Marketing In Practice Marketing Plan iBangle

TABLE OF CONTENTS

1.0 EXECUTIVE SUMMARY 2

2.0 COMPANY DESCRIPTION 3
2.1 Vision Statement 4
2.2 Mission Statement 4
3.0 PRODUCT DESCRIPTION 5
4.0 SITUATION ANALYSIS 9
4.1 Industry Analysis 9
4.2 SWOT Analysis 12
4.2.1 Strength 12
4.2.2 Weakness 14
4.2.3 Opportunity 14
4.2.4 Threat 15
4.3 Competitors Environment 16
5.0 MARKETING OBJECTIVE 17
6.0 TARGET MARKET 18
6.1 Segment Identification 18
6.2 Segment Needs 18
6.3 Segment Trends 18
6.4 Segment Growth Potential 18
6.5 Size of Segment (Population) 18
7.0 POSITIONING STRATEGY 19
8.0 MARKETING STRATEGY 21
8.1 Product Strategy 21
8.2 Price Strategy 22
8.3 Promotion Strategy 24
8.4 Place Strategy 26
9.0 FINANCIAL PROJECTION & EVALUATION 27
10.0IMPLEMENTATION PLAN 33

1.0EXECUTIVE SUMMARY

The marketing plan includes the fundamental for the introduction of a unique and
ingenious product known as iBangle by Apple Inc. The analysis of internal and external

-1-
Marketing In Practice Marketing Plan iBangle

of the organisation, competitive environment enables the team to propose dynamic and
constructive strategies for iBangle to fulfil the company’s objectives and strategic
mission. The iBangle will be introduced as another innovation of Apple and marketed as
mp3 player in portal music player (PMP) sector. This also will enable Apple Inc to
penetrate and dominate the PMP sector and emerge as leader in innovation of unique
products as well as successfully gain market share. The marketing strategies are outlined
to gain market segment size of 102,665,043(targeted) male and 103,129,321(targeted)
female of 15-64 years with forecasted sales growth average at 4.8% over next 3 years and
profit of USD 8,229,000. The accomplishment and success of iBangle will be measured
with the capture of market share in PMP sector, as well as penetrating geo-clustering
targeted market in across the global.

2.0COMPANY DESCRIPTION

Apple Inc. was formed by Steve Jobs and Steve Wojniak in April 1976 and
incorporated on 3rd January 1977. The organisation’s headquarter is situated at Cupertino,

-2-
Marketing In Practice Marketing Plan iBangle

California. The current CEO is Steve Jobs. Apple Inc. mainly involved in industry
related to computer software, hardware, and consumer electronics. The organisation
mainly design, manufacture and market product that varies from personal computer,
portable digital music players, mobile communication devices and various related
software, services, peripherals, and networking solutions. The main distribution channels
are its online stores, retails stores, direct sales, and others. Moreover, the customers range
from consumers, corporations, small and medium business, education, enterprise,
governments and creative customers. The organisation currently has 35,100 employees
and growth of 62.5%. According to fiscal year ending report of September 2008, Apple
Inc. had generated the following revenue and shows growth of 35.5% for one year growth
and about 38.3% of income growth:-
TABLE 1: Financial Data of Apple Inc. for 20081

2.1Vision Statement
• iBangle product will enable Apple Inc to establish as market leader in
portal music sector
• Apple Inc can be a revolutionary organisation in providing digital
lifestyle for customers
1
Abstracted from http://finance.yahoo.com/q/is?s=AAPL&annual

-3-
Marketing In Practice Marketing Plan iBangle

2.2Mission Statement

• Apple Inc is committed to provide a futuristic and empowered music

listening experience to the customer through iBangle.
• To capture share market of portal music player more than 55% and
dominate the market.

3.0 PRODUCT DESCRIPTION

-4-
Marketing In Practice Marketing Plan iBangle

‘iBangle’ will be future version of iPod product and will be positioned as the

bracelet iPod that available in the market. It will be equipped with 2GB capacity and

different sizes to accommodate customer’s wrist. The iBangle features and design as

shown below2:-

2
Extracted from http://www.yankodesign.com/2008/10/21/this-ipod-is-full-of-air/

-5-
Marketing In Practice Marketing Plan iBangle

-6-
Marketing In Practice Marketing Plan iBangle

-7-
Marketing In Practice Marketing Plan iBangle

The product will be able to provide exceptional music listening experience and have

multifunction as mp3 player as well as hand accessory (bangle). The product also

marketed as funky and matchless alternative device for portal music device and packaged

as unisex outlook that be suitable to be worn by men and women. The product is made of

aluminium.

4.0SITUATION ANALYSIS

4.1INDUSTRY ANALYSIS

-8-
Marketing In Practice Marketing Plan iBangle

4.1.1 Usage
Apple Inc. has sold 22.1 million iPods during 2008 holiday season
compared to 4580 unit in 2005. The sale of 21.0 million units in Q1 of
2007 also shows 50% higher than Q1 of 2006. This shows steady growth
of iPod since 2005. Moreover, it increased about 383% from 2005. This
projects strong value of brand position in the customers. Therefore, we
strongly believe that iBangle can penetrate the usage trend since this is a
variant of iPod.

Chart 1: iPod Unit Sales3

4.1.2 Trends
In 1960, 8-track player was introduced and followed by personal
cassette player in 1979 and later with walkman, walk disc player, until
MP3 player and MP4 player. The taste and trend of portable music players

3
Extracted from http://www.macworld.com/article/131874/2008/01/ipodsales.html

-9-
Marketing In Practice Marketing Plan iBangle

change tremendously among customers. The factors that influence the

evolution in the trends are:-
a. Customer preference to better sound quality
b. The sizes of iPod and mp3 players are more compact and
easy to carry.
c. The storage capacity is bigger and customers can opt for
different sizes compared to other devices.
d. The introduction of storage format like mp3, acc, and wma
enable to customer to store more music compared to earlier
version.

