New iPad

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Marketing strategy success is the result of being able to pinpoint your company’s competitive advantages in a given market and identify an effective marketing strategy to tie these factors together. This blog post provides a case study of how Apple did just that by building its 3rd generation Apple iPad marketing strategy around its competitive advantages, and as a result has seen tremendous success with the 3rd generation iPad, maintaining its dominance in the tablet market despite tremendous competitive pressures. This example is meant to demonstrate to startups and expansion-stage companies that knowing your company’s identity and competitive advantages will provide great direction in terms of what marketing and product strategies will and won’t work for your company. Ultimately, that will increase the likelihood of success with implementing new corporate strategies.

A little over 6 months ago, Amazon took the tablet market by surprise and decided to enter into the space with its $199 Kindle Fire tablet offering. (For more on the Kindle Fire market entry, please see my previous blog post on Amazon’s big bet.) With that entrance many thought Apple would be forced to alter its iPad marketing strategy because Amazon was offering a commodity-priced tablet that the lower-end of the tablet market might consider a sufficient substitute for the iPad, and that it also might challenge Apple’s dominance of tablet content consumption, as well. Rather than cave to pricing pressure from competitors — like most companies facing similar situations would — Apple did not budge. It knew its competitive advantages did not lend themselves to a price war. Instead, Apple stood strong and built a compelling marketing strategy around its competitive advantages in the tablet space.

Michael Porter Competitive Advantage Table

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Apple’s key competitive advantages in the tablet space are its:

  • Premium brand image
  • Market position
  • Technology leadership and patents
  • Product development
  • Large number of ancillary service offerings

Despite the entrance of price targeted competitors and the opening of a new set of more price-sensitive customers in the tablet space, Apple refined its iPad marketing strategy to address these changes in market dynamics, but made sure its competitive advantages in the market were at the heart of its iPad marketing strategy. The company has built its 3rd generation iPad marketing strategy and product strategy around the following eight factors, and has maintained a laser sharp focus to maintain its market position despite many competitor attempts to unseat Apple from market leadership in this product category.

  • Don’t compete on price, regardless of competitor offerings. Maintain the iPad as a premium brand.
  • Utilize Apple exclusive services like FaceTime and iCloud to further differentiate the iPad from competitors.
  • Exploit network effects like benefits to having more people on FaceTime.
  • Make sure the hardware is profitable and the additional content revenue is just add-on revenue.
  • Lead the race in research and development to ensure that the iPad maintains its top of line tablet functionality and performance.
  • Sell to major content consumers mainly, as this will also drive the likelihood of them consuming iTunes and other apple content.
  • Remind customers that the app store is still the largest store of its type with the highest security standards.
  • Stick to one device size so that accessory producers have an easy time continuing to offer cool accessories for the iPad that are not offered for other competing tablets due to the varying sizes.

Regardless of a company’s position in a market, its competitive advantage should be at the heart of its go-to-market and product strategies. These are the factors that will enable a company to differentiate itself from other competitors in the market place and maximize the favorable outcome of a given set of strategies.

The Apple iPad marketing strategy example provides an example of how to effectively build your company’s product and marketing strategies around its core competitive advantages, despite tremendous pressure from changing market dynamics. Losing sight of these factors will spell failure more often than not. Stay true to what makes your company what it is, and leverage those factors to make it something great — just as Apple has done time and time again over the last two decades with its iMac, iPod, iPhone, and now iPad products.

If you are interested in reading more about Apple’s marketing strategy, I recommend reading my colleague Tien Anh Nguyen’s blog post on Apple’s Marketing Strategy. Similarly, if you are interested in reading more about the Kindle fire marketing strategy, I also recommend reading my post on Amazon’s Big Bet.

Read more: The Desktop Strikes Back: Tablets Fall as PCs Make a Comeback