1. Education Market Strategy for Apple Inc. By Team Fusion Andrew Herfurth Carey Reynolds Andrew Schiewe Tanasha Smith Tanner Kelley Thao Nguyen Andrew Herfurth1

2. Roadmap o Recap o Andrew Herfurth o Implementation step overview o Carey Reynolds o Andrew Schiewe o Implications across organization o Tanasha Smith o Tanner Kelley o Thao Nguyen Andrew Herfurth2

3. SWOT Analysis Strength to be exploited ◦ (S1): MacOS system prevents most malware viruses Opportunity to be exploited ◦ (O1): Education market More effort into education market ◦ (S1, O1) Andrew Herfurth3

4. Profit to be Made 1.3 trillion dollars is spent on technology in educational institutions each year This money is mainly in the form of grants given by the United States government. Andrew Herfurth4

5. Implementation Steps Putting the plan together

6. Overview of Implementation Steps 1)Evaluation of entering into the educational market 2)Market Segmentation and Target Marketing 3) Seek more Textbook Company Partnerships 4) Educational App Development/ Improvement Carey Reynolds6

7. What to do Perform cost-benefit analysis to see where entering into the education market is most effective Be more flexible with their pricing to allow for more educational institutions to be able to purchase Apple products Promotions and advertisements directed towards educational markets ◦ Personal selling Carey Reynolds7

8. Target Market ◦ Middle to upper class suburban areas ◦ Reach out to other demographics to get more market share Market Segmentation ◦ Business to business markets ◦ Demographic and geographic segmentation variables primarily Market Segmentation/ Target Market Carey Reynolds8

9. Textbook Company Partnerships Current Partners: ◦ McGraw Hill ◦ Pearson Education ◦ Houghton Mifflin Harcourt Potential Partners ◦ Scholastic ◦ Oxford University Press ◦ Wiley Cheaper Textbooks Studies show benefits of technology in the classroom Andrew Schiewe9

10. Educational App Development/Improvement Current Apps: ◦ iTunes U ◦ iBooks App Customization/ Development services Contribution incentives for teachers/professors Note-taking and productivity apps Andrew Schiewe10

11. Implications of Implementing Apple’s Strategy Change happens when implementing new plans Andrew Schiewe11

12. Research and Development & Quality Management Implications

13. Research and Development $10 billion innovation expansion (2013) Marketing department training New employees Mobile learning Bring your own device programs Tanasha Smith13

14. Quality Management Level of customer satisfaction that must be maintained in the new apps and environment Improving quality in every facet of business Maximize utility of products in education Tanasha Smith14

15. Marketing and Human Resource Implications

16. Forecasted Marketing Implications Implication of Business to Business Market Segmentation: ◦ Form of Market Development  Targeting Educational Institutions entails expanding to new users as well as new uses of current products. Is expanding to the educational market profitable? ◦ Apple will need to expand sales by demonstrating new uses for its products ◦ To expand sales Apple must use personal selling  Product has high value, there are few customers, and buyers are geographically concentrated. Tanner Kelley16

17. Cost Implications of Personal Selling ◦ Expanding Apple’s market to include educational institutions requires a larger sales force  Leads to increased costs for salaries, wages & commissions  Apple sales force typically paid between $15 and $30  Recently, Apple announced raising employees wages by as much as 25%. Tanner Kelley17

18. Human Resource Implications of Increasing Sales Force Expanding the Sales Force requires: ◦ Average costs of hiring new employees is about $4,000 (University of California of Berkeley) ◦ Additional employee training:  Extensive training to become knowledgeable on Apple products  Increased cost in instructor-led classes for the Apple Certification Exam ◦ Recruitment:  Costs of recruitment include sourcing costs (i.e. advertising and internet postings) Tanner Kelley18

19. Forecasting and Budget Implications

20. Forecasting As of March, 2013, Sales will be $41 - $43 billion $10 billion on innovation, expansion in 2013, said Chief Financial Officer Peter Oppenheimer Apple's iPads education sales double, two iPads for every Mac ◦ McAllen, Texas, public school officials plan to distribute 25,000 iPads over the next few years  $20 million spent for the cost of the iPads, Wi-Fi network and training needed ◦ San Diego distributes 26,000 iPads to students ◦ Chicago public schools have around 20,000 iPads. “School iPads & tablets development, Fall 2012” Source: http://www.ipadinschools.com/ 20Thao Nguyen

21. Source: http://www.glassdoor.com/GD/Salary/Apple-Salaries-E1138.htm?filter.jobTitleFTS=sale 21Thao Nguyen

22. Budget Quarterly Hiring cost $4,000 Employees $20/hour (200 employees) $20/hour * 12hour * 80 days/quarter * 200 employees $3,840,000 R&D (6% of sale) March sale = $42 billion 6% * $42 billion $2,520,000,000 Investment in retail stores $1 billion in 2013 $1 billion/4 $250,000,000 Total budget $2,773,844,000 22Thao Nguyen

23. DuPont Analysis 23Thao Nguyen

24. DuPont Analysis Thao Nguyen24

25. Source: http://seekingalpha.com/article/1160191-peeling-apple-a-long-term-roe- analysis 25Thao Nguyen

26. Conclusion Implementation steps  Evaluation of entering into the educational market  Market Segmentation and Target Marketing  Seek more Textbook Company Partnerships  Educational App Development/Improvement Implications across the organization  Research and Development  Quality management  Implications in marketing, HR, and costs  Forecast Andrew Herfurth26

27. Q&A Team Fusion27

28. Works Cited http://work.chron.com/average-cost-hire-new-employee- 13262.html http://work.chron.com/average-cost-hire-new-employee- 13262.html http://online.wsj.com/article/SB1000142405270230476530457747 8903919636114.html http://online.wsj.com/article/SB1000142405270230476530457747 8903919636114.html http://www.apple.com/jobs/us/ http://www.ramco.com/blog/the-right-way-to-erp- implementation http://www.ramco.com/blog/the-right-way-to-erp- implementation http://www.forbes.com/fdc/welcome_mjx.shtml http://www.ipadinschools.com/ http://appleinsider.com/articles/13/01/24/apple-to-spend-10- billion-on-innovation-expansion-in-2013 http://appleinsider.com/articles/13/01/24/apple-to-spend-10- billion-on-innovation-expansion-in-2013 http://www.cnn.com/2012/01/23/tech/innovation/ipad-solid- education-tool http://www.cnn.com/2012/01/23/tech/innovation/ipad-solid- education-tool Andrew Herfurth28