The market trend is expected to show prolonged growth and future

products of portable players that have sophisticated design, features and
benefits like iBangle can gain customer interest as well as market demand

4.1.3 Profitability & Future Growth Potential

Apple had gain revenue of 48% from iPod Business Division in
first fiscal of 20074, meanwhile other music related products contributed
4
Extracted from http://www.scribd.com/doc/26711/Apple-sold-100-million-Ipods-How-much-did-they-
make

- 10 -
Marketing In Practice Marketing Plan iBangle

9% of total profit. We estimated that growth of average of 4% in sales

based on forecasting projection by year 2012 and expansion of 18.3% in
population by 2015.
5

4.2 SWOT ANALYSIS

5
Extracted from
http://blogs.eweek.com/applewatch/content/corporate/apple_q2_2008_by_the_numbers.html

- 11 -
Marketing In Practice Marketing Plan iBangle

4.2.1 Strength
4.2.1.1 Brand Position
Apple Inc. is one of the most progressive and established
IT brand in the IT industry. The organisation had managed to
create strong brand value position among its customers. Apple
products often associated with concept of fun, energetic,
sophisticated, and quality and it generated loyal and enthusiastic
customers that support Apple brands. The supremacy loyalty of
customers shows that Apple managed to gain customers as well as
sustain them. The sales of 22.1 million iPod show the customers
consumption of Apple products. The customers subscribes to
services and products that offered by Apple and willing to come
back for more Apple products lines. This can create opportunities
for Apple to market iBangle more proficiently.

4.2.1.2 Financial Strength

- 12 -
Marketing In Practice Marketing Plan iBangle

Apple Inc have stable and strong financial factor in the IT

industry. The organisation managed to generate net income of
USD 4834.0 million in 2008 and USD 2,523,000 of Cash flow6.
This shows that the organisation have capabilities to invest
sufficient amount to design, manufacture, and market iBangle in
the targeted market.

4.2.1.3 Innovation and Improvement

Strengths of Apple are innovation and the capability of
improving its product in diminutive period. This can be seen in the
6 times upgrading of classic iPod models since been introduced.
There are 6 generation of ‘Mini/Nano’ model since 2004. This will
enable the organisation to develop iBangle and improvised in short
time and capture market demand whenever the opportunities rise.

4.2.1.4 Product diversification

Apple Inc also managed to manufacture and market
products that varies from PCs, personal notebook, mobile
communication, hardware, software, portable music players to
peripheral devices. This has enabled them to penetrate wider
market. Therefore, it also contributed to revenue of Apple. This can
help Apple to launch and market iBangle in all level of market
without compromising the revenue much.

4.2.2 Weakness
4.2.2.1 Price
The prices of apple products are often expensive and only
can be afforded by certain group. Most of its products are ranges
from USD 200 onwards for its Mp3 and Mp4 compared to other

6
Source: http://finance.yahoo.com/q/is?s=AAPL&annual

- 13 -
Marketing In Practice Marketing Plan iBangle

brands like Samsung, Creative. Therefore, many customers from

lower income group could not afford Apple products and opt for
other brands.

4.2.2.2 Faulty products

Some of Apple products also face problems such as iPod
Nano faces faulty screen whereby the screen can easily break
under impact, and early iPods faced problem with faulty batteries.
This had force the company to replace all the faulty items and had
incurred more cost.

4.2.2.3 Lack of quality Control

The products like iPod Nano faced problems and shows
that Apple Inc had faced lack of quality control.

4.2.3 Opportunity
4.2.3.1 Better quality control implementation
The Apple Inc also can increase its quality control sector to
be able to provide more enhanced and quality product to its
customers.

4.2.3.2 Introduction of new products

Apple had been massive designing, and manufacturing
new products for its customers compared to the competitors like
Sony, Samsung. Therefore, Apple can penetrate PMP field with
new products like iBangle efficiently.
4.2.3.3 Brand awareness
The Apple has developed strong brand awareness among
customers and in the international market. Therefore, Apple Inc
can create market opportunity for iBangle more efficiently because
the customers are more perceptive and easily accept Apple

- 14 -
Marketing In Practice Marketing Plan iBangle

products compared to other brands due to brand awareness.

Moreover, the recognition of Apple brand in the international arena
also can generate international market opportunities for iBangle.

4.2.4 Threat
4.2.4.1 Strong Competition
Apple Inc also faced competition in today’s global
oligopoly market since the industry is been influenced by several
major competitors such as Sony, Samsung, HP and others.

4.2.4.2 Financial Crisis

The inconsistency of global financial stability and world
stock market can induce crisis and problems for Apple Inc during
introducing new products to the market. The financial crisis can
force customers to retreat and not support any new products due to
personal financial problems.

4.2.4.3 Political Unstable

One of major crisis that the organisation will face during
launching iBangle is political instability in some countries in the
world. This can cause by few factors such as internal political
power struggle, transition of ruling power and others. These
dilemmas can affect launching of iBangle in certain countries
such as South Africa, Thailand, Philippine, and others even though
there is vast market opportunity.

4.3 COMPETITORS ENVIROMENT

Apple Inc.’s main competitors in IT industry are Sony, Samsung, IBM and
HP. However, top competitors that have capabilities and financial strength
to produce similar products with Apple are Sony and Blackberry especially
for products like MP3 and MP4. Sony had been veteran in portal music device

- 15 -
Marketing In Practice Marketing Plan iBangle

circle and later entered by Apple. Apple managed to capture 50% of marketing
share since 2005 but Sony also progressively gain market share of 20% in
2006 and 30% in 20077. It shows that Sony has capacity and resources to
design, manufacture product that have similarities with iBangle.

5.0 MARKETING OBJECTIVE

The marketing objectives of iBangle for Apple Inc as follows:-

7
Source from http://www.venturacountystar.com/news/2007/nov/26/sony-is-trying-to-bite-into-apples-
ipod-market/

- 16 -
Marketing In Practice Marketing Plan iBangle

• To establish as market leader in creating and manufacturing innovative

products in IT industry

• To enable Apple Inc to satisfy, fulfil and equipped the consumer’s

personality and lifestyle needs as well to increase Apple popularity as
an icon in digital lifestyle product

• To establish as market leader in portal music player sector by

increasing market share

• To enable Apple Inc to monopoly the portal music device sector share
by 75% by year 2012

• To enable the Apple Inc revenue from iPod Business Division to

increase to 63% by year 2015

6.0TARGET MARKET
6.1 Segment Identification
iBangle is a version of MP3 player that can be worn on wrist to be
launched within the portable music player (PMP) sector in U.S.

