The Secret of Apple's Success
Traditionelles Marketing & Kultmarketing
©2010
Bachelorarbeit
88 Seiten
Zusammenfassung
Inhaltsangabe:Introduction:
At the end of the year 2009, Apple surprised the Wall Street by announcing record-breaking profits, as the Californian technology company continues to defy the recession.
By 2010, Apple had sold 250 million of its portable music devices answering to the name iPod, a synonym in the mp3-player market. In the third quarter of 2009, Steve Jobs, CEO of Apple, was celebrating a record profit of $1.67 billion. This is going to be huge the CEO said when they launched, in 1998, the all new iMac, a personal all in one case desktop computer. And he was proved correct!
Their major competitor, Microsoft, as well as others, has suffered from the recession and as a result, they have made a part of their workforce redundant, whereas Apple chose to expand and trump their own stock records every month.
According to the CEO Steve Jobs, a lot of companies have chosen to downsize, and maybe that was the correct way for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.
Apple does not behave like the mass. With their unique recipe for success, they were able to step out of the crowd As a result of their uniqueness, they have loyal fans.
The CEO Steve Jobs stated before Apple launched the Macintosh, weve got to be a great Marketing company. This quotation shows Apples main focus is on marketing. It is a key success factor for Apple and the researchers focus for this project.
Aims and Objectives:
In this project the author aims to investigate, with particular reference to the example of Apple, why a few brands are able to charge higher prices for their products and sell more of them than their competitors. The research is based on traditional- and Cult-marketing which contributes to Apples profitability success.
Therefore, the researcher has identified the following objectives:
Explore Apples strategic change in 1997 which brought the company back to profitability, considering the launch of Mac.
The whole history of the company was not a bed of roses, Apple also experienced a time of near bankruptcy. Therefore the author explored Apples strategic change in 1997 which saved Apples future. The researcher applied Apples new vision and strategy on the example of the Macintosh which was the first product that was all new developed and re-launched after the strategic changes.
Analyze Apples traditional Marketing […]
At the end of the year 2009, Apple surprised the Wall Street by announcing record-breaking profits, as the Californian technology company continues to defy the recession.
By 2010, Apple had sold 250 million of its portable music devices answering to the name iPod, a synonym in the mp3-player market. In the third quarter of 2009, Steve Jobs, CEO of Apple, was celebrating a record profit of $1.67 billion. This is going to be huge the CEO said when they launched, in 1998, the all new iMac, a personal all in one case desktop computer. And he was proved correct!
Their major competitor, Microsoft, as well as others, has suffered from the recession and as a result, they have made a part of their workforce redundant, whereas Apple chose to expand and trump their own stock records every month.
According to the CEO Steve Jobs, a lot of companies have chosen to downsize, and maybe that was the correct way for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.
Apple does not behave like the mass. With their unique recipe for success, they were able to step out of the crowd As a result of their uniqueness, they have loyal fans.
The CEO Steve Jobs stated before Apple launched the Macintosh, weve got to be a great Marketing company. This quotation shows Apples main focus is on marketing. It is a key success factor for Apple and the researchers focus for this project.
Aims and Objectives:
In this project the author aims to investigate, with particular reference to the example of Apple, why a few brands are able to charge higher prices for their products and sell more of them than their competitors. The research is based on traditional- and Cult-marketing which contributes to Apples profitability success.
Therefore, the researcher has identified the following objectives:
Explore Apples strategic change in 1997 which brought the company back to profitability, considering the launch of Mac.
The whole history of the company was not a bed of roses, Apple also experienced a time of near bankruptcy. Therefore the author explored Apples strategic change in 1997 which saved Apples future. The researcher applied Apples new vision and strategy on the example of the Macintosh which was the first product that was all new developed and re-launched after the strategic changes.
