Introduction
Technology advance and innovation paved way for the introduction of the Apple’s iPhone. However, Steve Jobs had the view that targeting only 1 percent share of the market, they could sell over ten million phones. That was considering that the brand was going into a highly competitive market with more players and the view that the product was the best in the world. However, the iPhone was subject to various market forces that determined its strengths, weaknesses, opportunities and threats as well as the strategies that Apple could apply. In that respect, this analysis presents a summary of the iPhone’s 4P strategies and a SWOT analysis.
Analysis
The analysis is a key tool for identifying key issues with a product as it outlines the strengths and weaknesses that result from the internal factors’ effect. Also, it identifies key opportunities and threats as a result of the microenvironment factors that are beyond the business control. In that respect, the following is a summary of the Apple iPhone’s strengths, weaknesses, opportunities as well as weaknesses.
Strengths
One of the product’s strengths is that the cell phone was iTune enabled. Further, the iPhone was a merged device functioning as a cell phone, web browser, and an iPod. Also, rather than applying the use of physical buttons, the interface was drawn on the screen as per particular functions and use at a time. Additionally, included in the interface were innovations that were patented as well as multiple locations’ touch input. Finally, the iPhone included an accelerometer enabling the adjustment of the screen orientation when the phone was turned to its side. With those features, the iPhone enhanced users’ experience.
Another strength of the product was its release in partnership with AT&T Company that was a key provider of cellular services.
Finally, the customer satisfaction with the iPhone was higher compared to the other products that the company and the competitors had introduced.
Weaknesses
Among the key weaknesses of the iPhone was the unlocking possibility.
Also, the product took long to realize its revenues given that took 24 months.
Further, the first iPhone release failed to target the business market as there was a lack of some features that were typically considered significant for the business use.
Finally, Apple had not maintained a dedicated sales or support staff for the business clients since the late 1990s.
Opportunities
The product had several opportunities that included the technology advance; hence, it was possible for the Company to develop the innovative product.
Further, there was high demand for an effective phone as marked by the eager customers’ lines formed outside many AT&T and Apple stores even before the iPhone was on sale. With that, the first weekend of the product launch was marked by the sale of more than 270,000 units. In the North America, the sales increased in more than double to 20.8 M for the year 2007 from the 2006’s sale of 10.3 million. Further, each of the year 2007 quarters saw an increase in shipment. Further, the smartphone version accounted for almost 10 percent of the mobile phone in the year 2007, which was equivalent to 115 million in unit sales.
Also, the product was also popular in many nations providing confidence for the company’s achievement of shipping over 10 million units in2008.
Additionally, the Android Open Alliance’s creation provided end users with access to thousand native applications.
Finally, there was an expectation for demand growth beyond the US, as it was already a prevalent mobile phone in the country.
Threats
Among the threats, the product faced high competition as the mobile phone global manufacturing increased to 990.8 million by the year from 816.6 million for the year 2005. The five top manufacturers were Motorola, Nokia, Samsung, LG and Sony Ericsson.
Also, there was a threat to the products market share when all major manufacturers of phone handsets announced look-alike iPhone products.
Finally, there was an expectation for a decrease in consumer spending in the year 2008.
4P strategies
Effective marketing of a product requires strategies that position it suitable given the market needs and expectations. In that respect, an analysis of the 4P strategies identifies how effective the product’s marketing was. With that, the following is a summary of the IPhone’s 4P strategies given the case study analysis.
Product positioning
The iPhone positioning to serve the market needs was marked by enterprise features that were combined with a revolutionary user interface Multi-Touch and software architecture. In that respect, the features were highly advanced providing good user experience as well as a software platform that was the most effective for any mobile device.
Further, the product was understood as being the mobile phone having features that were advanced; making it amazingly more data-centric and less voice-centric than the traditional phones.
Also, the positioning involved features that supported email, iPod functions and web browsing.
Additionally, the product provided support for the third-parties’ applications through its second version.
