ASIA PACIFIC INSTITUTE OF INFORMATION TECHNOLOGY IN COLLABORATION WITH STAFFORDSHIRE UNIVERSITY UK BA (Hons) in Business Administration

[Individual Assignment]
Apple iBangle marketing plan: marketing it in Sri Lanka

Module code & Title Intergraded Marketing Communication Prepared by Chamila Illukkumbura (CB002598) GF1041BA Date of Submission 15 November 2009 Instructor Mr. Marlon Gunasekara Submitted in partial fulfilment for the Degree of Bachelor of Arts (Hons) in Business Administration Word Count (3278 words)

ACKNOWLEDGMENTS

I would like to thank my lecturer Mr. Marlon Gunasekara for his immense support and guidance towards completing this assignment efficiently and effectively. Without his guidance and support this Study would have been short sighted.

My dear parents for their unconditional support and guidance given to me, without whom I would have not come this far. Furthermore I would like to express my gratitude and my appreciation to my dearest loved ones Eroshani Fernando, Shehan Perera and Neomal Ellawala for standing by me and lending a helping hand to see me through this project. And last but not least to Business school of Asia Pacific Institute of Information Technology for providing me with the background and tools necessary for the accomplishment of this study. Thank you

EXECUTIVE SUMMMERY
Apple .inc an innovative leader in the electronic industry has presented a revolutionary new product named the iBangle. The following is a marketing plan which emphasise on successfully introducing and marketing it in Sri Lanka. Furthermore the following report contains a step by step analysis of the climate, company, customer, and competitor. In order to justify the analysis primary and secondary research has being carried out.

TABLE OF CONTENTS
ACKNOWLEDGEMENT ............................................................ Error! Bookmark not defined. EXECUTIVE SUMMMERY .................................................................................................... 3 01. INTRODUCTION ............................................................................................................... 6 01.1 INTRODUCTION TO APPLE IBANGLE. .................................................................... 6 01.2 THE CURRENT PRODUCT LINE IS AS FOLLOWS .................................................. 6 02. QUALITATIVE OBJECTIVES ........................................................................................... 8 02.1 BRAND AWARENESS ................................................................................................ 8 02.2 GOOD WILL ................................................................................................................ 8 02.3 QUALITY AND FEATURE AWARENESS ................................................................. 8 02.4 BRAND LOYALTY...................................................................................................... 8 02.5 POSITIONING THE PRODUCT................................................................................... 8 03. QUANTITATIVE OBJECTIVES ........................................................................................ 9 03.1 MARKET SHARE ........................................................................................................ 9 03.2 NUMBER OF DISTRIBUTION CHANNELS ............................................................... 9 03.4 SALES PER MONTH ................................................................................................... 9 03.5 SALES REVENUE........................................................................................................ 9 04. THE COMPETITIVE ENVIRONMENT ANALYSIS FOR APPLE IBANGLE ................ 10 04.1 POLITICAL SITUATION ........................................................................................... 10 04.2 ECONOMICAL FACTORS ........................................................................................ 11 04.3 SOCIAL FACTORS .................................................................................................... 12 04.4 TECHNOLOGICAL .................................................................................................... 13 04.5 NATURAL /ECOLOGICAL ....................................................................................... 14 05. THE SWOT ANALYSIS FOR APLLE IBANGLE ............................................................ 15 05.1 STRENGTHS .............................................................................................................. 16 05.2 WEAKNESS ............................................................................................................... 16 05.3 OPPORTUNITIES ...................................................................................................... 17 05.4 THREATS ................................................................................................................... 17 06. COMPETITOR ANALYSIS FOR IBANGLE ................................................................... 22 06.1 THREAT OF NEW ENTRANTS................................................................................. 22

06.2 THREAT OF SUBSTITUTES ..................................................................................... 22 06.3 BARGAINING POWER OF BUYERS ........................................................................ 22 06.4 BARGAINING POWER OF SUPPLIERS ................................................................... 23 06.5 BRAND COMPETITION ............................................................................................ 23 06.6 INDUSTRY COMPETITION ...................................................................................... 25 06.7 FORM COMPETITION .............................................................................................. 25 06.8 GENERIC COMPETITION......................................................................................... 25 07. MARKET SEGMENTATION ........................................................................................... 29 07.1 MARKET SEGMENTATION ..................................................................................... 29 07.2 SEGMENTATION ANALYSIS .................................................................................. 31 08. TARGET MARKET.......................................................................................................... 33 09. POSITIONING APPLE IBANGLE ................................................................................... 34 09.1 CONCEPTUAL MAPPING FOR IBANGLE............................................................... 35 10. MARKETING MIX .......................................................................................................... 36 10.1 PRODUCT DECISIONS ............................................................................................. 36 10.2 PRICE ......................................................................................................................... 39 10.3 PLACE ........................................................................................................................ 43 10.4 PROMOTIONS ........................................................................................................... 47 10.4.1 PROMOTIONAL BUDGET ................................................................................. 51 11. IMPLEMENTATION........................................................................................................ 52 11.1 GANTT CHART ......................................................................................................... 52 11.2 FEEDBACK AND CONTROL MECHANISM ........................................................... 53 12. CONCLUTION ................................................................................................................. 55 13. REFERENCE .................................................................................................................... 56 14. APPENDICES................................................................................................................... 60 14.1 APPENDIX 01 ............................................................................................................ 60 14.2 APPENDIX 02 ............................................................................................................ 67 14.3 APPENDIX 03 ............................................................................................................ 68 14. 4 APPENDIX 04 ........................................................................................................... 69

01. INTRODUCTION
01.1 INTRODUCTION TO APPLE IBANGLE.
Apple Computer .Inc is a multinational company based in the United States of America. Their primary business operation is manufacturing and distributing consumer electronics and computer software products. As of 2008 the companys total assets exceeded 39.57 billion US dollars and have currently over 35,000 employees. Established in April 1st 1976 By Steve Jobs, Steve Wozniak and Ronald Wayne (apple-history.com, 2009), Apple has changed the face of electronics industry in the world. Apple.inc in an innovative organization, who without waiting for others to created new ideas, comes up with their own.

