I-Phone in the Mobile Phone Market in the UK 1
2 DECLARATION I...assure that this project work is my own and is written in my own words. All the external information for the completion of the project in any form is only used as a point of reference and has been included in the bibliography. All these things are properly acknowledged. Signed: Date:
3 Name: Student Number: Programme: Title of Topic: i-phone in the Mobile Phone Market in the UK Module Title: Tutor: Date: Word Count:
4 Table of Contents 1.0 Introduction...4 2.0 Firm/Market Analysis...4 2.1 Segmentation Analysis...4 2.2 Analysis of Competitors...5 2.3 Market Trends (Micro and Macro)...6 2.3.1 Micro (Consumer Buying decision making)...6 2.3.2 Macro (PEST Analysis)...6 2.4 Products and services offered by Apple...8 3.0 Aim and Objectives...9 4.0 Context Analysis...10 5.0 Marketing Concepts used in project...11 6.0 Significance/Importance of the project...12 7.0 Achievements of the project...12 8.0 Conclusion...12 9.0 Gantt Chart...13 10.0 List of References...13 Appendix 1...15 Appendix 2...16
5 1.0 Introduction: The underline study is conducted on the i-phone in mobile phone market in the United Kingdom. The first i-phone was unveiled by Apple, its features include, video camera, SMS, visual voice-mail, media player, Internet, Web Browsing, Wi-Fi, games, GPRS and 3G connectivity (Ali 2009). The study undertakes the preliminary study on the market of i-phone in UK, which includes the growth of i-phone in UK; currently there are around 25 million users of i-phone in UK. After the introduction of i-phone by Apple, Microsoft and Google have also entered in the market. In the market of UK, there are many i-phone providers, such as O2, Orange, Tesco, Vodafone, Samsung, Motorola, HP, HTC, RIM, etc, which creates a competitive environment. The study also includes market trends of i-phone, conduct its PESTLE analysis and the firm analysis on the basis of past three years of the market. The second section describes the aims and objectives of the project, concept of the market and detail analysis of the project. Section-1 Preliminary Analysis of i-phone mobile market in UK 2.0 Firm/Market Analysis 2.1 Segmentation Analysis: Geographic Segmentation- Apple has geographically segmented its i-phone application in UK on the basis of spending level of people, income level, employment level and buying habits. The people in UK are excited about i-phone, government is also spending thousands of pounds in developing i-phone, around pound 10,000 to pound 40,000 is spend on developing i-phone (iphone Generation UK 2009). Demographical Segmentation- Apple i-phone are focused on generation y, i.e., adults and teenagers in UK, as they are the biggest users of i-phone applications in their
6 business, personal contacts, surfing social networking sites, video calling, browsing internet, playing music, etc. Middle upper class is also targeted in UK, as the spending and likeliness is seen more in these segments of UK. This class is targeted by the Apple, as the product range of i-phone application is high, which can be only afforded by this class of segment (iphone Generation UK 2009). 2.2 Analysis of Competitors: The rise of i-phone has led the market into competition. There is a variety of range of i-phone in the market offered by different companies. In the i-phone market, there are many competitors of Apple i-phone, such as Microsoft, Google, O2, Orange, Tesco, Vodafone, Samsung, Motorola, HP, HTC, RIM, etc., which creates a competitive environment for the company and they are giving threat to the company (Sayer 2007). In the current year around 285 million i-phone are sold, and from these 1.4 million were sold by Apple (Martellaro, 2007). Just like Apple, which is famous for its product marketing, other companies are also trying to impress the consumers in UK. Samsung launch its new phone in the British Museum in London to promote its new phone and gain the attention of the mass public. Other companies like Nokia, Vodafone are also trying to grab the market share in UK. Apple is giving high threat to other market players as it has a competitive advantage over others. The market share and the sales volume of Apple is very high, it is also providing a variety of product range to the customers not only in UK but throughout the world. Market share of competitors of the company: In today's scenario, Nokia has dominant competitive position in the market of the UK. However, close competitors of Nokia like Apple and Sony Erickson are eroding the over all market share of the company. In the year, 2010 the market share of Nokia is 31.7% in the UK. Further, Apple Inc has 24% and Sony Erickson has 10.6% market share in 2010. with the