- 17 -
Marketing In Practice Marketing Plan iBangle

6.2 Segment Needs

iBangle will be a device that accommodate social needs of customer such
as it will be perceived as one of tools of digital lifestyle, fun and cool device
and sense of belonging within peer group, brand that need to be owned,
cultural lifestyle and others needs. It also cater personal needs such as for
customers that want to experience music without tangled with wires when
they performing the daily activities, luxurious activities such as exercise,
jogging, surfing and others activities.

6.3 Segment Trends

The current trend shows transcend from wired and bulky PMP to light,
easy, compact in size, more capacity, less wired or wireless and multifunction
players like MP3 players. The trends also change towards wireless player,
brand conscious and digital lifestyle. Therefore, market opportunity for
iBangle is far vaster due to trend transformations.

6.4 Segment Growth Potential

According to statistic report, the segment growth can be projected increase
of 18.3% over next 5 years (2015) for 21 years and above subsets. Meanwhile,
the segment for 14-17 years old, anticipated growth is 0.93% and 19-24 years
old is about 10.52%.8

6.5 Size of Segment (Population)

According to statistics report of CIA, the size of segment 15-64 years old
consists of 102,665,043 male and 103,129,321 femalei.

7.0POSITIONING STRATEGY
Apple has been enable to create and revolutionised the portal music player sector by
adapting to visceral design, and manufacture creative, innovative, and cool products such
as iPods. Moreover, iPod managed to became measurement against any portal music
8
Refer to Appendix 2,

- 18 -
Marketing In Practice Marketing Plan iBangle

players since its penetration into the market. 9 Therefore, iBangle player will be adapting
strategy by being the ultimate must have mp3 player in the perception of customers. The
organisation will be adapting strategy of product differentiation in marketing iBangle in
the market. Moreover, Apple also will be providing quality and excellent customer
service for iBangle customers.
Apple will be developing unique selling proposition (USP) for iBangle by
differencing iBangle from other mp3 player through its designs, features, and benefits
that shown below:-

• Benefits positioning: listen to music without tangles of wires and wear it as

accessory
• Features: include multi-track touchpad, wireless ear headphones, customised
according to wrist size, better music quality, and download music via Bluetooth
• Product Positioning: the shape of bangle enable customer to wear at wrist, portray
cool look, personalised mp3 player (other people might not notice the player) and
the first mp3 player in the world designed as bangle.
• User Positioning: iBangle as the most suitable and coolest trend for digital lifestyle
oriented customers

Even though iBangle main function is mp3 player, it also will be marketed as hand
accessory. Apple has strong brand personality (image differentiation) among its
customers and worldwide can enable them to market iBangle to the targeted market
more efficiently. The features, benefits, and unique design of iBangle can aid the
company to create impression of must have mp3 player in the cognitive mind of
customers. The success of iPod in 2000 as shown below is an example of people
acceptance of Apple products10.

9
Source : http://www.scribd.com/doc/8688101/Cultural-Marketing-Analysis-Why-iPod-A-Case-Study
10
Source: http://www.tuftsdaily.com/2.5512/ipod-nation-1.599109

- 19 -
Marketing In Practice Marketing Plan iBangle

8.0MARKETING STRATEGY
8.1 Product Strategy
8.1.1 The core
iBangle is mp3 player that worn at wrist equipped with wireless
ear headphones to listen to music.

8.1.2 The actual product

- 20 -
Marketing In Practice Marketing Plan iBangle

The design of mp3 player is unique and innovative by Apple and

be worn wrist. It also can function as hand accessory. As for
banding, Apple logo is embedded on the bangle and the colour for
iBangle is silver to cater for unisex customer as well as to establish
as stylish bangle.
The trade name is iBangle™, an Apple product. The brand
personality adapted for this product consist of stylish, cool, trendy,
originality and think different. The iBangle also equipped with 1
year warranty and customer service.

8.1.3 Based on life product life cycle, iBangle is new product to the
market and currently no imitation products. Therefore, proactive
and comprehensive marketing campaign can enable iBangle to be
recognised immediately and sales of the product will be
accelerating progressively.

8.1.4 The unique design of iBangle will enhance its’ differentiation

among existing portal music players and generate advantages to
the product. Moreover, Apple is known to produce award winning
innovative products as stated below11.
Apple had worn eight iF (International Forum) Product Design Awards
at CeBIT 13 2008 show in Hanover, Germany for out of nine products
that were submitted for consideration.
8.1.5 The other factors that create differentiation for iBangle is the Apple
managed to create emotional benefits12 for its users. Therefore,
iBangle also can provide emotional benefit to customers in form of
maintaining simplicity, stylish design, easy to use and constructive
customer service.

11
Source : http://www.scribd.com/doc/3936101/A-study-of-ipods-product-design
12
Source: : http://www.scribd.com/doc/8688101/Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 21 -
Marketing In Practice Marketing Plan iBangle

8.1.6 The iBangle also considered ‘green’ product since the main
component to manufacture iBangle is aluminium. Aluminium is
one of the most recyclable materials.13 This enable iBangle to gain
status as ‘eco-friendly product’ and infiltrate environmental
concern oriented customers.

8.1.7 The iBangle product has another distinguish advantage that is the
brand name of Apple. Apple had become one of the most powerful
icons14 in the IT industry due to its visceral design, unique
products, quality and features. Therefore, branding Apple logo on
iBangle will increase its value and perception among the
customers.

