1. How has Apple maintained
its power base?
Mikey Fendick
May 2012

2. History of Apple
• Steve Jobs and Steve Wozniak created Apple Computers on 1
April 1976
• They both liked electronics and that led to an interest in
computers.
• They both wanted to make personal computers that were really
user friendly
• They developed and launched the Apple Mac in 1984
• The Apple Company is now a market leader in making and
launching new products.
• But it has also been very aggressive in how it protects its market
lead.

3. So how has Apple been able to
maintain its power base?

4. Apple makes great products
• Apple learned to develop:
– great products
– that matched a need
– and were not just new technology.
• Steve Jobs
– had a vision for products.
– thought about people and what they wanted
– developed products to suit people’s lifestyles
"There's an old Wayne Gretzky quote that I love. 'I skate to where the
puck is going to be, not where it has been.’ And we've always tried to
do that at Apple. Since the very, very beginning. And we always will."
—Steve Jobs, Apple CEO, Co-Founder and Chairman (1955-2011)

5. Apple knows what its customers
want
• Apple doesn’t do market research.
• They don’t talk about target markets
• They don’t have focus groups.
Everything Apple designs is based on what Steve
Jobs and his team think is a good product.
There’s a great quote by Henry Ford, right? He said, ‘If I’d have asked
my customers what they wanted, they would have told me ‘A faster
horse.’’’ Steve Jobs

6. Apple designs great products
They
• start with the look and the shape of a
product
• design the look and feel of the products
• pay a lot of attention to detail
• concentrate on the user interface
“In most people’s vocabularies, design means veneer. It’s interior
decorating. It’s the fabric of the curtains or the sofa. But to me,
nothing could be further from the meaning of design. Design is the
fundamental soul of a human-made creation that ends up expressing
itself in successive outer layers of the product or service.” Steve Jobs

7. Apple products are different from
competitors
• They are mostly for content consumption, not for
creating things like documents.
• They don’t have styluses, you input with your finger.
• They don’t come with a user manual, because “you
already know how to use it”.
• They link the software to the hardware, so it is the
only way you can use the product.
‘Using Apple products makes you feel like you are playing with technology
from the future. Microsoft’s tablets may have been decent tools, but
Apple’s iPads are more like cool toys.’
Robin Parrish in Apple Gazette

8. Apple has created a whole new
language linked to their brand.
• They don’t use model numbers like the rest
of electronics market.
• Apple product names are usually quite
simple e.g. iPad, iPod, iPhone
• The letters I and P have become linked to
Apple
• Apple product names have become almost
the generic word for the category

9. Apple’s creates a captive market.
• All Apple products interconnect and
interwork, locking in loyalty.
• Apple keeps introducing new services and
features, including apps, games, iCloud, Siri
• The more Apple continues to integrate
services, the more loyal its users become.
‘Steve Job’s pitch, as he leveraged the success of the iPod, was very
simple: Apple products work, and if you buy more than one, they work
better.’ Philip Elmer-DeWitt in Fortune Magazine

10. Apple inspires strong brand
allegiance
• 84 percent of iPhone users would choose the iPhone as their next mobile device,
followed by 60 percent of Android users and 48 percent of BlackBerry users.
• Many survey-takers cited ease of use, quick navigation, and customization as the top
reasons for not wanting to switch devices, meaning that comfort level is a major factor
for consumers when considering a switch.
• Those who are satisfied with their current set-up will be difficult to tempt to a new
platform and the more services they use, the greater a consumer's loyalty to a brand.
• The greater number of services a customer uses from one company, the more likely they
are to stick with that brand.
• Apple also has a "cool factor," especially among young consumers. The iPhone's user-
friendly interface can be personalised and the trendy marketing appears to be a
winning formula.
Source: Gfk Worldwide Smartphone Research, October 2011

11. Apple creates a strong corporate
image.
• It has strong corporate ethics, such as volunteerism,
support of good causes or involvement in the community
• It has its own visual and verbal vocabulary, expressed in
product design and advertising. Apple products look
similar and their advertising and brand image are the
same.
• It makes a connection with its customers. The company
thinks about its customers and how they live, then designs
products for them.
• Customers feel that when they buy an Apple product, they
are joining a group of people who are like them

12. Apple creates very clever
advertising.
Apple’s advertising communicates
• how different Apple’s philosophy and products are
• how their products are simpler, easier and more user
friendly
• how this is better than the competitors

13. The look and feel of its advertising is
important to Apple, and all the ads have
• simple designs and graphics
• monochrome colour schemes
• imagery the same as the brand and the stores

14. Apple has a different approach to
selling its products
‘More than 50 million customers go to an Apple store every three months, and half
of them who buy something are first-timer purchasers.’ Apple
• Apple wants to ‘delight’ its customers when they come into its stores.
• Apple stores look different with modern designs.
• Apple stores put products on tables rather than shelves, so customers can use them.
• Apple wants the customer to feel important and so has good tech and educational
support.
• Apple sales people are taught not to sell products. They are there to help customers
solve problems. They ‘empathise’ with their customers.
• Apple is constantly updating its stores
• Apple uses technology. The shops don’t have cash tills and the sales people complete
transactions on mobile devices.
• Apple Store staff are recruited for their knowledge of Apple products as well as their
enthusiasm.
All this makes customers think that Apple is different to its
competitors.

