Topic 9: Innovation and Markets

At the heart of any business strategy is a marketing strategy Businesses exist to deliver products that satisfy customers.

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services.

A marketing strategy is composed of several interrelated components called the marketing mix: The Marketing mix consists of answers to a series of product

and customer related questions.

Putting the right product in the right place, at the right price, at the right time.

Create a product that a particular group of people want, put it on sale at some place that those same people visit

regularly, and price it at a level which matches the value they feel they get out of it; and do all that at a time they want to

buy.

Corporate strategies

The success of a company relies heavily on the corporate strategy it adopts. There are many different corporate

strategies a company can consider:

Pioneering: Being the first to market with a new innovation ­ Consider Starbucks

Imitative: Developing products that are similar to an existing new product ­ Consider all the companies that have copied the Starbucks approach to selling

coffee.

Market development: Finding new applications for existing products, thereby opening up new markets ­ Starbuck in India & China

Product development: The creation of new, modified or updated products aimed mainly at a company’s existing customers ­ Starbucks is rolling out a line

of carbonated drinks called Fizzio in selected markets in the sunbelt from California to Florida.

Market penetration: Increasing sales of more established products into existing markets, often by increased promotion or price reductions or better routes

to market, for example online. To be successful, starbucks focused heavily on the developing quality experience of its product and service range and

differentiated itself as a third place to enjoys its products. It also sought various methods to deliver its products outside its store front outlets. It opened

licensed retail locations inside grocery stores and formed alliance with SSCO, pepsi C., U.S. foodservice, and Kraft foods to distribute products to grocery

store and other food retailers.

Product diversification: involves developing new products and putting them into new markets at the same time. Diversification is considered the most

risky strategy. This is because the business is expanding into areas outside its core activities and experience as well as targeting a new audience. It also

has to bear the costs of new product development. Starbucks increased its product ranges more quickly and without diverting from its main products.

Starbucks new product ranges were related with each other and thus giving consumers a presentation of strongest of brand of specialty in its products.

Hybrid approaches: Using more than one of the above strategies

Students should be able to identify where products have been developed using pioneering and imitative strategies and consider the relative success of the

pioneering and imitative strategies.

Minicase: Starbucks’ Global Expansion [2]

Starbucks’ decision to expand abroad came after an extended period of exclusive focus on the North

American market. From its founding in 1971, it grew to almost 700 stores by 1995, all within the

United States and Vancouver, Canada. It was not until the next decade that Starbucks made its first

entry into international markets. By 2006, Starbucks operated approximately 11,000 stores, with 70%

in the United States and 30% in international markets, and international revenue had grown to almost

20% of Starbucks’ total revenue. Starbucks offered the same basic coffee menu internationally as it

did in the United States; however, the range of food products and other items, such as coffee mugs

stocked, varied somewhat according to local customs and tastes.

Along with many other companies that pursue global expansion, Starbucks continually faces

questions about where and how to further increase its global presence. Should the emphasis be on growth in existing countries or on increasing the number

of countries in which it has a presence? How important is the fact that international markets so far have proven less profitable than the U.S. and Canadian

markets?

Starbucks in Japan. Interestingly, Starbucks’ first foreign move (i.e., outside the United States and Canada) was a joint venture in Japan. At the time, Japan

had the second largest economy in the world and was consistently among the top five coffee importers in the world.

The decision to use a joint venture to enter Japan followed intense internal debate. Concerns among senior executives centered on Starbucks’ lack of local

knowledge, and questions were raised about the company’s ability to attract the local talent necessary to grow the Japanese business quickly enough.

Starbucks was acutely aware that there were significant differences between doing business in Japan and in the United States and that it might not have

enough experience to be successful on its own.

Among other factors, operating costs were predicted to be double those of North America, and Starbucks would have to pay to ship coffee to Japan from its

roasting facility in Kent, Washington (near Seattle). In addition, retail space in Tokyo was 2 to 3 times as expensive as in Seattle. Just finding rental space in

such a populous city might prove to be a tremendous challenge. Starbucks concluded it needed to form an alliance with a local group that had experience

with complex operations and real estate.

Starbucks executives worried that a licensing deal would not be the right solution. Specifically, they were concerned about possible loss of control and

insufficient knowledge transfer to learn from the experience. A joint venture was thought to be a better answer, and, after a long search, Starbucks

approached Sazaby, Inc., operators of upscale retail and restaurant chains, whose president had approached Starbucks years earlier about the potential of

opening Starbucks stores in Japan. Similarity in values, culture, and community­development goals between Starbucks and Sazaby were important

considerations in concluding the 50­50 deal. The two companies were equally represented on the board of directors of the newly created Starbucks Coffee

Japan. Starbucks was the sole decision­making power in matters relating to brand, product line advertising, and corporate communications, while decisions

regarding real­estate operational issues and human resources were handled by Sazaby. Despite strong local competition, the venture was successful from

the start. By fiscal year 2000, Starbucks Coffee Japan became profitable more than 2 years ahead of plan.

