Saturday, October 31, 2009
Friday, October 30, 2009
Monday, October 26, 2009
Henry Ford once said, "Failure is simply the opportunity to begin again; this time more intelligently."
Jobs and Apple had learned some hard lessons with products like the Apple III and the Lisa. During Job's absence from Apple, he'd certainly matured and took into account the things he should have done differently. Now, he had a chance to begin again more intelligently.
Apple had hit the market with a shocking new device which dominated the electronics headlines…. but they had more. They just needed to wait a little longer before they rolled out the next secret weapon. The Bondi Blue iMac had more than enough market sizzle to generate attention for the remainder of the year. New fruit colors came out in January 1999 which spawned a new look in everything from clock radios to electric grills. Apple was still getting front-page coverage and still changing markets beyond the computer.
Then, in late 1999 (October 2, 1999) it was time to hit the market again with a refreshed iMac. This time, it needed more than new colors to regain press headlines. This was a true second generation iMac and one designed to attract the traditional Apple user, not just the PC neophyte. Apple’s mainstay had been the professional graphic artist, photographer, and videographer.
The new iMac followed step two in “The Apple Way” perfectly: “find that one thing you do better and make that one thing matter.” Apple was going in for the kill and the weapon of choice was FireWire.
With FireWire, Apple made it easier to download video from a professional or prosumer (low-end professional, high-end consumer) camcorder into a computer. With iMovie shipping on the computers, it was possible for consumers to edit home movies with title slides, music, transitions between scenes, voice over and other professional touches. With Final Cut and a high-end Mac, professionals were creating digital movies much more easily than in the past.
CNN told the 1394 Trade Association that it was saving a million dollars a year by going digital. In the past, CNN had to ship cases of equipment to locations where news was unfolding. Huge cameras and video editing equipment were required to capture and process the analog video. With the advent of digital and the addition of FireWire to professional cameras and high-end notebook computers, all the equipment needed to record and edit a story was contained in the carry-on bags of the camera crew.
Now Apple had a story that everyone was interested in hearing. No longer did they need to rely on paid advertising to get their message in front of the consumer. In what became the most effective use of PR in the history of electronics, Apple started feeding their story to media outlets and the media outlets were eager to publish it. Time Magazine, USA Today, Oprah and many others became the marketing arm of Apple. This started in late 1999 and continues to this day. That is shock and awe as we have never seen it.
James Snider is the Business Development Director for Accelerant Marketing Alliance, LLC == Marketing, Communications and Design
Corporate Marketing Department ... one hour at a time.
Tuesday, October 20, 2009
In 1998, Apple had to overcome a huge barrier. As stated earlier, the people "in the know" were counting Apple to be as good as dead. It was risky to buy an Apple. Apple might not be around in a year or two. Apple was not going to succeed in selling to the computer savvy buyer. Apple had to target a computer buyer who did not know that Apple was a risky purchase. Apple had to go to the first time computer buyer; the home computer buyer. Not since the early days of Apple had they targeted the first time home computer buyer. This was a bold step backwards for a company that prided itself in being better than everyone else.
To reach this new market, Apple had to identify the reason why a person would finally breakdown and buy a computer? The answer was, "To get on the Internet." The "information super highway," as it was sometimes called, was getting a lot of attention and people were motivated to get a computer simply so they could get on the Internet.
An average CEO would have played to "not lose" and would have developed another beige box. However, that is what got Apple into trouble in the inter-Jobs period of Sculley, Spindler, and Amelio; playing to "not lose". That was not Jobs' style because that was not going to generate any sizzle. Sizzle is Jobs' most effective weapon. He had to leap frog the competition. Small steps were not going to be adequate to save Apple.
For most companies, this would have been stellar success, far beyond expectations, but for Steve Jobs, this was just the beginning. The first step in a much larger plan.
With the release of the iMac, Apple revolutionized the PC industry with a new look and attitude. However, the iMac also delivered a second game changer. They removed all peripheral ports except for USB. No other computer maker dared to be that bold. However, Apple was targeting the first time computer buyer who had no peripherals. USB was the easiest way to connect peripherals.
Apple accomplished in one product release what Intel could not. Apple started the USB revolution. After three years of effort and the vast worldwide resources of Intel, USB was an unused port on 90% of the computers on store shelves. There were no peripherals to connect to the USB port. Intel makes chips for computers. They have total influence over PC makers. They have no influence over peripheral makers. USB was a flop and Intel was about to pull the plug on it.
Apple works closely with a limited number of peripheral makers. They make computers....the thing that drives the sales of peripherals. Apple influences their peripheral makers. Now there were USB peripherals entering the market and they were selling well. More peripherals followed. USB was saved.
