Apple's Iphone Launch: a Case Study in Effective Marketing

Topics: IPhone, Steve Jobs, Apple Inc. Pages: 7 (2077 words) Published: July 6, 2013
Apple's iPhone Launch: A Case Study in Effective Marketing
Kyle Mickalowski, Augustana CollegeMark Mickelson, Augustana CollegeJaciel Keltgen, Augustana CollegeABSTRACT When CEO Steve Jobs announced in January 2007 that Apple would be releasing a revolutionaryiPhone five months hence, consumers waited with bated breath for a phone that would deliver all the features of their iPods as well as a smart phone. Anticipation grew, just as Jobs knew it would, as Juneapproached. The launch would become one of the most heralded technological product splashes Apple,known for its masterful media build-up, had ever planned. How the iPhone was developed, priced, promoted, and distributed is lesson for marketers around the world. Apple investors were pretty happy withthe outcome as well. INTRODUCTION

One year after Apple Inc. CEO Steve Jobs announced the company’s industry-changing iPhone onJanuary 9, 2007, at the Macworld convention in San Francisco, the share price of Apple’s stock has morethan doubled to a January 9, 2008, value of $179.40 (See Chart 1). This stock price incorporates all of Apple’s business, but a large part of the rise in value can be attributed to the launch of the cutting-edgeiPhone, of which four million have already been sold through mid-January 2008 (Carew, 2008). Based onthis simple observation of the stock price, the iPhone can so far be declared a success, at least from ashareholder standpoint. This paper will explore both the pre- and post-launch activities surrounding theiPhone to explain why it was such a success for the stockholders and why Apple’s reputation forunparalleled marketing success is deserved

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One blogger (www.blogs.business2.com) was so interested in Apple's iPhone advertising
schedule, he conducted a Nexis search for newspaper stories that mentioned the iPhone between June 23and August 18, 2007. During that timeframe, Apple had aired nine new TV ads. The week the iPhone waslaunched, 1,547 stories appeared in the media, compared to 206 in mid August. Apple's advertisingschedule appears to reinforce the iPhone's presence in media during times when the buzz or free media hastapered off. This combination of paid and free media gives consumers the impression that the iPhone is aconstant presence in the popular media.One of the most influential periodicals dedicated to advertising, Advertising Age

, in 2007 selectedApple as a runner-up for the annual Marketer of the Year award. This status was conveyed because of Apple's "rare accomplishment of successfully bringing a new product into an already crowded andcompetitive market. Apple's agreement with cellular telephone service provider AT&T gave it an upperhand in their relationship older cellular telephone firms have yet to acquire" (Bulik and Cuneo, 2007).While Apple's advertising budget and schedule aren't readily available, Adweek

's AndrewMcMains estimated the Apple global account was worth $250 million in 2006 to agency TBWAWorldwide (2006). Other pundits have guessed that Apple will spend at least $20 million to launch theiPhone in Europe and easily surpassed that figure in the United States during the summer of 2007 alone. DISTRIBUTION CHANGES

Apple made some changes in its traditional consumer distribution channels, choosing to eschewthird-party dealers/retailers such as Best Buy and RadioShack Corp. when planning where to sell theiPhone. AT&T offers the phones in its roughly 1,800 company-owned stores; iPhones are also available inApple stores or through Apple's website (Sharma, 2007). While impossible to predict a possible backlashfor Apple as it continues to market its entire product line, altering established distribution channels canconfuse customers and risk future distribution plans with those retailers who were cut out of the iPhoneplan. THE IPHONE GOES GLOBAL

The excitement surrounding the release of the iPhone was not contained solely in the U.S. Longlines outside stores and enthusiastic countdowns...

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