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Thursday, August 09, 2007

iMarketing 401: The iPod iPhone Strategy

If there is one thing Apple knows how to do it is build up the cachet of a product. Of course the early model is priced high, flooding the market with a cheap model is the very last thing you do. Carrying an iPod remains a global fashion, art, music, and lifestyle statement, all at once, years later. So will the iPhone. Podcast is becoming a common word.

Creating real long term demand for a line of products and associated services with monthly revenue streams is an art mastered by Jobs and his team. Wharton, Stern, and all the other MBA students now study how iPod and iTunes became such a success. There's a very, very specific marketing formula at work here during the iPhone introduction years. It's right out in the open for everyone to see and learn from.

Jorma Kaukonen 00031

The fascinating discovery being made by a growing number of iPod users is the Apple behind the gadget. People have heard of Apple Computers for years but when was the last time the average Windows user decided to get up early on a Saturday morning and spend all that lawnmower money on an Apple anything? Tens of millions of kids have done that for one version of the iPod music box or another.

Early on, purchasing an iPod involved a walk through an Apple retail store. Imagine the Windows kid looking at all those white laptops and shiny G5 cases. More than one of them slid the mouse around once or twice on 20 inch Apple display before or after completing their iPod sale, in the back of the store. It appears like a buyer has to go past a certain amount of product to complete a purchase in Apple Stores. (They do not, many Apple store employees appear to carry a portable cash register around their necks) They could not afford to buy that cool Apple laptop years ago when they bought the iPod.

Today that iPod kid is making payments on a condo. She has a job in the legal department of a big firm. She is using her second or even third iPod. She bought her latest iPod over the Internet. Over 500 downloads from iTunes are on her home PC and her iPod. She can afford to buy an Apple iMac, MacBook or any other manufacturer's computer.

Now the marketing blitz for iPhone crashes over the big city where this iPod customer lives. She goes in just to look at the iPhone, she thinks it's really too expensive. But there on the tables in the Apple store sit those computers she saw years ago. The prices here seem closer to the prices she saw over at Best Buy.

She asks the Apple employee a question. "I have a lot of Windows software I bought, I've heard you can use Windows software on these new Macs. Is that really true?"

(to be continued...)

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