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'Steve Jobs' Book Review: Product Strategy & Management
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'Steve Jobs' Book Review: Product Strategy & Management

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Term Review as part of the Product Strategy & Management course at IIM Bangalore.

Term Review as part of the Product Strategy & Management course at IIM Bangalore.

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'Steve Jobs' Book Review: Product Strategy & Management Presentation Transcript

  • 1. Learnings in branding from the architectural genius of a brand new retail format called the “Apple Stores”
  • 2. Steve Jobs used to say: “If Apple is going to succeed, we’re going to win on innovation… and you can’t win on innovation unless you have a way to communicate to customers.” Learning – “Communication and physical expression of an organization’s offerings are as important as the offerings themselves.” Overall experience is key! • • • Apple Stores: A physical expression of their products: playful, easy, creative yet impressive David Aaker’s Framework2 : Truly new product/service Branding creates differentiation: Anything can be branded; features, service, program or ingredients, as long as they are relevant to the customer1 What to brand? Jobs said: “Make great products BUT more importantly get people curious by making them inviting enough.” Holding relevance for customers Revenues/Bottom line contribution Sustainable Competitive Advantage Needs resource allocation over time Moving target? Parallels from Indian Context Fabindia – Branded traditional Indian wear • • • • Differentiated commodity products! Stores: One swipe grasp of layout Reflect the brand philosophy of ‘Indianization’ of offerings Immense brand loyalty towards Fabindia
  • 3. If something isn’t right, you can’t just ignore it & say you’ll fix it later. That’s what other companies do. We’ve got only one chance to get it right. – Jobs about Apple’s Stores Learning – “Competitors and customers won’t give you a second chance if you get it wrong the first time. (this holds even if you’re an iconic brand!)” • Last minute revamp of Apple Stores at the cost of a four-month delay in the rollout • Why? Because the layout should be right to provide the appropriate customer experience Parallels from Indian Context Toyota - has recalled 500,000+ Prius models since 2009 • Coca-Cola (Coke) - Rapid folding of it’s knee-jerk response “New Coke” to Pepsi’s popularity Concept Development Framework3: Apple Store Idea Generation Striving till you get it right! Screening Concept Formulation Service Development Tata Nano – Several recalls over engine-fire issues. Sales? Brand? • Business Analysis • Evaluation via concept testing YES Is concept suitable? NO Concept Reformation • ‘Right’ is when the brand experience caters to what customers want to do, not to glorify products 2 years
  • 4. Learnings from the path-breaking product that turned Apple’s fortunes through continuous innovation: “Apple iPod”
  • 5. The iPod became the essence of everything Apple was destined to be: poetry connected to engineering, arts and creativity intersecting with technology and a design that’s bold and simple and integrated end-to-end ease of use. Learning: “Truly breakthrough innovations invariably have to be at the cutting edge of both creativity & technology. Not to forget, they need to be promptly branded.” Food for Thought – “Designing iPod” • • • • • Integration of hardware, software and operating system, but innovate to push complexity behind the scene • Simple, elegant and intuitive – a new way to do an old thing with some excitement features thrown in (later) • A beautiful product with a theme: A 1000 songs in your pocket – a Drive to store it, a wheel and intuitive interface to browse through it, a battery that could play it and a cable that could transfer everything in 10 minutes Name was distinctly Apple – “iPod” Scroll Wheel Designed for perfection: “Pure White” body with Aluminium back White headphones + accessories “… It just understood your emotional and intensely personal relationship with your music… ”
  • 6. I had this crazy idea that we could sell just as many Macs by advertising the iPod. So I moved $75 million of advertising money there, even though it didn’t justify 1/100th of it. Learning: “Seemingly irrational business decisions may result in huge payoffs if we can cash in on the positive externalities. But be sure its backed with a strong brand!” • Massive advertising campaign launched for the iPod • Triple Bang: drove sales of iPod + sales of Mac + lend lustre and youthfulness to the entire Apple brand image • What was the result? • Dominated music player market for years, still does! • iPod positioned Apple as “innovative and youth” • How to decide? The Digital Hub – Jobs’ Vision for iMac Truly new product/service New way to do an old thing – ‘superior experience’ Revenues/Bottom line contribution Huge iPod sales, increased Mac sales What to brand? Apple’s New Music Player Holding relevance for customers Changed the way music was heard. Loyalty for Apple. Sustainable Competitive Advantage ‘iPod as the standard bearer’ ‘Apple as an innovative company’ Moving target? Requires resource allocation over time Potential to maintain innovation-based differentiation using line extensions
