EFMM 6003 Final Major Project
PART 1 ILLUSTRATED REPORT Mary Carson - Unit Leader Issue date - 14th January Distribution list -Mary Carson Nerissa Ann Luik 1006234
ILLUSTRATED REPORT
Contents
6
34
EXECUTIVE SUMMARY
2. MARKET MIX
8
36
INTRODUCTION
2.1. PEOPLE 2.1.1 Demographics (38) 2.1.2 Spending Power (48) 2.1.3 Marketing Typologies (52)
10
1.THE PROPOSAL 1.1 Company overview (12) 1.2 Outline of the new product (22) 1.3 USP (26) 1.4 Ansoff Matrix (30)
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2.2 PRODUCT 2.2.1 Product Overview (64) 2.2.2 Cad Range Plan (70) 2.2.3 Sourcing Strategy (76) 2.2.4 Sustainability/ethical manufacture (80)
84
2.3. PRICE 2.3.1 Pricing Policy And Architecture (86) 2.3.2 Price Band Matrix (88)
100
2.5 POSITION 2.5.1 Price Style Matrix (102) 2.5.2 Competitor evaluation (104)
114
2.5 PROMOTION 2.5.1 Branding (116) 2.5.2 Experiential Relating (124) 2.5.3 Integrated Marketing Strategy (128)
146
3. BUSINESS PLANNING
164
BIBLIOGRAPHY
3.1 Sales Revenue (148) 3.2 Expenditure (150) 3.3 Capital Spending (154)
158 4. SWOT
92
2.4. PLACE 2.4.1 Distribution Strategy (94) 2.4.2 Omni-Channel retailing (98)
4.1 Strengths (158) 4.2 Weaknesses (159) 4.3 Opportunities (160) 4.4 Threats (161)
142
2.7 Persuasion
162
5. CONCLUSION
168
APPENDICES
Executive Summary
6
This report shows an in-depth proposal for a new line of personal electronic device cases for Apple, using the latest 3D printing technology. Using this new technology will enable the consumers to personalise their cases but still be affordable. Personaliation is on the rise, with many consumers expecting to have an input into the way their products are made. “...customisaton has become an expectation, and something people have come to see as more than just a frivolous way to express their personality, but as recognition that no two people’s needs, are the same” (Mintel 2014) Research carried out has shown significant potential in the market for cases, due to the wide (huge) ownership of personal electronic devices. The market is showing strong signs of growth, with new technological developments and products that are introduced to the market. How we house, carry, ‘show-off’ and protect our personal electronic devices has become important. “As technology becomes increasingly pervasive into our lives, designers are seeking ways to integrate it more beautifully as an extension of the human body” (Walker, D 2013) The report looks deeply into the consumer and demographics to understand buying habits and to establish who they are, helping create the perfect product and marketing campaign to appeal to the target consumer. The report discovered that generation Y and X, are the biggest consumer demographic for personal electronic devices who are mainly within ABC1 socio-economic group. The research carried out when producing this report has enabled the creation, development and design of a new product and promotional campaign for a new line of cases to fit consumer needs this should help see off current competitors. In addition, in-depth research has been carried out to ensure the viability of the product, including branding pack and business planning.
Introduction
8
Technology has become part of every day life with many consumers owning personal electronic devices. 1 in 5 people in the world own a smartphone and 1 in 17 own a tablet these number are predicted to grow rapidly over the next few years. It has become important for owner to protect their device in a case that speaks to both function and personal style. 55% don’t believe there is a good selection of cases currently on the market with 78% saying they want a case. Currently Apple Proves to be the most popular manufacture of personal electronic devices. Mintel recently published a report saying that Apple needs a new must have product, as they have currently been loosing market share to upand-coming cheaper competition. Apple is keen to avoid the fate of Blackberry whose market was devastated by the rise of Apple smartphones therefore it will be in Apple’s interest to create a new line of distinctive cases for their current devices, this will help to keep their customer base intact and add to it, by offering something new without significantly increasing the cost to the consumers whose spending budgets remain tight.
Primary and secondary sources has helped build a new range of cases for Apple. The range will appeal to the target market due to indepth research looking at current competitors, popular marketing trends, and consumer typologies. Branding has proved important as many consumers buy into Apple due to the design of their products, therefore when design the new line it is crucial that Apples current brand Image is show, as this will ensure the new product line is successful.
Primary Questionnaires and focus groups thave been used to gain information on what the customers needs and wants are so to gain insight into customer typologies. • Store visits to gain first hand observations of the current market and competitors. • Visits to relevant exhibitions and to learn more about emerging technologies such as ‘The Future Is Here: A New Industrial Revolution’ (exhibition on 3D printing). •
Secondary Looking at relevant online and offline, articles and journals (e.g. Marketing Magazine, BBC News and Mintel etc). To gain information on the latest macro and micro marketing environment. • Using trend-forecasting sites such as LSN and WGSN – to discover new trends looking into customer typologies, market, products and new product developments. • Market research into current size and changes within the market. Using Mintel and annual reports from relevant companies. •
Limitations •
Looking at a relatively new and a growing market (i.e. cases for personal electronics), the figures and statistics available are somewhat limited. Therefore this report has looked at current ownership of personal electronic devices to determine how big the potential market is.
1. The Proposal
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1. The Proposal 1.1 Company Overview 1.2 Outline Of the New Product 1.3 USP 1.4 Ansoff Matrix
1.1 Company Overview
Apple is a multinational consumer electronics company that has revolutionised the personal computer, using break through technology and innovative software.
Company mission statement: Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings. - Apple inc 12
1.1 Company Overview - Key Performance Interdictors
Net sales 2013 $171 billion + 9% increase on 2012
iMac 4,837 Thousand (units sold 2013)
iPad 26,035 Thousand (Units sold 2013)
264 million units sold (2013)
$193.9 billion current available cash assets
iPod 6,049 Thousand (Units sold 2013)
iPhone - 51,025 Thousand (Units sold 2013) Apple inc (2013)
1.1 Company Overview - Key Performance Interdictors & Brand Identity (The words dotted around the pages are from the focus group)
1st
Current
Electronics brand for 2013
Mbaskool.com (2013)
1st
Clean
Superbrand of 2013
Superbrands (2013)
2nd
Innovative
Consumer Superbrand of 2013 Superbrands (2013)
4th
Smartphone 2013
1st
Beavis,G (2013)
Simple Modern
Tablet for 2013
stuff.tv. (2013)
Minimalistic 14
100% recognise the company logo.
Apple have succeeded in creating a strong brand identity by creating one of the most recognised logs, helping gain a loyal customer basis.
Up-To-Date
79% are loyal Apple consumers. 89% believe that Apple is aspirational
Apple has become an aspirational brand, with many consumers lusting for the latest Apple product.
Quality
77% believe that Apple products are Innovative 81% find Apple products visually pleasing. 89% believe that Apple offer good customer service 60% believe that Apple products are reliable
Sleek Reliable
Stylish (The brand - fluidsurveys.com, N,Luik 2014)
Consumers choose to buy Apple due to the reputation and reliability they have built, through quality and Innovative products, offering outstanding customer service and visually pleasing products.
TIMELINE OF 1ST STORE OPENINGS
1.1 Company Overview - Stores
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2001 19th May Opens 1st Apple store Tysons Corner USA 2003 November 30th Opens 1st store in Japan 2004 November 20th Opens 1st store in the UK 2005 21st May Opens 1st store in Canada 2007 31st March Opens 1st store in Italy 2008 19th June Opens 1st store in Australia 2008 19th July Opens 1st store in China 2008 25th September Opens 1st store in Switzerland 2008 6th December Opens 1st store in Germany
2009 7th November Opens 1st store in France 2010 4th September Opens 1st store in Spain 2011 September Open 1st store in Hong Kong 2012 3rd March Opens 1st store in the Netherlands 2012 15th September Opens 1st store in Sweden 2014 15th February Opens 1st store in Brazil
Apple currently have a portfolio of 417 stores in 15 countries
1Stores
3 Stores
13 Stores
3 Stores
37 Stores
29 Stores
16 Stores 7 Stores
254 Stores
14 Stores
7 Stores 10 Stores
1Store
21 Stores
1.1 Company Overview - Time-line
1970
1974 24th January Introduced 1st Macintosh 1976 Steven Jobs, Steve Woznizk & Ronald Wayne found Apple 1976 Introduced 1st mass produced computer, sold approx. 6 million units.