Starbucks in the United Kingdom. Unlike its expansion into Asia and (later) the Middle East, Starbucks chose to enter the United Kingdom through acquisition

rather than partnerships. Speed was a major factor in Starbucks’ decision to enter the fast­growing UK market by acquisition. In addition, the culture,

language, legal environment, management practices, and labor economics in the United Kingdom were considered sufficiently similar to those that Starbucks’

management already knew. This meant that a 100%­owned UK subsidiary could be successfully established from the outset. In May 1998, Starbucks

acquired the Seattle Coffee Company, which had a presence in the United Kingdom for some time. This fast­growing chain was modeled on its own style of

operations and, at the time of the purchase, had 56 retail units. The Seattle Coffee Company was an attractive acquisition target because of its focus:

relatively small market capitalization and established retail units. By 2005, Starbucks had 469 stores in the United Kingdom, which made it the third largest

country, after the United States and Japan, to serve Starbucks coffee.

Licensing in China. In a number of developing markets, including China, Starbucks chose to enter into minority share licensing agreements with high­quality,

experienced local partners in order to minimize market­entry risks. Under these agreements, the local partners absorbed the capital costs (real estate, store

construction) of bringing the Starbucks brand abroad. This eliminated the need for substantial general and administrative expenses by Starbucks and enabled

it to establish a presence in foreign markets much more quickly than it would have if it had to invest its own capital and absorb start­up losses.

Risk was also a major consideration when Starbucks looked to enter China. While offering high­volume

opportunities in an untapped coffee market, the prevailing culture and politics in China potentially posed

significant problems. In April 2000, Beijing city authorities ordered Kentucky Fried Chicken to close its store

near the Forbidden City when its lease expired in 2002. Similarly, under pressure from local authorities,

McDonald’s removed its golden arches from outlets near Tiananmen Square. These incidents demonstrated

China’s ambiguous attitude toward a growing Western economic and cultural influence.

Another major concern with starting operations in China was recruiting the right staff. Uniformity of customer

experience and coffee quality was the key driver behind the Starbucks brand; failure to recruit the staff to

ensure these key criteria not only would mean failure for the Chinese retail outlets but also could harm the

company’s image globally.

Although these factors made licensing an attractive entry model, with growing experience in the Chinese market, Starbucks is steadily reducing its reliance on

the licensing model and switching to its core company­operated business model to increase control and reap greater rewards.

Starbucks’ globalization history shows that while it was a “first mover” in the United States, it was forced to push harder in international markets to compete

with existing players. In Japan, Starbucks was initially a huge success and became profitable 2 years earlier than anticipated. However, just 2 years after

Starbucks Japan had become profitable, the company announced a loss of $3.9 million in Japan, its second largest market at the time, reflecting a major

increase in local competition. Additional international challenges were a result of Starbucks’ chosen entry mode. Although joint ventures provided Starbucks

with local knowledge about the market and a low­risk entry into unproven territory, joint ventures did not always reap the rewards that the partners had

anticipated. One key factor was that it was often difficult for Starbucks to control the costs in a joint venture, resulting in lower profitability.

Ansoff Growth Matrix The Ansoff Growth matrix is another marketing planning tool that helps a business

determine its product and market growth strategy.

Market Penetration Product Development

a growth strategy where the business focuses on selling existing products into existing markets

a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets.

Market penetration seeks to achieve four main objectives: Maintain or increase the market share of current products – this can

be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling

Secure dominance of growth markets Restructure a mature market by driving out competitors; this would

require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors

A strategy of product development is particularly suitable for a business where the product needs to be differentiated in order to remain competitive. A successful product development strategy places the marketing emphasis on:

Research & development and innovation Detailed insights into customer needs (and how they change) Being first to market

Increase usage by existing customers – for example by introducing loyalty schemes

A market penetration marketing strategy is very much about “business as usual”. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer needs. It is unlikely, therefore, that this strategy will require much investment in new market research.

Market Development Diversification

a growth strategy where the business seeks to sell its existing products into new markets.

the growth strategy where a business markets new products in new markets.

There are many possible ways of approaching this strategy, including: New geographical markets; for example exporting the product to a

new country New product dimensions or packaging: for example New distribution channels (e.g. moving from selling via retail to

selling using e­commerce and mail order) Different pricing policies to attract different customers or create new

market segments Market development is a more risky strategy than market penetration because of the targeting of new markets.

This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience. For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks. However, for the right balance between risk and reward, a marketing strategy of diversification can be highly rewarding.

.

Market Sectors and Segments

In order to identify the wants and needs of a target market, the designer first has to

identify what the target market is. These can be considered in two ways:

Market sector ­ a broad way of categorizing the kinds of markets a company is

aiming for.

Market Segment —markets divided up into smaller segments where the

purchasers have similar characteristics and tastes.

Market Sectors Market sectors are groups of businesses that produce similar goods and services for

sale to consumers. This status places all companies involved in a particular market

sector in competition with one another. The term is also used to identify groups of

buyers that compete with one another to secure goods and services at the most

cost­efficient rates.

