Marketing In Practice Marketing Plan iBangle TABLE OF · PDF fileThe marketing plan includes...

61
Marketing In Practice Marketing Plan iBangle 1.0EXECUTIVE SUMMARY The marketing plan includes the fundamental for the introduction of a unique and ingenious product known as iBangle by Apple Inc. The analysis of internal and external - 1 - TABLE OF CONTENTS 1.0 EXECUTIVE SUMMARY 2 2.0 COMPANY DESCRIPTION 2.1 Vision Statement 2.2 Mission Statement 3 4 4 3.0 PRODUCT DESCRIPTION 5 4.0 SITUATION ANALYSIS 4.1 Industry Analysis 4.2 SWOT Analysis 4.2.1 Strength 4.2.2 Weakness 4.2.3 Opportunity 4.2.4 Threat 4.3 Competitors Environment 9 9 12 12 14 14 15 16 5.0 MARKETING OBJECTIVE 17 6.0 TARGET MARKET 6.1 Segment Identification 6.2 Segment Needs 6.3 Segment Trends 6.4 Segment Growth Potential 6.5 Size of Segment (Population) 18 18 18 18 18 18 7.0 POSITIONING STRATEGY 19 8.0 MARKETING STRATEGY 8.1 Product Strategy 8.2 Price Strategy 8.3 Promotion Strategy 8.4 Place Strategy 21 21 22 24 26 9.0 FINANCIAL PROJECTION & EVALUATION 27 10.0IMPLEMENTATION PLAN 33

Transcript of Marketing In Practice Marketing Plan iBangle TABLE OF · PDF fileThe marketing plan includes...

Marketing In Practice Marketing Plan iBangle

10EXECUTIVE SUMMARY

The marketing plan includes the fundamental for the introduction of a unique and

ingenious product known as iBangle by Apple Inc The analysis of internal and external

- 1 -

TABLE OF CONTENTS

10 EXECUTIVE SUMMARY 220 COMPANY DESCRIPTION

21 Vision Statement

22 Mission Statement

3

4

430 PRODUCT DESCRIPTION 540 SITUATION ANALYSIS

41 Industry Analysis

42 SWOT Analysis

421 Strength

422 Weakness

423 Opportunity

424 Threat

43 Competitors Environment

9

9

12

12

14

14

15

1650 MARKETING OBJECTIVE 1760 TARGET MARKET

61 Segment Identification

62 Segment Needs

63 Segment Trends

64 Segment Growth Potential

65 Size of Segment (Population)

18

18

18

18

18

1870 POSITIONING STRATEGY 1980 MARKETING STRATEGY

81 Product Strategy

82 Price Strategy

83 Promotion Strategy

84 Place Strategy

21

21

22

24

2690 FINANCIAL PROJECTION amp EVALUATION 27100IMPLEMENTATION PLAN 33

Marketing In Practice Marketing Plan iBangle

of the organisation competitive environment enables the team to propose dynamic and

constructive strategies for iBangle to fulfil the companyrsquos objectives and strategic

mission The iBangle will be introduced as another innovation of Apple and marketed as

mp3 player in portal music player (PMP) sector This also will enable Apple Inc to

penetrate and dominate the PMP sector and emerge as leader in innovation of unique

products as well as successfully gain market share The marketing strategies are outlined

to gain market segment size of 102665043(targeted) male and 103129321(targeted)

female of 15-64 years with forecasted sales growth average at 48 over next 3 years and

profit of USD 8229000 The accomplishment and success of iBangle will be measured

with the capture of market share in PMP sector as well as penetrating geo-clustering

targeted market in across the global

20COMPANY DESCRIPTION

Apple Inc was formed by Steve Jobs and Steve Wojniak in April 1976 and

incorporated on 3rd January 1977 The organisationrsquos headquarter is situated at Cupertino

- 2 -

Marketing In Practice Marketing Plan iBangle

California The current CEO is Steve Jobs Apple Inc mainly involved in industry

related to computer software hardware and consumer electronics The organisation

mainly design manufacture and market product that varies from personal computer

portable digital music players mobile communication devices and various related

software services peripherals and networking solutions The main distribution channels

are its online stores retails stores direct sales and others Moreover the customers range

from consumers corporations small and medium business education enterprise

governments and creative customers The organisation currently has 35100 employees

and growth of 625 According to fiscal year ending report of September 2008 Apple

Inc had generated the following revenue and shows growth of 355 for one year growth

and about 383 of income growth-

TABLE 1 Financial Data of Apple Inc for 2008 1

21Vision Statement

1 Abstracted from httpfinanceyahoocomqiss=AAPLampannual

- 3 -

bull iBangle product will enable Apple Inc to establish as market leader in

portal music sector

bull Apple Inc can be a revolutionary organisation in providing digital

lifestyle for customers

Marketing In Practice Marketing Plan iBangle

22Mission Statement

30 PRODUCT DESCRIPTION

- 4 -

bull Apple Inc is committed to provide a futuristic and empowered music

listening experience to the customer through iBangle

bull To capture share market of portal music player more than 55 and

dominate the market

Marketing In Practice Marketing Plan iBangle

lsquoiBanglersquo will be future version of iPod product and will be positioned as the

bracelet iPod that available in the market It will be equipped with 2GB capacity and

different sizes to accommodate customerrsquos wrist The iBangle features and design as

shown below2-

2 Extracted from httpwwwyankodesigncom20081021this-ipod-is-full-of-air

- 5 -

Marketing In Practice Marketing Plan iBangle

- 6 -

Marketing In Practice Marketing Plan iBangle

- 7 -

Marketing In Practice Marketing Plan iBangle

The product will be able to provide exceptional music listening experience and have

multifunction as mp3 player as well as hand accessory (bangle) The product also

marketed as funky and matchless alternative device for portal music device and packaged

as unisex outlook that be suitable to be worn by men and women The product is made of

aluminium

40SITUATION ANALYSIS

41INDUSTRY ANALYSIS

- 8 -

Marketing In Practice Marketing Plan iBangle

411 Usage

Apple Inc has sold 221 million iPods during 2008 holiday season

compared to 4580 unit in 2005 The sale of 210 million units in Q1 of

2007 also shows 50 higher than Q1 of 2006 This shows steady growth

of iPod since 2005 Moreover it increased about 383 from 2005 This

projects strong value of brand position in the customers Therefore we

strongly believe that iBangle can penetrate the usage trend since this is a

variant of iPod

Chart 1 iPod Unit Sales 3

412 Trends

In 1960 8-track player was introduced and followed by personal

cassette player in 1979 and later with walkman walk disc player until

MP3 player and MP4 player The taste and trend of portable music players

3 Extracted from httpwwwmacworldcomarticle131874200801ipodsaleshtml

- 9 -

Marketing In Practice Marketing Plan iBangle

change tremendously among customers The factors that influence the

evolution in the trends are-

a Customer preference to better sound quality

b The sizes of iPod and mp3 players are more compact and

easy to carry

c The storage capacity is bigger and customers can opt for

different sizes compared to other devices

d The introduction of storage format like mp3 acc and wma

enable to customer to store more music compared to earlier

version

The market trend is expected to show prolonged growth and future

products of portable players that have sophisticated design features and

benefits like iBangle can gain customer interest as well as market demand

413 Profitability amp Future Growth Potential

Apple had gain revenue of 48 from iPod Business Division in

first fiscal of 20074 meanwhile other music related products contributed

4 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 10 -

Marketing In Practice Marketing Plan iBangle

9 of total profit We estimated that growth of average of 4 in sales

based on forecasting projection by year 2012 and expansion of 183 in

population by 20155

42 SWOT ANALYSIS

5 Extracted from httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbershtml

- 11 -

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

of the organisation competitive environment enables the team to propose dynamic and

constructive strategies for iBangle to fulfil the companyrsquos objectives and strategic

mission The iBangle will be introduced as another innovation of Apple and marketed as

mp3 player in portal music player (PMP) sector This also will enable Apple Inc to

penetrate and dominate the PMP sector and emerge as leader in innovation of unique

products as well as successfully gain market share The marketing strategies are outlined

to gain market segment size of 102665043(targeted) male and 103129321(targeted)

female of 15-64 years with forecasted sales growth average at 48 over next 3 years and

profit of USD 8229000 The accomplishment and success of iBangle will be measured

with the capture of market share in PMP sector as well as penetrating geo-clustering

targeted market in across the global

20COMPANY DESCRIPTION

Apple Inc was formed by Steve Jobs and Steve Wojniak in April 1976 and

incorporated on 3rd January 1977 The organisationrsquos headquarter is situated at Cupertino

