Promotion techniques across the iPhone product life cycle

Sales Promotion and Product Life Cycle

The aim of this paper will be to analyze the variation of the promotion techniques, as a component of the marketing mix, across the product life cycle. The thesis of the paper is that the promotion instruments and messages for the customers vary significantly across the product life cycle, as the company is trying to adapt it more to the reaction of the market in the different stages of the product's life. In order to exemplify, we will use the iPhone, as one of the introduced technologies that has not yet gone through all the stages of the product's life.

While examine the current promotion techniques, identifiable for the stages that have already been completed, we will also look into the future and anticipate how the promotion instruments will vary in the next stages. At the same time, this practical aspect of the research will be doubled by a theoretical background that will look at the general characteristics of promotion through the literature available on this subject and from a general perspective.

Introduction

Apple announced the new concept of iPhone in January 2007 and the entire novelty of the concept proposed the new technology as a great success. There were several things of great novelty, but perhaps the best thing about the new product was that it seemed to put together everything that other phones had separately. The notion of touch screens had existed in other electronic tools as well and it was successfully incorporated by the iPhone, along with everything ranging from quick access on the Internet to larger storage capacities.

The best advantage of the new product was, however, the fact that it provided a large and varied flexibility for the user through the incorporation in the same tool of different devices. With the iPhone, you had the GPS, the camera, the musical facilities, the text functions and action to Internet all at your fingertips and all incorporated in a small and handy device. This is probably why it was named the invention of the year 2007 by Time Magazine.

Apple had always been at the very top of the creative processes on the market, ever since they began as a computer company in the late 1970s. Some of its computers and operating systems have remained fundamental milestones in the evolution of the computer. Today, through products such as the iPhone and the Mac Book, the products that Apple releases on the market have remained synonym to style and to class and, additionally, to an extra something over existing products on the market.

The reasons why the iPhone and Apple were chosen as the object of study for this project are covered in the previous paragraphs, but it was also an incentive to have a product that is not yet at the end of its life cycle and for which this study can also anticipate its future development on the market, given the existing signals about how it is positioning itself and what the company's policies towards the iPhone, its market and customers are.

As mentioned, the report will focus on an analysis of the theoretical background relating promotion as part of the marketing mix to the product life cycle and carry that theoretical background to match the evolution of the iPhone during its lifecycle.

Analysis

With the iPhone, the promotion actually did start in the development phase, despite the previous considerations that have been discussed. According to different sources, the rumors about the launch of the iPhone had already circulated for several years before the product was eventually released.

With such rumors, Apple was trying (and it succeeded) to create the right atmosphere and expectation on the market for the new product. Such a promotion campaign in the development phase can also be dangerous and costly, because the expectations on the market can have a double sense and the customers may find, when the product is eventually released, that it has not lived up to the promises of the company and to what has been discussing on the market. This was not however the case of the iPhone.

Despite the fact that the differentiation objective becomes a priority usually only in the maturity phase, Apple decided to emphasize this aspect ever since the introduction phase of the iPhone. The main element of differentiation was the touch screen option, which had been used before for other technological devices, such as cameras, but never for phones. Much of the promotional campaigns throughout the introduction and growth periods were centered on this facility.

According to different sources, the purpose of the promotion element was to promote "revolutionary communications and audio/visual experience" as an integrated experience. This would be the fundamental message in the introduction and growth promotions and the explanation for this is simple, being connected with something mentioned in the introduction: besides exceptional individual features, such as the touch screen, the most important asset of the iPhone is its capacity to integrate different instruments from different areas of our every day activity.

The iPhone is at the same time a camera, an accessible way to navigate the Internet, to communicate with one's friends or colleagues through different environments (email, text messages, voice) and so on. Emphasizing this during the introduction stage of the product encouraged this idea to be carried on into the other stages as well.

The month of the introduction of the new product was specifically chosen to be June, with the college students ending their academic year at that point. As such, the promotion was targeted, foremost of all, on this group of consumers identified as the most likely clients. The TV campaign went on throughout the month of June, with exactly the goal specified in the theoretical discussion: creating awareness. Nevertheless, the procedure was not one that encouraged bombarding the public with the new product, but rather a gradual awareness campaign in which the public became familiarized with the iPhone. As previously mentioned, the framework had been set by the rumors campaign encouraged in the previous years.

Once in the growth stage of the iPhone, Apple began using targeted ads designed especially for the group of consumers that had been identified as the most likely clients. This group included young, active and social users and the ads were less designed to emphasize the differentiated, comparative better technology over the competitors, but rather the capacity to communicate unlimitedly with the iPhone, as the primary positive characteristics in the targeted group of consumers' evaluation.

At the same time, throughout both the introduction and growth stages, the iPhone was linked with other Apple products so as to create brand awareness as well, not only product awareness. One of the TV ads in June alluded to the 1984 Apple ad during the Super Bowl. With the early 2008, still in the growth stage of the iPhone, Apple was keen to "build buzz" for future developments in the iPhone product portfolio. These would include the future iPhone 3G and other more technically sophisticated versions, with higher storage capacities and greater interconnectivity.

The Beijing Olympics in 2008 proved an excellent event during which the promotion of the iPhone by Apple to re-emphasize its international and global presence. With the entire world watching the Olympics, the objective of this promotional campaign was to make iPhone one of the key players in the communication industry.

For 2010, the plan for Apple is most likely to consolidate and increase the market share for the iPhone portfolio of products as much as possible. The shift will probably move the emphasis away from the promotion element and towards other elements of the marketing mix, including the pricing and product elements. The promotional campaigns will most likely focus on the brand itself and some of its defining characteristics.

It is interesting to anticipate what will happen in the decline stage from a promotion perspective. First of all, the iPhone can still be transferred to some of the developing countries, where new markets can be formed (especially if the pricing strategy is properly adapted for these new markets). Second, the promotion element will probably focus on developing the brand and on anticipating the next generation of iPhone products, probably linked to the existing one. Similarly to how the 1984 ad from the launch of the Apple Mac was somewhat used in introducing the iPhone, the iPhone could also be used to create the right framework and environment for the next Apple products.

Conclusion & Recommendations

The first obvious conclusion of this report is that the promotion part of a marketing mix for a new product varies across the different stages of the product life cycle. In the case of Apple and its iPhone, this was also the case, with the promotion element taking the particularity of pre-introduction rumors, to continue with differentiating ads and campaigns during the introduction and growth period and brand awareness campaigns throughout the entire life cycle of the product. We have also anticipated that the iPhone will be similar to other product in its decline stage and the promotion then will set the trend and prepare the market for the next generation of iPhone products or other Apple products.

At the same time, there is also a strong interrelation between the different elements of the promotion for a certain product. The promotional campaigns depend on the resources and the financial resources tend to be more generous in the introduction and growth phases rather than in the final stages. This is probably going to be the case with Apple as well: the Beijing Olympics, for example, were used as an excellent moment for an aggressive and very costly campaign, exactly because the product was still in its growth stages and awareness was needed in other countries than the U.S. And Western Europe. Nevertheless, with the iPhone and Apple, given the observations made about the final stage of the product, the financial resources allocated to promotion may decrease, but they will still be significant, so as to properly prepare the market for the next generation of phones.