Analyze Apples traditional Marketing […]
Leseprobe
Inhaltsverzeichnis
Sascha Schneiders
The Secret of Apple`s Success
Traditionelles Marketing & Kultmarketing
ISBN: 978-3-8428-0163-9
Herstellung: Diplomica® Verlag GmbH, Hamburg, 2010
Zugl. University of Leeds, Leeds, Großbritannien, Bachelorarbeit, 2010
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http://www.diplomica.de, Hamburg 2010
III
ABSTRACT
There is possibly no other company which is so casual and at the same time so powerful
as the computer and entertainment manufacturer Apple. The company controls the
online-music market, the market for portable music players and is now capturing the
high-tech mobile phone market. Apple moves into new electronic markets with strong
competitors, in order to monopolise them just a short time later.
The CEO, Steve Jobs, has brought a brand into being that is different and at the same
time mainstream. A strong magnetic brand which yields more influence in people's life
than one would care to admit. This is absolutely the reason why every company in the
world wishes for a strong magnetic brand which can be defined as a "CULT BRAND".
They get repeatedly chosen over the competition. They bring higher prices than the
competition. And if they are a strong enough brand their customers not only use their
products, but evangelize them to the world.
This project aims to analyze Apple's marketing activities in order to figure o
ut, what
makes this company so successful. It adds to the traditional marketing theory, the new
theory of "cult
marketing" because traditional marketing delivers no approach to
explain the behavior of cult brands.
The phenomena of a Cult Brand are comparable to the patterns of a religion and Apple
as well has strong believers. When it comes to their favorite brand, they enjoy telling
who ever will listen how great it is and why they love it so much. People are camping in
front of Apple's stores just to get their latest innovative product.
And if their Messiah,
Steve Jobs, enters the stage to introduce a new product to thousands of viewers, he
brings the house down.
iv
ACKNOWLEDGEMENT
The successful achievement of this dissertation would not have been possible
without the support, help, motivation and attention of a number of people.
Hereby I would first like to thank my project supervisor who has constantly
accompanied me in good spirits through this whole process.
Special thanks go to my family who has financially and emotionally supported
me to conduct my studies in the United Kingdom.
v
TABLE OF CONTENTS
ABSTRACT ...I II
ACKNOWLEDGEMENT ... IV
LIST OF FIGURES ... 7
ABBREVIATIONS ... 9
1
INTRODUCTION TO THE STUDY ... 10
1.1
A
IMS AND
O
BJECTIVES
... 11
1.2
R
ESEARCH QUESTION
... 12
1.3
B
ACKGROUND
... 12
2
LITERATURE REVIEW ... 13
2.1
A
PPLE
B
ACKGROUND
I
NFORMATION
... 13
2.2
T
RADITIONAL
M
ARKETING
S
TRATEGY
... 14
2.3
W
HAT IS A
B
RAND
? ... 15
2.4
W
HAT IS
B
RANDING
? ... 16
2.5
C
ULT
M
ARKETING
... 16
2.5.1
Cult ... 16
2.5.2
Relation between Cult and Marketing ... 18
2.5.3
"7 Golden Rules of Cult Branding"... 19
2.5.4
Cult of Apple ... 20
2.6
C
USTOMER LOYALTY
... 21
2.7
E
VANGELISM
... 21
2.8
M
ASLOW
'
S
H
IERARCHY OF
N
EEDS
... 22
3
METHODOLOGY ... 23
3.1
R
ESEARCH
M
ETHODS
... 23
3.2
P
RIMARY AND
S
ECONDARY DATA
... 24
3.2.1
Primary data ... 24
3.2.2
Questionnaire ... 24
3.2.3
Sampling ... 25
3.2.4
Secondary data... 26
3.3
Q
UANTITATIVE
&
Q
UALITATIVE DATA
... 26
3.4
R
ELIABILITY
... 27
3.5
V
ALIDITY
... 27
3.6
G
ENERALIZABILITY
... 28
3.7
E
THICAL ISSUE
... 28
4
RESEARCH FINDINGS ... 29
vi
4.1
T
HE
S
TRATEGIC
C
HANGE IN
1997,
A
PPLE
'
S
R
ESCUE
... 29
4.1.1
Apple's financial Situation in the 90's ... 29
4.1.2
The Strategic Change in 1997 ... 29
4.1.3
Apple's Change on the Example of Mac ... 32
4.2
T
RADITIONAL
M
ARKETING
... 34
4.2.1
The 4P Analysis of Apple ... 34
4.2.2
Product ... 34
4.2.3
Place ... 40
4.2.4
Price ... 42
4.2.5
Promotion ... 44
4.3
C
ULT
M
ARKETING
... 49
4.3.1
Reason for a Cult ... 50
4.3.2
Elaboration of the Seven Golden Rules on the Example of Apple ... 52
1.
