Apple Case StudyHow Apple has turned their Beloved Brand Status            into power and wealth
“You’ve got to find  what you love”              Steve Jobs
The Brand Love CurveConsumers move along The Brand Love Curve, going to from Indifferent to Like It to Love It and finally...
Consumers move along the “Brand Love Curve”   Understanding where your brand is on the Love Curve, helps choose           ...
How can you Generate more Love for your Brand                    The                                                The   ...
How Love turns into a Source of Power                                                    Consumers                        ...
How Brand Power turns into Brand Wealth.                               Inelastic:  Loyal consumers, weakened channels pay ...
Beloved = Power = Growth = Profit
Apple           Case StudyHow the Love for the Brand turns into         power and profits.
Visionary Strategy: The Power of WhyStart with what’s in you: The most successful brands start with a purpose  driven visi...
Think Different    “Here’s to the crazy ones.Because the people who are crazyenough to think they can change the world, ar...
How Love for Apple turns into a Source of Power                                                    Consumers              ...
How Love for Apple turns into a Source of Power                                       Consumers                           ...
Apple is seen as the most Beloved Brand in the Category.Samsung and Sony have some that Like It, no one that Loves it.    ...
At the Beloved stage, demand becomes desire, needs         become cravings, thinking is replaced with feelings.Indifferent...
How Apple has used Innovation and Product Development    to move along the Brand Love Curve and build Momentum            ...
How Love for Apple turns into a Source of Power               These are the classic Porter’s Competitive Forces  Apple’s p...
Apple stores are a Gathering Place for Brand Advocates Genius Bar where you can                                      Acces...
How Love for Apple turns into a Source of Power    Apple is a passionate culture, but a tough passion.People want to be pa...
How Love for Apple turns into a Source of Power                        Apple leverages it’s power to influence and        ...
Apple manages the Consumer Buying System at every stage                                                  Hype Launch      ...
Apple’s brand power helps them earn Media via the News, Social Media and Twitter dwarfs their competitors.        General ...
Apple’s Advertising including the first Super Bowlad, Mac vs. PC, Think Different, iPod white earphones….                 ...
How Love for Apple turns into a Source of Power                      Conversations                      Popularity breads ...
How Love for Apple turns into a Source of Power                     Max 5 Stars Consumers Channels Substitutes New Entrant...
Apple’s Revenue mix shifting to iPhone and iPads• Apple has done a good job in diversifying over the years. However, with ...
Apple has Used Brand Love to Drive Revenue and Smart                        Business to Drive the Operating Profits.160,00...
Apple has been able to turn Love into Power and then into                 Profits and a remarkable increase in Brand Value...
Apple over-delivers against                                       Apple has seen a 25-fold the promise of simplicity      ...
“If you don’t love the work, how do youexpect the consumer to fall in love with              your brand?”                 ...
This presentation is solely for the use of students, client personnel or attendees of thepresentation. No part of it may b...
Apple Case Study
Apple Case Study
Apple Case Study
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Apple Case Study

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A look at how Apple achieved their status as a Beloved Brand and how they turned that into Power and into Wealth.

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Apple Case Study

  1. 1. Apple Case StudyHow Apple has turned their Beloved Brand Status into power and wealth
  2. 2. “You’ve got to find what you love” Steve Jobs
  3. 3. The Brand Love CurveConsumers move along The Brand Love Curve, going to from Indifferent to Like It to Love It and finally to Beloved Brand for Life. At each stage the connection gets stronger.
