Marketing Plan Assignment

APPLE SMART GLASSES Marketing Plan I. Company Overview A. Company Overview and Background- Established in 1977 in California, Apple Inc. is a global designer, manufacturer and marketer of mobile communication and media devices, personal computers, and portable digital music players. Apple is the largest IT company in the world by revenue and total assets and the second-largest mobile phone manufacturer. The company also sells a variety of related software, services, accessories, networking solutions, and third-party digital content and applications. The company serves consumers, and small and mid-sized businesses; and education, enterprise, and government customers worldwide. The company also sells its products through its retail and online stores, and direct sales force; and third-party cellular network carriers, wholesalers, retailers, and resellers. It operates through the following geographical segments: Americas, Europe, Greater China, Japan, and Rest of Asia Pacific B. Mission Statement- Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store and is defining the future of mobile media and computing devices with iPad. Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and 1 APPLE SMART GLASSES consumers around the world through its innovative hardware, software and Internet offerings. C. Vision Statement- “We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the selfhonesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.” D. Competitive Advantage- Apple’s ability to design and develop its own operating systems, hardware, application software and services to provide its customers products and solutions with innovative design is placed at the core of its business strategy. Apple pursues product differentiation and premium pricing business strategies. The company is also engaged in acquisition of related businesses II. Objectives and Goals 2 APPLE SMART GLASSES A. Objective- Revolutionize and dictate the movement for future technology. The objective of smart glasses is to seamlessly blend human vision with the virtual world, producing a kind of ubiquitous computer. B. Goals:  Build critical mass of users.  Develop new markets to increase sales by 5 percent over the upcoming oneyear period.  Develop new markets to increase sales by 10 percent over the upcoming twoyear period.  To increase gross sales by 20 percent within 38 months.  Expand emerging markets.  Develop great products.  Initiate collaborations with networking companies.  Provide the customer what they want. III. Situation Analysis A. Industry Analysis: The market for smart glasses at moment looks incredibly promising and is looking better and better by the day. The augmented and virtual reality industry was valued at $14.1 billion in 2017, which was estimated to almost double in 2018 at $27 billion. The market is ready to explode at any moment. By 2024, the AR/VR industry is estimated to be at a value of anywhere from $34 billion to $547 billion, with the split of value being 4:1 AR to VR, augmented reality being a large trend with developing Smart Glasses. Of course, AR/VR consists of a lot more than just 3 APPLE SMART GLASSES Smart Glasses, but analysis of the wearable technology industry shows just as much potential. The value of the global market for wearable technology is estimated to be worth $67 billion by 2024, with a compound annual growth rate of 15.5%. Additionally, Statista estimated that global AR Smart Glasses revenue increased by over 900% from 2017 ($409.67 million) to 2018 ($4.42 billion), and by 2022 it will reach heights of $19.72 billion. Currently, there are a few Smart Glasses emerging, many for specific uses like fitness trackers, music players, and navigation assistants. There aren’t too many major contenders for an all-purpose Smart Glasses. Apple is a large, trustworthy tech company with a competitive advantage and has incredible potential to be the leading seller in Smart Glasses. Apple is clearly a leader in the Smartwatch industry, so Smart Glasses have great potential, especially considering the current industry for wearable technology and augmented reality products. B. Market Size: Smart Glasses are considered to be a niche product. They’re considered an up and coming technology due to their unique fitment. Generally, most people don’t wear glasses that have multiple capabilities but with the large increase in people purchasing and using smart devices, it’s only a matter of time before Smart Glasses become a common place like the successful Apple Watch and related products. Currently, there are 12 different Smart Glasses products on the market. The current market is incredibly small and can be considered to be niche. Of the 12 companies that are making Smart Glasses and selling them to the public, most are 4 APPLE SMART GLASSES considered to be smaller companies but there are big companies taking part with the most recognizable ones being Google and Microsoft. Those 12 companies that are currently selling Smart Glasses are selling them with various purposes. Some of the glasses, like the ones made by Epson and SixthSense, are meant to be augmented reality (AR) devices that aren’t like a traditional Smart Glasses application. While others, like Google, Epiphany, Eye Tap, and Microsoft are glasses that act as a heads-up display (HUD) system. Smart Glasses had a slow start, but currently the estimated number of users is roughly around the 4.3 million user mark. While the first pair of Smart Glasses began selling in 2014, the only obtainable data had recordings starting in 2016. Due to the small market overall, we can look at the market of smart devices in general because Smart Glasses will