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Introducing New Market Offerings | chapter 15 479

analysis, product development, market testing, and heavy users and early adopters of new products because
commercialization. At each stage, the company must both groups can be reached by specific media and tend
decide whether to drop the idea or move to the next to be opinion leaders. The consumer-adoption process is
stage. influenced by many factors beyond the marketer’s con-
4. The consumer-adoption process is the process by which trol, including consumers’ and organizations’ willingness
customers learn about new products, try them, and to try new products, personal influences, and the charac-
adopt or reject them. Today many marketers are t­ argeting teristics of the new product or innovation.

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Applications
Marketing Debate Marketing Discussion
Whom Should You Target with New Product Innovativeness
Products? Think about the last new product you bought. How do
Some new-product experts maintain that getting close to you think its success will be affected by the five charac-
customers through intensive research is the only way to teristics of an innovation: relative advantage, compatibility,
­develop successful new products. Other experts disagree complexity, divisibility, and communicability?
and say customers can’t possibly provide useful feedback
on what they don’t know and can’t provide insights that will
lead to breakthrough products.
Take a position: Consumer research is critical to new-
product development versus Consumer research may
not be all that helpful in new-product development.

Marketing Excellence revolutionary MP3 player became “the Walkman of the

21st century,” and the launch of the iTunes online music
store helped drive iPod sales through the roof.
>> Apple The iPod was also central in changing the way peo-
Apple has transformed the way people listen to m ­ usic, ple listened to and used music. According to musician
play video games, talk on the phone, and even read John Mayer, people felt like they were “walking through
books. The company’s revolutionary product innova- musicology” when they used their iPods, leading them
tions include the iPod, the iMac, the iPhone, and to listen to more music and with more passion. The iPod
the iPad. They are the reason the company topped has gone through a series of re-generations, adding
Fortune’s Most Admired Companies list every year from features like photo, video, and radio capabilities along
2008 to 2014. the way.
The iPod introduced many consumers to Apple and Apple reached its impressive market domination
initiated a series of monumental product innovations. It through a combination of shrewd product innovation
exemplified Apple’s innovative design skills and looked, and clever marketing. The marketing effort appealed
felt, and operated like no other device. To the delight to both Apple fans and people new to the brand. To
of Apple (and the chagrin of competitor Sony), the reach such a broad base, the company had to shift its
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480 PART 5 | Creating Value

channel strategies. It added “mass electronic” retail- The launch of the iPad also created media frenzy in
ers such as Best Buy and Circuit City (now defunct) to 2013. The multitouch device combined the look and feel
its existing channels, which quadrupled its number of of the iPhone with the power of a MacBook and gave
outlets. consumers access to music, books, movies, pictures,
Besides this enhanced “push” effort, Apple also video games, documents, and hundreds of thousands
developed memorable, creative “pull” advertising that of applications at the touch of a finger without mouse or
helped drive the popularity of the iPod. The Silhouettes keyboard. Apple followed up with the launch of the iPad
campaign featured silhouettes of people listening to and mini, a smaller version of the original, and the iPad Air,
dancing with their iPods and appeared all over the world. accompanied by a powerful marketing campaign that
This simple message worked across cultures, portraying inspired consumers to do anything with their iPad, includ-
the iPod as cool but not beyond the reach of anyone who ing creating movies, building wind turbines, studying coral
enjoyed music. reefs, and making mountain climbing safer.
As the iPod’s popularity grew, a halo effect helped In recent years, Apple has faced more serious com-
increase Apple’s share in its other markets. In fact, in petition for its smart phones, tablets, and other handheld
2007 the company officially changed its name from Apple devices, especially from Samsung and HTC. Investment
Computer Inc. to Apple Inc. to help communicate its in research and development is just one way the com-
­focus on non-computer products. pany remains a leader in this cutthroat industry. It spent
Apple’s next-largest product launch after the iPod $2.4 billion in R&D in 2011, $3.4 billion in 2012, and $4.5
was the iPhone, its 2007 entry to the cell phone industry. billion in 2013. Creating, producing, and launching new
With its touch-screen pad, virtual keyboard, and Internet products is a top priority for Apple. With creative market-
and e-mail capabilities, the iPhone launched to huge ing support behind them, these products are the reason
consumer excitement; people lined up for hours to be consumers and analysts stay on their toes awaiting
among the first to buy one. Investment analysts initially Apple’s latest product news.
feared that Apple’s two-year contract with AT&T and
the iPhone’s high price would hinder its success. But Questions
74 days after the product’s debut, 1 million units had
been sold. It had taken the iPod two years to reach the 1. Apple’s product launches over the past decade have
cumulative sales ($1.1 million) the iPhone had reached been monumental. What makes the company so
after just its first quarter. In fact, half the iPhones’ buyers good at innovation? Is anyone comparable to Apple
switched to AT&T, incurring fees to break their contracts in this respect?
with other carriers, just to have a chance to own an 2. How important was the iPod to Apple’s current suc-
iPhone. cess? Discuss the significance of the iPhone and
Over the next few years, Apple dropped the price of iPad launches to Apple’s new-product development
the iPhone significantly and added impressive picture and strategy.
video capabilities, video game features, a faster proces-
3. It has been a few years since Apple’s last epic inno-
sor, and access to millions of additional applications. The
vation. What’s next for Apple?
iPhone had become yet another game-changing techno-
logical invention. When the iPhone 4 launched in 2010, Sources: Matt Vella, “Apples’ Latest Ad Is Probably Going to Give You the Chills,” Time, January 13,
showcasing FaceTime video calling, Steve Jobs declared 2014; www.apple.com; 2013 Apple Annual Report; “iPhone4: The ‘Most Successful Product Launch’
in Apple’s History,” Independent, June 28, 2010; Joseph De Avila, “Why Some Apple Fans Won’t
it “the most successful product launch in Apple’s history.” Buy the iPhone,” Wall Street Journal, September 12, 2007, p. D3; Nick Wingfield, “Apple Businesses
Jobs died in 2011 and didn’t get to witness the success Fuel Each Other; Net Jumps as Mac Sales Top PC-Industry Growth Rate; iPhones, iPods Also Thrive,”
of the iPhone 5 launch in 2012. Apple received more Wall Street Journal, October 23, 2007; Terril Yue Jones, “How Long Can the iPod Stay on Top?,” Los
Angeles Times, March 5, 2006; Beth Snyder Bulik, “Grab an Apple and a Bag of Chips,” Advertising
than 2 million preorders of the iPhone 5 within the first Age, May 23, 2005; Jay Parsons, “A Is for Apple on iPod,” Dallas Morning News, October 6, 2005;
24 hours, far exceeding sales of any preceding iPhone Peter Burrows, “Rock On, iPod,” BusinessWeek, June 7, 2004, pp. 130–31; Jay Lyman, “Mini iPod
launch. When the phone officially hit the shelves on Moving Quickly, Apple Says,” TechNewsWorld, February 26, 2004; Steven Levy, “iPod Nation,”
Newsweek, July 25, 2004; “Apple Computer: iPod Silhouettes,” New York Marketing Association;
September 21, 2012, the company couldn’t keep up with Steven Levy, “iPod Nation,” Newsweek, July 25, 2004; Effie Worldwide, www.effie.org.
the initial demand.