The iPad 2

Business Marketing

2011-05-10T08:56:00.000-07:00

Through out this past semester, we have studied all the aspects of successful marketing, often to consumers. But this chapter discusses something a bit different- marketing to businesses. Apple has been successful at marketing to both consumers and businesses because its computers and now iPads are creating a product that can satisfy the needs of the consumer and the business, in one. After all, a business person is still a consumer when he/she goes home, so why not have a product that transcends both worlds seamlessly?
Business-to-business electronic commerce (B2B e-commerce) has revolutionized the way companies do business in the 21st century. Exchanging goods and services is now as simple and easy as a click and a few key strokes. This has, however, created problems for marketers and how they determine who is buying what. So they use three factors to measure online success. Recency says that consumers who have recently made a purchase are more likely to make a purchase again very soon than consumers who haven't purchased in a long time. Frequency identifies consumers who purchase often and are very likely to continue purchasing. Marketers also look at monetary value, because those who spend more are more likely to keep buying more. Together these elements can tell a lot about a company's online success.
This data is sometimes also used in addition to other statistics to determine stickiness. Stickiness is determined by: frequency x duration x site reach. Measuring stickiness frequently and after certain changes are made to the site can be extremely informative in determining whether changes made are improving site activity. B2B is a growing market and companies need to reevaluate the methods they use to get information out to consumers, especially growing medias such as RSS and social networks.
When the internet first had its boom, businesses thought that it would change the way business is done by eliminating the intermediaries such as resellers or wholesalers because consumers would want to pay less by buying direct from the producer of the product. This is called disintermediation. But this was not so, and businesses still needed to use distributers for many reasons to make business easier. Providing only a direct online purchase option was similar to having only one store in NYC and it was unsuccessful because it couldnt meet the individual demand. Therefor they introduced reintermediation.
With the internet taking over the business industry, creating relationships, an important aspect of business, has become much easier. Companies can build strategic alliances to strengthen operations.

Segmenting and Targeting Markets

2011-05-04T21:05:00.000-07:00

Through out the semester we have studied many different aspects of marketing and analyzed different markets, but sometimes we view groups too broadly, and must use market segmentation to create smaller more defined groups to market to. Market segmentations helps large companies create products to satisfy specific groups' needs. All segments must meet four criteria to be successful:
Substantiality is very important in defining a market segment. The segment must have enough members & power to support the products created for it. Identifiability and measurability is important to decide whether there are even enough people to establish a segment. If the group cannot be readily identified and counted then it cannot be accurately established. Accessibility is often difficult in particular segments but a means must be figured out in order to reach its target group. This is one area where Apple is limited because all of its products require the use of the internet, while it is becoming very common in house holds, it still does not accommodate particular markets such as those in rural areas where internet is slow or hard to establish, or the elderly who have difficulties understanding how to use the internet, even if they know how to use the product. Responsiveness is the last criteria for successful segmentation, and it is used to determine whether a segment is truly acting differently than another based on its reactions. Although segments are different for various reasons, they may be treated the same if they act the same.

Markets are segmented based on many different variables and characteristics. Some of the most common types are as follows:
Geographic segmentation which can be based on location, market density, or climate. Demographic segmentation contains many subcategories such as age, race, gender, sexual orientation, or income. Although very broad, it can be very useful and accurate at predicting consumers behavior. There is also Psychographic segmentation which adds to the demographic information. It reflects more on the consumers personality, motives, lifestyles, and geodemographics.
Benefit segmentation is different however, because it groups consumers based on what they desire out of the product, not demographic information. Usage-Rate segmentation is also different in that it divides the market by how much is consumed. This creates segments like "potential users" "light users" "heavy users". It also utilizes the 80/20 principle which states that 20 percent of users create 80 percent of all demand. This is because generally "heavy users", although few in numbers, use exponentially more than other users.

