Marketing In Practice Marketing Plan iBangle TABLE OF · PDF fileThe marketing plan includes...
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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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ELMER-DEWITT P2008 Analyst Applersquos US consumer market share now
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share-now-21-percent [Accessed 25th May 2009]
- 36 -
Marketing In Practice Marketing Plan iBangle
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DALRYMPLEMICHAELS COHEN JPP2008 Apple reports $158 billion
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San Francisco Mac Publishing LLC Available from
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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
- 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
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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
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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
- 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
-