How Companies Have Failed The Changing Computer Consumer

Introduction

Today, the U.S. consumer has made adjustments to the faltering economy by altering their spending habits, while many of the nation’s largest companies and brands struggle as a result. Many are receiving federal bailout money, others are declaring bankruptcy – and only a few are looking for ways to win and grow market share.

Those aiming higher than the rest understand that, no matter the economic situation or the category, a few always emerge as the victors by taking market share from competitor brands.

For that reason, Stealing Share commissioned a national research study of U.S. consumers to get a snapshot of what consumers were thinking in this new economy and how it affects their actions now and in the future. The survey asked consumers about their habits, decision-making processes and beliefs about themselves and the world at large. It also asked questions about many specific industries, including the computer industry.

Computers

For those who know Stealing Share well, it comes as no surprise that we consider Apple to be the premier brand in the technology category, if not among those in every category.

Apparently, we’re not alone. We asked consumers if they agreed with this statement: “I believe Macs are better computers than PCs.” The results were unusual, but very interesting, including that 21.8% agreed with the statement.

That may seem like a low number but not when you consider that it is significantly more than the market share of Macs. Reports of the market share of Macs vary, although it seems to be between 8-10% of all computers sold in the U.S.

The fact that a percentage of those using a competitor believes Apple is better speaks to the power of the brand and its continued growth potential. It means Apple is in their considered set when considering a new computer, having already believed the Mac is better.

In addition, 27.4% said they didn’t know which was better, an unusually high number for a “Don’t Know” response. It means nearly a third of consumers are still shifting through the waters, which can be muddled.

We could spend all day talking about why the Apple brand is so powerful, so we’ll keep it short:

• The brand is about the consumer (“Hi, I’m a Mac”) and not about the computer.

• The brand is consistent in every mode of expression, from marketing to packaging to its product development.

• The brand is direct and simple.

• It is crystal clear about whom it is about: For those who see themselves as innovators (“Think Different”) and like to demonstrate that Apple-like forward thinking to others around them.

Microsoft, however, has exploited that last point in recent TV spots. Although the ads essentially boil the selling point down to price, there is a little bullet in each one that reaches the heart of the Apple brand.

The sense among many Mac followers is that these are terrible ads because they only discuss price, which by itself does not create preference.

Price does, however, when there’s a strategy involved. In this case, that little, inserted line “I guess I’m not cool enough for a Mac” hits Apple right where it counts, presenting the Apple brand as trendy or arrogant – the flip side of the “think different” brand.

Some indicators say the approach is working, and it may slow down Apple’s momentum temporarily (especially in the context of today’s economy in which 67% of U.S. consumers now base most purchasing decisions on price).

And Apple is adjusting, using its “Mac vs. PC” ads, the nirvana of brand marketing, to emphasize quality and Apple is also negotiating with Wal-Mart to have a larger presence in the retail giant’s locations.

But computers and technology can be a different animal than most other categories because innovation is expected. Meaning, if you are not innovative and simply say you are cheaper, you will get left behind.

In fact, Apple has lived up to its brand promise by drastically and quickly transforming industries, not just in computers. The iPhone has revolutionized the cell phone industry with competitors scrambling to match its technology, which may be hard to do without the applications from Apple’s iTunes. In just one year, the market share of the iPhone has doubled from 5.3% to 10.8% in a market where our research showed 15% of consumers switch cell phones each year.

The iPod and iTunes has completely transformed how consumers purchase music. Our research showed that most U.S. consumers (51.8%) have not purchased a CD at a store in the last year.

How that relates to the computer world stands on the power of brand, of which Apple has the brand platform to explore other categories. In computers, though, it has been far ahead in creating a brand that’s a reflection of the customer. Dell is the market leader, but it’s seeing its share slipping.

The market share of Macs is continuing to grow, but it’s low-cost player Acer that’s nearly doubled its market share in the last year.

Price is something brands in all categories must confront, but it doesn’t create long-term preference. If that were true, then the lowest cost provider would always win.

In time, Mac should make continued inroads into the computer market – that is, until the competition figures out where Apple is vulnerable (starting to happen now) and who the consumers are that use that brand.

Click here to read about the whole study or click one of the categories to the right for more information

If you would like more information on how Stealing Share can help your brand Click Here

Click Here for Site Map