Developing and Managing Products

2011-05-04T20:15:00.000-07:00

Apple is known for coming out with "new" products very frequently, but what exactly is a "new product"? Well "new" is relative to the market.
New-to-the-world products such as the iPad and iPad 2 create an entirely new market (the now booming tablet market).
New product lines produce a product that was not previously offered by that company. Apple rarely does this, as they usually create new markets with new technology, but you could consider their inital iPod release a new product into an existing market, as mp3 playing devices had existed by other companies but ultimately were popularized by Apple.
Additions to existing product lines are products that supplement an existing line. An example for this would be the iPod Shuffle, which was an iPod that was more affordable and took up less space than a traditional iPod to reach new target markets.
Apple more commonly improves and revises existing products. Every few months they come out with a new "generation" of iPod, iPhone, iPad, Macbook or iMac. Each new "generation" of a product typically has advanced technologically, has become sleeker or lighter, and faster.
Repositioned products include already existing products aimed at a new market. One example of this is the new iPod Nano which is small and touchscreen and often worn on an attachable watch strap. This is no longer just targeting teenage music lovers, but also young professionals by offering many useful tools including music, and the time at easy access in a sleek and stylish watch format.
The last category, Lower-priced products generally does not apply to Apple, as they create new and expensive products which are often imitated by competitors who produce lower priced products.

Then there is the New Product Development Process which has 7 steps:
New Product Strategy links the goals of the marketing department, the business unit, and the corporation. The Idea Generation includes many sources for new ideas such as consumers, employees, competitors, vendors, research and development and more. They often brainstorm and use focus groups to gather ideas. Then there is Idea Screening which filters out ideas which will not be successful for one reason or another and then issue concept tests for the remaining ideas. Business Analysis is then applied to those ideas which pass the concept tests to estimate financial aspects of the product. If the analysis proves profitable, the idea will move to the Development stage where a prototype will be created and its marketing strategy outlined. Most aspects of development are done simultaneously by different departments to save time and money. After development is finished the product is now Test Marketed. Test marketing involved introducing the product to a limited audience for a year or more. Sometimes simulated market testing is used to avoid leaking a product to the public or competitors before the product is officially ready to be released. Last but not least, the product is Commercialized and introduced into the market.

All products face challenges, but one growing problem for companies is producing products that will succeed globally. Apple has been very successful with this, and their products are in high demand all over the world. Without a doubt, Apple must have experts from around the globe to ensure this. Especially with touchy issues such as the internet and social networking, modified versions of products have to be introduced in certain parts of the world where restrictions on such things are very strong.

Integrated Marketing Communications

2011-04-13T21:35:00.000-07:00

Apple is very aware of the elements of promotion and they have effectively used them to sell out their newest product, the iPad 2. Using the 4 elements of the promotion mix: advertising, public relations, personal selling, and sales promotion, they have made the iPad2 one of the most lucrative items in the world. Apple is well known for their sleek, simplified, successful advertising campaigns and the iPad 2 is no exception. They have applied their advertising in many mediums including email, the web, billboards, television and print ads which have combined, been highly successful in both marketing the new version of the iPad but more-so the new "Smart Cover" as an essential accessory. Their public relations department has done an excellent job at creating a positive image for the iPad 2 by creating an image of it as both a business product and a family friendly product. Many of its advertisements include children using the product, family members connecting via Facetime, or a possible kid-friendly app. All of these have created a very positive image for Apple. The iPad has also gained publicity in the media frequently being used on television in news broadcasts and even by the mayor as a display tool. As far as promotions are concerned, Apple rarely partakes in any but recent news has said that Best Buy is reserving iPad 2's for an upcoming promotion, which we are all very excited to see what that might be. Personal selling, is also rarely used by Apple as it relies more on the internet to sell its products, but for consumers who purchase in-store, Apple representatives help finish the sale.
Apple has been one of the most successful companies at communicating its message to consumers. With interpersonal communication via its Apple stores, and mass communication via its advertisements. Their mass communication efforts have been very effective because they reduce the clutter and distractions, and convey a simple to the point message about each product. For example "The iPad 2: Thinner, Lighter, Faster." communicates the most important aspects of the iPad 2 in a simple way.
When Apple promotes a product it has 3 main goals: inform, persuade, remind. When a new product such as the iPad 1 was coming out, they needed to inform the consumer on the uses of the product. Once the consumer understands the product they need to be persuaded to buy it by seeing how it will positively impact their life. Last Apple needs to remind consumers of the product even once it is already well known, such as the iPhone 4 commercials which feature new apps and updates.

