Brand Audit iPhone Pbm 9nov

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Brand Audit of the Apple i Phone

Sonali Budhia (18), Muzzaffar Anjum (05), Pooja Budhia (23), Dinesh Hota (27), Ankit Pattnaik (09)

MBA – (2010-12)

Submitted on 9th Nov 2011

Under the supervision of

Mr. Arvind Tripathy

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Executive Summary

The objective of this study is to make inferences about the iPhone‟s brand equity from a sample

of the population. Specifically, the value associated with the iPhone‟s strength in the market was

tested through collection and assessment of associations in a sample of current and non-users of

the iPhone. This report finds brand equity to be high amongst consumers. Strong brand

awareness exists amongst consumers due to high levels of depth and breadth of awareness: With

strong brand recognition and recall, it was found that the iPhone possessed top of the mind

awareness in a variety of mobile phone categories and consumers were very familiar with the

functions and capabilities of the iPhone. In addition, the iPhone also possessed top of the mind

awareness in a variety of purchase situations, and is associated with various consumption

possibilities, indicating the broad awareness consumers have of the iPhone. In terms of brand

image, there were certain common associations that were considered strong, unique and

favorable amongst all respondents, specifically ease of use, and innovativeness, or how

technologically sophisticated the iPhone is. A singular common negative association would be

poor battery life, for which all respondents consistently gave high scores for. However, due to

differences in lifestyles, values and needs, differences were found to exist amongst users and

non-users regarding their attitudes on which attributes of the iPhone could be considered unique

or favorable. For instance, current users find the affordability more desirable than non-users, and

current users state that breadth of applications and style would be the iPhone‟s points of

differentiation whereas for non-users it would be the iPhone‟s “superb touch-screen”. Generally,

this report finds that whilst brand salience of the iPhone is high, perceptions towards brand

performance and brand imagery differ, leading to conflicting brand feelings and judgments’

amongst users and non-users.

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Contents

Executive Summary ......................................................................................................................2

1.0 Introduction.......................................................................................................... .................. 4

2.0 Brand Awareness....................................................................................................................4

2.1 Depth of Brand Awareness........ ........ ...................................................................................4

2.2 Breadth of Brand Awareness..................................................................................................5

3.0 Brand Image ..........................................................................................................................6

3.1 Strength of Brand Associations .............................................................................................6

3.2 Favourability of Brand Associations......................................................................................7

3.3 Uniqueness of Brand Associations........................................................................................ 8

4.0 Conclusion ............................................................................................................................9

Appendix …….............................................................................................................................10

Surveys …....................................................................................................................................14

Survey 1 …..................................................................................................................................14

Qualitative Survey Part 2 ............................................................................................................15

Bibliography ................................................................................................ ................16

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1.0 Introduction

Strong brand equity is an asset to an organization. Consequently, it is important to have a

thorough understanding of an organization‟s brand equity. Comprehension can be achieved by

focusing on and examining the key drivers of brand equity. This report identifies and analyses the

drivers of the Apple iPhone‟s brand equity in a brand audit. The audit uses findings obtained by

surveying a sample of 200 people on two occasions. An indirect measurement of brand equity

was taken by recording participants‟ perceptions of the primary components of equity: brand

awareness and brand image. To examine brand awareness, a qualitative assessment of depth of

awareness was measured by asking participants to identify the product category in which they

perceived the iPhone to fit and indicating the strength of the iPhone‟s association with that

category. The technique of free-word association was used to uncover consumer perceptions of

specific attributes and features of the iPhone. Finally, to determine the iPhone‟s breadth of

awareness, consumption habits and associations with a degree of purchase situations were

analyzed.

In terms of brand image, strength, favorability and uniqueness of the iPhone‟s attributes and

benefits were tested through a quantitative assessment. The quantifiable scores were used to

identify any gaps between consumer expectations and firm deliverables. A conclusion shall then

be given presenting current brand attitudes consumers have towards the iPhone, as an indirect

assessment of brand equity. It is intended that these findings assist Apple‟s strategic planning of

the iPhone in the mobile phone market in future.

2.0 Brand Awareness

Consumer familiarity with the iPhone‟s attributes, features and uses is very strong, which

indicates deep and broad awareness of the iPhone and thus, high brand awareness overall.