- 2 -

Marketing In Practice Marketing Plan iBangle

California The current CEO is Steve Jobs Apple Inc mainly involved in industry

related to computer software hardware and consumer electronics The organisation

mainly design manufacture and market product that varies from personal computer

portable digital music players mobile communication devices and various related

software services peripherals and networking solutions The main distribution channels

are its online stores retails stores direct sales and others Moreover the customers range

from consumers corporations small and medium business education enterprise

governments and creative customers The organisation currently has 35100 employees

and growth of 625 According to fiscal year ending report of September 2008 Apple

Inc had generated the following revenue and shows growth of 355 for one year growth

and about 383 of income growth-

TABLE 1 Financial Data of Apple Inc for 2008 1

21Vision Statement

1 Abstracted from httpfinanceyahoocomqiss=AAPLampannual

- 3 -

bull iBangle product will enable Apple Inc to establish as market leader in

portal music sector

bull Apple Inc can be a revolutionary organisation in providing digital

lifestyle for customers

Marketing In Practice Marketing Plan iBangle

22Mission Statement

30 PRODUCT DESCRIPTION

- 4 -

bull Apple Inc is committed to provide a futuristic and empowered music

listening experience to the customer through iBangle

bull To capture share market of portal music player more than 55 and

dominate the market

Marketing In Practice Marketing Plan iBangle

lsquoiBanglersquo will be future version of iPod product and will be positioned as the

bracelet iPod that available in the market It will be equipped with 2GB capacity and

different sizes to accommodate customerrsquos wrist The iBangle features and design as

shown below2-

2 Extracted from httpwwwyankodesigncom20081021this-ipod-is-full-of-air

- 5 -

Marketing In Practice Marketing Plan iBangle

- 6 -

Marketing In Practice Marketing Plan iBangle

- 7 -

Marketing In Practice Marketing Plan iBangle

The product will be able to provide exceptional music listening experience and have

multifunction as mp3 player as well as hand accessory (bangle) The product also

marketed as funky and matchless alternative device for portal music device and packaged

as unisex outlook that be suitable to be worn by men and women The product is made of

aluminium

40SITUATION ANALYSIS

41INDUSTRY ANALYSIS

- 8 -

Marketing In Practice Marketing Plan iBangle

411 Usage

Apple Inc has sold 221 million iPods during 2008 holiday season

compared to 4580 unit in 2005 The sale of 210 million units in Q1 of

2007 also shows 50 higher than Q1 of 2006 This shows steady growth

of iPod since 2005 Moreover it increased about 383 from 2005 This

projects strong value of brand position in the customers Therefore we

strongly believe that iBangle can penetrate the usage trend since this is a

variant of iPod

Chart 1 iPod Unit Sales 3

412 Trends

In 1960 8-track player was introduced and followed by personal

cassette player in 1979 and later with walkman walk disc player until

MP3 player and MP4 player The taste and trend of portable music players

3 Extracted from httpwwwmacworldcomarticle131874200801ipodsaleshtml

- 9 -

Marketing In Practice Marketing Plan iBangle

change tremendously among customers The factors that influence the

evolution in the trends are-

a Customer preference to better sound quality

b The sizes of iPod and mp3 players are more compact and

easy to carry

c The storage capacity is bigger and customers can opt for

different sizes compared to other devices

d The introduction of storage format like mp3 acc and wma

enable to customer to store more music compared to earlier

version

The market trend is expected to show prolonged growth and future

products of portable players that have sophisticated design features and

benefits like iBangle can gain customer interest as well as market demand

413 Profitability amp Future Growth Potential

Apple had gain revenue of 48 from iPod Business Division in

first fiscal of 20074 meanwhile other music related products contributed

4 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 10 -

Marketing In Practice Marketing Plan iBangle

9 of total profit We estimated that growth of average of 4 in sales

based on forecasting projection by year 2012 and expansion of 183 in

population by 20155

42 SWOT ANALYSIS

5 Extracted from httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbershtml

- 11 -

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

California The current CEO is Steve Jobs Apple Inc mainly involved in industry

related to computer software hardware and consumer electronics The organisation

mainly design manufacture and market product that varies from personal computer

portable digital music players mobile communication devices and various related

software services peripherals and networking solutions The main distribution channels

are its online stores retails stores direct sales and others Moreover the customers range

from consumers corporations small and medium business education enterprise

governments and creative customers The organisation currently has 35100 employees

and growth of 625 According to fiscal year ending report of September 2008 Apple

Inc had generated the following revenue and shows growth of 355 for one year growth

and about 383 of income growth-

TABLE 1 Financial Data of Apple Inc for 2008 1

21Vision Statement

1 Abstracted from httpfinanceyahoocomqiss=AAPLampannual

- 3 -

bull iBangle product will enable Apple Inc to establish as market leader in

portal music sector

bull Apple Inc can be a revolutionary organisation in providing digital

lifestyle for customers

Marketing In Practice Marketing Plan iBangle

22Mission Statement

30 PRODUCT DESCRIPTION

- 4 -

bull Apple Inc is committed to provide a futuristic and empowered music

listening experience to the customer through iBangle

bull To capture share market of portal music player more than 55 and

dominate the market

Marketing In Practice Marketing Plan iBangle

lsquoiBanglersquo will be future version of iPod product and will be positioned as the

bracelet iPod that available in the market It will be equipped with 2GB capacity and

different sizes to accommodate customerrsquos wrist The iBangle features and design as

shown below2-

2 Extracted from httpwwwyankodesigncom20081021this-ipod-is-full-of-air

- 5 -

Marketing In Practice Marketing Plan iBangle

- 6 -

Marketing In Practice Marketing Plan iBangle

- 7 -

Marketing In Practice Marketing Plan iBangle

The product will be able to provide exceptional music listening experience and have

multifunction as mp3 player as well as hand accessory (bangle) The product also

marketed as funky and matchless alternative device for portal music device and packaged

as unisex outlook that be suitable to be worn by men and women The product is made of

aluminium

40SITUATION ANALYSIS

41INDUSTRY ANALYSIS

- 8 -

Marketing In Practice Marketing Plan iBangle

411 Usage

Apple Inc has sold 221 million iPods during 2008 holiday season

compared to 4580 unit in 2005 The sale of 210 million units in Q1 of

2007 also shows 50 higher than Q1 of 2006 This shows steady growth

of iPod since 2005 Moreover it increased about 383 from 2005 This

projects strong value of brand position in the customers Therefore we

strongly believe that iBangle can penetrate the usage trend since this is a

variant of iPod

Chart 1 iPod Unit Sales 3

412 Trends

In 1960 8-track player was introduced and followed by personal

cassette player in 1979 and later with walkman walk disc player until

MP3 player and MP4 player The taste and trend of portable music players

3 Extracted from httpwwwmacworldcomarticle131874200801ipodsaleshtml

- 9 -

Marketing In Practice Marketing Plan iBangle

change tremendously among customers The factors that influence the

evolution in the trends are-

a Customer preference to better sound quality

b The sizes of iPod and mp3 players are more compact and

easy to carry

c The storage capacity is bigger and customers can opt for

different sizes compared to other devices

d The introduction of storage format like mp3 acc and wma

enable to customer to store more music compared to earlier

version

The market trend is expected to show prolonged growth and future

products of portable players that have sophisticated design features and

benefits like iBangle can gain customer interest as well as market demand

413 Profitability amp Future Growth Potential

Apple had gain revenue of 48 from iPod Business Division in

first fiscal of 20074 meanwhile other music related products contributed

4 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 10 -

Marketing In Practice Marketing Plan iBangle

9 of total profit We estimated that growth of average of 4 in sales

based on forecasting projection by year 2012 and expansion of 183 in

population by 20155

42 SWOT ANALYSIS

5 Extracted from httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbershtml

- 11 -

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

22Mission Statement

30 PRODUCT DESCRIPTION

- 4 -

bull Apple Inc is committed to provide a futuristic and empowered music

listening experience to the customer through iBangle

bull To capture share market of portal music player more than 55 and

dominate the market

Marketing In Practice Marketing Plan iBangle

lsquoiBanglersquo will be future version of iPod product and will be positioned as the

