Davies Wu's Blog

Recently I have been browsing the web and I came across this really interesting blog written by Axel Schultze.  He describes in his blog :

http://www.customerthink.com/blog/is_apple_unstoppable_my_recent_customer_experience_story

how Apple is using a “waiting-list marketing campaign” to attract more customers, but the long wait list has nothing to do with the availability of the product.  The authour also relates our time to the “Russian economy where people stood in line to buy something and needed to be thankful to be in the “elected circle” to even get a product.”

Even though I am disgusted at how so many people have turned into so called “Apple maniacs”, but ironically I am using my brand-new Macbook Pro as I am typing this marketing blog.  So this got me thinking, why is Apple so successful?

Lets look at the Diffusion of Innovative Theory:  If a product is diffused at a faster rate through the diffusion curve, then the product will gain higher acceptance amongst the consumers.  First of all, Apple has a clear relative advantage compared to its competitors, which means Apple is perceived better than substitutes.  Since many people already own one or more of Apple’s products, the similar structure a newly launched Apple product has a high compatibility.  Apple products that are used as demos in all the Apple stores are available as trials, therefore Apple products have high trialability. Finally, with many Apple products already around us, there is no doubt Apple products have observability.

The question is: How far can they take it?  Since there are many rumours that the symbol of Apple Steve Jobs is suffering from cancer and may not live for another 3 months, it will be interesting to see how Apple will manipulate their current strategy as the Apple giant falls.

A few days ago, I made up my find spending $600 on the Ipad before my friend told me Apple is launching Ipad 2 in a month.  Should I wait?  The question is, there is always going to be Ipad 3, Ipad 4… and many people don’t have the luxury to keep up with the updates.

After learning about the Diffusion of Innovation, I asked myself, “Is Ipad considered to be in its Innovators Stage, Early Adopters Stage, or Early Majority Stage?”  Even though many Apple’s competitors also carry touch-screen tablets at a lower cost and Apple is profiting from a larger group of buyers, the consumers still take a lot of risk since a large amount of consumers purchase the Ipad when it first came out.  Also, every new apple product comes with a new technology that has never been tested in its market, therefore large group of consumers still purchase the product regardless of the risks.

With Apple’s successful marketing strategy, Apple is able to quickly diffuse its products through the diffusion curve, thus time of adopting of the innovation can be neglected.  Apple has established itself as a majority, but also innovators who are able to encourage many consumers to try their new products.

A few days ago I decided to stock up some pop for my party this weekend and I couldn’t believe I had a problem deciding what kinds of Cola to buy.  Isn’t that ridiculous?  When I order a meal from a fast food restaurant, I only had to choose between diet coke and regular coke!  It wasn’t until I stood infront of the Cola shelf at Safeway till I realize there are so many different types of Colas! I asked myself, “Why do some many people buy Coca-Cola and why is it so addicting?”

Other than the irreplaceable taste, its segmentation ,targeting , and position strategy explain how the company is so successful.

Coca-Cola uses a  differentiated segmentation strategy, a strategy through which the firm targets several market segments with a different offering for each.   An example would be the Coke Diet, which is targeted towards individuals want to consume a suger-free drink while still having the taste of a Coke.   For Coca-Cola Zero, the product is targeted towards Women who want to keep fit and remain on a calorie-low diet while still being able to drink Coke.  Although these 2 products are pretty similar, the company tried to avoid too much overlapping between sements to meet segment member’s needs.

Also, the company uses symbols such as polar bears as a positioning tool.  Therefore the brand is distinquishable from its competitors.

With successful segmenting, targeting, positioning strategies, there is no doubt Coca Cola comes to the top from its competitors.  Consumers can drink the Coke best suited for him or her and addicted to this well established brand.

Recently I was looking around to buy a new mouse to replace my old Logitech G9, a high-end gaming mouse with multiple DPI and weight adjustments.  Although already knowing a lot about eletronics and the most recent technologies, I have came across Annie’s blog https://blogs.ubc.ca/annecheng/2011/02/03/catching-up-with-technology/ , and she gave me insights into making post-purchasing decisions.

She mentions how “If technology is increasing at this rapid pace, does that mean that the products in Razar’s BCG Matrix are moving around it at a similar pace?”  Applying this concept to consumption behaviour, a company can develeop a product in a pace related to the demand in the market.  Logitech, a competitor of Razar, has successfully maximized the firm’s profitability by putting more or less money into marketing a specific product.

Logitech offers different mice for different purposes and consumers can purchase the one that is best suited to his or her needs.  Such as the G-series for gaming purposes and the M-series for daily comfort usage.  However, Logitech does not launch new products under these categories annually but only chooses to focus on a specific series from time to time.  Even though Logitech is well known for its gaming mice, the G-series mice do not always remain as “stars” (high market growth and high relative share), due to a higher demand for comfort usage consumers, there would be a high market growth for this category thus a gaining a higher relative share.  Therefore it makes sense how Logitech markets a different series every year accordingly to the market demand.

A lot of companies nowdays are getting more aware about consumer’s behaviour and why some brands sell better than the others.  When I was surfing on the internet few days ago, I came across a question that I found really interesting:  Why does Toyota have the largest revenue and profit in its industry?

By looking at this advertisement, you can see how Toyota’s marketing campaigne has influenced its consumer’s behaviour.  Besides from being cost-efficient and reliable, Toyota’s eco-friendly retrieval sets have established firmly inside many consumers. The product does not only have need recognition, which means the products satisfy consumers who want to go from their actual, needy state to a different, desired state, but also fullfills consumers’ functional and psychological needs.

As for the Prius, the vechicle has a relative low cost compared to its competitors, but most importantly consumers can associate themselves to the car, thus adding value to the product.   Toyota is also very successful is establishing customer loyalty, therefore some consumer would include no other firms in their evoked set (alternative brands that consumer states before he or she makes a decision).

Back to the question, why doesn Toyota sell better than Porsche.  We can easily conclude that even though both companies have their own customer base and strategies, Toyota have differentiated their products in a way that other companies such as Porsche cannot be defined with, such as hybrid cars.  With different targeted consumers, different strategies, a cheaper and lower performance car can out-sell other expensive car brands such as Porsche and Mercedes-benz.

LV, Gucci, Burberry, Hermes, Dior, Dolce & Gabbana…

What comes to your mind when you see these brands?  Most people, including myself, would instantly relate these brands to ridiculous price tags and the so called “fashion”. If you did as well, then I can safely conclude that Gucci’s and LV’s marketing campaigns have been tremendously successful.  To speak the truth, if I put you in a $1000 USD Louis-Vuitton shirt and a brand-less shirt, you wouldn’t tell the difference before you look at the tag.  However, why do many people still rip open their wallets to pursue these luxuries?

Marketing has been playing a big role.  Marketing by Wikipedia definition is “the process of performing market research, selling products and/or services to customers and promoting them via advertising to further enhance sales”.  Marketing is a crucial tool utilized by every single organization to create a better environment for both the consumers and the producers.  Through research, manufacturers are more aware of consumers’ needs and purchasing behaviours so they can satisfy consumers through production of various goods.  Marketing sounds very nice and comfortable when I put it this way.  If I switch it up, marketing basically just means producers do research to squeeze every last penny from consumers who are willing to purchase.

So is marketing good or bad? It is good when you can tell your friends, “Oh I just bought a Birkin bag for only 10k last week!” Then your friends would most likely be, “OH SO CHEAP? WHAT A NICE BAG!!”  It is bad when you realized you could’ve spend $100 on a bag and most likely find the 9.9k sitting more comfortable in your own wallet.

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