  4. 4. Consumers move along the “Brand Love Curve” Understanding where your brand is on the Love Curve, helps choose strategies to push the brand to be More Loved. No Opinion.INDIFFERENT Not Aware. Confused. LIKE IT Not Interested. Stick to Current Brand. Crave It. Satisfies Need. Great Experience. A Thought About it. Tried it. Favourite. Emotional Practical. Makes Sense. Choice. Lifestyle Fit. LOVE IT BELOVED Self Expressive. BRAND Outspoken Fan. Would never switch. Memories. FOR LIFE Built into Life. 4
  5. 5. How can you Generate more Love for your Brand The The Brand Consumer T h e r e a r e 5 S o u r c e s of C o n n e c t i v i t y Promise Experience How well does Strategy Freshness How well does the the brand How well doesconcept connect What focused Story brand experience choices does the the brand stay live up to andto the consumer brand make to How well does fresh and on top consistently deliver drive growth and the brand of trends with the promise? profits? communicate consumers? their differences Positioning and move Culture & consumers Brand Plan Innovation Operations 5 Communication
  6. 6. How Love turns into a Source of Power Consumers Conversations Think Less, Feel More. Channels Popularity breads Outspoken Defenders People switch stores popularity. A line up before brands. attracts a line. Key Influencers Substitutes More likely to actively Can’t duplicate recommend emotional appeal Social Media How the Beloved New Entrants Advocates follow & Harder to breakshare. Spread news. Brand wields its power through loyal users (12 Forces) Search Media Suppliers Being a famous brand Willing to give a little beats paid SEO. to be part of brand. Earned Media Employees/Culture Brand is newsworthy. Brand and Culture are one. New Products are a Paid Media Advocates want to work there. lead story. Better slots, Lower Fully Engaged on Day 1. rates, more 6 integrations
  7. 7. How Brand Power turns into Brand Wealth. Inelastic: Loyal consumers, weakened channels pay Price premiums, and trading up where offered. More engaged employees deliver better experience—even Unit more premiums. Minus Margins Efficient: Economies of scale. Suppliers cut costs due Cost to volume and wanting brand in portfolio. Efficient media spend, free media through search, earned and social. Gov’t willing to subsidize. Partners give favorable terms.Profits Times Market Momentum: Crowds draw crowds. Power of media Share (search + social + earned) keeps brand in the conversation with heavy influence. Unit Volumes Times Market Will Follow: Loyal users will follow where the brand Size goes, and doors will open to new ventures. The idea of brand no longer tied to product, but to how the brand makes you feel.
  8. 8. Beloved = Power = Growth = Profit
  9. 9. Apple Case StudyHow the Love for the Brand turns into power and profits.
  10. 10. Visionary Strategy: The Power of WhyStart with what’s in you: The most successful brands start with a purpose driven vision (why) and match the strategies (how) and the execution (what) to the vision. Strategy Apple Why do you exist? What’s your Purpose or Cause? • At Apple, we believe in challenging the status quo, we believe in thinking differently. Making a dent in the universe. How we deliver against the Purpose or Cause? Why • To challenge the status quo, at Apple, we make sure our products are all beautifully designed, simple to use and user friendly. How What What do you do to deliver the purpose? • Sell computers, laptops, cell phones, tablets that are highly stylized and consumer friendly. 10
  11. 11. Think Different “Here’s to the crazy ones.Because the people who are crazyenough to think they can change the world, are the ones who do.” Steve p. Jobs
  12. 12. How they Generate more Love for the Apple Brand A p p l e‘s 5 S o u r c e s of C o n n e c t i v i t yPromise • We make it easier to use electronics, so that you will feel smarter and at the leading edge of technology, no matter who you are. • Technology made simple and consumer friendly across a broadStrategy array of electronics products. Products have simple stylish designs, user friendly functionality, convenience and speed. • Technology doesn’t have to be intimidating or frustrating. AtStory Apple, we believe you should be engaged right away, be able to do more and get more, no matter which Apple product you are using. • Ten years of surprising technology advancements that changedFreshness the world: iPod, iTunes, Macs, Air Books, iPhone & iPad. Every product was stylish, simple, easy to use & leap frogged competitors. • Consumers first: Apple starts with the consumer experience andExperience works back to the technology, helping create experiences that surpass the promise. Competitors, who think technology first remain confused. 12
