This paper presents a comprehensive marketing plan for Libertad, a proposed build-to-order smartphone designed to serve an underserved global market that major manufacturers like Apple and Samsung cannot efficiently address through their standardized production models. The plan covers market analysis including customer segmentation, a SWOT analysis, competitive landscape, and a PEST assessment of the business environment. It outlines a strategy grounded in Porter's Five Forces, details a Google Android-based product offering, and describes a social-media-driven communications plan. The budget section projects a $3.65 million first-year investment with anticipated revenues of $4.2 million and a 15% return on investment.
The paper demonstrates how to build a business case through sequential market analysis: it identifies a market gap, validates it with external data, and then constructs a strategy that directly responds to the identified opportunity. Each section scaffolds the next, moving from "who the customer is" to "what the competition looks like" to "how we will reach and serve customers" to "what it will cost."
The paper follows a classic marketing plan structure: an executive-level introduction establishes the opportunity; a business challenge section frames the problem; a five-part market analysis (customers, company, collaborators, competitors, climate) provides the situational foundation; a four-part strategy section covers positioning, product, communications, and distribution; and a budget section closes with financial projections and ROI. This structure mirrors industry-standard marketing plan formats taught at the undergraduate business level.
Smartphones have revolutionized how people and organizations communicate and collaborate globally, completely reordering the software, services, and cloud computing platforms of entire industries. Despite the rapid growth of the iPhone and its competing Google Android, Microsoft Windows, and various mobile operating system-based devices, the majority of the global market remains underserved. The need for a build-to-order smartphone is apparent from the millions of requests Apple receives for customizing the iPhone for the specific needs of corporate clients (Apple Investor Relations, 2013). Providing customers with the ability to self-design their own devices — from PCs to cars — has been shown to continually improve gross margins while significantly increasing the size of the total available market globally (Franke & Schreier, 2010).
When a build-to-order strategy is executed consistently and with a series of standardized processes, the products produced achieve economies of scale quickly, further reducing costs over time (Hardy, 2010). For the global smartphone market, this translates into a market-sizing multiplier of two to three times current estimates, given Apple's internal estimates and research released through filings with the U.S. Securities and Exchange Commission (Apple Investor Relations, 2013).
Apple has considered moving into a build-to-order smartphone model, yet has resisted this direction strategically given its significant gains from economies of scale with standardized production processes (Apple Investor Relations, 2013). Apple cannot launch and profitably sell a build-to-order smartphone given the constraints of its highly automated, standardized production process. This opens up a significant market opportunity for a smartphone startup that relies on contract manufacturing to produce the device while investing heavily in a highly visible, successful new product introduction.
With Apple unable to address the market for build-to-order smartphones, and smaller competitors following their lead by relying on lean manufacturing-based strategies, the potential to be first to market with a build-to-order smartphone is significant. The most significant business challenge is creating a unique brand that speaks to customers' need for freedom of expression while also providing an exceptional selection of features. Freedom is a very powerful motivator and has consistently proven to be highly effective as a marketing strategy.
The proposed build-to-order smartphone is called Libertad (Spanish for "freedom"). As this is a unique business model, a separate business unit will be created with the mission statement: Freeing Your Passion to Communicate.
The dominant customer base for the Libertad will be men and women aged 18 to 45, as this segment is historically the most active in terms of smartphone adoption, purchase, and use. The sub-segment of 18- to 24-year-olds are early adopters of new smartphone features and platforms and represent the primary audience for the Libertad. Apple's analysis shows that this 18- to 24-year-old segment generates 30% of all profitability for iPhone devices and data plans through carrier partners globally (Apple Investor Relations, 2013). The most intensive users of advanced scheduling and time management applications are 30- to 45-year-olds, who are often managing multiple roles as parents, employees, caregivers, and leaders (Apple Investor Relations, 2013). The Libertad must be designed to give these customer segments the flexibility they need to customize a build-to-order smartphone to their specific needs.