C
ONSUMERS WANT TO BE A PART OF THE GROUP THAT IS DIFFERENT
... 52
2.
C
ULT
B
RANDS INVENTORS DARING DETERMINATION
... 54
3.
C
ULT BRANDS SELL LIFESTYLES
... 55
4.
L
ISTEN TO YOUR CUSTOMERS AND CREATE
C
ULT
-B
RAND EVANGELISTS
... 57
5.
C
ULT
B
RANDS ALWAYS CREATE CUSTOMER COMMUNITIES
... 60
6.
C
ULT
B
RANDS ARE INCLUSIVE
... 61
7.
C
ULT
B
RANDS PROMOTE PERSONAL FREEDOM AND DRAW POWER FROM THEIR ENEMIES
... 61
5
CONCLUSION... 63
5.1
C
ULT FACTOR
... 66
5.2
S
TEVE
J
OBS
'
IMAGE IN RELATION TO THE
A
PPLE BRAND
... 67
5.3
F
ORECAST AND RISKS
... 68
5.4
L
IMITATION OF STUDY
... 69
6
BIB LIO GRAPH Y ... 70
7
APP ENDIX ... 80
7
List of figures
Figure 1:
Model of Marketing Mix
Figure 2:
Forms of Cult
Figure 3:
7 Golden Rules of Cult Branding
Figure 4:
Apple's Marketing Patterns
Figure 5:
Hierarchy of Needs
Figure 6:
Two-by-Two Grid
Figure 7:
Strategic Change on the Example of the Mac
Figure 8:
To which brands do the pictures belong?
Figure 9:
Identification pictures of two Brands
Figure 10:
To which brand belongs your mp3-player?
Figure 11:
Apple's Product
Life Cycle
Figure 12:
Apple's Multichannel Distribution
Figure 13:
iPod Classic Price Development
Figure 14:
iPod Sales Development
8
Figure 15:
If you buy a mp3-player, what is important?
Figure 16:
Advertising Expenses
Figure 17:
Profit Margin
Figure 18:
Elements: Look, Say & Feel
Figure 19:
Apple's New Look, Say & Feel
Figure 20:
How often do you use your Mp3-Player
Figure 21:
Apple's Customer Relationship
Figure 22:
Are you satisfied with your mp3-Player
Figure 23:
Why have you bought the iPod?
Figure 24:
If you have not bought an Apple product yet, would you buy one
Figure 25:
Strategic Change Process of Apple
Figure 26:
4 Factors of Apple's Ad efficiency
9
Abbreviations
Ad
Advertisement
CEO
Chief Executive Officer
IBM
International Business Machines Corporation
Mac
Macintosh
US/USA
United States of America
10
1 Introduction to the study
At the end of the year 2009, Apple surprised the Wall Street by announcing record-
breaking profits, as the Californian technology company continues to defy the recession.
By 2010, Apple had sold 250 million of its portable music devices answering to the
name "iPod", a synonym in the mp3
-player market. In the third quarter of 2009, Steve
Jobs, CEO of Apple, was celebrating a record profit of $1.67 billion (Johnson, 2009,
[online]). "This is going to be huge" (Young & Simon, 2005, prologue) the CEO said
when they launched, in 1998, the all new iMac, a personal all in one case desktop
computer. And he was proved correct!
Their major competitor, Microsoft, as well as others, has suffered from the recession
and as a result, they have made a part of their workforce redundant, whereas Apple
chose to expand and trump their own stock records every month.