fall right into this realm when they become more mainstream. As of 2016, there was a recorded 17.68 billion connected devices worldwide. The population in 2016 was estimated to be about 7.4 billion people and that means that in 2016 there was roughly 2.4 connected devices per head in the world. That is a large market for a smart device. C. Market Needs: Currently the smart device market is meant to fill in the small gaps in people's daily lives. All kinds of smart devices are available to fulfill the daily needs for people. Currently the market focuses on the needs for a mobile, rechargeable devices that can connect to the internet or cellular networks in most places. These 5 APPLE SMART GLASSES devices must be reasonably affordable and be durable to daily activities. To get specific, Smart Glasses need to be the same relative profile as a regular pair of glasses and weigh the same amount, give, or take a few ounces heavier, then a typical set of glasses. Where our Smart Glasses can take advantage are the needs of the market that are not currently being met by smart devices. The main need is being hands-free. Smart Glasses are worn like typical glasses which do not require to be held in place by the hands and simply balance on the bridge of the nose and the tops of the ears. Being hands-free puts Smart Glasses at an advantage. This means that they may be used safely while operating a car or other vehicle, unlike a typical smart device which requires user input via hand motions and strokes. Another need to address would be the dexterity of the glasses. Smart Glasses add a feature of dexterity that a handheld device cannot provide. Being able to be remain hands-free is a glaring issue that plagues all smart devices, except Smart Glasses. Finally, what smart devices need are to be multifaceted and flawlessly integrated. These devices need to be able to handle multiple tasks and be integrated into the aesthetics of glasses and overall image. D. Market Trends: Due to the entry of the large number of technologically led companies the market share of smart devices is growing. The global Smart Glasses market should reach about $20.0 billion by 2022 from $340.4 million in 2017 at a compound annual growth rate (CAGR) of 125.8%, from 2017 to 2022. 6 APPLE SMART GLASSES Smart Glasses refer to wearable computing devices that add information to what the user sees. These devices function in a way similar to mobile phones and tablets and have the ability of processing and implementing various programs and applications. A majority of the Smart Glasses currently used in the market are embedded with touch and voice command features. In general, Smart Glasses cover both the virtual reality (VR) headsets and augmented reality (AR) headsets. In VR, the user is completely submerged in a virtual environment, whereas in AR, the digital information is projected on top of the real world. E. SWOT Analysis: I. Strengths Apple is one of the most recognizable and strongest brands in the world. This company can introduce new products and sell them just on the brand name alone. Over the years Apple has become the second most valuable brand in the world following behind Google. Apple brand value reach $300.6 billion by 2018. In 2006 its brand value was only 15.98 billion U.S dollars. In addition, Apple uses a premium pricing strategy that brings in high profit margins. The strong brand name and premium pricing strategy ensures that profits are maximized even when sales are low. These high profit margins allow Apple to invest in brand building and Research and development activities. By doing this, Apple does not only increase brand awareness, but they also embrace technological advance to keep a competitive advantage against competitors. In 2006 its brand value was only 15.98 billion U.S dollars. Finally, Apple is 7 APPLE SMART GLASSES capable of being competitive in many different fields. Apple has competitive advantages in hardware, software, services, and application software and very few companies except for Google and Samsung can challenge those advantages. II. • Diverse product ecosystem • Strong brand image • High profit margins Weakness While Apple’s premium targeting and pricing strategy be strength that maximizes profit, it can also be a weakness. The high-end targeting leads to a smaller consumer base and the high pricing demands innovation in product design and quality. Apple revolutionized the technological market, so customer expectations for them are very high. Customers will expect updates for software and hardware updates, and it will be hard to meet these expectations all the time. The high prices can also push customers who are conscious about price to switch to other brands like Samsung that create products with similar specs and reasonable prices. For example, people in countries like China and India are switching to android phones, like Samsung, due to the high prices of Apple products. Consumers always wish the brand to surpass its own standards and deficiencies leads to frustration among its consumers and fans. High cost of product also means fall in market share. It 8 APPLE SMART GLASSES leads to difficulties when economic activity is low. The falls is share are also amplified due to limited distribution centers since it limits market reach. III.  