1980
1980 December Becomes a Public company 1983 Introduced ‘Lisa’ 1st computer with user graphical interface. 1984 January Super bowl commercial 1984 Becomes 1st commercially successful small computer with graphical interface.
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1987 launches 1st Macintosh with colour screen 1989 20th September Launch 1st laptop ‘Macintosh portable’
1990 90’S 2G introduced
1992 Internet becomes available to the public 1997 Introduced online store. Customers can customer order their Apple products online. 1997 10th November Starts to experiment with product placement (seeing the Apple PowerBook G3) in the movie ‘ You’ve Got Mail and TV series ‘Sex & The City’ 1998 Introduced the iMac
http://www.engadget.com/2013/05/25/ apple-1-671-4k-auction-new-record/
2000
2004 Introduced iPod mini
2001 9th January Introduced iTunes
2005 22nd January Introduces Mac Mini
2001 23rd October Introduced the iPod
2005 September 7th Introduces iPod nano which replaces iPod
2002 17th July Introduced 1st windows compatible iPods 2003 3G introduced 2003 28th April Opens iTunes music store in US 2003 June Millionth iPod sold 2003 September iTunes hits 10 million downloads 2004 June BMW is the 1st car to have an audio system with iPod integration 2005 January 11th Introduces iPod shuffle
2006 2006 10th January Introduce MacBook Pro 2006 February 2nd iTunes sells billionth song 2006 May Apple & Nike introduce Nike+ (in-shoe sensor) 2006 October Announces the new iPod Nano product red special edition to benefit the global funds to fight AIDS Tuberculosis and Malaria. 2007 9th January Introduced Apple TV
1.1 Company Overview - Time-line 2007 29th January Introduced 1st iPhone which broke the mould for the common handset and brought mobile email and the internet to the masses. 2007 5th September Launches iPod touch 2008 15th January Introduces the App store & MacBook Air, which becomes the best selling Apple laptop.
2010 December Gains 84% of the tablet market
2011 2011 4G introduced
2011 2nd March Launches iPad 2 with invite only event at the SanFrancisco store and Steve Jobs attends.
2010 27th January Introduces the iPad in the 1st week they sell 500 000 units
2011 August Apple owns 19.1% of smart phone market
2010 24th January Introduces iPhone 4 with retina display
2011 August 24th Steve jobs steps down as CEO and takes the position of chairman of the board and Tim Cook becomes CEO
2010 24th February Sells 10 billion songs via iTunes 2010 October Reaches 170 million sales of iPad world wide
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2011 4th October Apple reaches 18 billion App downloads 2011 October Introduced IOS 5.0 with Siri and iCloud
2012 21st September Introduced iPhone 5, 2 million orders made in 1st 24 hours of release. 2012 2nd of November Launches iPad Mini 2012 15th October Steve Jobs dies
Apple Announces iTunes Radio June 10, 2013 2013 3rd July Paul Deneve (former CEO YSL) moves to Apple to work on ‘special projects’ 2013 1st November Launches iPad Air
2013 20th September Introduced iPhone 5c and 5s 2013 September Introduced touch iD finger print scanner
2013 October Confirm rumours about expanding into wearable technology starting with iWatch
2013 October 14th Announced that Angela Ahrendts (fromer CEO of Burberry) will join Apple and become senior vice president of retail and online stores
2015 iCover to launch
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OUTLINE OF THE NEW PRODCUT
1.2
1.2 Outline Of The New Product
iCover
A new line of cases designed by Apple for all their portable devices introducing ‘iCover’
1
DOWNLOAD ‘iCreate’
Download on to any iOS device or vist www.apple.com/iCreate to create your unique case.
iCover is a range of cases that are stylish, functional and meet the consumers needs. Products will be produced in-store using a 3D printer, some will be produced in a factory (due to different materials). 3D printing enables the consumer the chance to own, design and watch their unique case being made instantly, in-store or via a video sent to the consumer. Customers will create their case using an application called iCreate.
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3
DESIGN & COLOUR
Chose from any of the designs to create your unique case or upload your own design.
2
PRODUCT CHOICE
Choose from a range of base designs for your chosen product. (e.g. iPad clip case)
4
SEND
Send your design to print
(Consumers can place, scale and rotate the designs to their personal preference)
The steps involved to make an iCover using the application iCreate
5
Either select a time @ any one of the 3D printing Apple stores to watch your case being printed in store OR get your case sent straight to you.
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USP
1.3
1.3 USP - Product USP
iCover
iCover, the case with you in mind UNIQUE . ATTRACTIVE . INSTANT (Using the latest 3D printing technology) 28
USP - for Apple
iCover
A new prodcut, driving sales with a unique store experience to increase store footfall.
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ANSOFF MATRIX
1.4
32
EXISTING PRODUCTS
NEW PRODUCTS
EXISTING MARKETS
CONSOLIDATION OR MARKET PENETRATION
PRODUCT DEVELOPMENT
NEW MARKETS
1.4 Ansoff Matrix
MARKET DEVELOPMENT
DIVERSIFICATION
Apple will introduce a new line of cases, ‘iCover’ targeted at their existing market. Using new technology, (3D printing) will require further research and development. 3D printing in-store will create a spectacle, hoping to bring new customers to Apple, increasing sales of existing products. Therefore a consumer pack is essential to ensure the product appeals to the target market. From the resulting consumer research, a range had been designed that meets the needs of the consumers . In addition, in-depth research has been carried out to ensure the viability of the product, including the range and branding pack.
2. Marketing Mix
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2. Marketing Mix 2.1 People 2.2 Product 2.3 Price 2.4 Place 2.5 Position 2.6 Promotion 2.7 Persuasion
2.1 People
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2.1 People 2.1.1 Demographics 2.1.2 Spending Power 2.1.3 Marketing Typologies
2.1.1 Demographics
Apple attracts a wide range of consumers aged 16-44 accounting for 78% of Apple’s current consumers. These age groups are part of generation X and Y. GENERATION X 33 - 48 (current age)
GENERATION Y 16 -32 (current age)
It is important to understand these demographic groups as they are key consumers for iCover.
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Mintel (2013)
Apple appeals to the more affluent socio-economic groups 45% form A/B and a further 45% in C1/C2
2.1.1 Demographics - Common factors shared by both Generation (X & Y) How generation X & Y shop and use thier electrical goods*
(looking at soical media and shopping habits via moblie devices) Where they buy electrical products (2013)
Products bought via mobile online channels (2012)
35% music, video/film downloads or ebooks
In-store Purchase 78%
Online Purchase 73%
32% clothing and footwear
57% ‘Always checks prices online before buying’
It’s important for retailers to offer good after-sales service 77% Agree 20% Neither Agree Or Disagree
38% ‘Believe low price is the most important factor’
3% Disagree
56% ‘Find it useful to do product research before buying’
It’s worth paying a little more to by from a retailer you trust
(when choosing a retailer to buy form)
27% food and drink
27% books, CD, DVDs, video games & PC software
26% Toys & games
40
What factors do customers look for/check when buying electrical goods
53% Agree 35% Neither Agree Or Disagree 12% Disagree
Mintel (2013/14)
Fequency of vists to soical networks (2013) Facebook
45% At least once a day
13% At least once a day
3% At least once a day
12% A few times a week
7% A few times a week
4% A few times a week
6% Once a week
5% Once a week
5% Once a week
3% 2-3 times a month
4% 2-3 times a month
4% 2-3 times a month
5% Once a month or less
6% Once a month or less
6% Once a month or less
25% Never
65% Never
78% Never
(2013)
(2013)
(2013)
Proportion of unique PC visitors to top social and media networks.
2011
91.2% social networks
8.8% media networks
2012
85.8% social networks
14.5% media networks
2013
78% social networks
18.7% media networks (*Electrical goods incluned personal elecrtion devices)
2.1.1 Demographics - Generation Y (13-32) By 2015, generation Y are expected to be the largest consumer demographic. Generation Y are known to be incredibly sophisticated, technology wise.