(.richardsona.com, 2009)

01.2 THE CURRENT PRODUCT LINE IS AS FOLLOWS

Personal Computers Apple Servers iphone ipod Apple TV Cinema Displays Joining this ever expanding family of products is the all new Apple iBangle.

The iBangle, the newest member of the iPod MP3 Music player family, is an aluminium bracelet which uses multi touch and wireless technology, to gives its customer a high quality and innovative experience.

02. QUALITATIVE OBJECTIVES

02.1 BRAND AWARENESS
According to the primary market research results, it is evident that an over whelming majority of the population are not aware of Apple products. Hence the main marketing objective of Apple in the Sri Lankan market is to create brand awareness among its target audience.

02.2 GOOD WILL

For any organization it is vital to establish a company good will in- order to be accepted by the consumer community. E.g. DIMO Lanka is renowned for their excellence service as being the agent of Mercedes Benz.

02.3 QUALITY AND FEATURE AWARENESS

By using both push and pull advertising strategies Apple intends to make its consumer base aware of the quality standards and the uniqueness of the iBangle

02.4 BRAND LOYALTY

Having brand loyalty will reassure that the Apple customer will stick to Apple products even though competitor products may offer better benefits.

02.5 POSITIONING THE PRODUCT

Apple intends to position the iBangle as a symbol of social status among consumers.

03. QUANTITATIVE OBJECTIVES

03.1 MARKET SHARE
From the date of its initial launch, Apple aims to capture 45% of the total market share for MP3, MP4 music players in Sri Lanka within 6 months. As mentioned above in brand awareness, most Sri Lankan consumers are not familiar with Apple products, hence in order to capture the market share that is targeted; Apple must have an effective promotional campaign.

03.2 NUMBER OF DISTRIBUTION CHANNELS

Apart from the 10 sales outlets that are already in existence, Apple aims to open 4 additional sales outlets between the 16th of June and the 16th of July in Sri Lanka. Furthermore Apple is in the process of negotiation with organizations such as ODEL, MONDY to sell and promote the iBangle via those outlets.

03.4 SALES PER MONTH

Apple targets to sell at least 200 units per month.

03.5 SALES REVENUE

Rupees from iBangles.

During the 1st three months Apple targets to gain total revenue of 15 million Sri Lankan

03.6 AVERAGE SALES UP TO 1000 UNITS

By December 2009 Apple intends to make its average sales in Sri Lanka to a 1000 units per month.

04. THE COMPETITIVE ENVIRONMENT ANALYSIS FOR APPLE IBANGLE 04.1 POLITICAL SITUATION
Favourable  Sri Lanka has a democratic republic political system where political parties can compete with each other to gain the majority of public vote in order to gain power. Unfavourable

 The current constitution which governs the nation was created in 1978 by the former UNP government. Since then the Sri Lanka freedom party and the United National Party have come into power on several occasions. The UNP party which came into power in December 2001 was dismissed in March 2004 due to the controversial agreement with the LTTE Terrorists, yet after SLFP returned to office in 2004 with Mr. Mahinda Rajapakse winning the 2005 election and becoming the president of Sri Lanka. From the 19th of November the political arena changed dramatically.

 In 18 may 2009 the Sri Lankan government declared victory over the LTTE terrorists, who was known as the most ruthless terrorists outfit in the world.

 The current coalition government has a very strict policy towards importing luxury goods.

 

 From the provincial council election which was kept in 3 segments, was won by the SLFP lead coalition government with a recordable 60% win.

Sri Lankan political situation was extremely unpredictable in the recent past. Yet when carefully analyzing and evaluating the current progress and events that have occurred, it
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is evident that the present government of Sri Lanka will not change in the near future. Hence it can be said that the political situation is very much stable, making it a suitable environment for organizations to conduct business activities.

04.2 ECONOMICAL FACTORS

Favourable  The gross domestic product of Sri Lanka was recorded at 2,939 Billion Rupees in 2006 which was followed by 3,596 in the year 2007 and 4,411 Billion in 2008.(CBSL) with an economic growth rate of 7.7% in 2006, 6.8% in 2007 followed by 6.0% in 2008

Unfavourable

 The world economic crisis has not directly affected Sri Lanka as in the case of other world economies. Yet the sudden decline in the economic growth rate is believed to have been caused by this scenario.

 The per capita income of Sri Lanka was estimated at 1,421 US Dollars in 2006, 1,639 in 2007 followed by 2,014 in the year 2008.

 Moments after this declaration of victory over the EELAM war the main price indices of the Colombo stock exchange gained remarkable figures. The All Share Price Index (ASPI) gained 123.2 points (6.5%) to close the day at 2030.9. Furthermore the Milanka Price Index (MPI) reported a gain of 162.0 points (7.8%) with the days trading closing at 2230.2. (srilankatoday.com,2009)

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Even though the world economic crisis has devoured many world economies mainly, the United States, European Union and Japan, it has had very little effect on the Sri Lankan economy. With the current ongoing development projects such as MAGANAGUMA, GAMANAGUMA, riving the North and East, THARUNATA HETAK, will affect favorably to the economic growth of Sri Lanka. On 9th of June 2009, the US Dollar was buying at 114 Rupees and selling at 115 (CBSL). If the Sri Lankan policy makers manage to further strengthen the value of the Sri Lankan Rupee it will cut down the cost of importing the iBangle to Sri Lanka.

