“Brand longevity” – lessons from Apple

How come some brands survive and thrive, enjoying “brand longevity”, whilst others decline and die? Fons Van Dyck of Think BBDO shared some insights on “the biology of corporate survival”, using the Apple brand as an example, at last week’s EURIB conference in Rotterdam. I was also speaking at the event, on ‘Rebooting branding for a digital age’. Below I share some key lessons on longevity from the Apple story.

Focus, focus, focus

We tend to forget that Apple has not always been successful. Former Pepsi executive John Sculley led the company during a golden period from 1985-90, but there then followed a dark period in the early to mid 90’s. The company over-expanded, trying to compete at both the high and low ends of the market, including supplying ‘clone’ PC makers. It also produced printers, cameras and other peripherals. In 1996 the Wall Street Journal predicted Apple’s demise with the headline, “Buy a PC. They’re cheaper. And the Mac is going to disappear”.Even pro-Apple magazine Wired worried started to loose the faith, as shown by the front cover below. The company was reportedly only days from going bust.

One of the key actions that Steve Jobs took when he returned as CEO in 1997 was to dramatically focus the product offer, cutting 70% of the hardware and software ranges. On the Mac business he created the simple 2 x 2 matrix below, with anything outside this being cut. The change painful, with 3,000 employees being laid off. But the ruthless focus paid off in the long run.

DESKTOP                  PORTABLE

PROFESSIONAL    Power Macintosh      PowerBook

CONSUMER            iMac                            iBook

Fast follower, not pioneer

Another misconception of Apple is that they are a market-leading innovator. In fact, as Fons highlighted, they have generally failed when they were first to market, with examples including:

  • Apple Lisa (high-end PC) 1983
  • Apple Newton (PDA) 1993
  • Apple G4 Cube (small, designer PC) 2003

Apple’s success has been as a ‘fast follower’, improving on new product categories by bringing superior design and ease of use. Examples include the iPad, iPod and iPhone. In each case other companies launched products years before Apple.

The other critical element to Apple’s innovation is the ‘ecosystem’ it has created, where the Mac, iPhone, iTunes and App Store all work together to create a seamless, unified customer experience. People buying an iPhone find it works much better with a Mac and so end up buying one, and vice versa.

Follow the money

Apple’s dramatic growth under Jobs and then Tim Cook also reflects a clear business model that has been consistently applied. Fons highlighted the following key elements of this business model

  • Focus on penetration: including recruiting younger consumers, and entering China
  • Premiumisation: with a c. 40% price premium, creating more margin for brand investment
  • Distribution: key to driving penetration and also controlling the customer experience was the creation of the Apple Retail stores, online store, iTunes and the App Store
  • Product design: Apple is at its heart an engineering business, with teams of talented people under Jonathan Ive designing beautiful, simple but powerful products
  • PR buzz: Apple have been masters at whipping up PR about new product launched months before the actual launch, creating pent up demand that drives early sales success, which in turn creates more PR (see image below from an article predicting the features of the iPhone 8, that doesn’t even have a launch date yet)
  • Brand investment: the higher margins achieved by Apple allow them to invest heavily, with Fons reporting that the company spends 3x as much on advertising today versus 2007

In conclusion, the Apple story gives some clues on how to increase your brand longevity, especially the need to focus time, talent and money on creating and implementing a distinctive business model.

 

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