iPhone 5sp Market PlanPage | 1

Marketing Plan

iPhone 5sp the Solar Powered Phone

LaMarcus Bailey

Kyle George

SuziTullis

California State University, Monterey Bay

Bus 306-90

May 4, 2014

Contents

Executive Summary

Situation Analysis

Market Summary

Market Analysis

Demographics

Geographics

Psychographics

The Market

Market Needs

Market Trends

Market Growth

SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

Competition

Product Offering

Keys to Success

Critical Issue

Marketing Strategy

Value Proposition

Mission

Marketing Objectives

Financial Objectives

Target Markets

Demographics

Positioning

Strategies

Marketing Mix

Marketing Research

Financials

Break-even Analysis

Sales Forecast

Expense Forecast

Controls

Implementation

Marketing Organization

Contingency Plan

References

List of Tables and Figures

Executive Summary

Suzi needs to do (Can’t do until the rest of the paper is written)

Marketing Analysis

Situation Analysis

On June 17, 1946 the first mobile phone call was made. In the 68 years since that time there has been an exponential amount of growth and a growing dependence on cell phones. The growing dependence on cell phones has made battery life an extremely important aspect of design. The iPhone 5sp will have an integrated solar powered battery. This will enable users to forget about the conventional methods of cell phone charging and constantly have a fully charged cell phone.

Market Summary

There are currently a multitude of solar chargers on the market. These charges range in price from $20-$150 and offer a variety of features including, light weight design, durability, and varying levels of performance. None of the current solar chargers on the market are integrated in a cell phone.

Customers want a charged cell phone and convenience. There are many alternative (non-solar) cell phone chargers available currently. One such option is the mophie juice pack. The mophie Juice pack ranges in price from $79 to $118. It encases the iPhone and protects it from bumping around; it also carries a backup rechargeable battery. Another alternative charger is the bootcase hybrid power case. This case costs $99 and has mixed consumer reviews. Both of these examples are expense and require the consumer to carry around an extra piece of equipment. The convenience offered by an integrated solar battery charger would appeal to consumers who are willing to spend a little extra money for a constantly charged battery.

Label, Title, Brief Explanation, Citation

Need to insert a graph incorporating the raw data from LaMarcus’s research

Target Market

Demographics

Outdoor enthusiasts are likely to be interested in the iPhone 5s due to its use of the sun as its power source. Outdoor enthusiast spend $646 billion dollars annually in the United States, in California alone this group spends $85.4 billion dollars annually (Outdoor Recreation Economy). The average age of a cell phone user is 13 years old; this creates a huge market of young consumers. Young adults have an average annual spending power equaling $183 billion (Vivion, 2014) Young adults who enjoy outdoor activities,and have an annual income of more than $50,000, are the main target audience for the iPhone 5sp.

Geographics

Studies show that 20% of the world’s population does not have access to electricity (The World Bank). The people without access to electricity live in developing countries with the highest concentration being in Africa and India. While most of these individuals that do not have access to electricity are not concerned with cell phones, a cell phone with an integrated solar battery would still be useful in these regions. This is why the initial target market for the iPhone 5sp will be travelers, outdoor enthusiast and athletes. Imagine how useful an integrated solar battery charger would be to a National Geographic photographer spending months in the safari. There will be a large demand for the iPhone 5sp because of the large portion of the world still living off the grid.

Psychographics

Initially the iPhone 5sp will target members of the upper middle class. The iPhone 5sp is going to have a starting price of $649 and will therefore not be obtainable by members of every social class. The iPhone 5sp is aimed at individuals who spend a good amount of time outdoors and/or away from conventional power sources. The iPhone 5sp will appeal most to outdoor enthusiasts, athletes and travelers. The specific athletes that the iPhone 5sp is going to target are bicyclists, backpackers, and hikers. Travelers are often concerned with carrying around the least amount possible. With restrictions on weight and size of baggage, travelers do not want to have extra pieces of equipment in their bags.

The Market

Market Needs

The smart phone market is in need of a solution that can keep up with the active and busy lifestyle of today’s consumers. Smart Phones are becoming the default mode of access to information, services, data collection and internet browsing. One of the biggest challenges cell phone users face today is how to keep their cell phone charged while constantly on the go. There is a direct correlation to the amount of features built into a cell phone and the phones battery life. This is an ongoing concern for cell phone companies, there is a need in the marketplace for a solar powered smart phone.

A survey was conducted to assess the potential success of the iPhone 5sp. Of the people surveyed, 59% currently own an iPhone. Of those surveyed, 90% said that they would be interested in purchasing a smart phone with an integrated solar charger. The oldest person involved in this survey was 65 years old, the youngest was 18. The Average age of those surveyed was 22. From this survey and other research it can be concluded that young adults who already use Apple products are likely to be interested in buying the iPhone 5sp. (LaMarcus Bailey, Survey, March 2014)

The average smart phone user uses their phone for a variety of everyday tasks. In many cases the smart phone is replacing the necessity of a desktop or laptop computer. A smart phone allows its user to connect to the internet and creates an element of convenience in everyday tasks. Studies of market trends among smart phone users show that there are key needs and wants that are not being met.

