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Competition is all around us. Companies fight in to survive and gain competitive advantage e.g. in order to get hanged in survive and capture larger market share. According to Kotler (2004), marketing plays a critical role in helping many companies to take advantage over these opportunities. And thus marketing can be defined as "the creation and delivery of a standard of living".
Advertising is the most widely used part of marketing. Keller & Kotler (2006) says advertising is everywhere around us. "The means of providing the most persuasive possible selling message to the right prospects at the lowest possible cost. Advertising has been adapted by companies as a promotional tool which helps them to pass on their message to the masses and hope that they all react in a desired way. In terms of technology giants, Microsoft, the brand which almost out-smarted Apple in terms its quality, product and weld output. The brand which is known for its marketing has unsuccessful to capture the interest of people during its launch of the new product- Zune. As mentioned in the report by Nick Farrell (2006), headlines 'Microsoft Zune fails to make an impact'. Lack of adverting was supposed top be the main reason behind the lack of interest compared to that of Apple iPod. Though Zune also has some different characteristics but has features are something like iPod with an addition of little plus of wireless facility and having a small antenna but still did not do well in the launch. Digital media player and ipod became almost synonymic.
Apple immediately after its launch, captured huge markets and made it difficult for other competitors to stay in the lead for long time.
THE COMPANY OVERVIEW
The company has also been known for its 'think different mindset'. According to Fisk (2006), Apple's profile include- business computers with its Mac line and can be used in houses as well, iPod family from the mp3 music industry and distribution of third-party digital content by online iTunes Store. It also has iPhone 3GS as the latest addition to the range of products. Apple was founded in 1979 by Steve Jobs in wozaniak. The first product launched from Apple was the Mac computers which was in high demand in the beginning but later on the year, due to high price and competition in the market they had to slow down. Rather, company exponentially focusing on niche markets. [Apple, 2008]
Fig 1- iPos's sales vs. other handheld devices
Steve jobs saw, what he describes as a market gap in the music industry with all the existing companies been saturated, he noticed a potential for a business. Apple Launched ipod and later launched its itunes, which was a complementary service provided by the company. I tunes alone sold, more than 70 million pound. [Phillip, 2007]
Figure 2- birth of an iPod
The company was making cleaver decisions and in giving the market ipod, it not only revolutionised the way people hear music but also stopped its near by music sellers or imitators. It all kept the market busy with surprising them with superior quality product and affordable prices.
Figure 3- Range of iPod's in the market
AIMS OF THE RESEARCH
The aim of this research is to find the impact of ads on the success of Apple iPod from customer's point of view. By success here means, why consumers feel motivated to buy an Apple ipod and what do they think about Apple's advertising strategies.
The following literature review will examine all the models and theories which are applicable for the research which would take place.
APPLE IN MUSIC INDUSTRY
iPod holds the largest share at 70% [US. [BBC, 2005]
The iPod/iTunes can store between 2,500 and 10,000 downloadable songs
ADVERTISING- application and model
The definition of advertising is expanding day by day as technology makes it possible for new advertising to be more personal and interactive. Burnett, Wells and Moriarity (2007) provides a modern definition of advertising is- it is paid persuasive communication that uses non-personal mass media- as well as other forms of interactive communication- to reach broad audiences to connect an identified sponsor with a target audience.
The most common and long-standing explanation of advertising effects is one referred to as AIDA, which stands for attention, interest, desire and action. As mentioned by Batra, Myers and Aaker (1996) the concept of AIDA is that first an ad gets attention, and then it creates interest, then desire and then finally stimulate action. AIDA assumes that consumer start with attention and wind up with the decision, which is referred to as a hierarchy-of-effects model.
An additional comparatively simple answer to how advertising works is the model that tries to get around the hierarchical problem commonly known as think-feel-do. People get motivated to think about the message is what advertising does, feel something about the product and do something, such as try to buy it. Various types of patterns are identified due to this model which solely depends on the type of product we buy.
This particular public relation had became a phenomenon success with more than 6,000 iPod and iTunes stores in major publications around the world.
According to TNS media Intelligence /CMR, the total spending for the iPod print ads in the first half of 2003 was $9 million, up from $4 million in all of 2002. Overall Apple spend $125 million in 2003 advertising for iTunes and iPod on billboards, TV shows and in main stream print magazines.