  • 7. Jobs & his team were able to keep coming up with new versions of the iPod that extended Apple’s lead... The iPod Shuffle was even more revolutionary with ads reading “Embrace Uncertainty.” Jobs view was “If you don’t cannibalize yourself, someone else will.” Learning: “Product leadership can be maintained by incremental innovation with new excitement features without being averse to cannibalization. In short, don’t settle!“ • Classic, Nano, Shuffle, Mini, Touch enhanced iPod brand • Launched at different price points: cannibalization was ok • iPod Mini: designed using customer consumption chain, usage by athletes/sportsmen, clipping facility was USP • iPod Shuffle: Brought a number of excitement features • Shuffle feature of earlier iPods was realised as huge excitement feature  “Embrace Uncertainty”  Song randomness became obsession with users • Later followed up with incremental innovations like ‘Genius Playlists’ and ‘Genius Mixes’ • Shuffle’s ‘VoiceOver’: made up for the lack of screen Parallels from Indian Context • Maruti Suzuki: models with incremental differences across the price points right from first small car to high-end SUVs/sedan • WagonR, Eco and Ertiga are examples of models targeted at customer usage situations • Often overlapping features in adjacent models  leads to cannibalization of models, but that’s okay! • Samsung Mobiles: Another example of a company which uses cannibalization as a market leadership strategy.
  • 8. Learning from the phenomenal success of the “iTunes Store” – a classic case of platform innovation
  • 9. Because the companies were worried about pricing model & unbundling of albums, Job pitched his new service “iTunes Store” would be only on the Macintosh, a mere 5% of the market. “We used our small market share to our advantage…” Jobs said. Learning: “Brand relevance drives market dynamics - establish successful leadership in subcategory before repositioning globally as a market leader. “ • Realised that winning subcategory battle1 was more important & effective than winning brand share fight • Positioned the new iTunes Store in a rather small subcategory of Macintosh + iPod owners only • Tied the subcategory with established Apple ‘i’ brand • Promise of simple, safe, legal downloads for 99 cents • Benefit of an ecosystem (iPod, iTunes, iMovies, iDVD) got the music labels to go along with the “package” • Established itself as winner in this narrow subcategory • Repositioned as global leader by porting iPod, iTunes and Store to Windows, music labels readily agreed! • Competitor response: “We were smoked.” - Microsoft Food for Thought – “Brand Relevance”2 • • • Identity of leading firms driven by new categories or subcategories supported by a distinct vision Change what customers buy, give things they refuse to do without Competing brands lacking those characteristics become irrelevant for an extended time (eg: Sony vs Apple) Parallels from Indian Context Balaji Chips – targeted quantity conscious buyers, bulls-eye concept to easily proliferate other markets in midst of high inflation
  • 10. Learning from how Apple rekindled a whole new category of devices written-off long back with the “iPad”
  • 11. Jobs said: “It’s got to make a statement. It needs to be a manifesto. This is big. The iPad is revolutionizing the world. We need ads that stand up and declare what we’ve done.” Learning: “In the introductory phase, of a new product, communicate the “Voice” i.e. the core benefits of the product first to build customer brand equity.“ • • • • • • • • • The 1st TV commercial of iPad had no words.  Jobs hated it saying it’s a “typical soft cute ad” He wanted to “Explain what the iPad was” all about… Before other companies come out with copycats, people should remember “iPad was the real thing” Every Brand has a “Voice” – Distinctive benefits Apple’s Voice - “Simple, Declarative, Clean”. 2nd ad (which aired) extended that “Voice” to iPad iPad commercials were not about the device but about what you could do with it Follow up ads - Clean white background which tells the message “The iPad is…” Food for Thought – “Build Customer Brand Equity” • • Introduction phase for products which aren’t purely functional– marketing to build user perceptions Ads should focus less on features or specs but on benefits or experiences – what “job” or activity you could perform with the product Building Associations… “iPad is thin. The iPad is beautiful”- Clean “You already know how to use it” - Simple “It’s already a revolution” - Declarative Parallels from Indian Context Dettol Kitchen - Focuses on job! 1) Voice – Clean & germ-free 2) Attempts to extend existing Dettol brand to Kitchen Gel
  • 12. There’s one more thing… Thanks! Questions?