04.3 SOCIAL FACTORS

Favourable  The population of Sri Lanka is calculated at 21,324,791(CIA world fact book ,2009) who has a literacy rate of 90.7%

Unfavourable

 Sri Lanka is categorized as a developing nation; hence it still has a considerable population under the poverty line. For the breakdown of the Sri Lankan poverty line please refer (APPENDIX 01)

 15.2 % of their Sri Lanka population will not even consider purchasing a luxury good. Yet out of that 15.2 % less that 6.7% live in urban areas where targeted markets are located. Even though the Sri Lankan poverty line is high it will have small effect on sales.( statistics.gov.lk,2009)

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The average Sri Lankans, when compared with other South Asian citizens, are much more westernized. Hence the Sri Lankan consumer is willing to accept western brands and products without protest. The iBangle can be easily marketed in Sri Lanka in a similarly fashion to that of the US. Despite the fact that Sri Lanka is a multi ethnic and multi religion nation, it will have little or no effect on introduction of the iBangle.

04.4 TECHNOLOGICAL

Favourable There is an estimation of 771,700 internet users in Sri Lanka as in 2007(CIAfactbook.com, 2009) which is a massive mileage to the marketing of the Apple iBangle.

Unfavourable

Yet only 18 percent of the population in the age group of 5 to 69 years is aware about computers (statistics.gov.lk,2009).

 

Even though the computer literacy levels are low in Sri Lanka programs such as THARUNYATA HETAK, which are currently undergoing in rural and urban areas, will have a huge impact on the above figures.

The number of internet users and computer literacy is an important factor, for using the internet is one of the major methods Apple uses to promote their products. Apart from this the iBangle is a technologically advance product thus the consumer should be computer literate.

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04.5 NATURAL /ECOLOGICAL Natural Ecological

Favourable

Unfavourable

The new environment protection policies such as the Green tax and strict regulations of the use of polyether products will cause certain barriers when conducting business activities. Hence organization must adapt to the changes.

In the 21 century business world, eco friendliness is a must. The current effects of global warming are inevitable. Responsible companies such as Apple Incorporated, has taken the pioneering steps in conducting business as ecologically friendly as possible. The current environment protection laws in Sri Lanka are not as strict when compared to those of the US. Yet it is expected that the current administration will put preacher to further strengthen the environmental laws.

Likert scale Factors Weight unfavourable 1 Political Economical Social Technological Natural / Ecological Overall score 25 30 20 15 10 100% 2 3 Favourable 4 5 Score Weight score 4 3 1 0.9 1 0.6 0.2 3.7

    

5 4 2 19

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05. THE SWOT ANALYSIS FOR APLLE IBANGLE

Favourable/Unfavourable Strengths  High quality product  Strong brand name  Very stylish and trendy  Brand loyalty Weakness Favourable/Unfavourable

   

 Existence of substitutes.  The services that the iBangle provide are limited  Risk of being a market leader

  

Opportunities

Threats

 Novel product in the Sri Lankan market

 

 Competitor products which offer same service for lesser prices.  Sudden increases in tax rates.

 Growth in the Use of Electronics.  Alliances with fashion outlets such as ODLE and MONDYs will expose the product to border customer base.

 

 World Economic Crisis will effect negatively on consumer buying habits

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05.1 STRENGTHS
Strong Brand name: Products of Apple Inc are widely accepted and renowned by millions of customer around the globe, for Apple Inc is one of the worlds leading innovative of electronic technology providers. Ever since the introduction of Lisa and Macintosh, Apple has become a trend setter for innovative products. All Apple products including the iBangle are made to meet the highest standards of quality. Furthermore the innovative idea of making a music payer in to a fashion accessory has made it become an extremely hip product to be owned.

05.2 WEAKNESS
Substitutes: There are no close substitutes to replace the iBangle, due to the fact that the iBangle is novel to the Sri Lankan market. However there are many substitutes which can provide the basic feature that the iBangle provides, which is, a portable music player. After carefully conducting a research into other music players available in the Sri Lankan market it can be seen that most music payers provide many more features than the iBangle. E.g. Video Screen and Picture viewing: Noika N95, I touch, Samsung 700

05.3 MARKET LEADER

Apple.inc is an innovative market leader. Hence this creates a huge risk, when a new product is developed; for it can become a success or an unbearable failure. For example in 1997 Apple reached its minimum point where even the chairmen of DELL computers Mr. Michael S Dell was quoted saying What I would do? Id Shut it down and give the money back to the share holders(Dell.M.S,1997, nytimes.com,2009) Therefore the Apple iBangle stands the chance of becoming a complete flop or a massive successes.

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05.3 OPPORTUNITIES
There are hundreds of substitutes for a potential customer to choose from, yet the iBangle provides many benefits that no other product can provide nor compete with. The iBangle will not just be another music player out of a shelf. It will be the MERCEDES BENZ or the ROLEX among music players. It is a symbol of quality, innovation and prestige.

05.4 THREATS
The iBangle is priced at nearly at 25, 000 SLR which is comparatively a high amount to be paid for a MP3 player. Yet there are many competing product which offer the same service or even more for a far lesser price.

