Product Marketing Plan for the iPhone (release 5.0) May 2 2011 The objective of this document is to present a brief product marketing plan based on the Customer and competitive analysis. Also, a description of the Product Marketing strategy and initiatives with a high level understanding about the financials are covered in this document. 95-821 Assignment 4 Mukul Hinge Mehrzad Kootar Puneet Tiwari Product Marketing Plan for the iPhone Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Contents 1. Executive Summary ...............................................................................................................................................3 2. Goals and Objectives .............................................................................................................................................3 2.1Product Goals and Objectives ...............................................................................................................................3 3. Situation Analysis .......................................................................................................................................................3 3.1 Segmentation.......................................................................................................................................................3 3.1.1 Customer Analysis and Segmentation. .........................................................................................................3 3.2 Target Customer Market Overview .....................................................................................................................4 3.2.1 Market trends ...............................................................................................................................................4 Market Definition ..................................................................................................................................................4 Market Size and Growth: .......................................................................................................................................4 Market Trends .......................................................................................................................................................4 3.3 Target Positioning ................................................................................................................................................5 3.4 Competition .........................................................................................................................................................6 4. Product Marketing Strategy and Initiatives ...............................................................................................................8 4.1 Strategy Summary ...............................................................................................................................................8 4.2 Product ................................................................................................................................................................8 4.2.1 Product Offering ...........................................................................................................................................8 4.2.2 Positioning Statement ..................................................................................................................................8 4.3 Promotion Plan ....................................................................................................................................................9 4.4 Pricing Plans .........................................................................................................................................................9 Channel overview ........................................................................................................................................................12 Advantages ..................................................................................................................................................................12 Challenges....................................................................................................................................................................12 5. Pro Forma Financials and Metrics............................................................................................................................12 5.1 P&L (3 Yrs)..........................................................................................................................................................12 Schedule (Tasks, Owners, Timeframes, Milestones) ...............................................................................................12 Appendices ..............................................................................................................................................................14 Goals and objectives ............................................................................................................................................14 References ...............................................................................................................................................................19 2 April 2011 Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Product Marketing Plan for the iPhone 1. Executive Summary Through this document we have highlighted our Product and Product marketing Goals and Objectives. We have also closely analyzed our customer segmentation and make our target positioning , promotion strategy , pricing and lastly our schedule. 