bracelet iPod that available in the market It will be equipped with 2GB capacity and

different sizes to accommodate customerrsquos wrist The iBangle features and design as

shown below2-

2 Extracted from httpwwwyankodesigncom20081021this-ipod-is-full-of-air

- 5 -

Marketing In Practice Marketing Plan iBangle

- 6 -

Marketing In Practice Marketing Plan iBangle

- 7 -

Marketing In Practice Marketing Plan iBangle

The product will be able to provide exceptional music listening experience and have

multifunction as mp3 player as well as hand accessory (bangle) The product also

marketed as funky and matchless alternative device for portal music device and packaged

as unisex outlook that be suitable to be worn by men and women The product is made of

aluminium

40SITUATION ANALYSIS

41INDUSTRY ANALYSIS

- 8 -

Marketing In Practice Marketing Plan iBangle

411 Usage

Apple Inc has sold 221 million iPods during 2008 holiday season

compared to 4580 unit in 2005 The sale of 210 million units in Q1 of

2007 also shows 50 higher than Q1 of 2006 This shows steady growth

of iPod since 2005 Moreover it increased about 383 from 2005 This

projects strong value of brand position in the customers Therefore we

strongly believe that iBangle can penetrate the usage trend since this is a

variant of iPod

Chart 1 iPod Unit Sales 3

412 Trends

In 1960 8-track player was introduced and followed by personal

cassette player in 1979 and later with walkman walk disc player until

MP3 player and MP4 player The taste and trend of portable music players

3 Extracted from httpwwwmacworldcomarticle131874200801ipodsaleshtml

- 9 -

Marketing In Practice Marketing Plan iBangle

change tremendously among customers The factors that influence the

evolution in the trends are-

a Customer preference to better sound quality

b The sizes of iPod and mp3 players are more compact and

easy to carry

c The storage capacity is bigger and customers can opt for

different sizes compared to other devices

d The introduction of storage format like mp3 acc and wma

enable to customer to store more music compared to earlier

version

The market trend is expected to show prolonged growth and future

products of portable players that have sophisticated design features and

benefits like iBangle can gain customer interest as well as market demand

413 Profitability amp Future Growth Potential

Apple had gain revenue of 48 from iPod Business Division in

first fiscal of 20074 meanwhile other music related products contributed

4 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 10 -

Marketing In Practice Marketing Plan iBangle

9 of total profit We estimated that growth of average of 4 in sales

based on forecasting projection by year 2012 and expansion of 183 in

population by 20155

42 SWOT ANALYSIS

5 Extracted from httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbershtml

- 11 -

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

lsquoiBanglersquo will be future version of iPod product and will be positioned as the

bracelet iPod that available in the market It will be equipped with 2GB capacity and

different sizes to accommodate customerrsquos wrist The iBangle features and design as

shown below2-

2 Extracted from httpwwwyankodesigncom20081021this-ipod-is-full-of-air

- 5 -

Marketing In Practice Marketing Plan iBangle

- 6 -

Marketing In Practice Marketing Plan iBangle

- 7 -

Marketing In Practice Marketing Plan iBangle

The product will be able to provide exceptional music listening experience and have

multifunction as mp3 player as well as hand accessory (bangle) The product also

marketed as funky and matchless alternative device for portal music device and packaged

as unisex outlook that be suitable to be worn by men and women The product is made of

aluminium

40SITUATION ANALYSIS

41INDUSTRY ANALYSIS

- 8 -

Marketing In Practice Marketing Plan iBangle

411 Usage

Apple Inc has sold 221 million iPods during 2008 holiday season

compared to 4580 unit in 2005 The sale of 210 million units in Q1 of

2007 also shows 50 higher than Q1 of 2006 This shows steady growth

of iPod since 2005 Moreover it increased about 383 from 2005 This

projects strong value of brand position in the customers Therefore we

strongly believe that iBangle can penetrate the usage trend since this is a

variant of iPod

Chart 1 iPod Unit Sales 3

412 Trends

In 1960 8-track player was introduced and followed by personal

cassette player in 1979 and later with walkman walk disc player until

MP3 player and MP4 player The taste and trend of portable music players

3 Extracted from httpwwwmacworldcomarticle131874200801ipodsaleshtml

- 9 -

Marketing In Practice Marketing Plan iBangle

change tremendously among customers The factors that influence the

evolution in the trends are-

a Customer preference to better sound quality

b The sizes of iPod and mp3 players are more compact and

easy to carry

c The storage capacity is bigger and customers can opt for

different sizes compared to other devices

d The introduction of storage format like mp3 acc and wma

enable to customer to store more music compared to earlier

version

The market trend is expected to show prolonged growth and future

products of portable players that have sophisticated design features and

benefits like iBangle can gain customer interest as well as market demand

413 Profitability amp Future Growth Potential

Apple had gain revenue of 48 from iPod Business Division in

first fiscal of 20074 meanwhile other music related products contributed

4 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 10 -

Marketing In Practice Marketing Plan iBangle

9 of total profit We estimated that growth of average of 4 in sales

based on forecasting projection by year 2012 and expansion of 183 in

population by 20155

42 SWOT ANALYSIS

5 Extracted from httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbershtml

- 11 -

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

- 6 -

Marketing In Practice Marketing Plan iBangle

- 7 -

Marketing In Practice Marketing Plan iBangle

The product will be able to provide exceptional music listening experience and have

multifunction as mp3 player as well as hand accessory (bangle) The product also

marketed as funky and matchless alternative device for portal music device and packaged

as unisex outlook that be suitable to be worn by men and women The product is made of

aluminium

40SITUATION ANALYSIS

41INDUSTRY ANALYSIS

- 8 -

Marketing In Practice Marketing Plan iBangle

411 Usage

Apple Inc has sold 221 million iPods during 2008 holiday season

compared to 4580 unit in 2005 The sale of 210 million units in Q1 of

2007 also shows 50 higher than Q1 of 2006 This shows steady growth

of iPod since 2005 Moreover it increased about 383 from 2005 This

projects strong value of brand position in the customers Therefore we

strongly believe that iBangle can penetrate the usage trend since this is a

variant of iPod

Chart 1 iPod Unit Sales 3

412 Trends

In 1960 8-track player was introduced and followed by personal

cassette player in 1979 and later with walkman walk disc player until

MP3 player and MP4 player The taste and trend of portable music players

3 Extracted from httpwwwmacworldcomarticle131874200801ipodsaleshtml

- 9 -

Marketing In Practice Marketing Plan iBangle

change tremendously among customers The factors that influence the

evolution in the trends are-

a Customer preference to better sound quality

b The sizes of iPod and mp3 players are more compact and

easy to carry

c The storage capacity is bigger and customers can opt for

different sizes compared to other devices

d The introduction of storage format like mp3 acc and wma

enable to customer to store more music compared to earlier

version

The market trend is expected to show prolonged growth and future

products of portable players that have sophisticated design features and

benefits like iBangle can gain customer interest as well as market demand

413 Profitability amp Future Growth Potential

Apple had gain revenue of 48 from iPod Business Division in

first fiscal of 20074 meanwhile other music related products contributed

4 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 10 -

Marketing In Practice Marketing Plan iBangle

9 of total profit We estimated that growth of average of 4 in sales

based on forecasting projection by year 2012 and expansion of 183 in

population by 20155

42 SWOT ANALYSIS

5 Extracted from httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbershtml

- 11 -

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

- 7 -

Marketing In Practice Marketing Plan iBangle

The product will be able to provide exceptional music listening experience and have

multifunction as mp3 player as well as hand accessory (bangle) The product also

marketed as funky and matchless alternative device for portal music device and packaged

as unisex outlook that be suitable to be worn by men and women The product is made of