But what about the people who already owned peripherals? There were virtually no USB peripherals in the market until Apple launched the Bondi Blue iMac. This new Apple computer was going to place a hardship on current Apple users as they would have to replace all their peripherals with ones that had USB ports on them. As it turned out, Apple loyalist were willing to accept a lot of inconvenience in order to move up to the next cool thing coming out of One Infinite Loop. Apple's bold move even attracted them.
The Bondi Blue iMac was only the first step in a series that would turn the world upside down. The next step would come in a matter of months and it involved FireWire.
Wednesday, October 14, 2009
The Dell notebook I was replacing had been an expensive, high end notebook in its day. It came in a brown corrugated cardboard box with “Dell" printed on the outside in blue ink. The packing materials were functional and gave the impression that "efficiency" was the chief criteria, not delighting the customer. The product was a very good product. The presentation was not.
If you are in the market of selling inexpensive products to the cost conscious, then surprising the customer with a positive retail experience,unparalleled free advice, premium packing, eye popping product design, etc. will not be significant. But staying in the premium market, and doing it well, is what made it so Apple made money when other computer makers could not. Not to mention the fact that Apple has more cash on hand ($76 billion) than the Federal government ($74 billion). That is shocking to consider.
Saturday, October 10, 2009
Component 4 is, once again, an area where Apple is second to none.
Component 4) Make your message memorable.
I already mentioned the iMac "Three steps to the Internet" slogan. For the iPod it was “1,000 songs in your pocket”. "The computer for the rest of us" was an effective slogan for the amazing 1984 introduction of the Macintosh.
But Apple did more than invite. They enticed people to join the Apple counter culture. For a company that once flew a pirate flag over their corporate headquarters in recognition of Steve Jobs' famous question, "Why join the Navy if you can be a pirate?" there was better gold than pirate gold to be had. That gold came from going mainstream. Apple's ability to slip quietly into the mainstream without losing the excitement of being part of the counter culture is nothing short of astonishing. I doubt it could have happened in other generations, but Mr. Jobs was part of the counter culture generation that went corporate and he was able to make that work for Apple.
More on that in a future blog.
An excellent article on how the "Think Different." ad campaigned turned around Apple: http://lowendmac.com/orchard/07/apple-think-different.html
Component number 3 of Apple marketing is fairly unique to Apple.
Component 3) Empower early adopters to help you get the word out.
Apple maintains that the early adopters want to promote you, so you should make your product stand out. Make your product look distinctive. A notable example is the Apple notebook computer. Apple did not launch a notebook in a plain plastic case. They introduced a notebook with a glossy white, black or aluminum case with a glowing Apple logo on the lid. They must have that glowing logo trademarked because it is clear from a great distance that a person is using an Apple notebook. No other company does that. Dell has the Dell Button on their notebooks but that is not nearly as distinctive. Nothing looks like an Apple notebook or Apple desktop.
Additionally, Apple includes several Apple logo stickers with each Apple product purchased. You see those on rear windows of automobiles. I have heard of several instances where people who use Macs at home have covered over the Dell logo on their work notebook with the Apple logo sticker.
Related to this concept is the “halo effect” where the huge success of the iPod (and the iPhone) made Apple more successful in other endeavors. For example, once the iPod became a household name, iMac sales increased. A friend of mine told me recently that 90% of premium home computer sales are now Macs. That is great news, but the real plum is the business user. We will discuss that in a few blogs.
James Snider is the Business Development Director for Accelerant Marketing Alliance, LLC == Marketing, Communication and Design
Corporate Marketing Department ... one step at a time
Component number one in the Apple approach to market success was "Do not sell the product, sell what the product does." That is a basic marketing concept that too many marketers lose sight of.
Component number two goes against traditional marketing as taught in universities and practiced in corporations.
Number 2) Never be first to market.
Most of us assume that it is best to be first to market with a brand new "break through" product, but anyone who has been in business for long is familiar with the dangers of being a little too early to market. I have seen dozens of start ups with excellent products fail because the market took 2 years too long to develop. It is very risky to be first to market.
The Apple 1 was not the first computer in the market. The Altair 8800 is widely acknowledged to have started the personal computer movement, but they were purchased by Pertec Computers in 1977 and the Altair name faded into history. There were other computers in the market before Apple entered, including a portable computer from IBM (5100).
The "Apple Way" involves entering a good market with a better product. It is difficult to get the consumer to understand a whole new product category. MP3 players, for example, had a difficult time displacing the portable CD player until Apple entered the market in October 2001 with the first iPod. The Diamond Multimedia "Rio" and the Compaq "Personal Jukebox" are just two examples of early MP3 players that were not market successes.
