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iPod Shuffle 3rd Generation Media Strategy Campaign

Emily Gray - Brianne Herr - Jessica Hil - Kayelyn Means Com 338 - Brother Hochstrasser - Winter 2010


Contents

Executive Summary Situation Analysis Marketing Goals Target Audience Media Objectives Creative Execution Media Strategy Media Execution Promotional & Non-Traditional Budget & Media Breakdown Appendix

Citations Ostrow Model MP3 Brand Share Brand Development Index Ev% Creative Demonstration

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Executive Summary

Apple is a leading brand of the music industry and in MP3 player, holding a full 54% of slaes in the category. Though Apple is an internationally recognized name, with an almost extreme in brand loyalty, many people are unaware of some of their various products, and others are just not loyal to or users of the brand. Within the next fiscal year, Apple hopes to insure their place as the category leader and blunt the competition. They also hope to drive annual sales over $800 million and promote iTunes along with iPod products. Apple’s other goals are to utilize non-traditional advertising promotions, and build brand loyalty for iTunes and iPod products. We have decided to target our campaign specifically to ‘the modern housewives,’ women who are ages 30 to 54 years, a married or single mother of children between the ages of 6 and 17 years. Women in this demographic are typically a stay-at-home, work-from-home, or working mom, college educated, and in some cases a full-time job in a professional occupation, as well as, a mother. Technology plays a big role in their life, and they have an annual household income $60,000 to $150,000 + and home valued at $200,000 to $500,000 +. Our campaign’s marketing include reaching 80% of our target audience with an average frequency of 2.7 times within a given month of the eigth selected for the campaign’s flight. This should result in approximately 216 Gross Rating Points per month in February, April, May, June, September, October, November and December. Although we will rely on National for each of the eight months of our campaign, our emphasis will fall heavily on our Spot markets for our ‘heavy’ months (February, May, October and December) to more effectively reach our target audience. We will utilize magazine, Internet, Network and Cable television, radio, outdoor, newspaper and non-traditional media. Our Spot market cities include: Boston, Chicago, Cleveland, Dallas, Las Vegas, Phoenix, Seattle and San Fransisco. As we focus our advertising in specific areas and in specific media vehicles particularly applicable to our target audience, we will be more successful in reaching our marketing objectives. With highly focused advertising, we will not only increase Apple’s brand awareness and loyalty, but also increase potential sales and beat out the competition.

Red Hanger, inc.


Situation Analysis

Historical Analysis

At the beginning of the decade, portable music devices were inconvenient, unattractive and overpriced. Apple saw this as an opportunity, and introduced their latest addition to the long-standing company, the iPod. At first, the iPod was just as large and clunky as existing technology, and had a high price tag. After overwhelming success and interest caught on, Apple started to develop new and innovative products. One of those products was the iPod Shuffle. Weighing in at a measly 0.78 ounces and with dimensions no larger than the average flash drive, the iPod Shuffle quickly caught on as the exercise enthusiasts go-to musical device. In addition to introducing the iPod, Apple introduced iTunes, a digital music store, in 2001. It has grown over time to become the number one music vendor in the United States with over one-billion downloads.

As time went on, the iPod Shuffle underwent two more face-lifts. The first restructuring was released in September of 2006, keeping many of the same features of the original iPod Shuffle -- the trademark wheel, the sleek design, and the high-quality musical interface. This time around, Apple released a 2GB version in addition to their 1GB version. In 2009, however, the iPod Shuffle underwent one more major change. This time the Shuffle released was quoted as being “jaw-droppingly small,” and it included a new clip feature, which allowed the user to clip the iPod to their clothing in order to ensure stability and that the iPod wouldn’t be lost. It also included a revolutionary design wherein the iPod Shuffle would “talk” to the user and announce upcoming songs. Apple removed the trademark scroll wheel and added it to the volume-controling earbuds, and even released a new 4GB option. This is the current iPod Shuffle available on the market. Many people who use the iPod Shuffle do not know that they can purchase music from iTunes, leading to a decrease in usage of the online store by those users over time.