aluminium

40SITUATION ANALYSIS

41INDUSTRY ANALYSIS

- 8 -

Marketing In Practice Marketing Plan iBangle

411 Usage

Apple Inc has sold 221 million iPods during 2008 holiday season

compared to 4580 unit in 2005 The sale of 210 million units in Q1 of

2007 also shows 50 higher than Q1 of 2006 This shows steady growth

of iPod since 2005 Moreover it increased about 383 from 2005 This

projects strong value of brand position in the customers Therefore we

strongly believe that iBangle can penetrate the usage trend since this is a

variant of iPod

Chart 1 iPod Unit Sales 3

412 Trends

In 1960 8-track player was introduced and followed by personal

cassette player in 1979 and later with walkman walk disc player until

MP3 player and MP4 player The taste and trend of portable music players

3 Extracted from httpwwwmacworldcomarticle131874200801ipodsaleshtml

- 9 -

Marketing In Practice Marketing Plan iBangle

change tremendously among customers The factors that influence the

evolution in the trends are-

a Customer preference to better sound quality

b The sizes of iPod and mp3 players are more compact and

easy to carry

c The storage capacity is bigger and customers can opt for

different sizes compared to other devices

d The introduction of storage format like mp3 acc and wma

enable to customer to store more music compared to earlier

version

The market trend is expected to show prolonged growth and future

products of portable players that have sophisticated design features and

benefits like iBangle can gain customer interest as well as market demand

413 Profitability amp Future Growth Potential

Apple had gain revenue of 48 from iPod Business Division in

first fiscal of 20074 meanwhile other music related products contributed

4 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 10 -

Marketing In Practice Marketing Plan iBangle

9 of total profit We estimated that growth of average of 4 in sales

based on forecasting projection by year 2012 and expansion of 183 in

population by 20155

42 SWOT ANALYSIS

5 Extracted from httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbershtml

- 11 -

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

The product will be able to provide exceptional music listening experience and have

multifunction as mp3 player as well as hand accessory (bangle) The product also

marketed as funky and matchless alternative device for portal music device and packaged

as unisex outlook that be suitable to be worn by men and women The product is made of

aluminium

40SITUATION ANALYSIS

41INDUSTRY ANALYSIS

- 8 -

Marketing In Practice Marketing Plan iBangle

411 Usage

Apple Inc has sold 221 million iPods during 2008 holiday season

compared to 4580 unit in 2005 The sale of 210 million units in Q1 of

2007 also shows 50 higher than Q1 of 2006 This shows steady growth

of iPod since 2005 Moreover it increased about 383 from 2005 This

projects strong value of brand position in the customers Therefore we

strongly believe that iBangle can penetrate the usage trend since this is a

variant of iPod

Chart 1 iPod Unit Sales 3

412 Trends

In 1960 8-track player was introduced and followed by personal

cassette player in 1979 and later with walkman walk disc player until

MP3 player and MP4 player The taste and trend of portable music players

3 Extracted from httpwwwmacworldcomarticle131874200801ipodsaleshtml

- 9 -

Marketing In Practice Marketing Plan iBangle

change tremendously among customers The factors that influence the

evolution in the trends are-

a Customer preference to better sound quality

b The sizes of iPod and mp3 players are more compact and

easy to carry

c The storage capacity is bigger and customers can opt for

different sizes compared to other devices

d The introduction of storage format like mp3 acc and wma

enable to customer to store more music compared to earlier

version

The market trend is expected to show prolonged growth and future

products of portable players that have sophisticated design features and

benefits like iBangle can gain customer interest as well as market demand

413 Profitability amp Future Growth Potential

Apple had gain revenue of 48 from iPod Business Division in

first fiscal of 20074 meanwhile other music related products contributed

4 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 10 -

Marketing In Practice Marketing Plan iBangle

9 of total profit We estimated that growth of average of 4 in sales

based on forecasting projection by year 2012 and expansion of 183 in

population by 20155

42 SWOT ANALYSIS

5 Extracted from httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbershtml

- 11 -

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

411 Usage

Apple Inc has sold 221 million iPods during 2008 holiday season

compared to 4580 unit in 2005 The sale of 210 million units in Q1 of

2007 also shows 50 higher than Q1 of 2006 This shows steady growth

of iPod since 2005 Moreover it increased about 383 from 2005 This

projects strong value of brand position in the customers Therefore we

strongly believe that iBangle can penetrate the usage trend since this is a

variant of iPod

Chart 1 iPod Unit Sales 3

412 Trends

In 1960 8-track player was introduced and followed by personal

cassette player in 1979 and later with walkman walk disc player until

MP3 player and MP4 player The taste and trend of portable music players

3 Extracted from httpwwwmacworldcomarticle131874200801ipodsaleshtml

- 9 -

Marketing In Practice Marketing Plan iBangle

change tremendously among customers The factors that influence the

evolution in the trends are-

a Customer preference to better sound quality

b The sizes of iPod and mp3 players are more compact and

easy to carry

c The storage capacity is bigger and customers can opt for

different sizes compared to other devices

d The introduction of storage format like mp3 acc and wma

enable to customer to store more music compared to earlier

version

The market trend is expected to show prolonged growth and future

products of portable players that have sophisticated design features and

benefits like iBangle can gain customer interest as well as market demand

413 Profitability amp Future Growth Potential

Apple had gain revenue of 48 from iPod Business Division in

first fiscal of 20074 meanwhile other music related products contributed

4 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 10 -

Marketing In Practice Marketing Plan iBangle

9 of total profit We estimated that growth of average of 4 in sales

based on forecasting projection by year 2012 and expansion of 183 in

population by 20155

42 SWOT ANALYSIS

5 Extracted from httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbershtml

- 11 -

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

change tremendously among customers The factors that influence the

evolution in the trends are-

a Customer preference to better sound quality

b The sizes of iPod and mp3 players are more compact and

easy to carry

c The storage capacity is bigger and customers can opt for

different sizes compared to other devices

d The introduction of storage format like mp3 acc and wma

enable to customer to store more music compared to earlier

version

The market trend is expected to show prolonged growth and future

products of portable players that have sophisticated design features and

benefits like iBangle can gain customer interest as well as market demand

413 Profitability amp Future Growth Potential

Apple had gain revenue of 48 from iPod Business Division in

first fiscal of 20074 meanwhile other music related products contributed

4 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 10 -

Marketing In Practice Marketing Plan iBangle

9 of total profit We estimated that growth of average of 4 in sales

based on forecasting projection by year 2012 and expansion of 183 in

population by 20155

42 SWOT ANALYSIS

5 Extracted from httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbershtml

- 11 -

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

9 of total profit We estimated that growth of average of 4 in sales

based on forecasting projection by year 2012 and expansion of 183 in

population by 20155

42 SWOT ANALYSIS

5 Extracted from httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbershtml

- 11 -

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

421 Strength

4211 Brand Position

Apple Inc is one of the most progressive and established

IT brand in the IT industry The organisation had managed to

create strong brand value position among its customers Apple

products often associated with concept of fun energetic

sophisticated and quality and it generated loyal and enthusiastic

customers that support Apple brands The supremacy loyalty of

customers shows that Apple managed to gain customers as well as

sustain them The sales of 221 million iPod show the customers

consumption of Apple products The customers subscribes to

services and products that offered by Apple and willing to come

back for more Apple products lines This can create opportunities

for Apple to market iBangle more proficiently

4212 Financial Strength

- 12 -

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry The organisation managed to generate net income of

