EMRE KIRATLI EMBA 5202 BRAND MANAGEMENT HW 2 14.04.

2011

iPOD: CREATING AN ICONIC BRAND CASE STUDY

TABLE OF CONTENTS

I. INTRODUCTION
II. THE MOST IMPORTANT FEATURE OF iPOD
III. iTUNES; SHOULD IT CONTINUE TO BE A CLOSED SYSTEM?
IV. APPLE’S MARKETING PLAN FOR iPOD
V. APPLE’S DISTRIBUTION NETWORK; REACHABILITY VS CUSTOMER RETAIL EXPERIENCE
VI. THE FUTURE OF THE iPOD

I. INTRODUCTION

iPod, the invincible product line of portable media players of Apple Inc., literally “rocked” the market
since its launch in October 2001. During the decade, 297.000.000 units were sold worldwide 1 and
the whole product line maintains a market share above 70%. There are currently 4 different
variations on the product line; iPod Classic (6G), iPod Shuffle (4G), İPod Nano (6G) and iPod Touch
(4G). If we look at the Customer Based Brand Equity model, we can clearly see that Apple
successfully satisfied the needs of each level.

Imagery
Salience: Apple provided the market with a digital music player, perfectly capable of storing and
playing thousands of songs.

Performance: Large storage capacity and easily & effectively working, simple control interface

Imagery: iPod is seen as a convenient and easy-to-use product.

1
Wikipedia (2011). http://en.wikipedia.org/wiki/IPod

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Judgement: Apple’s perceived high quality and convenient innovations accompanied with iPod’s
proven quality supported the product’s place as number one in the “judgement seat”.

Feeling: iPod, clearly invoked the feelings like freedom, excitement and fun. Furthermore, iPod users
became a community, thus creating a social acceptance and a feeling of being part of a certain social
level.

Resonance: High loyalty, strong attachment and a wide community of iPod users worldwide.

In his book “Best Practice Cases in Branding”, Kevin Lane Keller analyzed the success of the iPod in a
detailed case study2. This article will try to answer Keller’s questions at the end of the case study 3.

II. THE MOST IMPORTANT FEATURE OF iPOD

In the first question, Keller asks “what is the

most important feature of the iPod and why?”
The answer to this question is simplicity and
continuous innovation on the product helping
Apple to be ahead of the competition. The
perfect symbol for iPod’s simplicity would be
its click wheel (see the figure on the right).

The genius behind iPod’s success, Steve Jobs summarizes

this concept with the words “most people make the
mistake of thinking design is what it looks like. People think
it’s this veneer – that the designers are handed this box
and told, ‘Make it look good!’ That’s not what we think
design is. It’s not just what it looks like and feels like.
Design is how it works”.

Jobs often complained about the competitors trying blindly

to clone the product’s features without even
understanding them. By these complaints, he meant the
simplicity of the product. iPod operates thru its
revolutionary click wheel and provides the user with means
of quick, effective and idiot-proof control of the product.

Using this simple and effective control design, Apple continuously added new features to the product
and extended the family. The figure below shows the timeline of iPod models along with other Apple
media / telecommunication products. By improving or adding features like storage capability,
smaller design, ability to play videos, Apple continued to dominate the market while keeping the

2
Keller, K. L. (2008). Best Practice Cases In Branding. New Jersey: Pearson Education Inc. P. 153-174
3
Keller, K. L. (2008). Best Practice Cases In Branding. New Jersey: Pearson Education Inc. P. 168

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simplicity of control.

Another important part of iPod’s simplicity is the iTunes software. While providing users with the
ability to manage their media catalogue, it also allowed them to buy the songs they wanted for as
low as 0.99 USD and to actually own those songs for their lifetime. This feature was revolutionary in
an era in which people were in the potential chaos of facing lawsuits caused by illegal peer 2 peer
music downloading and of music industry’s futile and totally wrong effort in building subscription-
based digital selling where a user would lose all rights on the song he paid, upon termination of the
subscription. Apple “valiantly” saved the users from such chaos and gave them the perfect and
simple means thru iTunes.

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EMRE KIRATLI EMBA 5202 BRAND MANAGEMENT HW 2 14.04.2011

III. iTUNES; SHOULD IT CONTINUE TO BE A CLOSED SYSTEM?

The second question is whether Apple should continue to operate a closed system or open it to any
type of digital music player? There are multiple factors influencing the answer to that question.

iTunes’ current motto is “If it makes you want to sing,

dance, listen, watch, or play, it’s most definitely on
iTunes”4. In other words, one can find almost anything in
iTunes’ huge selection of Music, TV Shows, Movies,
Podcasts, Audiobooks and iTunes U (U stands for
university). People can rent or buy movies in HD format
for as low as 0.99 USD, or get the whole semester’s video
lecture set of Oxford University’s Professor J.J. Binney’s
Introduction to Quantum Mechanics for free.
Furthermore, the platform offers millions of applications
for new versions of iPod and other Apple media
devices such as iPhone or iPad. In short, iTunes offers the widest range of digital media content with
perfectly affordable prices.

