iPodCreating An Iconic Brand

“It’s really hard to design products by focus groups.

A lot of times, people don’t know what they want until you show it to them.”

Problem Statement

• Has Apple successfully differentiated itself from their competitors?

• How can the iPod keep its dominance?

• Is Apple’s marketing of the iPod effective?

History of iPod

Extent of Demand

Sales of iPod

• 2001: 125,000

• 2003: iTMS launched

• 2003: 1,451,000

• 2001-2006: 88,701,000

• Market Share: 73% in 200601 02 03 04 05 06

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10,000

20,000

30,000

40,000

50,000

(thousands)

Extent of Demand

Market Entrance: Differentiation

• Unique Product• Storage capacity• Use-friendly interface• Attractive design

• Premium Price: $399• “Idiots Priced Our Device”

• Advertising• Focused on attributes and benefits

Extent of Demand

Extent of Demand

Increasing Brand Stature

• Continued Product Innovation• Bigger Storage, Better Functions, etc• iPod mini (2004), Shuffle (2005), etc

• Expansion of Distribution Channels• Apple Store (2001)• Major Electronic Retailers, etc

• Silhouette Ad Campaign

Extent of Demand

Nature of CompetitionBefore the iPod

iPod introduced in November 10, 2001

Nature of Competition

After iPod’s Release

iPod’s Competition in 2006

Environmental Climate

Political Social

• RIAA (Recording Industry Association of American) copyright needed-filing lawsuits against individual file swappers.

• The public was eager for an legally easy-to-use digital music service

Economics Technology

• Purchasing power depends on the economic conditions.

• Since 2003, the US’s

economic conditions were getting better.

• People required more entertainment- digital music explosion.

• The adoption of Napster spread quickly to more than 25 million users in less than one year.

• Let users connect and manage a wide range of digital devices and software - iTunes.

• Simplicity but efficiency - hard disk drive Mechanical scroll wheel.

• ITunes music store was key for apple and digital music offerings.

Marketing Mix

Product Place PricePromotion

• Personal music player

• Originally black and white only, but color screens became available later

• A size to fit every lifestyle (iPod, iPod

mini, iPod nano, iPod Shuffle)

• Features the distinctive click-wheel

Product Place PricePromotion

Marketing Mix

• Sold at 113 Apple stores, online, and at selected retailers like Circuit City and Best Buy

Product Place PricePromotion

Marketing Mix

• 1,000 songs, in your pocket • A Capella

• Silhouette Ads

• 2004 iTMS Super Bowl

Product Place PricePromotion

Marketing Mix

• Price per GB goes down with each new model

• Ranges from $149 for 1GB iPod Shuffle to $399 for 60 GB video iPod

SWOT Analysis

• Unique design: The most important feature!

• High market share (78% of the total market)

• Culture and social phenomenon

• iTunes: Help to identify key customer needs; Differentiation

SWOT Analysis

• Limitation of target segments: Apple fans and music lovers

• iTunes: Not an open system

SWOT Analysis

• iPods start turning up in universities and schools: new and innovative ways to exploit Apple’s technology

• The growth of podcasting: allow users to create and share

SWOT Analysis

• iPod Killers: Competitors & Cell phones

Evaluation of Alternatives

Create a new campaign for iPod

Pros:• Low cost compared with designing a

new product• Helps to keep up with current media

trends

Cons:• Dilute brand image

Create a new product

Pros:• Compete with competitors• Target more segments• Expand the product line, increase the

market share and revenue

Cons:• High cost of designing and producing• May cause cannibalization

Recommendation• Create iPod with touch screen:

watch videos, play video games & listen to music

• Maintain all the other versions of iPods

• Decrease the prices of normal iPod

• Keep iTunes Music System closed

• Create Partnerships

“ I think if you do something and it turns

out pretty good, then you should go do something else wonderful, not dwell on it for too long. Just figure out what’s next.”

Questions

What was the Name of the First ITunes Compatible phone?

A. Pebble B. IPhone C. Razor D. ROKR

Questions

What Did Sandisk’s Marketing Campaign call iPod Users ?

A. Sheeple B. Hipsters C. iSheep D. Posers

Questions

When did Apple release the First iPod?

A. September 12, 2000 B. October 13, 2003 C. December 15, 2001 D. November 10, 2001

Questions

What was the first ad campaign Apple ran for iPod products?

A. SilhouetteB. I Fought the Law and the Law WonC. 1,000 Songs, In Your PocketD. A Capella

Questions

What does RIAA stand for?

A. Recording Industry Association of America

B. Recording Industrial American Application

C. Recording Ideas Across AmericaD. Really I Always Amaze