USD 48340 million in 2008 and USD 2523000 of Cash flow6

This shows that the organisation have capabilities to invest

sufficient amount to design manufacture and market iBangle in

the targeted market

4213 Innovation and Improvement

Strengths of Apple are innovation and the capability of

improving its product in diminutive period This can be seen in the

6 times upgrading of classic iPod models since been introduced

There are 6 generation of lsquoMiniNanorsquo model since 2004 This will

enable the organisation to develop iBangle and improvised in short

time and capture market demand whenever the opportunities rise

4214 Product diversification

Apple Inc also managed to manufacture and market

products that varies from PCs personal notebook mobile

communication hardware software portable music players to

peripheral devices This has enabled them to penetrate wider

market Therefore it also contributed to revenue of Apple This can

help Apple to launch and market iBangle in all level of market

without compromising the revenue much

422 Weakness

4221 Price

The prices of apple products are often expensive and only

can be afforded by certain group Most of its products are ranges

from USD 200 onwards for its Mp3 and Mp4 compared to other

6 Source httpfinanceyahoocomqiss=AAPLampannual

- 13 -

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

brands like Samsung Creative Therefore many customers from

lower income group could not afford Apple products and opt for

other brands

4222 Faulty products

Some of Apple products also face problems such as iPod

Nano faces faulty screen whereby the screen can easily break

under impact and early iPods faced problem with faulty batteries

This had force the company to replace all the faulty items and had

incurred more cost

4223 Lack of quality Control

The products like iPod Nano faced problems and shows

that Apple Inc had faced lack of quality control

423 Opportunity

4231 Better quality control implementation

The Apple Inc also can increase its quality control sector to

be able to provide more enhanced and quality product to its

customers

4232 Introduction of new products

Apple had been massive designing and manufacturing

new products for its customers compared to the competitors like

Sony Samsung Therefore Apple can penetrate PMP field with

new products like iBangle efficiently

4233 Brand awareness

The Apple has developed strong brand awareness among

customers and in the international market Therefore Apple Inc

can create market opportunity for iBangle more efficiently because

the customers are more perceptive and easily accept Apple

- 14 -

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness

Moreover the recognition of Apple brand in the international arena

also can generate international market opportunities for iBangle

424 Threat

4241 Strong Competition

Apple Inc also faced competition in todayrsquos global

oligopoly market since the industry is been influenced by several

major competitors such as Sony Samsung HP and others

4242 Financial Crisis

The inconsistency of global financial stability and world

stock market can induce crisis and problems for Apple Inc during

introducing new products to the market The financial crisis can

force customers to retreat and not support any new products due to

personal financial problems

4243 Political Unstable

One of major crisis that the organisation will face during

launching iBangle is political instability in some countries in the

world This can cause by few factors such as internal political

power struggle transition of ruling power and others These

dilemmas can affect launching of iBangle in certain countries

such as South Africa Thailand Philippine and others even though

there is vast market opportunity

43 COMPETITORS ENVIROMENT

Apple Incrsquos main competitors in IT industry are Sony Samsung IBM and

HP However top competitors that have capabilities and financial strength

to produce similar products with Apple are Sony and Blackberry especially

for products like MP3 and MP4 Sony had been veteran in portal music device

- 15 -

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple Apple managed to capture 50 of marketing

share since 2005 but Sony also progressively gain market share of 20 in

2006 and 30 in 20077 It shows that Sony has capacity and resources to

design manufacture product that have similarities with iBangle

50 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows-

7 Source from httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-ipod-market

- 16 -

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

bull To establish as market leader in creating and manufacturing innovative

products in IT industry

bull To enable Apple Inc to satisfy fulfil and equipped the consumerrsquos

personality and lifestyle needs as well to increase Apple popularity as

an icon in digital lifestyle product

bull To establish as market leader in portal music player sector by

increasing market share

bull To enable Apple Inc to monopoly the portal music device sector share

by 75 by year 2012

bull To enable the Apple Inc revenue from iPod Business Division to

increase to 63 by year 2015

60TARGET MARKET

61 Segment Identification

iBangle is a version of MP3 player that can be worn on wrist to be

launched within the portable music player (PMP) sector in US

- 17 -

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

62 Segment Needs

iBangle will be a device that accommodate social needs of customer such

as it will be perceived as one of tools of digital lifestyle fun and cool device

and sense of belonging within peer group brand that need to be owned

cultural lifestyle and others needs It also cater personal needs such as for

customers that want to experience music without tangled with wires when

they performing the daily activities luxurious activities such as exercise

jogging surfing and others activities

63 Segment Trends

The current trend shows transcend from wired and bulky PMP to light

easy compact in size more capacity less wired or wireless and multifunction

players like MP3 players The trends also change towards wireless player

brand conscious and digital lifestyle Therefore market opportunity for

iBangle is far vaster due to trend transformations

64 Segment Growth Potential

According to statistic report the segment growth can be projected increase

of 183 over next 5 years (2015) for 21 years and above subsets Meanwhile

the segment for 14-17 years old anticipated growth is 093 and 19-24 years

old is about 10528

65 Size of Segment (Population)

According to statistics report of CIA the size of segment 15-64 years old

consists of 102665043 male and 103129321 femalei

70POSITIONING STRATEGY

Apple has been enable to create and revolutionised the portal music player sector by

adapting to visceral design and manufacture creative innovative and cool products such

as iPods Moreover iPod managed to became measurement against any portal music

8 Refer to Appendix 2

- 18 -

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

players since its penetration into the market 9 Therefore iBangle player will be adapting

strategy by being the ultimate must have mp3 player in the perception of customers The

organisation will be adapting strategy of product differentiation in marketing iBangle in

the market Moreover Apple also will be providing quality and excellent customer

service for iBangle customers

Apple will be developing unique selling proposition (USP) for iBangle by

differencing iBangle from other mp3 player through its designs features and benefits

that shown below-

Even though iBangle main function is mp3 player it also will be marketed as hand

accessory Apple has strong brand personality (image differentiation) among its

customers and worldwide can enable them to market iBangle to the targeted market

more efficiently The features benefits and unique design of iBangle can aid the

company to create impression of must have mp3 player in the cognitive mind of

customers The success of iPod in 2000 as shown below is an example of people

acceptance of Apple products10

9 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study 10 Source httpwwwtuftsdailycom25512ipod-nation-1599109

- 19 -

bull Benefits positioning listen to music without tangles of wires and wear it as

accessory

bull Features include multi-track touchpad wireless ear headphones customised

according to wrist size better music quality and download music via Bluetooth

bull Product Positioning the shape of bangle enable customer to wear at wrist portray

cool look personalised mp3 player (other people might not notice the player) and

the first mp3 player in the world designed as bangle

bull User Positioning iBangle as the most suitable and coolest trend for digital lifestyle

oriented customers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

80MARKETING STRATEGY

81 Product Strategy

811 The core

iBangle is mp3 player that worn at wrist equipped with wireless

ear headphones to listen to music

812 The actual product

- 20 -

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist It also can function as hand accessory As for

banding Apple logo is embedded on the bangle and the colour for

iBangle is silver to cater for unisex customer as well as to establish

as stylish bangle

The trade name is iBangletrade an Apple product The brand

personality adapted for this product consist of stylish cool trendy

originality and think different The iBangle also equipped with 1

year warranty and customer service

813 Based on life product life cycle iBangle is new product to the

market and currently no imitation products Therefore proactive

and comprehensive marketing campaign can enable iBangle to be

recognised immediately and sales of the product will be

accelerating progressively

814 The unique design of iBangle will enhance itsrsquo differentiation

among existing portal music players and generate advantages to

the product Moreover Apple is known to produce award winning

innovative products as stated below11

815 The other factors that create differentiation for iBangle is the Apple

managed to create emotional benefits12 for its users Therefore

iBangle also can provide emotional benefit to customers in form of

maintaining simplicity stylish design easy to use and constructive

customer service

11 Source httpwwwscribdcomdoc3936101A-study-of-ipods-product-design 12 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -

Apple had worn eight iF (International Forum) Product Design Awards

at CeBIT 13 2008 show in Hanover Germany for out of nine products

that were submitted for consideration

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

816 The iBangle also considered lsquogreenrsquo product since the main

component to manufacture iBangle is aluminium Aluminium is

one of the most recyclable materials13 This enable iBangle to gain

status as lsquoeco-friendly productrsquo and infiltrate environmental

concern oriented customers

817 The iBangle product has another distinguish advantage that is the

brand name of Apple Apple had become one of the most powerful

icons14 in the IT industry due to its visceral design unique

products quality and features Therefore branding Apple logo on

iBangle will increase its value and perception among the

customers

82 Price Strategy

As for pricing strategy for iBangle there are several factors should be

considered as such consumer demand product lifecycle and potential

substitutes The price of iBangle will be at USD 39000 This is because at initial

introduction only 10000 units will be produced and marketed in USA The

profit margin is 30 Apple Inc should given important aspect toward customer

demand

Since Apple had be able to portray themselves as icon of PMP sector through

introduction of iPod generation iBangle is can create massive demand among

customers due to its unique design and features The skimming price strategy will

be adapted to market iBangle to the customers The price will be set at USD

39900 at introduction stage and price will be reviewed at later stage of product

lifecycle

The organisation also has advantages such there is no substitute or imitation

product like iBangle that available currently on the market However potential

substitutes produced by competitors is possible therefore Apple have to establish