7 help of the data it can be identified that Nokia still contains a leading position in the market. However, Apple is not far behind than Nokia. With the help of its new and innovative product offerings, Apple is grasping the market of the country, gradually. Market share of Sony Erickson is quite low in comparison of that of Apple. The company need to alter its core product offerings, according to the competition and customer demands, so that overall market share of the company can be enhanced (Nokia s market share eroded by Apple and Sony Ericsson in Western Europe 2010). Product strategy of competitors of the company There some significant differences in the product strategies of Apple, Sony Erickson and Apple can be identified 2.3 Market Trends (Micro and Macro): 2.3.1 Micro (Consumer Buying decision making): The buying behaviour of products and services by the consumers influence their daily lives. The consumer behaviour involves what a consumer acquires, consume and dispose goods, services, activities or ideas in order to satisfy their needs. Consumer buying behaviours is influenced by the firm's marketing efforts, culture, psychology and decisionmaking (Jones 2008). The behaviour of consumers in UK towards i-phone is very demanding, When the Apple launched its i-phone in 2007 with touch screen interface and internet, in the first two days sales cross one million (Noel 2008). There were some problems in the first sales, but Apple managed to solve all the problems. The demand of Apple i-phone is so high in UK that hundreds of people lined outside the Apple stores and outlets to purchase it. 2.3.2 Macro (PEST Analysis)
8 Political Factors- The UK government interfere in the mobile phone market, in 2000, the government of UK provided license to 13 companies to sell i-phone in the country. With the raise of the next generation mobile phones around pound 22.47 billion were earned by the countries (Mohr, Sengupta and Slater 2009). To take the license from the government, the companies paid huge sum of money and the license was allotted through the auction. Restrictions are put by the court on users for the access of Internet. The government of UK has suggested ISP to monitor the content coming through networks. Economic Factors- There are some economical factors which positively affects the Apple i-phone market in UK. Consumers of Apple i-phone in UK are purchasing the phones at drastic rate, and they are least interested in cutting the spending on i-phone in comparison with the other forms of entertainment sources. In the Mobile marketing, the advertising expenditure is increased in promoting i-phone, in comparison with the other source of media. Network operators of mobile are also increasing the payment options, so that Internet browsing can be included in their pricing packages (Gregory 2009). Social Factors- Marketing companies are benefited with the i-phones in mobile market, as these mobile phones are ubiquitous and have unlimited capacity of sending marketing messages. The growth of social networking can be broadened from internet to the mobile phones, so that brand can be made aware to the consumers. Due to the smart features in Apple i-phone it has gradually became the standard mobile device and its users have increased to 50 million (Simos, Skas and Konstantopoulos 2009). Companies in UK are using Apple i-phone for brand publicity, campaigning, outdoor advertising, etc.
9 Technological Factors- Network operators are also advertising and developing their own portals to promote the Apple i-phones. These phones places the difference between real and virtual world, by providing graphics, sounds, and images captured through i-phone camera Technological developments has given capability to the applications, blue-tooth and 3G services has made the communication more advanced (Simos, Skas and Konstantopoulos 2009) 2.4 Products and services offered by Apple: Apple is a Multinational Corporation of America which deals in consumer electronics, consumer software and personal computers, ipod, ipad, iphone. The services which Apple provides include designing as well as marketing of electronics equipments. The hardware products provided by the Apple are Macintosh computers, 3G's i-phones, i-pads, i-pods etc (iphone 2011). The best known software which Apple provides are the Mac OS X operating system, the itunes Media Browser, the ilife suite of multimedia and creativity software, the iwork suite of productivity software, Aperture which is a professional package for photography, a suite for professional audio and film industry software called as Final Cut Studio, a suite for production of music tools called as Logic studio and a mobile operating system called as ios etc. For the marketing of the products and services which the Apple provides, it has launched online retail stores where it can sell its software and hardware products. Apple also provides computers, but in 2007 it removed this business line. Apple provides variety of iphones for different users according to their demand; such as iphone3g's, iphone4, etc. The range of Apple i-pad that are offered are ipad in business, ipad in education, ipad 2 in which latest and advanced technology is used in order to cope up with the competitors. Apple is continuously giving its contribution towards research and development, so that it can best serve to the consumers using electronic equipments (Sharma,