50% of generation Y men and 70% of generation Y women consider shopping a form of entertainment Honigman, B. 2013
37% of generation Y love shopping and 48% enjoy it
Generation Y own multiple devices
Honigman, B. 2013
16% Go straight to their favourite or preferred retailers
72% Using MP3 players
Honigman, B. 2013
Out of 68% who own smartphones and or tablets 54% shop via these devices 59% own smartphones
67% use gaming platforms Greenhill, D. (2012).
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This generation find it easy to use technology as they have grow up in an ear of technology breackthoughs. They are always swithed on, 9 out of 10 check thier phone as part of their morning rounie. (WGSN 2013)
Generation Y communicate quickly and effectively via email, social networks, text messaging as opposed to traditional means of communication
33% also favour brands that have Facebook pages and mobile websites Honigman, B. 2013
Average of 17.4 hours per week on their social media networks. Honigman, B. 2013
‘They’re also focused on customising their phone with cases and covers that match their fashion preferences and personality.’ (WGSN 2013)
Generation Y strive to be self-sufficient, they are confident, sophisticated and ambitious
52% more likely to make impulse purchases. Want to take on essential roles within organisations as soon as they begin. 1 in 9 have a credit card
41% Update Facebook once a day
21% Update Twitter once a day
91% Have uploaded images to social networking sites
24% Downloaded an application to track or manage their health
Strive to gain success, money and happiness with a balanced working, social and family life.
Want to improve the state of the environment - ‘In 2011, 75% donated to charity and 60% volunteered for a good cause’
(WGSN 2013)
2.1.1 Demographics - Generation X (33-48) Generation X have the highest average household income of the generation groups and spend the most money online. Generation X are not digital natives, they have spent much of their lives without the Internet, they learn fast to keep up new technology.
Generation X own multiple devices 95% own a mobile phone
Generation X spend 37.4 hours per month online (Lamb 2013)
74% of generation X use online banking & 81% make purchases online.
Generation X are more likely to read a screen over print.
Generation X main use for technology is for convenience. 49% own smartphones 11% own a tablet 44
Generation X have trust in respected brands, they are willing to pay a premium for products/services form a brand they trust.
53% are open to the idea of a mobile phone as a wallet.
Top 3 Internet activity among generation X email, checking new and weather and banking transactions
Generation X borrow more that generation Y
Use facebook and twitter for over 50% of commuinications with co-worls, friends and family.
95% Have a Facebook account
35% Have a Linkedin account
25% Regularly post on Twitter
(WGSN 2013)
Generation X are extremely independent, they are ambitious, hardworking and willing to take risks to achieve success.
19% Downloaded an application to track or manage their health
On average generation X have 2 credit cards.
70% of generation X are living with there spouse or partner and 74% have children, 82% home owners (Morison, K 2013)
Family and social life for generation X is extremely important, they choose careers that will help improve their lives and their family’s
2.1.1 Demographics - Summary
Both generations like to have the option of online and in-store shopping therefore it is important to offer iCover for both channels of shopping. Currently, we can see that M-Commerce is not popular, but due to the predicted rise in personal electronic devices it is important to offer this way of shopping . M-Commerce is also important as consumers, can quickly share their purchases via social media. The generations own multiple devices, it is important that iCover offer a range of covers for different types of personal devices.
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SPENDING POWER
2.1.2
2.1.2 Spending Power Many factors suggest that disposable income will grow in the coming years but the outlook remains clouded due to the recent recession, if the disposable income does not rise the market for cases will remain strong as they offer a cheap and effective way of appearing to own a state of the art device even when one cannot afford to buy the latest version. Mintel (2013/14)
How do Men and Women spend their extra money?
31%
33%
GOING OUT
22%
21%
SHORT BREAK/HOLIDAY
33%
31%
DINING OUT
19%
17%
DAYS OUT
27%
28%
BOOKS/DVD/CDS
9%
23%
CLOTHING/JEWLLERY
24%
22%
LONG HOLIDAYS
14%
5%
INVESTMENTS
19%
26%
FOOD/DRINK @ HOME
13%
6%
HOME ELECTRONICS KEY
48
MEN
WOMEN
What Electrical Products Do They Buy? Purchase Of Any Electrical Good
Mobile Phone
57% Always check prices online. 38% Believe that trust is very important when buying electrical goods.
75% 33%
Computer
Attitudes Towards Buying Electrical Goods
Tablet
35% Believe that low price is the most important factor when choosing which retailer to buy from.
‘Apple customers are more likely to say it’s worth paying a bit more to shop from a trusted retailer and are less likely than most to agree that low price is the most important factor’ How customer shop for small electrical products or gadgets (mp3, smartphone etc)
20%
17%
Entertainment Electronics
Video Games Console
8%
8%
53% Compare price from several retailers websites
34% Compare price in-store
20% Go straight to their favourite/ preferred retailer
13% Ask friends/family & colleagues for advice on where to shop
12% Ask for advice form in-store assistants
11% Read opinions about the retailer online
2.1.2 Spending Power - Summary
Due to the recession consumer are money conscious, therefore can’t always afford or want to spend money on new technology, but iCover is a product that will keep their current devices fresh and up-to-date with technology movements. Many consumers want value for money. It is important that iCover prices appeal to the target consumers, research has been carried out to discover how much they want to pay. The benefits of 3D printing is that it is an cheap way to create a personalised product with a high standard of quality, this will help keep the RRP down and attractive for the consumer.
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MARKETING TYPOLOGIES
2.1.3
2.1.3 Marketing Typologies iCover will appeal to a wide range of consumers, with the core consumer form generation X and Y. (Below shows the 4 marketing typologies.) For more information on Marketing Typologies please refer to ‘Consumer Pack’
13-21 Aspiring Luxury Junkie
Abby Budden 16 52
Generation Y 13-32
Josh Hargreaves 20
Sophie Dulieu 23
22- 32 Luxury Enthusiast
Philip Horne 31
33-39 Established Conscientious
Nicky Batten 34
Generation X 33 - 48
Will Batten 39
40-45 Affluent Trustee
Jon Gleave 42
Charmian Wylde 45
2.1.3 Marketing Typologies 22- 32 Luxury Enthusiast
13-21 Aspiring Luxury Junkie
From A/B socio-economic group.
From B/C1/C2 socio-economic group.
Mid to high disposable income.
Strives to gain success, money and happiness with a balanced working, social and family lifestyle.
They Lead hectic lifestyles. They use technology to help them multi-task and keep connected to their friends, family and co-workers.
Either studying or working their way up to the top of the ladder.
Abby Budden 16
Aspires to be able to afford a luxury lifestyle. Wants to own the latest products that are seen to be fashionable.
Sophie Dulieu 23
They use technology to monitor their well-being and surroundings, to help create a better lifestyle.
Likes to save money to afford the latest technology and items from luxury brands (often from outlet or sales).
Mind and body wellbeing are important, they take great pride in their appearance.
Searches for the best deals, often using price comparison websites.
Josh Hargreaves 20
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Enjoys shopping online or offline. Aspiring Luxury Junikie’s broadcast their thoughts and experiences though social media.
The luxury enthusiast has grown up surrounded by new emerging technologies. They are constantly plugged in.
Philip Horne 31
Loyal customers to brands offering excellent products and services. Wants to improve the state of the environment.
33-40 Established Conscientious
Nicky Batten 34
42-45 Affluent Trustee
From B/C1 socio-economic groups.
From A/B socio-economic group
These consumers have gained success in their working environment and are looking to settle down. Therefore spending is restrained choosing only to buy essential items.
Highly successful with a large disposable in-come. These consumers already have family’s. (Either married and/or have children between the ages of 4-15)
They lead hectic lifestyles and use technology to help them multi-task as-well as keeping connected to their friends, family and co-workers
They are constantly on the go. Not always having time to find out about the best new gadgets, they choose to go with the current popular brands such as Apple.
Wants a balanced lifestyle in order to be happy and healthy. To accomplish this they often use technology to track their: finances, energy use, mind and body.
Jon Gleave 42
They prefer to buy products that last, from trusted or luxury brands.
