Week 6: STDP - A few thoughts....

As we get deeper into the concepts of segmentation, differentiation and positioning, it just becomes more and more evident as to how complex a subject this can be. In today’s extremely fast moving world, there is a lot that can be lost if we focus very narrowly on small core segments, as the user preferences can change very quickly and might spell doom for the entire business. At the same time, if you can be in the same frequency as the customers and adapt your offerings to match the changing user preferences, you will end up creating a very loyal customer following.

  Apple seems to be extremely successful in this endeavor. Their innovation and attention to quality has made them one of the most successful brands with a very loyal segment. But something in the article. “The Greatest Comeback Story Of All Time: How Apple Went From Near Bankruptcy To Billions In 13 Years” (http://www.businessinsider.com/apple-comeback-story-2010-10#2010-the-year-of-the-ipad-14) caught my attention. It said: “Innovation doesn't require focus groups. Steve Jobs doesn't believe in asking customers their opinions. You can develop products people will want before they even know they want it. Sometimes, you can know customers better than they know themselves.”  The first lesson that I learned in Marketing is all about knowing your customer. The immediate thoughts that come to our mind is to conduct survey and have constant dialogues with the customers so that we know what they want. But in reading this, in contrast, it makes me think that, it is not sufficient to know what your customers want, you should be capable of anticipating their needs, even before the customers know that they have such a need. This is indeed powerful and goes a long way to explain Apple’s market leadership position.

    One of the most important aspects in marketing is the customer perception. As Rory Sutherland explains in his talk as well as shared in a previous video, we could serve the same wine at different prices and the consumers would enjoy the costlier wine more, just because it was priced higher.   Recently, Apple had issues with the maps that they launched with the Iphone5. This proves that even the giants can falter and make mistakes. But what is more important is to acknowledge the mistake, take responsibility, communicate immediately to the consumers, apologize and ultimately learn from these mistakes.  Attached is a link to the letter from Tim Cook, Apple’s CEO, apologizing for Apple’s mistake. http://www.apple.com/letter-from-tim-cook-on-maps/.  Also including an excerpt from a Bloomberg article on how Apple may benefit from this mistake- “Cook was still apologizing a few weeks ago when he told Bloomberg. "We set out to give the customer something to provide a better experience. And the truth is it didn’t live up to our expectations. We screwed up."

There's a concept in psychology called the "pratfall effect." Put simply, we like competent people more than incompetent people, but the people we like best are competent people who occasionally falter. The classic pratfall experiment shows how individuals find a competent person who spills coffee on himself more attractive than a competent person without slippery fingers. So Apple Maps may enable Apple Inc. to benefit from the pratfall effect. “

 The full article can be found at http://www.bloomberg.com/news/2012-12-13/how-apple-will-benefit-from-its-miserable-maps-failure.html

  In short, Apple is perceived as a high quality brand, one that strives hard for quality and customer satisfaction. Based on that, the customer will be okay to overlook a few issues or errors, but other players in the space who are not perceived the same by the consumer may not be that lucky!