13 Source httpezinearticlescomWhy-is-Aluminum-So-Recyclableampid=2277133 14 Source httpwwwscribdcomdoc8688101Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

as market leader for iBangle This can create market demand for iBangle since it

has unique characteristics

One of the examples of successful pricing strategy can be seen in sales of iPod

in the market and it shown in Chart 215

83 Promotion Strategy

831 Objectives

bull To create strong awareness about iBangle throughout the

target customers (14 to 29years old) as well as parents

bull To penetrate and increase market shares in portal music player

sector and override competitors

15 Extracted from httpwwwscribdcomdoc26711Apple-sold-100-million-Ipods-How-much-did-they-make

- 23 -

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as lsquothe

futuristic mp3 player and the coolest product for everyonersquo

The media selection for promoting iBangle is varies for the selected

customers group However one of the most powerful media is Internet media

The internet usage in United States is about 223 million in 200816 It shows

creative advertisements via online can penetrate the target customer faster and

more efficient Moreover online store also can boost the sales of iBangle

Moreover Apple also will be using electronic media as advertisement

arena to launch iBangle to the world Apple is knows for creating innovative and

unique advertisements to promote their products such as in using slogan lsquoThink

Differentrsquo use famous lsquofree thinkersrsquo like Pablo John Lennon Mahatma

Gandhi 17and others to shows that Apple product is unique and different from

others Therefore unique advertisement such as constant advertisement about

iBangle at prime time TV shows radio shows can create brand awareness

among the customers

Other than that Apple also will be using idols and international stars to

promote iBangle Apple is planning using teen idol Hannah Montana as teen

ambassador to promote iBangle to teenagers group Furthermore in order to

penetrate the current trend and culture iBangle will be attached to celebrities such

as Beyonce Missy Elliot and Jason Marz The product will be worn by these

stars in the video clips and photography session for magazines and events The

personalities from sport arena such as Cristiano Ronaldo and S McGee also will

be recruited to promote iBangle The celebrities spotted with iBangle can create

brand awareness among customer more massively Apple will be running

advertisement on iBangle during important events like Super bowl games NBA

and World League This is to target sport oriented customers

Apple also will sponsor prime time TV shows like lsquoLeveragersquo and lsquoCSIrsquo

to promote iBangle for the young adults customers The advertisement of

iBangle will be aired during the Showtime to capture young adultsrsquo attention on

iBangle

16 Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon 17 Source httpwwwscribdcomdoc2648710iPod-The-Marketing-of-an-Idea

- 24 -

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

84 Place Strategy

Other than that the company will be choosing distribution channels such as

a online stores

b retail stores

c direct sales

One of the most established distribution channels is Apple retails stores

Therefore iBangle will be launched and marketed at all Apple retails stores

- 25 -

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle Apple managed to gain USD

145 billion from 208 stores in 200818 ensure that retail store is one of the most

successful distribution channels Moreover online stores also another

important distribution channel that can aid the sales of iBangle and will be

able to penetrate geo-clustering segment more proficiently

18 Source httpejschmidtcomblogapple-success-design-distribution

- 26 -

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

90 FINANCIAL PROJECTION amp EVALUATION

- 27 -

Average-Cost Pricing

A Calculation of Planned Profit if 10000

B Calculation of Actual Profit if Only 10000

items Are Sold items Are Sold

Calculation of Costs Calculation of CostsFixed overhead expenses $200000 Fixed overhead expenses $200000 Labor and materials 700000 Labor and materials 700000 Total costs $900000 Total costs $900000 Planned profit 3000000Total costs and planned profit $3900000 Calculation of profit (or loss) Calculation of profit (or loss)Actual unit sales x price (below) $3990000 Actual unit sales x price (below) $3900000 Minus total costs 900000 Minus total costs 900000 Profit (loss) $3090000 Profit (loss) $3000000

Calculation of reasonable priceExpected total costs and planned profit $3900000 Planned number of items to be sold 10000Reasonable price $39000

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

TABLE 4 Cost for iBangle Production

Based on Table 3 and Table 4 the price of iBangle for introduction stage will be USD

39000 will margin profit of 35

- 28 -

Cost Classifications for an iBangle

ComponentsTotal cost Variable Fixed

Operating expenses

Direct labor$18000

0 $180000 $0 Direct supervision 50000 50000 0Social Security 20000 150000 0Materials 110000 110000 0Operations overhead 0 0 85000

Subtotal$36000

0 $490000 $85000 Non operating expensesAdvertising $35000 $0 $35000 Promotion 20000 0 20000Field sales 15000 0 15000Product management 15000 0 15000Marketing management 20000 0 20000Product development 50000 0 50000Marketing research 20000 0 20000Customer service 70000 50000 20000Testing 50000 0 50000General amp administrative 0 30000

Subtotal$29500

0 $50000 $275000

Total$65500

0 $540000 $360000

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Based on Table 5 projection profit contribution of Ibangle

Based on Table 5 projection of profit margin is 30 and iBangle profit contribution to

Apple revenue by 2010 is USD855 000

- 29 -

TABLE 5 Contribution Margin Statement for iBangle

Product iBangle

Income Statement

31-Dec-10

Revenues (no of units x price) $3900000

Variable costs

Direct labor $180000

Direct supervisionclerical 50000

Social Security 150000

Sales force commissions 100000

Customer service 70000

Materials 110000

Operations overhead (plant etc) 75000

Total variable costs $735000

Contribution margin rate (percent) 30

Contribution margin amount $1170000

Fixed costs

Operations overhead $10000

Advertising 35000

Promotion 20000

Field sales 15000

Product management 50000

Marketing management 20000

Product development 15000

Marketing research 20000

Customer service 50000

Testing 50000

General amp administrative 30000

Total fixed costs $315000

Operating profit (loss) $855000

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Based on break even analysis projection the sales force need to sale minimum

1071 units of iBangle and gain break even at USD 417857

- 30 -

Break-Even Analysis

Break-Even Point (units) = 1071 Break-Even Point ($s) = $417857

Total Fixed Costs TFC = $360000 FormulasVariable Cost per Unit VCU = $5400 BEP (units) = TFC(SPU-VCU)Sales Price per Unit SPU = $39000 BEP ($s) = BEP (units) SPU

Unit Increment x-axis 400

Graph DataTotalUnits TFC TVC TC Sales Profit

0 360000 0 360000 0 -360000400 360000 21600 381600 156000 -225600800 360000 43200 403200 312000 -91200

1200 360000 64800 424800 468000 432001600 360000 86400 446400 624000 1776002000 360000 108000 468000 780000 3120002400 360000 129600 489600 936000 4464002800 360000 151200 511200 1092000 5808003200 360000 172800 532800 1248000 7152003600 360000 194400 554400 1404000 8496004000 360000 216000 576000 1560000 984000

copy Copyright 2009 Jaxworks All Rights Reserved

($500000)