Product Concepts

2011-04-05T09:04:00.000-07:00

Apple products such as the iPad2 or the Macbook Pro can be considered both industrial AND consumer products as they are used both in professional fields as well as for personal use. As a business product it helps facilitate organizations operations. More often though it is used as a consumer product because it satisfies individual wants and needs.
The iPad 2 is a Specialty Product because people are reluctant to accept substitutes, although they do exist, and Apple has become a very important brand name. Apple is starting to develop a product line around the iPad 2 which includes its predecessor the iPad, iPad accessories such as the stand or the new magnetic cover for the iPad 2, and there will most likely be more variations of the iPad as time passes, furthering the product line similar to that of the iPod and iPhone. The iPad and accessories are only one small and rather new line in the larger product mix that Apple has created. In the mix are the Mac & Macbooks, iPods & touches, and the iPhone variations. They use somewhat different marketing strategies but utilize similar advertising campaigns and have a similar sleek image which is part of Apple's recent goal of "brand unity".
Apple has been very well known for utilizing product modification frequently which then causes planned obsolescence causing consumers to purchase the new product soon after the purchase of the last generation product by making it seem obsolete in comparison to the modified new product.
Apple has become one of the most successful examples of branding by simplifying its original image and name (Macintosh) to just Apple and white Apple outline for its logo. These have become instantly recognizable and are marked on every product in a way that does not clutter it. Apple has been very successful in creating brand loyalty by creating products that work perfectly with each other, as well as perfectly on their own which helps build consumer loyalty.

Apple's Sales Promotions

2011-03-29T08:55:00.000-07:00

Apple has become notorious for rarely ever having sales or discounts, whether the product is purchased via Apple directly or a third party retailer. The price of an ipod, iphone, or ipad remains the same through it's lifetime until a new generation of the product is released which is when a possible price change may be issued with the new product. They do however utilize small, but well thought out online sales promotions via the online Apple store that gives the consumer an advantage over purchasing from a third party retailer such as Best Buy or Target. Since the introduction of the iPod, they have offered free engraving when ordering online. This may seem simple or even insignificant, but has been surprisingly popular when giving iPods as gifts or just to mark you iPod to deter theft.
The only other promotion that has been in place on Apple's website is their Mac Educational Pricing. This allows college students, teachers, and administrators to get a good discount on mac products and software when ordering online. The discount is not more than 20% but I did use it to purchase my macbook pro and it was helpful. This promotion was extremely well thought out because it promotes mac in the schools, and will help younger users become more familiar with mac products and possibly grow up to switch to mac regardless of what their parents have at home because of the influence mac has had in their schooling. This is similar to the technique McDonald's used with the Happy Meal in that they got their product out to children who would grow up with the product and be more inclined to purchase it again as an adult.
Apple also utilizes tools for trade sales promotion in their flagship stores by having a team of qualified Apple Specialists available to help with all consumer needs and questions, as well as always having products readily available for demonstration. The fact that the consumer can try to use the product themselves as well as have the product explained to them is a key selling point.

The Evolution of Apple's Advertising

2011-03-22T08:55:00.000-07:00

Above is the first Apple commercial, deemed one of the best advertisements ever created. Its very cinematic and different from the style of Apple ads we're used to seeing, although very effective in advertising its first "Macintosh Computer". This is an example of pioneering advertising.

