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Apple Business Models; Rest of the World Should Take Notice

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Today, an article published in Advertising Age online caught my eye: Written by guest columnist David Murphy, it explores the possibility of applying the lessons learned from Apple’s success (mainly that of the iPhone) to other business models, specifically that of the auto business. The author presented the question: What would an automaker have to do to seduce consumers to stand in line to buy a hot new car (like those of us who wait in line for Apple’s latest releases)?

Functionality: “Auto execs pondering how to replicate the iPhone’s commercial and cultural success would be wise to note that the iPhone is not simply a marketing phenomenon. The iPhone is a breakthrough product. It revolutionized the mobile phone indusry through design, features, software and general functionality.” Throughout the last century the automobile represented freedom, mobility, joy and modern life at its best. These days technology brands are the new car, with Apple as the chicest Lamborghini with the highest miles per gallon. According to David Murphy, in order to revolutionize the automobile industry, manufacturers would have to design a vehicle that is truly modern: one that “democratizes the latest technologies; car that liberates us from tired compromises by proving that design and performance go hand in hand with safety and environmental responsibility; a car that is an extension of the personal technologies we use to make our lives more efficient, organized and entertaining.” Murphy finalizes his point by instructing auto makers, to at the very least: create a car that joyfully proclaims that today is better than yesterday.

Design: “The iPhone looks like nothing else. It took no cues from category norms.” In this case though, the iPhone still remains simplistic and accessible in design. Typically when the auto industry develops their “concept” models the design tends to appear futuristic, over thought, and out of touch with true consumer needs and wants. The auto industry in general is the antithesis of what Apple strives to represent: To Apple, their ability to edit their design, to keep their ideas concise and on course, is paramount. This results in sales, and an extremely devoted user base that salivates at the hint of a new release.

Cult of Celebrity: In the age of celebrity, being able to put a face to a name means the world, and increased sales to boot. “Auto companies tend to believe ‘celebrity’ is attained by having A-list actors and rappers drive the car.” Today, that simply is not enough. For Apple, the celebrity is organic. Steve Jobs is the face of Apple. Even head of design, Jonathan Ive is a celebrity. They have their faces on the cover of Vanity Fair, Fortune and Time magazine. They are recognized and adored by the public. Who is the CEO of Ford or GM? How about members of the design team for BMW? Does anyone know what they look like? Is it time to elevate the automotive designers to be the face of the company instead of suits? To fast track their stake in ‘design celebrity’, one of the few progressive automakers (Honda anyone?) should enlist the next hot industrial designer or acclaimed architect to create the newest must-have design of the year. Because when it comes down to it, automakers are first and foremost industrial design firms, which sadly enough many of their consumers here in the U.S. have seem to forgotten.

Limited Supply: Automakers get a pen and piece of paper and take some notes! By now, it’s obvious that when there is a limited supply for something, people want it more. Shall we repeat that? When there is a limited supply of anything, people want it more. We don’t need to explain why, or look into the psychology behind it. This is a fact. A fact, that when put into place, can save companies from having to discount their products, therefore depleting the status of the brand. Additionally, we all know that limited supplies create a rarity that strengthens the marketers pricing power. While Apple is a genius at this, so is another hot commodity… Diamonds.

New Distribution Model: As any good Apple devotee knows, when you walk into an Apple retail store you are sure to meet a sales associate that is thoroughly trained and the best living representation of the Apple brand. In fact many could argue (feel free to correct me if I am wrong) that there is a stereotypical “look” that Apple employees posses that is a far cry from the public’s view on the good ol’ user car salesman. Auto companies should forgo the common dealerships and adopt centrally and strategically located “viewing galleries- in shopping malls, in airports, in downtown business district- staffed by the same well-trained ladies and gentleman hired for car show,” David Murphy suggests. In other words: Drop the old, stiff suit and tie and develop a corporate culture that reflects the brand you want to be.

…and finally…
Advance Buzz: With the plans for the first iPhone as secretive as a military overseas attack, many were left with nothing else to do except speculate. With curiosity abound, Apple said nothing. They announced the launch date, sat back, and watched the rumors fly. By the time Release-Day was finally upon us, the buzz was finally at its peak and everyone was determined to be the first to get the coveted iPhone in their hands. Hence those waiting days in line, and paying exorbitant amounts to cancel cell carrier contracts to get the iPhone. On the contrary, automakers debut the concept car years prior to its actual (if ever) release, create micosites for sneak peeks and give the buff books early test drives in return for good coverage. Often times, the actual car that makes it to production is a watered down version of what we were all promised in the first place. The Apple message here: Under promise, over deliver…and ALWAYS leave them wanting more.

We all know that Apple is ahead of the pack in terms of design, functionality, branding, supply control, and distribution. But it is nice to know that the new model of business is finally garnering attention and can teach a thing or two to industries which have as thorough of a history as auto makers. Who will be the first to pick up this advice and make a move towards real innovation in the automobile industry, or any other industry for that matter? We have yet to find out. I for one cannot wait to have a vehicle that represents my lifestyle as well as the products Apple has ultimately provided me.

“Apple did all this and more. Break though product. Inspiring design. Smart pricing. Clever marketing. Seems so simple. And therein lies the beauty of Apple’s success.”- David Murphy, co-president and head of brand innovation at Barrie D’Rozario Muphy.

Read – Full article by David Murphy

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