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Design as Marketing: Apple. Sucheta Acharyya Kelly Kivioja Liang Xu Dali Zheng Ying Wei. Agenda. Differentiating using design Eisenman’s framework – commoditized industries as fashion systems Design differentiation at new product introduction Apple’s iMac and iPod .
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Design as Marketing: Apple Sucheta Acharyya Kelly Kivioja Liang Xu Dali Zheng Ying Wei
Agenda • Differentiating using design • Eisenman’s framework – commoditized industries as fashion systems • Design differentiation at new product introduction • Apple’s iMac and iPod
Differentiating using Design • Ability to charge premium price • Tap different market segments • Leverage psychosocial diversity amongst consumers • Can create different meanings of the product • Ability to create meaning using symbols more likely achieved by brand centric versus product centric companies • Ability to effectively integrate good design involves integration of R&D, engineering and marketing – difficult to imitate • Therefore, can be used to create a sustainable competitive advantage
Or it can be really simple… “the moral of the story, which I repeat many, many times to engineers, is that all the fancy-ass technological engineering in the world couldn’t get us a nickel more for the product, but squirt –gun green plastic, which actually cost us nothing, could get us fifteen bucks extra per unit.” (Fortune, 2001).
Third state in industry evolution - “Aesthetic Ferment” • Eisenman’s dissertation postulates that there is a third state in industry evolution: • innovation and the introduction of new products • maturation and exploitation of scale economies • Aesthetic ferment is when companies focus on differentiating using aesthetic product qualities to resist the de-commoditization of products Eisenman’s claims that this stage is particularly important to technology products as they typically have longer commoditization periods.
Design Differentiation at Product Introduction • For companies that have already created a fashionable brand image, introducing a new high-tech product as a fashion statement can help speed product diffusion whether it is an effective and resonant expression of collective taste or viewed as a status symbol. • For a new high tech product that is successfully positioned as fashionable, competitors are more likely to be construed as imitators, allowing the product to capture a premium price for longer than the competition. • For new product introductions in a winner take all market, if a fashionable image can help disseminate the product more quickly then aesthetic design can be the competitive advantage.
A high tech product becomes a cultural good meaning that it is “consumed in the act of interpretation rather than being used in some practical way to solve some practical problem” --- Lawrence and Phillips 2000, page 2 People perceive Apple as a Cultural good
iMac and iPod Apple examples fitting into the 7 Ps of Eisenmen… • P1&P2: Board of Directors are comprised of: Arthur Levinson - CEO of biotech company Genetech • Insight into how to move Apple scientists and researchers forward in their research Millard Drexler, CEO of GAP • help direct Apple to satisfy the needs of consumers and change the image of Apple into a “hip” company
P3a &P3b: BLADE 3: • Blade: "What's she doing?"Ryan Reynolds: "She's making a playlist. She likes listening to MP3's when she hunts"Close up of Jessica Biel making a playlist in iTunes, and then puts on her iPod..........AND THEN SHE MAKES A PLAYLIST AGAIN BEFORE THE LAST BIG FIGHT http://www.brandchannel.com/brandcameo_films.asp?movie_year=2005#138
P4: • Apple’s sustained success in being able to design new products • This track record of success is also seen in Apple’s iPod product category
P5: Customer reaction to imitation products Imitation products such as the Super Shuffle & IPOD mini cannot recreate the same prestige and status for customers: “I would never be able to live with myself if I actually bought this thing. I'm sure there’s some kind of immense catch. Like price must certainly be higher. And I bet a dollar the build quality is nowhere near Apple's. But mostly, it is such a blatant rip off by a company who's obvious only intent was to siphon sales from an outstandingly popular product. I would never ever buy one.” http://www.macnn.com/articles/05/03/10/ipod.shuffle.knockoff/#comments
P6: Intermediaries such as U2 endorsing the iPod & iTunes products positively influence sales of U2 autographed iPod case Newsweek “iPod therefore I am” P7: Apple as an organisation is already in a mind set that will allow it to sustain a competitive advantage over it’s competitors Current Apple business strategy allows for the major investments needed to build and maintain a brand that is built on aesthetic-based differentiation.
Risks to differentiating based on fashion • Fashion goes ‘out-of-style’ and typically fashion oriented products have a shorter than average product lifecycle • Brand management mitigates this risk. • Aesthetic design aligned with brand promise has the potential to increase brand loyalty. • If fashionableness is associated with the brand and the product fits within the brand then the key skill is to introduce the next generation of product under the brand before the last goes out of style.
