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Apple Ipod Case

Marketing Management
2007

Apple iPod
Case Study



Table of contents
1 ANSWER TO QUESTION 1 1
1.1 HOW WOULD YOU DEFINE THE MARKET FOR THE APPLE IPOD? WHICH ARE THE RELEVANT EXISTING AND FUTURE COMPETITORS? 1
2 ANSWER TO QUESTION 2 1
2.1 HOW WOULD YOU DEFINE APPLE’S COMPETITIVE ADVANTAGE? 1
3 ANSWER TO QUESTION 3 2
3.1 HOW IMPORTANT IS CUSTOMER LOYALTY FOR APPLE? 2
3.2 WOULD YOU RECOMMEND A STRICT EXIT STRATEGY FOR ITUNES, IF THE PROFIT PER TRACK OF 10 CENTS WILL GO DOWN TO ZERO EVEN NEGATIVE? JUSTIFY. 2
4 ANSWER TO QUESTION 4 3
4.1 DEVELOPMENT OF A PERCEPTUAL MAP 3
4.2 WOULD YOU LIKE ADDITIONAL DATA? 4
5 APPENDIX 6
6 REFERENCES 9

Table of Tables
Table 1 Marketing questionaire of portable Mp3 players ranked for importance 3
Table 2 Score table for iPod according to ‚Importance’ 6

Table of Figures
Figure 1 Perceptual map 1 : Price vs. Portability 7
Figure 2 Perceptual map 2: Price vs. battery endurance 7
Figure 3 Perceptual map 3: Price vs. Special file formats 8
Figure 4 Price determination according to Van Westendorp 8


1 Answer to Question 1
1.1 How would you define the market for the Apple iPod? Which are the relevant existing and future competitors?
The market for MP3 players was relatively young in 2004. The first iPod was launched by Apple in 2001, but there were several competitors in the market.
Apple holds a market share in selling MP3 players by August 2004 of 66%, totaling 10 million MP3 players. Therefore Apple holds the lion’s share of the market for MP3 players. With the highest quarterly revenue in a decade as well as large profits Apple is on the roll.
The relevant existing competitors in 2004 are:
- Dell,
- Sony,
- Virgin Electronics and
- Samsung.
Because of growing market expectations, many additional imitators will enter the market within the next time with over 100 iPod substitutes.
In addition Microsoft is also aggressive promoting an alternative song format to Apple’s AAC.
At first...