How Apple Company Meets Its Advertising Needs - Case Study Example

Introduction Advertising is a communication to consumers with an aim of convincing or encouraging continuing or taking a new action. Advertising is mostly for commercial purposes, but it may also be used to sell ideologies such as in politics. The advertising message targets different audiences depending on the objective of the advertising agency. The target groups maybe shareholders, employees, consumers or even the general population. The media for advertising has evolved from traditional media to new media. Traditional media includes mass media while the new media includes forms such as websites, blogs and text messages. Estimates show that in 2010 alone advertising expense was around $467 billion worldwide. In this research paper to understand how advertising works, it explores how Apple Company meets its advertising needs. Apple is the current biggest firm in the world with a market capitalization of $600 billion. It is the manufacturer of the Mackintosh computers, ipads, iphones and IPods. In a competitive market, Apple needs to engage in advertising in order to ensure profitability. It engages in advertising to increase the consumption of its products, give more information on new and existing products and also to show the consumer the superiority of its products over the competitors. Advertising Agencies Apple is the market leader in the technology industry. However, it faces fierce competition from other technology companies such as Samsung, Motorola, and Research in Motion (RIM), Google, Amazon and many more technology companies. Samsung overtook Apple in the sale of smart phones last year due to aggressive advertising. Due to this fierce competition it needs to advertise through the traditional media such as newspapers, televisions, radio, magazines, billboards or direct mail and through the new media such as blogs, websites and mobile advertising. Apple continues to advertise actively since the advent of its first product the mackintosh computer in the late 1970s. They have engaged in advertising ever since to the present (O’grady 2009, pp150). The advertising culture at Apple Company has evolved rapidly over the years. The first advertisement was in the late 1970s. With the boom of the computing culture in the 1980s, the company undertook a campaign which aims at convincing consumers to own a computer especially an Apple. The advertising messages were heavy on text and used light images. Most of the advertisements on computers and other technology used the text heavy and light images. It graduated to the “The Think Different Campaign” of the 1990s that was widely successful. It featured a number of celebrities such as Mohammed Ali to achieve its purpose. This campaign served to make Apple brands familiar to consumers and also educate them on the functions of their products (Advertising Agency Magazine 1955, pp60). The advertisements of Apple products were more artistic in the 1990s than in the 1980s. The ads moved from the text- heavy and light images of the 1980s to ads that used more pictures in the next decade. The 1990s ads focused on showcasing the brands using pictures. Of recent, the company has in calculated new forms of advertising such as using its webpage and those of others such as the search engine Google. It also uses other forms such as blogs and mobile ads. However, it also uses traditional media such as television, radio, newspapers, magazines and emails advertisements. Current designs of Apple brands use two approaches. For the Apple computers, the ads have a white background that focus on the product while, for the iPods, the ads employ a bright background with silhouetted figures. The company has shifted most of its focus to television advertisement in the recent past. The ads haves helped the brands to become household names. They have helped to fuel demand for the products internationally, making Apple the most profitable company at present. First quarter results of the company on Bloomberg, reveals that the company sales continue on an upward trend, but with increasing competition from companies like Samsung, that launched its latest smart phone recently the company needs to invest more in its advertising campaign to ensure to remain on its profitable trend. To carry out its television advertisements, the company contracts agents such as TBWA/Chiat Day. They have contracted the agent since 1984 “Big Brother” commercial mackintosh. The commercial was a significant success and was the most famous of all time. The agency makes incredible TV commercials of the products. They usually range within a 20-30 seconds, but pass on a lot of information to the consumer. The quality of the TV commercials has made Apple to retain the agency for the long time. The first famous, TV commercial was during the 1984 Super Bowl based on George Orwell’s “1984” (Advertising Agency Magazine 1955, pp80). Recent TV commercials on the Apple products include the Mac verses the Pc ads. The company has focused more on television advertisements to reach its targeted customers than in the other media. The company has emphasized on television commercials because of its advantages. TV commercials are the most suitable for mass market. Apple has a wide market of consumers it needs to reach because it is a multinational corporation. It serves the international market; therefore, the TV commercials are the best. The company places its commercials during the popular shows. The Super Bowl games annually provide a platform for companies to reach their intended markets. On average, the advertising cost