Apple’s push for penetration (beyond its old loyalists)

Apple is a wonderful case study of a sophisticated mass marketer.  A company that stopped focusing on a narrow group of loyalists and massively expanded physical and mental availability.  With great branding too.

But it’s easy to forget just how much Apple has expanded its customer base.  Yes the iMac set it on a path to reach beyond the designer and education markets and sell computers to consumers.  Yes the work to fit in with the Microsoft Exchange server environment stemmed the losses in the corporate world.  Yes the iPod let them ride the digital music revolution better than any company.  But on top of all this, the real success has been to get the MacOS into millions of more hands, thanks to the iPhone and iPod touch, and now iPad.

Apple used to proudly note that it had a user-base of tens of millions, even in the dark days when they were seriously losing share and money.  Today they have grown the base of Macintosh users to around 50 million, a great achievement.  But they now also have 160 million people using iOS devices, practically all of whom have an iTunes account linked to their credit card so they can buy music, apps, and video from Apple with a single click.  Last quarter they were selling over 350,000 iOS devices every day.  That’s more than 10 million every month.

Or put another way, they currently achieve in a few months the amount of penetration growth that they achieved in the first 25 years of the company’s existence.

Apple deserves to have such a high market capitalisation, because it has built (and continues to build) phenomenal market-based assets (physical and mental availability.

Professor Byron Sharp (January 2011).


The power of physical availability – How Brands Grow

UK supermarket chain Sainsbury’s (a sponsor of the Ehrenberg-Bass Institute) has been doing rather well.  And over Christmas they astounded financial analysts with their performance compared to other retailers.  Like-for-like sales over the Christmas 2010 quarter were up 3.5%, and they overtook Asda to become the 2nd largest supermarket.

How did they do it?

Chief Executive Justin King highlighted one crucial factor – 12,000 tons of salt.  No they didn’t sell it, they used it on their car-parks when it snowed, ensuring that their stores where accessible to customers.  “You just have to get on with it and provide the best for customers. There is no doubt the snow had an impact, but if you lie back and become a victim to the snow, then you’re not doing what we’re here to do. Some [retailers] did better than others.” said Justin King.

And to further consolidate their success they opened 700,000 sq feet of new stores and upgrades.

A great example of the power of physical availability.