The Effects of a Temporary Withdrawal of All Media Advertising by Apple on Markets in Consumers - Assignment Example

Table of Contents Table of Contents 1 Introduction 1 A Brief Introduction to Company and its activities 2 Apple 2 Advertising & AIDA Model 4 Consumers and Advertising 5 Apple and Advertising 6 What if advertising is discontinued 8 Conclusion 9 References 10 Introduction Advertising plays a critical role in the development of the business over the period of time as consistent and effective advertising campaigns can yield great results for any organization. Advertising is so effective and necessary for the survival of the business that without putting a considerable effort into designing and promoting advertising, one can be hardly able to achieve success. Without advertising, it is almost impossible now for any organization to successfully manage the existing markets as well as the new markets and as such organizations need to provide consistent as well as more focused advertising campaigns. Apple is one such organization which is considered as one of the most innovative and successfully companies in the world because of its ability to roll out products and services which are not only considered as innovative but also according to the exact requirements of the customers. Apple has covered a long road to achieve the status it is enjoying now after going through a long and volatile period of consistent decline within the Industry. Its story is now considered as one of the successful stories of how a failing organization can turn around itself with sheer innovation of its products which are exactly in line with the requirements of the customers. This essay will present an analysis of the argument that what would be the effects on their markets in general and individual consumers in particular, of a temporary withdrawal of all media advertising by Apple. A Brief Introduction to Company and its activities Apple Apple was born as Apple Computers on April 1, 1976 by Steve Jobs and Steven Wozniak- two collage drop outs with enormous individual capabilities to take the world to a wholly new level of evolution. Steven Wozniak worked in HP and got experience into the computer design whereas Steve Jobs had the experience of working for Atari. The first computer manufactured by Steven Wozniak was called as Apple- I. However, it was not commercialized until 1977 when Apple II was rolled out as the commercial product from Apple Computers formed by two collage drop-out friends. By 1980, Apple III was released and Apple Computers could employ many employees to successful start a new revolution into the history of modern world. After successfully starting the company, Apple Computers started to invest heavily into the research and development and could manufacture first graphical user interface computer of the world during 1980s. The innovation at the company continued to go on as it became successful in rolling out more innovative products in the industry offering more unique features which were providing more flexibility as well as ease of operating the system. What is, however, also critical to note that the Apple’s computers could only run on the Operating system developed by Apple only? Therefore, it was not the platform free and users have to use its operating system to run it. Apple now operates into electronics industry as it has successfully made its transition from mere computer producer to the supplier of a whole range of electronic goods and services. It now offers products from smart phones and MP3 players to sleek and elegant T.Vs and Monitors for cinematic display. It’s Apple IPod and Apple, I-Phone are two of the hottest selling products as Apple IPod is believed to have more than 80% of the US retail market share.(Smith, 2004). The competitive strategy of Apple is considered as low end strategy as it attempted to enter the market which is largely dominated by the youth. Different variations of its IPod including IPod shuffle- an elegant and good looking MP3 player was specifically targeted at the youth with limited level of income. However, it is also argued that by running such a strategy Apple can face cannibalization as increasing success of its products can overshadow its other products.(Umashankar & Chaudhuri, 2005). Its main competitors are diversified as Apple has been able to diversify itself into different products such as Music players, Phones, Computers, Laptops, Online Music selling, as well as the operating system market. Its main competitors, therefore, include Sony, Microsoft, Nokia, Sony Ericson, RIM etc. Though, Apple may have been considered as a relatively new entrant into markets other personal computers. However, it is making its mark into these markets through sheer innovation and product modifications. Its market presence is such that it has been able to achieve growth rates even after the current economic conditions as it has been able to record a growth rate of more than 38% which are greater than the overall market growth in US computer market. (Shah, 2008). Due to its low end strategy, Company has been able to maintain its growth rates consistently despite the economic slowdown because it has been able to focus on those customers who are largely immune from the economic slowdown. Apple is slowly and gradually becoming market leader however, working in an industry which is largely