Competitive Analysis

As portable musical technology becomes more prevalent among consumers, the iPod Shuffle has increasing competition with companies that have similar products. Their main competition are the following companies: 1. Sony 2. SanDisk 3. Samsung 4. Creative Zen 5. Zune Each of these companies, in order of their market share, make and sell products at similar price points with similar features. Much of the advertisements from the other companies are similar to the style of Apple, who dominates the competition with a 28% share of the market, but are fewer in frequency.

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Situation Analysis: SWOT Strengths • • • • • • • • •

Apple holds 54% of the market share Strong brand awareness Strong brand loyalty Strong brand recognition Streamlined, cohesive Apple products Shuffle is easy to use, portable Able to hold 1-4GB of music iTunes store is the #1 music outlet in the United States Clip-on and small size are easier for on-the-go lifestyles

Weaknesses • • • • • • •

Older generations find other music downloading sites easier to use than iTunes Small GB size limits the amount of music Short life span 3 new versions released within the past 5 years Advertisements are general in nature, not targeted to a specific niche Clip is easily broken with applied pressure Hassle converting music purchased from iTunes into other usable forms

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Situation Analysis: SWOT

Opportunities

• Through demographic, good opportunity for growth among older generations • In choosing the modern housewife and women as the demographic, the donations will give the company good PR. Not only does the company have good products, they do good in the community • With a strong market share, Apple has the opportunity to dominate the competition even more than it already does • Through marketing iTunes in conjunction with the iPod Shuffle, more people will be aware of the store and its possibilities.

• • • • •

Threats

Sony is close behind Apple at market shares Older generations are more likely to rely on brands that they recognize than newer brands Other brands are easier to use than Apple “PC” vs. “Mac” debate-some people just are not loyal to the Apple brand and never will be Other music players, like Rhapsody, are seen as easier to use

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Marketing Goals

1. Grow Apple’s US franchise to new heights 2. Blunt competition 3. Insure iPod as the category leader 4. Capitalize on the ‘halo effect’ by integrating the iPod Shuffle and iTunes Store. 5. Drive annual sales over $800 million while cross promoting iTunes Music Store downloads. 6. Build brand loyalty for Apple’s iTunes. 7. Utilize non-traditional advertising promotions

Target Audience Characteristic Summary The Modern Housewife • • • • • • • • • • • • •

Women Ages 30 to 54 years Married or single mother Children between the ages of 6 and 17 years A stay-at-home, work-from-home, or working mom College educated A full-time job in a professional occupation, as well as, a mother Technology plays a big role in life Household annual income $60,000 to $150,000 + Home value $200,000 to $500,000 + Lives in the western United States Heavy internet and magazine user Light TV watchers

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Target Audience

The Modern Housewife

Explanaition & Jusification

An older generation would be a more suitable market for the iPod Shuffle. The younger generation, 11-25 years old, are more tech-savvy and want the advanced technology with all the “apps,” video and music capability. However, older adults are not as knowledgeable about technology and look for simplicity in electronics. The ideal target markets for iPod shuffle is the ‘Modern Housewife,’ who between the ages of 30 to 54 (137). She is a single (110) or married mother (117) with children between the ages of 6 to 17 years old (155, 162). She is college educated, (117). Most of these ‘moms’ work, having a business or management job (188), and few are stay-at-home moms. The ‘Modern Housewife’ is the woman who is always on the go. She works out at the gym, gets kids out the door for school, works, cleans, takes everyone to their soccer and dance practices, and still manages to cook dinner. With children under the age of 18, technology plays a big role in her life. According to Mintel, 59% of moms, from ages 30 to 45, own a MP3 player and use technology as a way to achieve family oriented goals. Additionally, she may reside in the western (138) part of the United States living in a home valued at $200,000 to $500,000 + (137, 138) with annual household income of $60,000 to $150,000 + (128, 160, 215). This target is also noted as heavy internet (177) and magazine (145) users and light TV (39) watchers.