2. Goals and Objectives The Goals and Objectives for the product marketing plan are categorized into two high level goals one is the Product Goals and Objectives which talks about what the intent of launching the product in the market aiming at which target audience and in what time frame and the other is the Product Marketing Plan Goals and objectives. 2.1 Product Goals and Objectives Goal To become the fastest growing smartphone in the enterprise and SMB (Small and Medium Business) business user smartphone market for each of the next three years. Objective Aiming for unit sales of volumes 445,000 units in the first year and to achieve 10% share based on sales in the subsequent years. 3. Situation Analysis 3.1 Segmentation 3.1.1 Customer Analysis and Segmentation. Small Business Size and Growth Rate 1 Corporate Business 49% 80- 85% Leading Customers Startups Fortune 100 companies Purchasing Behavior Cost is a factor, open source apps easily accepted Willing to purchase licenses and standardize the technology across the organization Purchasing Drivers- Needs Able to access documents and information with total mobility Able to access documents , video conferencing , global telephony information with total mobility Purchasing Drivers- Goals Scalability, Low Cost Scalability organization wide Purchasing Drivers- Visions A complete solution to have the business incorporated on the smart phone A complete solution to have the business incorporated on the smart phone Segment Who owns devices? Control oriented Enterprise Choice Oriented Enterprise or user User Who owns cellular Enterprise Enterprise or user User 1 ComScore data for enterprise 3 April 2011 Innovation Oriented Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Product Marketing Plan for the iPhone contract? Control points Primary management goal Device, network, sometimes user Guarantee service level and strictly control risk Network, application or user Satisfy users without incurring excessive risk App store policy Forbidden Example users Field engineers, government employees Focus of standards Devices, platforms, applications, processes Illustration of mobile e-mail solution Management metrics BlackBerry plus BlackBerry Enterprise Server (BES) Permitted, but with policy controls Managers needing mobile e-mail and Web access Interfaces and protocols (e.g., ActiveSync and HTML) Anything that can connect to Exchange Business process metrics, TCO, ROI, end-to-end service-level agreements (SLAs) Service Costs, bulk pricing for phone and data plans Purchasing pinch points Network, application or user Empower early adopters to develop new techniques and processes Full control over policy Entrepreneurs, researchers, CIOs of SMEs Services (e.g., "the user needs to obtain mobile e-mail") Any e-mail service the user chooses User satisfaction, server-side SLAs User satisfaction Price of phone and monthly cost of data plans Price of phone and monthly cost of data plans 3.2 Target Customer Market Overview 3.2.1 Market trends Market Definition The primary market is the enterprise Smartphone market Market Size and Growth: 67 million units sold in the US market in 2010 ~8.6 million users use Smartphone services and features on a regular basis. i Enterprise segment growing at the rate of ~12% per year Market Trends 4 An enterprise feature predominant market Shift from technically astute tech savants toward less tech-savvy comfortable conformists New approaches in Mobile Device Management (MDM) - high-level framework for categorizing users and managing Smartphone’s that will assist CIOs, planners, architects and vendors selling mobile devices or services Customizable, app stores and mobile ecosystems are causing a proliferation of new applications and services, some of which may benefit corporations. Young employees entering the organization will expect to be allowed to use them As devices and services (such as mobile e-mail) become commoditized and mature, they become easier to source and support externally. Providing and owning devices may be seen by some April 2011 Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Product Marketing Plan for the iPhone organizations as unattractive and expensive as new sourcing options emerge (for example, some carriers now offer "in the cloud" MDM services). Met Customer Needs Control oriented Choice oriented Innovation oriented Wireless Carrier Requirements Brand Availability Y Y Y Y Y Y Y Y Y N Y N N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y Y N Y Y Y N N N Y N Y Y Y Y Y Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Data Availability and tiered pricing Phone pricing Enterprise features (KEY REQUIREMENTS) Full web browsing capabilities and support for legacy standards such as WAP Audio and Video recording capabilities Connectivity to MS Exchange Server Security Policy Remote device management Remote restore Location services (GPS) Remote Wipe Encryption policy from enterprise server Facetime video calling Product Features Promotional Discount Ability to play music Dual keyboard/Full QWERTY keyboard and touch screen High Battery Life (15 +hours) Large Screen Size Ability to easily add on applications/games Ability to purchase apps/music Social Networking Features Unmet Customer Needs Multi-person Video Conferencing Live Video Broadcast Real time Augmented Reality for banking applications with secure logins. Cloud based system compatibility Paying bills through cell phones Live Video Broadcast 3.3 Target Positioning Target Market • 5 Primary business target is to partner with : Large enterprise software firms where information is critical to the end user. April 2011 Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Product Marketing Plan for the iPhone • • Secondary business target is mid-to mid-size corporations that want to help managers and employees stay in communication or access critical data on the go. Market segment will consist of companies with $10-$50 million in annual sales. Positioning • • • Using product differentiation, positioning the iPhone as the versatile, convenient, value-added device for personal and professional use. Focus on the convenience of having one device for enterprise communication, but also music, pictures, and video, and full Internet access. The iPhone will be promoted as both a enterprise solution and a hip. 3.4 Competition Unmet Customer Needs Flexible Security Policy Remote device management Remote restore Location services (GPS) Remote Wipe Encryption policy from enterprise server High Battery Life (15 +hours) Full Multitasking Apple iPhone N N N N N N N Expansion slots to increase storage (microSD card slot) Multi-person Video Conferencing Cloud based system compatibility Ability to use as a tethered modem RIM Y Y Y Y Y Y N Windows Mobile 7 (Microsoft) ? Y ? Y ? Y N Google Android ? N N Y N ? N N Y N N N Y Y Y N N N N N Y N N ? N N Y 3.5 SWOT Summary SWOT Analysis Strengths 6 April 2011 Blackberry 52% Market Share of corporate smartphone, secure and easily synchronized with the enterprise. Windows Huge investment in R&D, Microsoft office and web service are still strong selling and strong corporate ties. Google Fully integrated open Source. Google Brand and Assets * Open Handset Alliance Members' Extended Device Portfolios and Improved Device Designs * Smartphone Market Share Increase in North America and Europe * Rapid Platform Evolution * Strong User Interface Structure * All major vendor support * Google Apps Product Marketing Plan for the iPhone Weakness Opportunities Threats 7 April 2011 Mukul Hinge, Mehrzad Kootar,Puneet Tiwari * RIM's phones has an image of business phone, corporate Smartphone is now only 17% of total Smartphone. * RIM entered late in new generation touch phone Smartphone. They still don’t have stable OS which can support new touch screen features. * Blackberry phones are not popular among new generation of Smartphone users. * Blackberry phones expensive and come with expensive plans. * Blackberry apps store is still immature Great product with advance technology. * Lots of features in Blackberry. * Fulfill the business customer needs and wants. * Brand loyalty * Leading-edge radio technology. * Some famous communication product was already in the market for example pagers. * They were first in the market for their famous product Blackberry. Touch screen phones. Windows 6.5 was not made for touch screen phones. * Lost the opportunity of first movers. * Does not have a secure platform. * OS is closed. Google's Lack of Marketing Push for the Android Brand and the Android Market * Android Market Weak on UI Design and Application Discoverability * Lack of Application Testing Before Distribution in the Android Market * Availability and Ease of Purchase of Paid Applications * Lack of enterprise software solution * Windows 7 mobile * Zune multimedia phone * XBOX and games integration * Collaboration with Nokia * Fastest growing App store * Smartphone is Becoming a Mass Market Device * OS Expansion to Connected Mobile Consumer Electronics and Media Tablets * Growing Enterprise Support * Developing country market China, India Competition between Google, Apple and Microsoft. Aging OS, lacks looks appealing to the new generation. Google posse’s biggest threat with its rival products. Vendors leaving like Motorola, HTC Increasing Competition in Mobile OS Market, Fragmentation Issues Around Android Platform and Applications Product Marketing Plan for the iPhone Mukul Hinge, Mehrzad Kootar,Puneet Tiwari 4. Product Marketing Strategy and Initiatives 4.1 Strategy Summary In this section we talk about the product in general what features they will provide to the end user. The promotion plan at place the distribution strategy and the approximate pricing of the product. 4.2 Product 4.2.1 Product Offering • • • • Full year warranty along with an optional three-year Apple Care warranty specially for the enterprise. Same taste as all other Apple products and special modes for the enterprise and security features enabled. Launching a cheaper version in 2008 with less advanced features for small business along with a more advanced version for enterprise professional use Adding the following features to the iphone (large disk storage capacity,4G wireless for conferencing, Access to the corporate cloud for documentations, Enterprise emailing capabilities) 4.2.2 Positioning Statement Product Positioning Differentiators Positioning Dimensions Differentiators 1 Productivity Most comprehensive support for video conferencing and cloud interoperability 2 Security Usage in highly regulated environments and support for various styles of mobile device management 3 Usability Best display quality, user interface Product Positioning Statement For Enterprise users Who Desire the best combination of productivity and feature richness Our iPhone is a A smartphone That provides Greatly enhanced usability, productivity and security and application support Unlike Other smartphones Our product uniquely Multi person video conferencing and an enhanced productivity application suite offers So that you can Experience rich usability with vastly improved productivity Validating Points 1 Most comprehensive solution for video conferencing 2 Highly integrated cloud interoperability 3 Greatest variety of productivity applications and support for third party applications 8 April 2011 Product Marketing Plan for the iPhone Mukul Hinge, Mehrzad Kootar,Puneet Tiwari 4.3 Promotion Plan Place • • • • • Massive rollout worldwide at all reputable major retailers Massive rollout Online, Showrooms and in all cell phone providers Have a dedicated section of service and customer care for the Enterprise iPhone Being present in the world mobile conference to launch the Enterprise iPhone. Apple Stores will have the iPhone on display a full month before its worldwide release Promotion • • • Integrate Apple message of revolutionary communications for the enterprise and audio/visual experience together in all media advertisements and on all business channels. Differentiate the iPhone against others is the touch screen functionality and promote its ease of use in the enterprise for example: Mail is a click away. Advertising will be appearing on a regular basis to maintain general public awareness. 