29 September 2005

Taking a bite out of Apple

When Apple introduced the ipod nano in early September, it was hailed as a design breakthrough and once again took the ‘MP3’ industry by storm. And at only 0.27 inches thick and only weighing 1.5 ounces, it deserved our attention. It also does the business in terms of capabilities.

The nano stores up to 1,000 songs and promises a battery life of up to 14 playing hours. It also sports new features such as a stopwatch, clock and screen lock features. It is also the first ipod to feature an unplayed podcasts indicator in the form of a small blue dot that appears next to podcasts you haven’t listened to. In it’s first four weeks, it earned gushing reviews from reviewers, industry analysts and all importantly, customers. Stores in London sold out and the stock rose 10% in a week. Not bad.

Then the complaints began to trickle in.

It’s common knowledge that ipods scratch easily. But the nano was attracting more complaints than previous ipods, despite Apple insisting it uses a polycarbonate coating similar to that used by other ipods.

Customers were complaining about more severe scratches and even broken screens. These problems were caused by pulling the nano out of their pockets, in much the same way as Steve Jobs had done at the nano launch. One fifteen year old in the UK complained how he had saved his pocket money to buy his nano and was devastated when the screen suffered a crack within three hours of buying it.

Another nano buyer and Apple fan, Matthew Peterson, set up a website flawedmusicplayer.com. Peterson believed it was important to share his grievances with his ipod nano screen and allowed others to do so as well. Peterson was unhappy because, initially at least Apple refused to acknowledge the problem and when they did acknowledge the problem, they told him it was not covered by his warranty.

Understandably incensed, he opened his website to see if it was an issue with other loyal Apple users. It was. Apple was totally unprepared for what came next. One spokeswoman for Apple attempted to solve the problem by telling nano owners that if they were concerned about scratches, they should spend some more money and buy a protective case! Not a good move. Nano buyers posted comments, pictures and movies of their nano and assorted scratches, blemishes and so on. Soon after Apple changed tack and accepted there was a problem.

Mathew Peterson has since taken his site down after Apple promised to replace any damaged nano.

From a branding point of view, there are a number of lessons to be learned here. One is the response of companies to complaints. Apple has had a couple of good years since the launch of the first ipod and may have forgotten how to deal with unhappy customers. They were wrong to attempt to ignore the problem and hope it would go away. Once they realized their mistake, they acknowledged the problem but refused to accept responsibility. Finally, when the noise grew unbearable, and the stock price lost all its gains of the previous month, they took ownership of the problem. A lot of time, effort and resources were wasted on the wrong responses.

The impact of blogs and the voice and influence of the customer on a brand cannot be ignored. Blogs and increasingly knowledgeable consumers are aware of their importance in the success of a brand and they are increasingly aware of the influence.

19 September 2005

segment branding

Whether marketers like it or not, increasingiing global and regional competition, (it is estimated that there are more than 100,000 locations in Asia alone, actively seeking to attract business, industry and tourists) the fragmentation of the media and ever growing forms of leisure time pursuits mean an international, 'one-size-fits-all' tourism strategy is no longer effective.
Countries must brand themselves by aligning differentiated offerings with the values and requirements of specific segments. Perhaps one of the first to realise this was South Africa. Many years ago, the government and private high-end lodges got together to begin the long process of strengthening South Africa as a brand through eco-tourism.
The Singita Group actually turns away tourists thanks to a segmented approach to branding begun at the turn of the century. The Singita operates with a 3.5 staff to one guest and this is the foundation of their approach to provide the 'Big Five' experience of the Lion, Rhino, Leopard, Buffalo and Elephant in the comfort of a world class luxury environment.
Malaysia has traditionally pursued a mass market approach to developing a brand. This can be difficult to measure and expensive to maintain as it focusses on the acquisition of new customers, a sort of 'spray and pray' approach. By adopting a segmented approach, Malaysia tourism can first research those potential segments that are most likely to have the most chance of success, target those segments with relevent messages and measure the effectiveness of the campaigns. Finally Malaysia can actually develop a relationship with those segments and work to ensure they become repeat visitors and ambassadors.
The obvious segments include diving, shopping, beach & recreation, food and gourmet, medical and gap year students. Whilst these students may not have the disposable income of an Arab family of 12 from Riyadh, they actually contribute significant amounts to the economy due to the length of time spent in the country. Morover, they are the future heads of families that will be looking to take their families on holiday in the years to come. An estimated 2 million gap year trips are expected to be taken annually by 2010 and spending on those trips is extimated to be in the region of RM75 billion.
Another often neglected gap year market is those made redundant, taking a year off between jobs or giving themselves a retirement present. These older 'gappers' tend to stay in accommodation run by local people and often buy locally produced produce and goods and eat at local restaurants, rather than the international chain of hotels, restaurants or supermarkets, thereby contributing more to the local economy.
Food tourism is another segment attracting attention but still not being approached in an effective manner locally. Food tourism in the UK, yes the UK, is now big business and the BBC estimates the country has finally shaken off its image of fatty fried meals, burnt roast dinners and vindaloos. The food tourism industry in the UK is estimated to be worth RM28 billion a year already.
However, segmented branding requires more than simply ads in cook books or student union magazines. A structured, long term approach, designed to ensure the visitors do not only make a single visit is critical. After all, a relationship is critical to a long term profitable relationship with those customers.