Will Batten 39
Search for the best deals, using price comparison websites. They choose to shop in sales to get the best products for the best price. Believe it is important to keep fit by regular exercise and eating healthy, often choosing organic produce.
Charmian Wylde 45
The affluent trustee has little experience with technology, although they have quickly found the benefits. They use their devices and applications to help them multi-task and keep them connected with their friends and family. They are loyal to brands offering excellent products and services, they choose quality over price. In order to live a healthy lifestyle, they are gym members and like to take part in group sports.
Aspiring Luxury Junkie
Luxury Enthusiast
2.1.3 Marketing Typologies - Psychographic Profiles & Buying Motives
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Early Adopters
Early Majority
Late Majority
Laggards
WITHDRAWAL
Innovators
LAUNCH
2.5%
13.5%
34%
34%
16%
13-21 Aspiring Luxury Junkie
Generation Y 13-32
22- 32 Luxury Enthusiast
Buying Motives
EMOTIONAL Aspiring luxury junkies are emotional shoppers as they buy products out of desire, rather than thinking logically. Their motives include: social acceptance, curiosity, self esteem and improvement.
Psychographic Profiles Aspiring luxury junkies are the early majority, they like to be the first to own a new product, due to having a restrained budget they may have to wait until they can afford the latest product and wait for discounts and sales.
Psychographic Profiles Affluent trustee’s are early adopters, as they like to be one of the first to own latest products, they will wait for a few reviews if it’s from an unknown brand.
Buying Motives EMOTIONAL Luxury Enthusiast are emotional shoppers, as they have a want it, see it, buy it attitude, and have the income to support this. They also have some motives from patronage, as they have a strong brand allegiance for certain brands.
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Early Majority
13.5%
34%
Laggards
Early Adopters
2.5%
WITHDRAWAL Late Majority
Innovators
LAUNCH
Established Conscientious
Affluent Trustee
2.1.3 Marketing Typologies - Psychographic Profiles & Buying Motives
34%
16%
33-39 Established Conscientious
Buying Motives RATIONAL Established Conscientious are rational shoppers. They make logical purchases and choose not to buy unnecessary products they buy products that are functional and necessary to their wellbeing,
Generation X 33 - 48
Psychographic Profiles Established conscientious are within the early majority verging into the late majority. These consumers want to buy the latest products but will often wait until they have the money available to spend.
40-45 Affluent Trustee
Psychographic Profiles
Affluent Trustee’s are within early adopters, these customers like to buy new products and don’t have any financial worries, therefore they can buy products close to the release date.
Buying Motives EMOTIONAL Affluent Trustee’s are emotional shoppers, as they have they often buy products that are not a necessity, but are bought due to personal likes and desires. They also have some motives from patronage, as they have a strong brand allegiance and like to receive good service.
2.1.3 Marketing Typologies - Summary
Looking at the consumer typologies shows that most consumers want products that are of high quality, affordable with durability. They are mostly from B/C1 socio-economic groups. As they are successful and driven, in result they have a high disposable income. They look for stylish functional products that meet their needs. These consumers are always on their personal devices, with most using them every day. They require cases that are protective and help them to use their device with ease. iCover will offer consumers cases that are protective and add to the function of their device, to meet the consumers needs. Cases have been design with added functions such as a stand built into the case for the iPad. iCover uses materials that are hard wearing, this will help protect their device from damage, as consumers want to ensure a long lifespan for their personal electronics. Cases needs to speak to their personal needs, including style and function. iCover will prove to be successful with a wide range of consumers, as the new product enables them to design a case that suits their personal preferences.
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2.2 Product
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2.2 Product 2.2.1 Product Overview (Inspiration & Materials) 2.2.2 CAD Range Plan 2.2.3 Sourcing Strategy 2.2.4 Sustainability/Ethical Manufacture
2.2.1 Product Overview - Inspiration
It was discovered that current cases on the market do not meet the consumer requirements. 55% don’t like the current selection available.
(Cases - fluidsurveys.com, N,Luik 2013)
For the inspiration of the base design it was important to understand what the consumer is looking for. To gain this information it was important to carry out a focus group. (The focus group was built up of 12 respondents between the ages of 16 - 45. All from social economic groups C1/2 and B. Who all own or have access to an Apple device.)
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(For more information on the product, refer to the Range Pack)
INSPIRATIONAL IMAGES & QUOTES
2.2.1 Product Overview - Colours
Due to the low cost of filament used for Nylon and PLA 3D printing, Apple will be able to offer cases in a wide variety of colours. This will enable the consumer to truly personalise their case. Customers will be able to choose up to three colours for their cases. (Colours may slightly differ dependent on Nylon or PLA filament.) New colours can easily be added to the range to keep the collection fresh and current. Colours take inspiration from the logo introduced in 1976 (the rainbow logo) this will demonstrate strong branding, for both iCover and Apple. As they are still used today.
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Deep Saffron
Sunset Orange
Racing Red
Rust Red
Forest Green
PINK
Sulphur Yellow
Amazon Green
PURPLE
Ignite Yellow
Mint Green
Burnt Orange
BLUE
Apple Green
BLACK &WHITE
Pixie Green
RED
ORANGE
YELLOW
GREEN
Colours available for both PLA and Nylon 3D printing
Berry Pink
Candy Pink
Flamingo Pink
Misty Rose
Brilliant Violet
Sugared Lilac
Heather
Amethyst
Ocean Blue
Ink Blue
Holiday Blue
Sky Blue
Crystal White
Carbon Black
Lipstick Pink
Royal Purple
Midnight Blue
2.2.1 Product Overview - Materials
iCover will use two different types of 3D printing methods, this will enable some products to be of a higher quality, and enable more complex designs, where the products need to have some flexibility. The two types of 3D printing for iCover are: Fused Deposition Modelling (FDM) and Selective Laser Sintering (SLS). FDM will use PLA filament to print out the iCover’s, this material can easily be printed out in-store. SLS will use powdered Nylon to print out the iCover’s, due to the finishing needed for this type of material this will be printed out in a factory, and then sent to the consumer directly. For more information on the types of 3D printing please refer to the range pack pages 12-14.
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The two types of 3D printing for iCover are: Fused Deposition Modeling (FDM) and Selective Laser Sintering (SLS). FDM will use PLA filament to print out the iCover’s, this martial can easily be printed out in-store. SLS will use powderd Nylon to print out the iCover’s, due to the fishing needed for this type of material this will be printed out in a factory, and then sent to the consumer directly.
Poly Lactic Acid (PLA) PLA is formed from plants rich in starch (such as sugar beets, corn and wheat), it is 100% compostable and biodegradable. Why is PLA suitable for iCover? PLA is: strong and durable, the raw filament can be produced in any colour therefore it is ideal for making a desirable and practical electronic device case. (With PLA printing, print lines or ‘Stepping’ may be noticed) NYLON Why is Nylon suitable for iCover? Nylon is used to create a variety of objects, when it is thin it’s flexible enough for hinges and springs and when thick it’s strong and hard wearing. This combination will enable to create complex cases that are seen in iCover’s range, such as the ‘Smart iPad Cover’ iCover’s created using Nylon will need finishing, this may be polishing or sanding to gain a smooth finish. During the printing process nylon is white in colour therefore these cases will need to be painted, so that the consumer can truly personalise their case. (When printing with nylon, print lines or ‘Stepping’ may be noticed but much less compared with PLA)
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CAD RANGE PLAN
2.2.2
2.2.2 CAD Range Plan Customer will be able to choose from a range base case designs to personalise. (see below and for futher information see the Range Pack pages 26-34)
iPhone Clip Case
iPhone Wallet Case
(Available for iPhone 4, 5C & 5S)
PLA £20.00 NYLON £30.00
(Available for iPhone 4, 5C & 5S)
iPhone PLA Margin Achieved 90%
iPhone Nylon Margin achieved 90%
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NYLON £35.00 iPhone Nylon Margin Achieved 83%
iPod Touch Clip Case
iPod Classic Clip Case
iPod Classic PLA Margin Achieved 93%
PLA £20.00 NYLON £25.00 iPod Touch Nylon Margin achieved 89%
iPod Touch PLA Margin Achieved 94%
PLA £20.00 NYLON £25.00
iPod Classic Nylon Margin achieved 88%
NB CADs with a double ring are available to be printed in-store, as they are produced in PLA.
