Comparative Aanalysis of Dell And Apple Laptop Marketing - Essay Example

? Comparative analysis of Dell and Apple laptop marketing BY YOU YOUR SCHOOL INFO HERE HERE TABLE OF CONTENTS Executive summary Introduction......................................................................................... 2. Market review...................................................................................... 3. Literature review.................................................................................. 4. Critical analysis and discussion........................................................... 5. Recommendations................................................................................. 6. Conclusion.............................................................................................. References Executive summary Dell and Apple maintain different market positions, with Dell being a marketing entity focused on pricing and performance and Apple maintaining brand loyalty through expertise, quality and premiumisation. Both laptop manufacturers must use effective marketing and promotion to maintain competitive edge, however Apple continues to receive the most return on investment for these activities through years of effective business modelling that achieves significant brand equity. Findings discovered two organisations with radically different sales appeal, with Apple maintaining first mover advantages that make it difficult for Dell to compete against a company with considerable brand loyalty in key target markets. The report offers recommendations for improving the market position of both companies. 1. Introduction Apple’s laptop marketing campaigns rest on established brand loyalty that has endured since the 1990s. Apple established a positive brand reputation in terms of quality, performance and expertise that was built on knowledge sources within the Apple organisational hierarchy representing the brand, namely Steve Jobs and other internal corporate actors. Apple’s branding strategy is one built on emotions, establishing a brand personality focused on consumer lifestyle with themes of “imagination, liberty regained, passion, dreams and aspirations, and power-to-the-people through technology” (Robinson 2010, p.1). Apple maintains its core values on the importance of internal cultural unity and customer relationship management, expressing these values consistently in promotional developments. Apple’s brand personality is about removing complexity from consumer lifestyle through technology and the humanistic governance structure of Apple as a consumer-centric brand. 2. Market review Apple is much more transparent and accountable for its failures and successes associated with tangible product as part of the marketing mix. Apple performs what is referred to as movement marketing, a new marketing model that is strongly customer-centric, using corporate values as a foundation of sharing with consumers and being able to tap into their pre-existing values and lifestyle beliefs. Apple embraces social media as one platform by which to perform this movement marketing, using this forum to enhance customer relationship management and also to consistently reiterate what Apple believes in rather than simply expressing to target consumers the tangible benefits of various laptop products. This is the genuine key to brand loyalty (Goodson 2011). Making use of social media, such as Twitter and Facebook, provides Apple with unique opportunities to illustrate its belief in establishing effective, long-term customer relationships in key target demographics. Having established brand loyalty founded on years of consumer-accepted innovation launches that revolutionized the computing experience and with strict focus on customer relationship management philosophy. This provides Apple significant advantages over competition as once brand loyalty is established, it allows companies to position the brand under a premium pricing model (Chaudhuri and Holbrook 2001). Loyal customers are more apt to spend higher resources on their favourite brands and will be more active in providing the brand with positive word-of-mouth (Chaudhuri and Holbrook). This is what Apple has done: Created a solid positioning strategy founded on exclusivity and premium product offerings, allowing long-standing expertise and positive reporting of customer satisfaction to drive promotional content. According to a survey from JD Power and Associates, Apple maintains the highest level of brand loyalty in important target segments of any other computer manufacturer (Info Tech 2007). In 2006, more than 200,000 companies agreed to contract with Apple to create Apple-compatible products, a sudden increase of 26 percent from 2005 (Info Tech 2007). These alliances and contracts are publicised in a variety of multi-media mediums, illustrating that companies trust in Apple product integrity that, in turn, continues to express brand credibility and trust to consumers that value Apple’s premium offerings. The brand personality of Apple is one of the strongest differentiation tools available to the firm. In order to have an effective brand personality, the brand must be sincere, exciting, competent, and sophisticated (Aaker 1996). These are the intangibles of the brand that often have the ability to transcend physical products and service offerings to create total brand value (Aaker). Apple has managed to convince important target consumers in the B2B and B2C environments of a powerful and credible brand personality that maintains many dimensions akin to psychographics and lifestyle-based positioning. Apple, fortunately, has several options