Apple has created a new product – one that fulfills previously ignored aspects of the user experience. This iPhone 5sp is thoughtful, intelligent, and efficient by design. One of the biggest priorities in this new design was to remove the necessity of using excess cables. This new and improved iPhone will have a mini solar panel built into its screen and will have a backup battery. The phone will be completely powered by the solar panel and will never have a low battery life. The backup battery will come in useful when the phone does not have solar energy for charging.

Market Trends

The first 40 years cell phones were around saw very slow progression. The first mobile phone call was placed on June 17, 1946. It wasn’t until 1973, 27 years later, that a call was placed from the first mobile phone not connected to a car. Ten years later, in 1983, the Federal Communications Commission (FCC) approved the mobile phone for commercial use. In 1999 Nokia introduced the internet onto cell phones; this is the time when rapid improvements in cell phone technology started to take place.

Today’s consumers are accustomed to fast, easy to use technology. To meet the demands of consumers cell phone companies have made a point of constantly introducing new aspects into the cell phone design. With today’s cell phone technologies it is effortless to connect to the internet, use GPS, or communicate using one’s smart phone. The industry has also been progressing in reference to speed. Increasing the performance of the smart phone is a must in order to keep up with the high demand of performance. This includes increasing bandwidth, applications, software, and more efficient operating systems. All of these enchantments require more power consumption furthermore establishing the need for solar power which is on the go. (Yarrow, 2012) As cell phones get more advanced it becomes harder to keep them charged, an integrated solar charger would eliminate this problem.

Label, Title, Brief Explanation, Citation

Market Growth

The potential for growth with the solar powered cell phone battery is nearly limitless. No such product currently exists and consumers are growing more interested in solar power. “The demand for solar energy has grown by 30% per annum over the past 15 years. The strong push for renewable energy in 2009, photovoltaic (PV) installations grew by 20%. Revenues in 2009 for the PV industry also increased, reaching $38.5 billion” (Gandhi, 2013)

The market for solar powered technology is currently booming and is a very attractive market to enter into.

The global solar industry has grown 849% over the past eight years, from an installed capacity of 877 MW in 2000 to 8,325 MW at the end of 2007. That breaks down to a compounded annual growth rate (CAGR) of 37.9% for the same period (Hodge, 2008).

With the expansion of the solar industry and increased investment, “PV solar energy has made great strides in the last five years as solar technology has become more efficient and costs of production have decreased” (DOE, 2008). In her article “U.S. Solar Market” Ucilia Wang states that the solar equipment market grew nearly 76% in 2012. (Wang, 2014) The solar market has been experiencing a vast amount of growth. This growth is opening the doors to new technologies, such as the integrated solar battery charger available in the iPhone 5sp.

SWOT Analysis

STRENGHTS / WEAKNESSES
  • Never ending battery life
  • Less Cables = More Convenience
  • Reliability of iPhone, Strong Brand Name
  • Longer battery life = More Productivity
/
  • Requires Frequent Exposure to Sunlight
  • Cell Phone Covers May Block Solar Panel
  • Cost
  • Possibly Not Appealing in All Locations Geographically

Opportunities / THREATS
  • Increase Apple’s Market Share of Cell Phones
  • Convert Users
  • First to Introduce New Technology
  • High Revenues in Sunny Locations
/
  • Change in Market Trends
  • May not Charge as Fast as Conventional Methods
  • Competition Quickly Releasing Similar Products
  • Not Applicable in Locations Lacking Adequate Sunlight

Competition

There are currently a variety of alternative charges on the market. None of these are integrated into a cell phone and none are known for being overly efficient or convenient. Some of the most popular solar battery chargers include the Concept Green Solar (CGS) 1250, CGS 3500, and the JOOS Orange.

The CGS 1250 runs at about $20 per unit, the battery capacity is only 1250 mAH and cannot fully charge a battery. It is lightweight, small and relatively durable. Some reviewers found the CGS1250 to be a good product for the price paid, while others found it to be a heap of junk.

The CGS3500 runs at about $50 per unit, it is small, lightweight, and relatively durable. The battery capacity of the CGS3500 is 3500 mAH. Consumers really like this product but find the charging process to take too long.

The JOOS Orange solar charger has a price tag of $150 per unit with a battery capacity of 5400 mAH. The JOOS Orange can survive a wide range of temperature conditions and is water proof. It takes 12 hours to get a full charge, but one hour of sunlight results in two hours of talk time. The JOOS Orange is built for those on the go, who spend long spans of time away from traditional power sources. The JOOS may be heavy and bulky but it can withstand a multitude of situations making these attributes well worth it. The JOOS orange does not have to be directly angled toward the sun in order to receive a charge and can even charge on a cloudy day. Reviews are relatively positive for the JOOS Orange, with weight being the biggest complaint among consumers.