8.2 Price Strategy

As for pricing strategy for iBangle, there are several factors should be
considered as such consumer demand, product lifecycle and potential
substitutes. The price of iBangle will be at USD 390.00. This is because at initial
introduction, only 10,000 units will be produced and marketed in U.S.A. The
profit margin is 30%. Apple Inc should given important aspect toward customer
demand.
Since Apple had be able to portray themselves as icon of PMP sector through
introduction of iPod generation, iBangle is can create massive demand among
customers due to its unique design and features. The skimming price strategy will
be adapted to market iBangle to the customers. The price will be set at USD
399.00 at introduction stage and price will be reviewed at later stage of product
lifecycle.
The organisation also has advantages such there is no substitute or imitation
product like iBangle that available currently on the market. However, potential
substitutes produced by competitors is possible, therefore Apple have to establish

13
Source: http://ezinearticles.com/?Why-is-Aluminum-So-Recyclable?&id=2277133
14
Source: http://www.scribd.com/doc/8688101/Cultural-Marketing-Analysis-Why-iPod-A-Case-Study

- 22 -
Marketing In Practice Marketing Plan iBangle

as market leader for iBangle. This can create market demand for iBangle since it
has unique characteristics.
One of the examples of successful pricing strategy can be seen in sales of iPod
in the market and it shown in Chart 215.

8.3 Promotion Strategy

8.3.1 Objectives
• To create strong awareness about iBangle throughout the
target customers (14 to 29years old) as well as parents
• To penetrate and increase market shares in portal music player
sector and override competitors

15
Extracted from http://www.scribd.com/doc/26711/Apple-sold-100-million-Ipods-How-much-did-they-
make

- 23 -
Marketing In Practice Marketing Plan iBangle

One of the promotional important outputs is to portray iBangle as ‘the

futuristic mp3 player and the coolest product for everyone’.
The media selection for promoting iBangle is varies for the selected
customers group. However, one of the most powerful media is Internet media.
The internet usage in United States is about 223 million in 200816. It shows
creative advertisements via online can penetrate the target customer faster and
more efficient. Moreover, online store also can boost the sales of iBangle.
Moreover, Apple also will be using electronic media as advertisement
arena to launch iBangle to the world. Apple is knows for creating innovative, and
unique advertisements to promote their products such as in using slogan ‘Think
Different’, use famous ‘free thinkers’ like Pablo, John Lennon, Mahatma
17
Gandhi and others to shows that Apple product is unique and different from
others. Therefore, unique advertisement such as constant advertisement about
iBangle at prime time TV shows, radio shows can create brand awareness
among the customers.
Other than that, Apple also will be using idols and international stars to
promote iBangle. Apple is planning using teen idol Hannah Montana as teen
ambassador to promote iBangle to teenagers group. Furthermore, in order to
penetrate the current trend and culture, iBangle will be attached to celebrities such
as Beyonce, Missy Elliot, and Jason Marz. The product will be worn by these
stars in the video clips and photography session for magazines and events. The
personalities from sport arena such as Cristiano Ronaldo, and S. McGee also will
be recruited to promote iBangle. The celebrities spotted with iBangle can create
brand awareness among customer more massively. Apple will be running
advertisement on iBangle during important events like Super bowl games, NBA,
and World League. This is to target sport oriented customers.
Apple also will sponsor prime time TV shows like ‘Leverage’ and ‘C.S.I’
to promote iBangle for the young adults customers. The advertisement of
iBangle will be aired during the Showtime to capture young adults’ attention on
iBangle.
16
Source: https://www.cia.gov/library/publications/the-world-factbook/geos/us.html#Econ
17
Source: http://www.scribd.com/doc/2648710/iPod-The-Marketing-of-an-Idea

- 24 -
Marketing In Practice Marketing Plan iBangle

Table 2 shows the selection of media that used for iBangle promotion

8.4 Place Strategy

Other than that, the company will be choosing distribution channels such as
a. online stores
b. retail stores
c. direct sales
One of the most established distribution channels is Apple retails stores.
Therefore, iBangle will be launched and marketed at all Apple retails stores

- 25 -
Marketing In Practice Marketing Plan iBangle

across the country for the success of iBangle. Apple managed to gain USD
1.45 billion from 208 stores in 200818 ensure that retail store is one of the most
successful distribution channels. Moreover, online stores also another
important distribution channel that can aid the sales of iBangle and will be
able to penetrate geo-clustering segment more proficiently.

18
Source : http://ejschmidt.com/blog/apple-success-design-distribution/

- 26 -
Marketing In Practice Marketing Plan iBangle

9.0 FINANCIAL PROJECTION & EVALUATION

Average-Cost Pricing

A. Calculation of Planned Profit B. Calculation of Actual Profit if

if 10,000 Only 10,000
items Are Sold items Are Sold

Calculation of Costs: Calculation of Costs:

Fixed overhead expenses $200,000 Fixed overhead expenses $200,000
Labor and materials 700,000 Labor and materials 700,000
Total costs $900,000 Total costs $900,000
"Planned" profit 3,000,000
Total costs and planned profit $3,900,000
Calculation of profit (or loss): Calculation of profit (or loss):
Actual unit sales x price (below) $3,990,000 Actual unit sales x price (below) $3,900,000
Minus: total costs 900,000 Minus: total costs 900,000
Profit (loss) $3,090,000 Profit (loss) $3,000,000

Calculation of "reasonable"
price:
Expected total costs and
planned profit $3,900,000
Planned number of items to
be sold 10,000
"Reasonable" price $390.00

- 27 -
Marketing In Practice Marketing Plan iBangle

TABLE 4: Cost for iBangle Production

Cost Classifications for an iBangle

Components
Total
cost Variable Fixed
Operating expenses
$180,00
Direct labor 0 $180,000 $0
Direct supervision 50,000 50,000 0
Social Security 20,000 150,000 0
Materials 110,000 110,000 0
Operations overhead 0 0 85,000
$360,00
Subtotal 0 $490,000 $85,000
Non operating
expenses
Advertising $35,000 $0 $35,000
Promotion 20,000 0 20,000
Field sales 15,000 0 15,000
Product management 15,000 0 15,000
Marketing management 20,000 0 20,000
Product development 50,000 0 50,000
Marketing research 20,000 0 20,000
Customer service 70,000 50,000 20,000
Testing 50,000 0 50,000
General &
administrative 0 30,000
$295,00
Subtotal 0 $50,000 $275,000

$655,00
Total 0 $540,000 $360,000

Based on Table 3 and Table 4, the price of iBangle for introduction stage will be USD
390.00 will margin profit of 35%.