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Media Objectives

To establish our campaign’s marketing goals, we used the Ostrow Model, calculating that our frequency should 2.7 and our reach 80%, multiplying that to get 216 GRPs. We decided to use these as our National goals, while our Spot goals are 85% reach, 3.0 frequency and 39 GRPs. To increase iPod Shuffle purchases, ensure Apple as the brand leader in MP3 devices, we decided to use National Media for February, April, May, June, September, October, November, and December. Our total GRPs for National advertising is 820 GRPs, 205 GRPs each month. February, May, October, and December are our ‘heavy’ months due to their respective holidays or promotions -- each of these months have times when people are looking for gift ideas for moms, or are major promotional times for women. For each of these months our reach is 77.1 and frequency 2.7. We spent a majority of the budget in National advertising, feeling it is the best way to reach our targer all across the United States, while reserving an allocated amount for heavier emphasis for Spot advertising during the ‘heavy’ months. Though our target audience are light watchers, television still brings a large audience, and we felt it was best to put some of the budget into it. We allotted 30 GRPs for Net TV Prime, 45 GRPs for Net Cable-Daytime and 20 GRPs for National Syndication. More money was specifically put into Net Cable-Daytime because those moms who say at home make up the most probable audience of shows at this time, and therefore our advertising. Continuing with the trend of our target’s day time activity, we also allotted 30 GRPs for Net RadioMorning Drive, while mothers are on their way to work or dropping kids off to school. A big portion of our campaign focusing on magazines as we feel that they will greatly help reach our target audience. We allotted 30 GRPs for General Interest and 55 GRPs for Women magazines. In contrast, we chose to do minimal advertising in newspapers, and allotted only 20 GRPs to the medium. With a target audience with high Internet use, Internet is another big focus of our campaign. We chose to use Internet-Keyword and Internet-Targeted sites, as well as sponsorship of specific television program episodes aired online. For the Spot marketing in our ‘heavy months’, we decided to allocate money for Spot TV-Daytime at 35GRPs, Spot TV-Prime at 15 GRPs, and 645 GRPs are for outdoor. With National and Spot combined, we had a reach of 83 and had a frequency of 3.1. In our ‘light’ months (April, June, September, November), we have a reach of 69.5 and a frequency of 2.7, and a total for 740 GRPs, which is 185 GRPs each month. We allotted 20 GRPs for Net TV Prime, 45 GRPs for Net Cable Daytime, 60 GRPs for Net Radio-Morning Drive, 10 GRPs for General Interest magazines, and 50 GRPs for Women’s magazines. We also decided to use Internet Keyword and Internet Targeted sites. Between our National and Spot campaigns, our total GRPs for Internet is 16, which we allotted for both Internet keyword and Internet Targeted sites. All months combined for National and Spot marketing (excluding our Promotional and NonTraditional advertising, which totaled $3,574,300), the total cost came to $18,925,700 and 1,760 GRPs. We believe this plan will take customers away from competitors, making the Apple dominant brand.

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Creative Execution Audience:

Creative Brief

The ideal target audience for the iPod Shuffle is mothers, single or married, between the ages of 30 to 54, with children 6 to 17 years old. She either works or is a stay-at-home mom, with college education, and a household income ranging from $60,000 to $150,000 +.

Positioning:

We position the iPod Shuffle as the household brand for busy modern-day housewives.

Media:

The media to be used in this campaign is TV, Internet, magazines, radio, newspaper and outdoor.

Big Idea:

All creative will be focused on reaching women and moms with busy lifestyles. Advertisements will show moms doing everyday things, like work, exercising, cooking, cleaning, and taking care of children all while “grooving” to their iPod Shuffle. We want to show the convenience wearing and using the iPod Shuffle while doing all these various activities.