The second factor is the seamless integration of the iTunes content with all Apple devices (namely,
iPod, iPhone, iPad and Apple TV). Whether being a song, an episode of a TV show, or a game, Apple
devices are 100% compatible and capable of playing or executing those content.

The third factor is the competition being very weak. There are no competing platforms offering such
wide range of digital media and being able to integrate that content to portable devices. In other
words, iTunes is practically the sole entity in its area.

Finally, considering iTunes being an open platform, it would surely face device compatibility
problems and risk of losing a well established and loyal community.

Therefore, offering the widest range of digital media with seamless integration with its devices and
without any serious competition, Apple should continue to operate a closed system.

4
Apple Website (2011). http://www.apple.com/itunes/whats-on/

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EMRE KIRATLI EMBA 5202 BRAND MANAGEMENT HW 2 14.04.2011

IV. APPLE’S MARKETING PLAN FOR iPOD

The third question in Keller’s Case Study is whether Apple has done a good job of marketing the iPod
or not. In order to be able to answer this question, let us have a closer look at the marketing
strategies. Apple used dark “silhouettes” with their iPods and white earphones. They were usually
dancing, and these silhouettes were used almost everywhere in addition to TV commercials (please
see below examples).

Those silhouettes created an extremely good awareness of the product and made it distinguishable
from the competition. That product was an iPod, the others were MP3 players.

Along with this strategy, Apple relied heavily on testimonials and co-branding activities. It is well
known that testimonials strategy almost never fails. Therefore, Apple used celebrities (such as U2,
Eminem, and Oprah Winfrey) and brands (such as Nike, BMW and Ferrari) well known and well
trusted.

In addition, Apple carefully managed “information leak by the internal employee” about new
products. With that strategy, people knew just enough and became highly curious.

Finally, Apple Stores provided the customers with “Touch, Feel and Purchase” experience. Apple
Stores became the best place to learn and experience everything about iPod.

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In sum, when compared with iPod Sales Chart 5, it can be safely concluded that Apple did a great job
in marketing of iPod.

V. APPLE’S DISTRIBUTION NETWORK; REACHABILITY VS CUSTOMER RETAIL EXPERIENCE

In his next question, Keller asked about the importance of the large retailers and if Apple should be
concerned with not having full control over the customer retail experience. Apple had always been
focused on creating a very good customer experience in its stores. For this purpose, Apple
discontinued selling in large retailers such as Best Buy. Considering the fact that the relevant
products at that time were computers, selling expertise would be understandably important.
However, iPod was an idiot-proof, easy-to-use product. The risk of bad customer retail experience
was minimal. Furthermore, Apple needed to be in large retailers in order to penetrate the market.
In other words, the product had to be conveniently reachable in the market. Apple had only 110
stores, but the retailers had more than 20.000. The importance of these retails points was far
greater than the risk of bad customer retail experience. Therefore, Apple took the logical step of
extending its distribution network to include those large retailers. Again, based on the above iPod
Sales Chart, it can be concluded that Apple took the right decision. Additionally, Keller mentioned in
the case that due to iPod usage, PC users tended to buy an iMac within the year of their iPod
purchase6. In other words, extension to large retailers had a positive effect on Apple Stores’ sales.

5
Wikipedia (2011). http://en.wikipedia.org/wiki/IPod
6
Keller, K. L. (2008). Best Practice Cases In Branding. New Jersey: Pearson Education Inc.

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VI. THE FUTURE OF THE iPOD

The final question of Keller was, what should Apple do next to sustain iPod sales? The answer to this
question is not very difficult; continue to add or extend features in the product line while keeping the
simplicity. For example, iPod Touch added the ability to play all kinds of media along with executing
applications and started to use an even simpler control interface than the click wheel; a touch
screen. Furthermore, Apple extended its product line not only vertically but also linearly. The
company is offering the customers iPhone, iPad and Apple TV products.

Perhaps in the near future iPod devices will have the ability to play 3D media followed by holographic
projection capabilities. Especially in case of the holographic projection, it would be possible for an
iPod Nano sized device (Apple may name this product as iHolo) to create a room-sized, next
generation HD holographic content, eliminating the need of the screens in the product.

Additionally, Apple should continue to improve iTunes platform. It would be wise to integrate Cloud
Computing services to the platform’s portfolio so that it would continue to be ahead of the
competition.

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