1) Apple's iPod changed the MP3 market by addressing customer needs through iTunes legal downloads, easy organization software, and stylish yet functional devices. 2) Apple promoted different iPod versions to appeal to various market segments and expanded into the iPhone, attracting customers with its touchscreen, web access, and multimedia handling. 3) However, some early iPhone adopters felt betrayed when Apple dropped the phone's price by $400 only months after its debut, prompting Apple to offer $100 store credits to appease customers.

1. CHAPTER 5 DISCUSSION QUESTIONS
1) Read the Apple case on pages 112 & 113 and answer questions A-I.
A) In the late 1970's what was the popular device for on-the-go music loves to play tapes of their favorite music?
B) What was the first MP3 player?
C) What slowed down the initial adoption of MP3 players?
D) How did Apple's iPod change the attitude of the MP3 market?
E) How did Apple promote iPod versions to appeal to different market segments?
F) How did the iPhone change consumers views of the benefits of cell phones playing music?
G) Why did many early adopters of the iPhone feel betrayed by Apple?
H) How did Apple respond to the customers who felt betrayed?
I) Because consumer attitudes & preferences can change quickly in technology markets, what will Apple have to
do to build on its successes?
2) What does the economic-buyer theory say?
3) What are the 5 economic needs stated on page 115?
4) What is discretionary income?
5) What is the difference between needs & wants?
6) What are the 4 levels of consumer needs that are based on Maslow's hierarchy of needs?
7) What is the difference between attitude, beliefs, and expectation?
8) What does "AIO" stand for?
9) What is a lifestyle analysis?
10) Singles & young couples seem to be more willing to try what kind of products & brands?
11) What are empty nesters?
12) What is a reference group?
13) What is an opinion leader?
14) What are the steps in the adoption process?

2. EFFECTIVE MARKETING STRATEGY PLANNING REQUIRES A
REAL UNDERSTANDING OF CUSTOMERS & WHY THEY BUY AS
THEY DO.

3. IN THE LATE 1070’S WHAT BECAME A POPULAR WAY FOR ON-
THE-GO MUSIC LOVERS TO PLAY TAPES OF THEIR FAVORITE
MUSIC—ANYWHERE THEY WENT?
SONY WALKMAN

4. WALKMAN
-RETAIL: JULY 1, 1979 – OCTOBER 25, 2010 (COMPACT
CASSETTE TAPE EDITION)
-RETAIL: JUL 1, 1979 – PRESENT (ALL OTHER
EDITIONS)
-UNITS SOLD: 220 MILLION
-MAIN COMPONENT OF WALKMAN MARKETING
CAMPAIGN:
-PERSONALIZATION OF THE DEVICE.
-HAVING THE ABILITY TO CUSTOMIZE A PLAYLIST
WAS A NEW & EXCITING REVOLUTION IN
TECHNOLOGY.
-POTENTIAL CUSTOMERS HAD THE OPPORTUNITY TO
CHOOSE THEIR PERFECT MATCH IN TERMS OF
MOBILE LISTENING TECHNOLOGY.

5. IN THE LATE 1990’S, THE NEW MP3 FORMAT OFFERED QUALITY MUSIC
FROM A SMALL DIGITAL FILE THAT PLAYED ON A COMPUTER OR
PORTABLE PLAYER.
WHAT WAS THE FIRST MP3 PLAYER?

6. DIAMOND MULTIMEDIA’S RIO
-INTRODUCED: SEPTEMBER 15,
1998
-SIZE: 3.5” X 2.5” (DECK OF
CARDS)
-LCD SCREEN DISPLAYED TRACK
NUMBER BUT NOT ARTIST OR
SONG TITLE.
-MEMORY: 32 MB (30 MINUTES OF
MUSIC)
-POWERED BY 1 AA BATTERY (8-12
HOURS OF PLAYBACK TIME).
-RETAIL PRICE: $200

7. WHAT SLOWED DOWN THE INITIAL ADOPTION OF MP3 PLAYERS?
1) DOWNLOADING MP3 FILES
-USERS HAD TO DOWNLOAD MUSIC FROM VIRUS-RIDDEN
WEBSITES (NAPSTER)
2) CONVERTING CD’S TO MP3 FORMAT
-USERS HAD TO USE SPECIAL SOFTWARE TO “RIP” CD’S TO MP3
FORMAT.
3) LAWSUITS
-MUSIC COMPANIES CHARGED THAT SHARING DOWNLOADED MP3
MUSIC FILES WAS ILLEGAL.

