Photo credit: Luiz Nonato, Flickr.
Last week Compete hosted a webinar entitled Think Different: The Decade of Apple. The original iPod was launched 10 years ago this month, and in the past ten years Apple has demonstrated extraordinary product innovation and marketing mastery. Since a lot of people talk about Apple’s product innovation, Chris Collins, Director of Technology and Entertainment, thought it would be fun to look at Apple’s strength as a consumer marketer – what Apple does to drive brand awareness, to create brand engagement, to convert brand engagement into product consideration, and finally to convert product consideration into online and offline sales.
You can listen to the entire webinar below.
Read what Chris has to say below:
One of the most interesting elements of Apple’s success is its focus on product rationalization. Unlike many other consumer electronics companies, Apple offers a relatively small number of products, and then markets those products to as wide a range of consumers as possible. Where other CE companies might offer separate gaming, music, social networking and web browsing devices, Apple offers the iPod Touch. (If you think I’m over stating the degree of product proliferation at other CE manufacturers, check out the mind-boggling number of products available on Sony’s customer support page.) Product rationalization matters because it drives economies of scale: Apple can manufacture a product for less (because it is buying components at a lower unit cost), market it more aggressively (because marketing dollars are concentrated, rather than spread out across hundreds or thousands of products) and sell it more effectively (because call center and store sales reps require less training).
A great example of this strategy at work is Apple’s success in smartphones. In June 2008, for example, just four Apple “models” were available via wireless carrier websites. (In our analysis the 8 GB and 16 GB iPhone would be considered two separate phone models, but the same phone in white or black would be a single phone model). In the same month, however, Motorola offered ten times as many phone models via carrier websites. Yet as we can see in the chart below, Apple was much more effective driving online device interest than Motorola – nearly 20% of all online phone research in June 2008 was for Apple, versus just 10% for Motorola.
What’s most interesting is how things have changed since June 2008. Motorola has experienced a number of management and strategy changes in the past three years (including a bold, “all-in” decision to embrace the Android OS for all Moto smartphones), but just as powerful was Motorola’s apparent decision to emulate Apple’s approach to product rationalization. By April 2011, the number of Motorola models available via carrier websites had declined 40%, with minimal impact to its ability to drive online device interest. Apple for its part is going the opposite direction – offering 75% more phone models via carrier websites, but without the same (relative) growth of online device interest. We will continue to monitor this critical measure of online interest-to-portfolio-breadth, as we believe this is one of the key measures of successful device marketing.
One final note: Alyssa Maine and I selected last Thursday for our webinar a couple months ago, so we had no idea that we’d be speaking on the topic of Apple so soon after the passing of Steve Jobs. We didn’t intend to eulogize Jobs, but it is impossible to discuss Apple’s strengths as a marketer without referencing Jobs personally. Jobs basically invented the personal computer as we know it in his 20s, and then – in refutation of F. Scott Fitzgerald’s quote that “there are no second acts in American lives” – Jobs went on to create Pixar and dramatically remake Apple Computer into the consumer electronics / media / retail force that Apple is today. Each of these “acts” was driven by a simple belief that consumers want truly great products. Sometimes that is the greatest marketing of all.
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