$0

$500000

$1000000

$1500000

$2000000

0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

TFC

TVC

TC

Sales

Profit

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

100IMPLEMENTATION PLAN

- 32 -

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

- 33 -

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

- 34 -

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

110CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS

Moreover the marketing team also have to implement effective control

mechanism and evolution of effectiveness method in order to ascertain the launch

of iBangle is successful the marketing strategies are efficient and progress

constructively according to projection especially in sales and penetrating targeted

market The suggested apparatus had been designed to aid the department to

evaluate the effectiveness of iBangle marketing plan and objectives are shown

below-

a Constant market survey and research such as questionnaire method

observation on consumer behaviourism will be implemented in order

to evaluate the acceptance of iBangle among its customers

b Quality Control mechanism also will be introduced in order to

monitor the quality of iBangle since this is the debut to the market

This will enable the team to capture any defects faulty parts that can

occur after the customer purchase and use the product

c Customer Service and technical support team will be established to

aid the customers regarding any problems defects technical problems

and others This can ensure the quality of iBangle will not be

compromised

d The department also will generate and implement comprehensive plan

to monitor the sales of iBangle the re-evaluate the market needs and

prepare marketing strategies to gain more customers in the future

e The department will conduct customer survey to obtain report on the

customerrsquos satisfaction toward iBangle to gather suggestion

improvements that might be needed to enhance the second generation

of iBangle in the future

- 35 -

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

120REFERENCE

KOTLER P 1997 Marketing Management9th Edition New Jersey

SimonampSchuster Co

HEYMAN J H2008 All You Need is A Good Idea New Jersey John Wiley amp

Sons Inc

J PAUL PETER JAMES H DONNELLY JR A Preface to Marketing

Management MA Irwin

NICKELS W MCHUGHJ amp MCHUGHS 1999 Understanding Business5th

Edition MA The McGrw-Hill CompaniesInc

RIES AL TROUT J2001 Positioning The Battle for your Mind MA The

McGrw-Hill Companies Inc

MARKETING MINDS 2008 Apple Branding Strategy[online] Sydney

Marketing Minds Available from

httpwwwmarketingmindscomaubrandingapple_branding_strategyhtml [Accessed

20th May 2009]

YAMADA T2008 This ipod is full of Air[online] Yanko Design Available from

httpwwwyankodesigncom20081021this-ipod-is-full-of-air [Accessed 20th May

2009]

JAINM2008A study of i-pods products design[online] Scribd Available from

httpwwwscribdcomdoc3936101A-study-of-ipods-product-design [Accessed 23rd

May 2009]

MOREND2008 Analysis Inside Applersquos iPod Sales Figure[online] San

Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131874200801ipodsaleshtml [Accessed 25th May

2009]

ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now

21 percent[online] Cable News Network Available from

httpapple20blogsfortunecnncom20080401analyst-apples-us-consumer-market-

share-now-21-percent [Accessed 25th May 2009]

- 36 -

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

MULLER T2008 Analyzing Apples iPod Business[online] California

MrSwingcom Available from

httpwwwmrswingcomarticlesAnalyzing_Apple_s_iPod_Businesshtml [Accessed 8th

May 2009]

DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion

profit[online]San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle131754appleearningshtmlloomia_ow=t0s0a38g2

6r3c0001788b21014037 [Accessed on 8th May 2009]

DALRYMPLEJ2006 Apple scores high marks in customer satisfaction[online]

San Francisco Mac Publishing LLC Available from

httpwwwmacworldcomarticle51765satisfactionhtmlloomia_ow=t0s0a38g26r9

c0000319b21014037 [Accessed 8th May 2009]

LARSSON NORSTROM 2004Cultural Marketing Analysis Why iPod - A Case

Study [online] Scribd Available from httpwwwscribdcomdoc8688101Cultural-

Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]

GRUBERJ2008 Apple First Quarter 20008 Results[online] Daring Fireball

Available from httpdaringfireballnet200801aapl_q1_2008 [Accessed 10th May

2009]

NetMBA 2007 Market Segmentation[online] NetMBA Available from

httpwwwnetmbacommarketingmarketsegmentation [Accessed 10th May 2009]

NetMBA 2007 Pricing Strategy[online] NetMBA Available from

httpwwwnetmbacommarketingpricing [Accessed 10th May 2009]

NetMBA 2007 Product Life Cycle [online] NetMBA Available from

httpwwwnetmbacommarketingproductlifecycle [Accessed 10th May 2009]

KUROKAWAS2007 Sony is trying to bite into Apples iPod market

share[online]Camarillo The EW Scripps Co Available from

httpwwwventuracountystarcomnews2007nov26sony-is-trying-to-bite-into-apples-

ipod-market [Accessed 15th May 2009]

WILCOXJ2008 Apple Q2 2008 by the Numbers[online] Ziff Davis Enterprise

Holdings Inc Available from

- 37 -

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

httpblogseweekcomapplewatchcontentcorporateapple_q2_2008_by_the_numbers

html [Accessed 15th May 2009]

BAKERA2004 iPod nation[online]Boston The Tuffs Daily Available from

httpwwwtuftsdailycom25512ipod-nation-1599109 [Accessed 20th May 2009]

CIA THE WORLD FACT BOOK 2009 United States[online]Washington

Central Intelligence Agency Available from httpswwwciagovlibrarypublicationsthe-

world-factbookgeosushtmlEcon [Accessed on 25th May 2009]

US CENSUS Bureau2007 2005-2007 American Community Survey 3-Year

Estimates[online] Washington Available from

httpfactfindercensusgovservletACSSAFFFacts_submenuId=factsheet_1amp_sse=on

[Accessed 25th May 2009]

130APPENDIX

- 38 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19 Extracted from httpwwwcensusgovpopulationprojectionsSummaryTabB1pdf

- 40 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

HouseholdsPersons age 25 or older with

earningsHousehold income by race

All households

Dual earner

households

Per householdmember

Males Females Both sexes AsianWhitenon-

HispanicHispanic Black

$46326 $67348 $23535 $39403 $26507 $32140 $57518 $48977 $34241 $30134

Median personal income by educational attainment

MeasureSome High

School

High school

graduate

Some college

Associates degree

Bachelors degree or

higher

Bachelors degree

Masters degree

Professional degree

Doctorate degree

Persons age 25+ w

earnings$20321 $26505 $31054 $35009 $49303 $43143 $52390 $82473 $70853

Male age 25+ w

earnings$24192 $32085 $39150 $42382 $60493 $52265 $67123 $100000 $78324

Female age 25+ w

earnings$15073 $21117 $25185 $29510 $40483 $36532 $45730 $66055 $54666

Persons age 25+

employed full-time

$25039 $31539 $37135 $40588 $56078 $50944 $61273 $100000 $79401

- 41 -

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Household $22718 $36835 $45854 $51970 $73446 $68728 $78541 $100000 $96830

Household income distribution

Bottom 10

Bottom 20

Bottom 25

Middle 33

Middle 20

Top 25 Top 20 Top 5 Top 15 Top 1

$0 to $10500

$0 to $18500

$0 to $22500

$30000 to

$62500

$35000 to $55000

$77500 and up

$92000 and up

$167000 and up

$250000 and up

$350000 and up

Source US Census Bureau 2006 income statistics for the year 2005

Appendix 4

- 42 -

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Dennis Gilbert 2002William Thompson amp Joseph Hickey 2005

Leonard Beeghley 2004

ClassTypical

characteristicsClass

Typical characteristics

Class Typical characteristics

Capitalist class (1)

Top-level executives high-rung politicians

heirs Ivy League education common

Upper class 1

Top-level executives

celebrities heirs income of

$500000+ common Ivy

league education common

The super-rich

(09)

Multi-millionaires whose incomes commonly exceed

$350000 includes celebrities and powerful

executivespoliticians Ivy League education common

The Rich (5)

Households with net worth of $1 million or more largely in

the form of home equity Generally have college

degrees

- 44 -

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) most commonly

salaried professionals and

middle management with

large work autonomy

Upper middle class [1]

(15)

Highly educated (often with

graduate degrees) professionals amp managers with

household incomes varying from the high 5-

figure range to commonly above

$100000

Lower middle

class (30)

Semi-professionals and craftsmen with a roughly average

standard of living Most have some

college education and are white

collar

Lower middle

class (32)

Semi-professionals and

craftsman with some work autonomy household

incomes commonly range from $35000 to

$75000 Typically some

college education

Middle class

(pluralitymajority

ca 46)

College educated workers with incomes considerably above-

average incomes and compensation a man making

$57000 and a woman making $40000 may be typical

- 45 -

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Working class

(30)

Clerical and most blue collar

workers whose work is highly

routinized Standard of living varies depending

on number of income earners

but is commonly just adequate

High school education

Working poor

(13)

Service low-rung clerical and some

blue collar workers High

economic insecurity and risk

of poverty Some high school education

Working class

(32)

