Apple iPod's Promotional and Positioning Strategies

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Case Details:

Case Code : MKTG179
Case Length : 14 Pages
Period : 2001-07
Pub Date : 2007
Teaching Note :Not Available
Organization : Apple Inc
Industry : Digital Music Player
Countries : US

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"To launch the iPod, Apple used no fewer than seven types of innovation. They included networking (a novel agreement among music companies to sell their songs online), business model (songs sold for a buck each online), and branding (how cool are those white ear buds and wires?). Consumers love the ease and feel of the iPod, but it is the simplicity of the iTunes software platform that turned a great MP3 player into a revenue-gushing phenomenon."1

- Larry Keeley, Innovation Consultant, Doblin Inc., in April 2007.

"How will we remember the iPod? As something that embodies who we were -and who we were going to be -in the early part of a century bound to take us places we couldn't hope to imagine? It was our fetish and our future. Its irresistible contours made us hungry to possess it. But it possessed us. Taking full advantage of the flexibility and fungibility of digital technology, the iPod changed our behavior, made business winners and losers, and made everything it touched just a little bit cooler."2

- Steven Levy, Author, "The Perfect Thing: How the iPod Shuffles Commerce, Culture, and Coolness" in 2006.


In April 2007, US based Apple Inc. (Apple) was adjudged the world's most innovative company from among 50 companies, according to BusinessWeek-Boston Consulting Group study. Apple occupied this position for the third consecutive year. BusinessWeek wrote, "The iPod creator is a master of superb product, store, and experience design."3

It also named iPod the "Omnipresent Icon of Design".4 Commending Apple on iPod's marketing strategy, TII Innovation Journal said, "Today, innovation is about much more than new products. It is about reinventing business processes and building entirely new markets that meet untapped customer needs.

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Most important, as the Internet and globalization widen the pool of new ideas, it's about selecting and executing the right ideas and bringing them to market in record time."5 Apple had launched iPod, a portable digital music player, in October 2001. Since then, Apple had designed and sold different generations of iPod. iPod had created a market for almost 4000 iPod accessories. This market was also known as iPod ecosystem.

iPod was launched as a part of Apple's digital hub strategy (Refer Exhibit I for details on Apple's Digital Hub Strategy). iPod was user-friendly and simple to use - features that people adored. The marketing and advertising exposure given to iPod was unprecedented.

By the year 2004, gained a clear market leadership status in the global digital music player industry. Apple undertook incessant advertising for iPod. The advertisements featuring silhouettes dancing to the beats of their iPods were seen everyewhere -print, television, and billboards. In a very short time, Apple created an iconic image for iPod that attracted the young and the old alike.

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1] "The World's Most Innovative Companies According to Business Week", TII Innovation Journal, April 2007.

2] This book was released on the fifth anniversary of the iPod, i.e., in October 2006. It chronicles the evolution and impact of the iPod and Jobs' role in transforming the music industry with the iPod. Steven Levy, the author of this book is also the chief editor and Chief Technology Correspondent for the Newsweek magazine.

3] "The Most Innovative Companies: 1.Apple," BusinessWeek, May 05, 2007.

4] "The World's 50 Most Innovative Companies", Special Report, BusinessWeek, May 05, 2007.

5] "The World's Most Innovative Companies According to BusinessWeek", TII Innovation Journal, April 2007.


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