Rather than defining a new category, Apple would prefer to “occupy self space that already exists in the prospect’s mind”.
The thing that makes Apple so successful is their ability to find that one thing they do better and make that one thing important to people. This is a brilliant marketing approach. When Apple launched the new iMac, they were not differentiating their product as being "the best". They were not focused on being a lot better, just better somewhere and making that important. The iMac was not a superior computer. It was easy to use: “Three steps to the Internet” plug it in (to power); Connect it (to the phone jack), oops! No third step…you are on the Internet. That was their simple sales pitch.
The simplicity of this approach is what we would expect of a man with little formal marketing training. Sometimes our learning gets in the way of being effective.
James Snider is the Business Development Director for Accelerant Marketing Alliance, LLC == Marketing, Communications and Design
Friday, October 9, 2009
I have heard the Apple formula for success reduced to 5 components. Component One: Don't sell a product...sell what the product does.
"Don’t sell a product….sell what the product does" means that the marketer does not sell an MP3 player by showing the menu and how easy it is to download songs from a computer, etc. Show cool people having a fantastic time using your product.
This is Basic Marketing but no one does it. I have stopped saying "This is Marketing 101" because that statement usually precedes an example of very rudimentary marketing. Nothing Apple does is rudimentary.
Marketers who think about it will agree that “No one goes to the hardware store because they want a quarter inch drill bit. They go to the hardware store because they want a quarter inch hole.” We understand that concept but we often forget about it and market the drill bit. It is easier.
Apple understood that people don’t want an MP3 player. They don’t even want music. You have to get more visceral to reach the Apple level of marketing genius. People want fun. If the purpose of your product is to provide fun, then show people having fun with your product. Apple did an amazing job of this. In the first iPod commercial, the viewer could barely see the product. The product name did not appear until the last 5 seconds of the commercial (and then, only for 2 seconds) and company name did not appear at all. Only the company logo for the final second of the commercial.
Most marketing managers would be furious with this ad, but then, most marketing managers have never harnessed the power of marketing to the emotion.
Thursday, October 8, 2009
Tuesday, October 6, 2009
Monday, October 5, 2009
I first heard the term "FUD" at a 1394 Trade Association meeting at Microsoft in 1996. "FUD" is an underhanded marketing strategy which involves spreading "Fear, Uncertainty, and Doubt" about the competition. The term was used during a discussion in the "Marketing Working Group" which was comprised primarily of engineers with a sprinkling of marketers.
Saying something bad about a competitor is not FUD. It is a perfectly acceptable marketing practice to point out the deficiencies in a competitor's products. You know the competitor is not going to mention the problems, so you are giving a potential customer the benefit of additional accurate information. This enables a rational decision to be made.
FUD, on the other hand, is suggesting things that may not be entirely true with the goal of gaining an advantage based on emotion rather than facts. Engineers can understand the concept of FUD, but they can not embrace it. To provide inaccurate information for the purpose of encouraging an irrational decision goes against everything an engineer believes in. The world of engineering depends on precise truth, the whole truth, and nothing but the truth.
The use of FUD in the bare knuckled world of high tech marketing is common but it was a strategy that the 1394 Trade Association (being comprised of primarily engineers) could never embrace. The value engineers place on exactness can be frustrating but the value they place on truth is refreshing.
Unfortunately, FUD is effective. Management is motivated by fear as well as logic. Fear of a lawsuit. Fear of bad press. Fear of selecting a niche technology and ending up with a niche market when their projections were for a mainstream market.
Refuting FUD consumed a lot of 1394 marketing resources. For example, every two - three years, rumors would spread through the market that large companies were dropping 1394 en masse or that 1394 was in steep decline in Japan (a market where 1394 was extremely popular). I worked several years at Texas Instruments and we would find out about these rumors when customers started reducing orders for 1394 silicon. Marketing resources had to be used to research the truth and to document that 1394 was still on the rise. Spreading the truth to refute FUD was more time consuming than spreading the FUD had been. As Winston Churchill once said, "A lie gets halfway around the world before the truth has a chance to get its pants on."
Calls for striking back were rebuffed by 1394 leadership and 1394 continued on a somewhat quixotic journey. Eventually, 1394 succeeded despite bad odds and found a home in several hundred million products. The success that 1394 has achieved is due largely to a fiercely loyal following.
Those who leave 1394 generally leave it with great regret which is hard to identify. One of the early evangelists summed it up the best after he was redeployed from 1394 to promoting USB. In his words “USB is all about, 'sit down, listen, and make some money for your employer.' 1394 is all about changing the world and being a part of history. How can you not fall in love with that?”