2.2.2 CAD Range Plan
iPad Smart case (with stand)
(Available for iPad, iPad Air and iPad mini)
iPad Clip Case
(Available for iPad, iPad Air & iPad mini)
iPad Clip Case PLA Margin Achieved 77%
NYLON £50.00 iPad Smart Case Nylon Margin achieved 50%
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PLA £25.00 NYLON £35.00
iPad Clip Case Nylon Margin achieved 64%
See appendix 1 and 2 for full range plan.
Laptop Clip Case
(Available for MacBook and MacBook Air in all sizes)
MacBook Pro Clip Case PLA Margin Achieved 70%
iCover
THINK DIFFERENT
UNIQUE . ATTRACTIVE . INSTANT
HOW IT WORKS PLA £40.00 NYLON £50.00
MacBook Pro Clip Case Nylon Margin achieved 47%
To fully understand the process of how to create an iCover using the application iCreate please read ‘How It Works’ leaflet.
iCover & iCreate
Distribution iCover will be available online and in 39 Apple stores worldwide. Quantities of predicted sales have been based on actual sales in 2013/14 of Apple’s personal electronic devices. In 2015 we will see increases and decreases in these product areas, to work this out the report has used last year percentage increases/decreases to gain figures for predicted sales in 2014/15. Using these figures iCover will hope to sell 1 iCover for every 50 devices sold. iCover will require the purchase of raw materials (PLA filament and nylon powder). The quantity required has been established from the predicted sales in each product area.
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SOURCING STRATEGY
2.2.3
2.2.3 Sourcing Strategy
“Apple has developed an entire ecosystem of suppliers who support our business operations. Our goal, in a nutshell, is to obtain stellar products and services within tight timeframes, at a cost that represents the best possible value to our customers and shareholders� (Apple, 2014) Apple requires each of its suppliers to meet the highest standards for all goods and services. Therefore Apple’s sourcing strategy is designed to ensure equal and fair treatment of suppliers, so that they can achieve products that are of top quality. To ensure that iCover meets the Apple standard, Apple will take time in finding the right suppliers for the new products and facilities to manufacture the product components needed, in appropriate locations.
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The map shows the current location of Apple’s suppliers (Apple Inc, 2014)
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SUSTAINABILITY/ETHICAL MANUFACTURE
2.2.4
Apple wants all of their suppliers to be environmentally responsible. They are currently working with industry experts to identify high-risk facilities focusing on environmental issues. By carrying out audits they hope to develop methods to help improve their environmental impact. Currently Apple are working on a new project ‘Clean Water’ within this new project they hope to reduce the amount of water used and look into recycling water, for their production processes.
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“We expect our suppliers to go above and beyond the law to protect their local communities and minimize impact to the environment. Suppliers must uphold all of our environmental standards — including hazardous waste management, wastewater management, stormwater management, air emissions management, and boundary noise management — wherever Apple products are made.” (Apple inc, 2014)
Apple is commitment to environmental responsibility within their supply chain. It is important that iCover looks into the environmental issues that may affect Apples current sanding on their environmental responsibly. One of the benefits with 3D printing is there is little waste. Apple only have to order the raw materials, if iCover sales are lower than expected they can easily sell-on unwanted materials or hold off on further orders.
So Far In 2014 Apple have: • Completed more than 520 site profile surveys to help determine environmental risks. • Conducted 62 focused environmental assessments. • Launched the Clean Water Program pilot with 13 supplier sites to increase reuse and recycling of water
One of the materials used of iCover - PLA will benefit Apple’s environmental standards as it is formed from plants rich in starch (such as sugar beets, corn and wheat), it is also 100% compostable and biodegradable.
2.3 Price
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2.3 Price 2.3.1 Pricing Policy & Pricing Architecture 2.3.2 Price Band Chart
2.3.1 Pricing Policy & Pricing Architecture
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lity
Qu a
CT S
rin t
OD U
es tP
PR
igh
CE
-H
RI Ny
lon
TO PP
£35 (Mode)
£25 (Entry price)
ali ty
Qu
Pr int
-L
ow
er
£20 (Mode)
PL
A
PR
IC
E
PR
OD
UC
TS
£40 (Exit price)
LO W
Pricing Architecture
£50 (Exit price)
£20 (Entry price)
iCover has two tiers of pricing architecture: low price and high price, these categories overlap within pricing.
Nylon cases have a complex designs over PLA this also puts nylon products into ‘top price’. As PLA prints basic designs.
Having two tiers of pricing architecture is on brand with Apple, as top price products are of better quality e.g. Macbook pro 13 inch has 2.5 Ghz while Macbook pro has 2.6GHz with retina display, the price difference is £600
Low
ECONOMY
Quality
High
PENETRATION
Price High
Differences for pricing architecture is based on the quality of the print and martial cost. Nylon printed cases, produce a high quality of print and have a higher cost for raw material, While PLA prints to a lower quality and raw material is cost is low.
Low
SKIMMING
PREMIUM
PRICING POLICY iCover sits in both premium and penetration, as Apple currently offer products of high quality with a high price, iCover is a mid-high quality product at a low price. Apple currently use even pricing, to maintain a strong brand image the pricing strategy will remain the same.
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PRICE BAND CHART
2.3.2
2.3.2 Price Band Chart
MacBook Clip Case
iPod Clip Case
iPad Case with Stand & Cover
iPad Clip Case
iPhone Wallet Case
iPhone Clip Case
Entry Price Exit Price
01
90
0
20
30
40
50
Price in ÂŁ
60
70
80
90
71%
Prices are competitive with iCover’s competitors (please see page 109 for pricing of competitors)
Prices will appeal to the target consumers due to quantitative research carried out, The table shows how much consumers wanted to pay for each device cases (using the mode, mean and median) Some prices are slightly higher than figures found in the quantitative research, this is to ensure prices are competitive within the market. Due to higher production costs, customers will have to pay slightly more but 71% have indicated that they are willing to pay more for a personalised case.
Are willing to pay extra to personalise their case. (Cases - fluidsurveys.com, N,Luik 2013)
‘How much would you like to pay for the following types of cases?’ TABLET CASE
SMARTPHONE CASE
LAPTOP CASE
MP3 PLAYER CASE
MODE
£30
£10
£30
£10
MEAN
£28
£19
£41
£14
MEDIAN
£25
£20
£34
£10
ACUTAL PRICE RANGE
£20 - £50
£20-£35
£40-£50
£20-£25
2.4 Place
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2.4 Place 2.4.1 Distribution Strategy 2.4.2 Omni-Channel Retailing
2.4.1 Distribution Strategy
Apple currently have a portfolio of 417 stores across 15 countries. Most Apple stores are located in high footfall areas, Apple stores are known for their spectacular architecture with many consumer being drawn to visit the store as a tourist attraction.
iCover will be available in-store and online in all 15 countries. It will be put into 9.4% of Apples current store portfolio equalling 39 stores across 34 locations.
In the first month iCover will be launched only, in 12 stores within the USA. After the launch month iCover will be available in all 15 countries. As this follows Apple’s current launch procedure.
