The American Marketing Association (AMA) defines marketing as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large" (White, 2012, p. 1. 1). Value is an essential part of marketing and consists of trade offs between the advantages and sacrifices required to get the benefits. The marketing goal is to convince potential buyers that the product is a good value and to buy the good or service.
Companies want customers to exchange money for the products value. “Marketer’s objective is to develop and offering and price it in such a way that its value attracts customers and creates a profitable bottom line” (White, 2012, p. 1. 3). The marketing process is crucial to any company’s business operations. The marketing manager has to look over all marketing aspects, which includes: setting specific marketing goals, planning and execution of plans to meet the company goals, and tracking the progress to reach the goals.
Apple is a worldwide known company; that introduced the first Iphone in 2007. The first week Apple sold one million units and sales continued to hit records. “Beyond corporate publicity, the iPhone was selected as ‘the invention of the year’ in 2007 by Time magazine1 for its design, usability, advanced computing ability, and potential to change the mobile telecom ecosystem” (Kim, 2011, p. 261). Since the first Iphone Apple has gone through five generations of Iphones. In 2013 Apple came out with a highly anticipated upgrade to its Iphone 5.
Apple decided to upgrade the Iphone 5, coming out with two new versions, the 5s and the 5c. The Iphone 5s has better technology and updated processing system, while the Iphone 5c has the same operating system on the less expensive entry- level phone. This paper will assess how the new Iphone is marketed in the U. S and foreign markets, its competition, customer value, and its potential for a marketing campaign. People must acquire good and services to fulfill needs and desires. Customers value products by how they can use the product and its benefits.
“The goal is for you to create a business where customers believe that it is in their best interests to buy from you. And they'll do that because they receive the quality and value they want and expect. Then your goal is to get better and better at doing this” (Woods, 1996). Consumers’ purchases have been put into four categories called the four utilities of customer value. The fours utilities of customer value are form, time, place, and ease of possession. Apple has kept the four utilities of customer value in mind when creating the Iphone 5s/5c.
The first utility is form, which defined by White is, “ attributes that make an offering useful to customers” (2012, p. 1. 3). Companies must make a product useful and benefit customers. The Iphone 5s/ 5c does this well by providing a device that looks attractive, convenient, and allows people to access the Internet, camera, music, and much more at any time. The Iphone 5s is the first 64 bit smart phone in the world and its new A7 chip has two times faster graphic performance. Also, included in the new Iphone 5s is a new processor, the M7 chip, which provides a better power efficient phone.
Other new features consist of, a new iSight camera, touch ID (fingerprint identity sensor), and the phone now supports more LTE bands than ever before. Even adding all these new components to the Iphone 5s, Apple kept the customer in mind and maintained the thin, light design that society seems to love. Now all these new attributes are in addition to the already highly efficient regular Iphone 5, making the new Iphone 5s even more beneficial to customers. Not only will they have a better, faster phone, but also it reduces other products that a customer must buy.
For example, customers do not need to carry additional laptop because the Iphone 5s is capable of the Internet and receiving emails. Also, there is no need for a camera because the new camera on the iphone 5s makes it easier to get a great picture because of the new technology. The use of advanced technology has provided the company with a product that is useful in the customers’ daily life. The next two utilities, time and place, go together. Time is defined as, “Making offerings available when customers want them” (White, 2012, p. 1. 3).
Place is defined as, “Where the consumer takes ownership of the offering” (White, 2012, p. 1. 3). The availability and how the owner gets the product adds to customer value. Customers or potential customers have easy access to the new Iphones. If customer go to the Apple website they are able to order different versions of the Iphone 5s/5c. The different options from colors and GB size allow customers to customize the phone to their specific needs. Also, the Iphone is available in stores through, Apple, ATT, Verizon, Sprint, T-mobile, Target, and Wal-Mart.
Now the Iphone 5s/5c is not available in every country, one hundred countries do have access to the phone, which are forty-five more countries than pervious models. Countries do not need Apple stores for customers to purchase the new Iphones; they just need to have a cellular company that offers a carrier that carries the Iphone 5s/5c. Through the cellular company you can either purchase the Iphone 5s/5c or upgrade your current phone to the newest Iphone 5s/5c for a reduce rate by extending your contract.
Having a product that is easily accessible by customers in over one hundred countries makes the Iphone 5s/5c valuable to those around the world. Last of the four utilities of customer value is ease of possession, which is the attributes that make is possible to transfer title from seller to buyer. This includes anything that helps the buyer feel at ease, such as, the price, warranty, payment plans, or anything else that might benefit the buyer while purchasing (White, 2012, p. 1. 3). Now the Iphone 5s/ 5c can range from $549 to $849 depending on the model and memory desired, which is obviously not a benefit to most buyers.
However, Iphone 5s/ 5c price with a two-year contract ranges from $99 to $399, which is significantly less expensive than buying without the contract. Another benefit of purchasing an Iphone 5s/5c is that it does have a ninety-day free technical support and one year limited warranty. Now buyers can opt for the two-year warrant plan, Apple Care for IPhone, for an addition charge. Another option for users is to add monthly insurance, which will allow them to be cover if something does happen, customers will have to pay a deductible.
Lastly, if the IPhone 5s/5c is purchased through the Apple website or store customers can apply for a six month interest free payment plan or customers can even trade in previous IPhones for up to a three-hundred dollar credit to the store. This may ease the cost of the new Iphone 5s/5c. With so many different ways to save on the newest model of the Iphone gives customers product value and reduces the reasons not to buy. The Iphone 5s/5c are targeted to current Iphone users and also those wanting to switch to the popular phone.