10 Wingfield and Yuan 2007). Section 2: Project Design 3.0 Aim and Objectives: The general aim of the research is to analyse the product, especially i-phone as a product in the market of the UK. The research study was undertaken to learn the current position of i-phone, and to see its demand in the market. To analyse the market of i-phone, research was conducted on the Apple i-phone in the UK. The main objective of the research study was: To analyse the growth of the Apple i-phone in the market of UK. To analyse the growth, revenue projections of the Apple, UK has been conducted. The next objective of the study was to determine the demand of the Apple i-phone in the market. In order to analyse the demand of the product, consumer buying behaviour was analyse. A high demand for the product was seen in the market of UK. Consumers are ready to spend their spending to purchase i-phone. The research study was also conducted to understand the requirements and expectations of the customers, which includes the features and quality of the product. Business people usually demand, internet, video calling, messaging, Blue-tooth, 3G services with quality in their phone so that they can avail these services at anywhere they move. Apple i-phone includes all the above features with some more features which fulfilled the requirement of the consumers (McMahon 2007). Customer satisfaction was the next objective of the study, the study to conduct to note how the reactions of the customers about the product. The study includes the example
11 of the Apple I-phone, in which some problem was occurred in the phone, when it was first launched, the company tried its best to correct the errors in the product, so that customers can be satisfied. Competitive positioning of the Apple in the market was also analysed in the study. There are many competitors of the firm such as Microsoft, Google, Samsung, Nokia, etc. With the help of the study, current position of Apple in the market is explained, and its growth in terms of sales has been quoted. 4.0 Context Analysis: iphone has become very popular in the market of UK. People are still spending their income on purchasing i-phone. The above research study describes i-phone developed by Apple multinational corporation (UK). The study focuses on the 4 market indicators, i.e., Competitors, Customer buying behaviour and Segments. The research study fits with the customer buying behaviour. To grab the market, Apple focuses on the consumer behaviour towards its products. As per the needs of the customers, Apple included all those features in its products, which meets the expectations of the consumers, fulfil their requirements and satisfy their needs. The Apple launched it s i-phone in 2007, with touch screen interface and internet, as per the requirement of the consumers, so that they can perform multi-tasking. The result of this launch was, in the first two days sales cross one million (Jones 2008). 5.0 Marketing Concepts used in project: While undertaking the project, various marketing concepts are used in order to know the strategies used by the Apple multinational Corporation. The marketing concepts which are used widely in this project study are segmentation, targeting and positioning (STP), analysis of consumer behavior, PEST analysis (environment analysis) etc. The STP analysis
12 is applied in order to know the segments which are targeted by Apple Company. This analysis is done on the basis of two segments; segmentation on the basis of geographical area and segmentation on the basis of demographic factors. In demographic segmentation, the people served by Apple are of Generation Y, which is highly advanced and they want advanced technology. The targets under this section which is hit by Apple are Adults and teenagers. Another marketing concept used by the company is Consumer behavior regarding the products and services of Apple. The consumers demand for the products is very high and continuously increasing because they were very tech savvy and when Apple launched its touch screen with Internet i-phone, the demand in first two days went up to 1 billion. The next marketing concept is PEST Analysis, in which all the political, economical, social and technological factors are discussed which affects the Apple i-phone in the market of UK. 6.0 Significance/Importance of the project: The research study conducted on i-phone market in the UK is helpful in understanding the requirements of the consumers for any product. The firm which was taken for the research was Apple. Through competitor analysis, Apple current position in the market in between its competitors was analysed. This project was also significant, to understand the sales and revenue position of the Apple and how external environment affects the company. 7.0 Achievements of the project: Through marketing analysis of i-phone in the mobile market of UK, the project achieves the goal of analysing the mobile market. This project also includes the information of the Apple multinational corporation and its position in the market. The project also achieves the goal of knowing, which segment is targeted by the Apple, who all are its competitors and how Apple has maintained its position in the market by fulfilling the demand
