Running Head: iPhone 5sp Market Plan
Marketing Plan
iPhone 5sp the Solar Powered Phone
LaMarcus Bailey
Kyle George
Suzi Tullis
California State University, Monterey Bay
Bus 306-90
May 4, 2014
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iPhone 5sp Market Plan
Contents
Executive Summary
Situation Analysis
Market Summary
Market Analysis
Demographics
Geographics
Psychographics
The Market
Market Needs
Market Trends
Market Growth
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
Competition
Product Offering
Keys to Success
Critical Issue
Marketing Strategy
Value Proposition
Mission
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iPhone 5sp Market Plan
Marketing Objectives
Financial Objectives
Target Markets
Demographics
Positioning
Strategies
Marketing Mix
Marketing Research
Financials
Break-even Analysis
Sales Forecast
Expense Forecast
Controls
Implementation
Marketing Organization
Contingency Plan
References
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iPhone 5sp Market Plan
List of Tables and Figures
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iPhone 5sp Market Plan
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Executive Summary
Suzi needs to do (Can’t do until the rest of the paper is written)
Marketing Analysis
Situation Analysis
On June 17, 1946 the first mobile phone call was made. In the 68 years since that time there has
been an exponential amount of growth and a growing dependence on cell phones. The growing
dependence on cell phones has made battery life an extremely important aspect of design. The
iPhone 5sp will have an integrated solar powered battery. This will enable users to forget about
the conventional methods of cell phone charging and constantly have a fully charged cell phone.
Market Summary
There are currently a multitude of solar chargers on the market. These charges range in price
from $20-$150 and offer a variety of features including, light weight design, durability, and
varying levels of performance. None of the current solar chargers on the market are integrated in
a cell phone.
Customers want a charged cell phone and convenience. There are many alternative (non-solar)
cell phone chargers available currently. One such option is the mophie juice pack. The mophie
Juice pack ranges in price from $79 to $118. It encases the iPhone and protects it from bumping
around; it also carries a backup rechargeable battery. Another alternative charger is the bootcase
hybrid power case. This case costs $99 and has mixed consumer reviews. Both of these examples
are expense and require the consumer to carry around an extra piece of equipment. The
convenience offered by an integrated solar battery charger would appeal to consumers who are
willing to spend a little extra money for a constantly charged battery.
Label, Title, Brief Explanation, Citation
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Need to insert a graph incorporating the raw data from LaMarcus’s research
Target Market
Demographics
Outdoor enthusiasts are likely to be interested in the iPhone 5s due to its use of the sun as its
power source. Outdoor enthusiast spend $646 billion dollars annually in the United States, in
California alone this group spends $85.4 billion dollars annually (Outdoor Recreation Economy).
The average age of a cell phone user is 13 years old; this creates a huge market of young
consumers. Young adults have an average annual spending power equaling $183 billion (Vivion,
2014) Young adults who enjoy outdoor activities, and have an annual income of more than
$50,000, are the main target audience for the iPhone 5sp.
Geographics
Studies show that 20% of the world’s population does not have access to electricity (The World
Bank). The people without access to electricity live in developing countries with the highest
concentration being in Africa and India. While most of these individuals that do not have access
to electricity are not concerned with cell phones, a cell phone with an integrated solar battery
would still be useful in these regions. This is why the initial target market for the iPhone 5sp will
be travelers, outdoor enthusiast and athletes. Imagine how useful an integrated solar battery
charger would be to a National Geographic photographer spending months in the safari. There
will be a large demand for the iPhone 5sp because of the large portion of the world still living off
the grid.
Psychographics
Initially the iPhone 5sp will target members of the upper middle class. The iPhone 5sp is going
to have a starting price of $649 and will therefore not be obtainable by members of every social
class. The iPhone 5sp is aimed at individuals who spend a good amount of time outdoors and/or
away from conventional power sources. The iPhone 5sp will appeal most to outdoor enthusiasts,
athletes and travelers. The specific athletes that the iPhone 5sp is going to target are bicyclists,
backpackers, and hikers. Travelers are often concerned with carrying around the least amount
possible. With restrictions on weight and size of baggage, travelers do not want to have extra
pieces of equipment in their bags.
