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The Best of the Brands- How is Apple Competing with the Top Brands?

Welcome to reality Apple-Are you able to keep up?

When looking into the top brands in the world the first thing we think of is Apple. Apple has been around for so long and has been the talk of the decades because of the innovation they have with their technological products. The company has made some incredible products like the Apple iPhone in 2007, which change the game of cell phones and virtually destroyed some companies that were in the uprising of success like the Blackberry. As we all know it isn’t just the smartphone industry that Apple has been involved in. In fact, Apple’s marketing strategy is so brilliant that they seem to never lose against competitors until maybe now. As we enter this technology age it seems as if anything is possible and the amount of opportunities companies can get is now a lot bigger than before. Don’t get me wrong obviously Apple is a top 3 brand in the world, but could that change in the future? Just like how Apple has had great success, many other companies have been doing so also. Names like Google, Amazon, Samsung, AT&T, Verizon, Microsoft, Walmart, Facebook, Nvidia, and the list goes on. As stated before, the technology age is here, and this digital world is not getting smaller but expanding rapidly by the months.

So, the question is… Will Apple be able to be the top valuable brand in the world, or will other competitors in the same and different industries take over? What will Apple do?

As stated above, companies have been getting more recognized throughout the years and have been growing rapidly. Look at Amazon for example. They are literally in everything. By looking at the graph from 2017, we can clearly see the “Most Valuable Brands” for that year.  Apple is clearly a top brand like I mentioned; however, what is different about Apple when compared to the rest of the brands?

Yes, you are right. Apple’s change is -27% when everyone else has a positive change. “But Ryan, Apple is number #2 and is clearly about to pass Google as the most valuable brand in the world. So what?” Yes, this is totally true, but as stated as my question before, what will Apple do after seeing a slight rise in competition?

The answer is that they need to do exactly what they’ve been doing. Like Amazon, Apple has been diving into new markets ever since the beginning, which is why they are such a dominating and diversified brand. This graph was from 2017, but now let’s take a look at the top industry and consumer trends of 2019.

Overall, the top industry that is getting more popular and recognized is the fitness industry. The fitness industry has a huge following and many companies see the potential when developing products relating to fitness.

The next question is…How is the fitness industry dealing with the pandemic?

Before the Covid-19 pandemic, the fitness industry already had projections of having record breaking numbers due to more people getting involved with fitness. When looking at the industry trends of 2019, we can clearly see that fitness tech is the top choice with 24%. More people were in their homes due to the strict lockdown orders given by each state. As this was occurring, more people realized the restriction and were stuck at home trying to figure out what to do next. As time went on, more people started to get even more involved with fitness. Fitness instructors were now going virtual and are adapting to this new way of life. Now customers are investing in gym equipment for their home and cancelling their gym memberships.

Peloton, the exercise equipment company has been seeing a mass surge in sales in 2020. They have been crushing sales every quarter of this year. Lululemon have recently acquired Mirror, an in-house gym equipment and content service like Peloton for people working out in their homes. So… why am I showing you the surge in fitness if I was talking about Apple before? As stated before, the reason behind Apple’s success is from their great marketing strategies. A brand like Apple has a huge following and if an individual has an iPhone, most likely has other Apple products. By seeing how well the fitness industry is doing since not just from the pandemic, but overall, provided an opportunity for Apple. Apple sees the potential in this industry and now has entered it by creating their Fitness + product.

Like Peloton and Lululemon’s Mirror, Apple has created Fitness +, a similar product to reach even more customers. The fitness trend of 2019’s highest trend was in fitness tech and clearly I was not the only one seeing it. Apple’s strategy is to look into the next up-and-coming popular products and services. Apple’s Fitness + is coming in late 2020 and like Peloton is a gym service that keeps their customers fit through guided workouts across many categories. Apple hopes to increase its total subscription revenue in the upcoming years with Fitness +. Like all Apple’s products, they are compatible with one another and the Fitness + will be available across all Apple products such as the Apple watch, iPhone, iPad, Apple TV, and more.

