1. Market Planning Assignment: iPhone K Group 2: Carly Jones, Hyunsoo Kim, Ina Koelle, Sarah Hirschmann, and Tyler Darke BUS 306-01 Fundamentals of Marketing December 10, 2013

2. Agenda 1Market Needs 2Product and Software Introduction 3Product Position 4Competition 5Target Market and Segmentation 6Value Proposition 7Finances 8Conclusion and Questions 1976 1976 - 1998 1998 - 2000 2001 - 2007 2007 - Present

3. Market Needs Simple solution to parental controls Ease of use Quality, child-appropriate phone Desirable to children Access for children to smartphone features and benefits 46.6% of children in the U.S. own a smartphone Expected to increase to 70.4% by 2016

4. iPhone K Plastic exterior, steel frame interior Liquid repellent nano- coating Configurations 16 GB 32 GB K

5. iOS 7 K Limited internet Restricted email Restricted song, app, and video purchase Monitored or restricted messaging Incoming and outgoing call restrictions GPS monitoring

6. Product Position High-end smartphone for children Peace of mind for concerned parents Bridge between limited-technology children’s phones and current smartphones

7. Competition Kajeet Software only Limited to Sprint phones Firefly Very limited features Two color options Not appealing to children

8. Target Market Parents of children ages 5 – 12 Mid to high income levels Early-adopters

9. Market Segments Geographics Urban areas surrounding major cities Early-adopters Existing Apple store locations

10. Market Segments Demographics Parents ages 25 – 50 Likely to have children ages 5 – 12 Mid to high income levels Behavior / Psychographics Concerned parents 71% likely to set parental controls Dissatisfied with current options

11. Marketing Mix Pricing Distribution Apple stores, online, other licensed retailers Marketing Communications Television commercials, billboards, social media, mobile service providers Model No Contract 2-year Contract 16 GB$499$99 32 GB$599$199

12. Value Proposition Apple product Broad range of features Safest children’s phone on the market Shares appearance of iPhone 5C Price Benefits MoreThe sameLess MoreMore for moreMore for the sameMore for less The same The same for less Less Less for much less

13. Financial Plan ExpenseYear 1Year 2Year 3 Advertisements$70,000,000$78,984,439$103,891,252 Marketing Travel$20,000,000$22,566,983$29,683,215 Promotions$40,000,000$45,133,965$59,366,430 Distribution$30,000,000$33,850,474$44,524,822 Total$160,000,000$180,535,860$237,465,719 Cost Break Down Variable CostsPrice per Unit Materials$174 Manufacturing$60 Transportation$13 Storage$20 Total per Unit$267 Fixed CostsPrice per Quarter Machinery$300,000 Maintenance$10,000 Rent$190,000 Administrative$50,000 Total per Quarter$550,000

14. Break-Even

15. Conclusion iPhone K - technologically advanced children’s phone Perfect for concerned parents Superior to competition Key Learnings K

16. References Apple retail stores, united states. (2013). Apple. Retrieved December 5, 2013, from: http://www.apple.com/retail/storelist/ Brown, R. (September 4, 2012). The cost of making an iPhone. Investopedia. Retrieved December 1, 2013 from: http:// www.investopedia.com/financial-edge/0912/the-cost-of-making-an-iphone.aspx Elmer-DeWitt, P. (October 28, 2009). Apple's 2009 ad budget: Half a billion. CNN Money. Retrieved November 30, 2013 from: http://tech.fortune.cnn.com/2009/10/28/apples-2009-ad-budget-half-a-billion/ Hodgkins, K. (September 24, 2013). IHS: iPhone 5s component tally reaches $199, iPhone 5c costs $173. Tuaw. Retrieved December 1, 2013 from: http://www.tuaw.com/2013/09/24/ihs-iphone-5s-component-tally-reaches-199- iphone-5c-costs-17/ iPhone. (2013). Apple. Retrieved October 13, 2013 from: http://www.apple.com/iphone/compare/ Median age for u.s. counties map, statistics. (2013). Governing. Retrieved December 5, 2013,from: http://www.governing.com/gov-data/ census/median-age-county-population-map.html Median age for u.s. counties map, statistics. (2013). Governing. Retrieved December 5, 2013,from: http://www.governing.com/ gov-data/census/median-age-county-population-map.html Zact. (May 13,2013). Zact mobile report: navigating children's smartphone use. PR Newswire. Retrieved October 10, 2013, from: http://www.prnewswire.com/news-releases/zact-mobile-report--navigating-childrens-smartphone-use- 215817311.html

17. Questions iPhone K