Within market sectors, there are broad categories including:

geographical sectors, which focus on the values, culture and characteristics of

purchasers in that region along with purchasing power

client­based sectors, which may focus on consumers,

industrial

public sector

commercial

Market Segment

Market Segment —markets divided up into smaller segments where the purchasers have similar characteristics and tastes.

Market segmentation is a marketing strategy which involves dividing a broad target market into subsets of consumers, businesses, or countries who have, or

are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them.

Market segmentation strategies are generally used to identify and further define the target customers, and provide supporting data for marketing plan elements

such as positioning to achieve certain marketing plan objectives. Businesses may develop product differentiation strategies, or an undifferentiated approach,

involving specific products or product lines depending on the specific demand and attributes of the target segment.

Market segments are commonly classified by income, profession, age, family, values and behaviour. By dividing up a market into segments, a company can

target each individually through promotional campaigns. The segmentation allows the company to focus in on the particular characteristics and wants of the

consumers and allows it to better relate its products to them.

In the photographs above, identify the market segment.

One of the main reasons for engaging in market segmentation is to help the company understand the needs of the customer base. Often the task of segregating

consumers by specific criteria will help the company identify other applications for their products that may or may not have been self evident before. Uncovering

these other ideas for use of goods and services may help the company target a large audience in that same demographic classification and thus increase market

share among a specific sub­marketbase.

Applying a market segmentation strategy is most effective when an overall market consists of many smaller segments whose members have certain

characteristics or needs in common. Through segmentation, businesses can divide such a market into several homogeneous groups and develop a separate

product and marketing program to more exactly fit the needs of one or more segments. Though this approach can provide significant benefits to consumers and a

profitable sales volume (rather than a maximum sales volume) to businesses, it can be costly to implement. For example, identifying homogeneous market

segments requires significant amounts of market research, which can be expensive. Also, businesses may experience a rise in production costs as they forfeit the

efficiency of mass production in favor of smaller production runs that meet the needs of a subset of the market. Finally, a company may find that sales of a

product developed for one segment encroach upon the sales of another product intended for another segment. Nonetheless, market segmentation is vital to

success in many industries where consumers have diverse and specific needs, such as homebuilding, furniture upholstery, and tailoring.

Product Examples

Students need to identify products that

are designed for only one sector and

products designed to be sold to more

than one.

They will also need to develop an

understanding of how multinational

companies take into account market

sectors in the design and manufacture of

their products.

Students will need to demonstrate

understanding of how the needs of the

market segments listed above impact on

the design of products and scale of

production.

Segmentation

Relationship Customer Type Product Use

Kind of relationship weak, strong, “arm’s length” dealing, close partnership.

Type of customer manufacturer, service, government, military, non profit, wholesaler, retailer, end user.

How customer’s use product installation, components, accessories, raw material, eat, professional service.

Buying Situation Purchasing Methods

Buying situation rebuy, modified rebuy, new purchase.

Purchasing methods Internet, long term contract, warranty, financing, cash on demand.

Behaviour Geographic Location Psychographics

Needs economic, functional, psychological, social. Benefits quality, service, economy, convenience, speed. Attitude toward product Enthusiastic, positive, indifferent, negative, hostile. User status Nonuser, ex user, potential user, first time user, regular user. Loyalty status None, medium, strong, absolute. Brand Familiarity Unaware, aware, informed, interested, desirous, intending to buy. Occasion Regular occasion; special occasion, convenience, comparison shopping, unsought product. Type of problem solving needed routine, limited, extensive.

Region of world, country North America, South America, Africa, Asia, Europe. Regions within that country (For Example USA) Pacific Northwest, South, Midwest, New England. Size of city population under 5,000 people to 4 million or more. Urban vs. rural country, city, large city = more resources, more independence; country=more dependence on neighbors and pooling resources. Climate cold, hot, rainy, desert, beaches, mountains.

Lifestyle interests, hobbies, activities, interests, opinions, values, media preferences. Everyone has two lifestyles, the one they are in now, and the one they desire to be in, which is usually better than the current one. Almost all decisions are influenced by the buyer’s current and desired lifestyle. Personality traits Sincerity. Excitement. Competence. Sophistication. Ruggedness. Social class Lower, middle­low, middle, middle­upper, upper, upper­upper, working class, blue collar.

Demographics

Gender male, female, neither, both.

Age Infant, toddler, preschool, tween (age 8 to 12), teen, college age, 20, 30, 40, 50, 60, 70­90.

Family size 1 person, 2, 3, 4, 5 or more.

Family life cycle young, single, engaged, DINKS (double income no kids), SINKS (single income no kids), married with kids (babies, toddler, elementary school age, teen, older), recently divorced, empty nester (children have moved out), same­sex couples, single parents, extended parents (grandparents raising their grandchildren), retired (either wealthy or Medicare dependent/poor).

Income under $5,000 to $250,000+ a year.

Occupation unemployed, housewife, part­time, full­time, student, professional, craftsperson, farmer, retired.

Education grade school or less, some high school, high school graduate, some college, college graduate, graduate degrees.