The last question is… Is getting into a new industry good or bad for Apple?

The answer is that it is a good thing that Apple is going into more markets. Just like when we hear those financial analysts say to diversify your portfolio to eliminate risk, this is exactly what Apple is doing. Apple diversifies their products and enters new markets to attract new customers. Over the years this has been a major factor in Apple’s success. When looking at the product life cycle, it seems that Apple starts to enter in a new market that has a growth phase. We have seen this before with other companies. Apple saw that Peloton and other fitness equipment/service companies are becoming so popular and are in the growth phase of the product life cycle. As a result, they jumped right into the growth phase by creating Fitness +. By creating this product/service, Apple can grab new customers and hold onto existing customers. We can see on the graph provided by Statista the revenue of Apple products. Over the years, their Services and Wearables segment keeps on growing. Due to the pandemic and a rise in popularity within the fitness industry has allowed Apple to think of a great strategy by entering the fitness market and create a service that will keep increasing their revenue. In conclusion, Apple will keep entering new markets and diversifying their company with various products, which is why they are the top valuable brand in the world.

Sources:

https://www.ihrsa.org/improve-your-club/industry-news/2019-fitness-industry-trends-shed-light-on-2020-beyond/

https://www.statista.com/chart/9475/brand-value-of-10-most-valuable-brands-2017/

https://www.statista.com/chart/22836/peloton-annual-sales/

https://www.statista.com/statistics/382136/quarterly-segments-revenue-of-apple/

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Starbucks-Not the Ordinary Coffee Shop

Stand out, Be Unique, Be Starbucks.

When growing up like most kids, we hated coffee. The smell, the bitter taste, we always would ask ourselves, “Why do people enjoy drinking this.” It wasn’t until sometime where I indulged in my first cup of coffee that I began to understand why so many individuals liked it. For most individuals, the crave for coffee is from one word… caffeine. Me being a senior now, I start to reflect my time as a full-time college student. Racing to the dining hall to grab the worst metal taste of coffee and drinking it fast, so I can get enough energy to do various assignments, projects, papers… you get the picture. Like most college students, coffee is our friend because of the caffeine. It helps us conquer various tasks when we have little to no sleep. “Okay Ryan, I understand the need for coffee is this world, especially as a college student, but why are you going to discuss coffee shops in this blog?” The answer is… We are not going to talk about just any shops that serve coffee, but the coffee company that does it the best… Starbucks. As we all know, Starbucks has changed the game of coffee. It isn’t so much about getting caffeine in our system, but it’s about taste, the environment, and the social aspect of going into a Starbucks store.

Starbucks revenue over the years has had a positive trend of growth.  The company has been gaining so much in popularity and in 2019 it had a net revenue of 26.51 billion dollars.

The question is… How could a could a small coffee shop in Seattle, Washington turn into one of the most dominating coffeehouse companies in the world?

Like most successful companies, it begins with forming multiple strategies. In recent years, Starbucks has been very successful by focusing on their product growth matrix. Many companies use the product growth matrix on forming various marketing strategies that will hopefully promote growth within their business. With the case in Starbucks, they have been investing in their product development on developing accessories for their company, consistently updating their market penetration of new coffee flavors and other drinks, as well as expanding their markets internationally.

We can clearly see Starbuck’s expansion to international markets. From that one coffee shop in Washington, turning into a global dominating coffee company with over 31,000 stores. Even though Starbuck’s has had great success by fostering these marketing strategies, it isn’t different. Yes, these strategies have helped Starbucks, but other companies like Dunkin’ have done the same.

