Case Studies: Great Marketing (Part 1)

Case Studies: Great Marketing (Part 1) - StartupStorey.com

In this article, we highlight possible lessons we can derive from the great marketing efforts of known companies and use them as case studies for our learning.

The rest of the articles related to Marketing can be found here. The following companies covered in this article are:

  1. Apple
  2. Absolut Vodka
  3. Hi-Smile
  4. Hotmail
  5. Heatball

 

How Apple makes use of the Anchoring Effect – I mean, who really buys 256GB iPhones?

There is a term called “Anchoring Effect” in marketing. Apple has used it to its advantage for i-Products’ sales to a great deal.

Anchoring is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions.

iPhone 7 was released in 2016. Pricing for different models in 2016 was as below –

  1. 32GB – $649
  2. 128GB -$749
  3. 256GB – $849

Apple doesn’t release data for the individual models but I’d expect that 128GB model would outsell the other two choices. It’s clear that they employ anchoring effect to a good use.

  • Apple knows it’s not going to sell 256GB models in great numbers. But it’s just there as a decoy to create a price ceiling.
  • 32GB model priced at $649 is the anchor point.
  • 128GB seems a bargain in the comparison to the 32GB model. Most common thought in consumer’s mind is: “Just by paying $100 more than the 32GB model, I get 4 times as much memory.” I’d probably do the same.
  • In absence of choice#2, most people would just go with 32GB model. This allows Apple to charge $100 extra for an upgrade that costs them less tenth of that price.

Case Studies: Great Marketing (Part 1) - StartupStorey.com

A common marketing wisdom says – “How do you sell a $2000 watch? By placing it next to $12000 watch”. It’s basically the same principle.

Coming to 2017, Apple deployed a new marketing strategy. Until iPhone-7, the upper ceiling for regular 5.x inch iPhones was around $850.

Most carriers in US and Europe had already terminated their subsidy program with Apple. The last of people who availed of subsidy with iPhone-6S were about to finish their 24 months contract term in Fall of 2017.

Apple played a very clever trick with introduction of iPhone-8. The shell for iPhone-8 just looked like iPhone-7 (which looked very much like iPhone-6). Everyone noticed the lack of enthusiasm from Apple fan boys at iPhone-8 launch date. Apple stock prices went down by a few points. But in grand scheme of things, Apple very much anticipated this reaction. Again iPhone-8 was just a decoy.

By introducing iPhone-X and keeping the launch dates spaced out by 2 months, Apple played a masterstroke. Most Apple stores didn’t even carry display units for iPhone-X for a long time after it was introduced at the Apple Event. By delaying the launch date, they built a huge amount of curiosity and anticipation.

And just like that the price ceiling for their flagship 5.x inch screen iPhone product went from $849 to $999. This is Apple’s way of saying that from now on, be prepared to pay up extra $150 for any major design upgrade.

Apple is a hard negotiator for its part suppliers and I am positive (though I can not confirm) the price it costs Apple to build an iPhone-X (BOM or bill of material cost) did not vary too much from what it cost them to build premium tier iPhones in the past.

But they are able to demand extra $150 from the customers, by deploying a clever marketing strategy.

Case Studies: Great Marketing (Part 1) - StartupStorey.com

In the 80s, Absolut Vodka wasn’t exactly what it is today. It only had 2.5% of the vodka market and sold about 10,000 bottles.

That’s when they decided that they had to react and launched an ad campaign in association with artists like Andy Warhol that would last for 25 years and that would include more than 1500 different posters depicting the bottles in different manners.

 

Here are some of my favourites :

First, they started with very simple ads showcasing the bottle  – link. As we do not own the images, we are unable to publish them on here.

Then, they pushed the concept further by playing the shape of the bottle, which by the way isn’t very original. Look at this Absolut Vienna ad, and this Absolut New York ad.   

Following this brilliant campaign that ended in the late 2000s, the brand imported 4.5 million cases per year, and had 50% of all imported vodka in the US.

 

Hi-Smile had a very smart marketing strategy and they did it all using social media.

They use a scattergun marketing approach in the first six months, promoting the brand to anyone and everyone aged 15 to 35, before discovering their niche.

By the end of this period, they realised that their niche market is young women aged between 15 to 24.