Tag Line:

“On the move, in the groove.” or “In the groove while on the move.” (see Appendix for a Creative Demonstration)

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Media Strategy

We will be utilizing both national and spot marketing for our campaign. Given our emphasis on our promotional participation with the Susan G. Komen Foundation, we will select four cities hosting a ‘Race for the Cure’ as our main spot markets, and select other cities (according to EV%) throughout the continental United States to complete our spot market list. After examining the list of markets for our demographic as provided by Media Flight Plan, as well as figuring their EV% (see Appendix) and weights, we chose six different cities (apart from the four in which we will be attending a ‘Race for the Cure’) that we feel will benefit Apple the most with specifically increased marketing. The four cities whose races we have chosen to attend are Las Vegas, Phoenix, San Francisco and Seattle. The additional six cities we have chosen are Boston, Chicago, Cleveland, Dallas, Philadelphia and Salt Lake City. While each of these ten cities will receive a heavier emphasis than the nation as a whole, particular attention (mainly through PSAs of our spokesperson, Sherly Crow, and product giveaways) will be paid to the four cities with races we plan to attend. When selecting specific media to purchase, we first analyzed reserach obtained from Mediamark Researcher to gain more insight into and define our target audience. We used a chart from Mintel (see Appendix) to gain a better understanding of Apple’s place and share of the music industry and MP3 player market. Using this information, we realized that though Apple has a dominant presence in the music industry and MP3 player market, many women in our target audience either do not use portable music devices, or are using other brands. We realized that our target audience are heavy Internet users and light television users, and their magazine readership hasneither increased or decreased, so we need to emphasize Internet, though not totally disregard the use of television and magazine advertising for our ‘light’ campaign months (April, June, September and November). For our ‘heavy’ campaign months, we should continue to use Internet, television, radio and magazines, but should also incorporate newspaper and outdoor advertising for breast cancer awareness (October), and ‘mom-related’ holidays (February Valentine’s Day, May - Mother’s Day, December - Christmas). While radio listenership is more on the decline, we feel that moms are in ‘on the go’ and in their vehicles frequently enough that radio may still be a valuable vehicle to reach our target audience.

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Media Strategy Media Mix Information

Utilizing the research obtained from Mintel, Mediamark, and Media Flight Plan, and given our target audience, we decided to use a combination of continuity and flighting for our scheduling pattern. To optimize the efficiency and impact of our campaign, we will use television (Daytime, Prime Time and Cable), women’s magazines, Internet, and radio for our ‘light,’ continual months (April, June, September, November), as well as an edition of outdoor and newspaper for our ‘heavy,’ flighting months (February, May, October, December).

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Media Execution Specific Media Vehicles

To reach our target audience, we have decided to use cable and network television, magazines, newspaper, outdoor, newspaper, radio and various non-traditional forms. Each medium is described in detail below to justify how it will work for this campaign and how it will help effectively meet the reach and frequency goals outlined in the media objectives. The index numbers we were found in the Fall 2008 Product-Electronics MP3 Player (Portable)-Brands, Apple iPod Shuffle You Personally Own, a Mediamark report. Magazines quintiles I and II are 145, 115 respectively, Internet quintiles I and II are 177, 130 respectively, outdoor quintile I and II are 119, 130 respectively, and radio morning drive quintiles I is 121 while afternoon drive is 122. Any cable viewed in the last week for women owning an iPod shuffle has an index number of 110. All of these index numbers are above 100, which indicates a higher average for each medium.

