Three things we can learn from Apple’s $US18 billion net profit

Apple recently reported a record profit for the past financial quarter. The $US18 billion net profit is the largest quarterly profit to be posted by any company ever. Apple has gone from strength to strength, so what can we learn from one of the most successful companies in the world?

We can learn three important things from Apple to ensure success, prosperity, and growth for brands around the world.

The three keys to brand growth are:

1) Good product

Apple is a market leader when it comes to product innovation, improvements, and updates. They are not known for being the first in market, but they are known for having better products than everyone else. For example they have not yet released the Apple Watch, they have waited to learn from other similar products so they can improve and innovate their offering. Apple always thinks of the end user when developing their products which is evident in their sleek UX which focuses on minimising options to reduce complexity. This design philosophy is derived from Hicks Law which states that decision time increases as the number of alternatives increase. When you have a good product, people are happy to buy it. It’s simple, people won’t buy bad products. There is a reason why Apple sold over 74 million iPhone 6s in 90 days (this equates to 9 every second).

2) Well remembered

It’s highly likely that when you think about mobile phones you think of the Apple iPhone first. Your brand should strive to be the first brand thought of in your category, if people don’t know your brand, they won’t buy it. Apple spent over $US1 billion on advertising in 2013 just to let everyone know they exist. This may sound extravagant, but it only equates to roughly 6% of their profits. Apple has a very distinctive clean and minimalist style of advertising where the product is always the hero, which means when you see an Apple ad, you know it’s for Apple. Apple has built such strong distinctive brand assets over time such as their white head phones, sleek rounded product design, the “i” prefix in their product names, and the Apple logo. They are clearly recognisable in all of their product categories thanks to their distinctive look and consistent, wide reach advertising.

https://www.youtube.com/watch?v=ybIxBZlopUY&index=5&list=PLHFlHpPjgk71oZFqrr4VWF33NrZaky9Ff

3) Well distributed

Apple stores are hugely successful, they generate the most revenue per square foot than any other retailer in the US. However, only a portion of their products are sold in Apple stores with significant revenues coming from retail partners such as Walmart, Amazon, Best Buy, AT&T, Verizon, and numerous online stores. Apple takes a high reach approach to distribution, their products are always in a nearby store, or a click away. If your product is not readily accessible or available to consumers, they will seek alternatives. Make sure your product is everywhere that potential consumers may be.

SmartCompany: Me on Twitter’s churn and burn

I’m is quoted in this Patrick Stafford piece in SmartCompany. It’s about Twitter’s appalling churn rate of over 60%.

Some of the reasons why Twitter’s retention rate is so bad:

  1. It’s limited – 140 characters. No video / audio / rich media / expression / detail / depth – yes you can link to those things, but that’s it.
  2. It’s neither a mass broadcast mechanism nor is it targetted. Fine if you want to get a message out to a number of followers in a single moment, but terrible if you are using it for reach or for a more personal or limited conversation.
  3. It’s very easy to set up, so there’s little in terms of “purchase investment”. You register, follow a few people and if you walk away / forget, it’s not like you’ve spent hours of your time – there’s little to “lose” by abandoning it.
  4. It’s a media phenomenon. The media are going nuts over it, when the punters are far less interested. It’s like Second Life – not a day would go by when the media wouldn’t write about Second Life – it drove a spike in interest, but didn’t drive long term usage.
  5. As written in a previous post, Twitter is for old people. Young people couldn’t care less and aren’t using it in any substantial numbers. Older people either don’t have the time, or the interest, so they join up, look around and leave after a while – they don’t keep the ball rolling.
  6. It’s not customisable. I might enjoy some tweets of some people (person focussed), or some tweets by all people (topic focussed), but definitely not all tweets by all people. It needs to be customisable. Right now, whether I like it or not, I have to read the tweets of all of the people I follow on Twitter. You could argue that there are multiple plugins and applications that allow for customisation of Twitter, but the basic beginner user isn’t interested enough (or capable enough) to then look for filters and plugins. So they get bored / frustrated and stop using it.

Read the full article here: Research casts doubt over whether Twitter fad will last – Business news, business advice and information for Australian SMEs | SmartCompany.

Fred Stauder – “A hero to small business”

Today marks 20 years since the Supreme Court of Victoria awarded the Dollar Sweets Company damages in the fight against the thugs, bullies and standover men of the Confectionary Workers Union.

Dollar Sweets Fairy Bread

This article outlines the reasons why this case is so important – why it marked a serious turning point in the thankful erosion of union power in Australia.

My advice – get some white bread, spread some Western Star butter, sprinkle some “hundreds and thousands” or “dollars” over the bread and eat away while you read this article. You’ll be glad you did.

Increasing energy prices good for some companies?

How can BHP expand production at Olympic Dam without a new source of power? Can Australia really increase production volumes in its minerals and metals industry without increasing the number of natural-gas fired plants that run on gas from the North West Shelf? These must be the questions that keep mine executives up at night, among other things.