2.1 Depth of Brand Awareness

Depth of awareness was measured through brand recognition and brand recall of the iPhone

within the sample population. Strong brand recognition and recall indicate that the iPhone is

strongly embedded in the knowledge structures of consumers.

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Brand recall was found to be very strong; consumers‟ ability to retrieve the iPhone from

memory was high. For example, when asked for general mobile phone brands in their

immediate consideration set, the iPhone was the second-most mentioned brand by all

respondents. Although for music phones, the iPhone was only mentioned within the top 3

brands for 45% of all respondents, 85% of all respondents mentioned the iPhone when asked

to name a smart-phone, and 71% of all respondents mentioned the iPhone amongst their top 3

choices for multi-media enabled phones. Thus, it can be observed the iPhone possesses top-of-

the mind awareness when it comes to general mobile phones, as well as multi-media and

smart-phones.

Brand recognition was found to be strong. It is very easy for consumers to identify the

iPhone from rival mobile phones. 100% of all respondents knew the iPhone was a high-tech

mobile phone by Apple. 75% of all respondents have either seen an iPhone advertisement, or

walked past an iPhone store promotion in the past month. 35% of all respondents currently

own an iPhone, and 85% of all respondents recognized iPhone user imagery to be of young,

outgoing and tech-savvy people. Further, all respondents were aware of the Apple brand and

logo and 65% of all respondents consistently connected several key associations of the Apple

brand with the iPhone, i.e. stylish, innovative, sophisticated and cool.

2.2 Breadth of Brand Awareness

Breadth of brand awareness of the iPhone was also found to be high as respondents associated the

iPhone with a broad range of purchase and consumption situations:

Purchase situations: Consumers associate the iPhone with a broad range of purchase

situations. The iPhone was named amongst the immediate consideration set for 85% of all

respondents when asked which general phone brands they would consider should they require

a new phone. When narrowed down to specific product categories, the iPhone still performed

well: 65% of all respondents mentioned the iPhone as their first choice when purchasing a

new multi-media phone. Also, 71% of all respondents mentioned the iPhone as their first or

second choice should they need a phone with web-browsing capabilities, and more than 50%

mentioned the iPhone as their potential business phone of choice due to the iPhone‟s “cutting-

edge” task manager application.

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Consumption Situations: Consumers are also broadly aware of how the iPhone can be

utilized. In addition to making calls and sending text messages, 85% of all respondents

mentioned use of multi-media applications (such as games) as part of how they would use the

iPhone. 100% of all respondents stated that they would use the iPhone for web-browsing

(including email), and 35% of all respondents stated they would utilize the iPhone for its

audio and video capabilities. 10% stated they would use it for the iPhone‟s task manager, and

three respondents mentioned they would use the iPhone simply for its touch-screen, referring

to it as “superb and flawless”.

3.0 Brand Image

The iPhone‟s brand image was found to be strong amongst consumers by testing the strength,

favorability and uniqueness of those associations. It was found that differences in responses

correlated with whether respondents were users or non-users of the iPhone. Thus, differing

evaluations of the iPhone‟s attributes and features could be explained by whether or not

consumers use the iPhone.

3.1 Strength of Brand Associations

There are several common associations of the iPhone amongst consumers in general which are

strong in nature, i.e. those associations are deeply connected to the iPhone in the minds of

consumers. Although differences in the relevance and consistency of the attributes for consumers

existed between users and non-users i.e. different respondent groups.

Relevance: The iPhone‟s most relevant attributes amongst all respondents in general were

found to be „ease of use‟ and „innovation‟ (i.e. how technologically sophisticated it is). Both

attributes received 5 or more out of 7 from 85% and 75% of the population respectively on

how relevant those two attributes of the iPhone are to their current usage situation. Therefore

it would seem that the most important benefits sought by all consumers offered by the iPhone

are simplicity in product operation and sophisticated technology.

However, for current iPhone users, the numerous applications coupled with sleek and cool design

hold significant relevance for their current usage situation, with each scoring an average of

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between 5.5 and 6.5 – which are the highest scores amongst all the attributes tested. For non-

users, the iPhone‟s aesthetic attributes did not appeal so much – the iPhone‟s Sleekness and

coolness scored 4.2 and 3.6 out of 7 in terms of relevance towards current usage situation

amongst non-users. In addition, the iPhone‟s touch-screen and web-browsing capabilities scored

averages of 6.5 and 5.9 respectively. Thus, the iPhone holds different relevant benefits for

different consumers, depending on whether they are users or non-users, resulting in differing

attitudes amongst consumers regarding the usefulness and relevance of the iPhone.