- 28 -
Marketing In Practice Marketing Plan iBangle

TABLE 5: Contribution Margin Statement for iBangle

Product: iBangle
Income Statement
31-Dec-10

Revenues (no. of units x price) $3,900,000

Variable costs
Direct labor $180,000
Direct supervision/clerical 50,000
Social Security 150,000
Sales force commissions 100,000
Customer service 70,000
Materials 110,000
Operations overhead (plant, etc.) 75,000
Total variable costs $735,000
Contribution margin rate (percent) 30%
Contribution margin amount $1,170,000
Fixed costs
Operations overhead $10,000
Advertising 35,000
Promotion 20,000
Field sales 15,000
Product management 50,000
Marketing management 20,000
Product development 15,000
Marketing research 20,000
Customer service 50,000
Testing 50,000
General & administrative 30,000
Total fixed costs $315,000
Operating profit (loss) $855,000

Based on Table 5, projection profit contribution of Ibangle

Based on Table 5, projection of profit margin is 30% and iBangle profit contribution to
Apple revenue by 2010 is USD855, 000.

- 29 -
Marketing In Practice Marketing Plan iBangle

Break-Even Analysis

$2,000,000

$1,500,000

TFC
$1,000,000
TVC
TC
Sales
$500,000
Profit

$0
0 400 800 1,200 1,600 2,000 2,400 2,800 3,200 3,600 4,000

($500,000)

Break-Even Point (units) = 1,071 Break-Even Point ($'s) = $417,857

Total Fixed Costs TFC = $360,000 Formulas:

Variable Cost per Unit VCU = $54.00 BEP (units) = TFC/(SPU-VCU)
Sales Price per Unit SPU = $390.00 BEP ($'s) = BEP (units) * SPU

© Copyright, 2009, Jaxworks, All Rights Reserved.

Unit Increment x-axis 400

Graph Data:
Total
Units TFC TVC TC Sales Profit
0 360000 0 360000 0 -360000
400 360000 21600 381600 156000 -225600
800 360000 43200 403200 312000 -91200
1200 360000 64800 424800 468000 43200
1600 360000 86400 446400 624000 177600
2000 360000 108000 468000 780000 312000
2400 360000 129600 489600 936000 446400
2800 360000 151200 511200 1092000 580800
3200 360000 172800 532800 1248000 715200
3600 360000 194400 554400 1404000 849600
4000 360000 216000 576000 1560000 984000

Based on break even analysis projection, the sales force need to sale minimum
1071 units of iBangle and gain break even at USD 417,857.

- 30 -
Marketing In Practice Marketing Plan iBangle

INCOME STATEMENT

- 31 -
Marketing In Practice Marketing Plan iBangle

10.0IMPLEMENTATION PLAN

- 32 -
Marketing In Practice Marketing Plan iBangle

- 33 -
Marketing In Practice Marketing Plan iBangle

- 34 -
Marketing In Practice Marketing Plan iBangle

11.0CONTROL MECHANISM AND EVALUTION OF

EFFECTIVENESS
Moreover, the marketing team also have to implement effective control
mechanism and evolution of effectiveness method in order to ascertain the launch
of iBangle is successful; the marketing strategies are efficient and progress
constructively according to projection especially in sales and penetrating targeted
market. The suggested apparatus had been designed to aid the department to
evaluate the effectiveness of iBangle marketing plan and objectives are shown
below:-
a. Constant market survey and research such as questionnaire method,
observation on consumer behaviourism will be implemented in order
to evaluate the acceptance of iBangle among its customers.
b. Quality Control mechanism also will be introduced in order to
monitor the quality of iBangle since this is the debut to the market.
This will enable the team to capture any defects, faulty parts that can
occur after the customer purchase and use the product.
c. Customer Service and technical support team will be established to
aid the customers regarding any problems, defects, technical problems
and others. This can ensure the quality of iBangle will not be
compromised.
d. The department also will generate and implement comprehensive plan
to monitor the sales of iBangle, the re-evaluate the market needs, and
prepare marketing strategies to gain more customers in the future.
e. The department will conduct customer survey to obtain report on the
customer’s satisfaction toward iBangle to gather suggestion
improvements that might be needed to enhance the second generation
of iBangle in the future.

- 35 -
Marketing In Practice Marketing Plan iBangle

12.0REFERENCE

KOTLER, P., 1997, Marketing Management,9th Edition, New Jersey,

Simon&Schuster Co.,
HEYMAN, J., H.,2008, All You Need is A Good Idea, New Jersey, John Wiley &
Sons, Inc.
J. PAUL PETER, ,JAMES H. DONNELLY, JR , A Preface to Marketing
Management, MA, Irwin,
NICKELS, W., MCHUGH,J., & MCHUGH,S., 1999, Understanding Business,5th
Edition, MA, The McGrw-Hill Companies,Inc.,
RIES, AL., TROUT, J.,2001, Positioning: The Battle for your Mind, MA, The
McGrw-Hill Companies ,Inc
MARKETING MINDS, 2008, Apple Branding Strategy[online], Sydney,
Marketing Minds, Available from
http://www.marketingminds.com.au/branding/apple_branding_strategy.html [Accessed
20th May 2009]
YAMADA, T.,2008, This ipod is full of Air[online], Yanko Design, Available from
http://www.yankodesign.com/2008/10/21/this-ipod-is-full-of-air/ [Accessed 20th May
2009]
JAIN,M.,2008,A study of i-pods products design[online], Scribd, Available from
http://www.scribd.com/doc/3936101/A-study-of-ipods-product-design [Accessed 23rd
May 2009]
MOREN,D.,2008, Analysis: Inside Apple’s iPod Sales Figure[online], San
Francisco, Mac Publishing LLC, Available from
http://www.macworld.com/article/131874/2008/01/ipodsales.html [Accessed 25th May
2009]
ELMER-DEWITT, P.,2008, Analyst: Apple’s U.S. consumer market share now
21 percent[online], Cable News Network. Available from
http://apple20.blogs.fortune.cnn.com/2008/04/01/analyst-apples-us-consumer-market-
share-now-21-percent/ [Accessed 25th May 2009]