reliant on the innovation, and if it can keep the pace with the changing trends. Advertising & AIDA Model Advertising is generally defined as any form of non-personal communication as will as presentation which is paid. As such advertising also means that it requires significant investment as well as an effort to design and communicate a message, which can effectively reach to the desired audience. Advertising therefore, largely served as a tool to pursue, inform as well as remind your target audience about the potential benefits of the good or service you are willing to render. Traditionally, advertising has been based on the AIDA model and most of the practitioners adopted this approach to design and execute their advertising campaigns. This model is quite simplistic and requires a thorough and deep analysis of the interests of the consumers before applying it. The AIDA model is based on attention, Interest, Desire and Action as all these factors combine together to form the model which can be used to design as well as execute the different advertising strategies. It is also important to note that any firm including Apple design their media campaigns based on based on this model because it not only provides many simplistic solutions to the complex design problems but also provides an opportunity to analyze your target audience. However, as we will be discussing in following paragraphs, the consumer preferences are changing towards the traditional methods of the advertising, and they now prefer more informal communication with them therefore AIDA model may be working at the macro level for the firms however, it may be unsuitable when advertising is linked with the consumers at the micro level. Consumers and Advertising Numerous studies have indicated that the consumers are really selective and active when it comes to advertising and often prefers to challenge the traditional models of advertising. (O’Donohoe, 1994). This also means that at the micro level, advertising is really a fluid concept which requires consistency as well as change in order to keep the consumers intact. As discussed above that there are great changes taking place as for a s advertising is concerned because consumers are becoming more savvy and choosy and as such in order to enable the advertising to work at the micro level it is necessary that the advertising must be designed keeping in view the tastes and preferences of the consumers. O’Donohoe (1994) is also of the view that given the current consumer orientation, advertising planning process shall be strengthened in order to ensure that it is planned by considering all the stakeholders specially consumers. It is also critical to note that the consumers are now becoming more ethical and are emphasizing on having environmental friendly policies of the organizations. Because of this the advertising needs to be more focused as well as well directed at the targeted consumers. It has also been observed through the empirical studies that the advertising agencies hardly take into account the educational models while designing the advertising campaigns for their client, and it is because of this reason that most of the respondents found it difficult to follow academic models of advertising.( Gabriel, Kottasz, and Bennett,2006). This also means that such approach and mindset results into the culmination of advertising campaigns which are no longer acceptable to the consumers and as such organizations always need to focus on what is acceptable to the consumers. This is also important because organizations like Apple are customer oriented and requires to link their products and services with what the market requires therefore it is really critical that at the micro level, advertising must reflect what is required by the consumers. Apple and Advertising As discussed above that the Apple’s business model is unique, and it has made a long way to establish itself as one of the most innovative organizations in the world. Innovation however may not seem to work if the organization is not able to provide clear and effective message to its target audience than its success or failure may be uncertain. It has been argued that the advertising has more of an entertainment value than the relaying of real message therefore if advertising is either closed or poor planned can cost organizations a lot not only in terms of the lost market but also a consistent decline in the growth of the firm also.(Rotfeld,2002). This also means that the advertising priorities need to be set in a manner which provides organizations not only an edge over the competitors but also a consistent and prominent position on the market. Apple’s market is largely now consistent of youngsters who are often an easy target if the advertisement campaigns are designed in a way which attracts them towards the product. The Apple’s range of iPods is so diversified that through sheer advertising Apple can successfully gain consistent market space. This is also because the overall direction and orientation of the firm have change due to the changes in the demographics of the major markets. For example, UK’s majority population is ageing and comprises of those who are either on retirement or nearing their retirements therefore the overall priorities of the individuals differ greatly. In such circumstances advertising can play a critical role for organizations like Apple which not only have to manage the rapid innovation but also get it through their customers. It is also important to note that the new phenomenon of social networking has virtually redefined the way we used to interact with each other therefore teens as well as youngsters has taken a potentially new route to establish their social relations. However, their overall requirements for socializing to have changes too, now mobile phones and websites are considered as more plausible options to socialize rather than meeting in person. This also means that the way the advertising was done in the past needs to be changed and if there is any broken link in the advertising campaign than the organization may be faced with serious repercussions.