The Market
Market Needs
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The smart phone market is in need of a solution that can keep up with the active and busy
lifestyle of today’s consumers. Smart Phones are becoming the default mode of access to
information, services, data collection and internet browsing. One of the biggest challenges cell
phone users face today is how to keep their cell phone charged while constantly on the go. There
is a direct correlation to the amount of features built into a cell phone and the phones battery life.
This is an ongoing concern for cell phone companies, there is a need in the marketplace for a
solar powered smart phone.
A survey was conducted to assess the potential success of the iPhone 5sp. Of the people
surveyed, 59% currently own an iPhone. Of those surveyed, 90% said that they would be
interested in purchasing a smart phone with an integrated solar charger. The oldest person
involved in this survey was 65 years old, the youngest was 18. The Average age of those
surveyed was 22. From this survey and other research it can be concluded that young adults who
already use Apple products are likely to be interested in buying the iPhone 5sp. (LaMarcus
Bailey, Survey, March 2014)
The average smart phone user uses their phone for a variety of everyday tasks. In many cases the
smart phone is replacing the necessity of a desktop or laptop computer. A smart phone allows its
user to connect to the internet and creates an element of convenience in everyday tasks. Studies
of market trends among smart phone users show that there are key needs and wants that are not
being met.
Apple has created a new product – one that fulfills previously ignored aspects of the user
experience. This iPhone 5sp is thoughtful, intelligent, and efficient by design. One of the biggest
priorities in this new design was to remove the necessity of using excess cables. This new and
improved iPhone will have a mini solar panel built into its screen and will have a backup battery.
The phone will be completely powered by the solar panel and will never have a low battery life.
The backup battery will come in useful when the phone does not have solar energy for charging.
Market Trends
The first 40 years cell phones were around saw very slow progression. The first mobile phone
call was placed on June 17, 1946. It wasn’t until 1973, 27 years later, that a call was placed from
the first mobile phone not connected to a car. Ten years later, in 1983, the Federal
Communications Commission (FCC) approved the mobile phone for commercial use. In 1999
Nokia introduced the internet onto cell phones; this is the time when rapid improvements in cell
phone technology started to take place.
Today’s consumers are accustomed to fast, easy to use technology. To meet the demands of
consumers cell phone companies have made a point of constantly introducing new aspects into
the cell phone design. With today’s cell phone technologies it is effortless to connect to the
internet, use GPS, or communicate using one’s smart phone. The industry has also been
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progressing in reference to speed. Increasing the performance of the smart phone is a must in
order to keep up with the high demand of performance. This includes increasing bandwidth,
applications, software, and more efficient operating systems. All of these enchantments require
more power consumption furthermore establishing the need for solar power which is on the go.
(Yarrow, 2012) As cell phones get more advanced it becomes harder to keep them charged, an
integrated solar charger would eliminate this problem.
Label, Title, Brief Explanation, Citation
Market Growth
The potential for growth with the solar powered cell phone battery is nearly limitless. No such
product currently exists and consumers are growing more interested in solar power. “The
demand for solar energy has grown by 30% per annum over the past 15 years. The strong push
for renewable energy in 2009, photovoltaic (PV) installations grew by 20%. Revenues in 2009
for the PV industry also increased, reaching $38.5 billion” (Gandhi, 2013)
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The market for solar powered technology is currently booming and is a very attractive market to
enter into.
The global solar industry has grown 849% over the past eight years, from an installed
capacity of 877 MW in 2000 to 8,325 MW at the end of 2007. That breaks down to a
compounded annual growth rate (CAGR) of 37.9% for the same period (Hodge, 2008).
With the expansion of the solar industry and increased investment, “PV solar energy has made
great strides in the last five years as solar technology has become more efficient and costs of
production have decreased” (DOE, 2008). In her article “U.S. Solar Market” Ucilia Wang states
that the solar equipment market grew nearly 76% in 2012. (Wang, 2014) The solar market has
been experiencing a vast amount of growth. This growth is opening the doors to new
technologies, such as the integrated solar battery charger available in the iPhone 5sp.
SWOT Analysis
STRENGHTS

