Marketing Weblog: LESSONS FROM THE I-PHONE - Instituto de Empresa Business School

1. I do admire Steve Jobs as marketer. He is definitively one the best in the World. Apple owes much of its success to his constant creativity, enthusiasm, vision and ability to think in a different way.

2. For sure, the I-phone has revolutionized the mobile handset ant telecom market. As I will explain later, they have not been up to expectations, but they have been able to bring the smartphone industry to its 2.0 version.

3. It is always easy to analyze things after they have happened and bring out lessons. However, it is vital to analyze the facts and try to learn from them

Having said this I would like to share some thoughts about the way the I-Phone has been launched and handled during its first year of existence:

• Branding is not everything. It might be for anxious early adopters + brand fanatics, but not for everyone. For sure it is something key that will make the difference and let you charge a premium price. But on top of that there has to be a real layer that supports it. In the case of the I-Phone, the brand was incredibly powerful and was supported by some innovative features + superb design. However, it also had some technical limitations that had impeded it achieving the expected sales worldwide.

• The Power of the Brand differs from country to country and so should do the strategy. Seems to be an obvious statement, but it was not for Apple. They took for granted that the attractiveness of the brand was the same in Europe and USA, and evidence showed this was not the case. Europeans are not that fanatic about the brand, and applying the same strategy as in the USA has not worked so well. Lesson: The strategy has to be adapted to brand strength and positioning, in order to maximise results.

• Exclusive distribution does not work everywhere. The latter made Apple to start working on a exclusive distribution basis in some European countries like Germany + France + UK. The result? As long as people in these countries were not that Apple enthusiastic, the sales were well behind expectations. This has brought the brand to a change in the strategy and to opening its distribution in other key countries such as Italy.

• Beware of handling properly the expectations. No need to explain to you the huge buzz + expectations that Steve Jobs was able to create when announcing the product at the Mac Convention in San Francisco (which could be something good if properly handled!). In this case, these expectations went too far and made analysts and bidding telecom companies for the exclusivity believe that it would go much further than it has actually gone.

• Price planning to be managed with care. Hand in hand with those expectations came a big mistake in planning the right price. As you will remember, shortly after launching the I-Phone, they cut the price by almost 30%. Reasons were not disclosed but it seems that the overstock was the main one. In the end it caused such a big mess that Apple had to refund the price cut to customers claiming for it.

• Beware of competition. The announcement of the handset and the excessive time to market taken since the former was done, gave an advantage to competition. The result was that competition accelerated the introduction of cool terminals such as the HTC Touch, that reduced the potential sales to be achieved. Same thing has happened with the 3G version: It has taken too long to be launched and Blackberry and Samsung have already announced some state-of-the art handsets and get part of the momentum reserved for the 3G I-Phone.

• Use PR to justify your movements. Of course it makes sense to make up your mind in a different way, mainly when you have made a planning mistake. So if you make for instance a change in your distribution strategy, silence about it (which is what Apple has done) is not the best thing to do. PR will help you to explain things the way you like!.

The 3G I-Phone is likely to be launched within June. Let´s see what happens and what Steve Jobs has in mind to overcome all these points. To be continued.

Comments

Me and my friends had a great discussion related to your first 3 acknowledgments, is Steve a good marketer or just good because he is his self?

I mean, he looks and presents so pure. Not a marketeer but more, the pure Steve being enthusiast etc.

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