Sunday, March 13, 2011
WHAT MARKETERS CAN LEARN FROM THE iPAD 2
The iPad 2 went on sale Friday, 11 March. As expected, lines of eager customers formed around Apple stores and reports of out of stocks, and backorders, fed the mania. It seems that Apple Corporation can’t make enough of the iPad 2 to keep-up with the initial surge in demand.
While Steve Jobs calls the iPad magical, it is categorized as a tablet. Apple created the tablet market with their introduction of the iPad. It was first to market, selling 14.8 million devices globally in 2010, which generated about $9.5-billion in revenue. By the end of 2010 there were about 30 competitors in the tablet market.
Once a market is created the imitators rush in, fueling further growth. It’s the nature of markets, and competition. Approximately, 102 tablets, from 64 companies, are announced for 2011. Global market sales for 2011 are forecasted to be about $45-billion. Apple’s iPad share is forecasted to be 78% of the global market for the year. That’s quite impressive, wouldn’t you agree?
Predicted iPad success does not appear to be hype. There’s just cause to be optimistic regarding Apple Corporation’s continued category dominance. Consider this:
- The iPad 2 is faster than its predecessor
- It’s thinner at 8.8-millimeters as contrasted to 13.4-millimeters for the original
- It’s lighter at 1.3-lbs as opposed to 1.5-lbs
- Improvements in hardware are expected to make it a more attractive platform for software developers
- Comes with new software, accessories and the option to buy accessories including a soft multi-functional cover
- It has increased graphics circuitry that could inspire game developers
- The new iPad 2 is being introduced at the same price as the original
- The price of the original iPad has been reduced
What can all marketers learn from Apple Corporation’s iPad, and the introduction of the iPad 2?
BOATS & HELICOPTERS:
1) Be first “right.” We know from history that the first mover has the advantage. It’s not about just being first, but being first “right.” If the first shot is right, not perfect, but right, then the probability is high to secure the leadership share of the market that develops. (The original iPad was not perfect. If it were then there would not have been a need, so soon, for an iPad 2. For one, the original iPad did not have a camera.) First follower is likely to achieve about a 50% of the share of the leader. Each successive introduction yields reduced market share positions.
2) Be different, but keep it relevant. Is the iPad another personal computer? Yes, and no. Certainly, it’s computerized. It works like a computer. But then, so do our smart phones. The iPad provides users with more mobility, more flexibility than a personal computer. It’s more than an e-reader. It’s more than a mobile movie theatre. What is it? It’s a business tool, among other things. In fact, its uses are still being discovered by its growing legion of users. New applications are introduced every day to expand its usefulness, as defined by customers.
3) Continue to innovate. We can never rest on our laurels. Success tends to breed inertia. Inertia makes us vulnerable to aggressive competitors. These days every competitor is aggressive. If they’re not aggressive they will not survive. Yesterday’s winning performance won’t qualify us to compete in today’s market. We need to innovate to stay ahead of the pack. We need to continue to delight our customers to earn their respect, and loyalty. As Steve Jobs stated in a 2005 commencement address at Stamford University, “stay hungry and stay foolish.” We do not expect that the iPad 2 will be the last word from Apple.
4) Create real value. It seems that so many companies raise prices with every improvement, or new feature, they introduce. In fact, many companies raise prices annually, regardless of whether the product has been improved, or not. It just the way business has been done to deliver growth, and achieve the forecasted bottom line. But the marketplace is changing, very rapidly. There’s a call by customers in so many categories for GAQ (Generally Accepted Quality). Customers have become more frugal, more circumspect. Why pay for what we don’t really need? What we are not going to use? Why pay more for a product that we perceive as no different than competitors? While this practice of taking price hikes may have worked for marketers in the past, the future prospect is much less certain. Premium pricing and/or unearned price increases enable lower price competitors to enter the market, and suck sales and market share. It gives customers cause to look around and try something different, something, well, less costly.
5) Animate your marketing. Apple Corporation does an outstanding job of animating their marketing. By “animate” we mean compelling customers with BIG ideas that dramatize the appeal, or promise, of the offering. Beyond the product itself, which is undoubtedly compelling for many customers, Apple employs leadership advertising, where the product and what you can do with it is clearly featured. Additionally, product and packaging design create a highly favorable appeal that evokes desire to own it. Highlight the multifunctional cover and the iPad 2 is difficult to ignore. But it is not just what Apple is doing now. It is what they do preceding and following the sales launch too. A little more than a week before launch, Steve Jobs introduced the iPad 2 at a major consumer electronics show, causing quite a stir and generating significant buzz. Oh, and let’s not forget what is going on at retail, how the product is displayed and demonstrated, and how employees applaud for and cheer each customer who purchases an iPad 2.
6) Prepare for competitors who attack from another category, or redefine your category. In other words, watch out for the Marketects. Steve Jobs is the “Marketect” of our generation. He creates entirely new categories or redefines them, changing customers’ perception of the marketplace to favor his offerings. He changed animated films with Pixar. Ushered in the Personal Computer industry. Disrupted and redefined the music industry, and how we consume music. Redefined the retail experience with Apple retail stores. Created disequilibrium to disrupt the phone industry with the iPhone. And, more recently with the iPad, is challenging the personal computer industry. We cannot expect that we will have “like” competitors. If we do, someone is going to come along and stand your category, and business, on its head. The real disruptions come from competitors who think and act different. Be a Marketect and stand your competitors on their heads!
7) Get beyond hard selling products to marketing and extending brands. Apple Corporation understands brands. They don’t sell products. They market brands. We’re all aware of their brands. There are the Apple retail stores, iPhones, iPads, iMusic, Mac Book Pro, Garage Band, iMovie, etc. But a brand is more than a logo, or color. It’s about an experience. Apple delivers an unforgettable experience. Additionally, the same employees that applaud customers for purchasing an iPad 2 work to get customers up and running on the new device before they leave the showroom. Plus there are tens of thousands of Apps that the customer can choose to customize the iPad 2. If the customer has a problem it can be taken to the Genius Bar where an Apple Genius will resolve the issue and make things right on the spot. It all makes for quite a positive experience.
We hope to get our own iPads soon to learn what we can do with them to enrich our personal and professional lives. If you already have one, perhaps, you will drop us a note and let us know how you use and feel about it.
Richard Czerniawski and Mike Maloney
© 2003 Brand Development Network (BDN) International. All rights reserved.