Tuesday, 26 January 2010

Marketing 101 from Apple


If you’ve been within 100 miles of any business school, you have , no doubt, memorised from cover to cover, all the pages of Marketing Management by Philip Kotler. A doyen of marketing, Kotler is the S.C. Johnson & Son Distinguished Professor of International Marketing at the Kellogg School of Management . His work was the standard text book 30 years ago, and still is.

Many marketing hotshots are educated on his concepts and then blithely spend a lifetime ignoring it. Make a shoddy product, charge the moon for it, pour a fortune down the drain in advertising and then wonder why the product isn’t selling ! The zillions of dollars sloshing around the advertising industry is testament to this “Marketing Myopia”, to borrow a phrase from another seminal piece by Ted Levitt from a few decades ago.

One shining exception to this is Apple. They anticipate (and sometimes even create) consumer needs and meet it brilliantly. To hell with all the rest. Take the case of the iPhone. Absolutely brilliant product. But remember the awful contract with AT&T they forced American consumers into. Remember the small fortune it costs to buy one. Remember the shameful “pajama string” that goes for the cable (really what an abomination that is). Remember even now, you have to wait to get one and not just buy it off any shelf. And yet what happens to sales ? They just announced yesterday that iPhone sales grew by a measly 100% ! And what do they splurge on advertising ? Zilch.

Witness the virtual religious fervour over the event Apple has scheduled for Wednesday. It is hotly rumoured that we are going to see the unveiling of the iSlate or iPad, or whatever its going to be called. They have virtually the whole world drooling in anticipation. Huge secrecy (they have obviously never heard of Market Research), with well planted leaks to titillate. Simply brilliant. They have the whole world standing in a line waiting to see it. No prices for guessing how much they have spent on advertising to achieve such consumer interest.

How do they do it ? Simple. By focusing on getting a product that’s so outstanding that it needs nothing else. The iPod and iPhone together with iTunes and the Apps Store all fall into this category. Just one focus. Get a product that fills a consumer need , with a consumer experience that’s out of this world. Get the product right. Get the product right. Once more. Get the product right. And some more.

Methinks whoever invented the 4Ps of marketing did a disservice. The worthy should have nominated one P with capital letters and 3 small ps besides it. Actually marketing pundits have got this well understood. The trouble is they have got the wrong P in capital letters !

I suppose its only a coincidence that some of Apple’s blockbusters have got one capital P in its name – iPod, iPhone ……

17 comments:

  1. Ramesh, I agree in totality, I think the key distinction is that other companies are busy show casing prototypes, while Apple has the pudding for the tasting.

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  2. athivas26/1/10

    Oh,Apple and Steve Jobs-mind blowing!! I fret to even talk of them...They deserve all that applause!!

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  3. @Sabareesan - Very true. They are special. Lets see if the serving on Wednesday is sweet .

    @athivas - Yes and they are getting plenty of it. As always, this approach is high risk. Wednesday could see applause that will drown everything else. Or .....

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  4. A highly differentiated product which offers value for money can overtake the other Ps easily.

    However, where the product by its nature cannot be differentiated beyond a point, the other Ps also need to work in Tandom. Well thats what is driving the marketing myopia.

    It is very interesting to see where the industry is going, the TRP wars, the price off manias, the perceived value propositions have become bigger than star wars and with many many millions @ stake, its all going bizzarre. i just hope, it delivers the value it is perceived to deliver or as you said the the myopia engulfs it all.

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  5. They have like you rightly said got the Product right - and they are always a good inspiration to other people to copy.

    I am sure they will get their product right again this time and the next time... (I am a big apple fan as well)...

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  6. So true! In fact, during the Holiday Season, the Entire Mall had door-crashing deals going on, and not a single discount in Apple Store. It was almost audacious. But it had its usual buzz.