It is essential to look not only at alternative chargers but also other cell phone producers in order to get a clear picture of who the completion for the iPhone 5sp is.

Label, Title, Brief Explanation, Citation

Figure …. Provides a graphical look at the cell phone market for quarter three of 2013 (CNET, 2013). The iOS operating system has the second largest market share with 12.9%. Android has the largest market share with 81.0%. The biggest competitors that the iPhone 5sp faces are the Samsung Galaxy S5, the Lenovo Vibe Z, and the LG-G Flex.

We need to include place and price in these strageties. See the note she put on our graded first draft.

Samsung’s Strategy

Although Samsung put top of the line adapters and drivers into the Galaxy S5, they are taking the quality of life approach to market their new phone. In the Official introduction video for the Galaxy S5, Samsung opens up with the quote, “Innovation is not just about technology, It’s about how it improves every-day life”. Samsung has realized that the average phone consumer does not know enough about high performance processors, video rendering cards, and Memory, but is more concerned with the simple things like a camera that can “capture meaningful moments instantly” and being able to “stay fit and more active” (Samsung Mobile 2014).

Samsung is also aware that there is still a part of their consumers that is interested in their phones for the cutting edge technology they put inside of it. With a 2.5GHz quad-core processor, 2GB of RAM, and a battery that can last for hours on end, the Samsung has created a machine that is more powerful than the average computer of 5 years ago. These specs keep phone and tech enthusiasts coming back for the newest Galaxy product (Samsung 2014).

Lenovo’s Strategy

Lenovo’s model for the vibe is “for those who do”. Lenovo is focusing on the social aspect of a cellphone, with the ad trying to appeal to a younger, more active audience. Lenovo touts qualities such as the Vibe Z’s dual high resolution cameras and 4G speed because they know that the active youth want to capture their unforgettable moments, and share them as fast as possible. The Vibe Z is also no slouch in the technical department. It features a 2.2GHz quad-core processor, 2GB of ram and I high resolution 5.5” screen (Lenovo 2014).

LG Electronics’ Strategy

LG Electronics focuses on the innovation, sleekness, and durability of its G Flex model. LG uses clever slogans such as “shape your experience” due to the G Flex’s unique curved shape. This shape is not only for looks, it also adds high durability to the phone. In one commercial for the G Flex, LG continues to add more and more weight on the phone only to prove that it can withstand high pressure and will always return back to its original form. Even with its unique shape, the G Flex still has high quality technology to power itself. It uses a 2.26 quad-core processor, 2GB of ram, and 1080p full HD camera (LG Electronics 2014).

Product Offering

Label, Title, Brief Explanation, Citation

This image is a breakdown of our product, the iPhone 5sp. The iPhone 5sp features solar power technology, full 1080p HD display, fingerprint recognition, HD front facing camera, 30pin Apple USB, and an HD eight mega pixel camera.

The iPhone 5sp has a layer below the surface of the phone, surrounding the screen, of solar panels. These solar panels are directly connected to the phone’s battery station and, when in light, will continuously feed the battery energy. This can be done while the phone is in use, or while the phone is off. While the phone is in use, the phone will experience a much longer battery life on a full charge. While the current model iPhone 5s can only hold a charge in use for around 10 hours, the iPhone 5sp can maintain use for over 25 hours in sunlight. While the solar panels cannot provide enough power to charge the phone above its current state while it is in use, it is able to feed enough energy to the phone to increase energy efficiency above 100%. While the phone is on standby or off, the phone is put into charge mode. This mode will charge the battery of the phone, although a full charge may take up to six hours (Apple, 2014).

The phone features technology that makes the solar panels available to receive sunlight without the negative effects to the sleek look of the phone. This is done with a patented one way mirror type technology. This technology allows the solar energy to be received by the panels, but does not allow the user to be distracted by the solar panels surrounding the screen.

The phone is available for coverage from Apple care. Apple care will fix or replace damaged solar panels and any problems the phone may be having with the battery.

Keys to Success

The key to the iPhone 5sp’s success will be:

  • Apple market share growth
  • Lifestyle changes
  • Competitor incompetence

Apple market share growth would greatly accelerate the progress of the iPhone 5sp. As we have shown in the competition portion of this report, Apple is a far second, behind Samsung, in the cellular market. If Apple were to gain some ground and increase the percentage of people using iPhone, this would create more publicity for our product. Apple users have very high customer loyalty, meaning their next phone will most likely be an Apple product. If more people have iPhones, they will most likely upgrade to the newest model, which will be the iPhone 5sp.

Lifestyle changes would also accelerate the progress of the iPhone 5sp. The iPhone 5sp is useful for people of all walks of life, but will be especially useful for very active users. Active users refers to people who like to maintain an active lifestyle by doing activities such as hiking, running, biking, rock climbing, hunting, bird watching, etc. These people will have more incentive to purchase a phone that can last longer/charge in the sun, where they will be for most of their time. If we see an increase in these types of lifestyles, we may also see an increase in the amount of phones demanded.