For years, Apple has been the benchmark when it comes to an effective
marketing strategy. Apple’s marketing prowess is visible through their brand
equity, which according to Forbe’s is the most valuable brand in the world at $170
billion (Badenhausen, 2017). This represents 21% of the company’s $806 billion
market value. These numbers, alongside the overwhelming rate of growth over the
last 10 years, point towards a company that has pioneered many of the most
effective marketing strategies. This essay will explore the strategies used, by
what looks to be the first company in history, likely to reach a market cap of
$1 trillion.

 

Apple has always had a firm understanding of their market segmentation,
allowing them to target their strategies more effectively. Apple markets to three
major targets groups that all revolve around lifestyle. These include home
users, educators, students and professionals and web designers / publishers. Furthermore,
Apple have tended to target the urban population as these areas tend to be
occupied by individuals with greater purchasing power – the early adopters of
Apple products. However, distinct from many companies in the industry, Apple
actually pursues a somewhat mono-segment strategy, with fewer devices marketed
towards wealthy sections of society. Indeed, Apple is outsold unit wise compared
to handset producers Nokia, LG and Samsung 23.5 to 1, yet combined generate 82%
of Apple’s profit (Sigal, 2010). This is due to Apple’s strategy to position
their product line as a more premium interface targeted towards higher-income
users. Therefore, one of Apple’s key marketing strategies is in stressing their
unique value proposition rather than competing in price wars. They do not
associate themselves with being competitive on price, but they do associate
themselves with being competitive on value. This pricing strategy enables them to
shift products upwards of twice the price of the capable competition.

 

One of Apple’s key marketing strategies has been the use of information
vacuums around product releases. This powerful tool creates aura around Apple
launches, building intrigue, turning customers into raving fans. Alongside this,
Apple creates further mystery after the launch by holding back on advertising
and instead creating buzz through media and reviews. This was revealed during
Apple’s patent litigation with Samsung, where Schiller declared in 2007 that
there was a period following the launch of a product where Apple spent no money
on advertising (Patel). Schiller said, “we don’t need to”, because user stories
are more effective at selling products (Patel). That’s not to say that Apple doesn’t
advertise; they spent $97.5m on ads to promote the iPhone – Apple’s cash cow of
the BCG Matrix – alone in the US in 2007 (Patel). However, the company’s
ability to create an aura around new products gives them a competitive
advantage over the likes of Microsoft, as they can spend less money on
advertising, and instead build information vacuums, allowing the media to fill
the gaps with speculation and hype.

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Another successful marketing strategy used by Apple is product
placement. ABC sitcom, Modern Family, includes an Apple fan called Phil, who
said in an episode: “the iPad comes out on my actual birthday. It’s like God
and Steve Jobs got together and said, ‘We love you, Phil'” (Nield, 2015). Apple
has a powerful grip on Hollywood, with products represented in 891 TV shows in
2011 alone (Nield, 2015). Interestingly, Apple claims they don’t pay for such
placement and instead issue endless amounts of devices. Director of Worldwide
Brand Marketing for Apple in 1990, Jon Holtzman, pioneered product placement long
before the competition. He described it as a way of getting the brand in front
of millions of people at “very little cost” (Souer, 2017). When displaying
updates and changes to the executives within Apple, Holtzman could remind them
of the fact that Apple only had “10% market share of PCs sold, but 90% market
share of the silver screen” (Souer, 2017). This competitive advantage has
remained with Apple, with representation in 42.5% of the top US movies in 2011
alone (Nield, 2015).

