MARKETING STRATEGY MKT306

MARKETING STRATEGY MKT306 Student: Nguyen Hoang Kim No. 129045528 Module Leader: Stephen Storey Tutor: John Davison Table of Contents Student No. 129045528 Page 1 Executive Summary The purpose of the report is to discuss about the marketing strategy of Apple Company in UK market. The first part will be the current situation of Apple and it will be shown through SWOT and PESTLE analysis. Furthermore, competitive advantage is also implemented to highlight the unique point of Apple company. In the second part, the recommendation of segmentation, targeting, positioning and 4P will be discussed to launch new product to UK market. Student No. 129045528 Page 2 Introduction Apple is an American company which sells electronic goods such as computers, laptop, mp3 player and mobile phone. Apple is really successful in doing the business. Apple is the most admired company in the United State in 2010 (CNNMoney, 2010). In 2012, Apple has 394 stores in fourteen countries and in UK Market, Apple’s Iphone has the second biggest market share 28.5% (Guardian, 2012) Student No. 129045528 Page 3 PART A: CURRENT SITUATION PESTLE ANALYSIS PESTLE analysis is a tool dealing with external environment which has a great effect on the business and “it is an acronym for the Political, Economic, Social-cultural, Technological, Legislative and Ecological aspects of the wider environment” (Allen, 2001). Obviously, the external situation is continually changing in a dynamic environment therefore PESTLE analysis is a suitable tool for Apple to have an idea on UK mobile phone market. Political: First of all, taxation policy of UK has a great affect on Apple. According to UK government (2013), business having above £300,000 has to pay main rate tax instead of small profit rate which is 20%. Obviously, Apple is a big company and it has to pay the main rate tax. On another hand, government of UK decides to reduce the main rate tax in 2013 by 1% and it continues to reduce 1% in 2014 (appendix 1). UK reduces the tax rate to promote tax competitiveness with rival nations to state that UK is a welcome Student No. 129045528 Page 4 place for job, business, and investment (The Guardian, 2012). For that reason, Apple has many opportunities when doing business in UK. Economic: “Gross domestic product (GDP) is a key government statistic and provides a measure of the UK's total economic activity” (The Guardian, 2009). Therefore, GDP is the first factor that will be identified to figure out the current UK economic. Based on the chart, the GDP of UK is slowly recovering after the economic crisis in 2008 Since 2009, the GDP has slightly changed from the highest 0.9% to the lowest -0.4%. In the third quarter of 2012, the GDP is boosted to 0.9% thanks to the effect of London 2012 Olympic Game and then it shrinks again to -0.3% in the last quarter. Based on the analysis, the UK economic is in difficult situation and according to BBC news (2013), Chancellor George Osborne said the figures were a reminder that the UK faces "a very difficult economic situation". Student No. 129045528 Page 5 According to a research named Factor Affecting Consumer Choice Of Mobile Phones, it claims that the price of mobile phone plays an important role in the choice especially among lower income consumers (Karjaluoto, et al 2005) therefore, the second factor is the unemployment rate of UK in 2012. “The unemployment rate was 7.8 per cent of the economically active population, down 0.2 on May to July 2012 and down 0.5 on a year earlier” (Office For National Statistic, 2012). This is a good sign of the unemployment rate of UK and it is also good for the business of the company because more and more people are now having job and they can consider buying the product of Apple. Social and Cultural The first factors of social and cultural are population and age distribution of UK in 2012. According to the population chart which is attached in appendix 2 shows that the population of UK increases year by year and it increases from 59.57 million people in 2004 to 62.64 million people in 2012 and also from the age pyramid chart attached in appendix, people who have age from 18-35 make up a high percent of UK population. This creates a great chance for apple to sell smart phone in UK for the reason that the people aging from 18-34 purchases a large percent of smart phone (appendix 3) Secondly, due to the development of transferring information, many households in UK have access to internet. According to office for national statistics (2012), 21 million households in UK (80 per cent) had Internet access, compared with 19 million (77 per cent) in 2011. Furthermore, UK obtains the number nine in top 20 countries that have highest number of internet users in quarter 2 in 2012 (appendix 3). Internet is becoming more important for UK people. Especially, young British tend to have more activities through the internet Student No. 129045528 Page 6 for instance social network, emailing and online shopping. Based on the Guardian (2012), “British 18–to 24-year-olds are proving to be the world's top mobile social networkers, with 62% accessing their profiles from smart phones and tablets, a higher proportion than any of the countries”. Also, UK is also gain the number one in online shopping and UK consumers spend on average £1083 per year and more than 250 compared with Australia gaining the second position (Guardian, 2012). Hence, UK is a fertilize market for Apple to sell more smart phones. Technology Technology can have a substantial impact on people’s live and companies fortunes (Jobber, 2010). In mobile phone industry, 3G and 4G broadband is crucial for smart phone users if they need to use the internet whenever they are not at the place where the wireless is available. In UK, 3G broadband is widespread but 4G broadband is the new technology and in late 2012 only EE launched this kind of technology. BBC news (2011) claims that the 3g does not totally cover all the area of UK which means customers cannot have the same speed of the smart phone in different places. Furthermore, the speed of 3G is not as fast as the max speed of 7.2 Mb and in fact, the highest speed of is just 4.44 Mb and the average speed is under 2Mb (BroadbandGenie, 2013). Consequently, the broadband infrastructure of UK still has some problems that may affect the purchasing decision of customers. Student No. 129045528 Page 7 SWOT ANALYSIS According to Hollensen (2003), SWOT analysis is a technique, which has four categories, strength, weakness, opportunity and threat, helping the company to identify suitable marketing strategies for the company. Also, SWOT analysis is applied to “accomplish an organization’s mission by exploiting an organization’s opportunities and strengths while neutralizing its threats and avoiding (or correcting) its weakness” (Griffin, 2010). The table below is the SWOT analysis of Apple Company. Strengths Weaknesses • Strong brand name. • Easy to use and intuitive