High Selling prices  High-end targeting  Limited distribution network Opportunities In the technology industry, technological advances are always an opportunity and from a premier company like Apple advancement in the form of development of new product lines is expected. The demand for these new products will only increase. These new product lines can target a large customer base and perhaps even look at the lower end of the pricing range. In terms of development of new production lines or even the expansion of small product lines, Apple has Apple TV, the Apple Watch, and even the Apple electric car project. Apple can expand its distribution network because a small distribution network is a weakness to any company. Apple should try to expand its distribution channel to reach potential customers in the global market. Factors such as a larger distribution network will propel growth going forward or even drive up current sale numbers. IV.  Expansion of distribution networks  Development of new product lines  Higher sales volumes based on rising demand Threats Aggressive competition from other technology creators, like Samsung and the possibility of imitation. Apple products on the market are some of the biggest threats to Apple. These factors can cause roadblocks that hurt growth and 9 APPLE SMART GLASSES profitability. Apple has competitors in many markets such as laptops, smartphones, and competition with Apple TV. For apple to keep up with is competitors there need to be strong fundamentals for maintaining competitive advantages. The rising cost of labor involving contract manufacturers, such as those in China, reduces profit margins and can also further increase the price of Apple products. The threat of imitation is significant because of the large number of firms that imitate the design and features of apple products. To avoid this, Apple must take steps, so it is difficult to copy their products and work on an innovation strategy to hold out against is competition.  Rising labor cost  Aggressive competition  Imitation E. Competition, Company, and Customer analysis: I. Main competitors:  Microsoft: A massive electronics and software company that made the first major product in Smart Glasses. They have worldwide reputation, worldwide coverage, and the financial backbone.  Vuzix: The central electronics developer in the field of AR wearables with over 60 patents and has been a mainstay name in the product field of Smart Glasses. 10 APPLE SMART GLASSES  Google: Google is an American multinational technology company that specializes in Internet-related services and products, which include online advertising technologies, search engine, cloud computing, software, and hardware.  Samsung: Samsung comprises around 80 companies. It is highly diversified, with activities in areas including construction, consumer electronics, financial services, shipbuilding and medical services. II. Company Apple’s broad differentiation helps the company stand out. Differentiation in function and design supports the firm’s goal of leading the market through innovative products. Innovation is at the heart of Apple’s business. However, to improve its application of this generic strategy, the company must aggressively penetrate markets, especially developing countries where Apple’s market reach is still limited. Apple’s main intensive growth strategy is product development. Market penetration and market development are second and third in priority. The firm is strong in product development through innovation. III. Customer:  Primary customer target is the middle-upper income professional to coordinate their busy schedules and communicate with colleagues, friends, and family.  Primary business target is to partner with:  Large cell phone service providers, AT&T, Verizon, and Sprint 11 APPLE SMART GLASSES  Large eyeglass corporations  Large enterprise software firms where information is critical to the end user. G. Appendix The survey is to gauge expectation and general standards of the consumer base and what kind of company and style of tech they expect to purchase from. This will give a stronger idea of when and where the product can be marketed and what areas it could be heavily shown. I. Survey  What is your preferred electronics company?  What forms of advertisement do you usually see?  How much experience do you have with AR technology?  What activities would you like to use the AR product for  What expectations do you have of the product? IV. Identify Opportunities A. Marketing Strategy (STP Analysis): I. Market Segmentation A. Primary customer target is the middle-upper income professional to coordinate their busy schedules and communicate with colleagues, friends and family. This segment pertains to business owners, large-scale coordinators, media members, etc. Those who can utilize a hands-free device in order to make their daily tasks 12 APPLE SMART GLASSES more organized and efficient. Our product fits this segment by providing a solution to the needs of the professional markets. B. Secondary consumer targets are high school, college and graduate students who need one portable multi-function device. This segment encompasses students who have to organize their class work and schedules with outside activities and functions. It also reaches to students in lower schools who need to coordinate their assignments and resources. Our product will suit this segment nicely with the growing technology influence in younger generations. C. Primary business target is to partner with:  Large cell phone service providers, AT&T, Verizon, and Sprint  Large eyeglass corporations  Large enterprise software firms where information is critical to the end user.  Secondary business target is mid-to mid-size corporations that want to help managers and employees stay in communication or access critical data on the go.  