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Likert scale Factors Weight unfavourable 1 Strengths  High quality product  Strong brand name  Very stylish 10% 5% 10% 2 3 Favourable 4 5 Score Weight score

  

0.5

4 3

0.4 0.15

Opportunities  Novel product in the Sri Lankan market  Alliances with fashion outlets such as ODLE and MONDYs will expose the product to border customer base. 10% 15%

 

0.75

0.4

Weakness  Existence of substitutes.  The services that the iBangle provide are limited  Risk of being a 10% 5% 1 0.05 10%

0.2

 

0.2

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market leader

Threats  Competitors products offer same service for other prices.  Sudden increases in tax rates.  World Economic 10% 10% 5%

  

0.05

0.1

Crisis will effect negatively consumer habits Overall score 100% on buying

0.2

31

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COMPANY ANALYSIS
Favourable factors  Apple.inc is market leader and one of the innovative companies in the world.  Apple is the brain child of Steve Job, Most of Apple products were his concepts, he is unduatebly one of greatest entrupunuer of our time, hence Steve Jobs being the CEO gives apple a Hugh mileage  Apple is a world renound and excepted brand for it high quality, innovativeness and uniqe features.  As of 2008 the companys total assets exceeded 39.57 billion US dollars and have currently over 35,000 employees unfavoble factors  Even though Apple Creates innovative and novel products, the time span it takes to introduce new technologies is comparatively long.  Steve Job being the CEO is an emence stengh to the company. Yet if Apple were to lose such geart minds it will effect in a negative manner  The world Economic crisis have effect many industrial giants in the US, some have even declared bankruptcy. Apple.inc too has recorded significant drops in sales during late 2008 and early 2009.

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Likert scale Factors Weight unfavourable 1 Market Leader Innovative products Steve Jobs High Quality standards Time gap models World economic crisis Overall score 10% 100% between new 25% 20% 15% 20% 10% 2 3 Favourable 4 5 4 Score Weight score 1 1 0.45 0.8 0.1

     

5 3 4 1

1 18

0.1 3.45

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06. COMPETITOR ANALYSIS FOR IBANGLE 06.1 THREAT OF NEW ENTRANTS

As of June 2nd June 2009 Apple.inc is the only organization, who is known to import the iBangle into Sri Lanka, yet organizations such as BT Store are importing other Apple products such as the Apple iTouch and iPod. Hence if organizations such as BT Store, PC House imports and distributes the iBangle it will most certainly affect the market share and sales volume.

06.2 THREAT OF SUBSTITUTES

When analyzing the Sri Lankan electronics market it is evident that there is a range of products that one can choose from. A customer who is interested in purchasing a music player has the option of choosing among competing MP3 player brands, namely.  Sony,  Samsung,  Panasonic.  Microsoft Apart from this, a potential music player customer may choose to purchase a mobile phone with music playing ability. Furthermore a potential consumer may choose to purchase another Apple product such as,  iPod ( Touch, Classic)  iPod Nano  iPod Shuffle

06.3 BARGAINING POWER OF BUYERS

As mentioned above in the threats caused by substitutes for a music player, there are a wide range of products that a potential music player consumer may choose from. Hence the buyer has the upper hand in deciding which product he or she would choose to buy. Yet even though the Apple iBangle is a music player, it is one of a kind. There is no other product to match what the iBangle offers. Hence for a consumer who is searching

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for a music player which brings out social status and durability, while delivering the satisfaction of listening to high quality music, the iBangle has the upper hand.

06.4 BARGAINING POWER OF SUPPLIERS

The product will be imported directly from Apple.inc Hence the product will come at factory price. If the operation in the production department does not meet the deadlines it will create problems. Yet Shipping of the product units will be done via private shipping companies therefore Apple.inc will have to submit to certain condition of such organization who are willing to ship to Sri Lanka.

06.5 BRAND COMPETITION

As mentioned above in the threats caused by substitute products, there is no exact product which can replace the iBangle. Many organizations supply a wide variety of music players. The following illustration shows the main music player suppliers that iBangle would have to compete with. Brand Samsung Model  P3(16),P3 (8)  U5(2),Q2(16)  Q2(8)  p2(16),P2(8)  Q1 (8),  S3 (8 and 4 )  S2(1 and 2)  S5 (4)  T 10 (4GB) Panasonic  RF-P50 ,  RF-SW50  RF SW505  RR- QR230  RN-2021,  RQ-L51,

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 RQL31,  RQL11, Sony  NWZ-X  NWZ-S  NWZ-E  NWZ-A  NWZ-W  NWZ-B  NW-A  NW-E  NW-S  NWD-B Microsoft  ZUNE4  ZUNE8  ZUNE16  ZUNE80  ZUNE120

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06.6 INDUSTRY COMPETITION

Industry completion is the threat that is caused by another industry other than brand competitors  Disc-men  Walk-men  Pam Tops  Pocket radios

06.7 FORM COMPETITION

Any firm which has a reputed or increasing band name falls under form competition.  Websites on the World Wide Web which offers music listening and downloading capabilities.  Mobile phones with music playing abilities.

