Apple i phone5c product positioning failure - MBA

1. APPLE IPHONE 5C
Indian Market – A Product Positioning Failure
Rajdeep Saha (16BM61K09)
Nilabja Moitra (16BM61K12)
Rahul Banerjee (16BM61K16)
Bhabani Sankar Das Mohapatra (16BM61K18)

2. INTRODUCTION

3. Apple: Chronology
Founded
(4/1/1976)
by Steven Jobs &
Steven Wozniak
1/1/1977 -
incoporated
Jobs became
chairman
IBM released its first
PC
Introduced Macintosh
Jobs left Apple
Apple was in trouble
1990s
Jobs back as
"interim CEO" in
1997
iPod went to life
2001
iMac released
iTunes unveiled
iPhone launched
6/29/2007
iPhone 3G hit market
7/11/2008
iApple ?
1975 1980 1985 1990 1995 2000 2005 2010
Source: Apple
website and Wiki

4. Apple Brand Association
4
Delicate
Innovative/
Creative
Attractive
Luxury
User-Friendly
Expensive
Prestige

5. Apple Product Mix 2013
 iPod Touch
 iPod Nano
 iPod Shuffle
 iPhone 5C
 iPhone 5S
 iPhone 4S
 iPad Air
 iPad Mini
 iPad 2
 iPad 1  Mac Mini
 Mac Pro
 iMac
 MacBook Pro
 MacBook Air
iPod iPhone iPad Mac Others
P
r
o
d
u
c
t
L
i
n
e
Product Width
 iCloud
 iMovie
 iTunes

6. PESTEL: Indian Market 2013
• Fastest Growing
economy in the world
• Inflation rate is on
higher side
• Un-Stable Political
Situation
• Loksabha election
pending-2014
• Highly regulated Mobile
industry
• Internet Regulations
• High awareness of
Indian consumers
• Consumer Purchasing
power is increasing
• Increasing needs of
Communications.
• High speed data services
available
• Increasing availability of
Smart Phones
• Application based
services were getting
popular
• Young Population
• Increasing data
centricity
• Huge capable market
Political
Economic
Social
Technological
Environmental
Legal
PESTEL
Analysis

7. Market Overview 2012/13
• In India, smartphone sales more than doubled in 2012 to
reach 27.8M units.
• India to become third largest smartphone market by 2017.
• India’s smartphone market is expected to grow sharply due
to
 Greater availability of low cost devices
 Emphasis on low populous regions.
 Expansion of 3G network coverage and rollout of 4G network.
• India’s year-on-year smartphone shipment growth is
expected to be the highest among top countries – US, UK,
Japan, China, Brazil.
• Currently only 10% of mobile users using smartphones.
• India will become the 3rd largest smartphone market by
2017 after China and US.

8. IPHONE 5C
MARKET ANALYSIS

9. Smartphone Market Shares
Your Footer Goes Here 9
Source: ethinos
digital marketing

10. Key Drivers
• Increasing standard of living and buying power of
consumers is leading to growing usage of
smartphones.
• Availability of low cost mobile phones.
• Improving Features: Large display, hi-end graphics,
innovative features etc.
• Increasing usage of mobile internet.

11. Challenges
• Low penetration in outer and rural areas in India.
• The smartphone prices are higher as compare to
other value phones.
• Business Phones like BlackBerry that are still being
used by corporates.
• Low battery backup for smartphones compare to
other value phones.
• TABLETs are introduced, which can prove to be a
challenge in future.

12. Trends
Source:
www.digitalstrate
gyconsulting.com

13. Line Stretching – iPhone 5C
Down-Market Stretch
• The iPhone 5C is a variant of the iPhone 5, with
similar hardware specifications but a hard-
coated polycarbonate shell instead of the
aluminum of the original iPhone 5.
• The iPhone 5C was available in several color
options, and shipped with iOS 7. The iPhone 5C
was sold at a discounted price point in
comparison to the 5S.
Positioning
• The iPhone 5S became the new flagship of the
iPhone range, while the iPhone 5C was designed
as a mid-range model.
• The iPhone 5C was rumored to be the long-
awaited "inexpensive iPhone" or "cheap
iPhone".

14. ANSOFF MATRIX

15. IPHONE 5C
FAILURE

16. Twin: iPhone 5S and 5C

17. Causes
Expected Vs Perceived
• Customers Psychology: Apple is a high level & luxury brand, so a
cheap product like iPhone 5C will lose the value of themselves.
• Design: Apple made the colourful iPhone with the target market
for young people who liked the outstanding and dynamism.
• Plastic means Cheap: Design by plastic is the biggest failure of 5C.
Everyone thinks “plastic” with meaning “cheap” and that’s
reason why IPhone 5C could not compete with other high level
products.
• Features and configuration: The configuration is similar to iPhone
5 and nothing outstanding and differences about features.
Pricing Issue
• iPhone cost about the same price in India as of US. Wrong
positioning towards middle income group.
Channel Distribution
• Only few authorized distributors; rural areas are not covered to
the extend other competitors usually have.