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13 Stores
9.4% 1 Store 3 Stores
3 Stores
37 Stores
29 Stores
16 Stores 7 Stores
254 Stores
14 Stores
7 Stores
10 Stores
1 Store
21 Stores
(Apple store location)
2.4.1 Distribution Strategy Stores have been chosen based on area, square foot size and the aesthetic of the store. If iCover proves to be successful by 2019 iCover will be available in 50% of all stores. Each store will have 6 PLA 3D printers and total monthly printing capacity across all store is 963,000 units. This meets the predict demand of 149,000 units needed per month It also enables 84% extra capacity if required Six 3D printers are required for each store this is so Apple can meet the printing capacity. Multiple printers in store will add to their retailing environment which will enhance consumer store experience. 96
39 STORES
34 LOCATIONS
Store List Australia
Italy
United Sates Of America
Bondi, Oxford street Sydney, George Street
Bologna, Vai Rizzoli Rome, Euroma2
Brazil
Japan
California Los Angeles, The Grove San Francisoc, Stonestown
Rio De Jeneiro, Village Mall
Tokyo, Ginza
Canada
Netherlands
Montreal, Sainte-Catherine Toronto , Yorkdale Vancouver, Oakridge Centre
Amsterdam, Hirschgebouw, Leidseplein
China
Barcelona, Passeig de Gràcia Madrid, Gran Plaza 2
Beijing, Sanlitan Shanghai, Pudong
Spain
Sweden
France
Täby, Täby Centru
Paris Carrosle Du Lovre Opera
Switzerland
Germany
Zurich, Bahnhofstrasse Geneva, Rue De Rive
United Kingdom
Berlin, Kurfürstendamm Frankfurt,Grosse Bockenheimer Strasse London Munich, Rosenstrasse Regent street Covent Garden
Hong Kong
Hong Kong, IFC Mall
Glasgow, Buchanan street Belfast, Victoria square Manchester, Ardale
Florida Miami Beach, Lincolon Road Hawaii Honolulu, Royal Hawaiian Illinois Chicago, Lincoln Park Chicago, North Michigan Avenue Massachusetts Boston, Boylston Street New York City NYC, 5th Avenue NYC, Grand Central Texas Austin, The Domain Dallas, Knox Street
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OMNI CHANNEL RETAILING
2.4.2
2.4.3 Omni Channel Retailing iCover will be available to customer through: E-Commerce (Website), M-Commerce (Application - iCreate Available on any IOS device)
Time Line (Launch opening)
1 Week 22.05.15
Store launch in all 12 USA stores. (Pre-ordered cases will be shipped to customers)
1 Week
Store launch in all remaining stores (27 remaining stores). (Pre-ordered cases will be shipped to customers)
19.06.15
2015
USA Launch Only
MAY
International Launch
MAY
29.05.15
E - Commerce and M Commerce launch in the USA. Launched 1 Week before available in-store to create excitement for iCover, customers will not receive their iCover until store openings.
1 Month
JUNE
JUNE
26.06.15 iCover will launch E - Commerce and M - Commerce internationally (Customers will not receive their iCover until store openings)
2.5 Position
100
2.5 Position 2.5.1 Price Style Matrix 2.5.2 Competitor Evaluation
2.5.1 Price/Style Matrix TREND LED TREND
iCover
HIGH PRICE PRICE HIGH
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LOW LOWPRICE PRICE
CLASSIC CLASSICSTYLE STYLE
The new product will offer classic style and the option to create a trend led design. Pricing will be competitive with the current market. Looking at the price/style matrix you can see there is a range of competitors from fashion brands, luxury and specialists. (Highlighted in the green circle shows iCover’s key competition)
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COMPETITOR EVALUATION
2.5.2
2.5.2 Competitor Evaluation
This report looks at eight different key competitors in the market including: luxury, high street and specialist brands. Looking at a broad range of competitors will help indicate where the new brand of products should sit on the price/style matrix and whom they should target.
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Competitors include:
BRAND PERSONALITY Fun, Expensive & Quirky
BRAND PERSONALITY Strong, shown with consistency, eye catching packaging & store layout.
BRAND PERSONALITY Simple & minimal
MARKET POSITIONING Bridge
MARKET POSITIONING Diffusion
MARKET POSITIONING Mass Market
CORE BUSINESS Apparel
CORE BUSINESS Apparel
CORE BUSINESS Tech Accessories
CORE BUSINESS Enabling consumers to create their own 3D printed objects.
BRAND PERSONALITY Modern, simple & bold
BRAND PERSONALITY Creative
MARKET POSITIONING Mass Market
MARKET POSITIONING Mass Market
CORE BUSINESS Tech Accessories
CORE BUSINESS Tech Accessories
BRAND PERSONALITY Bold, simple & modern MARKET POSITIONING Mass Market CORE BUSINESS Paper Accessories
BRAND PERSONALITY Classic, timesless, luxury & modern MARKET POSITIONING Luxury CORE BUSINESS Leather Goods
BRAND PERSONALITY Modern & bold MARKET POSITIONING Mass Market
2.5.2 Competitor Evaluation
BRAND
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PHONE CLIP CASE
PHONE SLEEVE
PHONE BATTERY BOOST
PHONE/ WALLET
TABLET CLIP CASE
TABLET SLEEVE
TABLET CASE WITH STAND
LAPTOP CASE WITH STRAP
LAPTOP SLEEVE
LAPTOP CLIP CASE
ABLE TO PERSONALISE
Below lists all products available from the different brands
Price band matrix for all technological accessory cases £19
£99
£38
The competition offer a range of products to suit the needs of the consumers. Therefore it was important to ensure that iCover offers a wide range to compete with the competition.
£198
£24.95
£109.95
£1.32
£139
£18.90
Competitors’ prices are varied, it is important to choose price points that are in-keeping with the brand and that will appeal to the target consumer.
£70.90
£65
£16.99
£4,500
£34.99 KEY
£8
£22
ENTRY PRICE EXIT PRICE
PRICE
£0
£20
£40
£60
£80
£100
£120
£140
£160
£180
£200
£220
2.5.2 Competitor Evaluation - Target Consumers THE SIZE OF THE MALE/FEMALE ICONS SHOW THE CONSUMER BALANCE.
AGE: 18 - 35 GENDER: Men and women SOCIO-ECONOMIC: ABC1
AGE: 18 - 45 GENDER: Men and women SOCIO-ECONOMIC: ABC1C2
AGE: 18 -35 GENDER: Men and women SOCIO-ECONOMIC: ABC1
AGE: 26 + GENDER: Men and women SOCIO-ECONOMIC: AB
AGE: 16 - 55 GENDER: Men and women SOCIO-ECONOMIC: BC1C2
AGE: 18-35 GENDER: Men and women SOCIO-ECONOMIC: ABC1C2
AGE: 16-55 GENDER: Men and women SOCIO-ECONOMIC: BC1C2
AGE: 14 - 24 GENDER: Men and women SOCIO-ECONOMIC: BC1C2
Most of the brands offer a wide selection of products but most products only suit the female consumer, therefore it is important for iCover to appeal to make both male and female consumers. 110
The new range will lie within innovators and early adopters.
Psychogaphic Profiles
LAUNCH LAUNCH
WITHDRAWAL
2.5% 13.5%
34%
34%
Laggards
Late Majority
Early Majority
Early Adopters
Innovators
WITHDRAWAL
16%
2.5.2 Competitor Evaluation
Looking at variety of competitors has shown that many brands offer a range of products with varying prices. Prices are dependent on the status of the brand, helping to keep a consistent brand image. Looking at the competition we can see that there are only a few brands that just produce tech cases. These brands often have less advertising, therefore consumers may be unaware of these brands. iCover needs to stand out from the fierce competition, Apple need to offer a product with a USP that stands out. To compete with the current competition it is important to have competitive prices. Cases need to be promoted using the right form of media that fits in with the brand to maintain a strong brand image
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2.6 Promotion
114
2.6 Promotion 2.6.1 Branding 2.6.2 Experiential Retailing 2.6.3 Integrated Marketing Strategy
2.6.1 Branding
It is important to stick with the current brand DNA that Apple has created, as they have a memorable brand identity by using a simple logo, with a clear brand ethos/DNA. They are the number 1 brand for 2013. - Superbrand (2013) The logo translates on its products, packaging and promotion. The strong brand identity has helped Apple achieve and maintain a loyal customer base. Apple is seen as an aspirational brand, therefore the brand is always attracting new customers. (Please refer to the Branding Pack for more information on branding)
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BRAND DNA
BRAND ESSENCE
Creating technologically advanced products that offer the consumer innovative and elegant devices. Promotes creativity with faultless technology and a smile. (Offering friendly, helpful customer service)
DESIGN PRINCIPLE
Apple believe in simple not complicated products in deign and technology. Offer productive quality products, that avoids time wasting.
CORE VALUES
PERSONALITY & VALUES
Produce products that can be used easily and efficiently.
BENEFITS
2.6.1 Branding
The focus group enforced how much they like the current brand image, showing that it is important to maintain when creating ‘iCover’.