4.4 Pricing Plans At the launch of the second iPhone 3G, the price dropped to $200 which was significantly cheaper than the original and the technology was now up to the speeds of its competition. Again there was backlash from early adopters who had just paid $600 or $400 to buy the phone. Apple tried to make this easier to swallow by allowing anyone who purchased the phone 15 days prior to launch of the iPhone 3G and upgrade, but all others were out of luck. Anyone who wanted to immediately upgrade the phone from the old version was not penalized which was also a good gesture from ATT. Possibly since ATT did not subsidize the first phone it was comfortable subsidizing the second for a renewal of the two year contract. In addition to the new subsidized price, the iPhone 3G launched worldwide at the higher price. Even in the international market, special deals were required with carriers to utilize such features as visual voicemail that are unique to the iPhone. The price in the international markets reflected the normal unsubsidized price that ii international markets are accustomed to. The primary approach taken will be a market based approach. The current model is one which offers a heavily subsidized handset with severe lock-ins by mobile operators. In the interests of catering to more market autonomy, we recommend offering two distinct models with a varying degree of restriction For Governmental and Educational organizations: The plans will be similar to existing plans with a pricing strategy adopted with lock ins For SMEs: The plan will be based on a greater degree of autonomy with variable pricing according to region, promotions and discounts will be offered as required 9 April 2011 Product Marketing Plan for the iPhone 4.5 Distribution and Sales Plan 10 April 2011 Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Product Marketing Plan for the iPhone 11 April 2011 Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Product Marketing Plan for the iPhone Channel overview Advantages • • • Multichannel shoppers are more valuable Multichannel shoppers are more loyal Multichannel strategy strengths the brand Challenges • • • Needs coherence Database management is crucial Cooperative corporate culture 5. Pro Forma Financials and Metrics 5.1 P&L (3 Yrs) Year 1 ASP ($) COGS ($) Units (millions) Revenues ($000s) COGS ($000s) Gross Profit ($) Gross Margin Year 2 Year 3 529 147 18 499 132 24 399 122 32 9522 11976.0 12768.0 2646.0 6876.0 72.2% 3168.0 8808.0 73.5% 3904.0 8864.0 69.4% Schedule (Tasks, Owners, Timeframes, Milestones) All implementation activities are to begin at the start of the next fiscal year on June 1, 2011. Task 1 2 Description Core Team Creation Create four sales manager positions and the position of marketing director. The marketing director will serve as project leader of a new business analysis team, to be composed of nine employees from a variety of positions within the company Analysis Assign three members of the analysis team to 12 April 2011 Owner Target Date Completion Date 05/01/2011 05/01/2011 05/15/2011 05/15/2011 Comment Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Product Marketing Plan for the iPhone each of the following projects: (1) Research potential new product offerings, market analysis, competition, and corporate IT Department and corporate smart phone endusers (2) Design a customer survey project. The marketing director is responsible. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 The two project groups will report the results of their analyses. The full business analysis team will review all recommendations. Promotion Plan Create corporate – iPhone promotion plan Execute Promotion Plan Financials Create product marketing budget Meet with management to promote plan, including budget implications. Marketing Collateral Product Collateral Web Content Social Media Print Media Visual Media Demonstration & Tradeshow Product Demo and announcement at Apple Annual Conference Training Training to sales reps executive sales team and vendor training Field Trials Meet with vendor to set up trial. Launch internal employee trials Schedule mid-trial meeting for feedback and refinements. Assess trial results. Product Documentation Product Manual Online Help Electronic Manual Resource Kit Manufacturing Box Printing Assembly First Customer Slip Sales Operation Pricing Product sale plans Milestones 13 April 2011 05/15/2011 05/30/2011 05/15/2011 05/30/2011 05/15/2011 05/30/2011 05/25/2011 05/30/2011 Product Bulletin, data sheet, white paper Steve Jobs Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Product Marketing Plan for the iPhone Milestone 1 2 3 4 5 Description Capture 40% of Fortune 500 companies Achieve Growth Rate of 14% Capture 70% of Fortune 1000 companies Achieve Growth Rate of 25% Capture 60% of Smartphone Users Achievement Date 6 months from launch End of 