06.8 GENERIC COMPETITION

 Pam Tops  Laptops  PDAs

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Likert scale Factors Weight unfavourable 1 Threat of new entrants Threat of substitutes Bargaining power of buyers Bargaining Suppliers power of 15% 12% 15% 10% 2 3 Favourable 4 5 Score Weight score 4 2 0.6 0.24 0.45 0.4

      

3 4

Brand Competition. Industry competition Form Competition Generic competition Overall score

15% 11% 15% 7% 100%

3 3 3 2 23

0.45 0.33 0.45 0.14 3.06

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CUSTOMER ANALYSIS Market Size

Total Population Form age 15-64 years: 68% Earnings per day under US$ 2 - 41.6% (CBSL,2009) (6,035,079) 21,324,791 14,507,403

Potential market

8,472,324

Urban population 15% (CIA world fact book,2009) Actual market

(7,201,475)

1,270,848

Market growth Saturation rate

0.8% annual market growth can be expected Actual market

X 100

Potential market 14.99%

Brand awareness

According the primary research finding it can be assumed that the majority of the population is aware of Apple and its product range. Out of the 50 subjected to the research 39 admitted that they are familiar with Apple products. 23% of the participants said they would choose Apple over any other product When ask what they look for in a Music player percipients replied as follows Technology 16.6% Brand name 16.6%

Brand loyalty Customer expectations

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Quality 10% Stylishness 10% Price 32.2% Service 13.6%

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07. MARKET SEGMENTATION

No two human beings are alike. Their needs and wants differ from one to another. Hence it is the core objective of the Marketing managers of an organization to understand and satisfy the needs and wants of the consumer in a manner which is superior to its competitors. Out of the two main methods of marketing  MASS MARKERTING  TARGET MARKERTING Apple Sri Lanka has chosen target marketing as it approaches to the Sri Lankan consumer market, taking into account the product features of the iBangle. Therefore the first step in target marketing is to segment the market accordingly.

07.1 MARKET SEGMENTATION

Market Segmentation is the identification of portions of the market that are different from one another. Segmentation allows the firm to better satisfy the needs of its potential customers. (netmba.com, 2009) Furthermore in order to recognize the best segment which suits the company objectives the selected segment should hold the following characteristics.  Identifiable There should be a clear difference between the selected segment and the rest in order to differentiate between them.  Accessible  Substantial Communication and distribution channel must be available. The selected segment should be large and profitable enough to justify the cost of targeting it.  Unique needs In order to justify separate offerings by Apple Lanka the segment should respond differently to different marketing mixes.
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 Durable

Should be stable in order to minimize the cost endured by changes.

(netmba.com, 2009) Hence the segment which is appropriate for marketing the iBangle is a combination of several of the main bases of segmentation.

(Kotler and Armstrong,2006)

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07.2 SEGMENTATION ANALYSIS

Geographic Major cities and towns of Sri Lanka, namely  Colombo  Nugagoda  Nawala  Mount Lavinia  Kelaniya  Kiribathgoda  Gampaha  Kurunegala  Negambo  Kandy  Galle

Demographic

Population 21,324,791 (CIA world factbook,2009) Potential market : 14,507,403 Actual market : 12,331,289

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Psychographic

 The wealthy upper Colombo class  Teenage private university students ANC ,ACBT, NIBM, SLIIT, APIIT, ACBT, ABS, .  Students from International Schools 1. Lyceum College 2. Colombo International school 3. Stafford International School 4. Gate way college 5. British International School  Students from Local schools such as 1. Royal college 2. St Thomas college 3. St Peters college 4. Musaeus college 5. Ladies college 6. SBC

7. Bishops college
Behavioural 1. Benefits expected 2. Usage rates 3. Brand loyalty 4. Users status 5. Readiness to purchase 6. Occasions

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08. TARGET MARKET

After carefully analyzing and segmenting the market for iBangle it is evident that the market can be divided into 1 main segment which includes the following sub segments.  The wealthy fashion oriented young adult females.  Teenagers from the upper social classes  Male and female working crowd, ages 24 to 55. In order to target the above three segment Apple Lanka has chosen single segment strategy. Also know as concentrated strategy. One market segment (not the entire market) is served with one marketing mix. (netmba.com, 2009).

P = Product M = Market

(Kotler and Keller, 2007, p.262)

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09. POSITIONING APPLE IBANGLE

After choosing the target market, the organization needs to position itself in the selected segment. Positioning can be defined as The efforts to influence consumers perception of a brand or product relative to the perception of competing brands or products (businessdictionary.com) Apple products in Sri Lanka are becoming a symbol of social status. Even though a consumer can easily afford a Japanese or Chinese MP3 player for less than LKR.7000, they are still willing to pay a higher price to purchase an apple product due to its attributes. Therefore positing the iBangle in the selected segment is not a difficult task.

Quality

Durability

Innovative

Price

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09.1 CONCEPTUAL MAPPING FOR IBANGLE

Quality 5: Favourable 1: Unfavourable 5 4 3 2 1 1 Durability 5 4 3 2 1 1 2 3 4 5 2 3 4 5 Innovative

Price

Brand Name Apple iBangle Samsung Panasonic Zune

Innovativeness 5 4 3 2.5

Price 3.5 3 4 3.5

Quality 4.5 4 3.5 4.5

Durability 3.5 2 1 2.5

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10. MARKETING MIX

10.1 PRODUCT DECISIONS  Brand name

The product will be marketed in Sri Lanka as Apple iBangle.

 Functionality

The iBangle is a silver colour bracelet which the user will have to wear on his or her wrist. Furthermore the user has to insert the wireless head phone in to ones ear. After uploading music on to the devices the user will be able to listen to music via the wireless head phones.

 Styling

As mentioned above the iBangle has a silver colour finish, with the Apple logo embossed on the device itself. The iBangle looks extremely hip and smart.