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‘For me Apple, it completes my life due to the function and design’ - Nikky 34 ‘I like the products visually, really good quality. They are … aspirational for me I always want something Apple ... I’m just like, Apple person.’ - Petr 24
Looking at the current Apple DNA and consumers thoughts on the brand, has shown that Apple have built a clear brand image and consistency. This has benefited the brands success. It is important that iCover share the same brand DNA and ethos, so that iCover will sit in the Apple product range with the same brand identity. This will hope to ensure the success of iCover.
2.6.1 Branding - LOGO
It is crucial that iCover uses the Apple logo and typeface, to fit in with the current branding. The logo will help quickly identify the new line with Apple, helping drive sales due to current desire for Apple products.
iCover
The logo comes in 4 different colours; black, white, grey and sliver.
Both logos will appear in all marketing activities, in-store and on the packaging.
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iCover iCover
The logo for the application iCreate uses a similar logo to the one they used in 1976, the ‘Rainbow Logo’ but his has been updated to go with the new colour palette.
2.6.1 Branding - SLOGAN
iCover
THINK DIFFERENT
UNIQUE . ATTRACTIVE . INSTANT
The brand slogan looks back to the slogan introduced in 1976 ‘Think Different’ which sat along side the rainbow logo. Today all Apple products enable their customers to ‘think different’ but they have lost the slogan. iCover will bring back the slogan. Due to the use of 3D printing. 3D printing is the next up and coming technology movement. The technology enables consumers to create any product they desire (with some limitations) therefore they can now truly ‘Think Different’
2.6.1 Branding - PACKAGING
Packaging for low priced products (made from PLA) will be made out of clear strong plastic (like the one currently use for the iPod shuffle) The packaging can easily be opened as the product is produced in store, therefore they will be packaged in-store. To seal the packing clear stickers will be place onto the seal of the box. The packaging is sleek to fit the current packing design that Apple offer. It features the Apple logo and the slogan for iCover.
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(Packaging for PLA cases)
Packaging for high priced products (made from Nylon) will be made out of dense white card board (like the one currently used for the iPhone) The packaging is sleek to fit the current packing design that Apple offer. It features the Apple logo and the slogan for iCover.
(Packaging for Nylon cases)
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EXPERIENTIAL RETAILING
2.6.2
2.6.2 Experiential Retailing
iCover hopes to add to the retail experience for the consumers, and drive footfall, in result increasing sales, in all products areas.
The hashtag #iCover will be seen in the window so passers by can quickly search social media to see other uses experiences.
iCover will not require many changes to the current layout of the Apple’s stores. Store fixtures will remain the same so not to take away from the products, and to remain on brand. The 3D printing stations for iCover will be positioned near the front window. This is so passers by can see the 3D printers working, hoping to drive footfall, as many people have not seen 3D printing in action. The excitement of seeing the product being made should result in many sales.
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iCover
In this store mockup the two tables at the front of the store will be the 3D printing stations. The design will translate easily into all other Apple stores.
THINK DIFFERENT
UNIQUE . ATTRACTIVE . INSTANT
Simple decals in the window will advertise iCover, (these will be minimal so not to distract from the 3D printing going on in-store) and the application so users can start designing their unique case. The 3D printer will sit on a table like all of the other Apple products. Next to each of the 3D printers will be an iPad mini, showing the customer how iCover works. Newly trained staff will be on hand to help the customer create their own case, and to set up the printers.
Download iCreate to experience your own 3D moment
#iCover
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INTEGRATED MARKETING STRATEGY
2.6.3
2.6.3 Integrated Marketing Strategy
To keep on brand and make a successful marketing campaign for iCover it is important to keep to Apple’s current methods of advertising. Their current marketing strategy is heavily to do with timing. Apple leak and spread rumours around new products in order to create excitement. This technique has made their product launches highly successful. In 2012 Apple launched the iPhone 5 within the first 24 hours 2 million orders where made. To make sure that Apple is up-to-date with current marketing and popular methods, iCover will kick start Apples entry into the world of Social Media. iCover will introduce a application and hashtag, as this method is appropriate for their target market. Please use the marketing time calender to fully understand how hype and buzz will be created around iCover.
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iCover
THINK DIFFERENT
UNIQUE . ATTRACTIVE . INSTANT
2015 MARKETING CALENDAR iCover & iCreate
2.6.3 Integrated Marketing Strategy 1. Leaked information (5 months before product release, refer to the marketing calendar) Leaked information will create hype and excitement around iCover. The leaked information will have 3 stages, so to build buzz steadily over time, so that consumers and press are kept interested.
3D Printing: Apple orders over 100 Fused Deposition Modelling (FDM) Printers but what for?
A. Leaked information on the manufacturer or purchases of 3D printers. B. Leaked information on remodeling/make over of stores (locations given). C.
Leaked information ‘customers able to print Apple products in store’.
D.
Following the leaked information Apple will publish a press release to confirm the new product launch of iCover and iCreate 1 month before product launch. 132
Apple To Manufactor 3D Printers?
Apple to have 3D printing service in store but what do they plan to print?
Apple stores to go under makeover, what are they making room for? Apple, letting us design the product? With 3D printers?
2.6.3 Integrated Marketing Strategy
2. Billboard advertisement campaign (1 month before product release and during first 3 months of product launch, refer to the marketing calendar) The campaign will hope to create awareness and desire for the new product. The billboard campaign will be in two stages: E1.
30/04/15 Billboard campaign in all 9 cites in USA to offer iCover (until 30.06.15)
J 30/05/15 Billboard campaign in all 28 cites 2. across all other countries to offer iCover (until 30.07.15)
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iCover
THINK DIFFERENT
UNIQUE . ATTRACTIVE . INSTANT
The billboard campaign will be active a month before product release, this is so consumers can find out about the new product, and have time to start thinking about how they would like their case to look.
The hashtag, brand slogan, and application logo will appear in the adverts, to encourage passer by to download the application and use the hashtag to help gain awareness for iCover on social media platforms, prior to launch.
Images used for the campaign will be of different variations of iCover’s. The style of the advert will be much like the one seen on the left, to help keep on brand.
Download iCreate to experience your own 3D moment
#iCover
2.6.3 Integrated Marketing Strategy 3. E-Commerce and M-Commerce launch through application. (One week before launch) The application, ‘iCreate’ will be launched one week before iCover goes live to the public, this is so consumers can start designing their iCover before the launch. Resulting in high sales on lunch day and throughout the week.
r e v o C
#i
The application will have links to popular social media (Facebook, Twitter and Instagram). Users can share their case designs and experiences using the hashtag (#iCover), this will help generate awareness for the new range. Social media and the application is appropriate as it appeals to the target consumers The application will allow the consumer to design their iCover. (please refer to ‘how it works’)
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iCreate will build a story showing the step by step process, of their iCover (images of designs, printing and the finished product will be generated). Consumer will be able to upload their story onto social networks, using the hashtag #iCover, this will generate more awareness for iCover.
iCreate
4. Promotional leaflets (One week before store launch) Promotional leaflets will be distributed with Apple’s existing products packaging and available in-store. Not all consumers choose to buy their Apple goods in the Apple store. Therefore it is important to distribute leaflets in existing Apple products packaging, to catch the attention of customers who do not buy from the Apple store.
TH
r e v iCo T
ERESN F F NT I D IN TA . E V INK I T
E UNIQU
AC . ATTR
ORKS W T I e HOW iCreat iCover
&
2.6.3 Integrated Marketing Strategy
5. Launch event (Night before store launch in the USA) A store event in the 5th avenue NYC store will take place the night before the store launch. Invites will go out to celebrity fans of Apple and the press. A representative from Apple will talk briefly about 3D printing and iCover. Both Press and celebrities will get to make their own case on the night. The event will generate publicity from the press and hopeful trending of #iCover on social media generated by celebrities.
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6. Add on sales (With launch) Through trained Apple staff in-store,to push sales of iCover.
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Scan to see the amazement of 3D printing
New 3D machines in store will drive customer footfall, in result iCover becoming a marketing campaign.
TARGET MEDIA
2.6.3 Integrated Marketing Strategy
iCover will use advertorials to create consumer awareness in the following places.