Consistency: Generally, “poor battery life” was a very strong association amongst all

consumers. On average, respondents rated poor battery life a 6 or 7 as a strong association

they possessed towards the iPhone. “Ease of use” and “innovation” also received consistent

scores, with all respondents consistently giving both averages of 6 and 5 respectively.

However, perceptions of weight, size durability and aesthetics were inconsistent. Non-users

generally described the iPhone as heavy, bulky, fragile and antiquated. Current users, in

contrast, described the iPhone as sleek, cool, “just the right size” and portable. Thus, once

again, differences in perceptions of the iPhone‟s attributes correlated with whether

respondents were users or non-users of the iPhone.

3.2 Favorability of Brand Associations

The favorability of the iPhone‟s overall brand image is found to be moderate at best. This is due

to positive associations with certain attributes being negated by negative associations in others.

Favorability of the iPhone‟s image was assessed by observing the level of desirability and

deliverability.

Desirability: It was found that the iPhone possessed attributes that overall were desirable to

respondents in general. The three most desirable attributes of the iPhone were: “innovation”

(5.8), “simplicity” (5.1) and “coolness/sleekness” (4.9). Therefore, it can be inferred that

generally, benefits sought by consumers for mobile phones are: technology, facility and

adherence to a certain social image. Less desirable were the physical characteristics of the

phone: weight (4.4), battery (4.2), size (4.2) and durability (4.2). With a score of 3.3,

affordability is the least desirable attribute of the iPhone. In terms of affordability, it can be

observed that iPhone users relative to non users were more favorable towards the price than

non-users, with respective averages scores of 4.8 to 3.1. This could be due to users placing a

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higher value on the iPhone and/or having a higher disposable income to purchase such a

product.

Deliverability: Deliverability is high in terms of the top 2 preferences of consumers:

simplicity and innovation. Sleekness and coolness, although not highly important to

consumers (4.3, 3.8), are highly associated with the iPhone (5.3, 5.7). Hence, consumers

perceive the iPhone to exceed expectations on the above attributes, and this increases the

favorability of the iPhone‟s brand image. Consumers are unsatisfied with regards to

affordability and battery life. While affordability is important to consumers (5.1), consumers

do not strongly associate it with the iPhone (3.0). Similarly, battery life is highly important to

consumers (5.0), however respondents associate “poor battery life” strongly with the iPhone

(5.4); battery life is the fourth most important aspect to consumers (5.1) yet it falls in last

place in terms of associations with the iPhone (3.0). Thus a benefit sought by consumers (i.e.

significant battery life) is not satisfied by the iPhone and presents an area of future

improvement.

3.3 Uniqueness of Brand Associations

Although consumers generally have the same perceptions as to what are the iPhone‟s points of

parity, what makes the iPhone unique to non-users and users are different due to different

attitudes regarding the iPhone‟s unique selling points. However, this indicates consumers do

perceive the iPhone to possess unique brand associations that differentiate the iPhone from

competitors. Based on the high quantitative scores gathered, it can be observed those unique

associations are strong.

Points of Parity: The iPhone‟s attributes found to be points of parity are product quality,

web-browsing capabilities and simple functionality, where amongst all respondents the

average score for both was 5.1, 5.4 and 5.3 respectively out of seven on how good those

attributes were compared to other phone brands on the market – “rival phones”. One

exception to the rule would be size, where non-users usually find the iPhone‟s size to be big

and bulky, hence the low mean of 3.6 out of 7. This is in contrast to 5.1 for current users, who

seem to favor phones of larger size.

Points of Differentiation: Amongst non-users the main point of differentiation would be the

iPhone‟s touch-screen, as on average, they rated it a 6.4 out of 7 on how good it was

compared to rival phones. However, current users only gave it an average of 5.5, with style

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and breadth of applications scoring highly with averages of 6.7 and 6.4 out of 7 respectively

in contrast to non user average ratings of 4.3 and 4.8. Thus, different attitudes to the same

attributes have led to different perceptions as to what constitute the iPhone‟s points of

differentiation between users and non-users.

