Apple Ipod Promotional Strategy 73e54

Apple iPod’s promotional and Positioning strategies Presented by: Amita Chaurasia Chandan Kumar Gauri Ghatge Neha Banerjee Ira Rani

Prologue • Steven Wozniak and Steven Jobs had been friends in high school • They both had interest in gadgets and just ended up dropping out of school • They had worked for companies like Silicon Valley and Atari • They had been dabbling in computer design

Apple Products • Apple I: First PC in Job’s fathers garage, for a local computer store, 50-exclusive designs @US$666.66, apple Inc on Jan’1977. • Apple II: Improved version of its predecessor. The difference lay in the display, which used graphics and color. – Venture capitalist, Mike Markkula invested US$92000 in the company.

• Apple III: In may 1980, It’s been released to launched to compete with IBM’s first PC. It costs US$1395 but it failed because of the design fault and made loss of over US$60 Mn.

Contd… • Initial Public Offering,Dec’1980: – Shares ,4.6 Mn @ 22US$

• LISA: In Jan 1983, First GUI computers, which introduced the words ‘mouse’ ‘icon’ and dekstop to the world,cost@US$ 10,000. • Apple MaCintosh: In 1984, came up with black & white monitor, a mouse and a keyboard along with floppy drive @US$ 2,495. • 1985: Jobs Resigned.

• MaC Portable: In 1989 but was not successful • Power Book:

In1991, first laptop ever launched

• Color Classic: In 1993, Apple introduced its first computer with color screen

• PReP: Apple partnered with IBM to create a new platform, which used IBM and Motorola hardware and apple software. It failed as there were not enough buyers for these Power PCs

• NeXT: Acquired it, Established by Job after he left Apple, on Dec 1996. • Consultant & CEO: In 1997, reed apple. • Apple introduced iMac in 1998 and iBook, a laptop, in 1999. iBook- targeted at consumer and education markets. It was replaced by the MacBook line in may 2006. Apple launched Mac OS X operating system in Mar’2001.

Challenge • As Jobs became the full-time CEO in 2000. – Suffered lossed of US$25 & Revenue US$ 5.36 Bn. – Declined shares into the market.

– Despite the excellent product quality, it seemed to enjoy very low M share 4% in Us and less than that globally. – Poor Marketing of Apple product.

• Oct’2001, new product launch but,’It’s not a MaC.’

iPOD! • A surprised announcement: All were surpise to know that apple had launched MP3 player. • Pricing Strategy: Differential pricing ( Consumer walk into store to purchase a US$ 100 iPod, S/he probably ended up spending more US$50.

“Better Value for money”

Price/GB Model

Price

Price/GB

iPOD Shuffle 512MB

$100

$200

iPOD Shuffle 1GB

$150

$150

iPOD Mini4GB

$200

$50

iPOD Mini6GB

$250

$41.67

iPOD 20 GB

$300

#15

iPOD 30 GB

$350

$11.67

iPOD photo 60GB

$450

$7.50

PROMOTION

Promotion strategies of iPod • The ‘Surprise factor’ Two benefits – Impulse purchases & product information was kept secret from competitors • Partnership with Star hotels • Introduced limited edition iPods • Integrated iTunes into podcasts (a collection of audio or video files available at a web address). If the has subscribed to the site then any new file made available on the site would be automatically ed on his/ her iPod

iTune player: Has the entire media collection in the iTunes library, one can browse everything faster, organize it all more easily, and play anything whenever the mood strikes

iTune store: One can rent or buy blockbuster movies, buy HD episodes of favorite TV shows, shop for books, and apps for iPhone, iPod touch, or iPad. Subscribe to free podcasts about anything and everything.

Cont… • Apple’s collaboration with Nike Introduced ‘Nike plus’ shoe line Enabled recording, storing and sharing information and songs during jogging sessions Priced at $29 Parts - receiver in the iPod and sensor in the shoe Effects: exciting and cutting edge technology, this made two strong brands come together Smart move to integrate iPod into the running culture and vice versa

Nike + iPod Meet your new personal trainer

ROCK AND RUN • Check out the menu and choose how you want to run. You can use custom workout shortcuts to start your favourite workouts quickly. Try any workout or select one with time, distance, or calorie goals. Then pick your favourite playlist, shuffle songs, or choose Nike-created Sport Music. You can even program a Power Song to play when you need instant motivation. • As you run, your iPod tells you your time, distance, pace, and calories burned. And it gives you at the halfway point and in the final lead-up to your goal, as well as the details of your workout when you’re done.

