Apple is an icon because it has spent vast amount of time and effort to build a personality for its brand. Strong brand personality based on the ideas of nonconformity, innovation and creativity.
Apple iPod is an amazing research topic and when it is linked with consumer behaviour there are a number of questions that one can ask himself/herself. Apple in general was a major interest for this research study because they are a company that have reinvented themselves , Apple have reached the top of several markets on an international scale by reinventing the brand and producing innovative products. Apple iPod has created a new culture in the market.
Consumer behaviour “is the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires.” (Solomon et al, 2010, p.6)
Many people referred consumer behaviour in the early stages of its development as buyer behaviour, deemed only as interaction between consumers and producers at the time of the purchase. Consumer behaviour is now better understood by marketers as an on-going process, unlike limiting to only “what happens at the moment a consumer hands over money or a credit card and in turn receives some good or service.” (Solomon et al, 2010, p.7)
Consumer behaviour is the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas, or experiences to satisfy needs and desires. (Solomon et al, 2010, p.6) Consumers undertake various actions that change over time and differ from others. Consumers casually may “modify their consumption decisions” according to the situation or environment they are placed in. For instance it can resemble a particular play with actors on the marketplace stage who have different needs and desires, overtime needs and desires may change how actors are dressed or feeling depending on the situation and environment. (Solomon et al, 2010, p.6)
Impact of New Products on Consumer Behaviour
There are many attitudes that people have and they can be unique to each individual person. Two people may have a similar attitude to an object for many different reasons but it is always useful for any marketer to know why an individual has a certain attitude before attempting to change it. Change of attitude may result in developing loyal consumers who are repeat purchasers.
Sometimes it can be the case that our main purpose for consumption might be to explore the market and see what it has to offer us which is unique and different; searching the market for new possibilities of consumption may give some amount of pleasure. Simply put a new product or service experienced by consumers will satisfy needs and desires they may not even be aware of, new product/service can stimulate receptors of consumers that have not been exposed previously.
For instance a revamped trendy stimulus for the eyes of consumers since 2009 has been 3D TV, 3D games, 3D movies and even 3D pictures. 3D is not a new innovation as it has been experimented with in the 1970’s and 1980’s, acknowledged by The Guardian A new dimension in entertainment. 3D technology in recent years is different and is recognised as a new product to consumers, indications by A new dimension in entertainment are that 3D TV could become the ‘standard’ TV to buy in comparison with the HDTV in the current environment.
Markets containing few products or services will attract new and existing consumers to try new products or services that enter the market. In the late 80’s in the UK’s yoghurt market, companies had not segmented themselves into various markets or changed attitudes of markets that involved children, women and health conscious people. An instant hit was Ski from the Swiss which was launched in 1963 with added sugar and real fruit, British companies had not explored new ideas like this and that’s when foreign companies saw an opportunity to grow in the UK’s yoghurt market. Foreign yoghurt making company such as Muller from Germany took the yoghurt market from the British because it altered the attitudes of consumers in various markets and made it a product that was perceived to be healthy and a luxurious treat for them. (Yoghurt and the functional food revolution, 2010)
In the BBC article Yoghurt and the functional food revolution (Biswass, 2010) Felicity Lawrence states that “added value is where you take something that is a basic, cheap, raw commodity product like milk, and start processing it or packaging it or marketing it in a way that moves it up the chain so you charge more for what you’re doing.” Muller transformed the yoghurt market and changed attitudes and perceptions of people to see it as a sweet, luxurious treat where previously yoghurt was seen as a traditional healthy food product. With the added value it attracted new customers to try new products, Yoghurt and the functional food revolution indicates “it opened up the market to a lot of consumers who wouldn’t otherwise have seen themselves as yoghurt eaters.”
We can see from the yoghurt market revolution that it is possible for organisations to change the consumers perception with a consistent marketing strategy, adding value like German yoghurt makers Muller is one method. To go into more depth were going to illustrate a product that has not been fully established but it is very promising for the future. New product such as ‘Powermat Wireless Battery Charger’ as shown on a BBC website page ‘Charging gadgets using a magnet’ will change consumer behaviour in the future if it has not already. This is similar to modern day wireless broadband routers and mobiles.
Consumer behaviour will be impacted by a product like this because people in the present may have an attitude where they do not like wires everywhere in the household or office. For example this product would recharge many electrical items on the mat which would result in less healthy and safety risks at home and at work. When a product like this can offer benefits consumers will soon have a perception that is positive, individual chargers would not be required which results in more storage space and less manufacturing for companies.