  13. 13. How Love for Apple turns into a Source of Power Consumers Conversations Think Less, Feel More. Channels Popularity breads Outspoken Defenders People switch stores popularity. A line up before brands. attracts a line. Key Influencers Substitutes More likely to actively Can’t duplicate recommend emotional appeal Social Media How the Beloved New Entrants Advocates follow & Harder to breakshare. Spread news. Brand wields its power through loyal users (12 Forces) Search Media Suppliers Being a famous brand Willing to give a little beats paid SEO. to be part of brand. Earned Media Employees/Culture Brand is newsworthy. Brand and Culture are one. New Products are a Paid Media Advocates want to work there. lead story. Better slots, Lower Fully Engaged on Day 1. rates, more 13 integrations
  14. 14. How Love for Apple turns into a Source of Power Consumers Think Less, Feel More. Outspoken Defenders Apple is a badge that people want to show off. It is the anti- establishment anti-blue suit brand (anti-IBM, anti-Microsoft) that’s onthe side of the people. Apple uses this emotional power with consumersto defend, to buy every new product and to pay 30-50% price premiums. Everything starts with the consumer. “You’ve got to start with the customer experience and work backwards to the technology. You cant start with the technology and then try to figure out where youre going to sell it.” Steve p. Jobs 14
  15. 15. Apple is seen as the most Beloved Brand in the Category.Samsung and Sony have some that Like It, no one that Loves it. Apple’s Brand promise connects, and the product and experience exceeds expectation on delivering that promise. 15
  16. 16. At the Beloved stage, demand becomes desire, needs become cravings, thinking is replaced with feelings.Indifferent Like It Beloved It will do Consider Loyal Unaware Use Un-relenting Unfamiliar Functional Personal Open Mind Enjoy It Possessive Other Brand Rational Outspoken Basic Needs Random Emotional 16
  17. 17. How Apple has used Innovation and Product Development to move along the Brand Love Curve and build Momentum 2010 to Present: Transition post Jobs Rapid Growth, Masses. BELOVED 2007-2010 Mobile Magic: Launch of iPhone, iPad and Mac Book Air. 2003-2006: Brand Momentum continues growing from niche to mass. 2001-2003: iPod & iTunes is a Game Changer for the LIKE IT Music Industry. 1997-2000: Jobs return and brings stylish design andINDIFFERENT coolness to iMacs 1997: Apple was No Different 17
  18. 18. How Love for Apple turns into a Source of Power These are the classic Porter’s Competitive Forces Apple’s power gets it Preferential Treatment. Pricepremiums and lower margins for retailers. Popularity of Channel the Apple stores is tremendous. Best space in People switch stores malls, special sections in stores, sales rep fans. before brands. Competitors think technology first. Substitutes Confusing, frustrating, intimidating. Project technology Can’t duplicategadgets not consumer benefits. Void of design, simplicity and emotional appeal emotional appeal.New entrants have not been able to replicate the combination New Entrants of technology, simplicity, design and coolness. Harder to break through loyal users Suppliers play by Apple’s rules. Apple has a Supplier code of Suppliersconduct and an Apple Audit Team to ensure they are on side. Willing to give a little Apple has access to supplier’s best new products (e.g. Intel to be part of brand. chips) before others do. 18
  19. 19. Apple stores are the symbol of Style around the worldNew York Australia Hong Kong England China 19
  20. 20. Apple stores are a Gathering Place for Brand Advocates Genius Bar where you can Accessories to helpget one-on-one tech support personalize your Apple products and experience. Training Courses on how Take any Apple product on a test drive. Or just to use any Apple products. casually play around. Sign up on line. The stores are not a hard sell environment, but Apple still sells $16 Billion through their stores, making it the highest sales per square foot of any retailer. 20
  21. 21. How Love for Apple turns into a Source of Power Apple is a passionate culture, but a tough passion.People want to be part of Apple, but only the best of the best survive. Apple is a purpose driven culture that wants to make a “dent in the universe”.Challenging and perfection driven culture in the spirit of Steve Jobs. OK is always rejected, pushing for greatness obsessively on every detail. It’s a “Think Different” and a work-hard play-hard culture. Apple is about absolute secrecy and insistence on control almost to the point of dysfunctional. Employees/Culture Brand and Culture are one. Advocates want to work there. Fully Engaged on Day 1. 21
  22. 22. How Love for Apple turns into a Source of Power Apple leverages it’s power to influence and control all sources of media.People looking up Apple products directly and Outspoken Apple Apple ads Apple is naturally completely by- fans take to the consistently newsworthy and they pass search. social media innovative & know how to manage the airwaves. More breakthrough. news cycle. Every launch likes and tweets. has a surprising reveal. Crowds follow Emotional, artistic, ed gy, timely, talk value. Competitors complain crowds. Search Media about Apple media bias.Being a famous brand beats paid SEO. Social Media Advocates follow & Paid Media Earned Media share. Spread news. Better slots, Lower Brand is newsworthy. rates, more New Products are a 22 integrations lead story.