available in the promotional function: To position certain laptop products based on quality and expertise or provide communications that link consumer lifestyle to the Apple core vision and mission. This gives the brand much more flexibility in attempting to reach important markets using a basket of appropriate and proven strategies to gain market attention and improve market share in the process. How does Apple express these values in the promotional function? Apple differentiates itself from competition by providing advertising content that is lifestyle-centric, using relevant actors in creative imagery that best fit the profile of important revenue-building markets. Figure 1: Apple lifestyle marketing ad concept Source: Xtremewalls.com. (2012). http://xtremewalls.com/wallpaper/misc/apple/1/1024x768 Whilst other companies in this highly competitive industry focus on differentiation through pricing structures or even convenience, Apple is able to use creative ingenuity to express the differences between Apple and competing laptop manufacturers. The slogan “Think Different” illustrates that Apple is a brand that can set itself apart from the mainstream to inspire potential or existing consumers to remain loyal to the Apple brand. As illustrated by the creative ad concept in Figure 1, Apple defies the conservative mould that often drives technology manufacturer promotions and inspires creativity and inventiveness that strikes a proverbial nerve with important target consumers. Figure 2: Apple creative ingenuity under “Think Different” Source: Apple. (2012). http://www.coloribus.com/adsarchive/prints/apple-lucy-and-desi-1290655/ Branding is the core business activity that “emphasises continuity and connectedness with the firm and the external consumer environment, creating perceived brand value” (Abimbola 2001, p.98). As illustrated by the advertising content in Figure 2, Apple defies traditional product-based focus and inspires consumers to view Apple as an innovator using enthusiastic imagery that is considered lifestyle-relevant to important consumers. With much less emphasis on the tangible product and its benefits, Apple clearly illustrates its imaginative and inspired corporate philosophy that provides, ultimately, opportunities for exploitation of future brand equity. It is clear that the images provided by Apple in creative promotional content continue to meet with intended strategic success as Apple continues to report significant revenues year on year. 3. Literature review Dell maintains a much different positioning and differentiation focus than that of Apple, attempting to create a unique brand personality that is more focused on pricing and quality of laptop systems. Dell utilises a much broader series of integrated communications strategies to differentiate the brand, ranging from television and Internet to magazines and catalogues. Dell continues to be outperformed by Apple, largely due to the powerful brand personality and brand loyalty that has endured for the organisation since the 1990s. Therefore, Dell must focus on its core competencies internally as an effective differentiation strategy, taking these expert-based resources and translating it into advertising that strongly emphasises product and performance in the marketing mix. Figure 3: Dell expert positioning example Source: Forbes Magazine. (2009). http://www.tribbleagency.com/?p=2006 As illustrated by Figure 3, Dell understands the dynamics of what drives consumption behaviour in important target markets. In this case, it is the consumer that relies on Dell expertise and reliability to assist in business management or business planning. The advertising concept illustrates an appropriate actor that is relevant to the consumer lifestyle, using communications strategies that focus on Dell quality, such as with the Dell Latitude laptop highlighted in Figure 3. Dell also allocates considerable capital resources to the promotional function, with much visibility in a variety of television mediums. Television advertisements continue to illustrate Dell with a consistent message: That Dell products provide affordability and also efficiency. Figure 4: Dell television advertising focusing on price and performance Source: Coloribus. (2012). http://www.coloribus.com/adsarchive/tv-commercials/dell-computer-problems-5258855/ According to an executive at Dell, “What is really important is sustaining loyalty among customers and employees, and that could be derived from having the highest level of service and very high performing products” (Burns 2010, p.2). Dell operates in a highly competitive and saturated technology market in which Apple is the dominant market share holder and continues to have significant opportunities for extolling earned brand equity. Dell has a different loyal customer base with different needs and lifestyle-based characteristics, therefore the brand must differentiate itself in a way that is unique from major competitors. Many of the actual product benefits offered by Dell products are easily replicated in this market, leaving the business to rely on pricing with supplementary focus on tangible benefits to gain market interest. Additionally, Apple has been, currently and historically, a first-to-market mover with innovation launches consistently. Early entrants have significant advantages over late movers in the technology industry as consumers will often compare late movers to the pioneering company with rather unfavourable assessments (Kalyanaram and Gurumurthy 2008). In a market where consumers are largely risk averse, Dell has a difficult time seizing market share from major competition such as Apple