Product Branding

Brands - What makes them valuable?

In current global economy, with changing market dynamics and heightened competition, the need for highly valued brand has become increasingly important. Brand creates a distinct identity and differentiates a product from the competition. The stronger the brand, the more it encourages customer loyalty, attracts new customers, and boosts customer lifetime value (CLV), the total amount a customer spends on a brand.

The latest results from research agency Millward Brown's 2014¹ 100 Top BrandZ report says Google out-innovated Apple with its various "Google X" initiatives like Project Loon and contacts that measure glucose levels for diabetics. This year's Top BrandZ report was first spotted by Business Insider. Apple, meanwhile, was criticized by some for failing to keep breaking new ground, settling instead for incremental upgrades to its breakthrough products like the iPhone and iPad.

The result, Apple’s brand value dipped by 20% 10 $147.88 billion dollars, whereas Google’s brand value got a jumped by 40% to $158.84 billion dollars.

 

Source: Millward Brown

 

A study by Interbrand in association with JP Morgan (see Table 2.1) concluded that on average brands account for more than one-third of shareholder value.

Though, this is against the Generally Accepted Accounting Principles (GAAP) rules, I believe that brands belongs in the balance sheet since brand provide enhanced stream of continuous future cash flows.

References

1 http://appleinsider.com/articles/14/05/20/google-usurps-apple-as-worlds-most-valuable-brand-name-report-says

2 http://www.cnn.com/2014/05/21/tech/innovation/google-apple-brand-value/index.html

 

"If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trade marks, and I would fare better than you." 
— John Stuart, Chairman of Quaker (ca. 1900)

 

 

Week 8 - Pricing/Channel and IMC

Apple Inc. is the top in the list of 100 top companies with the highest brand equity followed by google and IBM. Surely this is because Apple has a strong and effective marketing mix strategy that entails profiting from brand loyalty.

      4 P’s of Apple
      Product

Apple’s product include portable computers, iPhone, iTunes and other storage devices, servers and accessories. Apple’s strategy is to offer small number of products that focus on high end quality and service and entails unique product that is attractive to customers

Price

Apple is a premium brand that does not compete on price. Apple uses premium pricing strategy by offering a high-quality products with great and innovative features and amazing user experience. I believe that Apple’s high price is often perceived as indication of its high quality product offering, and reducing the price may negatively impact its brand image.

Place

Vast majority of the Apple’s suppliers are in Asia with China and Japan as major suppliers. Apple has retail stores located worldwide. Apple service providers are certified technician, who complete apple training and assessment, and offers repair services and exclusive access to genuine Apple parts. Customer can either buy online or shop with a specialist or make purchase from his iPhone.

Promotion

Apple uses advertising heavily in television network, technology magazines and internet. Apple's online store offers free shipping and school offers. The other way Apple promotes its product and differentiates from others is by personal selling through its Apple Stores. Apple conducts free workshops that includes one on one training and free youth programs like Apple Camp. Apple also provides special offers in refurbished Macintosh computers, and iPods. Apple's emphasis is primarily on customer service that allows them to gain loyalty from new customers.

Target audience for Apple

Target audience for Apple is widely distributed. Apple uses a unique form of marketing strategy called “psychographic segmentation” to appeal to all consumers no matter the age, race, income level, and/or demographic.  For example, teenagers use iPods to socialize with friends and playing games. College and university students also use iPads and MacBook, for taking notes, watching videos and reading books online. Business professionals uses MacBook and iPhone for productivity and efficiency. Apple products are even useful to young children and kids for learning. Although, I believe that Apple typically appeals to middle and high class who do not mind spending extra cash for quality.

Communications with the target audience

Apple uses advertising, public relations, sales promotion, and personal selling as a part of their promotional and communication strategy. Apple’s ads have a lot of white space in them. It’s designed to create a sense of openness.  It shifts the focus onto the product that they are sharing and on to their words. There are no distractions and it makes it easy to connect with their key message. Apple promotes its product and differentiates from others is by personal selling through its Apple Stores. Trained sales associates provide effective customer support and promote brand loyalty.

References

http://appleinccasestudy.weebly.com/apples-target-market.html

http://www.marketwatch.com/story/apple-attacks-two-key-markets-2013-09-10

http://wvillefranche.blogspot.com/2011/11/segmenting-and-targeting-markets.html