Ipod - Place & Promotion Strategy

Part 1

Product: Apple iPod - 80GB

PLACE:

The Apple iPod doesn’t fall specifically under a direct or indirect channel of distribution. Instead, Apple uses a variety of direct and indirect distribution channels. (Channels of distribution - Perreault & McCarthy, p. 248-251) Apple sells its product not only through their own online stores and retail stores but they also sell their product through their direct sales force, and third party wholesalers and resellers. Asides from the above mentioned, you could purchase iPod’s through specific department stores like Macys (Department Stores - Perreault & McCarthy, p. 294), member only warehouse locations like Costco and Sam’s Club, large retail chains like Best Buy and Circuit City, and recently, mass-merchandisers like Wal-mart. (Mass-Merchandisers - Perreault & McCarthy, p. 295) I think that Apple uses a physical distribution concept for their iPod; I think that they try to coordinate as one complete system; however, they run into problems with inventory, it seems that when Apple first releases their products, they never have enough in stock at any of their intermediaries. (Physical Distribution Concept - Perreault & McCarthy, p. 271) I think that the iPod uses a selective market distribution; I think that Apple chooses their intermediaries wisely in order to ensure that those who they work with will do an excellent job at selling their product. The wholesalers and retailers they work with are also a lot more likely to promote the iPod more aggressively because they know that they’ll be receiving the majority of the sales through their own efforts. (Selective Distribution- Perreault & McCarthy, p. 259-260) I also believe that the target market wants exceptional customer service; they want help when they need it, they want value and quality, and they want the product to meet their expectations. Apparently Apple is doing something right, according to an annual survey; Apple scored an 83 out of 100 on customer service.

PROMOTION:

Promotion Method #1: Mass Selling

Description of method: Mass Selling is being able to communicate with a large number of hopeful customers all at the same time. It’s a lot less flexible than what personal selling is, however, it’s less expensive to use, in particular when the target market is large and scattered. (Mass Selling - Perreault & McCarthy, p. 319 ) Apple achieves this by advertising their product in magazines, billboards, bus stops, and TV. They also use publicity by having articles and reviews written about the new product which attracts attention to Apple as well as their product.

Specific promotion objectives: I think that Apples advertisements lacked in informing, the advertisements don’t really supply enough information on the product, the information provided in the commercial is not enough to make a purchasing decision, however, they obtain an action out of it, the lack of information causes potential consumers to go online or to the store and research and learn more about the product. Their promotion was very persuasive, their advertisements make it seem like those with an iPod have the most fun, and that iPod’s are “cooler” than competitors. Their advertising also reminds customers who already have a positive attitude about them, exactly why they have that attitude. Apple’s advertising for the iPod definitely gets attention, holds your interest, and arouses your desire to run to the store and purchase one.

Approach: I think that Apple uses both a combination of pushing and pulling, they “push” by using normal promotion efforts such as publicity and advertising in order to sell their product yet at the same they “pull” by customers wanting the product at their favorite store, and taking the time to ask the middlemen and stores to carry the product.

Message Medium: Apple uses many mediums, the majority of their advertising takes place in web ads, magazine ads, sales promotion in newspapers and magazines, commercials on TV and radio, and advertisements on bus stops and billboards.

1. Apple has continued to maintain a high customer service level (pg 269) because they deliver what it is customers want, when they want it. Apple continues to deliver quality and value; they continue to deliver a product that meets customer’s expectations.

2. Publicity (pg 319) is an unpaid form of non-personal presentation of ideas, goods, or services. Apple’s publicist writing a press release and feeding it to various newspapers and magazines is publicity. Apple also has a Public Relations