Although a partial answer to the question is good, it isn’t great, and we need to understand more about the company’s core strategy. Starbucks has turned into the face of the coffee industry because of their market strategy they formed from the beginning. What the company formed way back in Seattle Washington in 1971 was to focus on building a distinct identity around its great customer service, always taking care of their employees, having a comfortable in-store environment, and creating the best cup of coffee. All those strategies within the marketing matrix was from this one strategy. Most of what stands out with Starbucks that has been upgraded and really stood out over the years was the environment of going into a Starbucks store. When individuals go into Dunkin’, they just grab a cup of coffee and are on the go. Meanwhile, Starbucks is doing the same, but created their luxury store appearance that has led to many customers staying in a Starbucks stores to read, do homework, have business meetings, and more. This along with the other marketing strategies Starbucks has implemented over the years really shows why they have been this successful when compared to other coffee companies.

Even though there is a slight drop in coffee sale revenue for 2020, the industry is still going to grow with coffee lovers’ overtime.

Due to the slight drop in 2020, results in the next question … How will Starbucks adapt to this new way of life due to the coronavirus pandemic?

The Covid-19 pandemic has wreaked havoc in the world that we live in. It has literally changed the way of life on this planet and the year 2021 will be the year of rebuilding. So many people have been affected by this pandemic and many businesses have defaulted because of it. Starbucks has done very successful over the years due to always having great customer service and taking care of their employees. The top executives needed to make a huge business decision. Their decision was to close so many of their stores because of the uncertainty with the pandemic. According to Buinsessinsider, Starbucks closed roughly 400 North American stores. They turned to their strategy of always caring about their employees and customers and decided to protect them both. Even though this costed Starbucks millions of revenue, it had a greater impact. They formed a new strategy by opening their stores to do take out, which had a big success. As the lockdown restrictions began to stop, Starbucks began to open their stores and provide strict guidelines such as face mask coverings. In order to keep the company alive, 80% of their stores have been so called “on-the-go” when dealing with this pandemic. Like Starbucks first strategy, it is all about the customer and employees.

The next question… What other ways is Starbucks navigating through the pandemic?

Just how I pointed out before how Starbucks has created new products, they will keep on introducing more to their customers. With customer’s adapting to the “on-the-go” curbside pickup, the company introduced a new summer menu for 2020. Along with this menu, Starbucks has brought in “Starbucks Delivers” by partnering with Uber Eats to have food and drink deliveries to their customers. They are also updating their app, which allows users to locate a nearby store, order and pay right away, and simply pick up their favorite drink or meal. It seems that digital ordering is more common nowadays especially due to the pandemic.

In conclusion, we can see how different Starbucks is than an ordinary coffee shop. It is a brand that is always updating their products, having a great atmosphere for customers, while providing great customer service. They have brought multiple marketing strategies over the years and we can see how well it has done for the company. As with the coronavirus pandemic, it seems that Starbucks lost million of revenue dollars by closing their store temporarily to figure out the curb side pick up; however, that was to protect the health of their employees and customers. They are still figuring out new ways to adapt to the pandemic. Many people like myself before Covid-19 would like to go in a Starbucks and do assignments because of the store environment. I wonder what Starbucks will do next in order to let people inside their coffee shops. I don’t know what they will do exactly; however, I do know they will look to the customer first and then them.

Sources:

https://www.statista.com/statistics/266466/net-revenue-of-the-starbucks-corporation-worldwide/

https://www.statista.com/outlook/30010000/109/coffee/united-states

https://starbuckstenthings.weebly.com/designing-a-global-scale.html

https://stories.starbucks.com/stories/2020/navigating-through-covid-19/

https://www.businessinsider.com/starbucks-shifts-post-pandemic-strategy-2020-6

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Diving Deeper- How Lululemon is changing the Fitness Industry

Was Lululemon onto something all along?

When we think of Lululemon, we automatically think of fitness. As we all know, Lululemon is an athletic apparel company that has technical athletic clothes for yoga, running, working out, and just for comfort. I stated in my last blog how well the fitness industry is doing, especially during the coronavirus pandemic. More people are staying inside because of Covid-19. People are working from home, so they want more comfortable clothing. People are either working out from their home or still going to the gym. The list goes on… fitness is here and is staying for a while. Lululemon just acquired Mirror, the company that’s product is a mirror that interacts with consumers and helps them with their workout needs. Lululemon saw how well Peloton has done this year and acquired the small New York-based startup for $500 million dollars. Let’s see how well Lululemon has done over the years.

