ZEN versus iPod

iPod advertisement - iPod formidable brand equity outweighs ZEN's superior product features - ZEN vs iPod case study

Exhibit 2.1   iPod advertisement (Courtesy of Apple Inc.).

Best known for his Sound Blaster line of sound card products that dominated the global PC audio market, Mr. Sim Wong Hoo was one of Singapore’s most celebrated entrepreneurs.

Rising from the humble beginnings of a computer repair shop, he developed expertise in hardware design, created devices for a variety of computer applications, and set up Creative Technology to mass produce these devices for corporations like Apple.

Among its many award-winning gadgets, Creative’s ZEN range of portable media players was a product that the company believed outperformed competition. In 2005, competing with the formidable iPod, Creative invested heavily in a US$100 million advertising campaign that stressed ZEN’s functional superiority.

That ZEN may not have lived up to Creative’s expectations had much to do with iPod’s extraordinary brand equity. Yet one also wonders whether ZEN’s initial campaign presenting a feature-by-feature comparison with iPod resonated with the majority of teenagers and young adults. It appeared that at the onset, Creative was marketing a B2C product in a B2B style. A buyer in a business setting would examine closely the product features and price of competing products to decipher which one of them offered superior value. Ordinary consumers however usually do not give as much importance to feature-by-feature comparisons. For products that reflect their lifestyle, they are swayed more by intangible associations such as symbols, emotions, imagery and relationships with the brand.

The teens and young adults, who were the target market for portable media players, are not the tech-savvy users they are popularly thought to be. Their market has historically been Apple’s stronghold. With experience spanning the decades that the company devoted to marketing the Mac and a host of other devices to schools and universities, Apple knew their tastes, preferences and needs. The iPod was advertised to appeal to their senses and leave them intoxicated with the music.

Interestingly when Apple in 1983 launched the Lisa PC, which at a price tag of US$10,000 was intended for business users, the company struggled to cater to the requirements and expectations, such as total solutions and technical support, of the business market. The elements of the marketing mix undergo considerable change when a company moves from one sphere to the other. Apple has traditionally excelled in consumer marketing, whereas Creative’s roots lie in business marketing.

ZEN has since carved out its niche within the high tech, great value for money, portable media players, and its campaigns are well targeted for this segment.

It is worth remembering that during its glory days the iPod was Apple’s leading brand; that in 2006 it accounted for 40% of Apple’s sales. Brand sales peaked in 2008–2009, and roughly 450 million units were sold since its launch in October 2001. 

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