According to the CEO Steve Jobs,
a lot of companies have chosen to downsize, and maybe that was
the correct way for them. We chose a different path. Our belief
was that if we kept putting great products in front of customers,
they would continue to open their wallets.
(brainyquote, 2009,
[online])
Apple does not behave like the mass. With their unique recipe for success, they were
able to "step out of the crowd" (Chazin, 2009, [online]). As a result of their uniqueness,
they have loyal fans (Müller, 2007 [online]).
The CEO Steve Jobs stated before Apple launched the Macintosh, "we've got to be a
great Marketing company"
(Kahney, 2008, p.131). This quotation shows Apple's main
focus is on marketing. It is a key success factor for Apple and the researcher's focus for
this project.
11
1.1 Aims and Objectives
In this project the author aims to investigate, with particular reference to the example of
Apple, why a few brands are able to charge higher prices for their products and sell
more of them than their competitors. The research is based on traditional- and Cult-
marketing which contributes to Apple's profitability success.
Therefore, the researcher has identified the following objectives:
Explore Apple's strategic change in 1997 which brought
the company back to
profitability, considering the launch of Mac.
The whole history of the company was not "a bed of roses", Apple also experienced a
time of near bankruptcy. Therefore the author explored Apple's strategic change in
1997 which saved Apple's future. The researcher
applied Apple's new vision and
strategy on the example of the Macintosh which was the first product that was all new
developed and re-launched after the strategic changes (Kahney, 2008, p.38).
Analyze Apple's
traditional Marketing strategy by 4P Analysis
Apple's untypical philosophy also affects all areas of the 4P analysis. The company
strives for details which are not considered by the competition in the computing
industry. For instance, Apple was the first computer manufacturer that paid attention to
design.
Explore Cult-marketing and implement Apple's marketing strategy in the
elaborated theory in order to identify Apple as a "Cult brand".
There is resonating a spirit around Apple known as "cult". Strong brands like Harley
Davidson are "riding" on the same unicorn
as Apple, with their committed fans which
12
protect their brand like a treasure. The author is going to describe and analyse the most
common cult-marketing theory and apply it to the case study of Apple.
Evaluate the marketing strategy and the image of the CEO in order to understand
the "Cult status"
and profitability success of the company.
The project provides an evaluation of Apple's marketing strategy and Steve Jobs' image
relating to the "Cult status" of the brand. The CEO's special image as a person who
dared the impossible and succeeded has a major influence on Apple's share value
(Riedel, 2007, [online]).
1.2 Research question
On the basis of these aims and objectives, the author created the following research
question:
What is the secret of Apple's profitability success?
Analyzed by traditional- and cult marketing theories
1.3 Background
Some companies have a far superior performance in relation to sales, margins and
especially customer loyalty, which the author has described on the basis of marketing.
By reason of changing environmental influences the researcher become aware that
traditional marketing strategies cannot provide appropriate explanation for the
mentioned characteristics of "cult-brands" and therefore he extended his research to
forward-looking cult-marketing models.
Additionally the author has personal interest in marketing and he believes that the
project provides him a deep view into new marketing theories as well as it will enhance
his understanding of marketing.
13
2 LITERATURE REVIEW
2.1 Apple Background Information
In 1974 two college dropouts were driven by the vision of a computer for personal use.
Despite no professional qualifications and little capital, Steve Jobs and Steve Wozniak
founded Apple. Large computer companies like IBM laughed about their unprofessional
appearance and the vision of a computer which can be used by ordinary people. Their
success story started with the launch of the first personal computer which was easy to
use and fitted in a tiny case.
In the following years, they have launched innovative new personal computers with the
emphasis on the ease-of-use. Steve Jobs became dominant in the organization and the
creative director. The co-founder Wozniak was the person who realized Jobs' ideas on
technological basis but he was always eclipsed behind Jobs' dominant personality. After
a struggle with the board of directors, Jobs left the company in 1984 and returned in
1997 when the company was nearly bankrupt (Young & Somion, 2005; Kahney, 2006).