13 of the consumers and provided them with quality products. 8.0 Conclusion: It can be summarized, that demand of i-phone is increasing in the market of UK. To understand the demand and position of i-phone in UK, a research study was conducted. The study was divided into two sections. First section includes the preliminary study of the Apple, which includes competition analysis, segmentation analysis, PEST analysis, products and services offered by Apple. The next section includes the aims and objectives of the study, marketing concepts and market indicators. Through this study, goals of the project are fulfilled. 9.0 Gantt chart For successful implementation of the project, certain activities of the project were defined before starting the project. It took 10 months in completion of the project and each activity was alloted certain time period. Project Activities Time Specified (in months) 1 2 3 4 5 6 7 8 9 10 11 Analysis of objectives. 1 Planning the work according to the objectives 1 Estimating resources 1 Developing the project 1 Market research 2 Preliminary Analysis 1 Project Design 1 Defining the products of the project 1 Project Implementation 1 Evaluation and Controlling project execution 1
14 10.0 List of References: Ali, M. 2009. IPhone SDK 3 Programming: Advanced Mobile Development for Apple iphone and IPod Touch. UK: John Wiley and Sons. Gregory, A. 2009. Planning and Managing Public Relations Campaigns: A Strategic Approach. UK: Kogan Page Publishers. iphone Generation UK. 2009. [online]. Available at: http://oxygen.mintel.com/sinatra/oxygen/display/id=395911/brochure/id=395911 [Accessed on: May 28 2011]. i-phone. 2011. [online] Available at: http://www.apple.com/uk/iphone/apps-for-iphone/ [Accessed on: May 28 2011]. Jones, S. 2008. Consumer Buying Behaviour. [online]. Available at: http://www.articlesbase.com/branding-articles/consumer-buying-behaviour- 681623.html [Accessed on: May 28 2011]. Martellaro, J. 2007. BBC: iphone Competitors in UK Not Panicking. [Online]. Available at: http://www.ipodobserver.com/ipo/article/bbc_iphone_competitors_in_uk_not _Panicking/ [Accessed on: May 27 2011]. McMahon, K. 2007. The impact of Apple's iphone on the UK. [online]. Available at: http://seekingalpha.com/article/47652-the-impact-of-apple-s-iphone-on-the-uk-market [Accessed on: May 28 2011]. Mohr, J. J., Sengupta, S. and Slater, S. F. 2009. Marketing of High-Technology Products and Innovations. New Jersey: Jakki Mohr. Noel, H. 2008. Consumer behavior. UK:AVA Publishing.
15 Sayer, P. 2007. iphone in the Uk: Apple faces stiff competition. [online]. Available at: http://www.macworld.com/article/60093/2007/09/ukcompetition.html [Accessed on: May 28 2011]. Sharma, A., Wingfield, N. and Yuan, L. 2007. How Steve Jobs played hardball in iphone birth. The Wall Street Journal. pp.1-6. Simos, T. E., Skas, D. P. and Konstantopoulos, N. 2009. Marketing and Management Sciences: Proceedings of the International Conference on ICMMS 2008. London: World Scientific.
16 Appendix1: Meeting Records Meetings were held between the Project Manager and Project Team to discuss about the project. Meeting 1 Key Points discussed and events occurred during the Meeting1: Short speech is given by the Project Manager to inform the Project team about the purpose of the meeting. Discussion was done on which topic of the project should be undertaken? How the project will be developed, implemented and evaluated? How the project will be directed and who will direct the project or who will be the project leader? How much time a project will take in its completion and time schedule allotted in each activity? Who will be the part of the project and what will be their task? Meeting 2 Key Points discussed and events occurred during the Meeting 2: Presentation was given on the topic of the project by the Team member. Discussion was done on, how the research study will be conducted? Market analysis and PEST analysis was conducted. Which methodology will be conducted was discussed?
17 Appendix 2: Draft Market Analysis Segmentation Analysis: Segmentation was done geographically and demographically. iphone market was targeted in UK, on the basis of spending level of people, income level, employment level and buying habits, adults, teenagers and middle upper class. Analysis of Competitors: In the i-phone market, there are many competitors of Apple i- Phone, such as Microsoft, Google, O2, Orange, Tesco, Vodafone, Samsung, Motorola, HP, HTC, RIM, etc., which creates a competitive environment for the company and they are giving threat to the company. Market Trends (Micro and Macro): Micro (Consumer Buying decision making): The behaviour of consumers in UK towards i-phone is very demanding, When the Apple launched its i-phone in 2007 with touch screen interface and internet, in the first two days sales cross one million Macro (PEST Analysis): Political Factors: The UK government interferes in the mobile phone market, the government of UK provided license to companies through auction, to sell i-phone in the country, for that companies pay huge sum of money. Restrictions are put by the court on users for the access of Internet. Economic Factors: Consumers of Apple i-phone in UK are purchasing the phones at drastic rate, and they are least interested in cutting the spending on i-phone in comparison with the other forms of entertainment sources.
18 Social Factors: Companies in UK are using Apple i-phone for brand publicity, campaigning, outdoor advertising, etc. Technological Factors: Technological developments have given capability to the applications, blue-tooth and 3G services has made the communication more advanced.