 

Apple approach marketing differently to their competition by creating
experiences rather than products. The product launches are akin to a rock
concert, with Apple featuring performers like U2. Apple uses story telling and
sensory dimensions to immerse the customer in the keynotes, with a subtle marketing
strategy that focuses on emotion. Marketing consultant, Simon Sinek, explains
how Apple and Microsoft can have access to the same resources but achieve
drastically different results (Sinek, 2010). Sinek argues that Apple’s success comes
from the notion that “people don’t buy what you do, they buy why you do it.”
People make decisions emotionally and justify them with logic afterwards. This
is supported by the anatomy of the brain. The limbic system of the brain
contains the amygdala, which controls decision-making (Sinek, 2010). The
amygdala’s also the emotion centre of the brain, supporting the idea that
people make decisions based on feeling and rationalise them with logic
thereafter. Apple creates loyalty in their followers in the same way that
Martin Luther King did. His speech that raised 250,000 people from around
America began not with “I have a plan”, but with “I have a dream” (King, 1963).
 In the example of Apple’s newest
creation – the iPhone X – Apple don’t market the phone’s new screen size by describing
its dimensions, but instead by using emotive language: “our vision has always
been to create an iPhone that is entirely screen. One so immersive the device
itself disappears into the experience.” This line of argument inspires a buying
decision in consumers, and loyalty in users, by appealing not to logic but to
emotion.

 

Logic creates customers, but emotion creates evangelists. Steve Jobs was
such a master at marketing because he was able to articulate his vision
effectively. His passion was so contagious that the phenomenon – Reality
Distortion Field (RDF) – was coined by Bud Tribble to describe his ability to
distort the perceptions of Apple consumers and colleagues (Fierberg, 2017). Apple’s
ability to weave the brand into the fabric of everyday life extends beyond
creating loyal customers, and may also impact the way in which users think, as
was found in a study done at Duke University’s Fuqua School when comparing
Apple to IBM (Sawyer, 2011). Providing consumers with a fundamental feeling of creativity
helps fuel the “App lifestyle”, and level of integration that Apple consumers
exhibit over the company’s various platforms. This would explain why Apple has
the highest brand retention rate of any smartphone at 92% compared to just 42%
for Nokia; the experience associated with using the product (a feeling of
creativity) results in consumers that don’t just buy iDevices once, but
continue to buy them again in the future (Gottsegen, 2017). 

 

Apple’s use of simplicity over complex jargon has been a lucrative
marketing strategy that has become more refined in recent years. Apple’s latest
YouTube video release – “Meet iPhone X – Apple” reached over 20 million views
in just 2 months and doesn’t contain a single spoken word besides the initial
music. Research by CEB found that brands that simplify customer decision making
are 86% more likely to be purchased, so Apple focuses on powerful minimalism
and strong visuals, with the only colours being the ones that resonate from
experiences that users are pictured having (DeMers, 2014). Apple are aware of a
concept that neuroscientists call Inattentional deafness, whereby people who
are focusing on a visual activity can’t hear their surroundings, because
hearing and vision use the same physical region of the brain (Venosa, 2015). By
applying such principles, Apple can create gripping commercials using dynamic
imagery that encourages consumers to want to know more.

 

Apple has come a long way in marketing and branding since the company
first started taking products to market in the late 1980s. Back then, Apple
would focus on marketing the specifics of products like Macintosh, and there
was a dichotomy between Apple products and the Apple brand, with many people thinking
Macintosh was its own distinct company (Souer, 2017). While having a good
product is an essential backbone to the success of Apple, the idea that the
product comes first is an out-dated and retro marketing idea (Clifford, 2014).
There are very few things that iDevices do that the competition can’t. However,
Apple’s competition is becoming increasingly rigorous which puts a question
mark over the company’s ability to sustain long-term growth. Apple’s TV
advertising has recently fallen behind the likes of Samsung, with Ace Metrix –
a company that ranks consumers responses to ads on a scale of 0-950 – reporting
Apple’s average to be 522, far below the industry average of 603 (Metrix, 2016).
That said, in the future Apple is looking to expand into India where the
smartphone industry is growing rapidly, using a distribution strategy that has increased
enormously since 2002; 498 outlets across 19 countries provide the company with
a substantial street presence (Dunn, 2017). Their sheer tangible assets, brand
equity and market share of almost 20% of global smartphone sales, suggests that
Apple’s total domination is unlikely to change any time soon. 

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