Clerical pink and blue collar

workers with often low job

security common household

incomes range from $16000 to

$30000 High school education

Lower class (ca

14 - 20)

Those who occupy poorly-

paid positions or rely on

government transfers Some

high school education

Working class

(ca 40 - 45)

Blue collar workers and those whose jobs are highly

routinized with low economic security a man making

$40000 and a woman making $26000 may be typical High

school education

- 46 -

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Underclass (12)

Those with limited or no

participation in the labor force

Reliant on government

transfers Some high school education

The poor (ca 12)

Those living below the poverty line with limited to no

participation in the labor force a household income of $18000

may be typical Some high school education

References Gilbert D (2002) The American Class Structure In An Age of Growing Inequality Belmont CA Wadsworth Thompson W amp Hickey J (2005) Society in Focus Boston MA Pearson Allyn amp Bacon Beeghley L (2004) The Structure of Social Stratification in the United States Boston MA Pearson Allyn amp Bacon1 The upper middle class may also be referred to as Professional class Ehrenreich B (1989) The Inner Life of the Middle Class NY NY Harper-Colins

- 47 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

- 49 -

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

- 50 -

Income Statement of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32479000 24006000 19315000

Cost of Revenue 21334000 15852000 13717000

Gross Profit 11145000 8154000 5598000

Operating Expenses

Research Development 1109000 782000 712000

Selling General and Administrative 3761000 2963000 2433000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6275000 4409000 2453000

Income from Continuing Operations

Total Other IncomeExpenses Net 620000 599000 365000

Earnings Before Interest And Taxes 6895000 5008000 2818000

Interest Expense - - -

Income Before Tax 6895000 5008000 2818000

Income Tax Expense 2061000 1512000 829000

Minority Interest - - -

Net Income From Continuing Ops 4834000 3496000 1989000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4834000 3496000 1989000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $4834000 $3496000 $1989000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

APPENDIX 6

Balance Sheet of APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 51 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11875000 9352000 6392000

Short Term Investments 12615000 6034000 3718000

Net Receivables 6151000 4811000 3452000

Inventory 509000 346000 270000

Other Current Assets 3540000 1413000 677000

Total Current Assets 34690000 21956000 14509000

Long Term Investments - - -

Property Plant and Equipment 2455000 1832000 1281000

Goodwill 207000 38000 38000

Intangible Assets 352000 382000 160000

Accumulated Amortization - - -

Other Assets 641000 1051000 1217000

Deferred Long Term Asset Charges 1227000 88000 -

Total Assets 39572000 25347000 17205000

Liabilities

Current Liabilities

Accounts Payable 8558000 6230000 6471000

ShortCurrent Long Term Debt - - -

Other Current Liabilities 5534000 3069000 -

Total Current Liabilities 14092000 9299000 6471000

Long Term Debt - - -

Other Liabilities 746000 67000 14000

Deferred Long Term Liability Charges 3704000 1449000 736000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18542000 10815000 7221000

- 52 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

APPENDIX 7

Cash Flow APPLE INC

View Annual Data | Quarterly Data All numbers in thousands

- 53 -

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4834000 3496000 1989000

Operating Activities Cash Flows Provided By or Used In

Depreciation 473000 317000 225000

Adjustments To Net Income 170000 332000 227000

Changes In Accounts Receivables (785000) (385000) (357000)

Changes In Liabilities 7517000 3245000 2907000

Changes In Inventories (163000) (76000) (105000)

Changes In Other Operating Activities (2450000) (1459000) (2666000)

Total Cash Flow From Operating Activities 9596000 5470000 2220000

Investing Activities Cash Flows Provided By or Used In

Capital Expenditures (1091000) (735000) (657000)

Investments (6760000) (2312000) 1032000

Other Cashflows from Investing Activities (338000) (202000) (18000)

Total Cash Flows From Investing Activities (8189000) (3249000) 357000

Financing Activities Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483000 362000 (37000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633000 377000 361000

Total Cash Flows From Financing Activities 1116000 739000 324000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2523000 $2960000 $2901000

APPENDIX 8

- 54 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

APPENDIX 9

APPENDIX 9

- 55 -

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

APPENDIX 10

Wednesday April 23 2008 630 PMEST

Apple Q2 2008 by the NumbersNews Analysis Apple continued to deliver strong results posting its strongest fiscal

- 56 -

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

- 57 -

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever Hows 43 percent revenue growth

If there is a US economic crisis Apple isnt yet feeling it Fiscal second-quarter revenue reached $751 billion up from $526 billion a year earlier Net profit jumped from $770 million a year earlier to $105 billion or 87 cents and $116 earnings per share respectively

Looking ahead Apple predicted fiscal third-quarter revenue of $72 billion up 33 percent year over year and $100 earnings per share

During the second quarter Mac sales grew 51 percent year over year the strongest Apple has seen in two decades Apple sold 2289 million Macs with 143 million being portables Mac revenue grew 54 percent year over yearmdash61 percent for portables Mac inventory increased about 60000 units during the quarter in part because of MacBook Air

As expected iPod units marginally gained year over year (1 percent) and declined sequentially (52 percent) Apple shipped 1064 million iPods during the quarter Shuffle sales declined but bumped up following price cuts Based on analyst numbers Apple claims 73 percent of the US MP3 market share The company ended the quarter with four to six weeks of iPod inventory Related Apple ended the quarter with about 50 million iTunes customers

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Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

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i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Apple shipped 173 million iPhones during the quarter but didnt realize all the revenue Apple wont realize revenue or product cost on iPhones sold after March 6 until the release of iPhone 20 software which is now expected at the end of June The decision is one of those accounting things related to Apple offering the software update for free Apple announced iPhone 20 on March 6

Apple claims that more than 200000 developers have signed up for the iPhone SDK One-third of Fortune 500 companies and 400 educational institutions have signed up for the iPhone Enterprise Beta program Clearly somebody is interested in connecting the iPhone to Microsoft Exchange Server

While iPhone sales declined 26 percent sequentially Apple couldnt meet demand particularly among its company stores We expected iPhone to decline more sequentially than it did said Apple Chief Operating Officer Tim Cook on Apples earnings conference call He acknowledged inventory as being low in Europe and the United States Despite the shortages Apple executives expressed confidence that the company would sell 10 million iPhones by the end of the calendar year

People have been buying phones from Apple stores with the intention of activating them later Cook said He described the shortages as a proxy for the worldwide demand of the phone That could be construed to mean that phones bought in the United States are ending up elsewhere even unlocked Cook wouldnt quantify the number of unlocked phones but acknowledged that it is significant

- 58 -

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter Direct sales whether in-store or online were 53 percent up from 49 percent a year earlier Retail store revenue rose 74 percent Apple stores sold 458000 Macs a 67 percent year-over-year increase Average in-store sales increased 48 percent Apple stores had 337 million visitors during the quarter up 57 percent year over year The company claimed that 50 percent of customers were new to Mac Be careful That doesnt mean all those customers bought Macs

Apple ended the quarter with 208 stores 27 outside the United States Apple plans to have opened 45 new stores during fiscal 2008 New stores are coming to Australia and China among other countries

Overseas Apple retail stores appeared to have little impact on broader international sales which sequentially declined slightly to 44 percent of the quarters revenue That said sales were strong in all Apples geographies in unit shipments up 45 percent or more year over year in every region

- 59 -

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

Marketing In Practice Marketing Plan iBangle

Apples Best Buy expansion briskly continued to 400 stores at quarters end Apple expects to be in 600 of Best Buys nearly 1300 stores by summer

Education sales were up by 35 percent year over year in the United States the strongest growth Apple has seen in eight years Cook observed that the growth results come well ahead of the traditional educational buying cycle

Apples gross margins for the quarter were better than expected 329 percent but still down from 351 percent a year earlier Apple generated $1 billion in cash during its fiscal second quarter ending the quarter with $194 billion

Posted by Joe Wilcox on April 23 2008 630 PM

- 60 -

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers

i Source httpswwwciagovlibrarypublicationsthe-world-factbookgeosushtmlEcon

  • Apple Q2 2008 by the Numbers