Through out this past semester, we have studied all the aspects of successful marketing, often to consumers. But this chapter discusses something a bit different- marketing to businesses. Apple has been successful at marketing to both consumers and businesses because its computers and now iPads are creating a product that can satisfy the needs of the consumer and the business, in one. After all, a business person is still a consumer when he/she goes home, so why not have a product that transcends both worlds seamlessly?
Business-to-business electronic commerce (B2B e-commerce) has revolutionized the way companies do business in the 21st century. Exchanging goods and services is now as simple and easy as a click and a few key strokes. This has, however, created problems for marketers and how they determine who is buying what. So they use three factors to measure online success. Recency says that consumers who have recently made a purchase are more likely to make a purchase again very soon than consumers who haven't purchased in a long time. Frequency identifies consumers who purchase often and are very likely to continue purchasing. Marketers also look at monetary value, because those who spend more are more likely to keep buying more. Together these elements can tell a lot about a company's online success.
This data is sometimes also used in addition to other statistics to determine stickiness. Stickiness is determined by: frequency x duration x site reach. Measuring stickiness frequently and after certain changes are made to the site can be extremely informative in determining whether changes made are improving site activity. B2B is a growing market and companies need to reevaluate the methods they use to get information out to consumers, especially growing medias such as RSS and social networks.
When the internet first had its boom, businesses thought that it would change the way business is done by eliminating the intermediaries such as resellers or wholesalers because consumers would want to pay less by buying direct from the producer of the product. This is called disintermediation. But this was not so, and businesses still needed to use distributers for many reasons to make business easier. Providing only a direct online purchase option was similar to having only one store in NYC and it was unsuccessful because it couldnt meet the individual demand. Therefor they introduced reintermediation.
With the internet taking over the business industry, creating relationships, an important aspect of business, has become much easier. Companies can build strategic alliances to strengthen operations.
Tuesday, May 10, 2011
Wednesday, May 4, 2011
Segmenting and Targeting Markets
Through out the semester we have studied many different aspects of marketing and analyzed different markets, but sometimes we view groups too broadly, and must use market segmentation to create smaller more defined groups to market to. Market segmentations helps large companies create products to satisfy specific groups' needs. All segments must meet four criteria to be successful:
Substantiality is very important in defining a market segment. The segment must have enough members & power to support the products created for it. Identifiability and measurability is important to decide whether there are even enough people to establish a segment. If the group cannot be readily identified and counted then it cannot be accurately established. Accessibility is often difficult in particular segments but a means must be figured out in order to reach its target group. This is one area where Apple is limited because all of its products require the use of the internet, while it is becoming very common in house holds, it still does not accommodate particular markets such as those in rural areas where internet is slow or hard to establish, or the elderly who have difficulties understanding how to use the internet, even if they know how to use the product. Responsiveness is the last criteria for successful segmentation, and it is used to determine whether a segment is truly acting differently than another based on its reactions. Although segments are different for various reasons, they may be treated the same if they act the same.
Markets are segmented based on many different variables and characteristics. Some of the most common types are as follows:
Geographic segmentation which can be based on location, market density, or climate. Demographic segmentation contains many subcategories such as age, race, gender, sexual orientation, or income. Although very broad, it can be very useful and accurate at predicting consumers behavior. There is also Psychographic segmentation which adds to the demographic information. It reflects more on the consumers personality, motives, lifestyles, and geodemographics.
Benefit segmentation is different however, because it groups consumers based on what they desire out of the product, not demographic information. Usage-Rate segmentation is also different in that it divides the market by how much is consumed. This creates segments like "potential users" "light users" "heavy users". It also utilizes the 80/20 principle which states that 20 percent of users create 80 percent of all demand. This is because generally "heavy users", although few in numbers, use exponentially more than other users.
