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iPhone - A global perspective. The report is designed to comprehensively document the efforts to market Apples iPhone. It will analyze the international marketing environments, Political, Legal, Economic, Technological, Socio-Cultural, Geographic

Extracts from this document...

Introduction

TERM PROJECT PREPARED BY: AMY FARINA MENG-CHUN HUNG SACHIT BHJANGE GEORGE VIT DAVE PIREK TABLE OF CONTENTS PAGE Introduction................................................................................................................. 3 A. Purpose (Sach) B. Scope (Dave/Amy) C. Organization of Report (Amy) Political Environment (George)......................................................................................... 4 Legal Environment (Amy)............................................................................................... 5 Economic Environment (Dave).......................................................................................... 8 Technological Environment (Sach)....................................................................................... 9 Socio-Cultural Environment (Amy)..................................................................................... 10 Cannibalization and Creative Destruction Issues (Amy)............................................................ 12 Geography, Climate and Natural Resources Environment (Meng)................................................... 15 Infrastructure Environment (George)..................................................................................... 17 Competitive Environment (Meng)......................................................................................... 18 Porter's Five Forces Effecting Industry (George)..................................................................... 20 Global Marketing Mix....................................................................................................... 23 A. Product Strategy (Meng) B. Pricing Strategy (Amy) C. Promotion Strategy (Dave) D. Distribution Strategy (Sach) Conclusions and Recommendations (Amy[ph: 1-4];George[ph: 5])............................................... 32 Appendix................................................................................................................. 33 INTRODUCTION A. Purpose The report is designed to comprehensively document the efforts to market Apple's iPhone. It will analyze the international marketing environments, Political, Legal, Economic, Technological, Socio-Cultural, Geographical, Infrastructure, and Competitive. The global market mix will also be examined with regards to Product, Pricing, Promotion, and Distribution Strategies. B. Scope This report covers comprehensive research necessary for successful product launch of the Apples' iPhone. In order to simplify the process, the report identifies two major markets to which to focus, that of the United States and the European Union consisting of France, the UK and Germany. Briefly the idea of entering the Chinese market was reviewed, however there were negative factors affecting this decision. Some of those negative issues were: the Chinese consumer preferences with cell phones; Apple has not launched iTunes in China and has no plans to; there are no Apple Stores in China; and the iPhone has a closed architecture limiting Chinese consumer expectation of using 3rd party software on their devices. There are many similarities between the US market and the EU market; however, there are also considerable differences. The differences as well as the marketing approach to these differences is discussed with a view to the economy, consumer preferences, legal ramifications and concerns, along with recommendations for the various elements of the marketing mix. ...read more.

Middle

-Skip a 3G version and press onward for the 3.5G standard featured by HDSPA with a stealthy 1.7 Mbps Neither alternative addresses the removable battery, which is a demand of European phone consumers. The closed platform is an idiosyncrasy that even Europeans are used to with the iPod. The serious infrastructure hurdle that remains is the choice of a standard Option Standard Implications Option 1 Launch in 2.5G Gain early adopters. Dissapoint tech-savvy Europeans. Make launch date of June 2007 Option 2 Launch in 3G Gain acceptability by Europeans. Offer the same 3G standards that are in place. Post pone launch Option 3 Launch in 3.5G Postpone iPone launch even longer. Gain cutting edge 3.5G standard featured by HDSPA with 1.7 Mbps transfer rates. COMPETITIVE ENVIRONMENT Apple will release their first handset, the iPhone, in June 2007. In order to predict its performance in the market, we have to first understand the competitive environment it is surrounded and then compare the iPhone's function in terms of Apple's strategies to beat other competitors. Today, the handset vendors keep developing and adding new functions into their products. Ten years ago, nobody can imagine that a cell phone can be a camera, a media player or even a mini computer. But today, all those functions are becoming a standard in terms of cell phones. Although it is Apple's first "phone" product, the iPhone lives up the hype, and presents a significant challenge to certain handset vendors. One of the key areas Apple impacts the competitive environment is in user interface (UI). Apple builds a phone that is easy and genuinely pleasurable to use. Why hasn't anyone designed a bar phone with a slide lock/unlock switch found on every iPod (other than the shuffle) since its launch? Palm and RIM do include a dedicated slider/button for silencing the phone, and Nokia has a wonderful mini-menu for invoking frequently used features. ...read more.

Conclusion

It is further recommend that Apple not market the 6th generation iPod in the US, which contains similar features as the iPhone sans the phone, until late November or early December to take advantage of the holiday season. This would allow plenty of time for iPhone sales to dominate, whilst giving the edge necessary for Cingular to prosper from the agreement and provide extensive profit sharing returns for Apple. Apple should make use of contract negotiations with a European carrier, such as Vodaphone, as early as June or July to ensure global acceptance in Europe. Apple should also market the 6th generation iPods at the same time as the US market, early December. The EU states targeted by this study are largely Christian based and will be effective marketing areas for iPod sales for holiday purchases at the same time as the US. Also, consumers will have the choice at that time of purchasing an iPhone or an iPod, which will entice consumer spending. Marketing both products then will entice consumers who want a phone/converged device or a non-converged device, those merely looking for the latest iPod. Additionally, it is recommended that Apple setup a percentage of advertising content with Cingular, in other words, Apple would require Cingular to include iPhone in its advertising campaign; thereby allowing Apple to cut its advertising costs and leverage their agreement with Cingular to provide exclusive rights. Cingular would not only be required to advertise iPhone in is advertising campaign and also be required to purchase a certain percent of different forms of advertising in order to hold exclusive rights. Apple would reduce its costs in the US for advertising the iPhone; however, Apple would not be able to utilize this method in the EU where the situation is much different. At that point Apple, already obtaining a larger GPM would be able to support a larger, more costly advertising campaign, due to it's expect profit margin of sales. ...read more.

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