Impact of Radically New Products on Consumer Behaviour
Diffusion of innovations from E.M. Rogers (2010) is an important element in consumer behaviour which is important for companies and people who are innovators as it can change a whole social system. E.M. Rogers (2010, p. 25) states “diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system”. In that statement are the main elements involving the diffusion of new ideas, rate of adoption is one major element which will be tested with the Apple iPod to help further understand if it has and still is going through that process.
Rate of adoption is demonstrated with two innovations that changed consumer behaviour over a long period of time and went through the exact process that E.M. Rogers states. Two of the major innovations from many others that have had an impact on consumer behaviour are listed below:
- The Car
- The Washing Machine
The car has been the tool for evolution of mankind on Earth as it has made exploring and sourcing new material and food possible. We can truly say that the car was part of the industrial revolution in the world but the wheel was created by man many centuries ago and it is not possible to trace a certain date or record of it.
The four wheels that we see on cars today have been used by humans for centuries but it was in the industrial revolution that a motorised engine made four wheels drive forward without the assistance of animals. Wheels in the era of pharaohs were already used but only with help of men and animals that they would move.
The invention of the car has made life very easy for people to travel places and meet people they couldn’t before, for example a family member living in Manchester could meet another member living in London. Henry Ford with his mass production concept and strategy made it possible for all consumers to purchase a car which suited their needs and attitudes. An article on the CNN U.S website has a popular statement from Henry Ford that best illustrates how his cars would be inexpensive and open up new places for humans to explore further into. Henry Ford said “it will be so low in price that no man making a good salary will be unable to own one and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.” (CNN, 2004)
Automobiles were mainstreamed by America and it set the template for others to follow, consumers were affected by this because they were able to visit new places and purchase products which helped expand consumption and demand in markets. The Model T Ford from Henry Ford helped fulfil the need for a human to go beyond the horizon, “To be fair, Ford amassed his fortune and founded a dynasty not by robbing or taxing us, but by making us better off, raising our standard of living by bringing the motor car – and by example much else – within reach”. (Independent, 2008)
Any new innovation that has the prospect of changing consumer behaviour and the world takes some time, people go through a long process according to the concept of diffusion of innovations from Rogers (2010). The target market always needs time to adapt to a new innovation and develop a social system around it to raise awareness and make adaption easy for others.
Cars can be related to this because when Henry Ford started “automobiles were luxuries and many producers priced them accordingly and opposed any move to change the character of the product or market” (Wilson, 1994). This indicates to us that a new innovation like the car was adopted by the innovators who had the disposable income and were well informed about new engineering breakthroughs.
The lower classes of society had a larger population who were needed as they would contain opinion leaders to influence other social systems in the rate of adoption. Wilson (1994) states “Ford conceived of a mass market for cars in which a suitable product at a low price would be a great success”, Model T Ford as an automobile was so influential in the early 19th century that This Car Changed America (2008) indicates it built “15 million” over two decades. We as humans have went full circle again and find ourselves trying to adapt to hybrid and electric cars. We most likely perceive them as being unreliable and difficult to re-charge because of the social system not accepting them and placing certain tools and facilities for them throughout cities, towns and villages.
The Washing Machine
Sometimes people in wealthy nations such as the UK may think the internet was the most important innovation but it’s only for a small per cent in the world. The washing machine was more important because not only did it liberate women in a certain nation from domestic work but it also helped double the workforce and save time for the economy. “The first electric washing machine was produced in the U.S. in 1908.” History of Washing (Proctor & Gamble, 2005). When women had free time on their hands and started working they wanted equal treatment from men and if that was not given then they decided to live an independent life, major consequences for the economy if they were not productive outside the house and only busy washing clothes all day.
Washing machines changed the world and the society we live in today, article from The Guardian helps illustrate the impact of the household good. Ha-Joon Chang: The internet isn’t as important as we think indicates that “by liberating women from household work and helping to abolish professions such as domestic service, the washing machine and other household goods completely revolutionised the structure of society” and “Basically, it has doubled the workforce.”
Impact of iPod on Consumer Behaviour
The recognised company around the world Apple Computer Inc. was started in 1976 by two people, Steve Wozniak and Steve Jobs. They both worked on an apple farm and had thought that apples were the most perfect fruit in the world. Originally the Apple personal computer and McIntosh computer introduced in 1984 became popular for its user friendly software, graphics such as stylized pictures, symbols and icons had surpassed the markets and consumers’ expectations.