  23. 23. Apple manages the Consumer Buying System at every stage Hype Launch Announcements to Sense of a club creates a “with us creates news and or against us” advocacy that Mass Advertising that excitement. creates outspoken fans. connects emotionally and separates Apple products from the pack. Apple usesleadership position on social media to spread the brand Be everywhere by messages Influencing experts, critics and news media givesStylish Cool designs have credibility to Apple made Apple a badge to products. show off. Point of Sale space and experts creates distinction for Apple knows the details Apple, Apple stores, or the matter. The products over store-within-a-store concept. deliver and satisfy consumers. User friendly experience on day 1. Apple genius bar provides quick easy answers to make you smarter. 23
  24. 24. Apple’s brand power helps them earn Media via the News, Social Media and Twitter dwarfs their competitors. General Sentiment Media Value Report: Q3, 2012250200 Apple Samsung150 Sony100 50 0 News Social TwitterApple gets almost $2.5 Billion per year in value from Earned Media.• The value Apple receives from the Mainstream News media is4x higher than Samsung and 10x higher than Sony. This Apple brand power carries forward into Social Media and Twitter. 24
  25. 25. Apple’s Advertising including the first Super Bowlad, Mac vs. PC, Think Different, iPod white earphones…. 25
  26. 26. How Love for Apple turns into a Source of Power Conversations Popularity breads popularity. A line up attracts a line.Key InfluencersMore likely to actively Apple is a conversation starter with Outspoken recommend loyalists defending Apple brand and attacking competitors. The outspoken brand advocates are the first to bring it up. You are either with us or against us. Tech Experts speak out on behalf of Apple: Able to garner positive reviews for every new product launch and help defend against inferior competitors. Apple has a tight network of pro-Apple supporters they continuously reach out to. 26
  27. 27. How Love for Apple turns into a Source of Power Max 5 Stars Consumers Channels Substitutes New Entrants Beloved Brand Suppliers Employees/Culture Power Score Paid Media 94% Earned Media Exceptionally High Search Media Social Media Key Influencers Conversations 27
  28. 28. How Apple turns their Power into Brand Wealth. Inelastic: Loyal Apple consumers pay 20-30% higher price for iMacs, iPads and iPhones. Apple uses Price innovation to stay in the premium price position. Apple keeps entry level price points high and loyal users are Unit Minus still wiling to trade up. Margins Efficient: Low cost production in China—even low cost Cost Engineers. Apple uses their power to drive down costs, days inventory which positively impact operating margins. Apple store delivers high sales/square foot.Profits Apple.com extremely successful and efficient. High earned Times media through news/social media. Momentum: Every business line is gaining share and Market in growth mode—computers, laptops, smart phones and Share tablets. IPod units are down, but iTunes are still increasing. Unit Apple has a growing broad base of consumers— Volumes demographics, geography, occupations, interests. Times Will Follow: Because loyal Apple consumers buy into Market the Idea of they brand, they have followed the brand into Size every new category. They also follow each new upgrade from consumers using previous generation products. 28
  29. 29. Apple’s Revenue mix shifting to iPhone and iPads• Apple has done a good job in diversifying over the years. However, with the success of smart phones and tablets, Apple’s revenue has become a very mobile driven revenue stream.• With a shifting business mix, Apple has seen steady gains on Gross Margins % from 27% up to 44%. For instance, the iPhone has GM% of 58%. 29
  30. 30. Apple has Used Brand Love to Drive Revenue and Smart Business to Drive the Operating Profits.160,000 Revenue $US Millions 40 Operating Margin %140,000 35120,000 30100,000 25 80,000 20 60,000 15 40,000 10 20,000 5 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 • Apple has used the love for the brand to drive a remarkable 25-fold gain in revenue over 10 years going from $5.7 Billion up to $148 Billion. • That type of revenue growth can help cover a lot of the costs of advertising and R&D—which gives Apple extremely healthy operating margins that are now up to 35%. 30
  31. 31. Apple has been able to turn Love into Power and then into Profits and a remarkable increase in Brand Value• In the past 5 years, Apple’s Market Capitalization has gone up from $75 Billion up to $570 Billion. Apple is now the most valued Brand in the world600 Apple Most Valued Brands500 Market Capitalization Brand Finance400 $ Value 1. Apple 73B300 2. Google 48B200 3. Microsoft 46B100 4. IBM 39B 0 5. Amazon 27B 2008 2009 2010 2011 2012 Beloved = Power = Growth = Profit 31
  32. 32. Apple over-delivers against Apple has seen a 25-fold the promise of simplicity growth rate in the last 10and coolness to creates an years. Loyalists have emotional bond with an followed Apple into every extremely loyal and new businesses. outspoken following. Beloved = Power = Growth = Profit Apple has the power of Cash Flow + Optimism Momentum, with consumers gives strong brand value. creates badge & talk value. Revenue Growth helps Media hype, channel compliance. every ratio. Gross Competitors can’t keep up. Margins are up due to price premiums.
  33. 33. “If you don’t love the work, how do youexpect the consumer to fall in love with your brand?” Graham Robertson Beloved Brands Inc. Please visit the Beloved Brands blog at beloved-brands.com
  34. 34. This presentation is solely for the use of students, client personnel or attendees of thepresentation. No part of it may be circulated, quoted, or reproduced for distribution withoutprior written approval from Beloved Brands Inc. This material was developed by BelovedBrands Inc., for the sole purpose of an oral presentation; it is not a complete record of thediscussion.The Brand Love Curve is a Trademark owned by Beloved Brands Inc.© Beloved Brands Inc. 34

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