4.0 Conclusion

This brand audit finds that the iPhone‟s brand equity is high overall. Brand awareness is quite

high meaning consumers are very familiar with the iPhone. This is due to high awareness depth

and breadth: strong brand recall and recognition exists amongst all respondents, which is

indicated by the ease by which consumers can retrieve the iPhone from memory, as well as

identify the iPhone and discuss its attributes and benefits. In addition, consumers connect the

iPhone to a wide range of purchase situations and consumption possibilities. The iPhone‟s brand

image is also quite strong. Consumers in general perceive it to be an “innovative”, i.e.

technologically sophisticated phone that is easy to use and is generally used by young outgoing

people who are technologically-savvy. However, favorability and uniqueness of the iPhone‟s

brand image did not perform consistently well, particularly on affordability. Uniqueness and

favorability of associations differed between users and non-users. This could be due to different

lifestyles and needs, which result in different evaluations of the iPhone‟s attributes and benefits.

Thus, although brand salience of the iPhone is high, differences exist regarding perceptions of

brand performance and brand imagery, resulting in different brand judgments and feelings. This

could be due to an influx of new rival smart phones over the past year that offer consumer more

choice and sets the bar higher for the iPhone. Thus, the iPhone needs to continue focusing on its

key value drivers of product innovation and branding efforts to compete effectively in an

increasingly competitive mobile phone market in future.

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Appendix

Table 1.1: Mean Scores for how well the iPhone performs in the following attributes relative to

competitors, in terms of all respondents

Attributes

Product Quality

Internet Capabilities

Simplicity

Size

Touch Screen

Style

Breadth of application

All Respondents (score)

5.1

5.4 5.3 4.3 5.6 5.2 4.8

Table 1.2: Mean Scores for how well the iPhone performs in the following attributes relative to

competitors differentiated between users and non-users

Attributes

Product Quality

Internet Capabilities

Simplicity

Size

Touch Screen

Style

Breadth of application

Current Users

5.1 4.6 5.5 5.1 5.5 6.7 6.4

Non-Users

5.7 5.4 5.9 3.6 6.4 4.3 4.8

Table 2.1 Strength of Associations

Mean

Median

Mode

Sleek 5.65 6 7

Simple 5.15 6 6

Looks big 4.5 5 5

Heavy 4.15 4.5 6

Fragile 4.15 4 6

Poor battery 5.35 6 7

Affordable 3 3 2

Cool 5.65 6 7

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Innovative 6.25 7 7

Easy to use 5.4 6 7

Table 2.2 Strength of associations

Percentage that scored >=5

Sleek 85

Simple 70

Looks big 65

Heavy 50

Fragile 45

Poor battery 70

Affordable 20

Cool 80

Innovative 95

Easy to use 75

Table 2.3 Relevance of Associations

Mean

Median

Mode

Sleek 5.65 6 7

Simple 5.15 6 6

Looks big 4.5 5 5

Heavy 4.15 4.5 6

Fragile 4.15 4 6

Poor battery 5.35 6 7

Affordable 3 3 2

Cool 5.65 6 7

Innovative 6.25 7 7

Easy to use 5.4 6 7

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Table 2.4 Relevance of associations

Percentage that scored >=5

Sleek 45

Simple 80

Looks big 35

Heavy 40

Fragile 50

Poor battery 45

Affordable 70

Cool 40

Innovative 75

Easy to use 85

Table 3.1 Satisfaction with iPhone

How satisfied are you with the iPhone in terms of these characteristics?

Placement Association Mean Score out of 7

1 Innovation 5.8

2 Simplicity 5.1

3 Coolness 4.9

4 Sleekness 4.9

5 Weight 4.4

6 Battery Life 4.2

7 Size 4.2

8 Durability 4.2

9 Ease – of – use 3.9

10 Affordability 3.4

Total 4.5

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Table 3.2

How important to you are the following characteristics in a phone?

How strongly do you associate these characteristics with the iPhone?

Deliverability: Does the iPhone deliver?

