ipod creating an iconic brand. “ it’s really hard to design products by focus groups. a lot of...
TRANSCRIPT
“It’s really hard to design products by focus groups.
A lot of times, people don’t know what they want until you show it to them.”
Problem Statement
• Has Apple successfully differentiated itself from their competitors?
• How can the iPod keep its dominance?
• Is Apple’s marketing of the iPod effective?
Extent of Demand
Sales of iPod
• 2001: 125,000
• 2003: iTMS launched
• 2003: 1,451,000
• 2001-2006: 88,701,000
• Market Share: 73% in 200601 02 03 04 05 06
0
10,000
20,000
30,000
40,000
50,000
(thousands)
Extent of Demand
Market Entrance: Differentiation
• Unique Product• Storage capacity• Use-friendly interface• Attractive design
• Premium Price: $399• “Idiots Priced Our Device”
• Advertising• Focused on attributes and benefits
Extent of Demand
Increasing Brand Stature
• Continued Product Innovation• Bigger Storage, Better Functions, etc• iPod mini (2004), Shuffle (2005), etc
• Expansion of Distribution Channels• Apple Store (2001)• Major Electronic Retailers, etc
• Silhouette Ad Campaign
Environmental Climate
Political Social
• RIAA (Recording Industry Association of American) copyright needed-filing lawsuits against individual file swappers.
• The public was eager for an legally easy-to-use digital music service
Economics Technology
• Purchasing power depends on the economic conditions.
• Since 2003, the US’s
economic conditions were getting better.
• People required more entertainment- digital music explosion.
• The adoption of Napster spread quickly to more than 25 million users in less than one year.
• Let users connect and manage a wide range of digital devices and software - iTunes.
• Simplicity but efficiency - hard disk drive Mechanical scroll wheel.
• ITunes music store was key for apple and digital music offerings.
Marketing Mix
Product Place PricePromotion
• Personal music player
• Originally black and white only, but color screens became available later
• A size to fit every lifestyle (iPod, iPod
mini, iPod nano, iPod Shuffle)
• Features the distinctive click-wheel
Product Place PricePromotion
Marketing Mix
• Sold at 113 Apple stores, online, and at selected retailers like Circuit City and Best Buy
Product Place PricePromotion
Marketing Mix
• 1,000 songs, in your pocket • A Capella
• Silhouette Ads
• 2004 iTMS Super Bowl
Product Place PricePromotion
Marketing Mix
• Price per GB goes down with each new model
• Ranges from $149 for 1GB iPod Shuffle to $399 for 60 GB video iPod
SWOT Analysis
• Unique design: The most important feature!
• High market share (78% of the total market)
• Culture and social phenomenon
• iTunes: Help to identify key customer needs; Differentiation
SWOT Analysis
• Limitation of target segments: Apple fans and music lovers
• iTunes: Not an open system
SWOT Analysis
• iPods start turning up in universities and schools: new and innovative ways to exploit Apple’s technology
• The growth of podcasting: allow users to create and share
Evaluation of Alternatives
Create a new campaign for iPod
Pros:• Low cost compared with designing a
new product• Helps to keep up with current media
trends
Cons:• Dilute brand image
Create a new product
Pros:• Compete with competitors• Target more segments• Expand the product line, increase the
market share and revenue
Cons:• High cost of designing and producing• May cause cannibalization
Recommendation• Create iPod with touch screen:
watch videos, play video games & listen to music
• Maintain all the other versions of iPods
• Decrease the prices of normal iPod
• Keep iTunes Music System closed
• Create Partnerships
“ I think if you do something and it turns
out pretty good, then you should go do something else wonderful, not dwell on it for too long. Just figure out what’s next.”
Questions
What was the Name of the First ITunes Compatible phone?
A. Pebble B. IPhone C. Razor D. ROKR
Questions
What Did Sandisk’s Marketing Campaign call iPod Users ?
A. Sheeple B. Hipsters C. iSheep D. Posers
Questions
When did Apple release the First iPod?
A. September 12, 2000 B. October 13, 2003 C. December 15, 2001 D. November 10, 2001
Questions
What was the first ad campaign Apple ran for iPod products?
A. SilhouetteB. I Fought the Law and the Law WonC. 1,000 Songs, In Your PocketD. A Capella