 Variety

To attract customers the product must answer the requirements of customers to the most possible point. Therefore the iBangle is designed in sizes such as

Apart from this the consumer may choose from the following memory capacities, depending on his or her need.  2 GB  4GB  8GB

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 Quality

As all Apple products, the iBangle is made to meet the highest of Apple standards of quality

 Design

It is an extremely stylish wrist worn music player which uses wireless technology. This aluminium bracelet complete with an adjustable air chamber on the inner face can be adjusted to ensure a fine fit. The user may navigate by the means of a multi touch track pad and sound would be wirelessly transmitted to the head sets which are the size of an ear plug.

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 Features

 Bluetooth wireless in year head phones  Multi touch track pad  Led music control  Self sizing  4GB to 8 GB Mp3 storage  Aluminium finish  Docking station to charge : charging time 3 hours `  Supports Mp3, WMA formats  Listening time 1. 2GB= 38.85 hours 2. 4 GB= 77hours 3. 8GB=155.40 hours

 Packaging
It will be sold in the original packing that the product comes in. No alteration will be necessary.

 Warranty

Any customer who purchases the product will be given a 2 year product warranty.

 After sales services

For service and repairs Apple needs to implement a customer service hotline. Furthermore open a repair and service unit.

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10.2 PRICE
"The amount of money charged for a product or service, or the sum of values that customers exchange for the benefits of having or using the product or service" (Kotler 2006 p 307)

Pricing approaches: Value based pricing Unlike the cost based pricing method due to the fact that the iBangle is a high end product, value based pricing is the most appropriate approach. Hence the price of the iBangle will be set by calculating the cost and then adding the buyers perception of the product value.

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Pricing strategy Out of the 2 main new product pricing strategies  Market Skimming  Market Penetration Skimming is the most efficient pricing strategy for Apple iBangle in the introductory stage of its life cycles. Calculating the price 2 GB Type cost Factory price Shipping (if 200 Units are shipped) Duty 15% Sri Lankan goods tax None essential goods 10% Nation building tax 3% Sri Lanka Sales 12% Profits margin 30% Total 3180.60 13782.60 The final price will around up to 14,000 684 205.20 820.80 Added cost 6840 1026 1026 Final price

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4GB Type cost Factory price Shipping(if 200 Units are shipped) Duty 15% Sri Lankan goods tax None essential goods 10% Nation building tax 3% Sri Lanka Sales 12% Profits margin 30% Total 4138.20 17932.20 the final price will be around up to 18,000 8GB Type cost Factory price Shipping(if 200 Units are shipped) Duty 15% None essential goods 10% Nation building tax 3% Sri Lanka Sales 12% Profit margin 30% Total 22081.80 t he final Price will be around up to 25,000 Added cost 11400 1026 1710 1140 342 1368 5095.80 Final price 912 273.60 1094.40 Added cost 9120 1026 1368 Final price

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Analyzing competitor costs, prices and offers

Microsoft
Zune4 Zune8 Zune16 Zune80 Zune120

Price USD
99.99 139.99 176.99 229.99 249.99

Samsung
P3 Q2 U5 T10 S5

Price USD
199.99 129.99 39.99 204.74 179

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10.3 PLACE
Place refers to the company activities that makes the product available to the customers. In order to do so the company needs to select a distribution channel for their product. A distribution channel can be defined as "A set of interdependent organizations involved in the process of making a product or service available to the consumer"(Kotler,2009) There are numerous distribution channels and out of them a company must choose a channel/s that will best suit the company objectives. Therefore in order to make the Apple iBangle available to the Sri Lankan customer the following channels have been chosen. Channel 1 and Channel 2 distribution channels Channel 1

(Kotler, Armstrong,2006 ) Apple .Inc has its own chain of sales outlets in Sri Lanka which have been selling Apple products for Sri Lankan consumers for over 10 years. Therefore in-order to distribute the iBangle these Sales outlets can be used. Hence eliminating the need of a 3rd party intervention.

43

Channel 2

(Kotler, Armstrong,2006 )

Even though Apple has its own distribution network the iBangle will be made available to customers via leading fashion accessory outlets such as,  ODEL  MONDY And leading electronic dealers such as,  BT store  PC house.

44

Inventory management July The first batch of 600 units will be imported and distribute to sales outlets. August Assuming sales are as targeted (Appendix) Additional 300 units will be imported. September In order to manage an average stock of 800, another 450 units will be imported. October The stock will be increased to 1000 units. Hence 550 units will import. November December 400 units. Due to larger seasonal sales the stock will be kept at an average of 1500 units. 1000 units will be imported. 600+400-sales(500) 500+1000. 450+550 sales (400) 350+450 sales (350) 400 + 300 sales(350) 600- sales( 200)

Transportation The iBangle is a high end product aimed for the upper social classes. Therefore Apple should maintain a home delivery service. Hence the use of motorbikes would be most recommendable. Warehousing All units imported will be cleared from the Colombo ports authority and will be directly brought to the main sales outlet situated in 126/A Colombo 4. There the products will remain till being shipped to sales points, island wide.

45

Location

46

10.4 PROMOTIONS
Advertising The iBangle is the first of its kind to ever be marketed in Sri Lanka and therefore the Sri Lankan consumer is quite unaware of its existence. Therefore it is vital to have a major advertising campaign in order to make aware of the product.  Television commercials in all leading English channels and at least one Sinhala channel together with radio advertisements in channels such as TNL, E FM, YES FM.  Billboards in major street junctions in Colombo, Kandy, Nugegoda and Negambo. Magazine Articles Promotional articles about iBangle will be published on leading society magazines such as,  Hi Magazine  Femina (Sri Lankan Edition)

47

48

Sales promotions A 10% discount will be given for the first 200 customer to purchase an iBangle. Public relations Promotion girls will be sent to sales points such as ODEL, MC, CRESTCAT to talk to customers and use a sample product so that they can use and see for themselves. Publicity A fair portion of the advertising budget will be allocated to be given as sponsorships for events such as, 1. School sports meets 2. Parties and events of institutes such as ANC, ACBT, APIIT. Banners for such events are as follows.