18. Gap: Expected Vs Perceived
Service

19. Gap: External Communication
Vs Service Delivery

20. Pricing strategies
Source: Primate Lab

21. Product Life Cycle Instant Bust…
Source: Fiksu.com

22. SWOT Analysis
Innovative products
Brand equity
Advanced Technology
Rich UI
Price of iPhone 5C
Plastic Design
Missing Features
Limited distribution channel
Technological advancement
Constant growing middle
income group market
Market penetration
Intense Competitions
Cheaper Substitutes in Indian
Market
Android acceptability

23. RECOMMENDATION

24. Balancing Volume, ASPIRATION!
24
Option #1: Apple is an aspirational brand. They will (have to) balance
their volume push with that to get growth.
Option #2: Apple will penetrate mid-range smartphone market in India
by lowering it’s price to be at par with other competitors.
Apple ad man: Ken Segall
Apple is a company that doesn’t do
‘cheap.’ It makes products for people
who care about design, simplicity,
quality and a great experience — and
are willing to pay more for these
things. For Apple to compromise in
any of these areas would be a violation
of the Prime Directive.
What will be the Mr. Cook’s future strategy for iPhone 5c or any
upcoming iPhone?

25. Market Research

26. Market Research cont…

27. Strategic Recommendation
Introduction of a
new range of
product iLite
The main reason behind launching iLite instead of using iPhone brand
will be to target not just the upper-segment of buyers who have deep
pockets and can afford high priced super-phones, but also to cater to the
needs of the middle-class segment who are equally hungry for an
iPhone.
Strategic Analysis

28. Marketing Objectives
• Set an aggressive buy achievable objectives:
1.First-year Objectives - We are aiming for a 2 percent
share of the India and China PDA/Phone market
through unit sales volume of 445,000.
2.Second-year Objectives - are to achieve a 10 percent
share based on sales.
• Extend the brand name: Establish meaningful
positioning for iLite by Extending on Apples image of
innovation, quality and value.
• Measure the awareness and response: In order to
make adjustments to the marketing campaigns as
necessary.
• Differentiate iLite from PDA market

29. Marketing Objectives TARGETING…
• Primary Target: Primary customer targets is the upper-middle
income professional to coordinate their busy schedules and
communicate with colleagues, friends and family.
• Secondary Target: Secondary consumer targets are high
school, college and graduate students who need one portable
multifunction device.
• B2B Partner Target:
1.Large cell phone service providers, Airtel, Vodafone & Tata.
2.Large enterprise software firms where information is critical
to the end user.
3.Mid-to mid-size corporations that want to help managers
and employees stay in communication or access critical data
on the go.

30. Marketing Objectives POSITIONING…
• Using product differentiation, positioning the iLite as the
versatile, convenient, value-added device for personal and
professional use.
• Focus on the convenience of having one device for
communication, but also music, pictures, and video, and full
Internet access.
• The iLite will be promoted as both professional and hip.

31. Marketing Mix Strategy
Product
• Full year warranty along with an optional three-year Apple Care warranty.
• Same taste as all other Apple products.
• Special edition version to be launched iLite, iLite Nano, iLite Shuffle
• Adding the following features to the iLite (extendable disk storage
capacity, thinner device, long battery life, 4G, GPS etc.)
Price
•Set the base model at a cheap price of Rs.20000/-
•A more advanced model for Rs.45000/-((Reduce in phase manner)-market
skimming strategy)
•Special limited edition iLite for special prices
•EMI options.

32. Marketing Mix Strategy cont…
Place
• Massive rollout at all reputable major retailers in tier 1 & tier 2 cities.
• Massive rollout Online, Showrooms and in all cell phone providers.
• All Apple Stores the Apple website will dedicate themselves to the iLite.
• Eye catching displays will be found at all physical stores featuring the iLite to
make the product stand out from the pack.
• Apple Stores will have the iLite on display a full month before its worldwide
release.
Promotion
•Integrate Apple message of revolutionary communications and audio/visual
experience together in all media advertisements
•Emphasize Apple brand prominently and associate the iLite with the iPhone’s
groundbreaking lineage
•A massive TV campaign is planned before launching the iLite featuring a soon to
be legendary ad to be the talk of the country
•Advertising will be appearing on a regular basis to maintain general public
awareness

33. Go-to-Market Strategy
Source: Nielson
Marketing