Our Apple case study starts back in 1996, when the company bordered on bankruptcy. It was just another computer company without any real point of difference. By then, Steve Jobs had been gone for over a decade. Years of overlooked opportunities, flip-flop strategies, and a mind-boggling disregard for market realities caught up with the company. In addition, the Windows 95 launch by Microsoft had severely eroded Mac’s technology edge. Apple was rapidly becoming a minor player in the computer business with shrinking market shares, price cuts, and declining profits. At the time, the Apple brand strategy looked like any other technology brand.
The return of Steve Jobs
Apple looked like it would not survive, as it was a poorly run organization through the early 1990s. Executives made terrible decisions with inconsistent strategies and, most importantly, there was no brand idea for what they should be. After Steve Jobs came back in 1997, he shifted the focus to rebuilding around the brand idea of “Apple makes technology so simple that everyone can be part of the future.” Finally, Steve Jobs came in with a consumer-first approach in a market dominated by an obsession with gadgets, bits, and bytes.
At the heart of our Apple case study is the use of the brand idea of simplicity, and the impact it has on the Apple brand strategy.
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How the five elements of smart strategic thinking sets up Apple's famous turnaround plan:
1. Set a vision of what you want
To start, their vision is to make it easy to get everyone to be part of technology in the future. The main issue was how to create brand fans then mobilize them to spread the word to the masses.
2. Invest resources in a strategic program
Next, Apple invested and aligned everything behind a brand idea defined as “Apple makes technology so simple; everyone can be part of the future.” They use this brand idea at every touchpoint, including the brand positioning, communication, innovation, purchase moment, and experience.
3. Focus on an identified opportunity
For decades, Apple consistently focused on empathizing with—and taking advantage of—the consumer’s frustration with technology. In the 1980s, Apple attacked IBM personal computers as being too complicated. In 2005, they used “I’m a Mac, and I’m a PC” advertising to attack Microsoft. Each time, Apple used its “consumer-first” mentality to transform leading-edge technology into accessible consumer technology.
4. Leverage a breakthrough market impact
Above all, the Apple brand strategy takes a fast-follower stance that takes current technology and makes it simple to use. Every platform, including desktops, laptops, phones, watches, tablets, and music streaming delivers the brand idea of simplicity. They deploy high profile launch hype to use vocal Apple advocates to spread the word to their friends.
5. Performance result that pays back
Most importantly, Apple created a consumer bond with their brand fans to enter new categories. On top of that, it is now the most beloved consumer-driven brand, with premium prices, stronger market share, sales, and profits. The Apple brand strategy used brand love to help drive a remarkable 40x revenue growth over 10 years, skyrocketing from $5.7 billion in 2005 to $240 billion in 2015. This rapid growth helps cover the high costs of advertising and R&D, giving them very healthy operating margins, up over 35%. All this strategic effort has increased their market capitalization approaches $1 trillion.
To illustrate, click to zoom in on the Apple brand strategy.
The Apple brand plan
With the Apple case study, our strategic thinking model sets up the core elements the Apple brand strategy:
Vision: Apple wants everyone in the world to be part of the future.
Goals: Continue aggressive sales growth, geographic expansion into China, launch a major new consumer-friendly technology each year.
Key issues: 1) How do we convey Mac’s superior user experience versus the traditional PC? 2) How do we enter the music industry and increase the availability of online music to support our iPod?
Strategies: 1) Apple will launch a full communications assault to challenge the PC/Microsoft Windows dominant position by finding flaws in the PC to contrast with Mac computers’ simplicity to steal significant market share by enticing frustrated PC consumers to buy a Mac. 2) Apple will launch a full assault against the entire music industry with a disruptive innovator stance to show how iTunes provides higher quality digital music on your iPod much cheaper, faster and smarter than CDs to gain an entry point into the music industry.
Tactics: TV advertising to highlight new features and challenge competitors. Launch innovation each year including phones, tablets, online music, watches and personal computers. Laugh specific products for China. Increase retail space around the world. Build out the e-commerce program.
To illustrate, click to zoom in to see the Apple brand strategy.
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How Apple builds everything behind the “simplicity” brand idea
Using our brand positioning process, our Apple Case study narrows in on the brand’s potential benefit clusters of the functional and emotional benefits. Below, we show how Apple’s three functional benefit zones includes simplifies life, sensory appeal and the experience. And, their three emotional benefit zones includes optimism, feeling free and getting noticed.