In the late 90's this ad debuted, the first of many very stripped down ads that focused more on brand awareness than promoting a specific product. This is an excellent example of competitive advertising because although it offers very little information, it persuades the consumer that this product will make them "different" in some way, and the dominant logo helps promote the brand in general, even though at the time only the Macintosh computer was available.

With the introduction of the iPod, they stripped their advertisements down even further to not include a slogan or even the logo, only the white iPod against a black silhouette, which quickly became iconic.

Apple has also launched many successful advertising campaigns around the objective of getting PC users to switch to Mac. The initial "Switch" campaign utilized celebrities who had made the "switch" to Mac but it was only somewhat effective. They later revamped the idea of "switching" with the "Get A Mac" campaign which pitted a person representing a PC against someone representing Mac in a comical and extremely effective set of 24 commercials, in each showing a different feature that Mac does better.

Since these founding campaigns, where each product was marketed different with different styles of campaigns, Apple has decided to take on a concept of brand unity by advertising all products in a similar fashion as well as planning a redesign of all product in each products next release.

iphone

ipad

mac book air

ipod nano

ipod touch

As you can see each advertisement features the product predominantly and its features rather than any elaborate script such as that of the original "1984" ad.

Apple's Most recent and possibly most successful endeavor is the launch of the iPad 2. It utilized both styles of recent Apple advertisements where the product is being demonstrated against a plain white background, as well as the iPads many different uses in a flash of various everyday backgrounds and situations. The later style created advertising appeal which more consumers can relate to as it allows them to picture themselves using the product in any of the situations shown.

Retailing the iPad2

2011-03-15T08:59:00.000-07:00

The iPad 2, as well as all other Apple products are available at a variety of retailers from Apple themselves, through their interactive stores or website, to electronics chains such as Best Buy and even though the cell phone carrier Verizon. Each of these retailers offers different levels of service. The Apple Store for example allows you to test all products in their inviting and "play friendly" environment, hassle free with tech support readily available but rarely "selling you" the product. Busy Buy and Verizon, however have more aggressive sales associates and less room for you to explore the products on your own, as well as more competition. But no matter what retailer is carrying the iPad 2, one thing remains the same: the price. Apple products are rarely ever found at discount, no matter who the retailer is, or how old the product is.
The also effectively utilize direct marketing by making their product available to you via your own home. Many computer users, even those unfamiliar with the Apple products use itunes to play music, but in order to do so consumers must sign up for a free account and are then enrolled in Apple email updates. This is one of the easiest but most effective methods of accumulating and informing new consumers of their products and view demos on the online store. Once consumers have decided on a purchase, particularly with new products upon release, there is usually chaos and madness at each retail location and many consumers opt for their online store. The online store also includes custom engraving sometimes which is a key selling point for those giving gifts.

iPad 2 Release

2011-03-13T21:25:00.000-07:00

The Ipad 2 was available for purchase at 5pm on March 11th. This is the Apple store on Fifth Ave, around 8:30. The line was around the block and these people were still in line even after many employees had announced that it was sold out already.
(Photo taken by me)

Consumer Decision Making: The Ipad 2

2011-03-08T08:56:00.000-08:00

Apple is one of the leaders in marketing to consumers in a very basic and effective way. One of the main reasons they are so successful is because they understand the way the consumer makes their decision. First the consumer recognizes their needs: a portable device. Some consumers may already be familiar with the ipad1, others may just be discovering the product for the first time now. Apple knows this and creates advertisements that can relate to most all consumers and meet individual needs, even those which you may not have initially crossed your mind a "need" until the option was put in front of you. Next the consumer goes on an information search and tries to weigh all options and get a good idea of the product aside from the image that the marketer is projecting by seeking the opinions of those not related to the company. Many people will ask a friend or coworker who has the Ipad or other apple products how satisfied they are, and Apple knows very well that they have strong consumer loyalty (Once you go Mac, you never go Back ;D) so regardless of their marketing, a consumer who has tried or owned an Apple product is usually very pleased with it and will recommend it to others. They also have the option of entering an Apple store and trying out a product, hassle free to make their own judgement. These are types of nonmarketing-controlled information sources. Some marketing-controlled information sources that they might consider are advertisements put out by Apple or its retailers such as Best Buy or Verizon. After gathering a sufficient amount of information the consumer will evaluate alternatives such as the Samsung Galaxy or the HP Slate which are similar but less expensive, giving them the economic edge, especially when they have comparable features. Then it boils down to the brand, which is where again, consumer loyalty comes into play and people go with the more trusted and recognized brand, Apple.