Substantiality is very important in defining a market segment. The segment must have enough members & power to support the products created for it. Identifiability and measurability is important to decide whether there are even enough people to establish a segment. If the group cannot be readily identified and counted then it cannot be accurately established. Accessibility is often difficult in particular segments but a means must be figured out in order to reach its target group. This is one area where Apple is limited because all of its products require the use of the internet, while it is becoming very common in house holds, it still does not accommodate particular markets such as those in rural areas where internet is slow or hard to establish, or the elderly who have difficulties understanding how to use the internet, even if they know how to use the product. Responsiveness is the last criteria for successful segmentation, and it is used to determine whether a segment is truly acting differently than another based on its reactions. Although segments are different for various reasons, they may be treated the same if they act the same.
Markets are segmented based on many different variables and characteristics. Some of the most common types are as follows:
Geographic segmentation which can be based on location, market density, or climate. Demographic segmentation contains many subcategories such as age, race, gender, sexual orientation, or income. Although very broad, it can be very useful and accurate at predicting consumers behavior. There is also Psychographic segmentation which adds to the demographic information. It reflects more on the consumers personality, motives, lifestyles, and geodemographics.
Benefit segmentation is different however, because it groups consumers based on what they desire out of the product, not demographic information. Usage-Rate segmentation is also different in that it divides the market by how much is consumed. This creates segments like "potential users" "light users" "heavy users". It also utilizes the 80/20 principle which states that 20 percent of users create 80 percent of all demand. This is because generally "heavy users", although few in numbers, use exponentially more than other users.
Developing and Managing Products
Apple is known for coming out with "new" products very frequently, but what exactly is a "new product"? Well "new" is relative to the market.
New-to-the-world products such as the iPad and iPad 2 create an entirely new market (the now booming tablet market).
New product lines produce a product that was not previously offered by that company. Apple rarely does this, as they usually create new markets with new technology, but you could consider their inital iPod release a new product into an existing market, as mp3 playing devices had existed by other companies but ultimately were popularized by Apple.
Additions to existing product lines are products that supplement an existing line. An example for this would be the iPod Shuffle, which was an iPod that was more affordable and took up less space than a traditional iPod to reach new target markets.
Apple more commonly improves and revises existing products. Every few months they come out with a new "generation" of iPod, iPhone, iPad, Macbook or iMac. Each new "generation" of a product typically has advanced technologically, has become sleeker or lighter, and faster.
Repositioned products include already existing products aimed at a new market. One example of this is the new iPod Nano which is small and touchscreen and often worn on an attachable watch strap. This is no longer just targeting teenage music lovers, but also young professionals by offering many useful tools including music, and the time at easy access in a sleek and stylish watch format.
The last category, Lower-priced products generally does not apply to Apple, as they create new and expensive products which are often imitated by competitors who produce lower priced products.
Then there is the New Product Development Process which has 7 steps:
New Product Strategy links the goals of the marketing department, the business unit, and the corporation. The Idea Generation includes many sources for new ideas such as consumers, employees, competitors, vendors, research and development and more. They often brainstorm and use focus groups to gather ideas. Then there is Idea Screening which filters out ideas which will not be successful for one reason or another and then issue concept tests for the remaining ideas. Business Analysis is then applied to those ideas which pass the concept tests to estimate financial aspects of the product. If the analysis proves profitable, the idea will move to the Development stage where a prototype will be created and its marketing strategy outlined. Most aspects of development are done simultaneously by different departments to save time and money. After development is finished the product is now Test Marketed. Test marketing involved introducing the product to a limited audience for a year or more. Sometimes simulated market testing is used to avoid leaking a product to the public or competitors before the product is officially ready to be released. Last but not least, the product is Commercialized and introduced into the market.
All products face challenges, but one growing problem for companies is producing products that will succeed globally. Apple has been very successful with this, and their products are in high demand all over the world. Without a doubt, Apple must have experts from around the globe to ensure this. Especially with touchy issues such as the internet and social networking, modified versions of products have to be introduced in certain parts of the world where restrictions on such things are very strong.
New-to-the-world products such as the iPad and iPad 2 create an entirely new market (the now booming tablet market).
