DENIZ KURUGOLLU Blended Task 6 Apple: Building Successful Brand Deniz Kurugollu 10283502 MSc Marketing December, 2010
DENIZ KURUGOLLU Blended Task 6 IntroductionApple Computer Inc. was born in 1977 in a garage of one of the corporate founders, sellingpersonal computers (Nonaka, 1991). Today the company, Apple Inc. , operates in tencountries with more than 300 stores, producing and selling consumer electronics, consumersoftware as well as personal computers (Apple Inc, 2010). The aim of this report is to evaluatehow Apple combined seven elements of building successful brand, from a small garage inCalifornia to become the most admired company in its sector (Fortune, 2010). This report isdivided into seven main parts attributed to the seven elements of brand building. In each partfirstly, the role of a given element in brand building will be defined and then related examplesto Apple Inc. will be produced.Quality:Quality can be seen as a prerequisite in building successful brand. It is important for the brandto offer a specific level of quality (Anonymous, 2010a). Jobber (2010: 313) also points outthis idea that “the core product must achieve the basic functional requirements expected of it”.Here, we see the word „expected‟. It can therefore be inferred that quality is something basedon consumers‟ perception of the given product. As a matter of fact, Drucker (cited in Kotler,2003: 148) suggests that quality is not what you put into the product, but it is what thecustomers get out of it.Joseph (2010) states that Apple‟s design is a symbol reflecting a certain level of quality, eventhe packaging gives that sense. Coupled with the previous idea of Drucker, it could besuggested that Apple‟s products are perceived high quality, and design plays a key roleleading this perception. However, physically, are Apple products high quality? Or, maybe thequestion should be: „Does physical (tangible) quality matter?‟ Klein (cited in Kahney, 2002)argues that companies like Apple are no longer selling products, but hopes, dreams andaspirations. Additionally, Gobe indicates that “Apple is about imagination, design andinnovation. Without the brand, Apple would be dead. The brand is all they have. It is nothingto do with products” (in Kahney, 2002).Positioning:Kotler (2005) describes the product position as a place where the product resides inconsumer‟s mind. Hereby, it might be suggested that the product position is a word or a
DENIZ KURUGOLLU Blended Task 6couple of words that spring to mind when people hear the name of given brand. For example,Tide is power, while Fairy is gentle; or Volvo is safety, while Porsche is performance.Additionally, Kotler (2003) points out that some companies favour to build multiplepositioning. For instance, Absolut Vodka; purity and fun or Audi; sophistication andprogression (Jobber, 2010). Where is Apple in consumers‟ mind? Joseph (2010) states that„Apple is simple and intuitive‟. He goes on to say that‟ it makes me feel smart and keeps mylife moving‟. In addition, Hayden (in Kahney, 2002) states that Apple symbolizes„counterculture‟ which is „rebellious, free-thinking and creative‟.Repositioning:“No positioning will work forever. Companies must re-evaluate the positioning of their majorbrands” (Kotler, 2003: 138). According to Jobber (2010), in today‟s highly competitive andfast-driven environment where consumers‟ demand is volatile and divergent, companies mayneed to build brands from their initial base to meet consumers‟ needs and wants. This renewalcan be done by changing or expanding on the elements of brand positioning. As a matter offact, Apple needed to change its former name. As mentioned in the introduction section of thisreport, the name of the company was Apple Computer Inc. when it was first formed becauseat that time the company was marketing only personal computers. However, when thecompany expanded on its target market, from computers to various consumer electronics suchas MP3 players, phones, accessories and so on, the company name was changed as well(Apple Inc., 2007).Being first:Being first gives the company a chance to enjoy the potential advantages of technologicalleadership (Jobber, 2010). It might be argued that the other way around is also correct. Thatis, a technological competence can lead the company to be first, in consequence to be leaderin the market. The latter can be seen as one of the facts behind the company‟s success. Forexample let us review the iPhone case. When it was first launched in 2007, iPhone was aunique product; in fact, it can be suggested that iPhone created its own segment. The devicewas different from traditional mobile phones since there is neither buttons nor scroll wheels. Itwas operated through touchscreen and supporting wireless technology. All these innovationsgave Apple the opportunity to create a clear position in the minds of customers before thecompetitors enter the market (Jobber, 2010).