Market segment will consist of companies with $10-$50 million in annual sales. II. Target Market: 13 APPLE SMART GLASSES Primary customer target: Middle/upper class professionals to coordinate their busy schedules and communicate with colleagues, friends and family. This target was selected due to their likelihood of utilization. Those professionals have many different events, functions, meetings, phone calls, interactions, etc. to coordinate daily and require the most efficient method in organization possible. Those people require a product to replace what a secretary would do. Being able to consolidate all of their events into a hands-free smart device would allow for the user to be more efficient and organized. A segment with those needs suits our product perfectly. Primary business target is to partner with:  Large cell phone service providers, AT&T, Verizon, and Sprint  Large eyeglass corporations  Large enterprise software firms where information is critical to the end user. III. Positioning  Using product differentiation, positioning the Smart Glasses as versatile, convenient, value-added device for personal and professional use. 14 APPLE SMART GLASSES  Focus on the convenience of having one device for communication, but also music, pictures, video, and full Internet access.  The Smart Glasses will be promoted as both professional and fashionable. B. Identify Opportunities Marketing Mix: The 4 P’s I. Product: Product element of the marketing mix for Apple is marked with simplicity in design and convenience in usage. Apple products are also known for their durability and high quality and integrate innovative features and capabilities. Although the product range is limited, the products come in different sizes and colors. Additionally, the multinational technology company regularly upgrades its products and services with mobile updates and releases new product iterations annually with upgrades in each iteration. Apple products are known to be extremely user-friendly, which is a major strength of the Apple brand and all of their products. II. Price: Apple will use the premium pricing strategy, which offers products at a premium price compared to competitors.  Apple uses the Premium pricing strategy  Materials cost: $360 15 APPLE SMART GLASSES  Retail: $1450  Profit: $1,090 per phone III. Promotion: As technology advances and smart devices get less expensive, Apple will attract consumers and get current iPhone users to upgrade to Smart Glasses. Apple does an excellent job at introducing new products through presentation and advertisement. Apple highlights their premium brand image and premium quality of its products. Apple will use the following, in order to increase growth and demand:  Advertising (Though the usual apple websites, emails to owners of brand products, and through tech expos showing the AR tech).  Price Skimming (Price skimming helps build a high-quality image and perception of the product. It generates a high profit margin for the company).  Personal selling (By directly addressing to the emails of brand users but also users of AR tech to assure a more comfortable and confident purchase within our consumer niche) IV. Place: 16 APPLE SMART GLASSES Apple Headquarters is located at 1 Infinite Loop, Cupertino, California. It has 506 retail stores across 25 countries, including 272 in the United States. Apple also partners with retailers like Walmart, Target, RadioShack, AT&T, Verizon and Sprint.  Partnerships: Apple can collaborate with influential global mobile phone and eyeglass companies to overflow the market with Smart Glasses. Which will reduce cost in marketing and increase revenue through long-term agreement deals.  Apple Stores: The world’s largest IT company by revenue operates 499 retail stores in 22 countries worldwide. Apple Retail Stores are spacious and creatively designed place where consumers can use products and get friendly assistance from customer service representatives.  Online stores: Customers can purchase Apple products from its official website https://www.apple.com/  Third party cellular network carriers: Major cellular network carriers sell Apple products and services as part of their packages. These retailers, combined with the Apple stores, will be able to provide a full platform to sell this product to anyone, anywhere.  Wholesalers: Apple partners with many wholesalers to distribute the substantial part of its products and services. 17 APPLE SMART GLASSES V. Implantation Plan Apple uses the branding strategy in order to compete across several high competitive markets. They depend on the loyalty of their customers, good reputation, and on the luxurious of their products to attract other customers. Consumers are well noticed and familiar with the brand name and its products. So, they are willing to pay premium price to buy Apple products, regardless to other competitor’s product due to Apple brand equity. The best marketing approach Apple has used before is to create mystery about what they are doing next with product launches and announcements that keep what they are up to under wraps until the big unveiling. The best advertising methodology Apple has utilized is to make riddle about what they are doing next with item dispatches and declarations that keep what they are up to hush-hush until the huge divulging. This turns customers into rabid fans and gets them pumped up in a way that has them buying whatever it is rather than stopping to think if they even need what Apple is introducing. However, Apple has gone even farther by leaking certain information and starting rumors to further stir the mystique around a product introduction, They really know how to stir up the audience. Usually, marketers tell their customers everything about a product, but Apple creates more excitement by withholding information and making everyone speculate. 18 APPLE SMART GLASSES 19 APPLE SMART GLASSES 20