- 36 -
Marketing In Practice Marketing Plan iBangle

MULLER, T.,2008, Analyzing Apple's iPod Business[online], California,

MrSwing.com, Available from
http://www.mrswing.com/articles/Analyzing_Apple_s_iPod_Business.html [Accessed 8th
May 2009]
DALRYMPLE,MICHAELS, COHEN, J.,P.,P.,2008, Apple reports $1.58 billion
profit[online],San Francisco, Mac Publishing LLC, Available from
http://www.macworld.com/article/131754/appleearnings.html?loomia_ow=t0:s0:a38:g2
6:r3:c0.001788:b21014037 [Accessed on 8th May 2009]
DALRYMPLE,J.,2006, Apple scores high marks in customer satisfaction[online],
San Francisco, Mac Publishing LLC, Available from
http://www.macworld.com/article/51765/satisfaction.html?loomia_ow=t0:s0:a38:g26:r9
:c0.000319:b21014037 [Accessed 8th May 2009]
LARSSON, NORSTROM, 2004,Cultural Marketing Analysis: Why iPod? - A Case
Study [online], Scribd, Available from http://www.scribd.com/doc/8688101/Cultural-
Marketing-Analysis-Why-iPod-A-Case-Study [Accessed 10th May 2009]
GRUBER,J.,2008, Apple First Quarter 20008 Results[online], Daring Fireball,
Available from http://daringfireball.net/2008/01/aapl_q1_2008 [Accessed 10th May
2009]
NetMBA, 2007, Market Segmentation[online], NetMBA, Available from
http://www.netmba.com/marketing/market/segmentation/ [Accessed 10th May 2009]
NetMBA, 2007, Pricing Strategy[online], NetMBA, Available from
http://www.netmba.com/marketing/pricing/ [Accessed 10th May 2009]
NetMBA, 2007, Product Life Cycle [online], NetMBA, Available from
http://www.netmba.com/marketing/product/lifecycle/ [Accessed 10th May 2009]
KUROKAWA,S.,2007, Sony is trying to bite into Apple's iPod market
share[online],Camarillo, The E.W. Scripps Co., Available from
http://www.venturacountystar.com/news/2007/nov/26/sony-is-trying-to-bite-into-apples-
ipod-market/ [Accessed 15th May 2009]
WILCOX,J.,2008, Apple Q2 2008 by the Numbers[online], Ziff Davis Enterprise
Holdings Inc., Available from

- 37 -
Marketing In Practice Marketing Plan iBangle

http://blogs.eweek.com/applewatch/content/corporate/apple_q2_2008_by_the_numbers.
html [Accessed 15th May 2009]
BAKER.A.,2004, iPod nation?[online],Boston, The Tuffs Daily, Available from
http://www.tuftsdaily.com/2.5512/ipod-nation-1.599109 [Accessed 20th May 2009]
CIA THE WORLD FACT BOOK, 2009, United States[online],Washington,
Central Intelligence Agency, Available from https://www.cia.gov/library/publications/the-
world-factbook/geos/us.html#Econ [Accessed on 25th May 2009]
US CENSUS Bureau,2007, 2005-2007 American Community Survey 3-Year
Estimates[online] , Washington, Available from
http://factfinder.census.gov/servlet/ACSSAFFFacts?_submenuId=factsheet_1&_sse=on
[Accessed 25th May 2009]

13.0APPENDIX

- 38 -
Marketing In Practice Marketing Plan iBangle

APPENDIX 1

- 39 -
Marketing In Practice Marketing Plan iBangle

APPENDIX 219

19
Extracted from http://www.census.gov/population/projections/SummaryTabB1.pdf

- 40 -
 Marketing In Practice Marketing Plan iBangle

APPENDIX 3

Median income levels

Persons, age 25 or older with

Households Household income by race
earnings

Dual Per White,

All
earner household Males Females Both sexes Asian non- Hispanic Black
households
households member Hispanic

$46,326 $67,348 $23,535 $39,403 $26,507 $32,140 $57,518 $48,977 $34,241 $30,134

Median personal income by educational attainment

High Bachelor's
Some High Some Associate's Bachelor's Master's Professional Doctorate
Measure school degree or
School college degree degree degree degree degree
graduate higher

Persons,
age 25+ w/ $20,321 $26,505 $31,054 $35,009 $49,303 $43,143 $52,390 $82,473 $70,853
earnings

Male, age
25+ w/ $24,192 $32,085 $39,150 $42,382 $60,493 $52,265 $67,123 $100,000 $78,324
earnings

Female,
age 25+ w/ $15,073 $21,117 $25,185 $29,510 $40,483 $36,532 $45,730 $66,055 $54,666
earnings

Persons,
age 25+,
$25,039 $31,539 $37,135 $40,588 $56,078 $50,944 $61,273 $100,000 $79,401
employed
full-time

- 41 -
 Marketing In Practice Marketing Plan iBangle

Household $22,718 $36,835 $45,854 $51,970 $73,446 $68,728 $78,541 $100,000 $96,830

Household income distribution

Bottom Bottom Bottom Middle Middle

Top 25% Top 20% Top 5% Top 1.5% Top 1%
10% 20% 25% 33% 20%

$30,000
$0 to $0 to $0 to $35,000 to $77,500 $92,000 $167,000 $250,000 and $350,000
to
$10,500 $18,500 $22,500 $55,000 and up and up and up up and up
$62,500

Source: US Census Bureau, 2006; income statistics for the year 2005

Appendix 4

- 42 -
Marketing In Practice Marketing Plan iBangle

Academic Class Models

- 43 -
Marketing In Practice Marketing Plan iBangle

William Thompson &

Dennis Gilbert, 2002 Leonard Beeghley, 2004
Joseph Hickey, 2005

Typical Typical
Class Class Class Typical characteristics
characteristics characteristics

Multi-millionaires whose
incomes commonly exceed
The super-
$350,000; includes celebrities
Top-level rich
and powerful
Top-level executives, (0.9%)
executives/politicians. Ivy
executives, high- celebrities, heirs;
League education common.
Capitalist rung politicians, Upper income of
class (1%) heirs. Ivy League class 1% $500,000+
education common. Ivy
Households with net worth of
common. league education
$1 million or more; largely in
common. The Rich
the form of home equity.
(5%)
Generally have college
degrees.