Race White, Black, Asian, Hispanic, Native American, mixed race, etc.

Religion Christian, Jewish, agnostic, atheist, Muslim, Islam etc.

Culture/nationality American, French, English, African, Russian, Indian etc.

Product Family

Group of products derived from a common product platform. Members of a product family normally have many common parts and assemblies, use similar or

same materials and production processes, have similar physical characteristics, are branded consistently and share aesthetic characteristics, and may share

customer segments, distribution channels, pricing methods, promotional campaigns, and other elements of the marketing mix. Products comprising a family are

usually priced and discounted as a package. Several product families make up a product portfolio. Also called product group or product line. Designers often

develop product families to extend a successful product range and to develop products for market segments that are already familiar with the original product.

Pure Pop Digital Radios Thread Family Stools Helix Fuel Dispensers SanDisk USB

Today's highly competitive and volatile marketplace is reshaping the way many companies do business. Rapid innovation and mass customization offer a new

form of competitive advantage. In response, companies like Sony, Black & Decker, and Kodak have successfully implemented strategies to design and develop

an entire family of products based on a common product platform to satisfy a wide variety of customer requirements and leverage economies of scale and scope.

Designing products and product families so that they may be customized for the global marketplace and achieving these goals in an abbreviated time period,

while maintaining mass production efficiencies, is the key to successful manufacturing operations. Research in this area has matured rapidly over the last decade,

and "Product Platform and Product Family Design: Methods and Applications" discusses how product platform and product family design can be used

successfully to:

Increase variety within a product line

Shorten manufacturing lead times

Reduce overall costs within a product line

In a product family each component (products) share common elements, both in shape, materials, technology and style and all of those individual products have

one defined SEC (Socio Economic Class) because it was made for a defined consumer range.

Marketing mix

The “marketing mix” involves a number of factors—product, place, price and promotion—the 4Ps. These

factors are identified by company executives through market research and provide the designer with an

accurate brief of market requirements.

"Marketing mix" is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or

service to market. The 4Ps is one way – probably the best­known way – of defining the marketing mix, and was first expressed in 1960 by E J McCarthy.

The 4Ps are:

Product (or Service).

Place.

Price.

Promotion.

A good way to understand the 4Ps is by the questions that you need to ask to define your marketing mix. Here are some questions that will help you understand and define each of the four elements:

Product/Service Price

What does the customer want from the product/service? What needs does it satisfy? What features does it have to meet these needs?

Are there any features you've missed out? Are you including costly features that the customer won't

actually use? How and where will the customer use it? What does it look like? How will customers experience it? What size(s), color(s), and so on, should it be? What is it to be called? How is it branded? How is it differentiated versus your competitors? What is the most it can cost to provide, and still be sold sufficiently

profitably?

What is the value of the product or service to the buyer? Are there established price points for products or services in this area? Is the customer price sensitive? Will a small decrease in price gain you

extra market share? Or will a small increase be indiscernible, and so gain you extra profit margin?

What discounts should be offered to trade customers, or to other specific segments of your market?

How will your price compare with your competitors?

Place Promotion

Where do buyers look for your product or service? If they look in a store, what kind? A specialist boutique or in a

supermarket, or both? Or online? Or direct, via a catalogue? How can you access the right distribution channels? Do you need to use a sales force? Or attend trade fairs? Or make

online submissions? Or send samples to catalogue companies? What do you competitors do, and how can you learn from that and/or

differentiate?

Where and when can you get across your marketing messages to your target market?

Will you reach your audience by advertising: Newspapers; TV; Radio; Billboards; Direct Marketing

Mailshot; PR or the Internet? When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the

timing of your market launch, or the timing of subsequent promotions? How do your competitors do their promotions? And how does that

influence your choice of promotional activity?

Pricing Customers buy a product by weighing the benefits they receive from a product versus its cost. Benefits are usually gained through a product’s features. A

company can choose a strategy of offering products which are differentiated, by features or functionality, from its competitors’ products, and a differentiated

product can sometimes be offered at a higher price. Alternatively, a company can choose a strategy of offering products which are similar to its competitors’

products, but at a lower price. In practice, a company’s strategy usually includes both differentiation and low cost, but it is useful to try to determine which of

these two is most prominent.

Many companies choose to sell directly to the consumer through the internet, while also selling through suppliers and stores. There are advantages and

disadvantages to both approaches, and also to using this hybrid model. Students need to consider the implications of internet selling for a company in relation to

its supply chain and distribution network.

An extremely important aspect of marketing a product is setting the correct price that will attract consumers to make a purchase while generating profit. Without

getting the balance right, a company can quickly find that they are losing money through lack of sales or through lack of profit generation. The following strategies

for setting price can be used:

cost­plus pricing

demand pricing

competitor­based pricing

product line pricing

psychological pricing

Product Pricing as a Marketing Strategy

Pricing isn't just about a number. There is a lot of strategy involved. Assume you make widgets for $5 each. As a business owner, you want to achieve 20 percent

profit. However, simply selling your product for $6 may not work, as customers may not be willing to pay that much for your widget. Or the nearest competitor may

charge $8, so you could make an even bigger profit by charging $7. Setting a reasonable pricing strategy constitutes one of the biggest marketing decisions a

business undertakes.

