Apple consumer behaviour case study

Case 4-3

Remember the Apple

Thanks to a steady stream of innovative products combining user-friendly technology and elegant design,

Apple’s [http://bi.galegroup.com/essentials/company/300559?u=tlearn_trl] bite of the consumer

electronics market has been getting a little larger year by year. Once it hit the iPod sales jackpot, however,

Apple’s brand took a major leap forward in public awareness and cachet—a leap that has also boosted

sales of Apple’s other products.

Apple has a history of zigging when the rest of the industry is zagging. The Apple brand is fun,

unique, and memorable because it is such a departure from brands that sound serious and corporate. The

company’s original name, Apple Computer (changed to Apple several years ago), helped reinforce the

link between the seemingly whimsical “apple” and the concept of computers. Apple’s Macintosh

computer has always stood out because it looks different from other personal computers and relies on

software that even novices can learn. Like every Apple product, the Mac and its packaging sport the

company logo, an apple with one bite taken out of it.

Then came the iPod. Apple didn’t invent digital music devices, but it did take them to a new level of

style and convenience with the iPod, which debuted in 2001. Backed by music-driven advertising, the

player with the white ear buds immediately became the product of choice for many consumers. Newer

models such as the iPod Nano and the iPod Touch have continued the tradition of adding new features

and updating the styling to make the product even more irresistible to current customers and to new

buyers alike. Today Apple sells $8 billion worth of iPods every year and earns millions from its iTunes

online store, where customers can buy songs, movies, TV shows, and other downloadable entertainment

products.

And then came the iPhone, a new combination of mobile phone, iPod, and wireless Internet/e-mail

appliance with a large, colorful touch screen for one-finger operation and accessories like the iPod’s well-

http://bi.galegroup.com/essentials/company/300559?u=tlearn_trl
known white ear buds. Prompted by extensive publicity and introductory ads touting the sleek phone’s

smart features and trendy look, buyers lined up for days to get the first iPhones in 2007. Within months,

Apple began a second round of advertising to encourage non-iPhone customers to switch from their

current phones. Rather than focusing exclusively on the product, this campaign showcased customers

talking about how they use their iPhones.

The iPhone was an instant success: Apple sold 4 million units in the product’s first six months and,

with a price cut, sales have continued to be strong. But something else happened during those six months

that Apple had not anticipated. With so many shoppers browsing Apple stores in search of iPhones and

iPods, the company began to sell many more Macintosh computers. Although Apple’s share of the

worldwide personal computer market remains below 5 percent, it has room to grow as the Mac

momentum builds.

Since then, Apple has expanded Macintosh distribution and stepped up advertising in all media to

make the most of the high awareness and popularity of its brand. One campaign, titled simply “Get a

Mac,” targeted consumers who use non-Mac computers by presenting humorous commercials about the

features that make the Mac easier to use than competing products. This campaign also ran in the United

Kingdom and Japan, with local actors and content customized for each culture. As with every Apple ad,

these Mac ads closed with a shot of the apple logo.

Both sales revenue and profits are rising as Apple bites more deeply into the global market for

personal computers, mobile phones, digital music players, and other electronics. The key to building

demand across product categories is to help consumers remember the Apple. i

Case Questions

1. Use the concepts of trace strength and spreading of activation to explain why the Apple brand is

memorable. What does Apple do to strengthen trace strength, and why is doing this important for the

company‘s long-term success?

2. How has the iPod’s prototypicality affected the Apple brand?

3. Why would Apple change to new advertising right after the introduction of the iPhone? Explain,

using your knowledge of memory and retrieval.

i Dan Moren, “Apple’s Ad Game,” MacWorld, February 2008, pp. 32+; Mike Elgan, “Elgan: A

New iPhone This Summer?” ComputerWorld, January 25, 2008, www.computerworld.com; Saul

Hensell, “Can the Touch Revive Apple’s iPod Sales?” New York Times, January 22, 2008,

www.nytimes.com; Troy Wolverton, “Meet Apple’s New Star, the Mac Computer,” San Jose

Mercury News, October 26, 2007, www.mercurynews.com; Anastasia Goodstein, “Teen

Marketing: Apple’s the Master,” BusinessWeek Online, August 17, 2007,