Never ending battery life
WEAKNESSES

Requires Frequent Exposure to
Sunlight

Less Cables = More Convenience

Cell Phone Covers May Block
Solar Panel


Reliability of iPhone, Strong
Brand Name

Cost
Longer battery life = More

Possibly Not Appealing in All
Locations Geographically
Productivity
Opportunities

Increase Apple’s Market Share of
Cell Phones
THREATS

Change in Market Trends
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

Convert Users

First to Introduce New
Conventional Methods

High Revenues in Sunny
Locations
Competition Quickly Releasing
Similar Products
Technology

May not Charge as Fast as

Not Applicable in Locations
Lacking Adequate Sunlight
Competition
There are currently a variety of alternative charges on the market. None of these are integrated
into a cell phone and none are known for being overly efficient or convenient. Some of the most
popular solar battery chargers include the Concept Green Solar (CGS) 1250, CGS 3500, and the
JOOS Orange.
The CGS 1250 runs at about $20 per unit, the battery capacity is only 1250 mAH and cannot
fully charge a battery. It is lightweight, small and relatively durable. Some reviewers found the
CGS1250 to be a good product for the price paid, while others found it to be a heap of junk.
The CGS3500 runs at about $50 per unit, it is small, lightweight, and relatively durable. The
battery capacity of the CGS3500 is 3500 mAH. Consumers really like this product but find the
charging process to take too long.
The JOOS Orange solar charger has a price tag of $150 per unit with a battery capacity of 5400
mAH. The JOOS Orange can survive a wide range of temperature conditions and is water proof.
It takes 12 hours to get a full charge, but one hour of sunlight results in two hours of talk time.
The JOOS Orange is built for those on the go, who spend long spans of time away from
traditional power sources. The JOOS may be heavy and bulky but it can withstand a multitude of
situations making these attributes well worth it. The JOOS orange does not have to be directly
angled toward the sun in order to receive a charge and can even charge on a cloudy day. Reviews
are relatively positive for the JOOS Orange, with weight being the biggest complaint among
consumers.
It is essential to look not only at alternative chargers but also other cell phone producers in order
to get a clear picture of who the completion for the iPhone 5sp is.
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Label, Title, Brief Explanation, Citation
Figure …. Provides a graphical look at the cell phone market for quarter three of 2013 (CNET,
2013). The iOS operating system has the second largest market share with 12.9%. Android has
the largest market share with 81.0%. The biggest competitors that the iPhone 5sp faces are the
Samsung Galaxy S5, the Lenovo Vibe Z, and the LG-G Flex.
We need to include place and price in these strageties. See the note she put on our graded first
draft.
Samsung’s Strategy
Although Samsung put top of the line adapters and drivers into the Galaxy S5, they are taking the
quality of life approach to market their new phone. In the Official introduction video for the
Galaxy S5, Samsung opens up with the quote, “Innovation is not just about technology, It’s
about how it improves every-day life”. Samsung has realized that the average phone consumer
does not know enough about high performance processors, video rendering cards, and Memory,
but is more concerned with the simple things like a camera that can “capture meaningful
moments instantly” and being able to “stay fit and more active” (Samsung Mobile 2014).
Samsung is also aware that there is still a part of their consumers that is interested in their phones
for the cutting edge technology they put inside of it. With a 2.5GHz quad-core processor, 2GB of
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RAM, and a battery that can last for hours on end, the Samsung has created a machine that is
more powerful than the average computer of 5 years ago. These specs keep phone and tech
enthusiasts coming back for the newest Galaxy product (Samsung 2014).
Lenovo’s Strategy
Lenovo’s model for the vibe is “for those who do”. Lenovo is focusing on the social aspect of a
cellphone, with the ad trying to appeal to a younger, more active audience. Lenovo touts qualities
such as the Vibe Z’s dual high resolution cameras and 4G speed because they know that the
active youth want to capture their unforgettable moments, and share them as fast as possible. The
Vibe Z is also no slouch in the technical department. It features a 2.2GHz quad-core processor,
2GB of ram and I high resolution 5.5” screen (Lenovo 2014).
LG Electronics’ Strategy
LG Electronics focuses on the innovation, sleekness, and durability of its G Flex model. LG uses
clever slogans such as “shape your experience” due to the G Flex’s unique curved shape. This
shape is not only for looks, it also adds high durability to the phone. In one commercial for the G
Flex, LG continues to add more and more weight on the phone only to prove that it can
withstand high pressure and will always return back to its original form. Even with its unique
shape, the G Flex still has high quality technology to power itself. It uses a 2.26 quad-core
processor, 2GB of ram, and 1080p full HD camera (LG Electronics 2014).
Product Offering
Label, Title, Brief Explanation, Citation
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This image is a breakdown of our product, the iPhone 5sp. The iPhone 5sp features solar power
technology, full 1080p HD display, fingerprint recognition, HD front facing camera, 30pin Apple
USB, and an HD eight mega pixel camera.
The iPhone 5sp has a layer below the surface of the phone, surrounding the screen, of solar
panels. These solar panels are directly connected to the phone’s battery station and, when in
light, will continuously feed the battery energy. This can be done while the phone is in use, or
while the phone is off. While the phone is in use, the phone will experience a much longer
battery life on a full charge. While the current model iPhone 5s can only hold a charge in use for
around 10 hours, the iPhone 5sp can maintain use for over 25 hours in sunlight. While the solar
panels cannot provide enough power to charge the phone above its current state while it is in use,
it is able to feed enough energy to the phone to increase energy efficiency above 100%. While
the phone is on standby or off, the phone is put into charge mode. This mode will charge the
battery of the phone, although a full charge may take up to six hours (Apple, 2014).
The phone features technology that makes the solar panels available to receive sunlight without
the negative effects to the sleek look of the phone. This is done with a patented one way mirror
type technology. This technology allows the solar energy to be received by the panels, but does
not allow the user to be distracted by the solar panels surrounding the screen.
The phone is available for coverage from Apple care. Apple care will fix or replace damaged
solar panels and any problems the phone may be having with the battery.
Keys to Success
The key to the iPhone 5sp’s success will be:

Apple market share growth

Lifestyle changes

Competitor incompetence
Apple market share growth would greatly accelerate the progress of the iPhone 5sp. As we have
shown in the competition portion of this report, Apple is a far second, behind Samsung, in the
cellular market. If Apple were to gain some ground and increase the percentage of people using
iPhone, this would create more publicity for our product. Apple users have very high customer
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loyalty, meaning their next phone will most likely be an Apple product. If more people have
iPhones, they will most likely upgrade to the newest model, which will be the iPhone 5sp.
Lifestyle changes would also accelerate the progress of the iPhone 5sp. The iPhone 5sp is useful
for people of all walks of life, but will be especially useful for very active users. Active users
refers to people who like to maintain an active lifestyle by doing activities such as hiking,
running, biking, rock climbing, hunting, bird watching, etc. These people will have more
incentive to purchase a phone that can last longer/charge in the sun, where they will be for most
of their time. If we see an increase in these types of lifestyles, we may also see an increase in the
amount of phones demanded.
Competitor incompetence refers to our biggest competitor, Samsung, not being able to live up to
expectations on their Galaxy S5. If Samsung’s “next big thing” is a flop, they will lose some of
their hold on the cellular market share. If Apple can take advantage of those dissatisfied
customers and convert them to iPhone users, they are most likely to purchase the newest iPhone
model series which includes the iPhone 5sp.
Critical Issue
Critical issues for the iPhone 5sp will be:

Hardware Specs

Cost

Durability
Hardware Specs are on growing in importance when it comes to what customers are looking for
when shopping for a phone. Apple is notorious for being skimpy with the amount of hardware
they put in their products. An Apple laptop with $300 worth of hardware can cost a consumer
well over $1000. In order to keep up with other cellphone manufactures, who supply their
phones with quad core processors and large amounts of RAM, Apple must follow suit and
upgrade the hardware specifications.
Cost will be an issue for the iPhone 5sp. iPhones are not cheap and solar panels are not cheap.
The iPhone 5sp is a combination of both and will therefore not be cheap. Not only will it be
expensive to purchase, but also to manufacture. It is essential to find an achievable cost of goods
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in order for Apple to continue making a profit. If the price of the iPhone 5sp is substantially
higher than that of the iPhone 5s it could potentially scare off customers.
Durability will be crucial to the iPhone 5sp. Cellphones are used to seeing all types of abuse,
from being sat on to being dropped on concrete, but the iPhone 5sp will have an extra thing to
worry about with the solar panels. If one drop can shatter a screen, one drop can also shatter solar
panels. Apple must make the phone durable enough to withstand the impact of a fall or else
consumer perception will fall. If people think the main selling point of the iPhone 5sp will break
too easily, they will not purchase it.
Marketing Strategy
Value Proposition
The iPhone 5sp disconnects the cell phone from the power outlet, opening up a world of freedom
for the user. The iPhone 5sp is an iPhone with an integrated solar panel to charge the battery. The
iPhone 5sp is always there for you when you need it, out of site but constantly working. Our
customers are athletic and always on the go, they expect convenient, dependable technology. The
integrated solar panel cell phone battery allows the user to stop worrying about the cell phone.
Bringing life to your phone to equip you with the tools you need to thrive.
Mission
We excel at offering cutting edge technology. Through innovation and open channels of
communication we are able to provide the customer with the products they are asking for. We
are in business so we can have a positive impact on the lives of those we provide products to. By
offering style, functionality, and new technologies we prove to ourselves, and to our customers
that we are the best of class.
Marketing Objectives
The purpose of the iPhone 5sp is to allow users the freedom associated with a constantly charged
cell phone battery. Through a survey of 51 respondents it was found that 90% would be
interested in purchasing a cell phone with an integrated solar panel cell phone charger. It is
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expected that once this battery is proved to be successful in maintaining a full charge, it will be
desired by all cell phone users.
Financial Objectives
When looking at the production costs of making an iPhone 5sp, we must first look at the
production costs of making an iPhone 5s. On a strictly hardware and manufacturing level, the
iPhone 5s costs approximately $199 to produce (Wall St. Cheat Sheet 2013). This price may vary
due to components being outdated or discontinued, but for the purposes of this report we will
assume the production price of $199. Apple sold the iPhone 5s for $649 at launch, bringing in a
crude profit of $450 (this does not include software, licensing, royalties or any other
expenditures).
The iPhone 5sp will have a similar price. Although the solar panels will add an additional $5 to
$20 to produce, depending on the type of panels and the cost of integration, it will be possible to
keep costs down using similar methods as the iPhone 5c. This means the iPhone 5sp will have to
sacrifice luxuries such as the more powerful processor and the fingerprint scanner. These lost
features will not affect the iPhone 5sp because its purpose is battery life not computing power,
which usually comes at the expense of battery life. By dropping such luxuries, the iPhone 5c has
kept its manufacturing costs down to $173 (Cnet, 2013). It will be possible to achieve
manufacturing costs less than that of the iPhone 5s using the iPhone 5c specs. The additional cost
of the solar panels will result in a manufacturing cost of $193 per phone. This will bring in a
crude profit of $456.
For opening weekend it is estimated that the iPhone 5 sales figures will be surpassed. The iPhone
5 sold 5 million units during its launch weekend. The iPhone 5s and the iPhone 5c sold 9 million
combined units during their launch weekend. The iPhone 5c and iPhone 5s were released in a
dual launch; those sales figures are not obtainable for a single launch of the iPhone 5sp. Selling 5
million units will bring in approximately $3.24 billion in revenue and $2.28 billion in crude
profits.
Target Markets
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In the market analysis portion of this report the target market was touched on briefly in terms of
demographics, geographics, and psychographics.
Demographics
The target market has been chosen based on who the iPhone 5sp will benefit the most. Single,
active, young adults are the primary target market. Single people will be more compelled to
spend a significant amount of money on advanced technology because they do not have anyone
else to worry about financially supporting. Young adults are tend to be more active and will
therefore be spending more time away from home. This will result in the iPhone 5sp having a
perceived value that may not be present in other demographics.
Geographics
The iPhone 5sp will be marketed in the United States initially, with potential for an immediate
launch in Europe and Asia. These three regions have the highest purchasing power (Country
Comparison, 2014) and are likely to see the highest sales.
Psychographics
Suzi needs to do
Outdoor Enthusiasts
The iPhone 5sp can be used for a wide variety of things including, as a GPS, as a camera, and as
a music player. All of these applications can be useful during long periods spent outdoors.
Unfortunately they also all drain battery life failry quickly. The iPhone 5sp will appeal to
outdoor enthusiasts for this reason.
Positioning
The cell phone industries major product attributes are:

User Friendly

Computing Power

Simplicity

Cost
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Other iPhone models and competitors have already positioned themselves to fit these attributes.
The iPhone is positioned as a user friendly phone. It boasts its simple, yet effective, user
interface (UI), ease to use camera, and huge variety of apps.
The Samsung Galaxy series has positioned itself as a power packed mobile phone. The Galaxy
series is always a leader in top-of-the-line processors, detailed cameras, and display.
Simplicity is a position which usually belongs to the elderly or the technologically impaired. The
most successful mobile phone manufactures have abandoned this position in order to put more
resources into manufacturing modern phones, however, some companies embrace this position
and continue to build simple phones with buttons and hardly any UI. The Jitterbug is a cell phone
that has very large buttons and only has the ability to send and receive calls.
The iPhone 5sp will create a new niche in the market positioning toward battery life and
convenience. Currently people do not take battery life much into their decision of buying a new
phone; this does not mean it is a trait they do not want. As has been shown through research,
battery life is a problem the majority of cell phone users have and something they want a
solution for. One of the reasons it is not something cell phone users take into consideration when
purchasing a new phone, is because it is an issue cell phone manufactures have not addressed
yet. It is a problem that up until this point has been left for third party accessories to address. By
combining the phone and a battery life solution, it is possible to offer a phone with a long lasting
battery and the convenience associated with it.
Strategies
Kyle needs to do
Marketing Mix:
Pricing
Pricing the newly innovative Apple iPhone involved deep consideration of certain key factors,
including identifying the target market, tracking how much competitors are charging, and
understanding the relationship between quality and price. The price for the iPhone 5sp was
decided based off of competitors pricing of similar products and previous set prices from Apples
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latest products. The recently launched iPhone 5 had an initial selling price of $649 when
launched on January 25, 2013. Apple sold roughly 5,150,000 iPhone 5s within the first two
months on the market. A majority of these sales, 83%, came from loyal Apple fans who
previously owned the iPhone 4. The iPhone 5sp will be priced at $649, to stay on track with
previously successful prices. A price skimming and premium pricing strategy will be
implemented. This pricing strategy will give Apple the flexibility to lower the price of the iPhone
5sp to meet the demands of the market and their response to the initial set price.
Distribution
Apple products are currently available through multiple channels, such as the Apple store,
distributors, and online retailers. The most successful channel for iPhone sales are through
distributors such as AT&T and Verizon. Through these distributors people have the ability to
link their cell phone plan with the iPhone. The iPhone 5sp will be available in all the places
people already have access to Apple products, this will add convenience and familiarity. The
iPhone 5sp will initially be launched in the United States, and will later be launched in the other
two geographic segments that Apple operates within. With time the iPhone 5sp will be sold at an
international level through all reputable retailers.
Market Communications
Advertising, public relations, sales promotions, and personal selling will be the major
communications tools utilized.
Advertising
The goal of the iPhone 5sp campaign is to integrate Apples current message of “revolutionary
communications and audio/visual experience” with solar technology. This is in quotations marks,
should it have a sourche Is it a direct quote? Why is it in quotes? The iPhone 5sp will
differentiate itself from its competitors through its solar technology. A.T.V campaing (What is
this? What does A.T.V stand for? It needs to be explained) Advertisements will appear heavily
on television with the intention of making people aware of the new technology and its benefits.
The innovative distinctions found on the iPhone 5sp, such as the reduced need for recharging the
battery, will be emphasized in all advertisement techniques used.
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Public Relations
Public relations will be established through sponsorships with popular sports players and/or
public stars who will endorse the iPhone 5sp. This sponsorship will reflect positively on Apple
and the new technology by making it visible at sporting events and on public media. Building
good relationships with those sponsored will give Apple favorable publicity and build an
attractive corporate image.
Personal Selling
The associates that work in Apple stores are very knowledgeable and tech savvy. These
representatives are trained thoroughly in both product information and customer service. When
the iPhone 5sp is released, all staff will be trained to effectively help customers with any
questions or problems associated with the iPhone 5sp.
Marketing Research
Primary research was conducted through surveys intended to foresee potential interest and
success of the iPhone 5sp. The results showed that the target market would have interest in a cell
phone with an integrated solar charged battery. It also showed that people would be willing to
pay more for a technology that would add convenience and make it easier to keep up with busy
lifestyles. Secondary research was done through various internet sites that allowed multiple
statistics and Apple facts to be used when necessary. There was much discussion and research
done to figure out who the biggest competitors to Apple are, and the most effective way to
launch a new product. The primary and secondary research was utilized to better understand the
target market, how to effectively place the iPhone 5sp, an adequate price, and where to place
emphasis on selling.
Financials
Break-even Analysis
Suzi needs to do
Sales Forecast
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Below are charts showing the iPhone 5sp’s projected sales. The past few generations of the
iPhone have been released in September, the last month of the third quarter (Q3). This release
time is so that sales do not dwindle from a lack of relevancy during the holiday season.
Year
Q1
2014 N/A
2015
2016
Year
Q1
2014 N/A
2015
2016
Q2
N/A
Q2
N/A
Q3
Unit Sales
Q4
30,000
Yearly Totals
26,500
56,500
50,000
24,000
Revenues
Q3
Q4
Yearly Totals
$ 19,470,000,000.00 $ 17,198,500,000.00 $ 36,668,500,000.00
$ 32,450,000,000.00
$ 15,576,000,000.00
Q3 of 2014 yields high sales even though the phone will be released at the end of the quarter.
This is due to the fact that iPhones have extremely successful launch dates. Many units will be
sold during the first weekend because Apple has a very loyal fan base and is known to build up
hype around the release of a new product. Q4 of 2014 will see relatively high revenues due to the
holiday season and the newness of the phone.
The first two quarters of 2015 will see sales similar to those of 2014. Apple releases a new model
of cell phone almost every year, this will result in a decrease in sales for the iPhone 5sp in the
second two quarters of 2015 as customers anticipate a new release. 2014 will see higher revenues
than 2015 even though the iPhone 5sp was only available for four months during 2014.
Expense Forecast
LaMarcus needs to do
Controls
Four key segments of business will be analyzed in order to measure the success of the iPhone
5sp. These are:

Financial: revenue and profitability
iPhone 5sp Market Plan

Marketing: sales velocity and market share

Product Level: time, quality of product, and budget to sales

Customers: satisfaction, awareness, image
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The selling price of the iPhone 5sp will be constantly measured and evaluated. The revenues and
profits received off of these sales will then be derived and recorded. These records will be
evaluated on a monthly and annual basis. Prosperous returns are anticipated due to successful
product launches of the iPhone4 and 5; which sold roughly 5 million units within the first two
months at a stable market price. The market price of $649 is expressed within the reputable
Apple name and is ultimately what consumers will pay for an Apple product.
The number of units sold will be measured on a weekly, monthly, and annual basis.
Customer surveys will additionally help Apple monitor the progress and success of the iPhone
5sp. These surveys will provide detailed information about how the consumers perceive the
product. These perceptions may reflect: pricing, quality assurance, known issues with the
product. The questions will be relative to the four drivers stated above and will be focused
questions in regard to the short and long term goals established.
Implementation
Kyle needs to do
Marketing Organization
LaMarcus needs to do
Contingency Planning
As previously mentioned in the critical issues section of this report, the difficulties the iPhone
5sp is facing are: hardware specs, cost, and durability. There is not a phone on the market that
can withstand every major impact, the iPhone is no exception to this. The addition of a solar
panel will ultimately make the phone more susceptible to damage upon impact. The solar panel
will be located on the front of the phone, allowing the use of protective casings. The worst case
scenario would be that the solar panel breaks easily upon impact. This would give the iPhone 5sp
a bad reputation and could ultimately tarnish Apples brand image. This situation would be
iPhone 5sp Market Plan
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handled by addressing the issue immediately and supplying the customers with free repairs and a
better protective case. Going forward it would be necessary to reconstruct the protective bearing
around the solar panel and provide better support.
The cost of an iPhone and solar technology are not cheap, combining the two will result in an
extremely expensive cell phone to manufacture. The survey indicated that people are willing to
pay more in order to have the convenience a solar charged phone would offer. It is likely,
however, that there is a ceiling to how much people are willing to pay for such a convenience. It
would be extremely unfortunate to realize that the money spent on manpower, time, and
materials would not see a return on investment (ROI). In this situation it would be wise to partner
with a successful solar panel company in order to keep costs down. This could include an
agreement where Apple provides the company with cell phones, and the phone then supplies
Apple with solar panels. The logo of the solar company would then be engraved on the back of
all iPhone 5sp’s to provide the solar company with additional advertisement.
Apple is notorious for supplying minimal product at maximum prices. Apple is able to do this
because they have been able to differentiate themselves and offer products unlike those offered
by the competitors. Apple products do not require anti-virus protection, yet do not get viruses.
Apple products are more durable than those of competitors in terms of everyday wear and tear.
Apple products are also made to very high standards and have a very loyal fan base. If a
competitor were able to discover how Apple produces their products to the standards they do it
could prove very detrimental. This would take away Apples competitive advantage and require
them to strategize the business plan. In order to stay one step ahead of the competitor Apple must
find an innovative genius that could keep the company on the path that Steve Jobs laid out.
References
Country Comparison :: GDP (purchasing power parity). (n.d.). Retrieved May 1, 2014, from
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html