news from the intersection of branding & technology

Steve Jobs dips into Apple’s brand equity to answer critics….

In Apple, brand-building on July 30, 2010 at 6:40 pm
Image representing Steve Jobs as depicted in C...
Image via CrunchBase

by Robert Liljenwall

How strong is Apple‘s brand?  Count the numbers – more than 3.3 million iPads sold in the past two months….Apple is selling the new iPhone4 at the rate of 4 million per month….Apple becomes the nation’s second largest corporation (the largest tech company ahead of Microsoft) in terms of valuation, second only to EXXON Mobile.  Overall, between the iPhone, iPad, and iPodTouch, Apple is selling 6.85 million IOS devices a month or 42 percent more than Android.  This is a battle of classic proportions between Apple and Google, and it ain’t over yet.

But let’s talk about brand equity=.  How does any company deal with adversity and controversy about its behavior or product failure?  We can all take lessons from British Petroleum on how NOT to conduct crisis management.  Also, we have learned from Johnson & Johnson’s masterful handling of the Tylenol scare in February 1986 when a woman was reported dead from cyanide poisoning in Tylenol capsules.  Johnson & Johnson immediately pulled the product from all shelves.  It was, indeed, a brilliant and gutsy move to take their most popular brand off the shelf.  It preserved their brand leadership for the past 25 years.

What did Steve Jobs do when their antennae wasn’t working the way they said it would work on the new iPhone4?  He held a much-anticipated, well-attended news conference.  No recall.  No apologies.  He explained this was a very common problem with all cell phones and his expertly designed Keynote slides demonstrated that the actual failure was so minor that it was within so-called industry standards.  Steve did offer a free phone guard to keep your sticky, electric-generating fingers and hands off of his iPhone so the antennae would work.  Besides, he said, all cellphones have the same problem. There, take that!  And what did his competitors say:  “Hogwash!”.

This is what we call in the brand business – a brand equity withdrawal.  If your company has a strong brand – you can get away with this once in awhile – not all the time, of course.  But Apple has been performing so spectacularly these past few years, it is hard to argue with Steve Jobs or Apple’s overall financial (re: brand) performance. The numbers don’t lie:  These are consumer votes, and they not only vote with their feet, but with their wallets.  Apple stores are grossing over $4,000 a square foot around the world (average) and it’s the highest of any retailer in the world.

When you go into an Apple store, as I did yesterday to finally pick up my iPhone4, I was amazed that in the middle of a workday, the place looked like the character shop on Main Street at Disneyland.  (I can’t recall someone asking Steve Jobs after his news conference….”where you going?”  “To an Apple Store!”).  Every spare experiential station was full with people standing in line to try out the new iMac (just came out) or the iPad or the iPhone.  Gold cards were flying out of wallets.

Let me tell you a cute story….After getting my new iPhone4 activated (“do you need a bag?” the kid in the blue shirt asked me?  “No.”  I wanted to show off the new iPhone4 box it came in).  I’m walking out the store – hated to leave, but just before I reach the doors, this young gentleman is walking next to me.  I look at him, and whispered…”Did you buy anything?”  “No, I didn’t.”  “Well,” I said, “you know, don’t you, that the alarm goes off if you didn’t buy anything.”  He stopped and looked at me, surprised at what he had heard.  I stopped, too, cracked a faint smile, and we walked and laughed our way out of the Apple store in Pasadena.  Me?  I had my new iPhone4 and damn happy about it.  The kid?  He’ll be back.  He told me Mom had to approve it first.

Apple’s brand equity?  There is probably no company on the Planet right now who has more equity in their brand than Apple.  And in Steve Jobs.  If you want a good, ol’fashion cry about the success of free enterprise, read Fast Company’s current article on Apple.  You’ll find out why Apple epitomizes the best of American ingenuity, creativity, business success, and why the Apple culture is to be emulated.

OK, so you think I’m biased.  I am.  I admit it.  But what was amazing to learn that my perception of the Apple brand is that its customers are similarly attracted to other classy, sophisticated brands.  I teach Brand Management at UCLA Extension and we talked about the Apple customer – what are their values?  What other brands would they be attracted to?  We came to the conclusion that an Apple iPhone user is the same type of person who would want to own a Porsche.  Fast Company came to the same conclusion.  I used to own a Porsche….but my needs have changed.  I own a Toyota Tundra (small ouch) to pull my Airstream (another fabulous brand)….but I damn sure am going to own Apple’s latest iPhone.  Can’t do without it.  And neither can the other millions who couldn’t wait to get their hands on the new iPhone.  If anyone knows that, it is Steve Jobs.  He knows his customers.  He has turned a “want” into a “need”.

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