Since Apple came out with both the upgrades it allows them to serve more customers. The obviously pricier 5s is targeted towards those we are already Iphone users and want to upgrade to the sleeker and advance technology, whereas, the 5c is geared toward those who want a cheaper option to switch to. Almost 50% of 5c users switch from competitors’ brands compared to the 80% of 5s users who up graded from other Iphones. In the U. S the 5c model demand is coming from lower income households, “ 42% of Iphone 5c owners earn less than $49,000 compared with just 21% from Iphone 5s” (Eddy, 2013).
This shows that because Apple created a less expensive option, lower income families are able to afford the Iphone 5c. This will give them a chance to try out an Iphone 5c for not a lot of money, and in the future they will be able to upgrade when new models come out. Now, the high price tag of the Iphone 5s and even the reduced price of the 5c did not do as well in foreign markets as Apple thought. When Apple announced the price for the 5c analysts across the board were disappointed by the high price, which led to the Iphone 5c sales bombing in markets where they were expected to do well.
In January 2014, Tim Cook, the CEO of Apple admitted that he must have misjudged the demand of the Iphone 5c. In efforts to get sales back up Apple teamed up with China Mobile the worlds largest mobile carrier and for the first time they starting selling the Iphone. Also, Apple came out with a cheaper version of the 5c (Asian and European markets), it only has half the memory space, but the technology is the same. This phone is likely to get first time looking to explore the iOS system. This shows that Apple is targeting markets where 4G LTE is just being introduced or in the first stages of adoption.
Since the release of the cheaper 8GB 5c sales in BRIC (Brazil, Russia, India and China) have soared claims Tim Cook, IPhone sales in Brazil, which got its first Apple Store this year, were up 61 percent during the first half of the company's fiscal year compared with the same period last year, Cook said. Russia grew 97 percent, and India 55 percent, he said. Apple set a quarterly revenue record for Greater China at $9. 8 billion — thanks in no small part to a 28 percent jump in iPhone sales, with the addition of China Mobile, the largest phone company in the world (Milian, 2014).
Apple efforts in foreign markets have truly helped their sales. They repositioned themselves in the foreign mobile world to reach and accommodate the foreign markets. When Apple introduced the Iphone back in 2007 there was little to none competition, but since then Google and Samsung have teamed up and come out with the competitors for the Iphone. Some of the phones that are Iphone’s competition are the Galaxy and the Note. These phones do have comparable features, but run on a different processor. Since Apple has release the
Iphone 5s and 5c in more countries than previous years this means that they are able to introduce their product to new customers and keep up with the competition in those markets. In recent years being an environmental friendly company is very important to society. Many people are trying to become green and notice when companies are being greener. Apple has taken this trend and has adapted many environmental friendly practices, while still acknowledging there is always room for improvement. Apple has made sure that they use green materials and less packing.
If you have ever bought an Iphone, you know that it comes in a box that fits it just right, and does not include much plastic or extra packing. Also, Apple tries their best to keep their products out of land fields and come up with new product designs that take advantage of recycled materials. Next, Apple has created new data centers that are powered by the sun and wind, manufacturing centers that run on one hundred percent clean energy. All of Apple’s effort not only benefits each person, but the environment as well.
Lastly, Apple pushes customers to bring in old products so that they can properly recycle them. Being a large technology company they know that it is harsh on the environment, but are trying to reduce their impact as much as possible. Customers take notice in companies that are willing to help save the environment for future generations. Many are more willing to buy items from a company that gives back to the people and environment. If I were to become part of the marketing team for Apple Iphone 5s/5c I would start by researching both the U. S and foreign markets.
I would look at trends and the customers’ ability to purchase the new Iphone (location, accessibility, and price). It is important to develop a campaign that will appeal to all customers in the U. S and foreign markets. Since The Iphone 5s/5c was highly anticipated in the U. S, I would have focused more on the release in foreign markets. I think that one important factor is getting the phone sold in as many countries as possible. Expanding the countries that the Iphone is sold in broadens the customer base, and opens those customers up to other Apple products.
One of the smartest moves Apple marketers did was teaming up with China Mobile in January 2014. China mobile is the “leading mobile services provider in Mainland China, the Group boasts the world's largest mobile network and the world's largest mobile customer base… customer base which reached 767 million” (Overview, 2014). If I were part of the marketing team I would have recommended teaming up with China Mobile at the release of the Iphone 5s/5c back in September 2013. This would have let China Mobile’s customer base access the new Iphones instead having to wait.
One thing that I would have done differently is reducing the price of the Iphone 5c when it first came out. This would allow for investors and customers to feel comfortable with the purchasing price. This would have prevented the low demand for the Iphone 5c and the company having to come out with the 8GB Iphone 5c at a lower price. Doing this would have saved the company both money and time. Overall, the Iphone does not need much marketing because it already has such a large following. You rarely see commercials or a ton of advertising when new Iphones come out.
The quality and technology of the new Iphone 5s/5c speak for it and is why it draws in so many customers. Marketing is a key factor in a company’s success. Marketers create an offering that attracts customers and creates a profit for the company. The Apple Iphone 5s/5c was created as an upgrade to the pervious model. It not only was it better quality, but it incorpoated new technology that attracted many customers. It is easily accessible through mobile carries and the Apple store. The Iphone 5s/5c also comes with a warranty and reduced price if you start a two- year contract.
This is the first Iphone that has been sold in more than one hundred countries, which broadens the company’s customer reach. Apple employees may have over estimated the Iphone 5s/5c demand, but the marketing department did a great job refocusing the Iphone’s price to help the sales. “Current changes and challenges in the marketplace call upon marketing management to create better product and service offerings, while convincing customers about their corporate and product credibility” (Srivorailai, 2011, p. 243).
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