New product lines produce a product that was not previously offered by that company. Apple rarely does this, as they usually create new markets with new technology, but you could consider their inital iPod release a new product into an existing market, as mp3 playing devices had existed by other companies but ultimately were popularized by Apple.
Additions to existing product lines are products that supplement an existing line. An example for this would be the iPod Shuffle, which was an iPod that was more affordable and took up less space than a traditional iPod to reach new target markets.
Apple more commonly improves and revises existing products. Every few months they come out with a new "generation" of iPod, iPhone, iPad, Macbook or iMac. Each new "generation" of a product typically has advanced technologically, has become sleeker or lighter, and faster.
Repositioned products include already existing products aimed at a new market. One example of this is the new iPod Nano which is small and touchscreen and often worn on an attachable watch strap. This is no longer just targeting teenage music lovers, but also young professionals by offering many useful tools including music, and the time at easy access in a sleek and stylish watch format.
The last category, Lower-priced products generally does not apply to Apple, as they create new and expensive products which are often imitated by competitors who produce lower priced products.
Then there is the New Product Development Process which has 7 steps:
New Product Strategy links the goals of the marketing department, the business unit, and the corporation. The Idea Generation includes many sources for new ideas such as consumers, employees, competitors, vendors, research and development and more. They often brainstorm and use focus groups to gather ideas. Then there is Idea Screening which filters out ideas which will not be successful for one reason or another and then issue concept tests for the remaining ideas. Business Analysis is then applied to those ideas which pass the concept tests to estimate financial aspects of the product. If the analysis proves profitable, the idea will move to the Development stage where a prototype will be created and its marketing strategy outlined. Most aspects of development are done simultaneously by different departments to save time and money. After development is finished the product is now Test Marketed. Test marketing involved introducing the product to a limited audience for a year or more. Sometimes simulated market testing is used to avoid leaking a product to the public or competitors before the product is officially ready to be released. Last but not least, the product is Commercialized and introduced into the market.
All products face challenges, but one growing problem for companies is producing products that will succeed globally. Apple has been very successful with this, and their products are in high demand all over the world. Without a doubt, Apple must have experts from around the globe to ensure this. Especially with touchy issues such as the internet and social networking, modified versions of products have to be introduced in certain parts of the world where restrictions on such things are very strong.
Wednesday, April 13, 2011
Integrated Marketing Communications
Apple is very aware of the elements of promotion and they have effectively used them to sell out their newest product, the iPad 2. Using the 4 elements of the promotion mix: advertising, public relations, personal selling, and sales promotion, they have made the iPad2 one of the most lucrative items in the world. Apple is well known for their sleek, simplified, successful advertising campaigns and the iPad 2 is no exception. They have applied their advertising in many mediums including email, the web, billboards, television and print ads which have combined, been highly successful in both marketing the new version of the iPad but more-so the new "Smart Cover" as an essential accessory. Their public relations department has done an excellent job at creating a positive image for the iPad 2 by creating an image of it as both a business product and a family friendly product. Many of its advertisements include children using the product, family members connecting via Facetime, or a possible kid-friendly app. All of these have created a very positive image for Apple. The iPad has also gained publicity in the media frequently being used on television in news broadcasts and even by the mayor as a display tool. As far as promotions are concerned, Apple rarely partakes in any but recent news has said that Best Buy is reserving iPad 2's for an upcoming promotion, which we are all very excited to see what that might be. Personal selling, is also rarely used by Apple as it relies more on the internet to sell its products, but for consumers who purchase in-store, Apple representatives help finish the sale.
Apple has been one of the most successful companies at communicating its message to consumers. With interpersonal communication via its Apple stores, and mass communication via its advertisements. Their mass communication efforts have been very effective because they reduce the clutter and distractions, and convey a simple to the point message about each product. For example "The iPad 2: Thinner, Lighter, Faster." communicates the most important aspects of the iPad 2 in a simple way.
