Top Bananas | Category Archives: Marketing

Apple Inks Deal with Oprah Winfrey

Posted on June 15, 2018 by admin Posted in Business, Marketing Leave a comment

What it is: Apple signed a deal with Oprah Winfrey to bring her content to Apple products.

Oprah Winfrey is a powerful woman who can create content in video and books. That’s why Apple recently signed a deal to access any future content Oprah creates or acquires the right to. That could mean future Oprah TV shows or movies could appear on Apple TV and future Oprah books could appear on Apple’s bookstore.

Apple has been aggressively pursuing original content for Apple TV because without it, Apple TV is just a commodity, offering the same thing that everyone else offers. Commodity markets are the least profitable markets. Just witness the android smartphone market where Samsung makes most of the money and all other Android device makers lose money. Making products that lose money is simply not sustainable in the long run.

Without original content, Apple TV offered little to attract customers. Now with more Hollywood deals including the latest with Oprah Winfrey, Apple can differentiate themselves from their rivals. Just as Netflix and Hulu have created original TV shows, so does Apple TV need original content that Oprah can provide. Any content created or endorsed by Oprah will immediately attract a huge following simply based on her name alone. Most likely any content endorsed by Oprah will be decent but the quality is far less important than Oprah’s name attached to it because Oprah’s name and following will insure that her content will be widely publicized and viewed.

Apple may be late to the original content market that Netflix and Amazon helped pioneer, but it has the money to stay in the market and outbid rivals for original content. This latest deal with Oprah will simply help Apple TV get started and compete against rivals. Now we just have to wait and see how good Oprah’s content really might be.

Apple Ads Target Android Users

Posted on May 23, 2017 by admin Posted in Business, Marketing, Software Leave a comment

What it is: Apple recently released a series of ads explaining how to switch from an Android phone to an iPhone.

Back in 2008, Apple released a series of ads called “I’m a PC” where an actor portraying a PC would comically fail comparing himself against another actor portraying a Macintosh. Those ads highlighted the differences between the Macintosh and a Windows PC to convince people to switch to a Mac.

Many people have switched to a Mac while many others still use Windows. Since the number of new computer users isn’t growing fast enough, the Macintosh growth rate often comes at the expense of people switching from a Windows PC or buying a Macintosh instead of another Windows PC.

Now Apple is targeting the much larger world of Android smartphone users. The number of new mobile phone users keeps shrinking all the time so the best way to keep selling iPhones is to sell them to people switching form Android. While some people switch from an iPhone to an Android phone, most people go the other way. That means steady growth for the iPhone and a slow trickle of defections from Android to the iPhone.

It’s unlikely that Apple will ever get everyone to switch from Android to an iPhone just like they could never get everyone to switch from a Windows PC to a Macintosh. However, the goal is simply to convince more people to switch even faster than before. If more people switch to Apple products than switch away from Apple products, that represents steady growth.

The latest Apple switcher ads highlight different concerns people might have in switching to an iPhone such as moving their music, photos, or other data to an iPhone. Rather than make fun of Android like their previous ads made fun of Windows, these latest Apple ads simply highlight how easy it can be to switch. In general, most people tolerate Windows where some dislike it, so Apple’s old ads poking fun at Windows appealed to many people.

Not as many people feel as much frustration towards Android as they do towards Windows. That’s probably why Apple’s latest ads don’t poke fun at Android but simply state facts for how to switch to an iPhone.

Over time, more people are switching to an iPhone than leaving it. This suggests steady growth for the iPhone over time with steady defections from Android over the same time period. Android will never go away, but it will serve as an introduction to smartphones so people can eventually compare their smartphones to an iPhone.

Apple’s Cafe Idea

Posted on February 14, 2017 by admin Posted in Business, Marketing Leave a comment

What it is: Back in 1996, Apple toyed with the idea of creating an Apple Cafe for people to visit.

In 1996, most people bought and used a Windows PC. Not because Windows was a necessarily a great operating system but because it was the best option available. Linux was freely available but was still too hard for most people to use and install. Even worse, Linux lacked the software library that Windows offered.

Even the Macintosh was mostly neglected during this time. After all, why buy a Macintosh for more money when you could get a better Windows PC that was more compatible with hardware and software? for that reason, most stories that sold computers focused on selling Windows PCs. If they sold the macintosh, they often had the Macintosh in a neglected corner.

That’s why Apple flirted with the idea of an Apple Cafe, which later got focused into the Apple Store. The original idea of the Apple Store was to sell Apple products such as the Macintosh and later the iPod. The huge problem with the Macintosh was that few places sold them because they found it easier to sell Windows PCs instead. So by opening their own stores, Apple could focus on providing a better buying experience for the Macintosh than people could get from other computer stores.

