Apple: My go-to Brand (Week 10)

When someone asks you to think about brands, your thoughts are immediately filled with words, designs, images and slogans tied to a particular company.  All of these components help to differentiate the company from its competitors.  However, just because consumers recognize a brand does not mean that they will show loyalty to it or spend their money with the company.

Brand Equity
Brand equity, as defined by Marian Wood, is the extra value customers perceive that enhances their long-term loyalty to the brand.  In the pyramid below, Kevin Keller shows the process for a company to move a consumer from recognition to relationship with the brand.

For a company to truly have brand equity with a customer, it must move the customer from just being able to identify the brand to having a relationship with it.  At the top of the pyramid a brand resonates with a customer.  It is at this point that a customer will build loyalty towards the brand and continue in an ongoing relationship with it.

Apple

For me, Apple is a brand in which I have gone through the above pyramid and have ultimately come to the point of resonance.  Over the years, I have moved through each of the four categories above in my own unique way.

Identity (Salience)

I first became aware of Apple when I took a photography class in high school.  It was in the class where I first saw Apple's iMac.  At this point, I had never used the computer or had any personal feelings about the products.  However, I did immediately recognize the distinct design and logo.  

Meaning (Performance and Imagery)

I didn't think much of the brand at the time, but over the next few years I continued to encounter MacBooks and other Apple products in collage.  It was around this time that I made my first Apple purchase, the iPod.  My experience with the iPod was extremely positive.  The performance, reliability, and durability of the product was beyond my expectations.  In addition to the performance factors of the product, I was surprised at the social response to my ownership of the product.  Conversations around the iPod were either with current owners of the product or people interested in becoming an owner.  This was the first time where I started to experience the societal interaction with the product.

Response (Judgments and Feelings)

My response to the above performance and imagery resulted in the purchase of several more Apple products.  I continued to buy Apple because of the consistent quality, trust in their ability to innovate, and competitive advantage in performance in the market.  I had not had a bad experience with the product.

My personal Apple iTourage

Relationship (Resonance)

My transition from response to relationship was quite quick.  Today, I don't even do a whole lot of research on an Apple product before I purchase it.  I trust that they will only put out excellent products that exceed my expectations.  In addition to my personal loyalty, I will happily spread the Apple brand name to prospective customers of their products.

Although the example above is my personal tale, each and every customer will go through their own unique experiences in the process.  Successful companies will ensure that their marking and communication efforts help move customers through the above process to ultimately achieve brand equity with them.  

What does this do?: Portable Music Player Revolution (Week 6, Chapter 6)

It's hard to believe that new generations of grade school-aged kids will never have to wind up the tape of a cassette again.  I happened upon a pretty funny video the other day that really highlighted how far personal music players have come in such a short time.  Some companies have found themselves on the outside looking in because they failed to stay in touch with technology trends occurring in the environment around them.

History of Portable Music Players
This is not meant to be a comprehensive summary, but rather cover the three main technology changes over the past 50 years.
In the early 1970s, the first portable cassette player was released.  However, it wasn't until the 1980's when the Sony Walkman was released that people really started buying cassettes and cassette players en masse.

Fast forward a few years to 1982, when the compact disc was released.  Shortly after, portable CD players were the new mode of choice.  The CD player improved on the cassette by allowing the user to quickly skip, repeat, and play their song of choice.  The CD quickly passed cassettes in sales over the next few years.

Finally, in 1999, the mp3 music file was released.  This allowed users to move hundreds of these files onto small mp3 players for portable use.  Although the mp3 was a significant improvement from the previous two, it was not until Apple released the iPod and iTunes in 2001 that the portable music player really changed.

Cassette player vs iPod 4 P's
In hindsight, the launch of the iPod was really the death of cassettes and CDs.  Apple truly revolutionized the Core of what portable music players were.
Product:  The iPod was a tangible good, but intimately tied to the iTunes library where consumers could purchase new music.
Price:  The iPod was priced at roughly an equivalent price to a cassette player when it was launched.  At the time of launch though, the iPod was priced higher than a portable cassette player.
Place:  The iPod could be purchased at one of Apple's stores, at another retailer, or on-line.
Promotion:  The iPod had significant influence on the industry because of its connection with the iTunes store.  Consumers could do in one-click of the mouse what used to take a trip to the store or purchase from a music catalog to secure new music.

Apple created a better tool with the iPod.  Customers value a product that provides ready access to the music of their choice.  The iPod offered a product that was easier to get, cheaper to use, and more user friendly for the consumer.  All those variables put together really make all of the old music players obsolete.  We should all be thankful the days of winding up cassette tape are over.

Office for iPad: A look at the hypothetical STDP (Week 5, Chapter 4/5)

Microsoft launched its Office Apps for iOS at the end of March.  One day after the apps went live, it held the top three spots on the App Store.  Now, similar to other apps, the true test will be to see how long the App is a popular download.  Several other apps have gone before, yet quickly fluttered out after failing to meet customer expectations.  [As an aside, the screenshot below was from 29-March; when I downloaded the Apps today Word, Excel, and PPT still held the top 3 spots]  Now presumably, Microsoft did a thorough STDP analysis on this product release, but I'll take a swing at a simplified version below.

Segmentation
It's quite obvious that Microsoft is pursuing the tablet market, specifically those consumers who use the iPad/iOS.  For this segment, the most obvious observable variable is the purchase or possession of an iPad.  One thing to note in Microsoft's segmentation though, is that the company had to have realized that there would be some cannibalization of its own table market share.  Assuming that some consumers purchasers their table, the Microsoft Surface, solely for access to Office.  It would be safe to assume that some consumers would move towards the iPad, since it is now Office capable.  However, the overall market expansion and profitability were too good to pass up.

Targeting
Since Office is already available to Android powered tablets and it comes pre-installed on the Microsoft tablet, Microsoft is targeting the iOS market and confidence that this market segment will continue to grow.  Based on the Garner data below, Microsoft saw the obvious market share with regard to operating system and decided it would be in their best interest to include iOS in its offering.   The data shown here, is the Worldwide Tablet sales to end users, by operating system.

The next table shows the Worldwide tablet sales to end users, by Vendor.  It's obvious from the data below, that Microsoft wanted an opportunity to target the 70M plus customers using Apple products.  

These customers could also be Office users on their notebook and desktop, but have selected Apple for their tablet needs.  

Differentiation

The Office product has set itself apart as the go-to for workplace and personal document platform.  What Microsoft is looking to do with Office on iPad, is get that large target market above accustomed to using the platform on their tablet.  A quick 4 P analysis below shows that Place is the key marketing-mix element for setting itself apart, but the true revenue stream will come in how they use Pricing.

Product:  Office (Word, Powerpoint, Excel, Note)

Place: Apple App Store

Pricing: Free download, for full access to platform will require Office 365 subscription

Promotion: Emphasis on ease of Office use on iOS

It's easy to see how Microsoft is looking to lure in potential customers with the free version for document viewing, but to get the creation and editing options, the user must pay for the Office 365 service.  This service costs $10 per month or $100 per year.

Positioning

Microsoft has found a valuable place in customer's minds as so many people are on the go these days and prefer the ease of a tablet over their notebook computer. I can personally think of dozens of times where Office on my iPad would have made life easier.

Microsoft's decision was certainly based on a more robust STDP analysis than what I showed, but it should offer some insight into the key decisions that were made in the marketing process.