Apple iPod is an excellent example of an innovation being diffused and adopted very rapidly all over the world. As stated in The iPod phenomenon: identifying a market leader’s secrets through qualitative marketing research Apple has been able to use the iPod to boost its revenue, improve corporate image moreover research and develop new innovations. Apple has extended the iPod market from having a group of early adopters to the early majority “without diminishing the product’s cool factor” (Reppel, Szmigin and Gruber, 2006).
It is not for one to say that all members of different social systems will adopt this brand and purchase the Apple iPods. For e.g. London could have social systems with a higher rate of adoption to innovative products than a city in Pakistan like Multan. Mr. A in London will be more likely to adapt to an iPod than Mr. B in Multan because of system affects, Mr A living in London will be encouraged by friends, neighbours and family members to adapt to an iPod as they themselves have adapted to the product/brand. These are also recognised as norms that differ from village to village and one country to another.
It can be indicated from secondary research that Apple iPod sales can be related to Rogers (2010) rate of adoption. From the worldwide sales chart of Apple it can clearly be seen that the only sales made at the beginning of the iPods life was in the innovators category and that is why there were only a small percentage of sales.
Innovators are a group of people who are interested in new ideas and this leads them out of a local circle and into a cosmopolite group. Figure 1 clearly indicates to us that sales were low and slow because it attracted the innovators to attain and test the products before any other social system trust the iPod with their disposable income. The category of early adopters has the highest degree of opinion leadership and it’s with this group’s social influence that sales of iPods picked up in 2006, 2007 and 2008. Relating to Rogers (2010) opinion leaders serve as role models for many other members of a social system and can be catalysts for innovations.
Figure 1 seems as if the iPod may be in decline with its sales and it’s the last category in the social system known as the laggards who may be purchasing iPods now. Sales may be down because millions of people have iPods and it may need to match the iPhones features, iPods are not repeatedly purchased compared to the number of Apple apps bought in figure 2. Laggards are the steady buyers of iPods as Apple is seen as a reliable brand and is accepted into the systems norms and traditional values after a long period after its launch.
Figure 1. iPod Unit Sales (Worldwide)
This iPod sales chart can be related to the rate of adoption chart because Rogers (2010) clearly states in Diffusion of Innovations that the innovators are the niche market who bought the iPod at the beginning of its life. Early adopters in the rate of adoption have certain opinion leaders that influence others in the social system and increase the sales, we can see them sales increase once the early adopters accept the innovation. A product life cycle, sales chart and rate of adoption have one thing in common and that is the S-shape diffusion curve. As mentioned before in 2009 Apple iPods reached its highest peak in its lifetime and similar to any S-shape curve the sales and product life cycle can only be predicted to go into decline in the near future.
An article in The Guardian identifies how the market for Apple iPods is changing and how a new innovation such as Apple apps is a product/service that has repeat purchasers. It is stated in iPod hits a sour note as apps take over that Apple gets 30% on the sale price on apps, eBooks and roughly the same on music as well, indications are from the past two years that sales are expanding for the apps and eBooks while music downloads are not.
Overall the Apple iPod did affect consumer behaviour when it was launched because it was a reliable, convenient and innovative device in the market at that period. No other products in the market could compete with it and consumers in 2011 found it easy to use with music accessible anytime and anywhere. Apple created new markets and markets that seemed unnecessary before were now necessary for consumers and competitors.
Rogers (2010) rate of adoption was tested with the help of primary research. It can be understood now that the Apple iPod as an innovative device has gone through a similar process to Rogers (2010) rate of adoption. Apple iPod first purchased in various years by various age groups has helped illustrate the products rate of adoption. The Apple iPod when first launched had a group of innovators who purchased the iPods. Products purchased from social groups such as innovators and early adopters then influenced other social groups in the social system
From this research it is clear that because the Apple iPod has been established for 10 years it has now reached the group of late majority. It is possible it may be in the laggard stage but further research would have to be conducted for a few years to establish this stage accurately as it may only have begun.
Discussion from the focus group suggested that the rate of adoption increased in the period when the Apple iPod Nano range was launched.
Apple iPod now seems to be a product which is integrated into other Apple products and this is a concern because the Apple iPod may be obsolete in the future if it has no element of innovation. Respondents from the research seem to be interested in innovative products such as the Apple iPhone and Apple iPad which have all the features of the Apple iPod.
Apps can be considered to be a healthy product and service for the future as it is generating more revenue than any other Apple product because they accessible and ready to purchase anytime and anywhere. More Apps are being purchased and downloaded than iPods, 280 million Apps downloaded in December 2010 alone while generating $250 million in revenues
Apple devices are not going to be purchased on a daily basis whereas numerous Apps can be bought whenever a consumer wants it. Apple iPod has integrated this product and service to satisfy the markets demand as there are now alternative MP3 players and Apple want to keep their iPods unique and in competition with other Apple products.