DENIZ KURUGOLLU Blended Task 6Kotler (2003) offers the word „product juggernauts’ for brands where product development isan ongoing and interactive process. In addition, Beverland et al (2010) states that „productinnovation is vital to ongoing brand equity and is responsible for the revitalizing manybrands‟ such as Apple. In light of foregoing, it can therefore be suggested that Apple is aproduct juggernaut where innovation is vital for its success. This ongoing effort can also betestified in the tag-line for iPhone 4 – “This changes everything. Again”- (Apple UK, 2010).Well blended communicationMarketing communication tools mainly consist of advertising, sales promotion, personalselling, direct marketing and public relations (Stone, 2007). Kotler (2006) adds them up alsoonline marketing, social marketing and word-of-mouth. All or some of them can be used bycompanies to reach their target audiences in order to create a clear position in the minds ofconsumers (Jobber, 2010). Considering the iPad launch, it can be well understood how Appleachieves a great harmony with multiple marketing communication tools. On January 2010, atYearba Buena Center for Arts, in San Francisco iPad was launched by Steve jobs. „It was notjust a product launch, but a marketing communications event‟ (Anonymous, 2010b). Thebuilding was covered with the same colours with press announcement and banner designs aswell as event invitations. The iPad story already was told in MacRumour site. Several newsstations and agencies around the globe were ready at the venue. The show was recorded onvideo and uploaded concurrently to social media platforms such as YouTube, Twitter and liveblogs. At the same time, Flickr photos appeared on internet.On the other hand, it is evident that communication is an ongoing process. It is not the casejust for launching a product or until closing its sales. Delivering customized services to thecustomers is one of the key principles of strategic brand management (Hollis, 2008). In theApple case this can be seen in the Genius Bar concept where customers can get technicalsupport for their Mac, iPod, Apple TV or iPhone from fully trained staffs (Apple, 2010). Inaddition to the Genius Bar, Apple also offers free workshops in many of its stores on usinghardware and applications (Anonymous, 2010a).Internal marketing:Internal marketing is marketing efforts within a firm that are directed to its employees in orderto encourage and support them so that the company achieve its goals (Dacko, 2008). In termsof delivering great customer service, training and supporting employees could be seen as a
DENIZ KURUGOLLU Blended Task 6precondition. As a matter of fact Apple gives two weeks of intensive training to its newemployees (called as Genii) in the company‟s headquarters in Cupertino where they earnApple technical certifications and learn the company‟s policies before going up to customers(Anonymous, 2010a)Long-term perspective:The last element of successful brand building is long-term perspective. It can be suggestedthat long term perspective in brand building may refer two meanings. The first one is thatbrands cannot be built in a day. In the Apple case, it can be seen that it took more than 30years for the company to reach its current power. Ensuring quality standards (Quality),creating unique products and position (Being first and Positioning), introducing them tocustomers and expecting them to accept the brand (Well-blended communication); all of themneed a long time and effort.On the other hand, the second meaning of long-term perspective is that current success maynot guarantee the long-term success. It can therefore be suggested that brands require long-term activities to survive. As a matter of fact, Jobber (2010) points out that brands need to beprotected against competitors and renewed from time to time. Hereby again, the links withabove elements can be seen such as repositioning (renewal), internal marketing (employeeloyalty to defend against rivals) and being first (patent to defend against rivals). ConclusionThe purpose of this report was to evaluate how Apple combined seven elements of buildingsuccessful brand. To summarise, it has been noted that Apple used all seven elements to someextent. Of note, well- blended communication and the company‟s creative position can beseen as leading factors behind Apple‟s success. However, it should be borne in mind that allthese seven elements are linked to each other distinctly. Appendix 1 summarises therelationships between elements.The key discussion has occurred in terms of product quality. Do consumers know or justperceive the quality? Further study to focus on the relationship between successful brandbuilding and tangible quality of the core product may be an area of interest.
DENIZ KURUGOLLU Blended Task 6 Appendix 1: Relationships between elements Long-term perspective Being Positioning Repositioning first 2 5 3 Well- blended communication Quality 1 Internal marketing 4 1: Employees‟ (Genii) skills and abilities affect the company‟s service quality 2: Being first creates the innovative, and hence the leader image for Apple in the minds of consumers before the competitors 3: Consistent and interactive communication in every interaction point (stores, social media, ads, etc.) with customers empowers Apple‟s position. 4: Genius Bar and Genii 5: From “Apple Computer Inc.” to “Apple Inc.”
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