49

Billboards Billboards such the following will be set up in major road junctions in the following cities  Colombo  Kiribathgoda  Gampaha  Kandy  Nugegoda  Negambo

50

10.4.1 PROMOTIONAL BUDGET

Type of cost TV commercials Magazine and news paper Adds Radio commercials 750,000 1,000,000 25,000 500,000 750,000 500,000 100,000 25,000 500,000 100,000 25,000 450,000 50,000 1,000,000 500,000 10,000 Sponsorships 500,000 Billboards Public relations 750,000 750,000 100,000 100,000 500,000 750,000 750,000 1,000,000 1,000,000 500,000 500,000 750,000 1,000,000 2,000,000 2,000,000 750,000 750,000 1,000,000 2,000,000 July August September October November December

Total

4,750,00

5,000,000 1,975,000

1,975,000 2,775,000

5,000,000

51

11. IMPLEMENTATION
11.1 GANTT CHART

52

11.2 FEEDBACK AND CONTROL MECHANISM

After implementing the proposed marketing plan for the iBangle it is vital that Apple.inc should track the results and monitor new developments (Kotler and Keller, 2006) Market research Before importing and distributing the iBangle in Sri Lanka Apple will conduct a primary evaluated,  Consumer awareness  Brand loyalty Customer expectation of the product. Furthermore a secondary research is conducted in order to evaluate the market research which will

competitor environment.

Plan Performance Analysis

After implementing the marketing plan for iBnagle apple need to keep a close eye on the progress of the planned activities. The progress can be mushroomed via,  Sales Analysis  Market expense to sales analysis  Financial analysis  Profitability analysis (Kotler and Keller, 2006)

53

Progress review meetings

Meeting at regular interval will be held in order to evaluated the progress of the marketing efforts, in these meeting it will be evaluated if the pricing, promotion strategies are effective or not. Furthermore it sees to it that the organisation meets it targeted sale volumes.

Marketing budget variance analysis

Apple will make sure that it still to the estimates expenditure yet if these expenses varies for what was expected, Apple will intervene and control these expenses

54

12. CONCLUTION
The iBangle is not just another Mp3 player; it is a benchmark for all music players. There is no doubt that this product is the Mercedes Benz or the Rolls Royce in the music player market. It is purely a symbol of prestige and success. Hence the iBangle will surely become at home in the minds and hearts of the Sri Lankan consumer.

55

13. REFERENCE

Book 1. Kotler.P And Armstrong.s, 2006,Principals of marketing, 11th edition, Asoke k. Ghosh, New Delhi

2. Kotler.p and Keller.K..l,2006, Marketing management, 12th edition,Asoke k. Ghosh, New Delhi

Web Reference

1. statistics.gov.lk

[Online],

Available

linhttp://www.statistics.gov.lk/HIES/HIES2006_07Website/Publications/Poverty Indicators.pdfe (Last Accessed December,19,2008 )

2. fundinguniverse.com

[Online],

Available

http://www.fundinguniverse.com/company-histories/Apple-Computer-IncCompany-History.html(Last Accessed December,19,2008 )

3. roughlydrafted.com

[Online],

Available

http://www.roughlydrafted.com/RD/RDM.Tech.Q1.07/FFE4A8E2-9816-43449FB0-61BED246674C.html(Last Accessed December,19,2008 )

4. doingbusiness.org

[Online],

Available

http://www.doingbusiness.org/ExploreTopics/PayingTaxes/Details.aspx?econom yid=174(Last Accessed December,19,2008 )

56

5. srilankatoday.com

[Online],

Available

(http://srilankatoday.com/index.php?option=com_content&task=view&id=2590 &Itemid=52) (Last Accessed December,19,2008 )

6. netmba.com

[Online],

Available Accessed

http://www.netmba.com/marketing/market/target/(Last December,19,2008 )

7. quickmba.com [Online], Available http://www.quickmba.com/marketing/riestrout/positioning/(Last Accessed December,19,2008 )

8. businessdictionary.com/

[Online],

Available

http://www.businessdictionary.com/definition/market-positioning.html(Last Accessed December,19,2008 )

9. ezinearticles.com

[Online],

Available

http://ezinearticles.com/?Product-

Positioning-Strategies&id=474245,(Last Accessed December,19,2008 )

10. tenonline.org

[Online],

Available

http://www.tenonline.org/art/mm1/9305.html(Last Accessed December,19,2008 )

11. statistics.gov.lk

,[Online],

Available, Accessed

http://www.statistics.gov.lk/cls2004/index.htm,(Last December,19,2008 )

12. richardsona.com

,[Online],

Available,

http://www.richardsona.com/main/2008/2/10/an-evolution-of-tech-companylogos.html,(Last Accessed December,19,2008 )

57

13. scribd.com

,[Online],

Available,

http://www.scribd.com/doc/11983566/A-

Strategic-Analysis-of-Apple-Corporation,(Last Accessed December,19,2008 )

14. echeat.com

,[Online],

Available

,http://www.echeat.com/essay.php?t=28528,(Last Accessed December,19,2008 )

15. marketingteacher.com

,[Online],

Available, Accessed

http://www.marketingteacher.com/SWOT/apple_swot.htm,(Last December,19,2008 )