It is possible to say that Apple iPod will not survive amongst its own company products because there are other innovative devices which offer consumers more. Apple products such as iPhones are looking to be bought from the focus group discussion because consumers will rather spend another few hundred pounds and buy a product which can be used to call other people and text.
In simple terms the Apple iPod is now in a period of change where the simple music listening device is now a product offering various media and communication tools. This is one of many reasons why the Apple iPod is not having an effect on consumer behaviour as it is no longer a unique exclusive product in the market.
The Apple iPod has integrated the iPhones features and this does not make the iPod innovative or a product which has changed consumer behaviour once again. Apple iPod for instance would be innovative and change consumer behaviour once again if it integrated a new technology, alternative payment methods to credit/debit cards for consumers to use in retail outlets when purchasing products or services.
In conclusion the product has affected consumer behaviour and from research the changes in rate of adoption can be seen and this suggests that innovative products such as iPods follow Rogers (2010) rate of adoption model.
This research project does not represent the overall region of Tyne and Wear or Newcastle upon Tyne and it is suggested that further research is needed in the area of Rogers (2010) rate of adoption regarding Apple and its iPods.
All this is backed up with evidence from certain websites, journals, books and primary research conducted in the region of Newcastle upon Tyne.
Rogers, E.M. (2010), Diffusion of Innovations. (5th edn). Free Press.
Solomon, M.R., Bamossy, G., Askegaard, S. and Hogg, M.K. (2010), Consumer Behaviour: A European Perspective. (4th edn). Prentice-Hall, Essex.
Ratneshwar, S., Shocher, A., Cotte, J. and Srivastaya, R. (1999) ‘Product person, and purpose: putting the consumer back into theories of dynamic market behaviour’, Journal of Strategic Marketing, Vol. 7, pp. 191-208. Emerald Group Publishing Limited [Online]. Available at: http://www.emeraldinsight.com [Accessed: 2 January 2011].
Reppel, E.A., Szmigin and Gruber, T. (2006) ‘the iPod phenomenon: identifying a market leader’s secrets through qualitative marketing research’, Journal of Product and Brand Management, Vol. 15 Issue 4, pp. 239-249. Emerald Group Publishing Limited [Online]. Available at: http://www.emeraldinsight.com [Accessed: 14 January 2011].
Wilson, J.M. (1994) ‘Henry Ford’s just-in-time system’, International Journal of Operations & Production Management, Vol. 15 Issue 12, pp. 59-75. Emerald Group Publishing Limited [Online]. Available at: http://www.emeraldinsight.com [Accessed: 20 January 2011].
Wright, T.W., Newman, A., Dennis, C. (2006) ‘Enhancing consumer empowerment’, European Journal of Marketing, Vol. 40 Issue 9/10, pp. 925-935. Emerald Group Publishing Limited [Online]. Available at: http://www.emeraldinsight.com [Accessed: 8 January 2011].
Arlidge, J. (2002), The revolution in your pocket. The Guardian. Available at: http://www.guardian.co.uk/technology/2002/sep/22/mobilephones.johnarlidge [Accessed: 15 April 2011].
Arthur, C. (2010) iPod hits a sour note as apps take over. The Guardian. Available at: http://www.guardian.co.uk/business/2010/aug/29/apple-ipod-apps-music-industry [Accessed: 19 February 2011].
BBC Weather (2011). Available at: http://news.bbc.co.uk/weather/forecast/10?area=NE4 [Accessed: 1 April 2011].
Biswas, S. (2010) Yoghurt and the functional food revolution. BBC News. Available at: http://www.bbc.co.uk/news/business-11926609 [Accessed: 28 February 2011].
Gigaom (2010), The Apple App Store Economy. Available at: http://gigaom.com/2010/01/12/the-apple-app-store-economy/ [Accessed: 10 March 2011].
Macworld, J.D. (2009), Strong iPhone and iPod sales drive Apple profits to $1.21 billion. Available at: http://www.macworld.com/article/140162/2009/04/appleearnings.html [Accessed: 6 February 2011].
P&G (2005), Science in the box, History of Washing. Available at: http://www.scienceinthebox.com/en_UK/pdf/history-of-washing.pdf [Accessed: 25 February 2011].
SurveyMonkey (2011). Available at: http://www.surveymonkey.com/ [Accessed: 1 April 2011].
The Guardian (2010) A new dimension in entertainment. Available at: http://www.guardian.co.uk/life-in-3d/launching-3d-television [Accessed: 09 March 2011].