Measure the Market Pricing strategy begins with a market analysis of what the optimal product price for a given product or service should be. Business owners determine the total cost

to produce one unit of a product or service then conduct market research­­including focus groups and comparative price analyses­­to determine the point where

the company's willingness to supply a unit at a given price is identical to the market's willingness to purchase a unit at that price. This point is called the

"equilibrium point," although companies are not required to sell at that price.

Cost­Plus Pricing Cost­plus pricing ensures that the company's total costs plus a predetermined profit margin are recovered in full.

This is classic lemonade­stand pricing, and is common in the manufacturing business­to­business sector. In this

case, pricing equals costs plus a static profit.

Related is target­return pricing, in which the price is set to earn a specific return on an investment (ROI). For

example, a pharmaceutical company that spent $2 billion to develop a new drug, and which has a 20­year patent

on the drug, may set price to recover its research­and­development costs, the research and development of failed

drug development, marketing and salaries for the projected demand over the life of the patent.

Demand Pricing Demand­based pricing, also known as customer­based pricing, is any pricing method that uses consumer demand ­ based on perceived value ­ as the central

element. For example, sellers of compact discs charge a higher price for recordings that appeal to a broad market, such as those of Garth Brooks or Madonna,

than they charge for recordings of classical music. The manufacturing cost of the product and the required gross profit margin are of secondary importance to

demand in setting the price.

Competitive Pricing Competition­based pricing strategies focus solely on what the competition is charging, and

strive to meet or beat those prices. Sometimes this strategy is referred to as a rock­bottom

pricing strategy, or a low price leader strategy. The goal is to best your biggest competitors

based on pricing alone. As Web Marketing Today exhibits, the competition­based pricing

strategy is used by many large retailers on the Internet. Because the same products are

available from multiple sources, the consumer buying decision is simply to select the retailer

with the lowest price.

This pricing strategy is a difficult one for small businesses to maintain, because it provides

very narrow profit margins that make it challenging for the business to achieve enough

momentum to grow.

Product line pricing

Product line pricing is used when a primary product is offered with differing features

or benefits, essentially creating multiple different products or services. For example, a

car could be the primary product. It could come standard, with a sunroof and

navigation system or fully stocked with all the features and add­ons. The iPad (right)

has a range of prices for models that have different capacity and function.

Each product would then be priced accordingly.

The goal of product line pricing is to maximize profits. The more features offered, the

more consumers will pay. The goal is to draw enough interest in the primary product

to sell the upgraded product at a greater price based on the interest in the basic

primary product. By using PLP, some individual products may not make profits, but

the goal is for the line as a whole to turn a profit.

Loss Leader Also known as a promotional pricing strategy, the goal of the loss leader pricing strategy is to get

new customers even if you do not make a profit from the initial sale. By taking a loss on the first

sale, businesses can offer related products or upsells at normal prices. Despite losing profits on

the promotional product or loss leader, enough profits are normally made from the additional

regular­priced products and services to sustain the strategy for the long term.

Grocery store sales utilize the loss leader pricing strategy on a regular basis. They discount one

or more items on their shelves to the point of taking a loss of profit, with the intention of getting

customers into their stores. Once there, the customers are likely to buy more than just those

products that are on sale.

Psychology of Pricing Psychological pricing is a marketing practice based on the theory that certain prices have a psychological impact. The retail prices are often expressed as "odd

prices": a little less than a round number, e.g. $19.99. The theory is this drives demand greater than would be expected if consumers were perfectly rational.

Bundle pricing is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software

business, in the cable television industry, and in the fast food industry in which multiple items are combined into a complete meal. A bundle of products is

sometimes referred to as a package deal, a compilation, or an anthology.

Promotion The Kia Motors Corporation has 12 manufacturing and

assembly plants and subsidiaries in 165 countries around

the world. Globally the Hyundai Kia Group is now the fourth

largest car company in the world. Kia Motors UK has more

than 166 dealerships. Kia is a relatively new entrant to the

UK car market. However, it has become more well known in

recent years. Kia does not have the same level of brand

heritage in the UK as it does elsewhere in the world. Kia

aims to overcome this through its massive ambition and

plans for growth in the European market.

To support this growth plan, Kia has to develop its brand

identity. In the past Kia has competed mainly on price, using

a competitive pricing strategy. The challenge for Kia has been to increase awareness of its brand within European markets. Alongside this it has created positive

perceptions of its products through high profile sponsorship deals. It wants consumers to view the brand as a manufacturer of cars of great quality and design. To

do this it has harnessed the power of sports marketing to influence consumers’ perceptions of its products.

For example, the marketing mix for Kia is based around:

product – good design and quality alongside a high level of customer service, Kia’s unique selling point is its 7­year warranty

price – competitive prices provide an advantage over competitors

place – with 166 dealerships there is a large and expanding number of outlets

promotion – this includes a new sponsorship in cricket and long­term partnerships in football and tennis.