1 year End of 2nd year nd End of 2 year rd End of 3 Year Appendices Exhibits Exhibit 1 Smartphones Now 28% of U.S. Cellphone Market – Nielsen Research Exhibit 2 Top 3 Month Total Total Subscribers Google 14 Avg. Ending U.S. Smartphone Smartphone Feb. 2011 vs. 3 Month Avg. Smartphone Subscribers Share (%) of Subscribers 20102011- Feb Nov 100.00% 100.00% 26.00% April 2011 33.00% Smartphone Ending Ages Platforms Nov. 2010 13+ Point Change N/A Share (%) of Smartphones 20092010Nov Aug 100.00% 100.00% Point Change N/A 7 10.00% 6% 16.00% Enterprise Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Product Marketing Plan for the iPhone RIM 33.50% 28.90% -4.6 69.00% 66.00% -3% Apple 25.00% 25.20% 0.2 30.00% 31.00% 1% Microsoft 9.00% 7.70% -1.3 10.00% 9.00% -1% Palm 3.90% 2.80% -1.1 7.00% 6.00% -1% Exhibit 3 Smartphone and business-phone trends Market Size Growth rate Market Leader/Share Device trends 15 April 2011 Smartphones 69.5 million 13% Google: 33.0% RIM 28.9% Apple 25.2% Microsoft 7.7% Palm 2.8% Large Displays and resolutions A Solid Touch Screen Operating System Carrier Agnostics A bigger and better App Store Multitasking Business phones 7.6 Million Google: 16% RIM: 66% Apple 31% Microsoft 9% Palm 6% Configuration management Security management Over-the-air (OTA) intelligence, troubleshooting, and support Asset management and reporting Software management Scalability Product Marketing Plan for the iPhone Exhibit 4 Exhibit 5 16 April 2011 Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Product Marketing Plan for the iPhone Exhibit 6 Exhibit 7 17 April 2011 Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Product Marketing Plan for the iPhone Exhibit 8 Column1 Google RIM Apple Microsoft Palm Trend Market: Market leader in Smartphone Lost market share by 5% Third in the market share race Market share very small Trend iii Technology Syncs enterprise phone system and email server directly from the mobile device Syncs mobile Voice System 5 with voice over Wi-Fi calling Integrates multiple conferencing products including audio conferencing, web conferencing and video conferencing into a single UC application Can be integrated with SharePoint 2010 Market share diminishing rapidly N.A. Trend Environment Outsource to other companies N.A. Lead Free, BFR- Free, PVC Free, Mercury Free Arsenic Free glass Recycling hardware Using environmentally friendly materials Reducing waste Increasing recycling and recovery of new products Trend iv Regulatory Google Apps Premier Edition to manage email and calendar services Blackberry Enterprise Server and Blackberry Enterprise Server Express I phone Configuration utility 2.0 Exchange ActiveSync. and Microsoft System Center Mobile Device Manager(MDM 2008) N.A Implications to us Need to monitor trends in enterprise mobile device management Need to formulate comprehensive enterprise solution -- Need to consider integration with legacy systems and with SharePoint Unlikely to be a competitive threat 18 April 2011 Product Marketing Plan for the iPhone Mukul Hinge, Mehrzad Kootar,Puneet Tiwari Goals and objectives Corporate Goal: To become the fastest growing firm in the US enterprise smartphone market for each of the next 3 years Product Goal: To become the fastest growing smartphone in the enterprise and SMB (Small and Medium Business) business user smartphone market for each of the next three years Objective: To capture the highest US enterprise and SMB smartphone market for the next three years (10% in the first year, and between 5-10% in the subsequent years) References Mobile Snapshot: Smartphones Now 28% of U.S. Cellphone Market – Nielsen Research (November 2010) http://blog.nielsen.com/nielsenwire/online_mobile/mobile-snapshot-smartphones-now-28-of-u-s-cellphone-market/ https://partners.blackberry.com/web/guest/solutions Search Unified Communications - http://searchunifiedcommunications.techtarget.com/feature/Videoconferencing-standards-and-interoperability-considerations Gartner- iPhone OS 4 Introduces Some Significant New Features for the Enterprise (May 2010) Ibid. Ibid. i i Gartner - New Approaches to Managing Mobile Users and Smartphones (June 2010) TNS Business wave – Smartphone market trends (http://www.tns-us.com) (January 2011) i Mobile Snapshot: Smartphones Now 28% of U.S. Cellphone Market – Nielsen Research (November 2010) http://blog.nielsen.com/nielsenwire/online_mobile/mobile-snapshot-smartphones-now-28-of-u-s-cellphone-market/ i comScore MobiLens, , AppleInsider, Google’s Android Platform Continues to Snatch Smartphone Market Share (May 2010) http://www.comscore.com/Press_Events/Press_Releases/2010/7/comScore_Reports_May_2010_U.S._Mobile_Subscriber_Market_Share i TNS Survey Smartphones gain traction (January 2011) http://www.tnsglobal.com/news/news-EBE5DD9AE77B4A09AB7FA6B1AF0E4BE2.aspx i Gartner - The Illusive Enterprise Focus in the Smartphone Industry – Oct 2010 i Gartner - New Approaches to Managing Mobile Users and Smartphones (June 2010) i i i Using Gartner's Segmentation Model for Mobile and Client Computing (October 2010) Seamless enterprise http://seamlessenterprise.com/unified-communications/the-latest-trends-in-business-class-smartphones/ i TechWorld (June 2010) http://howto.techworld.com/mobile-wireless/3227581/how-to-manage-smartphones-in-your-business/?pn=2 comScore 2010- Mobile year in review ii Pricing analysis for iPhone : http://www.johnkoblinsky.com/2009/03/pricing-strategy-for-the-jesusphone/ iii iv Seamless enterprise http://seamlessenterprise.com/unified-communications/the-latest-trends-in-business-class-smartphones/ TechWorld (June 2010) http://howto.techworld.com/mobile-wireless/3227581/how-to-manage-smartphones-in-your-business/?pn=2 19 April 2011