(Yet & Lamminman,2004). Apple is also making a transition towards becoming a truly electronics company rather than a computer manufacturer therefore what we are witnessing is a shift in the overall identity of the Apple also. In such circumstances, advertising plays really a critical role because during such transition period, organizations need to remain close with their customers. A close of advertising whether temporary or permanent, therefore, would also mean that the Apple may start to slid down in terms of overall marketability of its products. This is so crucial because such transition periods mean not only requires visionary leadership but also requires a complete re-focus on the organization’s advertising strategies. The launching of IPHONE is one of the prime examples of how Apple was interested in promoting itself on a large scale with maximum exposure to its targeted audience. What if advertising is discontinued Considering the above situation, it is also critical to note that the advertising vehicles used for promoting the business largely depends upon the nature of the product as well as the business model followed by the organization. For an organization like Apple, media advertising may not be as effective as it may be perceived because Apple’s overall market acceptability is largely driven by the unconventional means of advertising, and it is mostly done through other advertising vehicles such as online marketing as well as print media. This is also critical since Apple’s overall market orientation is entirely different, and it prefers to market its products through means which are not conventional in real sense therefore in presence of alternative delivery channels for advertising such as Internet marketing, it is really difficult to assess the impacts of how the temporary closure of the advertising can affect Apple. It is also important to note that the pace of innovation at Apple has slowed down, and it has been able to develop a brand loyalty which can easily transform itself into loyal customer base requiring minimum media and advertising exposure to buy Apple products. This reality also means that the closure of the media advertising for the temporary period may not really impact the position of the Apple within the market because of above reasons. Therefore, if, considering a hypothetical situation where a temporary withdrawal by the Apple of all its media advertising will result into losses assuming that the Apple has not yet developed a loyal base of customers. However, if we consider this fact that the Apple has a large base of loyal consumers than this argument may not be as plausible as it may seem. Conclusion Advertising is really critical to the overall success and failure of the organization, and it is really critical that the firms must develop advertising campaigns in ways which reflect the overall orientation of their customers. The earliest models of advertising now seem to be outdated as the overall mood and orientation of the consumers have changed. This requires that the advertising must be carefully designed and implemented at the macro as well as micro level. Proper advertising planning as well as execution requires that the organizations must choose the right message as well as the right delivery channels to get the message to their consumers. Apple, over the period of time has been able to evolve itself to a point where it has developed a critical mass of consumers. Given the innovative pace of the Apple and its basic business model, there may be very little impact on the overall market of the Apple as well as its consumers because it does not seem to rely more on media as the important advertising vehicle. References 1. Rotfeld, H (2002) Misplaced marketing The real reason for the real bad advertising. Journal of Consumer Marketing. 19 (4) 299-301 2. Syrett, Michel and Lamminman, Jean, (2004). Advertising and millennials. Young Consumers. 5, pp.62-73. 3. Stephanie O'Donohoe (1994). Advertising Uses and Gratifications. European Journal of Marketing. 28, pp.52 - 75. 4. Smith, Tony. (2004). Apple iPod grabs 82% US retail market share. Available: http://www.theregister.co.uk/2004/10/12/ipod_us_share/. Last accessed 10 April 2009. 5. Umashankar, Roopa & Chaudhuri. Sumit Kumar (2005). Apple's 'Low-end' Strategy: The Payoffs. Available: http://www.ibscdc.org/Case_Studies/Strategy/Competitive%20Strategies/COM0005.htm. Last accessed 10 April 2009. 6. Shah, Agam. (2008). Apple now third largest PC vendor in the U.S. Available: http://www.infoworld.com/article/08/07/17/Apple_now_third_largest_PC_vendor_in_the_US_1.html. Last accessed 10 April 2009. Read More