Cable and Network Television:

Our decision to use cable networks on the basis of type of channel and index numbers. Modern housewives are attracted to channels that demonstrate and show ways to improve their homes and families. Cable networks utilized in this campaign are: • HGTV (Home and Garden Television), 111 • TLC (The Learning Channel), 131 • ESPN 2, 130 • The Food Network, 124 • Travel Channel, 122

Magazine:

Magazines will be a main focus in our campaign because of the high index numbers for quintile I and II (145,115). From the analysis of multiple magazines that are directed toward our target audience we have found that content about life, fashion and celebrities attract our target audience. Magazines utilized in this campaign are: • Elle, 219 • Parents, 118 • People, 118 • InStyle, 194 • Martha Stewart, 147

Internet:

Internet is the prime source for reaching our given target audience. We will use search engine optimization and keywords. Keywords will include: iPod, shuffle, MP3 player, etc. Banner ads will be placed on four Internet sites. Internet sites utilized in this campaign are: • Gmail.com, 178 • Amazon.com, 182 • Youtube.com, 182 • Facebook.com, 194 • Blogspot.com

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Media Execution Newspaper:

Specific Media Vehicles

National newspapers will run our PSAs for breast cancer awareness to promote the promotional and non-traditional part of our campaign. Each newspaper ad will be half page, black and white, featuring our selected spokesperson, Sheryl Crow.

Outdoor::

Billboards will be placed in the spot markets of the campaign. Billboard will be place in medium-high traffic areas, including: • near schools • grocery stores • shopping centers • freeways

Non-Traditional:

Apple will make a contribution to sponsor the Susan G. Komen Foundation’s Race for the Cure. At various events, Apple will show up and randomly distribute free pink ribbon iPod Shuffles and themed iTunes gift cards to randomly selected participants and survivors. We will use product placement in television programs simultaneously with television product giveaways. Some examples include: • Extreme Makeover Home Edition • The Biggest Loser • Desperate Housewives • Grey’s Anatomy • Oprah show We will also sponsor specific episodes on television programs on the Internet so our ads will be played before and during those episodes viewed on ABC.com and Hulu.com.

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Media Execution

Media Flowchart

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Promotional & Non-Traditional • Make the Apple website pink for the month of October • Use Sheryl Crow as Apple’s spokesperson for breast cancer awareness for the PSA campaign for the month of October • Market an iPod Shuffle package with $15 iTunes gift card doning the Breast Cancer Society pink ribbon • Give away free iPod Shuffles to audience members on the Oprah show • Product Placement on television shows such as Desperate Housewives and Grey’s Anatomy • Give away free products on television shows such as Extreme Makeover: Home Edition and The Biggest Loser • Send out e-mail blast to Apple subscribers • Advertise on popular mom blogs In October 200, Apple came out with the special edition pink iPod Shuffle to support breast cancer awareness. The package included an iTunes gift card and part of the sales went to the Breast Cancer Research Foundation. In January 2010, Apple created a web “app” for mobile breast cancer detection. As part of our campaign, we want to target our audience and do more with breast cancer awareness. First, Apple will use Sheryl Crow as a spoke person for the limited pink ribbon iPod Shuffle package that will be sold during Breast Cancer Awareness month, October. Like the previous campaign, it will be a package with an iPod Shuffle and $15 iTunes gift card; proceeds will all go to the Susan G. Komen Breast Cancer Research Foundation. The Apple website will also be don the pink ribbon for the entire month. Also in October, Apple will give away the pink ribbon iPod Shuffle package to an entire audience during an episode on the Oprah show in support of breast cancer awareness. In May, June, September, and October Apple will, as a national sponsor of the Susan G. Komen Foundation, will be represented at four select ‘Race for the Cure’ locations - Las Vegas, San Francisco, Seattle, and Phoenix. They will run breast cancer awareness PSAs featuring spokesperson Sheryl Crow prior to the race, and have a booth to hand out water to participants, as well as 50 pink ribbon iPod Shuffle packages and 100 $15 iTune gift cards to randomly selected participants. Apple will also place product on shows such as Desperate Housewives and Grey’s Anatomy. Since women are light TV watchers, but heavy Internet users, Apple will sponsor Desperate Housewives and Grey’s Anatomy episodes on ABC.com and Hulu. The featured commercial breaks and billboards will be of moms on the go with their iPod Shuffles. Apple will also supply 100 iPod Shuffles to The Biggest Loser and Extreme Makeover Home Edition to give away as gifts on their various shows, and also advertise on popular mom-written blogs. Apple will also send out e-mail blast to subscribers’ with information about their limited edition pink ribbon iPod Shuffle package and what they are doing to support breast cancer awareness.