All the content the brand’s shares across Snapchat, Facebook, Twitter, YouTube, Google Plus and Pinterest now caters to this market.

HiSmile has a thriving social media following across multiple platforms that exceeds 650,000 fans and they did this by approaching online personalities directly. Which means most of their marketing is free.

“We sent well over half of our stock to influencers and bloggers just so they could get their hands on it,” says Tomic, the co-founder of Hi-Smile.

A lot of Hi-Smile marketing strategy can be copied. A related article would be How HiSmile founders Nik Mirkovic and Alex Tomic used social media to turn teeth whitening into a $10 million business.

Case Studies: Great Marketing (Part 1) - StartupStorey.com

P.S.: I love you. Get your free e-mail at Hotmail

Flashback to 1996, before Hotmail had launched as one of the first free web mail services and became an early example of a product to “go viral.”

As Adam Penenberg describes the meeting in Viral Loop, Hotmail’s founders, Sabeer Bhatia and Jack Smith, sat across the table from Tim Draper, the famous venture capitalist. He told them that he thought the product—web-based e-mail—was great but wondered how they’d get the word out.

Bhatia’s first instinct was that industrial marketing approach we’ve been talking about: “We’ll put it up on billboards,” he said. Draper nixed such an expensive approach for what would be a free product. So they kicked around more ideas. Radio ads? Same problem. What about sending an e-mail to everyone on the Internet?

Draper suggested. That was an equally old mindset—spam doesn’t work. Then Draper happened accidentally on growth hacking. “Could you,” he asked, “put a message at the bottom of everybody’s screen?” “Oh, come on, we don’t want to do that!” “But can you technically do it? . . . It can persist, right? You can put it on one message, and if he sends an e-mail to somebody else you can put it on that one, too, right?”

“Yeah, yeah,” they replied. “So put ‘P.S.: I love you. Get your free e-mail at Hotmail’ at the bottom.”3 — This little feature changed everything. It meant every e-mail that Hotmail’s users sent would be an advertisement for the product.

And that advertisement was effective not because it was cute or creative but because it showcased an amazing product that many people wanted and needed. Each user meant new users; each e-mail meant more e-mails and more happy customers.

And most crucial, all this could be tracked and tweaked and improved to drive as many users as possible into the service.

After adopting Draper’s suggestion—which the founders resisted for the first few months because it seemed so simple—growth was exponential: one million members within six months. Five weeks after that, membership had doubled again.

By December 1997, with nearly ten million users, Hotmail was sold to Microsoft for $400 million. It took just thirty months from its launch for Hotmail to accumulate its thirty millionth user.

And though it has now been renamed, Hotmail still exists, unlike the majority of its peers from that era.

Case Studies: Great Marketing (Part 1) - StartupStorey.com

Heatball reacts to an EU Ban on Incandescent Light Bulbs

Back in 2008. The European Union has banned by law trading of incandescent light bulbs due to their bad efficiency/ecology. Not everyone was happy with this decision and one firm decided to rebel against that decision in a pretty creative way.

Since the 95% of the energy light bulb makes goes into heat and only the remaining 5% are spent on producing light, they decided to promote and sell the light bulbs they had in stock as the heat sources – hence the name HEATBALL. They actually put some effort and dedicated a whole web page to it.

Website is still live if anyone wants to check it out: Heatball :: Home

This was, of course, short lived campaign but nonetheless a creative way to use the marketing as a means to protest and in the end, sell the product you otherwise could not place on the market.

Moral side of the story is up for debate but the way they decided to tackle the problem was unusual and I hope worth sharing.

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How can I improve my product marketing growth results?

Marveling at other companies’ successes is fun, but creating your own success is better! You can teach yourself how to keep eyes open for opportunities to improve customer acquisition and retention through product enhancements.

When thinking about product marketing, I like to look at crucial blockers or operational bottlenecks that are preventing my marketing funnel (below) from operating optimally.

It may help to sit down, draw out your marketing funnel and brainstorm what things are most in the way of your seamless funnel and making your business millions of dollars.

For instance, let’s say you’re having no problem acquiring strong leads for your B2B business using a suite of digital marketing tactics, but your sales team isn’t closing these supposedly strong leads.

The first two things that I would investigate are 1) why are borrowers not funding their deals with us and 2) whether your leads are actually strong.

If you liked this article, check out our Marketing section.

 

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