Promotion is about communicating with customers and potential customers. It has a number of purposes, for example:

increase awareness – such as the range of vehicles Kia offers

to raise brand recognition – this is important in an industry with over 30 major players in the UK

to increase demand – thereby helping to meet the objective of growth in the UK

to improve brand perception – promotion communicates the fun approach of the Kia brand

to highlight the superiority of the product – e.g. the high quality and great design of Kia cars.

Sports marketing To reach its promotional objectives, Kia uses conventional techniques

alongside extensive use of sports marketing such as sponsorship.

Sponsorship involves a business paying to be associated with another

organisation, event or even television programme. Sports marketing

allows Kia to reach a large audience and create positive associations.

Sports sponsorship enables Kia to be linked with superiority in another

field.

For example, Kia was involved with the FIFA World Cup in Korea and

Japan in 2002 through sponsorship. Since then it has become partners

of the World Cup until 2022. This enables Kia to link its activities with well­attended and well publicised football matches that are enjoyed by large groups of

people.

Sponsorship also helps to develop good public relations with European audiences. Public relations helps to build positive perceptions of the brand. This enables

Kia to engage with potential customers who then view the organisation in a positive way. This is particularly important in markets where the brand identity lacks

awareness and profile, such as when a new brand enters a marketplace. By associating with exciting and interesting sporting events Kia shows that it is also

exciting and interesting. Kia proves it is a major player in the UK market through its sponsorship links with such high profile sporting events.

Kia’s sponsorships include:

Cricket. A new 5 year partnership with Surrey County Cricket Club including extensive branding, shirt sponsorship

and naming rights for the historic Kia (formerly Kensington) Oval cricket ground.

Football. Kia is the official sponsor for both the FIFA World Cup finals and UEFA Championships. These long term

partnerships (through to 2022) include extensive branding and promotional opportunities, also extends to other

associated tournaments (Women's World Cup, Under 21 Championships, etc). Kia is also shirt sponsor for a number

of major clubs in Europe and around the world, including Athletico Madrid in Spain and Bordeaux in France.

Tennis. Kia has sponsored the Australian Open for 10 years. Rafael Nadal is Kia's global ambassador.

Above­the­line and below­the­line promotion

Above­the­line There are a number of approaches to promotion that are open to organisations. Above­the­line promotions use mass media

methods. This type of promotion focuses on advertising to a large audience. It includes print, online media, television and

cinema advertising.

As the fourth largest car company in the world, Kia is a big brand. It offers a range of products targeted at different market

segments. Above­the­line activities include adverts in the press. They also produce online banner advertisements, place

advertisements on billboards and use their website to meet the needs of their consumers. Recent TV advertising campaigns

have included the ‘small yet mighty’ cat for the new Picanto and the ‘future proof’ Kia cee'd, emphasising the 7 year warranty.

TV advertising has also been used to relay the message that Kia is an official FIFA partner.

Making a message memorable to a large audience is not always easy. It is difficult to tailor a promotion to a specific group of consumers through above­the­line

promotions. This is because it is viewed by a mass audience with different tastes and needs. Above­the­line promotion is also very expensive.

Below­the­line Below­the­line methods are very specific, memorable activities focused on targeted groups of consumers. They are under the control of the organisation. Kia uses

these techniques to target clearly defined consumer groups rather than a mass audience like its above­the­line activity. The purpose of these activities has been

to develop the brand by creating awareness and building a brand profile. Below­the­line methods include:

sponsorship

sales promotions

public relations

personal selling

direct marketing.

Sponsorship and social media Sponsorships have helped to raise Kia’s profile amongst key target markets. Kia has

also developed its relationships with consumers through public relations. Traditional

press releases work alongside newer forms of marketing. For example, Kia uses

digital and social media as an integral part of its below­the­line activity. This helps to

create relationships with customers online.

These channels include blogs and social networking sites such as Facebook. Kia

also has its own YouTube channel to emphasise its brand presence amongst target

consumers. This enables them to develop eCRM, allowing Kia to collect data from

customers and use it in a variety of ways for interaction. It also helps to create the

basis for viral marketing. This is when messages are so widely received that they are

passed on either electronically or by word of mouth to other customers.

Kia also supports a variety of environmental issues, shown through below­the­line promotions. For example, Kia works in partnership with Trees for Cities, an

independent charity which aims to create social cohesion through inspiring people to plant and love trees. Environmental issues are high on public agenda.

Partnerships like these are an important way for Kia to demonstrate its commitment to supporting public concerns.

Sponsorship Sponsorship involves positioning and matching brands together. It develops a relationship that is both comfortable and positive for both businesses. Kia’s

partnership with Surrey County Cricket Club was its first venture into cricket. Cricket is becoming an increasingly popular sport.

The T20 form of the game has helped the sport appeal to a larger audience. Sponsorship provides Kia with a presence beyond which many expect. It also

provides Kia with a very high profile and famous site in the heart of London, ‘The Kia Oval’. The relationship has also involved branding, on­line marketing and

shirt sponsorship.