The Apple Cafe concept took this one step further and envisioned a restaurant as well. The idea was to make the Apple Cafe a destination in itself where Apple products just happened to be sold. While this concept likely would have flopped, it did plant the seeds for the Apple Store to come.

Initially critics claimed the Apple Store would flop. After all, Gateway Computers had opened multiple stores and failed. The big difference between the Apple Store and the Gateway Computer stores was that Gateway’s stores were nothing more than a showroom for their computers. If you liked their computers, you couldn’t buy one there. You had to order it online.

The Apple Store was different. You could try out various Apple products for as long as you wanted. Then you could buy the one you wanted right there and walk out the door with it. If you needed help, you could go to the Apple Store and visit a Genius Bar. Apple Stores not only sold products, but they supported them in a friendly environment.

Microsoft has tried to duplicate the Apple Store with their Microsoft Stores, but there’s a huge difference. Microsoft makes most of their money in the enterprise market while Apple makes most of their money in the consumer market. That’s why Apple Stores appeal to shoppers because they want help with their iPhone or Macintosh. That’s also why Microsoft Stores don’t appeal to individuals because most people can buy a Windows PC from any store so there’s little reason to go to a Microsoft Store.

If you need help, you can take a Windows PC to Best Buy, a Microsoft Store, or any smaller third-party repair shops. Windows PCs have plenty of third-party support so a Microsoft Store isn’t necessary. For the longest time, Apple products lacked such a third-party support network, so Apple had to create the Apple Stores to fill this unmet need.

Today, Apple Stores are still a place for individuals to try out various products and get help using and fixing their devices. There are some third-party support stores that offer similar help and support, but when most people think of getting help, they think of an Apple Store first. With a Windows PC when most people need help, they rarely think of a Microsoft Store first if at all.

While the Microsoft Store looks like an Apple Store, it’s not succeeding nearly as well. Microsoft is most likely losing money keeping their stores open since it’s hard to earn enough revenue selling Windows PCs that people can easily buy somewhere else, especially after decades of doing just that every time they needed a Windows PC.

Apple Stores filled a need and now they’re dominant. Microsoft Stores never filled a need so they’re far less successful.

The brilliance of the Apple Store wasn’t the store itself but in filling an unmet need, which was making the experience of shopping and buying an apple product easy and convenient. Third-party Apple stores have mostly withered away but there weren’t many to begin with. Apple Stores succeed because of the poor conditions surrounding the experience of buying Apple products.

Sot he lesson is clear. Just copying the physical layout of an Apple Store won’t magically bring success, which is what the Microsoft Stores are trying to do. The real secret of the Apple Store is filling an unmet need. In the case of Apple, most stores did a horrible to non-existent job of selling Apple products. In the case of Microsoft, most stores did a decent job selling Windows PCs and accessories, so Microsoft Stores were never necessary in the first place while Apple Stores were.

If you want to study the success of the Apple Stores, it has little to do with the physical appearance although that helps make apple Stores distinctive. The real success of the Apple Stores is filling an unmet need. Whether the original 1996 Apple Cafe concept would have succeeded or not is debatable, but offering food and drinks in an Apple Cafe would likely have distracted people instead.

Nobody goes to an Apple Store today and wants a sandwich and a drink. Yet the concept of the Apple Cafe led to the Apple Store. Success comes to those who fill an unmet need and stay focused. The Apple Stores do that while the Apple Cafe concept does not.

There’s a thin line between success and failure. As Microsoft discovered, just copying the Apple Store idea is not enough. You must also fill an unmet need and that’s why the Apple Store is still a success after all these years and the Microsoft Store is not.

Swimming Against the Tide

Posted on December 25, 2016 by admin Posted in Business, Marketing, Software Leave a comment

What it is: A company called Cyanogen tried to build a more open, better version of Android, but failed.

If you want to succeed, don’t fight the crowds. Right now, the crowds have pretty much chosen iOS and Android as the two dominant mobile operating systems. Yet back in 2007, some programmers started creating their own open source mobile operating system. Then they decided to fork Android and create their own version of Android called Cyanogen.

The goal as simple. Be just as good as Android but more open. Unfortunately, they failed.

The problem was that both companies and consumers had little reason to switch from Android to Cyanogen. Consumers don’t care what operating system their devices use just as long as it works, and for most people, Android works just fine so there’s little reason to switch. Even worse, there’s less of a reason to switch if you lose all of Googl,e’s services and android compatibility with the huge market of available apps.

Trying to knock off Android makes as much sense as trying to knock off Windows as a desktop operation system. Even though Linux is arguably better, more secure, and far more open than Windows (while also being free), Linux has made little headway into the desktop operating system simply because most people are comfortable with Windows and see little reason to switch. For those who do see a reason to switch, they often just buy a Macintosh. Only tech-savvy users switch to Linux simply because Linux is not as well supported by third parties as Windows and macOS.