2.7 Persuasion
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2.7 Persuasion
2.7 Persuasion
New technology - 3D Printing Consumers will be excited to try out new Consumers will be excited to try out new technology, and see a product that they have designed be brought to life, 3D printing offer the consumer a unique experience which will help to the success of iCover.
Unique retail experience
The Power Of Apple
Apple is currently one of the most trusted brands for technology, due to offering products that are reliable and innovative. Their products have become aspirational for consumers due to the high price tags, iCover will allow consumers to up-date their personal electronic devices will little cost involved. Research found that 86% are already Apple users suggesting that Apple will be the perfect brand to introduce a new line of cases.
(Cases - fluidsurveys.com, N,Luik 2013)
Many consumers are interested in new technology, iCover enables consumers the chance to watch the 3D printing possess live. Using this technology instore will hope to draw customer through the door, increasing footfall and hopefully resulting in high sales of iCover and all other Apple products. 144
Keeping iCover on brand to fit the Apple brand image will help to the success of the new product line, as it is recognized throughout the world number one brand for 2013 - Superbrand, (2013)
Personalisation/unique
iCover offers consumers the chance personalise their case to suit their needs. No two cases will be the same; recently we have see the rise in the customer desire for personalised products. “...customising has become an expectation, and something people have come to see as more than just a frivolous way to express their personality, but as recognition that no two people’s needs, are the same” (Mintle, 2013)
Ahead Of The Competition
Market research showed that currently consumers cannot find cases that answer their needs when purchasing an electronic device case, in both function and style. “55% do not like the current selection of cases available on the market”
(Cases - fluidsurveys.com, N,Luik 2013)
iCover offers a range of functional cases that meet the practical requirement for the consumers. The design can be altered, giving the consumer involvement, in the design of their product, to show they’re individuality. In result this should make iCover hugely popular and financially successful.
3. Business Planning
146
3. Business Planning 3.1 Sales Revenue 3.2 Expenditure 3.3 Capital Funding
3.1 Sales Revenue
Sales revenue will be generated through the sales of iCover. Predicted to sell 1.6 million units in the first year of trade.
The number of units to be sold is based on predicted sales for 2015 of Apple’s personal electronic devices.
For evey 50 personal electronic devises sold, 1 iCover will be purchased.
Break-even will be achieved in the 3rd month of trading.
148
1.6 Million
Number of units to be sold in first year of trade
ÂŁ 31.3 Million Gross profit achieved within first year of trade.
68%
Average margin
ÂŁ 56.3 Million Sales Revenue (over first 12 months trading)
Break-Even £35,000,000 £30,000,000
Cost & Revnue (£)
£25,000,000 £20,000,000 £15,000,000 £10,000,000 £5,000,000 £0
0
100,000
200,000
300,000
Break-Even Point (units) = 287,899 Break-Even Point (£) = 9,466,128
400,000
500,000
Units
600,000
700,000
800,000
900,000
1,000,000
Revenue
Total Costs Total Fixed Costs
150
EXPENDITURE
3.1
3.1 Expenditure
To fund iCover’s start-up cost iCover needs an investment of £1.5 million
The initial investment will be will be paid back within the first year of trade.
£
1. 5 Million Investment
(To fund iCover start up costs - amount will be paid back within 1st year of trade)
£ 9.7 Million Total costs* - over 16 month period
(First 4 months start-up costs and including first year of trade)
152
Start up costs
Fixed Costs
Variable Costs
(To cover first month of trade) Office Overheads
£25,000
Office Overheads
£55,000
Production Costs
Copy right fees
£10,000
R&D
£13,750
Marketing Costs
£3,854,000
R&D
£21,250
Salaries
£858,000
TOTAL COSTS
£4 Million
In-store staff training
£39,000
Production Costs
£2,423,208
Salaries
£24,000
Repayment Of Capital Investment
£1,500,000
PLA 3D Printers
£351,000
Production costs
£9,599
Factory costs
TOTAL COSTS
£169,219
£4 .8 Million
£61,401
Store re-fits
£195,000
Design costs
£52,500
Marketing costs
£96,000
TOTAL COSTS
£888,750
(*Total costs including - start-up, fixed and variable cost)
154
CAPITAL FUNDING
3.2
3.2 Capital Funding
Apple currently have a cash total of £8 billion.
£
8 Billion Apple’s current available cash (2013)
Apple inc (2013)
iCover needs 1.5 million investment. The investment is not significant compared to Apple’s current cash available.
Apple will be eager to invest in iCover due to the predicted rate of return of 2073%
Profit achieved in first year of trade - £31.1 million Capital investment - £1.5 million
ROI = 2073% (Return on investment)
4. SWOT
156
4. SWOT 4.1 Strenghts 4.2 Weaknesses 4.3 Opportunities 4.4 Threats
S STRENGTHS
4.1 Strenghts
158
Reputation of Apple’s brand identity will drive sales of iCover. Strength of creative and technical team already in place at Apple (Having already began research into 3D printing). Internal finances within the company to develop new product line – no risks on taking out loans and not being able to pay them back. Current existing loyal customer base continuing to buy into the Apple brand. Winning formula for creating desire around new products, to ensure successful product launch, leading to high sales. As apple only have to order the raw materials. If iCover sales are lower than expected they can easily sell-on unwanted materials or hold off on further orders, saving on cost.
W WEAKNESSES
4.2 Weaknesses
Apple’s website not always found user friendly (noted in the focus group). ‘I find Apple’s website and nightmare it’s not user-friendly can’t find anything on there, which is odd as with all other Apple products can’t fault the design.’ – Nicky 34
Apple have currently been losing marketing share. High pricing strategy may deter some customers and demographic groups. 3D printing is a new technology and it’s still in the development stage, there maybe possible technical problems and further developments. Layouts of store will have to be changed to house 3D printers; this could mean stores have to be closed for refurbishments therefore losing money.
O OPPORTUNITIES
4.3 Opporunities
160
Further advances in 3D printing could lead to other products being produced; Apple will be able to use this technology to lower costs of prototypes and components. As iCover is at a low price point customers who can’t afford to update their electronic devices can update their case as this will keep their current device looking updated. New in-store 3D printing machines will create a store spectacle increasing footfall, this will hope to boost sales of all other product areas. With the launch of iCover this will create higher desire and draw in new customers wanting to own Apple devices over other electronic brands. Apple has just signed a deal with China Mobile (worlds largest with 750 million customer) this hopes to bring a new customers to the brand.
T THREATS
4.4 Threats
Other companies are offering 3D printing, in result it may become a highly competitive market. Many low cost cases currently on the market. Changes in import or export laws and tariffs could affect pricing or supply sources. Changes to exchange rate or interest rates. Changes to trade laws. Slow recovery from economic downturn.
Conclusion
162
Market research carried out for this report found that consumers are not satisfied with the current selection of cases available. “55% do not like the current selection of cases available on the market, with 78% wanting a case for their personal electronic devices”
(Cases - fluidsurveys.com, N,Luik 2013)
iCover will prove to be successful as the range offers functional case designs that meet the requirement of the consumers. Customers can easily create a unique case that fits their personal style, thought 3D printing. This will make iCover successful with many consumers and lead to high sales. Due the rise and expected growth of personal electronic devices many consumers are looking for cases that offer function and style that meet their needs. The amount of personal electric devices sold, predicts that many cases will be required for consumers. Therefore a high volume of iCover’s are predict to be sold, resulting high profitably for iCover, reaching break even with in the first 3 months of trade and a profit of £31 million. The predicted success of iCover and growth in personal electronic devices will potentially lead to the requirements of a larger 3D printing capacity. To increases the capacity, 3D printers can be located in more/all Apple stores, worldwide. This will also gain further recognition with consumers who are not located near one of the current Apple 3D printing stores. iCover, due to launch in 2015 is set to be highly successful, as it will hope to reverse the current loss of market share and help promote the brand using new marketing strategies.
Bibliography
164
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Appendices
168
Appendices
Appendix 1 Range plan for first month of trading USA stores only)
170
Appendix 2 Range plan for total stores (after first month trading)
172
Appendix 3
174