when they already have favourable impressions of the first mover. Pricing and performance, whilst also expressing to consumer markets the unified corporate culture of knowledge systems at Dell under its current decentralised business model, is what provides Dell with the proper market positioning required to ensure strategic revenue production in key target markets. Dell also understands the psychology of using celebrity endorsers to assist in generating more consumer interest. In 2007, the company started the “Yours is Here” campaign, illustrating the customizable opportunities that were being provided by the company to specialise laptop purchasing (Topolsky 2007). Dell began restructuring its operational model to include make-to-order products, at a moderately higher price than traditional system offerings, to add convenience and quality of service to the Dell brand. Major celebrities from Hollywood were involved in the series of advertisements in the “Yours is Here” campaign, creating a psychological connection with potential consumer markets. Celebrity endorsements are powerful marketing tools if the relevant actors recruited are deemed attractive, credible and expert (Pornpitakpan 2003). The “Yours is Here” campaign represented a complete market repositioning of the business during a period where sales revenues had declined and the Dell brand was swiftly moving into the decline stage. By adding specialised product offerings into the marketing mix, it allowed quality to enter strategic differentiation conceptions, giving the business new market opportunity with an entirely different basket of potential consumers willing to pay higher prices for a personalized product experience and expert support systems. Figure 5: Customizable Dell laptop offerings Source: McCoy, F. (2008). http://www.creativefluff.com/designs/industrial-design/mike-ming-trendy-illustration-meets-commercial-industrial-design/ The creative laptop skins, such as those illustrated in Figure 5, were developed by renowned international artists and then incorporated into the new positioning strategies associated with customization. The ability to transform Dell laptops into representations of the self and personality gave Dell much more revenue growth after launching this conception and opportunities to gain profitability from general mass market consumers. Greenwald et al. (2002) identify that when a brand is able to provide consumers with perceptions of self-expansion, they will ultimately be more loyal to the brand. “Positive associations between the self and the brand may subsequently lead to strong brand attachments” (Zhang and Chan 2009, p.1068). Dell managed to instil a new type of creativity into the marketing mix, using innovation in product packaging and design conceptions alongside trusted pricing and efficiency focus that has brought Dell success in its target markets. It should be said, then, that Dell has a much more diversified branding focus than Apple, even though Apple maintains more market share and much more brand loyalty. Dell is a model of an evolving marketing plan, allowing the business to adjust its market position by introducing new offerings related to service and brand aesthetics. Since pricing positioning in markets where there is much price competition is not always sustainable, Dell has established a proper blend of lifestyle-related focus merged with traditional promotional expression of Dell efficiency and competency. Dell maintains market share by being more evolutionary in product and service whilst Apple, its largest competitor, sustains profitability through innovation and ingenuity with supplementary focus on relationship development with consumers for more intimate brand connections. 4. Critical analysis and discussion As previously identified, it is very easy in this market for competitors to replicate laptop technologies. However, a powerful brand is the one asset that a competitor cannot copy (Bennet and Rundle-Thiele 2004). One of the most important evaluation tools required to determine whether the business has a strong brand is to, first, assess what trends and characteristics are driving consumption behaviour in important target markets. A recent study conducted by Executive Digest (2008) illustrated that the majority of 25 to 34-year-olds are content with their lifestyles and are more confident than previous generations about their role in society. For Apple, this has significant advantages as the majority of its loyal customers fit within this market demographic. The 25 to 34-year-old target market maintains adequate disposable resources and also has a propensity to gravitate toward luxury and premium products (Executive Digest 2008). Apple, through marketing research and quantitative analysis of sales figures, is able to recognise these characteristics of loyal customer markets and then create integrated marketing communications that continue to focus on premiumisation and brand relationship development with consumers. Dell, however, has a much more sporadic market that consists of multiple, diverse consumer profiles attracted to either pricing, efficiency and expertise, or customizable services that are relevant for many age-based demographic groups. This makes it harder for Dell to create a streamlined and consistent promotional campaign as there are multiple segments that require unique messages to gain market attention and ultimate loyalty to the brand. Fortunately for Apple, the business understands that it has already established a powerful reputation for product innovation, product quality and support-related expertise. The strong brand equity that exists with Apple laptop products no longer requires the firm to focus intently on the tangible product benefits provided by Apple branded products in order to sustain market loyalty. Instead, the organisation is able to consistently reinforce ingenuity and creativity into the promotional model that illustrates a person-centred business model and one that inspires imagination and originality. Dell, in opposite accord, promotes not only pricing incentives as a differentiation tool, but also internal human capital competencies and advantages that will serve to guarantee positive customer service delivery, support services, and the ability to tailor products to best fit consumer personality and attitude. 