- 44 -
Marketing In Practice Marketing Plan iBangle

Highly educated
Highly educated
(often with
(often with
graduate degrees)
graduate degrees),
professionals &
Upper most commonly Upper
managers with
middle salaried, middle
household
class [1] professionals and class [1]
incomes varying
(15%) middle (15%)
from the high 5-
management with
figure range to
large work
commonly above
autonomy College educated workers with
$100,000 Middle
incomes considerably above-
class
average incomes and
(plurality/
compensation; a man making
Semi- majority?;
$57,000 and a woman making
professionals and ca. 46%)
Semi- $40,000 may be typical.
craftsman with
professionals and
some work
craftsmen with a
Lower Lower autonomy;
roughly average
middle middle household
standard of living.
class class incomes
Most have some
(30%) (32%) commonly range
college education
from $35,000 to
and are white
$75,000.
collar.
Typically, some
college education.

- 45 -
Marketing In Practice Marketing Plan iBangle

Clerical and most

blue collar
workers whose
work is highly
routinized.
Working Standard of living
class varies depending
(30%) on number of Clerical, pink and
income earners, blue collar
but is commonly workers with
just adequate. often low job
High school Working security; common
class
education. household
(32%)
incomes range
Blue collar workers and those
from $16,000 to
whose jobs are highly
Service, low-rung $30,000. High Working
routinized with low economic
clerical and some school education. class
security; a man making
blue collar (ca. 40% -
$40,000 and a woman making
Working workers. High 45%)
$26,000 may be typical. High
poor economic
school education.
(13%) insecurity and risk
of poverty. Some
high school
education.

Those who
occupy poorly-
Lower
paid positions or
class
rely on
(ca.
government
14% -
transfers. Some
20%)
high school
education.

- 46 -
Marketing In Practice Marketing Plan iBangle

Those with
limited or no
Those living below the poverty
participation in
line with limited to no
the labor force.
Underclass The poor participation in the labor force;
Reliant on
(12%) (ca. 12%) a household income of $18,000
government
may be typical. Some high
transfers. Some
school education.
high school
education.

References: Gilbert, D. (2002) The American Class Structure: In An Age of Growing Inequality.
Belmont, CA: Wadsworth; Thompson, W. & Hickey, J. (2005). Society in Focus. Boston, MA:
Pearson, Allyn & Bacon; Beeghley, L. (2004). The Structure of Social Stratification in the United
States. Boston, MA: Pearson, Allyn & Bacon.
1
The upper middle class may also be referred to as "Professional class" Ehrenreich, B. (1989). The Inner Life of the Middle Class.
NY, NY: Harper-Colins

- 47 -
Marketing In Practice Marketing Plan iBangle

APPENDIX 5

- 48 -
Marketing In Practice Marketing Plan iBangle

- 49 -
Marketing In Practice Marketing Plan iBangle
Income Statement of APPLE INC

View: Annual Data | Quarterly Data All numbers in thousands

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Total Revenue 32,479,000 24,006,000 19,315,000

Cost of Revenue 21,334,000 15,852,000 13,717,000

Gross Profit 11,145,000 8,154,000 5,598,000

Operating Expenses

Research Development 1,109,000 782,000 712,000

Selling General and Administrative 3,761,000 2,963,000 2,433,000

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss 6,275,000 4,409,000 2,453,000

Income from Continuing Operations

Total Other Income/Expenses Net 620,000 599,000 365,000

Earnings Before Interest And Taxes 6,895,000 5,008,000 2,818,000

Interest Expense - - -

Income Before Tax 6,895,000 5,008,000 2,818,000

Income Tax Expense 2,061,000 1,512,000 829,000

Minority Interest - - -

Net Income From Continuing Ops 4,834,000 3,496,000 1,989,000

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 4,834,000 3,496,000 1,989,000

Preferred Stock And Other Adjustments - - - 50

- -

Net Income Applicable To Common Shares $4,834,000 $3,496,000 $1,989,000

Marketing In Practice Marketing Plan iBangle

APPENDIX 6
Balance Sheet of APPLE INC

View: Annual Data | Quarterly Data All numbers in thousands

- 51 -
Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Assets

Current Assets

Cash And Cash Equivalents 11,875,000 9,352,000 6,392,000

Short Term Investments 12,615,000 6,034,000 3,718,000

Net Receivables 6,151,000 4,811,000 3,452,000

Inventory 509,000 346,000 270,000

Other Current Assets 3,540,000 1,413,000 677,000

Total Current Assets 34,690,000 21,956,000 14,509,000

Long Term Investments - - -

Property Plant and Equipment 2,455,000 1,832,000 1,281,000

Goodwill 207,000 38,000 38,000

Intangible Assets 352,000 382,000 160,000

Accumulated Amortization - - -

Other Assets 641,000 1,051,000 1,217,000

Deferred Long Term Asset Charges 1,227,000 88,000 -

Total Assets 39,572,000 25,347,000 17,205,000

Liabilities

Current Liabilities

Accounts Payable 8,558,000 6,230,000 6,471,000

Short/Current Long Term Debt - - -

Other Current Liabilities 5,534,000 3,069,000 -

Total Current Liabilities 14,092,000 9,299,000 6,471,000

Long Term Debt - - -

Other Liabilities 746,000 67,000 14,000

Deferred Long Term Liability Charges 3,704,000 1,449,000 736,000

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 18,542,000 10,815,000 7,221,000

- 52 -
Marketing In Practice Marketing Plan iBangle

APPENDIX 7
Cash Flow APPLE INC

View: Annual Data | Quarterly Data All numbers in thousands

- 53 -
Marketing In Practice Marketing Plan iBangle

PERIOD ENDING 27-Sep-08 29-Sep-07 30-Sep-06

Net Income 4,834,000 3,496,000 1,989,000

Operating Activities, Cash Flows Provided By or Used In

Depreciation 473,000 317,000 225,000

Adjustments To Net Income 170,000 332,000 227,000

Changes In Accounts Receivables (785,000) (385,000) (357,000)