Going Global

2011-03-01T08:56:00.000-08:00

Although Urban Decay is rather a new company, they have big plans to expand for the future into the global market, especially Europe where luxury goods are in high demand. To do so, it must assess each country which it wishes to expand to's individual needs, resources and unique cultures as to best satisfy the needs of its consumer.

Chapter 4: The Gen Y Dilemma

2011-02-22T08:54:00.000-08:00

Who buys UD Cosmetics? And Why? Teens, 20-somethings, Soccer-moms? To go to school, the club or the office? All of the above. Urban Decay reaches a wide demographic of consumers, and why you may ask? Because they need to. If you wanted to block their general demographic into one large ambiguous group, it would be "Generation Y" those born between 1979-1994, which is those currently ages 32-17. A pretty huge demographic to tackle, and even more challenging due to the fact that consumers of all ages and backgrounds now have a wider range of interests and tastes, which is an expanding problem for marketers, not to mention the numerous other factors that influence the market such as technology, competition and maybe the biggest of them all, the economy.
UD has attempted to bridge the age gap by marketing to the broad demographic in a way somewhat different than other cosmetics companies. They do not advertise "super fun colors" or "age defying" which are both statements targeted to specific age groups, rather they use words that women of all ages can relate to:"dangerous","edgy", "individuality" and "feminine".
Another big issue that has risen for UD and other luxury cosmetics, is the economic downturn and how to keep sales up when the amount women are willing to spend, goes down. One way they have tackled this problem is by boasting how long the product will last over the course of the day, thus leading you to reapply it less and the product ultimately lasting you longer than the competitor, justifying the price. Now this makes the product feasible for both the teenager investing her allowance, as well as the saavy business woman treating herself on the weekends.

Urban Decay's views on Social Responsibility

2011-02-14T10:25:00.000-08:00

Urban Decay is dedicated to being one of the most ethical and socially responsible cosmetics providers on the market. They successfully safisfy all aspects of the Social Responsibility pyramid by putting the needs of the consumer and the planet above those of profit and growth. They fulfill their philanthropic responsibilities by providing a great work atmosphere, with for promotion and competitive benefits including Medical & Dental Insurance Coverage, Vision Insurance Coverage, Life Insurance Coverage, Disability Insurance, 401K, Paid Vacation, Sick, and Personal Days and Employee Discount. They satisfy their Ethical Responsibilities by doing what the company was founded on: creating a great product that does not harm animals. They do not partake in any animal testing with any of their products and were one of the first cosmetics producers to create a make-up brush that was of luxury quality as well as 100% synthetic, which has lead many other companies to follow suit and create animal hair free alternatives. Naturally they are Legally Responsible in that they follow all current laws regarding cosmetics standards and even exceed those that already exist. Lastly, it is their Economic Responsibility to profit for its own sake, the sake of its retailers (Sephora, Macys, Ulta, etc) and for the sake of the economy by creating luxury products that come at a price slightly higher than drug store cosmetics, but less expensive than competitors Nars and Chanel while maintaining the highest quality possible. This allows for more consumers to afford the product, not just the rich and glamourous and thus lead to increased profit.