Building brand awareness Surrey County Cricket Club’s partnership with Kia will last for at least 5 years, from 2011 until 2015. This will allow Kia to reach a new audience. It will also help

Kia to be viewed as a permanent player within the UK car market. This helps exhibit big brand behaviour. Kia is therefore demonstrating that it is a main player in

the car market through high profile sponsorship deals. This reinforces the size and scale of the Kia brand.

Creating consumer engagement Sponsorship is not simply an advertising message that engages with an audience at a particular time. It creates deeper engagement with Kia’s potential

customers. It also provides a platform for other exciting events to take place. For example, sponsorship of T20 games at the Kia Oval enables a variety of other

activities to take place such as the Kia Catch and promoting the Stick Cricket Game. With Kia Catch, any crowd member successfully catching a six can claim a

£100 prize, courtesy of Kia. Stick Cricket is an online batting game which is available through both the Surrey County Cricket Club and Kia websites.

Conclusion It is very difficult for a large brand, no matter how good the products are, to enter a mature market in which existing brands are popular. This is a major challenge

for Kia in the UK car market. Kia has created a variety of partnerships through different forms of sponsorship. These sponsorship deals help Kia raise its brand

profile and create positive associations with key sporting events and athletes. Associating the brand with high profile sporting events demonstrates the fresh, fun

and dynamic qualities of the brand. Kia has entered into a series of long term investments that will allow it to engage with consumers for the duration of the

sponsorship deals.

Standardisation ­ global marketing strategy

Since the beginning of the 1980s, the issue of ‘Globalization’ has become increasingly significant. For many companies, globalizing means to make uniform or

similar on a worldwide scale. With globalization, differences between countries have become smaller however they still exist. This onward march of globalization

and internationalization of businesses has had a strong impact on how companies view and plan for their global marketing strategy. Consequently, numerous

studies have been conducted on whether multinational companies should adapt or standardize international marketing behavior. As companies begin to market

its products abroad, one essential strategic decision is whether to use a standardized marketing mix (product, price, place, promotion, people, physical evidence,

process management) and a single marketing strategy in all countries or whether to adjust the marketing mix and strategies to fit the unique dimensions of each

local market (Vrontis and Thrassou,2007). One view suggests that markets are becoming more similar and progressively more global and believe that the key for

survival is companies’ ability to standardize. On the contrary, the other view points out the difficulties in using a standardized approach, and therefore supports

customization and market adaptation. However, evidence suggests that standardization and adaptation is not an all or nothing proposition but a matter of scale.

Standardization vs. Adaptation The first view is the standardization standpoint (as proposed by Jain, 1989; Levitt, 1983). According to these authors, supporters of standardization believe that

there is a union of cultures with similar environmental and customer demand around the globe. They argue that trade barriers are getting lower and that

technological advances and firms are displaying a global orientation in their strategy. As they believe, creating one strategy for the global market and

standardizing the marketing mix elements can achieve consistency with customers as well as lower costs. Levitt (1983) argues that companies that are managed

well have moved away from customizing items to offering globally standardized products that are advanced, functional, reliable and low priced. According to him,

companies can achieve long­term success by concentrating on what everyone wants rather than worrying about the particulars of what everyone thinks they

might like.

On the contrary, supporters of the international adaptation approach, emphasize the importance of customization. The fundamental basis of the adaptation school

of thought, is that when entering a foreign market one must consider all environmental factors and constraints such as language, climate, race, occupations,

education, taste, different laws, cultures, and societies (Czinkota and Ronkainen, 1998). However, researchers have identified important source of constraints that

are difficult to measure such as cultural differences rooted in history, education, religion, values and attitudes, manners and customs, aesthetics as well as

differences in taste, needs and wants, economics and legal systems. According to Vrontis and Thrassou supporters of this approach believe that “multinational

companies should have to find out how they must adjust an entire marketing strategy and, including how they sell, distribute it, in order to fit new market

demands” (2007). It is important to alter the marketing mixed and marketing strategy to suit local tastes, meet special market needs and consumers non­identical

requirements (Vrontis and Thrassou,2007).

Marketing Mix Standardization Adaptation

Product No changes are made to product/service

Specific changes are made to the product/service to fit cultural characteristics

Price Fixed pricing in all international markets

Prices are determined by local competitive conditions

Place Uniform channel structures Adjusting distribution

Promotion Same promotion is used in all international markets, and no changes are made

Specific changes are made to promotions to fit cultural contexts

Advantages and Disadvantages of Standardization Standardization and international uniformity has many advantages. For one, people can expect the same level of quality of any specific brand anywhere around

the world. Standardization also supports positive consumer perceptions of a product (Products and International Marketing, n.a). If a company enjoys strong

brand identity and a strong reputation, choosing a standardized approach might work to its benefit. Positive word­of­mouth can mean an increase in sales around

the globe. Another advantage includes cost reduction that gives economies of scale. Selling large quantities of the same, non­adapted product and buying

components in bulk can reduce the cost­per­unit. Other advantages related to economies of scale include improved research and development, marketing

operational costs, and lower costs of investment. In addition, standardization is a reasonable strategy at a time where trade barriers are coming down. Finally,

following a standardized approach helps companies aim focus

on a uniformed marketing mix specifically focusing on one

single product, leaving enough room for quality improvement.