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  7. Waiting for the so called 'tablet' tomorrow. But anyway these guys can spring surprises. It may not even be a tablet. :-)

    Understanding the way a customer could use their product, some forward thinking and simple and neat user interfaces for the product, not flooding it all over the place (an artificial scarcity) define their USP. And tight secrecy around a new product helps to maintain that aura. No wonder their products have a premium and they sell too.

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  8. @sandhya - Sure, different industries have differing opportunities to create something truly new, but that's no excuse for shortchanging product and pouring money into trivia. Mobile phones were also being commoditised until Apple brought iPhone. Its the lzy marketeer who thinks he cannot get a true product advantage.

    @mahesh - I am not a great apple fan, but I cannot help but marvel at their marketing chutzpah

    @Deepa - Yes, and they posted their best quarter results ever with every number hitting the roof.

    @RamMmm - Yes it may not even be a tablet and they may pull a completelty different rabbit out of the hat. Unlikely though, but you never know ...

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  9. !! apple products are too hifi for me!! still learning how to use that ipod library!!!!gizmos..rarely attract me..so me the skip. But the way u present it..awesome :) getting the post right..each time..everytime ;D

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  10. Get the product right! Write the post right , and write the post right, one more time write the post right for the readers and u dont need traffic modulation :) ur readership is growing these days and its no luck either :)

    I am ipod fan and will be , exception that my love isnt one and hates all this big brands- calls monopoly rule.

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  11. kiwibloke27/1/10

    Build a better mousetrap and the world will beat a track to your place is so very true of Apple. Once you have used Mac, you just would love to throw anything else out of the window! While the iPods/iPhones have been a rage, I still can't figure out why the Mac never became the preferred option despite product superiority. Does it have to do with lobbying - can't say, do'nt know!

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  12. @gils - You're awesome. There's nobody who comments so well as you.

    @Sri - very good advice sri. Except that if I really tried to get the post exactly write, maybe I can write only one post a year !! Just kidding !!

    Your love has to be "coverted" into a business lover. Would love to have her as a reader of my blog !!!

    @kiwi - I think if Apple had followed the same concept of Apps store when Mac had been launched, Microsoft would have been toast. Remember they tried to go proprietary and wouldn't let others develop on their OS. That was the fatal mistake. Once MS caught on, its impossible to dislodge because of the network effect. But see their position with iPhone. Google won't be able to catch up with them, I believe. Those days Steve Jobs was younger and brasher. Now he's older and more savvy !

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  13. Not many noticed that Apple has posted strong sales from their retail stores as well.When most of the retailers are struggling to post 1% or 2% growth, it is good to see that non-retail company is doing a good job. Apart from great product, it is their customer service, it is their managing customer expectations and managing whole tribe which is doing a trick for them. Apple does not believe in market research but they do know how to engage your best customers. Nice post as usual.

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  14. Vishal (VA)27/1/10

    What apple has done is a testament to the fact that good quality product remains a big-time hit with the consumers. On a second thought, I wonder that by offering a high quality product only a company would create spellbinding impact on its consumers. I think that Apple has perfectly tapped characteristics of the generation next and still continues to do so... may be a some sort of fifth P in form of "Prediction"

    P.S. - Please pardon my ignorance on marketing concepts, I had to google to get what 4P means.

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  15. @Adesh - Aha, I was waiting for the comment from the quintessential Apple fan. Yes they did a great sales quarter in a brutal environment. However the actual product that was unveiled was a little underwhelming, don't you think. Of course, it was humanly impossible to match all that hype ...

    @VA - Yes a superb product is the key. Nice idea of the fifth P.

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  16. Think Apple and you think of revolutionary products- coulourful Macs when there used to be bland PCs, stark white i-Macs and Macbooks, iPods, iPhones and now iPad. And not to forget the man behind the show- Steve Jobs. A great leader. A visionary. An institution in himself. They are not wrong when they say he has the midas touch.
    Very well written post Ramesh

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  17. @Zoobie - Hey thanks for your nice comment. I know the Sidhu household had one die hard Apple Fan. But you too !! Just kidding - yes its a great company.

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