The company that started in Vancouver, Canada in 1998 have really come a long way since then. Over the years this company has seen massive success. Over the last 3 years alone have seen some of their biggest gains in revenue especially in the United States.

So, the question is…. What marketing strategy should Lululemon do in order to be the head company of the overall fitness industry?

Like companies Apple and Amazon, their success has always been involved in the marketing strategies they have implemented over the years. One of the key indicators of success is to diversify your products, and I believe Lululemon can do that. “What new market should Lululemon dive into to stand out amongst the top health and fitness companies?” The answer is that they should go back to a product they released in 2015……beer.

The next question is… How will Lululemon be able to be in the beer industry? And why would they?

The company has already worked with breweries on different collaborations, so I don’t think this would be that difficult. Lululemon released their “Curiosity Lager” in 2015. According to an article on Brandchannel, Lululemon partnered up with Stanley Park Brewing company in Vancouver to be apart of the SeaWheeze Half Marathon & Sunset Festival in the summer of 2015. Lululemon’s global events manager, Travis McKenzie, claimed that the collaboration was “the coolest collaboration I’ve ever been involved in.” The beer was a limited edition and only sold 80,000 cans in the fall of 2015 around Canada. After the big success with the Lululemon beer it seemed as if it would be the next big thing in fitness as it was a “post-workout beverage”; however, it seemed to just disappear. I have reason to believe that Lululemon did not want to go into the beer industry just because it might be too much for the company way back when in 2015.

The beer market has been increasing steadily in the United States over the years. Since Lululemon’s largest customer sales have been in the U.S., I believe they should reintroduce their “Curiosity Lager” and see how well it does for the next year. Lululemon did this for a marathon run and festival, and since the beer market has been increasing and beer brands like Constellation Brands has been doing very well in 2020, it makes sense for Lululemon to dive into the market again. They are already a well-established brand and by taking their marketing strategy from 2015 into the reality of 2020, I believe this could work and benefit them.

The next question is…. Who will endorse their products?

Nowadays with the internet being such a big place and the influence it has on so many people it only makes sense for Lululemon to partner with influencers and celebrities. In my marketing management class for school we discussed how critical it is for companies to acquired new sponsors to represent their brand. One person who was the face of bodybuilding for decades is actor Arnold Schwarzenegger.

Arnold Schwarzenegger prefers beer over milk for post workout drink:

https://www.youtube.com/watch?v=pXOGS9cilKM&feature=emb_title

As soon as I heard Lululemon had a beer I instantly thought of Arnold Schwarzenegger. Before his acting career Arnold would compete in world bodybuilding competitions. In his documentary, “Pumping Iron”, Arnold states that he doesn’t drink milk for a post workout drink, but a beer. This is only a recommendation, but I believe with Lululemon gaining so much popularity over the years, their temporary beer could be permanent.

In this post I discussed a marketing strategy that Lululemon once produced, but then halted due to being hesitant on how people would react about it. Since the company has been increasing revenue with insane numbers only indicates to me that they are a now well-established fitness brand. They are obviously going to stick to their apparel clothing line because that is the bread and butter of the company; however, this is an opportunity they could possibly dive into. By looking at the product growth matrix, Lululemon once diversified their products and introduced a beer. They did it briefly in 2015 and it was a huge success, and the beer industry has been growing every year, especially during the pandemic. As stated before, companies that start to diversify their products are the ones that come out on top. They already acquired Mirror as a fitness service, so why not go into other industries? Lululemon would create this “post-workout beverage” that could be successful like it did back in 2015. What would be stopping them from doing it now?

Sources:

https://www.brandchannel.com/2015/07/20/lululemon-beer-072015/

https://www.statista.com/forecasts/944461/total-beer-market-size-in-the-us