Social connection • On buying a RED iPod nano, Apple gives a portion of the purchase price to the Global Fund to fight AIDS in Africa. • Apple directs up to 50 percent of gross profits from the sale of this product to the Global Fund to help fund AIDS programs in Africa. Since its introduction, RED has generated more than $180 million for the Global Fund

Advertisment  Traditional campaign preferred

e.g. television, advertising

print,

hoarding,

posters,

wrap

 2003-”Lifestyle advertising”  “Ignorance of iPod” as product  Most popular advertisment (dark silkhouetted young people along with their ipods and earphones,which were in white bright-coloured background)

Contd……………… ……….

 Changing of ment with type of song played  2004- “Verigo” for iPod U2  2006- New commercial  Best advertising award-

POSITIONING OF iPOD

• ment and commercials focused on coolness • Hype because ofUnique ment

Word of mouth Look and design • Creation of buzz

Result of research conducted by Diffusion group (2005) • iPod s like hip-hop music and rocks and non s like classical music • 12% purchased because of its good looks • Remaining 88% purchased because of its features • After 2000: Coolness was not the only factor driving sales • By 2002: iPod was a generic term for DMPs

Continued.. The reason to buy iPod- was age dependent For 15-24 years • Quality of interface • Familiarity with brand

• Cool factor

For 25-34 years • Aesthetics

• interface

For 35-50 • Familiarity with brand

Positioning strategy • “Whole widget”-Software, Music and Hardware all component from Apple • In the early days IPod was compatible with Mac only intended to increase Mac sale also

Positioning Analysis of Apple as a Company Apple • A brand that meets a need • Apple's positioning is aligned with targeting a less price sensitive customer • It’s culture and internal activities are structured to meet the needs of these customers • Need-based positioning • positioning

Example • Each new Mac revision has either maintained or been subjected to modest price increase while Apple has simultaneously improved product features. • A few examples include the introduction of the unibody MacBook and MacBook Pro, larger displays on the iMac, and the replacement of the $499 Mac mini with a higher priced ($599) model. The motive is clear, protect the brand position via a trade-off

A deeper strategic Insight • By maintaining its price at the expense of unit volume, Apple has created an imitation barrier that competitors cannot easily cross • E 2 E approach of hardware and operating system design • Core competencies are directed towards buyers

• Preventing the commoditization of their business by integrating hardware and software

• iLife

Differentiation

• Integration • The Mac to Mobile Me transition - the ability to sync across Apple devices, Macs, and even Windows • iPhone OS and Mac OS X integration, interoperability, and feature sharing • The continued advancements with the iPod line - the iPod touch, the voice over feature in the iPod shuffle • I-cloud

• Personalization of product

Product variants

iPod Touch - Starts at $ 199

Classic – at $ 249

THE ROAD AHEAD • Apple sold 9.8 million units of iPod for the third quarter ending June 2007. • The first quarter (October 2006 to June 2006) saw a record sales of 21 million iPods. • In the third quarter profits were a record US$818 million. • According to Herb Greenberg 21% of the sales for the quarter ending June 2007 was much lower than the previous quarter ending 2006. • Revenue growth for iPods fell from 36% in the previous year to 5% in 2007.

THE ROAD AHEAD • iPod was becoming a mature product and it generated revenues through iTunes • Apple followed a strategy of discontinuing the sales of existing iPods when a new iPod model was introduced. • Apple faced tough competition from companies like Sony, Microsoft , Samsung. • In June 2007,Apple introduced iPhone • iPod generated revenues not only as a product itself but also from several other products.

iPhone 4S • “iPhone 4S plus iOS 5 plus iCloud is a breakthrough combination that makes the iPhone 4S the best iPhone ever”

APPLE: an Inspiration • Lenovo’s global rebranding effort is focused on showing what its products can do, rather than just its specifications. • Samsung has been searching for a popular and -friendly operating system, partnering with Google and fully embracing both Android and Chrome • Intel is bringing experience to the component level with its ultrabook chips, which will allow a wide range of manufacturers to take advantage of the technology. • Apple is often considered to be a “cult brand”

Thank You!