To illustrate, click to zoom in to see the Apple’s consumer benefits.
Once you have everything settled, the overall brand positioning statement focuses on simplifies technology to help you feel smarter, so you can do more with every device.
To illustrate, click to zoom in to see the Apple brand positioning statement.
Building Apple's brand idea
The Apple case study uses the brand idea for Apple is “making technology so simple that everyone can be part of the future.” Most importantly, Steve Jobs insisted they take a consumer-first mentality, as they transform leading technology advancements into “consumer-accessible” technology, helping fuel the perception among the mass audience that Apple is an innovative leader.
Apple has done a great job in taking that simplicity brand idea and stretching it across their brand story through advertising, and their innovation plan (as they have entered many new technology categories).
They have also used their brand idea to guide how they manage the purchase moment (to make sure their retail outlets are easy for consumers), and how they create happy experiences for consumers. And, when they don’t nail the ideal consumer experience, they go out of their way to help out. They also have the genius bar and on-site lessons, which help increase the knowledge of consumers.
The other beauty of having a crystal clear brand idea, is that everything that goes against that brand idea almost acts like an obvious virus. Looking below, here are four examples of where Apple is missing out on “simplicity” which puts the brand idea at risk. Above all, these should trigger action plans to build into your brand plan. In pointing out these flaws within our Apple case study, I am yet to see Apple take action.
Apple’s advertising has delivered “simplicity” since the 1970s
Apple’s advertising has been relatively consistent for over 40 years and incredibly connected with consumers. The early print ads of the 1970s, as Steve Jobs was launching Apple, talked about how we designed the computer, so you don’t have to worry about the details.
The “1984” TV ads for the Mackintosh launch spoke about the freedom from machines. Although the message was a little ahead of its time, it fit with simplicity. Above all, the brilliance of the side-by-side “I’m a Mac and I’m a PC” TV ads epitomized the brand idea by making the PC seem overly complicated and frustrating while setting up the Mac as the simple alternative. You could build an Apple case study on the advertising alone.
Take a look at some of "I'm a Mac" TV ads. Enjoy!
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How Apple's brand love leads to increased power
As we continue our Apple case study, let’s take a look at the power and profit Apple generates through brand love.
As Apple has achieved an extremely tight bond with a loyal mass of followers, they use the tight consumer bond to generate brand power that they quietly wield in the market. Apple’s retail network of stores generates twice the sales per square foot of any retailer in the world, yet it is a very soft-sell environment.
I was recently on a double-decker bus tour of New York City, and when the bus went past the 5th Avenue Apple flagship store, half the bus stood up to take a photo. And, they have such a power over the supplier network with an array of engineers following extremely tight procedures.
Also, they have a power over the media, generating over $2 billion worth of free media each year. Moreover, Apple fans want to work at Apple, many times giving up lucrative jobs just to be part of the brand.
How Apple's brand power leads to increased profit
The Apple brand strategy extrapolates the power they generate into profit, with their incredible financial performance over the last 15 years. And, they generate significant price premiums, relatively lower cost of goods and moderate marketing spend ratios. Most importantly, this holds their margins at healthy levels for a technology firm.
Furthermore, Apple has entered many new categories over the past 15 years, each time their army of loyal fans has followed, moving into laptops, phones, tablets and the music business. In each segment, they continue to gain share to drive volumes.
Finally, the higher margins and higher volumes make for a beautiful profit statement.
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Even though Apple gives the perception of an extremely friendly brand who is on the side of the consumer, they are now a huge mass market corporate brand, with a market capitalization of $500-600 billion, which 2-3 times the value of companies like Coke, Procter & Gamble, Pfizer, and IBM.
So, if you invested a mere $10,000 in 2005, you would have $240,000 a decade later. The Apple case study is indeed glorious.
Apple turns their brand love into higher power and profits
What you can learn from the best Apple Advertising of all time
Apple advertising has delivered “simplicity” since the 1970s. As you review the Apple brand strategy, we can show how their advertising has been relatively consistent for over 40 years and incredibly connected with consumers. We said you could build an Apple case study on the advertising alone. So we did!