Placement Association Mean score out of 7

Placement Association Mean score out of 7

DIFFERENCE

1 Simplicity 5.7 5 Simplicity 5.2 -0.5

2 Innovation 5.5 1 Innovation 6.3 +0.8

3 Durability 5.2 8 Durability 4.2 -1.0

4 Affordability 5.1 10 Affordability 3 -2.1

5 Battery life 5 3 Battery life 5.4 +5.4

6 Ease-of-use 4.5 9 Ease-of-use 4.1 -0.4

7 weight 4.4 7 weight 4.2 -0.2

8 sleekness 4.3 4 sleekness 5.3 1

9 size 4 6 size 4.2 0.5

10 coolness 3.8 2 coolness 5.7 -1.9

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Surveys

Qualitative Survey Part 1 : Measuring brand awareness and associations:

1. What phone do you currently have?

2. If your phone breaks today and you need a replacement, because you were meeting up with an old friend

from overseas over the weekend, you have enough money to buy whatever you like, which phone would

you buy? iPhone BlackBerry O2 Nokia HTC Dell Samsung Others

3. If you required a smart phone which would you choose?

4. Do you currently have an iPhone? Yes No

5. If yes, what do you use it for? Gaming Surfing Chatting Presentations Others

If no, what would you use it for? Gaming Surfing Chatting Presentations

Others

6. What do you think of the iPhone‟s appearance? What words would you use?

7. How do you feel about the size, shape and weight of the iPhone? Good Bad

Average

8. How do you feel about the iPhone‟s durability and battery life? Good Bad

Average

9. Is the iPhone easy to use in your opinion? (touch screen, applications etc) Yes No

10. Relative to your current/previous phone, is the iPhone affordable? Yes No

11. When choosing your last phone how important was price? V. Imp Imp

Least Imp

12. What sort of people do you think use the iPhone? Students Executives Businessman

13. How would you describe the brand „Apple‟?

14. Any additional questions, queries, comments?

Qualitative Survey Part 2

Awareness Depth: Brand Recall: 1. In terms of phone brands in general, what are the top three that comes to mind?

2. When you think of music phones, which brands do you think of?

iPhone BlackBerry Sony Ericsson E Nokia Dell Samsung

Others

3. With regards to Internet phones, which are your favorite three?

4. Which phone brand do you consider to be the IPhone‟s most direct/ closest competitor, and why?

5. Can you name one significant point of differentiation that allows the IPhone to stand out from its closest

competitors?

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Awareness Breadth: Purchase Situation: 1. Should a brand new IPhone be released into the market, and its better in every aspect than your current phone, what is the likelihood that you will buy it immediately? (0n a scale 0f 1(high)-5(low))

2. Should a brand new version of competitor‟s phone (for e.g. Blackberry, Sony Ericsson) be released and

is better than your current phone in all dimensions, would you purchase it straight away? (0n a scale 0f

1(high)-5(low))

Associations 1. On a scale from 1 to 7, with 1 being the weakest and 7 being the strongest, how strongly do you

associate the following characteristics/ attributes with the IPhone?

Sleek ---------------------- Simple ---------------------

Looks Big -------------------

Heavy ------------------------- Fragile -------------------------

Poor battery life --------------

Affordable ----------------------- Cool ---------------------------------

innovative --------------------------

Easy to use ---------------------------- 2. How relevant are the following characteristics/ attributes on a scale from 1 to 7 with 7 being the most

relevant to your usage situation when purchasing a phone?

Sleek ------------------- Simple -------------------

Looks Big -----------------

Heavy ----------------------- Fragile -----------------------

Poor battery Life ----------

Affordable --------------------

Cool ------------------------------ innovative -----------------------

Easy to use ------------------------

3. How important on a scale from one to seven with 7 being the most important are the following

characteristics/ attributes to you when deciding which phone to purchase?

Sleek ----------------------- Simple ----------------------

Looks Big -------------------

Heavy ------------------------- Fragile -------------------------

Poor battery life -------------

Affordable ----------------------

Cool -------------------------------- innovative -------------------------

Easy to use --------------------------

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Bibliography

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Blog: http://theappleblog.com/2009/08/12/iphone-market-share-up-again/

Keller, K. L. (1993). Conceptualizing, Measuring and Managing Customer Based Brand Equity. Journal of

Marketing , 1-22.

Hearn, L. (1 September, 2009). Android phones hope to take a bite out of Apple dominance. Retrieved 7

September, 2009, from Digital Life: The Age: http://www.theage.com.au/digital-life/iphone/android-

phones-hope-to-take-a-bite-out-of-apple-dominance-20090828-f1qo.html

Keller, Kevin Lane (2008), Strategic Brand Management: Building, Measuring, and Managing Brand

Equity, 3nd Edition, Prentice Hall.