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iPod Creating An Iconic Brand
“ 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?
History of iPod
Extent of Demand Sales of iPod 2001: 125,000 2003: iTMS launched
(thousands) Sales of iPod 2001: 125,000 2003: iTMS launched 2003: 1,451,000 : 88,701,000 Market Share: 73% in 2006
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
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
Extent of Demand
Nature of Competition Before the iPod
iPod introduced in November 10, 2001
Nature of Competition After iPod’s Release iPod’s Competition in 2006
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 People required more entertainment- digital music explosion. The adoption of Napster spread quickly to more than 25 million users in less than one year. Political Social 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. Purchasing power depends on the economic conditions. Since 2003, the US’s economic conditions were getting better. Economics Technology
Marketing Mix Personal music player
Product Place Promotion Price 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
Marketing Mix Product Place Promotion Price Sold at 113 Apple stores, online, and at selected retailers like Circuit City and Best Buy
Marketing Mix 1,000 songs, in your pocket A Capella Silhouette Ads
Product Place Promotion Price 1,000 songs, in your pocket A Capella Silhouette Ads 2004 iTMS Super Bowl
Marketing Mix Price per GB goes down with each new model
Product Place Promotion Price 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
SWOT Analysis iPod Killers: Competitors & Cell phones
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? Pebble IPhone Razor ROKR
Questions What Did Sandisk’s Marketing Campaign call iPod Users? Sheeple Hipsters iSheep Posers
Questions When did Apple release the First iPod? September 12, 2000 October 13, 2003 December 15, 2001 November 10, 2001
Questions What was the first ad campaign Apple ran for iPod products? Silhouette I Fought the Law and the Law Won 1,000 Songs, In Your Pocket A Capella
Questions What does RIAA stand for? Recording Industry Association of America Recording Industrial American Application Recording Ideas Across America Really I Always Amaze
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