After the first product failure to address the customer business needs, the second version was developed with several features that were new specifically targeting the business people by improving the support for many business applications. The features included e-mail services compatibility running with Microsoft Exchange, a network that was secure using Cisco encryption software, and ability to delete data remotely.
Further, Apple discontinued the 4GB version of the iPhone as a means of effectively positioning the brand when there was a decrease in the product’s sales.
However, the key issue in the product positioning is that, after Steve Jobs return, the focus of brand was on individual consumers’ products and not institutions.
Pricing
Regarding the product’s positioning, it involved strategies that sought to enhance the buyers’ experience. In that respect, there were several possible payment structures such as bounty for the new users as well as flat rate and incremental revenue sharing.
Regarding the pricing application to address market changes, the company reduced the 8GB version’s price to 399 dollars from 599 dollars when there was a decrease in sales.
Finally, the pricing was intended to make the product affordable to more customers.
Place
Given the product’s distribution, it can be identified that its involved use of four main channels. In that respect, the phones were resold by the network operators to the end-users. Further, they were sold through contracted stores such as the AT&T.
Also, they were distributed by retailers who were independent, such as Best Buy and Wal-Mart.
Finally, there were direct sales from the manufacturer through the online stores or through outlets that were vertically integrated such as the Apple stores.
Promotion
One of the key promotion strategies that the brand applied was discount pricing. With that, Jobs viewed it that it benefited the brand and the other users of iPhone to get more new customers using the iPhone. It was also believed that the discount price of 399 dollars would help the brand achieve its sales target during the holiday season.
Regarding advertisement, the brand used traditional media that included both national and local channels.
In taking care of the brand’s early customers when it aggressively went after more new customers by lowering the price, the brand sought to ensure the trust of their earlier customers live up to the trust in every action they took in such moments. In that respect, the company decided to give each customer who had purchased their iPhone from AT&T or Apple, and who were not the recipient of rebate or other consideration, a credit of 100 dollars for use in purchases at the brand’s online and retail stores.
Finally, the company issued rebate and apology to all their initial customers as a public relations strategy after the substantial price cut.
Conclusion and recommendations
Given the analysis, it is clear that the Apple’s iPhone was an innovation seeking to take advantage of the market opportunities with a more effective phone. In that respect, the product was positioned to offer added features that could enhance the usability and the customers’ experience. Also, the product was offered at a price that could reflect value to the market, and its price change was meant to address competition. With that, it is identified that the brand had some key strengths and opportunities that marked its success. Some of the strengths included the added features; suitable pricing that enhanced its sales and a key distribution network in partnership with channels that were already established in the market. Consequently, the brand was able to capture the opportunities of high demand for an effective phone as well as the availability of key networks that enhanced the products’ functionalities.
Regarding the marketing strategies, the first version of the product can be identified to have been suitably positioned to serve the needs of the individual users but not the needs of businesses. However, subsequent change addressed the business customers' needs through added features. On pricing, the brand sought to offer an affordable product that resulted in a later decrease in price. On the other hand, the distribution is identified as having been a mixture of channels including the stores and online platforms that sought to reach many customers. Finally, the promotion involved advertisement through both local and national media as well as addressing the brand image through public relations.
However, there key issues have been identified regarding the brand’s weaknesses as well as threats. With that, there is a need to address the issues through effective marketing strategies that are recommended as follows.
Use the advanced technologies to enhance the iPhone security addressing the unlocking weaknesses
Reduce the revenue’s realization period to less than the 24 months to provide effective funds collection for better investments in marketing activities.
Target a vast scale of the customer segments to enhance the ability to maximize the product’s capacity and features.
Focus on providing committed support and sales teams for all the target segments as a means of enhancing customer satisfaction.
Provide more features to differentiate the iPhone from the competitors look-alike products.
Focus on emerging markets given the rising demand outside the US.
Apply more advanced distribution means such as an online platform to reach effectively the technologically savvy segments that are more likely to use the product.
Use more advanced advertisement means such as the social media that could easily reach the technologically savvy segment and more people at much lower cost.