The Marketing Strategy

2011-02-08T08:55:00.000-08:00

Urban Decay began with a few products to satisfy a very specific target consumer: The Edgy Rebel. But since its major growth since being purchased by HMLV, the luxury goods giant, in 2000, it has expanded to reach a wider target audience.
According to their mission statement, they strive to produce a product that is both high quality, cruelty free, and makes you feel dangerous and like an alter- ego of yourself. It is a pretty drastic promise to make but one that when worded properly, captures your attention and ignites the "rebel" in each consumer, from the teenager, to the 20 something editor.
Their objective is to create products that each consumer can relate to and feel is specificalyly for them.
UD's main competitive advantage is their "cruelty-free" cosmetics and synthetic brushes. The majority of the beauty field is dominated with cosmetics companies more concerned with profit and less with social responsibity. In the past decade social awareness has risen exponentially and not only do the vegetarians, vegans, and animal lovers of the world struggle to find a product to satisfy their beliefs as well as their style, but now many average consumers do as well. This is where UD gains the upper hand over other "luxury" cosmetics producers.
Their cruelty free/vegan edge is not just a tiny label on the bottom of the packaging, but a key selling point in the product differentiation when being closely compared to many other competitors in its usual retail spaces in high end beauty stores such as Sephora, Ulta or Macy's.
Although there are other cosmetics companies who produce cruelty free or vegan products, very few can say that they sell EXCLUSIVELY cruelty free products, which, atleast for the moment, is a significant advantage again competitors who create a "cruelty free" product amongst a line of many others which are not.

"Does Pink Make You Puke?" The History and Mission of Urban Decay Cosmetics

2011-02-03T10:41:00.000-08:00

The Start of a Beautiful Revolution

It all started 15 years ago. Hard to believe the fashionistas of the world survived the 80's without the cosmetic edginess that Urban Decay has now become synonymous with. UD was born when founder of Cisco Systems, Sandy Lerner, decided she did not want one of the 50 million shades of pink nail lacquer, lipstick, or eyeshadow. She was an individual with her own style and that included her face, and pink was just not cutting it. Thus came the infamous tag-line "Does Pink Make You Puke?" with the first 2 initial lines of nail lacquer and lipstick in a wild array of shades.
With the help of David Soward and Wende Zomnir they didn't just create a brand, they started a revolution.
It didn't stop at the bold new colors and textures, with names like "Oil Slick"(black matte), "Graffiti"(neon green) and "Midnight Cowboy Rides Again"(tan with tons of glitter). It grew to be something much, much more. A brand devoted to giving the consumer the highest possible quality while actually giving them the products they want, but cant seem to find anywhere else.
But UD goes one step further than just considering the final product. They have been a leader in the cruelty-free movement since the company's founding in 1996, with their pledge "We don't do animal testing. How could anyone?" printed on each and every product which has gained world wide recognition from The Coalition for Consumer Information on Cosmetics (CCIC) as well as People for the Ethical Treatment of Animals (PETA).
They are also working towards a goal of all vegan (no animal derived ingredients) products, with more than 50 available already, as well as being one of the only cosmetics producers on the market that produces high quality synthetic hair make-up brushes in a field where the majority are made from animal hair.
These high standards are what led the company to gain national recognition and be purchased by the Moet-Hennessy Louis Vuitton luxury goods giant in 2000, until 2002 when it was purchased by two business men going on the advice of their daughters and is now sold world wide and online. I'd say they made a wise investment.

The Mission

Sometimes outrageous, but never average Urban Decay is beauty with an edge. Find a color that makes your heart race, makes you want to dance, makes you want to write a song. Just find one that inspires you to be the most "you" you can be. Never settle for "okay". Don't throw on your make-up and walk out into another boring day. Make up your face like the subway is a runway. Don't be afraid to turn heads. You are not like the rest. And every shade will highlight your beauty. So go out with a look that could kill, but not any animals.
Urban Decay is every individual who said no to conformity and yes to extraordinary.