gadgets. • Product integration. • Small product footprints with stylish design. • Strong distribution chain. . • Limited product range. Opportunities Threat Student No. 129045528 Page 8 • Decreasing tax • Young trend generation • High accessing to internet. • Bad situation of UK economic. • Poor broadband infrastructure. Competitive advantage / USP: For business, keeping in touch with customers is really important because the firm can aware of what customers’ needs and wants and enhance the relationship with customer. Kandampully and Duddy (1999) states that what establishes a firm’s competitive advantage is their ability to serve customers’ present and future needs. Therefore, by establishing competitive advantage, the company can serve customer in a better manner and in the long run it will have more customer as well as earn more profit. Bharadwaj, Varadarajan and Fahy (1993) also supports it by saying some firms are more profitable than others, regardless of whether the average profitability of the industry is high or low. The superior performers conceivably possess something special and hard to imitate that allows them to outperform their rivals and they call it competitive advantage. Besanko, Dranove, and Shanley (2000) also based on economic profit to define competitive advantage “When a firm earns a higher rate of economic profit than the average rate of economic profit of other firms competing within the same market, the firm has a competitive advantage in that market.”. For that reason, by creating competitive advantage, the company can build up relationship with customer; get higher profit in the same market and make distinction with potential rivals. Student No. 129045528 Page 9 Nowadays, Apple commits to give customers an integration product and it has created an extreme consistency of its products. Because Apple makes the hardware, the operating system, and many applications, Apple products are truly integrated system (Apple, 2013). So this creates a distinctive difference to other mobile phone company for instance, the Google products are built by largely self-directed teams, so there Is little consistency between them (The Guardian, 2012) and it also makes Apple become the one of the leading company in mobile phone industry. Student No. 129045528 Page 10 [...]... product development strategy In development strategy, the company can increase its sale by introducing new product to the market through different versions for example different size, function, etc and the new product is also sold through the same distribution channel Marketing objective: Before the details of a marketing plan can be developed, objectives for the plan must be stated The marketing objectives... impressive therefore, the price of the new product is low and it will adopt market penetration strategy Furthermore, price is also go with other factors in marketing mix and the matrix below is shown the combination of price and promotion Student No 129045528 Page 18 In UK, there are many companies using rapid penetration strategy to gain high market share Take Tesco as an example, Tesco becomes the leading... (Assessed: 3 May 2013) Bensanko David Dranove, D and Shanley, M (2000) Economic of Strategy 2nd Ed New York: John Wiley & Sons David Jobber (2010), Principle and Practices of Marketing, 6th ed Maidenhead, Mc Graw-Hill Frank Ronald Massy,W and Wind, Y (1972) Market segmentation Englewood Cliffs, NJ, Prentice Hall, INC Hollensen, S (2003) Marketing Management Endiburgh Gate, pearson Education Limited Student No... change the differential advantages by experiencing IOS with surfing the internet and social network to position the product in the market Marketing 4P: Ansoft Matrix: Before establishing the objective of the company, Ansoft Matrix is implemented to identify the new strategy of the company This matrix allows marketers to consider ways to grow the business via existing and/or new products in existing and/or... company in supermarket chain industry in UK by focusing on high promotion using the strap-line “Every little helps” So Apple can apply the same pricing strategy to earn more market share Place: Based on the Ansoft Matrix, Apple adopts product development strategy to launch the new product and it can use the same distribution channel to deliver the product to customers Apparently, the distribution channel... tax, good sign of employment rate, young trend generation and modern lifestyle of people, there are still some drawbacks, bad situation of economy and poor broadband infrastructure Likewise, the marketing strategy of Apple shows clearly the four P (product, price, place, promotion) of the product which can help the company achieve the objectives Student No 129045528 Page 22 Appendix Appendix 1 Student... segmentation is an appropriate technique Market segmentation refers to recognition of the existence of multiple demand functions and development of a marketing plan to match one or more of these demand functions (Frank, Massy, and Wind, 1972) In segmentation, marketing research must be involved to implement the technique Customer market can be segmented in different Student No 129045528 Page 11 way according... p51 Kandampully, J and Duddy, R (1999) Competitive advantage through anticipation, innovation and relationships, 31(1) p51 Kumar, D (2010) Enterprise Growth Strategy Wey Court East Gower Publishing Limited Lamb Hair McDaniel (2009) Essential of Marketing South Western, Cengage Learning Office for National Statistics (2012) Labour market statistics Available at: http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/december-2012/statisticalbulletin.html... well To gain the well-known reputation, the most suitable way is to sponsor for a football club in UK In fact, Premier Ship is known as the most interesting league all over the world so this promotion strategy will be worthy Student No 129045528 Page 21 Word count: 3101 Conclusion Apple Company is going to launch new cheap smart phone in UK market Despite of the fact that there are advantages when doing... distribution channel Marketing objective: Before the details of a marketing plan can be developed, objectives for the plan must be stated The marketing objectives are the measurement for the success of the marketing plan and it should be SMART objective Student No 129045528 Page 14 Objectives Sell 1 million new products in the first three days after the product’s launch Achieve market share of new product . channel. Marketing objective: Before the details of a marketing plan can be developed, objectives for the plan must be stated. The marketing objectives are the measurement for the success of the marketing plan. MARKETING STRATEGY MKT306 Student: Nguyen Hoang Kim No. 129045528 Module Leader: Stephen Storey Tutor: John. multiple demand functions and development of a marketing plan to match one or more of these demand functions (Frank, Massy, and Wind, 1972). In segmentation, marketing research must be involved to implement