A SWOT analysis has been completed for the proposed new business unit that will produce, market, and service the Libertad:
Strengths
Alliances with contract manufacturers who can quickly and inexpensively produce the Libertad platform. A stable supply chain for the accessories and components sold as part of the build-to-order strategy is in place. Alliances with AT&T, Verizon, and a repurchasing agreement with Virgin America to resell the phones. A website including a product configurator and catalog has been built and tested to support build-to-order sales. $10M in financing from venture capitalists who view Libertad as the Dell of smartphones.
Weaknesses
Name awareness and brand-building will be critically important; the brand is not yet known in the market. Manufacturing processes to support build-to-order workflows have not yet been stress-tested at thousands of units per day. Supply chain links for the more expensive components need third- and fourth-source strategies to ensure availability across the lifecycle of each smartphone model.
Opportunities
Broaden the product line to include build-to-order tablet PCs and an iPad Mini-class device that can be sold at a price point of $150 — 50% of the Mini's current price. Grow global distribution through two-tier distribution, partnering with leading mass merchandisers in each regional market. Pursue Original Equipment Manufacturer (OEM) sales to leading telecom providers globally, customizing devices for their specific needs.
Threats
Supply chain disruption and continual cost increases of components could completely redefine the business model. Churn of trained personnel in production and build-to-order manufacturing poses an operational risk. Apple could enter the build-to-order smartphone market and capture a large share of the currently underserved 67% of the market.
For the Libertad to succeed, it will need a highly scalable ecosystem of partnerships and alliances. The success of the iPhone is a direct result of the many strategic alliances and partnerships Apple has with its global base of telecommunications partners and service providers. A conceptual map of the key alliances and partnerships necessary for the Libertad to succeed includes systems integration and process re-engineering providers, managed services and hosting companies, hardware infrastructure suppliers, enterprise application vendors, wireless LAN and service provision partners, network operators such as AT&T, BT, Vodafone, and Verizon/T-Mobile, and handset manufacturers including Nokia, RIM, Ericsson, and Motorola (Apple Investor Relations, 2013; Kwak, Kim, & Kim, 2009; Gill & Lei, 2009).
Google reported several years ago that there were over 60 different smartphones and tablet PCs in production using the Android operating system (Hardy, 2010). As of 2013 there are over 180, and the growth of the Microsoft–Nokia partnership continues to drive even greater competitive pressure into the smartphone market (Apple Investor Relations, 2013). Across all competitors, none offers a build-to-order option for customizing the smartphone to customers' unique requirements — this is the strongest differentiating feature of the Libertad. The dominant competitors for the baseline unit include HTC, Motorola, and Samsung, three of the top partners Google is relying on for the success of the Android operating system.
The political, economic, social and cultural, and technological factors pertaining to a build-to-order smartphone are favorable for the development and launch of the Libertad. A PEST analysis is provided below.
Political Climate: The deregulation of the telecom industry continues to favor new ventures. There are also initiatives in place to reward companies that operate in trade-free zones across the U.S. and globally. These areas would reduce tax costs for the new division and contribute to Libertad's profitability.
Economic Climate: Economic uncertainty makes a smartphone even more critical, as many members of the target segment are working two or more jobs and often use their smartphone to keep all aspects of their lives coordinated. The economic climate will also drive the development of a more effective pricing strategy over time.
Social & Cultural Environment: Social and cultural factors are the strongest forces favoring a build-to-order smartphone, as ethnographic studies completed by Apple have shown that more iPhone customers are seeking greater individuality in their devices (Apple Investor Relations, 2013).
Technological Factors: Continual advances in EVDO chipset technology allow a smartphone to connect to the Internet from virtually anywhere, presenting significant potential for redefining the smartphone market (Lee, Kwak, Kim, & Kim, 2009). The accumulated effects of iPhone and iPad demand have driven prices for advanced display technologies down, making it possible for an entire industry to embed these technologies into next-generation devices (Apple Investor Relations, 2013).
The continual growth of smartphone sales has shown that the market is stable, growing, and secure from an investment standpoint. By creating a unique build-to-order strategy that can economically produce a customized smartphone, the overall market for smartphones can increase by 67% or more (Apple Investor Relations, 2013). The differentiating aspect of the Libertad is the opportunity for customers to design its many features to align perfectly with their needs — an option no competitor can match today from a manufacturing workflow standpoint.
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