MARKETING EXCELLENCE APPLE

Apple has transformed the way people listen to music, play video games, talk on the phone, and even read books. The company’s revolutionary product innova­tions include the iPod, the iMac, the iPhone, and the iPad. They are the reason the company topped Fortune’s Most Admired Companies list every year from 2008 to 2014.

The iPod introduced many consumers to Apple and initiated a series of monumental product innovations. It exemplified Apple’s innovative design skills and looked, felt, and operated like no other device. To the delight of Apple (and the chagrin of competitor Sony), the revolutionary MP3 player became “the Walkman of the 21st century,” and the launch of the iTunes online music store helped drive iPod sales through the roof.

The iPod was also central in changing the way peo­ple listened to and used music. According to musician John Mayer, people felt like they were “walking through musicology” when they used their iPods, leading them to listen to more music and with more passion. The iPod has gone through a series of re-generations, adding features like photo, video, and radio capabilities along the way.

Apple reached its impressive market domination through a combination of shrewd product innovation and clever marketing. The marketing effort appealed to both Apple fans and people new to the brand. To reach such a broad base, the company had to shift its channel strategies. It added “mass electronic” retail­ers such as Best Buy and Circuit City (now defunct) to its existing channels, which quadrupled its number of outlets.

Besides this enhanced “push” effort, Apple also developed memorable, creative “pull” advertising that helped drive the popularity of the iPod. The Silhouettes campaign featured silhouettes of people listening to and dancing with their iPods and appeared all over the world. This simple message worked across cultures, portraying the iPod as cool but not beyond the reach of anyone who enjoyed music.

As the iPod’s popularity grew, a halo effect helped increase Apple’s share in its other markets. In fact, in 2007 the company officially changed its name from Apple Computer Inc. to Apple Inc. to help communicate its focus on non-computer products.

Apple’s next-largest product launch after the iPod was the iPhone, its 2007 entry to the cell phone industry. With its touch-screen pad, virtual keyboard, and Internet and e-mail capabilities, the iPhone launched to huge consumer excitement; people lined up for hours to be among the first to buy one. Investment analysts initially feared that Apple’s two-year contract with AT&T and the iPhone’s high price would hinder its success. But 74 days after the product’s debut, 1 million units had been sold. It had taken the iPod two years to reach the cumulative sales ($1.1 million) the iPhone had reached after just its first quarter. In fact, half the iPhones’ buyers switched to AT&T, incurring fees to break their contracts with other carriers, just to have a chance to own an iPhone.

Over the next few years, Apple dropped the price of the iPhone significantly and added impressive picture and video capabilities, video game features, a faster proces­sor, and access to millions of additional applications. The iPhone had become yet another game-changing techno­logical invention. When the iPhone 4 launched in 2010, showcasing FaceTime video calling, Steve Jobs declared it “the most successful product launch in Apple’s history.” Jobs died in 2011 and didn’t get to witness the success of the iPhone 5 launch in 2012. Apple received more than 2 million preorders of the iPhone 5 within the first 24 hours, far exceeding sales of any preceding iPhone launch. When the phone officially hit the shelves on September 21,2012, the company couldn’t keep up with the initial demand.

The launch of the iPad also created media frenzy in ‘ 2013. The multitouch device combined the look and feel of the iPhone with the power of a MacBook and gave consumers access to music, books, movies, pictures, video games, documents, and hundreds of thousands of applications at the touch of a finger without mouse or keyboard. Apple followed up with the launch of the iPad mini, a smaller version of the original, and the iPad Air, accompanied by a powerful marketing campaign that inspired consumers to do anything with their iPad, includ­ing creating movies, building wind turbines, studying coral reefs, and making mountain climbing safer.

In recent years, Apple has faced more serious com­petition for its smart phones, tablets, and other handheld devices, especially from Samsung and HTC. Investment in research and development is just one way the com­pany remains a leader in this cutthroat  industry. It spent $2.4 billion in R&D in 2011, $3.4 billion in 2012, and $4.5 billion in 2013. Creating, producing, and launching new products is a top priority for Apple. With creative market­ing support behind them, these products are the reason consumers and analysts stay on their toes awaiting Apple’s latest product news.

Source: Kotler Philip T., Keller Kevin Lane (2015), Marketing Management, Pearson; 15th Edition.