15. Apple’s packaging is an important part of its
success.
• Apple’s packaging look is always simple and clean.
• There is no product description or selling words on
the box.
• The only graphics on the package are the Apple logo
and the product name
• The product’s technical data is on the back at the
bottom.
• The accessories in the box are the same.
• There is no owner’s manual in different languages.
“You already know how to use it”.
• The box and the paperwork are good quality

16. Apple spend a lot of money on
product launches
• Apple hypes a new product by releasing just enough information
for rumours to start.
• Apple follows this with a keynote speech where they describe
the product and all its features.
• Apple release information months in advance to build up
anticipation about the product.
• When the product is launched, it is given a lot of advertising and
publicity.
“Once the product comes to market people have been known to fly half way
round the world to snag their devices early. Some simply skip work, college, or
school, to sleep on the pavement outside stores overnight to queue, and
hopefully pick up their devices on launch day. We actually don’t have to queue
outside stores for new toys. We can just give Apple money via its website for
products sight unseen. Some of which aren’t even in manufacture at the time of
ordering.” Steven Northcott of Touch Reviews

17. Apple aggressively protects the
rights to their products.
• They will go to court if they feel a competitor in
any way infringes their patents on hardware and
software that they have developed.
• Apple is in court with a number of cases with
Samsung, and is also suing Motorola.
• Steve Jobs was quoted in his biography as saying
that he was going to "destroy Android, because
it's a stolen product. I'm willing to go thermo-
nuclear war on this."

18. Primary research
Research has been carried out amongst UK
residents to discover if these findings are true of
the UK population
Objective of the research
To use a series of research methods to find out if
the target audience think that Apple’s products’
interface and functionality and their marketing
strategy is better than the competition

19. Methodology Used
1. An AB Survey to show the target audience the Apple iPad
and an Android tablet and to find out which interface
and functionality they prefer.
1. A Surveymonkey online questionnaire to find out what
the target audience’s experience of Apple and its
products and their usage patterns.
1. Face to face interviews to understand what people think
of Apple as a company and their product and marketing
strategies

20. Results of AB Testing Research
Before respondents saw and used the tablets

21. Results of AB Testing Research
After respondents saw and used the tablets

22. AB Testing Research Conclusion
Before the respondents saw the tablets:
• The Apple users were loyal to Apple and wanted more
products because they had a positive experience of the
brand.
• The Android user had made his purchase decision just on
price and had no loyalty to the Android system.
After seeing and using the two tablets:
• The Apple respondents became stronger in liking Apple.
• The Android owner still preferred the Android tablet
because of its size and price.

23. Therefore the target audience think that Apple’s
products user interface and functionality and their
marketing strategy is better than the competition.
• Apple users don’t change their mind after seeing and
using Apple products.
• The Android user thought that Apple’s products
interface and functionality and their marketing
strategy were good. The reasons he preferred
Android (low price, small size) were not part of
Apple’s marketing strategy.

24. Survey Monkey Survey Analysis
• Gender of respondents
Results
More females than males completed the
survey

25. • Age range of respondents
Results
The majority of respondents (Over 66%)
were 40+ years

26. • Number of Apple products owned
Results
The majority of respondents (74%) owned
only one or two Apple products.

27. • Initial Apple product
Results
Respondents first experience of Apple
was quite broad with around 25%
quoting iPod and a similar amount for
iPhone and a Mac computer of some
type.

28. • What is it about Apple products that you
like or dislike and why?
Analysis or reponses
Functionality 11 comments
Design 13 comments
Reputation 1 comment
Other 2 comments
Therefore:
The majority of the respondents, when asked which
aspects of Apple products they liked best felt it was
either the functionality of the products or the design of
the products

29. • Do you think that there are any Apple
products that you feel are "must have
products"?
Analysis of responses
iPhone 15 comments
iMac 3 comments
iPad 2 comments
iPod 1 comment
MacBook Air 1 comment
None 7 comments
Therefore:
The majority of the respondents, when asked which Apple product
was a ‘must have’ felt it was the iPhone. However a significant
number did not think any of the Apple products were ‘must haves’.