5. Recommendations Based on all research findings on Apple and Dell, two noteworthy recommendations can be provided to assist both companies in gaining more market share in laptop marketing. Dell’s basic positioning strategy is built on corporate competency and promoting price-related value to consumers. Goodson (2011) iterates, however, that in order to gain brand loyalty and sustain it, a brand needs to cease telling customers what they produce and instead focus on what the business or brand believes in at the core of corporate beliefs. Dell does not focus intently on the psychology of human behaviour that often creates positive brand connections between organisation and consumer. Apple’s power-to-the-people through technology philosophy continues to illustrate Apple as a potential lifestyle liberator; a brand that provides numerous opportunities for self-expansion. Dell should benchmark the relationship management principles found in the Dell marketing model that brings real-time consumer sentiment about the brand right into the corporate office at the business. Apple gains much market loyalty and positive brand sentiment in its key target markets by extolling genuine, heartfelt connections between business and consumer which leads to brand attachments and avoids the risk of brand defection in dedicated target markets. Dell is missing opportunities to add a humanistic element into the marketing mix that can be accomplished, at low cost, through social media outlets. Apple, on the other hand, can benefit from Dell’s customization strategy, offering similar customized offerings based on aesthetics. Even though this would require modification to the current production system at the business, the organisation maintains adequate capital resources to add aesthetic creativity into the product sales model. Dell experienced sudden increases in revenues after launching the “Yours is Here” campaign as it provided not only opportunities for self-expansion in the consumer market, the campaign illustrated the brand as an evolutionary brand willing to provide flexibility for discriminating consumers. Apple, whilst also resting on its positive international reputation for innovation, can gain supplementary revenues by adding customized skins and lifestyle-relevant artwork on product offerings to pilot revenue-building opportunities associated with established brand equity. An appropriate campaign entitled, “Make it Yours” (or other relevant catch phrase) could gain considerable market attention from consumers that are driven by aesthetic packaging and exclusivity conceptions. It would cheapen years of positive brand sentiment if Apple were to pursue using pricing as a positioning strategy, especially when consumers in the majority target market already gravitate toward premium products in the technology industry. Apple is currently differentiated from lower-priced competitors such as Dell and it would not serve the brand personality well to begin offering discounted price incentives when consumers both domestic and international already believe in the credibility and integrity of Apple products. 6. Conclusion Research identified radically different marketing strategies by Apple and Dell, illustrating two companies that must use unique tactics in order to gain more market attention and brand loyalty long-term. Apple understands its market characteristics and how to use affiliation and rapport as a means of gaining additional market share and sustaining existing profit patterns in key markets. Using values and principles at the corporate level as a promotional tool is unique in this technology industry and continues to provide greater sales volumes and the ability to expand various Apple branded product lines to include new innovation or supplementary service offerings. Dell must accept its current market position as a value-conscious brand that is aligned with consumer expectations for quality and excellence in service and support as it cannot justify premiumisation at this time. Dell unfortunately must rely on costly promotional ventures in order to produce greater revenues, however these efforts continue to put Dell back on the proverbial competitive map as a brand that can adjust with consumer needs and changing market conditions. References Aaker, D.A. (1996). Measuring brand equity across products and markets, California Management Review, 38(Spring), pp.102-120. Abimbola, T. (2001). 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[online] Available at: http://www.marketingminds.com.au/branding/apple_branding_strategy.html (accessed 21 November 2012). Topolsky, J. (2007). Dell launches star-studded “Yours is Here” ad campaign. [online] Available at: http://www.engadget.com/2007/11/21/dell-launches-star-studded-yours-is-here-ad-campaign/ (accessed 19 November 2012). Zhang, H. and Chan, D. (2009). Self-esteem as a source of evaluative conditioning, European Journal of Social Psychology, 39(2), pp.1065-1074. Read More