Changes In Liabilities 7,517,000 3,245,000 2,907,000

Changes In Inventories (163,000) (76,000) (105,000)

Changes In Other Operating Activities (2,450,000) (1,459,000) (2,666,000)

Total Cash Flow From Operating Activities 9,596,000 5,470,000 2,220,000

Investing Activities, Cash Flows Provided By or Used In

Capital Expenditures (1,091,000) (735,000) (657,000)

Investments (6,760,000) (2,312,000) 1,032,000

Other Cashflows from Investing Activities (338,000) (202,000) (18,000)

Total Cash Flows From Investing Activities (8,189,000) (3,249,000) 357,000

Financing Activities, Cash Flows Provided By or Used In

Dividends Paid - - -

Sale Purchase of Stock 483,000 362,000 (37,000)

Net Borrowings - - -

Other Cash Flows from Financing Activities 633,000 377,000 361,000

Total Cash Flows From Financing Activities 1,116,000 739,000 324,000

Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents $2,523,000 $2,960,000 $2,901,000

APPENDIX 8

- 54 -
Marketing In Practice Marketing Plan iBangle

APPENDIX 9
APPENDIX 9

- 55 -
Marketing In Practice Marketing Plan iBangle

APPENDIX 10
Wednesday, April 23, 2008 6:30 PM/EST

Apple Q2 2008 by the Numbers

News Analysis. Apple continued to deliver strong results, posting its strongest fiscal

- 56 -
Marketing In Practice Marketing Plan iBangle

second-quarter revenue and earnings ever. How's 43 percent revenue growth?

If there is a U.S. economic crisis, Apple isn't yet feeling it. Fiscal second-quarter revenue
reached $7.51 billion, up from $5.26 billion a year earlier. Net profit jumped from $770
million a year earlier to $1.05 billion, or 87 cents and $1.16 earnings per share,
respectively.

Looking ahead, Apple predicted fiscal third-quarter revenue of $7.2 billion, up 33 percent
year over year, and $1.00 earnings per share.

During the second quarter, Mac sales grew 51 percent year over year, the strongest Apple
has seen in two decades. Apple sold 2.289 million Macs, with 1.43 million being
portables. Mac revenue grew 54 percent year over year—61 percent for portables. Mac
inventory increased about 60,000 units during the quarter, in part because of MacBook
Air.

As expected, iPod units marginally gained year over year (1 percent) and declined
sequentially (52 percent). Apple shipped 10.64 million iPods during the quarter. Shuffle
sales declined, but bumped up following price cuts. Based on analyst numbers, Apple
claims 73 percent of the U.S. MP3 market share. The company ended the quarter with
four to six weeks of iPod inventory. Related: Apple ended the quarter with about 50
million iTunes customers.

- 57 -
Marketing In Practice Marketing Plan iBangle

Apple shipped 1.73 million iPhones during the quarter, but didn't realize all the revenue.
Apple won't realize revenue or product cost on iPhones sold after March 6 until the
release of iPhone 2.0 software, which is now expected at the end of June. The decision is
one of those accounting things, related to Apple offering the software update for free.
Apple announced iPhone 2.0 on March 6.

Apple claims that more than 200,000 developers have signed up for the iPhone SDK.
One-third of Fortune 500 companies and 400 educational institutions have signed up for
the iPhone Enterprise Beta program. Clearly somebody is interested in connecting the
iPhone to Microsoft Exchange Server.

While iPhone sales declined 26 percent sequentially, Apple couldn't meet demand,
particularly among its company stores. "We expected iPhone to decline more sequentially
than it did," said Apple Chief Operating Officer Tim Cook on Apple's earnings
conference call. He acknowledged inventory as being "low" in Europe and the United
States. Despite the shortages, Apple executives expressed confidence that the company
would sell 10 million iPhones by the end of the calendar year.

People have been buying phones from Apple stores with the intention of activating them
later, Cook said. He described the shortages as a "proxy for the worldwide demand of the
phone." That could be construed to mean that phones bought in the United States are
ending up elsewhere, even unlocked. Cook wouldn't quantify the number of unlocked
phones but acknowledged that it is "significant."

- 58 -
Marketing In Practice Marketing Plan iBangle

Apple retail stores posted a shockingly strong quarter. Direct sales, whether in-store or
online, were 53 percent, up from 49 percent a year earlier. Retail store revenue rose 74
percent. Apple stores sold 458,000 Macs, a 67 percent year-over-year increase. Average
in-store sales increased 48 percent. Apple stores had 33.7 million visitors during the
quarter, up 57 percent year over year. The company claimed that 50 percent of customers
were new to Mac. Be careful: That doesn't mean all those customers bought Macs.

Apple ended the quarter with 208 stores, 27 outside the United States. Apple plans to
have opened 45 new stores during fiscal 2008. New stores are coming to Australia and
China, among other countries.

Overseas Apple retail stores appeared to have little impact on broader international sales,
which sequentially declined slightly to 44 percent of the quarter's revenue. That said,
sales were strong in all Apple's geographies, in unit shipments up 45 percent or more year
over year in every region.

- 59 -
Marketing In Practice Marketing Plan iBangle

Apple's Best Buy expansion briskly continued to 400 stores at quarter's end. Apple
expects to be in 600 of Best Buy's nearly 1,300 stores by summer.

Education sales were up by 35 percent year over year in the United States, the strongest
growth Apple has seen in eight years. Cook observed that the growth results come well
ahead of the traditional educational buying cycle.

Apple's gross margins for the quarter were better than expected, 32.9 percent, but still
down from 35.1 percent a year earlier. Apple generated $1 billion in cash during its fiscal
second quarter, ending the quarter with $19.4 billion.

Posted by Joe Wilcox on April 23, 2008 6:30 PM

- 60 -
i
Source: https://www.cia.gov/library/publications/the-world-factbook/geos/us.html#Econ