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Budget

In the past, Apple has used a variety of media for their advertising. Many of their campaigns were focused on the younger generation rather than specifically on our target audience, the modern housewife. We have chosen to focus on media that is most compatible with our target audience. We broke down our budget of $22,500,000, dividing it among the media explained in the media execution. Our overall National budget was $15,00, our overall Spot budget was $3,348,200, and our nontraditional budget is $3,547,300. To best utilize the allocated funds, we allotted our budget as follows: • Network television – $5,155,000, comprising 22.91% of the entire budget • Cable Daytime – $3,574,300 comprising 7.15% of the entire budget • National Syndication – $1,256,600, comprising 5.58% of the entire budget • National Radio – $1,060,500, comprising 4.71% of the entire budget • Magazines – $5,497,800 comprising 24.43% of the entire budget • Newspaper – $$819,000 comprising 3.64% of the entire budget • Internet keywords and target sites – $180,000 comprising 0.80% of the entire budget • Spot television daytime – $568,800 comprising 2.53% of the entire budget • Spot television prime was allotted $844,400 comprising 3.75% of the entire budget Outdoor – $1,935,000 comprising 8.60% of the entire budget. • Non-traditional advertising – $3,547,300 comprising 15.89% of the entire budget To determine which cities to include in our Spot marketing, we chose the four cities whose races we are attending, and chose another six based on EV% and brand development indexes (see Appendix).

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Budget

Media Breakdown

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Appendix Citation

www.apple.com http://www.mac-history.net/ipod/2009-03-11/ipod-shuffle-3rd-generation http://www.ipodhistory.com/ Mintel Reports, http://academic.mintel.com/sinatra/oxygen_academic/my_info/ http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=393594/ display/id=466927?select_section=393594 http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=296665 Fall 2008 Product-Electronics MP3 Player (Portable)-Brands, Apple iPod Shuffle you personally own (base women). http://ureporter.mriplusonline.com/selectvolume.asp , www.mriplus.com

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Appendix

Ostrow Model

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Appendix

MP3 Player Brand Shares

Brand Development Index

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Appendix

EV% Chart

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Appendix EV% Chart

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Appendix

EV% Chart

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Appendix

Creative Demonstration

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About Red Hanger, inc. the Planning Team

About the Company:

Red Hanger, inc. is a student created marketing agency for Communications 338 - Media Planning and Strategies. This agency specializes in market research, creative design, and media planning and buying.

Emily Gray:

Emily Gray was born and raised in the Idaho Falls, Idaho area. She will graduate in July 2010 with a Bachelor of Science in Healthcare Administration with a minor in Public Relations. Emily has worked extensively with event planning on campus for the Social Activities program. Some of her hobbies include reading, shopping, playing games and being outdoors.

Brianne Herr:

Brianne Herr is a senior from Gilbert, Arizona studying University Studies with a minor in Advertising and clusters in Education and Clothing Construction. She has spent the last four years working extensivlely in marketing and research. Bri enjoys sewing and being outdoors.

Jessica Hil :

Jessia Hill is a senior studying Communications with an emphasis in Public Relations, and planning to graduate in July 2010. She most recently from Trenton, New Jersy, though has lived all the United States. Jessica has been heavily involved in various campaigns across the spectrum of Communications.

Kayelyn Means:

Kayelyn Means is a senior from Phoenix, Arizona preparing to graduate in April 2010 with a degree in Professional Writing and Public Relations. Kayelyn has served three internships, worked extensively in campus event planning, and has participated in the development (and implementation) of several PR, research and media planning campaigns.

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Ipod Shuffle Advertising Campaign