8. HOW DID APPLE’S IPOD CHANGE THE ATTITUDE OF
THE MP3 MARKET?
APPLE OFFERED AN INNOVATIVE MARKETING MIX
THAT ADDRESSED THE NEEDS OF THE TARGET
CUSTOMERS
1) ITUNES OFFERED LEGAL DOWNLOADS OF
SONGS AT A REASONABLE PRICE & WITHOUT THE
RISK OF VIRUSES.
2) FREE ITUNES SOFTWARE MADE IT EASY TO
ORGANIZE DIGITAL MUSIC ON A COMPUTER &
TRANSFER TO THE IPOD.
3) IPOD WAS DESIGNED TO BE STYLISH, PLAY A
HUGE NUMBER OF SONGS, & EASY TO USE.
4) APPLES ADS MADE CONSUMERS AWARE OF ITS
NEW CONCEPT & MOTIVATED THEM WITH THE
PROMISE OF “A THOUSAND SONGS IN YOUR
POCKET.”

9. IPOD
-RELEASED: OCTOBER 23, 2001
-STORAGE: 5GB
-UNITS SOLD WORLWIDE: 300,000,000 (OCTOBER 2011)

10. WITH INCREASED COMPETITION, HOW DID APPLE PROMOTE
IPOD VERSIONS TO DIFFERENT MARKET SEGMENTS?

11. HOW DID THE IPHONE CHANGE CONSUMERS VIEWS OF THE BENEFITS
OF CELL PHONES PLAYING MUSIC?
1) COLORFUL TOUCHSCREEN DISPLAY
2) WEBSURFING
3) COOL HANDLING OF MULTIMEDIA DOWNLOADS

12. IPHONE
-RELEASED: JUNE 29, 2007
-STORAGE: 4GB OR 8GB
-UNITS SOLD: 100 MILLION
(MARCH 2011)
-APPROXIMATELY 378,000
IPHONES SOLD EVERY DAY.
-APPROXIMATELY 371,000
BABIES BORN EVERY DAY.

13. NOT ALL OF APPLE’S MARKETING STRATEGY DECISIONS HAVE BEEN
SUCCESSFUL.
WHY DID MANY EARLY ADOPTERS OF THE IPHONE FEEL BETRAYED BY
APPLE?
A COUPLE MONTHS AFTER THE IPHONE HIT RETAIL FOR $600, APPLE
DROPPED THE PRICE TO $200.
HOW DID APPLE RESPOND TO THE COMPLAINTS?
OFFERED $100 STORE CREDITS TO CUSTOMERS WHO BOUGHT THE PHONE
FOR $600.

14. ECONOMIC BUYERS
“PEOPLE WHO KNOW ALL THE FACTS & LOGICALLY COMPARE
CHOICES TO GET THE GREATEST SATISFACTION FROM SPENDING
THEIR TIME & MONEY.”
RED LASER
FREE SHOPPING APP THAT ALLOWS USER TO SCAN BARCODE OF
ITEM & COMPARE PRICES ELSEWHERE.

15. STAGES A CONSUMER GOES THROUGH WHEN MAKING A PURCHASE
1) NEED RECOGNITION
2) INFORMATION SEARCH
3) EVALUATION OF ALTERNATIVES
4) PURCHASE
5) POST PURCHASE BEHAVIOR
INFLUENCES ON THE CONSUMER DECISION PROCESS
1) ECONOMIC NEEDS
2) PSYCHOLOGICAL VARIABLES
3) SOCIAL INFLUENCES

16. ECONOMIC NEEDS

17. ECONOMIC-BUYER THEORY
-STATES THAT CONSUMERS DECIDE WHAT TO BUY BASED ON
ECONOMIC NEEDS WHICH ARE CONCERNED WITH MAKING THE BEST
USE OF A CONSUMER’S TIME & MONEY—AS THE CONSUMER JUDGES
IT.
EXAMPLES OF ECONOMIC NEEDS:
-PRICE
-CONVENIENCE
-VALUE
DISCRETIONARY INCOME
-WHAT IS LEFT OF INCOME AFTER PAYING TAXES & NECESSITIES.

18. C9 YOGA PANTS
$40

19. LULULEMON YOGA PANTS
$100