for a 30 second television commercial is $3.5 million. Apple has advertised on such platforms to reach its intended audience. It brands its products to create an image they desire to the consumers. The other form of advertising used by the company is print media. Print media includes messages and ads disseminated through media such as magazines, newspapers and emails. Print media is usually used in conjunction with the television advertisements in the company. The medium has the advantage of reaching a wide range of consumers because of its wide readership base. Apple Company has placed ads of its products in national newspapers, local newspapers and trade journals. The company uses both classified ads and display ads. The print media helps consolidate the efforts of other advertising forms such as the television commercials (O’guinn 2012, pp297). The company has also employed new forms of media to reach its target consumers. The new media forms of advertising include websites, blogs and mobile ads. Through its website, the company can access its consumers. The company can educate its consumers on available and new products through its website. On the Apple website, the consumers can watch commercials on the company brands that will encourage and persuade them to consume them. Current consumers of Apple products can access support information and also be encouraged to consume the products rather than switch to the competitor’s. Websites have become one of the recent forms of advertising preferred by most companies. This is because of the increase in the use of the internet in the world. People in the world are internet literate compared to the past. The companies can advertise through agents such as Google’s website. It can advertise through the search ad that consumers can view in the process of searching for information. It can use a number of other companies’ websites to advertise. Another form of advertising used by Apple and other companies is social media advertising. The social media has gained familiarity in the recent past. The social media sites include Face book, Twitter, LinkedIn, MySpace and many others. The number of people using the social sites has surged with Face book users exceeding 900 million. Apple has noticed this trend and has strived to reach its target population through the social sites. Apple has a Face book page which it uses to offer information and support to a number of its customers. The customers can access information and where they do not understand. The company has a twitter account where it can communicate to its target consumers. It is also present in a number of other social sites such as LinkedIn and many more. The number of people using mobile phones has increased over the recent past. It has become a new form of advertising that can reach the mass market. To tap this gap, the company has invested in platforms such as Quattro wireless. It uses text messages, search ads, web display ads and application display ads to reach the market through the mobile. Through this platform, Apple Company can meet its advertising needs and those of other companies. Other ways the company uses to reach its target population include billboards, infomercials and radio. Ethical and Regulatory Issues The main ethical issue facing the company is deceptive advertising. Apple has been sued on a number of cases for giving incorrect information to consumers in their ads (O’guinn 2012, pp693). The most recent of such is the misleading advertisements in Australia that the ipad 3 is 4G enabled. The ipad 3 is not compatible with the 4G network in Australia. Most people in Australia bought the ipad 3 under this deceptive advertising. The company refunded the customers their money and had to take back the ipads they had already bought. The ipad 3 only works on the 4G networks in the United States and Canada. Through this deceptive advertising, the company risked being fined millions of dollars. However, the case will still be going to full trial due to the effect of their deceptive advertisement still lasting. Another case of misleading advertisement is in the United Kingdom. The Advertising Standards Authority (ASA) banned an Apple advertisement of its iPhone in the country. The ad claimed that all the internet components were present; however, it did not support java or flash. This ban in August 2008 led Apple to issue a new advertisement that in calculates the exceptions. Other iPhone advertisements of recent are misleading with them claiming higher internet speeds than the possible 3G network. However, they disclaim that it may not be as faster as claimed (Cross 2009, pp827). Another ethical and regulatory issue is the unfair competition in the industry. Claims are that Apple used its dominance in the industry to get the Federal Trade Commission to approve its acquisition of mobile advertising company Quattro. Google, on the other hand, has been trying to acquire AdMob, but the FTC stopped the deal to investigate it first. Claims are that Apple used its influence the decision hence to remain in the market as the dominant player in the mobile advertising market. Advertising Theory Apple Company employs a mix of advertising theories to carry out its advertising needs. The first theory the company uses is the hierarchy of effects model (Sandage 405). The model proposes the steps the consumer must pass through before finally making the decision to consume the product. The steps are awareness of existence of a product, gaining more knowledge of the product, liking it, preferring it over its substitutes, forming a conviction to consume and then finally