Market Planning Assignment:

iPhone K

Group 2: Carly Jones, Hyunsoo Kim, Ina Koelle, Sarah

Hirschmann, and Tyler Darke

BUS 306-01 Fundamentals of Marketing

December 10, 2013

Agenda1 Market Needs

2 Product and Software Introduction

3 Product Position

4 Competition

5 Target Market and Segmentation

6 Value Proposition

7 Finances

8 Conclusion and Questions

1976

1976 - 1998

1998 - 2000

2001 - 2007

2007 - Present

Market Needs

• Simple solution to parental controls• Ease of use

• Quality, child-appropriate phone• Desirable to children

• Access for children to smartphone features and benefits

• 46.6% of children in the U.S. own a smartphone• Expected to increase to 70.4% by 2016

iPhone K

• Plastic exterior, steel frame interior

• Liquid repellent nano-coating

• Configurations• 16 GB• 32 GB

K

iOS 7K

• Limited internet

• Restricted email

• Restricted song, app, and video purchase

• Monitored or restricted messaging

• Incoming and outgoing call restrictions

• GPS monitoring

Product Position

• High-end smartphone for children

• Peace of mind for concerned parents

• Bridge between limited-technology

children’s phones and current

smartphones

Competition

• Kajeet

• Software only

• Limited to Sprint

phones

• Firefly

• Very limited features

• Two color options

• Not appealing to

children

Target Market

• Parents of children ages

5 – 12

• Mid to high income levels

• Early-adopters

Market Segments

• Geographics

• Urban areas

surrounding major

cities

• Early-adopters

• Existing Apple store

locations

Market Segments

• Demographics• Parents ages 25 – 50• Likely to have children

ages 5 – 12

• Mid to high income levels

• Behavior / Psychographics• Concerned parents• 71% likely to set parental

controls

• Dissatisfied with current options

8%9%

13%

20%

51%

Likelihood of Parents to set Parental Controls on a 5-12 year-old Child's

Smartphone

Extremely UnlikelyUnlikelyNeutralLikelyExtremely Likely

Marketing Mix

• Pricing

• Distribution• Apple stores, online,

other licensed retailers

• Marketing Communications• Television commercials,

billboards, social media, mobile service providers

Model No Contract

2-year Contrac

t

16 GB $499 $99

32 GB $599 $199

Value Proposition

• Apple product

• Broad range of

features

• Safest children’s

phone on the

market

• Shares appearance

of iPhone 5C

Price

Benefits

More The same Less

More More for moreMore for the

same More for less

The same    

The same for less

Less    Less for much

less

Financial Plan

Expense Year 1 Year 2 Year 3

Advertisements $70,000,000 $78,984,439 $103,891,252

Marketing Travel $20,000,000 $22,566,983 $29,683,215

Promotions $40,000,000 $45,133,965 $59,366,430

Distribution $30,000,000 $33,850,474 $44,524,822

Total $160,000,000 $180,535,860 $237,465,719

Cost Break DownVariable Costs Price per Unit

Materials $174

Manufacturing $60

Transportation $13

Storage $20

Total per Unit $267

Fixed Costs Price per Quarter

Machinery $300,000

Maintenance $10,000

Rent $190,000

Administrative $50,000

Total per Quarter $550,000

Break-Even

- 100,000 200,000 300,000 400,000 500,000 600,000 $-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

Break-Even AnalysisSales Variable Cost Fixed Total Costs BE Units = 174,784

Units Sold Quarterly

Quart

erl

y R

evenue

Conclusion

• iPhone K - technologically advanced children’s phone

• Perfect for concerned parents

• Superior to competition

• Key Learnings

K

References• Apple retail stores, united states. (2013). Apple. Retrieved December 5, 2013, from:

http://www.apple.com/retail/storelist/

• Brown, R. (September 4, 2012). The cost of making an iPhone. Investopedia. Retrieved December 1, 2013 from: http:// www.investopedia.com/financial-edge/0912/the-cost-of-making-an-iphone.aspx

• Elmer-DeWitt, P. (October 28, 2009). Apple's 2009 ad budget: Half a billion. CNN Money. Retrieved November 30, 2013 from: http://tech.fortune.cnn.com/2009/10/28/apples-2009-ad-budget-half-a-billion/

• Hodgkins, K. (September 24, 2013). IHS: iPhone 5s component tally reaches $199, iPhone 5c costs $173. Tuaw. Retrieved December 1, 2013 from: http://www.tuaw.com/2013/09/24/ihs-iphone-5s-component-tally-reaches-199-

iphone-5c-costs-17/

• iPhone. (2013). Apple. Retrieved October 13, 2013 from: http://www.apple.com/iphone/compare/Median age for u.s. counties map, statistics. (2013). Governing. Retrieved December 5, 2013,from: http://www.governing.com/gov-data/ census/median-age-county-population-map.html

• Median age for u.s. counties map, statistics. (2013). Governing. Retrieved December 5, 2013,from: http://www.governing.com/ gov-data/census/median-age-county-population-map.html

• Zact. (May 13,2013). Zact mobile report: navigating children's smartphone use. PR Newswire. Retrieved October 10, 2013, from: http://www.prnewswire.com/news-releases/zact-mobile-report--navigating-childrens-smartphone- use-215817311.html

Questions

iPhone K