BRAND & BRAND EMBEDMENT
"A brand is an identifiable entity that makes specific promises of value"
Brand is something which determines the personality of the company and the owner with which they have to live their lives with , one they trust and hang on to while everything around them is changing, on that enables then to do what ever they couldn't otherwise achieve Sandage, Fryburger and Rotzoll (2004).
A powerful brand derives victory in financial and competitive market and certainly become the organisation's most precious asset. Powerful brand have the skill to cut through the competitiveness and noise of markets and to engage and retain the best customers in a way that delivers greater financial results in both long and short term. However, a brand that attracts great attention because of its inspiring ads and which is supposed to be cool and desirable and drives huge demand, but that same ad is not 'powerful' unless it can as well convert this demand into persistent profitability.
CONSUMER DECISION PROCESS & ADVERTISING
Different customer make altered decisions in diverse ways, but still the majority of people follow identical decision making process, though the purchase decision may differ among low involvement and high involvement, both high and low involvement decision making are part of almost every consumer's need-satisfying process- Solomon (2007).
The various stages are:
1) Need recognition:
It frequently happens when consumer recognize a need for a product. This requirement can differ in terms of seriousness. The goal of advertising at this particular stage is to trigger or encourage this need.
2) Information search:
This can be informal like reading and analysing ads and articles or it can be formal like probing for information on the consumer reports. Advertising tends to be useful for the search process by given the information and making it uncomplicated to locate, as well as memorize.
3) Evaluation of alternatives:
This is a stage where the consumer compares a variety of products and its features and tries to minimize his option list. They select a list of important features and then judge products according to them. Advertising is important in this estimating the process because it is useful to sort out products on the basis of tangible and intangible features.
4) The purchase decision:
This stage is often a decided in two parts, occasionally people choose the brand first and then the outlet where to buy, but sometimes people select the outlets first, predominantly with the impulse purchases. In-store promotions such as packaging, point-of-purchase display, price reductions, banners, coupons etc influence these choices.
5) post purchase evaluation:
Post purchase evaluation is the last step in the process and the face where people start to think again and give reason for their purchases to themselves. Once after purchasing the product people reconsider the product, whether they have got what they were looking for? Is the performance satisfactory? They basically start to revaluate their decision. This stage states whether people will acquire the product once more or not.
MASLOW'S HIERARCHY OF NEEDS
A motive is an internal force that stimulates a person to behave in a particular manner. This driving force is produced by the tension caused by unfulfilled needs. Psychologist Abraham Maslow describes motivation as a means of satisfying human needs. [Netmba, 2007]
People advance to superior levels if their lower level needs are satisfied and regress if their needs become unconvinced again.
Figure 8- Maslow's hierarchy of needs
Psychological needs direct people to struggle for acquiring and usage of food, clothing and shelter. For humans these needs are dominant. For many those who live in scarcity these needs are never sufficiently met so they never grow to the next level. Safety and security need is the next level, which is responsible for many people's fear of flying since attacks of 9/11. Volvo car makers to appeal to this need, have their entire ads slogan as 'drive safely'.
According to Maslow, once the safety needs are met, people crave for affection and belonging.. Teenagers take action and dress in a certain way to shape in their peer group but some adults take up golf in order to be seen as belonging to a corporate world.. These needs force them to buy the ipod. Once acknowledged as a part of a group, people begin to desire for self esteem and become conscious of their status. Everybody wants to be appreciated. Some people even use self gifts to inspire themselves.
At last once these physiological, safety, social and esteem needs are fulfilled. People begin to search and enlarge their bounds of their potential i.e. they seek self actualization.
This concludes that this review of the literature counting various models and theories in depth which includes- Advertising models; brand & brand embedment; product life cycle; consumer behaviour and their application to Apple's iPod. It can be observed that various advertising strategies followed by Apple to encourage iPod and its impact; iPod's brand image among customers; consumer buying methods and why do they need an iPod by Maslow's hierarchy of needs.
QUESTION FOR FURTHER RESEARCH
Though Apple's advertising made ipod a phenomenon success in the market, why could Apple not implement the same strategies in its Macintosh laptop sector.
Is it only advertising or it the integrated marketing communications that had led to the phenomenon success of the ipod.