segmentation. Basically, there are two frameworks in order to manage effective marketing mix decision at product or service level: 7Ps and 4Cs. Although, Apple may use 7Ps framework in order to manage effective marketing decision which are mentioned below.
Product: The iPhone 4 combine three amazing products- a mobile phone, wide screen iPod, and a breakthrough internet device–into one small, lightweight, hand held device with the best e-mail ever on a mobile phone, full screen with browsing, multi touch screen, and applications which gives the best experience of smart phone to the consumers.
Place: Apple has set the distribution channel which is appropriate and convenient to its targeted customer. It is offering this product not only through its own retail store and online store but it has build channel with other retail store and the network providers which give easy assess to the target customers.
Promotion: In order to promote iPhone 4 to the targeted market segment Apple is using several promotional tools like advertising, publicity, direct marketing, internet marketing, Bluetooth marketing etc. which really helps Apple to bust the sales. Apple is using both below the line and above the line promotional strategy.
Price: As other organization apple have their own pricing policy and the price of the iPhone 4 is marked according to it. The price of the iPhone may affect by marketing objective, marketing mix strategy, costs, nature and demand of the market, competition and other environmental forces like economy, reseller, government etc.
Other components of marketing mix decision are people, process and physical evidence. These components of marketing mix of Apple are well blended; the marketing strategy is well joined with strategy.
2.2 Identifying mitigation strategies for high risk components of the plan of Apple
Once marketing mix decisions have been done the marketing plan leads towards action plan. Action plan refers to the specific steps that must be taken and specific activities that must be performed well to achieve designed strategic objectives. It talks about the specific task: what will be done? Who is responsible for doing it? , time horizon: when will it be done? , resource allocation: how much will it be cost? In terms of Apple it has addressed these questions through its market plan to make marketing mix decision towards perform. Apple has set specific task (i.e. sales programmes, promotion programmes) and delegate responsibility to related person (i.e. marketing manager, sales assistance etc) in order to implement marketing mix decision with convenient time bound.
Furthermore, in order to implement action plan programme Apple need supporting budget which talks about resource allocation (i.e. cost and revenue). Without supporting marketing budget the action plan can not be completed because it is the most important part of marketing plan. Although, Each and every company have limited resources which may limit actions and Apple has considered it as well. So in terms of producing budget, Apple is aware of how limited resources produce optimum output and it has produced projected income statement for lunching iPhone 4 which gives the around figure of sales revenue which made up of forecasted unit sales and average net price, cost which made up of cost production, physical distribution and marketing and profit margin. Apple also has conducted Breakeven Analysis which determines the sales units where apple in position of neither profit nor loss from the sales of iPhone 4. It can provide additional information for the budgets or financial section of the marketing planning.
Apple has used key performance standards like costs/sales ratios, market shares, territory quotes, comparison with competitors in order to monitor the actions programme.
2.3 Producing marketing plan for Apple.
Marketing mix framework helps to enlighten consumer’s needs, how to exploit the competitive advantages that blends the core strategy with marketing mix and this helps to match corporate resources. Apple has set unique blend of product offering, pricing, promotion and distribution system designed to reach at targeted market. The marketing plan of iPhone 4 mainly focus the consumer satisfaction, the key goal of marketing plan, that can be only achieved by designing the marketing mix suitable for the customer groups or market segments. Marketing mix planning requires all possible tools analysis, such as segment analysis, market research and competitor analysis which play vital role in construction of marketing plan. So overall, marketing mix decision significantly contributes to make the effective marketing plan of iPhone4.
Market planning process provided a well-defined path from generating a business mission to implementing and controlling the resultant plans for Apple. The typical marketing plan structure is as follows:
A short overview of the plan for a quick management review:
Current marketing situation
The marketing audit to present background data on the market,product,competition and distribution
Identifies the company’s main strengths and weakness and the main opportunities and threats facing the product or service
Objectives and issues
Define the company’s objectives in the area of sales. Market share and profits and the issues that will affect these objectives
Presents the broad marketing approach that will be used to achieve the plans objectives
Specifies what will be done, who will do it. When it will be done and what it will coast
A projected profit and loss statement that forecasts the expected financial outcomes from the plan
Indicates how the progress of the plan will be monitored
3.1 Discussing how the plan supports strategic objectives.
David Jobber suggested five different organization structures in order to implement a marketing plan namely: no marketing organization, functional organization, product base organization, market centred organization and matrix organization. Out of these five structures, Apple has structured as a product based organization which focus on individual responsibilities to product managers for managing product lines. Specifically Apple focussed for individual product lines and can develop own marketing mix which helps to apple to align marketing plan to strategic objectives.
3.3 Identifying an evaluation and review measures for the agreed plan.
The marketing plan is a cycle that begins and ends with evaluation. The final stage of in the marketing plan is to measure the outcome of the marketing activities against the original objectives and targets. Continuous evaluation helps the marketing team to focus on modifying or introducing new activities to achieve objectives.
Apple adopted a range of key performance indicator to asses the success of the iPhone 4’s marketing plan.
Market share: Did the iPhone 4 hit the market share and help to achieve its market share objective? iPhone 4 is market leader of smart phone in some European countries and is consistently gaining market share.
Overall sales: Was this in line with objectives? iPhone 4 is increasing sales significantly comparatively to other competitors. It is meeting the expectation line.
Brand image ratings: Apple has an extremely positive brand image with consumers compared to other brand. iPhone 4 is able to increase the brand loyalty of Apple which helps to retain the consumer because consumer are getting the best smart phone experience.
Profitability: iPhone 4 is significantly contributing Apple’s profit margin.
These results show that the iPhone 4’s marketing plan met the overall targets, which was a significant achievement, considering the difficult economic environment. The marketing plan for iPhone 4 used past performance and forecast data to build a new marketing strategy. This built on the brand and company’s strength to take advantage of the increasing change of consumer towards smart phone.
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