30. • Why do you feel these are ‘must have’
products?
Analysis of responses
Features and Functionality 11 comments
Design and style 4 comments
Popularity 3 comments
Availability of apps 1 comment
Operating system 1 comment
Other 2 comments
Therefore:
Of those who felt there was an Apple must have product he
majority of the respondents, felt it was the products functionality
and features. However a significant number liked the style and
design of their nominated product and 3 respondents felt their
product was a must-have because it was popular or friends had one.

31. • Usage of Apple products

32. Results
Respondents who had Apple products used them for a number of different
tasks. The most popular tasks were accessing the internet (87%) and
accessing and sending emails (78%). Apps were very important to users as
well with 52% quoting usage. Nearly half of respondents (48%) used their
Apple product for music.

33. • Price Perceptions

34. Results
Most of the respondents (73%) thought that Apple products were either
too expensive or quite expensive. Only 4% felt that they were good value
for the price.

35. • Can you explain any brand loyalty you may
feel about apple?
Analysis of responses
Previous product/Like Apple products 8 comments
Apple service 4 comments
Durable, quality products, well made 5 comments
Functionality 1 comment
Apple Stores 1 comment
Product Design 1 comment
Range Compatibility 1 comment
Not Loyal 7 comments
Therefore:
The majority of respondents were loyal to Apple. (23/30 comments) The main reason for
loyalty was a good experience with the Apple product that was purchased. Because they
like the product they would be willing to buy again. There was also a wide spread of other
reasons why respondents considered themselves loyal to Apple, with the quality and
durability of the products an the good customer service given by Apple quoted most.

36. Surveymonkey Survey Conclusions
• Respondent’s first experience of Apple was quite broad with around 25% quoting iPod and a
similar amount for iPhone and a Mac computer of some type.
• The majority of the respondents liked either the functionality or the design of the Apple
products.
• The majority of the respondents felt the ‘must have’ product was the iPhone. A significant
number did not think any of the Apple products were ‘must haves’.
• The majority of the respondents who felt there was a ‘must have’ product thought it was the
product’s functionality and features that made it appealing.
• Respondents who had Apple products used them for a number of different tasks. The most
popular tasks were accessing the internetand accessing and sending emails.
• Most of the respondents thought that Apple products were either too expensive or quite
expensive. Only 4% felt that they were good value for the price.
• The majority of respondents were loyal to Apple. The main reason for loyalty was a good
experience with the Apple product that was purchased. There was also a wide spread of
other reasons particularly durability and the good customer service.

37. Apple Research: Face to face
interviews
Purpose
Face to face interviews to understand what people think of Apple as
a company and their product and marketing strategies
Methodology
I did the research by sitting down with them or interviewing over the
phone. Three of the four interviews were carried out in my home
and the fourth was done over the phone. The interviews took about
15 minutes.

38. Results for non purchaser:
All the respondents were over 25 years. Three were male
and one was female. They lived in different parts of the
UK, but the majority lived in the south of England.
Only one respondent did not own an Apple product. His
main reason for not owning one was price. His
perception of Apple was
• Their products are popular
• Their image is clean and stylish
• Their stores appealing and their advertising is
entertaining

39. Results for purchasers:
Three of the respondents owned Apple products. All three owned more
than one.
• The main reasons for purchase were user friendly functionality, ease of
exploring content, friend’s recommendation and liking Apple products. Apple
products were thought to be good quality and easy to use but expensive.
• The most important things about Apple for these respondents were product
style, design and reliability and Apple’s service in stores.
• These respondents felt that Apple’s strengths were in product design and
quality, but their high prices were the main weakness.
• Generally these respondents like the way that Apple markets its products. They
thought the advertising was appealing and that recommendation worked for
them because the products were good. They also felt that Apple customers
were very loyal to Apple. One respondent felt that Apple’s reputation for
products that are very easy to use was not always the case.

40. Apple Research: Face to face interviews
Conclusions
All the respondents were aware of Apple and its products
All the respondents felt that Apple products were
• Good quality
• Good design
• Easy to use
All the respondents felt that Apple’s marketing was
• Clean and stylish imagery
• Entertaining advertising
• Modern stores which are friendly and easy to use.
Three respondents bought Apple products because they were esy to use and
recommended by friends. The respondent who had not bought an Apple
product felt they were too expensive.
These results are the same as those found out in the secondary research.

41. Final Conclusion
Apple has maintained its power base by
• Knowing what the customer wants
• Making good quality products
• Focussing on design and functionality
• Making their products better than the competition
• Creating a whole new language for the brand
• Keeping customers locked in with inter working
• Creating a good corporate image
• Creating a brand image that customers like
• Creating advertising that is entertaining
• Selling their products in a completely new way
• Packing their products to make them feel special
• Creating lots of hype around product launches
• Aggressively protecting their product rights
Apple does this on every product they launch. Consumer research shows that Apple
customers know all of this and like the way that Apple makes and sells products. Even
people who are not Apple customers like it. This is what makes Apple successful.