The return of Steve Jobs had a fundamental influence on bringing the desolated
company back to a profitable business. During the time before he returned back to
Apple, he built up NEXT and the well known film production company Pixar (Young
& William, 2005).
Google's CEO Schmidt said in relation to Jobs second act: "Its resurgence is simply
phenomenal and extremely impressive."
(Caplan, 2006, [online])
14
2.2 Traditional Marketing Strategy
According to Young and William (2005, p.261), strategic change in products and
marketing strategy were fundamental for the success of the brand.
The book Principles of Marketing by Kotler et al. (2008) refers to the Marketing Mix
as the most common model to set up a marketing strategy. It is a tactical tool which
consists of synchronizing the elements as shown in the figure below: product, price,
place and promotion. The mixture of the elements is unique for every business.
Target
Market
Product
- Design
- Uniqueness
- Quality
- Package
- Support
- Warranty
- Brand name
Promotion
- Personal Selling
-Advertisement
- Public relations
- Promotion
Price
- Pricing Strategy
(skimming
Penetration...)
- discounts
- Bundling
- Price discrimination
Place
-transportation
ditribution channels
- order processing
-Inventory
- Location
Figure 1: Model of Marketing Mix
15
This model which is used by the vast majority as basic tool for a marketing strategy is
fairly general. According to Weis (2007, p.245), the Marketing Mix is a useful basis to
write down the marketing activities the organization is planning to realize. Due to the
fact that this tool is general, it can also be utilised for Apple in order to get a detailed
view of their marketing activities. The Marketing mix provides Apple's basic
marketing strategy which is set in a unique position compared to other entertainment
brands.
This model does not adapt to specific marketing activities or arising phenomenon of
strong magnetic brands called "Cult Branding" (see Branding).
2.3 What is a Brand?
A brand is something that lives in your head. It is a promise that links a product or
service to customers, whether by words, images, emotions, or any combination of these
three factors. Brands are associations that get stirred when you think about or hear about
a particular car, camera, watch or organization. You can immediately tell what makes
them different (Adamson, 2006, p.3).
Most brands are characterized by human character traits. "Human beings emboss
brands".
(Kilian, 2010, [online])
Apple itself is characterized with adjectives likes cool, friendly, metro sexual, good
looking and creative
(Rhoads, 2007 [online]). The actor Justin Long represents, in the
Apple "Get
-a-Mac" ad campaigns these particular adjectives by his personality
(Rhoads, 2007, [online]). When Jobs came back to Apple in the company's crises he
noticed that the Apple Brand had still a good image of being different, despite the fact
that Apple's sales had fallen in recent years. Strong brands can survive in people's
memories (Kahney, 2008, p.28).
16
2.4 What is Branding?
Branding is the process of building and executing a brand for profiling a company. It
tends to increase the company's worth in
the customer's view.
According to Levin (2003, p. 3), "Branding is a complex process, but its goal is simple:
It is the creation and development of a specific identity for a company, product,
commodity, group, or person". Apple started a rebranding ad
vertising campaign in 1997
because they noticed that their brand was one of their best assets. The explanation is
extendable to Cult Branding as the process of building up a Cult Brand.
2.5 Cult Marketing
2.5.1 Cult
A cult is originally a ritual worship of the Godhead, a person or a good which includes
religious acts regarding to something that enjoys extraordinary worship. It can deliver
their followers with unknown power (Kilian, 2009.p.12).
The researcher has noticed the mistaken impression that followers of a cult have weak
personalities and therefore are searching to be a part of such a group in order to
strengthen their personality. However it is possible to distinguish between two forms of
a cult:
Destructive cult
which Ross describes as "groups with an absolute authoritarian figure
at the top of the scheme of authority where there is no accountability for that leader."
(Ross 2001, cited in Bueno & Ragas, 2005 p. 5) Destructive cults hurt, harm,
manipulate, and often brainwash their members. They don't care about the well being of
their members.
In contrast a Benign cult is defined as "any group of people that are intensely devoted
to a person, place or thing, but where there is a relationship between the follower and
there is harmless or benign".