When Apple promotes a product it has 3 main goals: inform, persuade, remind. When a new product such as the iPad 1 was coming out, they needed to inform the consumer on the uses of the product. Once the consumer understands the product they need to be persuaded to buy it by seeing how it will positively impact their life. Last Apple needs to remind consumers of the product even once it is already well known, such as the iPhone 4 commercials which feature new apps and updates.
Apple has been one of the most successful companies at communicating its message to consumers. With interpersonal communication via its Apple stores, and mass communication via its advertisements. Their mass communication efforts have been very effective because they reduce the clutter and distractions, and convey a simple to the point message about each product. For example "The iPad 2: Thinner, Lighter, Faster." communicates the most important aspects of the iPad 2 in a simple way.
When Apple promotes a product it has 3 main goals: inform, persuade, remind. When a new product such as the iPad 1 was coming out, they needed to inform the consumer on the uses of the product. Once the consumer understands the product they need to be persuaded to buy it by seeing how it will positively impact their life. Last Apple needs to remind consumers of the product even once it is already well known, such as the iPhone 4 commercials which feature new apps and updates.
Tuesday, April 5, 2011
Product Concepts
Apple products such as the iPad2 or the Macbook Pro can be considered both industrial AND consumer products as they are used both in professional fields as well as for personal use. As a business product it helps facilitate organizations operations. More often though it is used as a consumer product because it satisfies individual wants and needs.
The iPad 2 is a Specialty Product because people are reluctant to accept substitutes, although they do exist, and Apple has become a very important brand name. Apple is starting to develop a product line around the iPad 2 which includes its predecessor the iPad, iPad accessories such as the stand or the new magnetic cover for the iPad 2, and there will most likely be more variations of the iPad as time passes, furthering the product line similar to that of the iPod and iPhone. The iPad and accessories are only one small and rather new line in the larger product mix that Apple has created. In the mix are the Mac & Macbooks, iPods & touches, and the iPhone variations. They use somewhat different marketing strategies but utilize similar advertising campaigns and have a similar sleek image which is part of Apple's recent goal of "brand unity".
Apple has been very well known for utilizing product modification frequently which then causes planned obsolescence causing consumers to purchase the new product soon after the purchase of the last generation product by making it seem obsolete in comparison to the modified new product.
Apple has become one of the most successful examples of branding by simplifying its original image and name (Macintosh) to just Apple and white Apple outline for its logo. These have become instantly recognizable and are marked on every product in a way that does not clutter it. Apple has been very successful in creating brand loyalty by creating products that work perfectly with each other, as well as perfectly on their own which helps build consumer loyalty.
The iPad 2 is a Specialty Product because people are reluctant to accept substitutes, although they do exist, and Apple has become a very important brand name. Apple is starting to develop a product line around the iPad 2 which includes its predecessor the iPad, iPad accessories such as the stand or the new magnetic cover for the iPad 2, and there will most likely be more variations of the iPad as time passes, furthering the product line similar to that of the iPod and iPhone. The iPad and accessories are only one small and rather new line in the larger product mix that Apple has created. In the mix are the Mac & Macbooks, iPods & touches, and the iPhone variations. They use somewhat different marketing strategies but utilize similar advertising campaigns and have a similar sleek image which is part of Apple's recent goal of "brand unity".
Apple has been very well known for utilizing product modification frequently which then causes planned obsolescence causing consumers to purchase the new product soon after the purchase of the last generation product by making it seem obsolete in comparison to the modified new product.
Apple has become one of the most successful examples of branding by simplifying its original image and name (Macintosh) to just Apple and white Apple outline for its logo. These have become instantly recognizable and are marked on every product in a way that does not clutter it. Apple has been very successful in creating brand loyalty by creating products that work perfectly with each other, as well as perfectly on their own which helps build consumer loyalty.