16. apple-history.com

,[Online],

Available,

http://www.apple-

history.com/?page=history&section=h1,(Last Accessed December,19,2008 )

17. bloomberg.com

,[Online],

Available,

http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=A APL:US&sid=ap0bqJw2VpwI,(Last Accessed December,19,2008 )

18. media.photobucket.com,[Online],

Available,

http://media.photobucket.com/image/apple%20logos/kediashubham/AppleLogo1 .png,(Last Accessed December,19,2008 )

19. media.photobucket.com,[Online],
December,19,2008 ) 20. nytimes.com,[Online],

Available,

http://dailymobile.se/wpAccessed

content/uploads/2008/12/apple-logo-wallpaper-320x480-02.jpg,(Last

Available,

http://www.nytimes.com/2006/01/16/technology/16apple.html?_r=1,(Last Accessed December,19,2008 )

21. sony-asia.com,[Online],

Available,

http://www.sony-

asia.com/product/ProductComparisonWizard.action?site=hp_en_AP_i&sectionty
58

pe=product&deepestLevelCategoryId=PA%20MP3%20Walkman,(Last Accessed December,19,2008 )

22. samsung.com,[Online],

Available,

http://www.samsung.com/us/consumer/type/type.do?group=audiovideo&type=m p3players#,(Last Accessed December,19,2008 )

59

14. APPENDICES
14.1 APPENDIX 01
Primary Research result evaluation The following is a market research conducted in order to evaluate the potential and actual market for the Apple I Bangle in regard to the completion of my second year marketing project. Furthermore this prime research intends to evaluate the consumer response to such novel product. Chamila Illukkumbura

Total 1. Age 10-15 16-20 21-30 31-40 41-50 51 and above 5 10 10 10 10 5

2.Sex

Female/Male (25/25)

Are you a music listener?

Yes (45)

No(5)

Are you currently,

Employed (26)

Unemployed

Student (24)

Do you currently own a,

MP3 Player

MP4 Player

Walkman

Discman 60

(14)

(5)

(5)

(3)

What is your most preferred brand of music player?

(Best:1 , Worst:5)

1 Apple (23%) Samsung (25%) Sony (30%) Panasonic (22%)

How much are you willing to spend on a music player?

5000 (20)

10000 (10)

15000 (10)

20000 (5)

Over 1 Lak (5)

Are you aware of Apple products?

Yes (39)

No (11)

61

What do you look into when purchasing a music player?

(Best:1 , Worst:5)

1 Technology (16.6%) Brand (16.6%) Quality (10%) Stylishness (10%) Price (32.2%) Service (13.6%)

Any other feature that interests you? ......................................................................................................................................................... ......................................................................................................................................................... ......................................................................................................................................................... ......................................................................................................................................................... .........................................................................................................................................................

How do you prefer to listen to music?

FM Radio (40)

Online (30)

Portable Players (35)

62

DVD Players (20)

VCD Players (5)

PC/Laptops (10)

63

What is important to you when listening to music?

I want quality in my sound

(20)

I want people to think Im cool (30)

Dont care as long as I can hear the song its fine

How important are file transfer capabilities in a music player?

Very Important

(35)

Not so Important

(15)

How important is your music player being able to store photo and videos?

Very Important

(10)

Not so Important

(5)

How important is a user friendly interface for navigation?

Very Important

(40)

Not so Important

(5)

64

How important is wireless connectivity in a music player?

Very Important

(30)

Not so Important

(20)

What do you feel about using a wireless headset?

Very good, no more getting tangled up with wires (40)

No traditional wire headsets are way better

(10)

65

What do you feel about touch screen technology?

Very convenient

(45)

Too complicated

(5)

Do you find carrying a music player convenient?

Yes

(10)

No

(35)

What are you feeling about having you music player as a piece of jewelry? ......................................................................................................................................................... ......................................................................................................................................................... ......................................................................................................................................................... ......................................................................................................................................................... .........................................................................................................................................................

Your Comments about the product

66

Name Date

........................................................................... .........................................................................

Signature

....................................

14.2 APPENDIX 02
Poverty line of Sri Lanka P .L Location Sri Lanka Urban Rural Estate 90/91 26.1 16.3 29.5 20.5 95/96 28.8 14.0 30.4 38.4 P .L 2002 22.7 7.9 24.7 30.0 P .L 06/07 15.2 6.7 15.7 32.0 P .L

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14.3 APPENDIX 03

Sales projections for apple IBangle. Month

July August September October November December

Number of units
1000 1350 1350 1400 1500 1600

Sales price
25000 25000 25000 25000 25000 25000

Total
25,000,000 33,750,000 33,750,000 35,000,000 37,500,000 40,000,000

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14. 4 APPENDIX 04
Expense
Primary research Product Activities Price Activities Promotio ns Activities Place Activities Employee Salaries

July August 4,000 205,200 1,140,000 205,200 1,140,000

September October

November

December

205,200 1,140,000

205,200 1,140,000

205,200 1,140,000

205,200 1,140,000

n.a

n.a

n.a

n.a

n.a

n.a

4,750,000

5,000,000

1,975,000

1,975,000

2,775,000

5,000,000

100,000

100,000

200,000

100,000

100,000

300,000

89,000

89,000

89,000

89,000

89,000

89,000

Marketing Budget 2009

Total expenditure per month

6,288,200

6,534,200

3,404,250

3,509,200

4,309,200

6,734,200

Predicted sales revenues

25,000,000 33,750,000 33,750,000 35,000,000 37,500,000 40,000,000

69