(Ross 2001, cited in Bueno & Ragas, 2005 p. 5) Cult
Brands belongs to the group of Benign Cults.
17
As seen in figure 2 the destructive cult has a person at the top of the pyramid who
assumed the power of a cult through brainwashing, harm and manipulation in order to
convert people into subordinates. In contrast in the benign cult the powerful person is
located at the middle of the circle and is surrounded by his followers. These followers
are persuaded to fulfill their needs and wants by means of this particular cult. The
powerful person creates a relationship to his followers through listening and providing
them with their wants and needs.
With regard to Apple, Steve Jobs who is sometimes called iGod is the preacher of the
Apple Cult. He listens to his customers and serves them with the products they want.
Moreover, he uses the feedback through Apple User-groups as a tool to turn his
customers into followers. As a result they get infected by the Apple brand and defend it
and their iGod against criticism (Kilian, 2009, pp. 23-25).
Figure 2: Forms of Cult
18
2.5.2 Relation between Cult and Marketing
The combination of both terms form the so called Cult-Marketing, which presents a
method of mystification and symbolization of a specific brand. The normal use of the
product becomes more and more unnecessary. Special brands all command super high
customer loyalty and almost evangelistic persons or followers. Therefore these specific
brands are called "Cult Brands"
(Gerken, 1998, p.89).
Bolz & Bosshart (1995, p.251) state, "In a global world people are not connected by
political or cultural belonging, they are connected by the cult-marketing of Global
brands."
It means that people find their connection to each other by using the same
brands.
Bolz & Bosshart (1995) analyzed our society, norms and values and came to the
conclusion that traditional marketing was no longer adjusted to the wants and needs of
the customers.
Gerken (1998) also investigated the phenomenon of Cult Marketing whereas he
extended his investigation to the company and customer relationship. He assumes that
the ordinary is going to be monochrome and consequently the society demands for
variety.
Gerken (1998) stresses that Cult Marketing is the only way to meet the future customers
demands and to fulfill their highest level of needs (See Hierarchy of needs). However
either Gerken or Bolz & Bosshart do not provide guidelines to become a Cult Brand.
19
2.5.3
"7 Golden Rules of Cult Branding"
Ragas & Bueno invented a means of building up a Cult Brand by looking at the
similarities of 9 "Cult Brands". This model consists of 7 cult-marketing rules which
provide a guideline for brands to become a Cult Brand and gain strong customer loyalty
(Ragas & Bueno, 2002, p.2).
The researcher used this model to identify Apple's pattern as a Cult Brand. This moswl
will be elaborated on in section 4.3.
20
Cult-Makerting
Traditional
Marketing
Apple
2.5.4 Cult of Apple
As one of the world's top ten brands
Apple has understood the new way of marketing
already in the 80's as its best
and expanded their traditional marketing to Cult
Marketing (Kahney, 2008, p.28). Apple's first cult succeeded with Macintosh supported
by the "1984" ad campaign (see promotion).
Their CEO Jobs was the impulse for Apple's Cult Marketing that speaks to the
individual. In the case of the iPod, the product is promoted as an integral part of the
consumer's personality. A
dditionally the Apple slogan "think different" reflects
people's individual identity and the desire to be
different (Kilian,2009, p24).
Steve Jobs has a sense for what customers really want and is adjusting the products to
their wants. "He tells us what we should love." (Verganti, 2010, [online]) The point is
that people don't know what they want until cult marketers show it to them (Ragas &
Bueno, 2005 p. 4).
Source: Own Analysis
Figure 4: Apple's Marketing Patterns
Details
- Seiten
- Erscheinungsform
- Originalausgabe
- Jahr
- 2010
- ISBN (eBook)
- 9783842801639
- DOI
- 10.3239/9783842801639
- Dateigröße
- 1.9 MB
- Sprache
- Englisch
- Institution / Hochschule
- University of Leeds – Marketing, Business Management
- Erscheinungsdatum
- 2010 (August)
- Note
- 1,3
- Schlagworte
- kultmarketing apple customer cult branding
