The Secret of Apple's Success

Bachelorarbeit von Sascha Schneiders

Introduction:

At the end of the year 2009, Apple surprised the Wall Street by announcing record-breaking profits, as the Californian technology company continues to defy the recession.

By 2010, Apple had sold 250 million of its portable music devices answering to the name ‘iPod’, a synonym in the mp3-player market. In the third quarter of 2009, Steve Jobs, CEO of Apple, was celebrating a record profit of $1.67 billion. ‘This is going to be huge’ the CEO said when they launched, in 1998, the all new iMac, a personal all in one case desktop computer. And he was proved correct!

Their major competitor, Microsoft, as well as others, has suffered from the recession and as a result, they have made a part of their workforce redundant, whereas Apple chose to expand and trump their own stock records every month.

According to the CEO Steve Jobs, a lot of companies have chosen to downsize, and maybe that was the correct way for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.

Apple does not behave like the mass. With their unique recipe for success, they were able to ‘step out of the crowd’ As a result of their uniqueness, they have loyal fans.

The CEO Steve Jobs stated before Apple launched the Macintosh, ‘we’ve got to be a great Marketing company’. This quotation shows Apple’s main focus is on marketing. It is a key success factor for Apple and the researcher’s focus for this project.

Aims and Objectives:

In this project the author aims to investigate, with particular reference to the example of Apple, why a few brands are able to charge higher prices for their products and sell more of them than their competitors. The research is based on traditional- and Cult-marketing which contributes to Apple’s profitability success.

Therefore, the researcher has identified the following objectives:

Explore Apple’s strategic change in 1997 which brought the company back to profitability, considering the launch of Mac.

The whole history of the company was not ‘a bed of roses’, Apple also experienced a time of near bankruptcy. Therefore the author explored Apple’s strategic change in 1997 which saved Apple’s future. The researcher applied Apple’s new vision and strategy on the example of the Macintosh which was the first product that was all new developed and re-launched after the strategic changes.

Analyze Apple’s traditional Marketing strategy by 4P Analysis Apple’s untypical philosophy also affects all areas of the 4P analysis. The company strives for details which are not considered by the competition in the computing industry. For instance, Apple was the first computer manufacturer that paid attention to design.

Explore Cult-marketing and implement Apple’s marketing strategy in the elaborated theory in order to identify Apple as a ‘Cult brand’.

There is resonating a spirit around Apple known as ‘cult’. Strong brands like Harley Davidson are ‘riding’ on the same unicorn as Apple, with their committed fans which protect their brand like a treasure. The author is going to describe and analyse the most common cult-marketing theory and apply it to the case study of Apple.

Evaluate the marketing strategy and the image of the CEO in order to understand the ‘Cult status’ and profitability success of the company.

The project provides an evaluation of Apple’s marketing strategy and Steve Jobs’ image relating to the ‘Cult status’ of the brand. The CEO’s special image as a person who dared the impossible and succeeded has a major influence on Apple’s share value.

Table of Contents:

Text Sample:

Chapter 5, Cult Brands always create customer communities:

Communities create social capital that enhances belonging to the brand. There has to be social glue that binds common goals, values and celebrates and mourns the same events. As the congregation’s members invest their time and resources in the community, they create social capital that further enhances the sense of belonging. Levine, a lecturer at University of Illinois believes that Mac users have a common way of thinking and of doing things. They share a certain mind-set. ‘We say we’re Mac users, and that means we have similar values’.

Consumers establish networks to support their favorite brand. In the 90’s, most zealous Mac fans went as volunteers to electronic stores, fix the Macs on display and help sell Macs. Therefore the customer community contributed to Apple’s survival.

Cult Brands are inclusive:

Normally, ad specialists assume that great brands are built upon product exclusivity and targeted marketing in order to gain high margins. In contrast, Cult Brands sell real products to real customers instead of renaming ordinary products with the intention to make them exclusive. Unless the brand is a luxury good company, inclusiveness and not exclusiveness is the primary mission of the brand.

Cult Brands have customers with a wide range of ages and incomes. There are universal qualities that all human beings share. A rebellious teenager and an aging baby boomer, while separated in decades by age, possibly seek for similar feeling like temporary escapism and unrestricted fun.

For example, a great Cult Brand like Harley Davidson maybe would not have millions of followers and real fans, if they were only targeting, for instance, single males with a medium household income of $30.000 to $35.000 a year. Harley Davidson attracts customers of every level of income with different personalities and education.

Apple doesn’t separate customers by income or age. On the contrary, they try to attract every sort of customer by providing a widespread product line for every sort of use. The products can be personalised in some ways through customizing them in the internet store. Customers can choose from different storage capacity and processor performance to different sizes of screens.

Cult Brands promote personal freedom and draw power from their enemies:

Cult Brands have understood that consumers are actively looking for the opportunity to buy feelings of freedom in their everyday lives.

Apple provides its customers the freedom to be different and to step out from the monotony life. This brand stresses their attention on areas which are unattended by other brands, like bringing design into the computer sector. Furthermore with their slogans ‘the computer for the rest of us’ or ‘think different’ Apple created a rebellion, freedom and cool image.

The rebellion image is a fundamental characteristic of Cult Brands. They have a sense of competitive spirit or a specific attitude against ideals in order to sell the customers the freedom they like.

The Mac owner in 1984 and today feels a certain rebellion against authority such as Microsoft, in owning the products. Apple especially provokes Microsoft by their ‘Get-a-Mac’ advertisements.