As always, a very interesting piece of analysis from the guys at The Daily Reckoning…

Alfred Chandler – GONE

Alfred Chandler, the man who almost singlehandedly invented the field of study in Business Management, has passed away.

In the past few months, we have seen the deaths of many a great contributor to our thinking and society (namely, Milton Friedman) – Alfred Chandler was one of these “gurus”.

A man who has helped so many of us work our way through the wonders of corporate strategy. Long may his thinking live on.

School Ties

Driving through the leafy suburban streets of Balwyn a few weeks ago, I was struck by the number of real estate boards outside homes which had a strange little logo on them “In the Balwyn High School Zone”. Balwyn High, a state school, is one of the best performed schools in Australia based on VCE results.

Every year, the results figures come out and Balwyn High ranks as highly (if not higher) as some of the “established” public schools such as Melbourne Grammar, Scotch College, Geelong Grammer and Mount Scopus. To get into those schools, parents must pay extraordinary school fees. However, to be able to attend Balwyn High (a “free” state school), you must simply live in the “Balwyn High zone”, hence why living in the zone is such a unique and attractive selling point for local properties. Tim Harford, the Undercover Economist, has written an excellent piece on the interesting distortions this places on the local real estate market and the resources of the school.

In essence, he highlights how odd the system is whereby parents pay for their children’s education by paying more for real estate in that area rather than paying less for real estate and paying more to the school itself. They are basically paying the same amount for their children’s education as those parents who choose to send their kids to a public school – however the school gets none of the benefits – the extra “fees” go to the previous landowner!

Another argument for the voucher system?

No bread for (red)

Have I mentioned this before?

What % of charity money goes to the people in need?

They’ve tried to diffuse it with this. Lame rebuttal. (red) is like many other major charities – a rort, a joke, and a means for people to feel like they’re doing something positive when in fact they’re feathering someone’s opulent nest.

I’ll ask this question until I’m blue in the face: “What % of charity money actually goes to the people in need?”

Bring on genuine, capitalistic microcredit. It’ll bring millions out of poverty in a flash.

Conservatory Hotel – Sydney: Do not stay there

It’s patently clear. Do not stay at the Observatory Hotel in Sydney unless you want news of your most intimate moments splashed all over the newspapers. Rowan Atkinson, Ralph Fiennes, Metallica – all exposed in this piece.

What ever happened to discretion? What a disgrace – those media hungry staff, looking for their 15 minutes of fame by talking about the celebs that stay there, should be sacked!

Westpac have created the worst bank ad of all time

There’s an ad on TV (or at least it was on TV) which is absolutely infuriating and appaling. It shows emotive footage of pollution, small seabirds covered in oil, burning refineries, clouds of smoke, barren landscapes and then has a text caption: “Some of the biggest problems in the world today were financed by banks”, and then goes on to say, in essence that banks are evil – except for Westpac. This utterly shit, cheap thinking is so bad, that I can’t help but think that the marketing leads and agency should be dismissed. It shows gross incompetence and worse.

Westpac makes so much of it’s corporate reputation, and yet damages in entire image of the banking industry by basically legitimising the rubbish hurled at banks by the most uninformed. Furthermore, it builds Westpac up as a target for future backlash WHEN (not if) one of the millions of projects that Westpac funds has some environmental or social issue attached.

Obviously some goose at an ad agency came up with the concept and the CMO has approved it with absolutely no foresight into the unsustainable and quite frankly stupid messages this ad sends in the broader context of social and public affairs. Who was the planner on this garbarge? a 16 year old Greens wannabe? How on earth did the CMO think it would be a good idea?

What’s worse – instead of focussing on the products at hand, the methodology with which Westpac is going about improving the environment or their lending process, it simply goes the emotion angle. It highlights the negative with emotion, rather than building up the positive – that banks are in a position to enforce greater transparency and accountability of projects it funds. This negative emotion hurts the bank and worryingly, it also hurts the credibility of all banks and financial institutions.

Westpac, you should be ashamed of yourselves.

“Another Budget Airline?”

There is talk low cost carrier Tiger Air, a joint venture between Singapore Airlines and Ryanair, will be coming to Australia soon.

The Age has a poll on it’s website asking: “Do we need another budget airline?”. I laugh at the word “another”. We don’t have one in the first place in Australia. Jetstar and Virgin Blue are NOT low-cost/budget airlines, they simply have a “budget” moniker which means they save on serving food, but they still charge huge money for flights.

Budget is not $200 inc taxes for Melbourne-Sydney return. Budget is $80 inc taxes Melbourne-Sydney return, or even less, which is what I paid for a London-Amsterdam and London-Copenhagen return a year or two ago.

I would welcome a genuine low-cost carrier with open arms and a big hug.