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–
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.
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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.