The lesson is clear. If companies want people to switch, they have to give them massive reasons to switch. People dumped Blackberry smartphones for iPhones because the iPhone was a massive improvement. People didn’t switch from the iPhone to Microsoft’s Windows Phone operating system because Windows Phone was not a massive improvement.

Cyanogen failed not because of technical reasons but because of social reasons. Why switch unless there’s a massive, compelling reason to do so? The next time you see a tech startup try to change the world, look at what they’re offering. If they’re not offering a massive improvement over existing technology, there’s a huge chance they’ll simply fail.

Advertising Can’t Sell Inferior Products

Posted on October 8, 2016 by admin Posted in Hardware, Marketing Leave a comment

What it is: Google plans to spend millions promoting their latest Pixel XL Android smartphone.

There’s a common mistake that if you advertise a product long enough, people will eventually buy it. The huge problem with this myth is that the amount of profits you make must always cover the cost of the advertising. If you spend too much on advertising, it doesn’t matter how many units you sell if you still lose money.

with the release of the Pixel XL Android smartphone, Google plans to spend millions heavily promoting the phone. However, more expensive advertising can never sell an inferior product. Even worse, the cost of the Pixel XL smartphone is equal to Apple’s iPhone 7, yet the Pixel XL phone is slower, lacks a telephoto lens, lacks optic stabilization, lacks water resistance, and lacks stereo speakers. So by spending just as much for a Pixel XL, you get much less than an iPhone 7. That’s like given a choice between buying a Maserati or a Yugo for the same price and choosing the Yugo instead.

For years, Android has been known as a poor man’s iPhone because Android phones were often much less expensive than the iPhone. Now that Google’s trying to sell the Pixel XL at the same price as the iPhone, why buy the Pixel XL when you can buy much cheaper Android phones instead?

If you’re going to pay more, why get an inferior Pixel XL when you can get an iPhone or even another Android phone with more features comparable to the iPhone?

Spending more money on advertising is never the answer. The answer always lies in selling a quality product in the first place. There’s nothing wrong with the Pixel XL if it was cheaper than the iPhone. What Google and other Android manufacturers are discovering is that if they want to create a high-end product, they have to spend money to make it, and that means charging more.

Google is trying to promote Android as a cheap alternative to the iPhone and as an equally expensive alternative to the iPhone. So people attracted by price will opt for cheaper Android phones. People who want to spend money on a high quality product will choose an iPhone or a comparable Android phone. People who just have a lot of money to spend to buy inferior products will choose the Pixel XL.f

The Pixel XL isn’t just inferior to the iPhone but to many other competing Android smartphones as well, such as the high-end Samsung phones. So give a choice, why buy the Pixel XL?

The purpose of advertising is to educate consumers on why a particular product meets their needs. Once advertising finds the right audience with the right message, sales will come automatically. After all, it doesn’t take much advertising to sell water to thirsty people in the desert. Likewise, it doesn’t take much advertising to convince hungry people to eat at a restaurant.

Google wants the Pixel XL to match the high-end smartphone market but with a product that isn’t high-end. All the millions spend on advertising won’t change this simple fact. It may fool people into buying it, but once they realize they paid just as much as an iPhone or Samsung premium Android phone, will they like buy another one or recommend the Pixel XL to friends?

Instead of spending money on advertising, Google should spend time and money positioning the Pixel XL to the right audience. With inferior technical specifications, the Pixel XL can’t compete against high-end smartphones so Google needs to lower the price. Yet the expense of creating the hardware in the Pixel XL means Google can’t make a profit lowering the price. That’s the real dilemma and that can’t be solved by throwing millions into an advertising budget.

The simple truth is that if you want a premium product, you have to pay more for it. If you don’t want a premium product, choose a less expensive alternative. If you try to sell a cheap alternative at a premium price, don’t be surprised if it doesn’t sell very well, and that’s the message Google’s advertising blitz won’t tell you at all.

The Folly of Copying the Leader

Posted on May 12, 2016 by admin Posted in Business, Marketing Leave a comment

What it is: After Apple proved successful with their retail stores, Microsoft created their own retail stores that look remarkably similar to Apple Stores.

If you’re always following, you can never be a leader. That bit of wisdom seems to escape the minds of so many companies, especially Microsoft. There are tow huge problems with following a leader. First, by following, you’re already behind. Second, by following, you risk getting caught in the same market conditions that can eventually hurt the leader.

Remember the good old days when Blockbuster Video stores dominated the video rental markets in practically every town in America? On Friday night, a huge crowd of people would rush to Blockbuster to grab the latest releases and pick up snacks along the way. Then rivals like Hollywood Video tried to copy that concept with similar large retail space with the latest movies every weekend. For a while, both Blockbuster and Hollywood Video stores did fine until streaming videos over the Internet (Netflix) and cheap DVD vending machines (Redbox) came along that decimated the traditional DVD rental market. Hollywood Videos went belly up first and then Blockbuster Video. That’s the danger of following the leader.