Tuesday, March 29, 2011
Apple's Sales Promotions
Apple has become notorious for rarely ever having sales or discounts, whether the product is purchased via Apple directly or a third party retailer. The price of an ipod, iphone, or ipad remains the same through it's lifetime until a new generation of the product is released which is when a possible price change may be issued with the new product. They do however utilize small, but well thought out online sales promotions via the online Apple store that gives the consumer an advantage over purchasing from a third party retailer such as Best Buy or Target. Since the introduction of the iPod, they have offered free engraving when ordering online. This may seem simple or even insignificant, but has been surprisingly popular when giving iPods as gifts or just to mark you iPod to deter theft.
The only other promotion that has been in place on Apple's website is their Mac Educational Pricing. This allows college students, teachers, and administrators to get a good discount on mac products and software when ordering online. The discount is not more than 20% but I did use it to purchase my macbook pro and it was helpful. This promotion was extremely well thought out because it promotes mac in the schools, and will help younger users become more familiar with mac products and possibly grow up to switch to mac regardless of what their parents have at home because of the influence mac has had in their schooling. This is similar to the technique McDonald's used with the Happy Meal in that they got their product out to children who would grow up with the product and be more inclined to purchase it again as an adult.
Apple also utilizes tools for trade sales promotion in their flagship stores by having a team of qualified Apple Specialists available to help with all consumer needs and questions, as well as always having products readily available for demonstration. The fact that the consumer can try to use the product themselves as well as have the product explained to them is a key selling point.
The only other promotion that has been in place on Apple's website is their Mac Educational Pricing. This allows college students, teachers, and administrators to get a good discount on mac products and software when ordering online. The discount is not more than 20% but I did use it to purchase my macbook pro and it was helpful. This promotion was extremely well thought out because it promotes mac in the schools, and will help younger users become more familiar with mac products and possibly grow up to switch to mac regardless of what their parents have at home because of the influence mac has had in their schooling. This is similar to the technique McDonald's used with the Happy Meal in that they got their product out to children who would grow up with the product and be more inclined to purchase it again as an adult.
Apple also utilizes tools for trade sales promotion in their flagship stores by having a team of qualified Apple Specialists available to help with all consumer needs and questions, as well as always having products readily available for demonstration. The fact that the consumer can try to use the product themselves as well as have the product explained to them is a key selling point.
Tuesday, March 22, 2011
The Evolution of Apple's Advertising
Above is the first Apple commercial, deemed one of the best advertisements ever created. Its very cinematic and different from the style of Apple ads we're used to seeing, although very effective in advertising its first "Macintosh Computer". This is an example of pioneering advertising.
In the late 90's this ad debuted, the first of many very stripped down ads that focused more on brand awareness than promoting a specific product. This is an excellent example of competitive advertising because although it offers very little information, it persuades the consumer that this product will make them "different" in some way, and the dominant logo helps promote the brand in general, even though at the time only the Macintosh computer was available.
With the introduction of the iPod, they stripped their advertisements down even further to not include a slogan or even the logo, only the white iPod against a black silhouette, which quickly became iconic.
Apple has also launched many successful advertising campaigns around the objective of getting PC users to switch to Mac. The initial "Switch" campaign utilized celebrities who had made the "switch" to Mac but it was only somewhat effective. They later revamped the idea of "switching" with the "Get A Mac" campaign which pitted a person representing a PC against someone representing Mac in a comical and extremely effective set of 24 commercials, in each showing a different feature that Mac does better.
Since these founding campaigns, where each product was marketed different with different styles of campaigns, Apple has decided to take on a concept of brand unity by advertising all products in a similar fashion as well as planning a redesign of all product in each products next release.
iphone
ipad
mac book air
ipod touch
As you can see each advertisement features the product predominantly and its features rather than any elaborate script such as that of the original "1984" ad.
Apple's Most recent and possibly most successful endeavor is the launch of the iPad 2. It utilized both styles of recent Apple advertisements where the product is being demonstrated against a plain white background, as well as the iPads many different uses in a flash of various everyday backgrounds and situations. The later style created advertising appeal which more consumers can relate to as it allows them to picture themselves using the product in any of the situations shown.
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