purchasing it. Through understanding this steps then the company can ensure that the company meets every consumers needs whichever the position on the hierarchy. Apple’s ads strive to create awareness, educate, persuade and encourage the consumer to purchase the company’s products. Another advertising theory the company uses is the leverage points. This theory aims at making the company’s products an integral part of the consumer. It does not aim at the consumer understanding the benefits derived from a product as an end, but making the benefits part of the personal values of the consumer. The “Think Different Campaign” of the 1990s by the Apple Company aimed at making the Apple brands of the revolution of how people think and reason. The final advertising theory employed by the firm is verbal and visual images. The advertisements uses repeated visual and verbal images to change the actions and thinking of society. The images and symbols become associated with positive or negative attributes in society. Apple advertisements such as “The Think Different Campaign” used a lot of images of celebrities such as Mahatma Gandhi and john Lennon to influence the society. There has been other advertising campaigns such as the “Get a Mac” campaign that strive to influence how the society perceives of what is normal. Functionality and Objectivity of the Campaigns The Apple advertisements have generally achieved their functions and objectives over the years. Through the advertising campaigns, Apple products are now household names that are an integral part of the consumers. Since the first advertisement in the late 1970s of the company’s products, the sales have shown an upward trend. The 1984 Super Bowl advertisement of Steve Orwell is one of the most successful commercial of all time. Other advertisement campaigns over the years to present such as “The Think Different” campaign “Get a Mac” and many others by the company have generally achieved their functions. The functions and objectives the campaigns have strived to achieve are to create awareness, disseminate knowledge, create preference for the company’s products, and create a conviction in the consumer and above all to promote the sales of the company. Branding and Measurement of Success of Advertisement The company has rebranded its logo and other slogans so as to increase familiarity and confidence of originality among its consumers. The logo has changed from the original one that showed Isaac Newton under an apple tree to the 1976 one that showed a bitten apple that contained the colors of the rainbow. The logo changed in 1998 to a monochrome apple that is bit on the side. The identifiable logo helps the consumers to ascertain the originality of its products. Other slogans that have become identifiable with the Apple products include are “Think Different”, “Byte” and “Newton” (Kelley 2011, pp80). Any company that advertises would wish to measure the effectiveness of their campaigns. It is relatively difficult to measure the successful of advertisements. It is relatively easy to measure the effectiveness of online advertisements. The company can monitor the number of people that visit a site, the number of people that click on the ads and finally the number of people that make a purchase due to visit to the site. However, this method is criticized as infringing on consumer privacy. The effectiveness of the other campaigns through traditional media cannot be accurately measured, but it can be evaluated through the elasticity of sales due to the advertisement campaign. The company can use Advertising Value Equivalency (AVE) as a tool to measure for the successfulness of advertisement campaigns. Recommendations Apple Company has generally been effective in meeting its objectives and functions through its advertisements. The effectiveness of their advertisement can be measured through the success of the company. The company is the most valuable in the world by market capitalization. The company is worth over $600 billion with a profit of $108 billion in the year 2011. Its advertisements also have translated into a strong public image. The company rates as the most admirable company in the United States and the in the world in general. However, the company must strive to maintain this profitability and image in the long run. It must not engage in deceptive advertising such as the iPhone ads in the UK and the iPad 3 ads in Australia that convinced the consumer through faulty information. This practice will lead to a bad reputation for the company which will eventually lead to reduced sales for the company as consumers migrate to other brands. Finally, the company must not infringe the consumer’s privacy in the effort of collecting information so as to provide better services and goods to the consumer. Although, it has the benefit of reduced costs to the company. The practice helps the company engage in targeted advertising. Reference list O'grady, J. D. (2009). Apple Inc. Westport, Conn, Greenwood Press. (1955). Advertising agency magazine. Bristol, Conn, Moore Pub. Co. O'guinn, T. C., Allen, C. T., & Semenik, R. J. (2012). Advertising and integrated brand promotion. Mason, OH, South-Western, Cengage Learning. Cross, F. B., Miller, R. L., & Cross, F. B. (2009). The legal environment of business: text and cases : ethical, regulatory, global, and e-commerce issues. Mason, OH, South-Western Cengage Learning. Sandage, C. H., Fryburger, V., & Rotzoll, K. B. (1989). Advertising theory & practice. New York, Longman. Kelley, L. D. (2011). Advertising account planning: planning and managing an imc campaign. [S.l.], M E Sharp. Read More