In the computer industry, Microsoft has made that same mistake multiple times. Way back in the early days of online services, CompuServe was the leader so Microsoft decided to make a CompuServe clone called the Microsoft Network, which arrived just in time as the Internet started to wipe out online services like Prodigy, Delphi, and CompuServe.

Back in the early days of MS-DOS programming, Turbo Pascal was a popular programming language so Microsoft cloned it and introduced QuickPascal, just as Borland International released a new version of Turbo Pascal that introduced object-oriented programming and made QuickPascal incompatible with Turbo Pascal code. If you never heard of QuickPascal, that’s the reason why. It died a quick death and never gained popularity.

Recently, Microsoft tried to clone Adobe’s Flash plug-in with Silverlight. When the plug-in market died with the rise of mobile computing in the form of smartphones and tablets, flash’s dominance faded and Silverlight died with it. Microsoft tried to make Silverlight a programming tool for their Windows Phone 7 operating system, which they hastily threw together to compete against iOS in the iPhone complete with a similar app store. Windows Phone was simply too late to the mobile computing market as Android and iOS carved up the market among themselves. Today, even Microsoft employees seem to be ignoring Windows Phone.

Rather than just copy a leader, it’s always best to leap one step ahead and compete in an area the leader is currently ignoring. Back when Apple started opening their own retail stores, everyone thought they were crazy since Gateway Computers had just started shutting down their own retail stores. Yet the conditions between the two were starkly different.

Gateway’s stores simply showcased their products but didn’t actually sell anything. Even worse, Gateway computers were just one of many PCs on the market, so you could easily see different types of PCs at various retailers like Best Buy or Fry’s Electronics stores. You didn’t need to go to a dedicated Gateway Computer store just to evaluate different PCs in person.

That was completely different with Apple products. Back then, most retail stores sold Windows PCs and accessories because that’s what sold the most. As a result, they rarely sold Apple products at all. If you wanted to go to a store to evaluate an Apple product, you couldn’t.

That’s the gap that Apple Stores filled. By providing you with a dedicated store filled with nothing but Apple products you could try as long as you wished, Apple Stores gave people a place to go to evaluate and purchase Apple products of all kinds along with accessories. Apple Stores filled a missing gap in retail shopping. Gateway Computer stores did not.

After Apple’s success with Apple Stores, Microsoft decided to open their own retail stores that looked remarkably similar to Apple Stores with the same type of open layout. Yet if you happen to live in a town with a Microsoft Store and an Apple Store, you’ll notice that the Microsoft Store is largely empty most of the time, even during the holiday shopping season. In comparison, the Apple Stores are mostly crowded so much that they can get uncomfortable visiting due to the crowds of people testing out various products.

Apple Stores make the largest amount of money per square foot of any retailer. So far, Microsoft has never listed how much their Microsoft Stores make per square foot. Most likely this is because Microsoft Stores pay high rent to put them in the same upscale shopping malls as Apple Stores, but with far fewer customers, Microsoft Stores most likely lose money every month. The problem with Microsoft Stores is that they sell PCs and other Microsoft products like Windows Phone devices and Xbox game consoles. Yet like Gateway computer Stores, you can buy those same products at a dozen other retailers, so why bother making a special trip to a Microsoft Store?

Microsoft Stores are visible proof that copying a leader is never a smart strategy if all you’re trying to do is look the same as the leader. There’s a reason why a leader in any industry becomes a leader. It’s because they filled a need at one time and they continue filling a need right now. The moment they no longer fill a need (think Blockbuster Video), they’ll go out of business.

Right now Apple Stores continue filling a need. Microsoft Stores do not. The folly of copying Apple Stores with Microsoft Stores makes as much sense as Oracle trying to open their own retail stores to sell products. Oracle’s products sell mostly to corporations and Microsoft makes most of their profits off corporations as well. Trying to sell to individuals is mostly a waste of time and money for Microsoft, yet that’s exactly what the Microsoft Store is meant to do, which is why it’s such a glaring failure.

For the most part, the Microsoft Store is just an expensive billboard for Microsoft that costs money to maintain with very little in return. Yet Microsoft keeps opening more stores in a futile attempt to show their relevance. In any business, it’s foolish to keep flushing money down the toilet, but that’s what Microsoft keeps doing with their Microsoft Stores with no end in sight. What’s the long-term strategy for the Microsoft Stores? There doesn’t seem to be one, which is why it’s a failure. When you have no clear goals or results in mind, it’s not surprising when you fail to reach anything worthwhile.