By emphasizing on one uniformed product, staff can be

trained to enhance the quality of the product attracting

manufacturers to invest in technology and equipment that can

“safeguard the quality of the standardized product offering”

(Products and International Marketing, n.a).

Standardization, however, poses a number of disadvantages.

As mentioned previously, different markets mean different

preferences. Selling one unified product lacks uniqueness.

This allows competition to gain market share through tailoring

their products to meet the need of a specific market/segment.

Since different markets have different needs and tastes, by

using the standardized approach, companies can become

vulnerable. One example is Walmart’s failure in entering

global markets. The retail giant faced many challenges when entering foreign markets such as Germany, Brazil, South Korea and Japan as it discovered that its

formula for success in the USA (low prices, inventory control and a large collection of merchandise) did not translate to markets with their own discount chains

and shoppers with different habits. The biggest problem was that Walmart, a uniquely powerful American enterprise, tried to impose its values around the world.

In particular, Walmart’s experience in Germany, where it lost hundreds of millions of dollars since 1998, “has become a sort of template for how not to expand into

a country” (Landler and Barbaro, 2006).

Another disadvantage is that it depends largely upon economies of scale (Products and International Marketing, n.a). Naturally, businesses that are global

manufacture in many counties. This can pose a problem since a number of countries implement trade barriers such as the USA and the European Union

(Products and International Marketing, n.a). In this case, adaptation is predestined.

Nevertheless, although the standardization approach is more common, its adoption is not unconditional, as proposed by Douglas and Wind (1987). The authors

explain that standardization strategy increases a company’s performance. However, this is only true for companies in which competition takes place in a global

range, such as consumer durables, electronics, fashion, luxury goods, perfumes, etc. In these cases, the same product can be sold throughout all markets. On

the contrary, there are other industries in which the same does not apply and this must be considered.

Consumer nondurables, including food products, are the most sensitive to differences in national tastes and habits, making them more likely to need changes for

various markets. For example, Unilever saw an opportunity among low­income consumers in India who wanted to buy the company’s high­end detergents and

personal care products, but couldn’t afford them. In response, the company developed a low­cost packaging product and other options that allowed it to offer

dramatically less expensive options. This flexibility not only opened a new market for the company, but also allowed it to develop brand loyalty that consumers

could take with them when their income increased and they could afford higher­end products from the same manufacturer.

Strategic Adaption to Foreign Markets Businesses should answer questions related to the marketing mix such as “what do we intend to standardize?” and “Do we standardize customer service and

product support, marketing communications, pricing, and channels of distribution?” The answers to these questions should neither be all standardized nor all

adapted. It should be a balance of both.

Striking The Right Balance Both approaches appear to be rational, logical and coherent, highlighting the advantages and benefits that a multinational company could gain by using either

approach. Yet, when multinational companies exert all their efforts on the extreme position of either approach, they often become unfeasible and incoherent. The

truth is, marketing for multinationals does not lie in either of these two opposite approaches, as both approaches are likely to coexist, even within the same

company, product line, or brand (Kitchen, 2003; Vrontis, 2003; Soufani et al., 2006).

Many researchers agree that standardizing certain elements of the marketing mix and adapting others to different market conditions is necessary (Vrontis and

Thrassou, 2007). These authors believe that standardization and adaptation is not an all­or nothing proposition, instead it is a matter of degree. For example,

diversity among different countries does not allow full standardization. However, the high cost related to adaptation may limit the use of the adaptation approach

(Vrontis, 2005). Nanda and Dickson (2007) concentrate on three factors to examine standardization/adaptation behavior: homogeneity of customer response to

the marketing mix, transferability of competitive advantage and similarities in the degree of economic freedom. They note that even in countries with similar

cultures (e.g. across the European Union) there are differences in customer needs and wants. Further more they argue that standardization will be successful

when the homogeneity of customer response and the degree of similarity in economic freedom is high and competitive advantages are easily transferable.

Elements of both approaches should be incorporated in order for multinational companies to succeed. Gaining the benefits of both approaches requires

companies to not only standardize various marketing mix elements and marketing strategies, but also to follow adaptation where essential in order to satisfy

apparent market needs.

McDonald's and the Marketing Mix

One company that has managed to highlight the benefits of both the standardized and adaptation

approach is McDonald’s. With more than 33,500 restaurants in 119 countries the company skillfully

manages its franchise model, delivering a remarkably consistent customer experience and branding

(I’m lovin’ It) while still allowing for locally relevant menu and service variations in segments across the

globe. Furthermore, all advertisements are shot in 12 different languages, featuring the customized

products catered to each region. In 2003, McDonald's introduced the McArabia, a flatbread sandwich,

to its restaurants in the Middle East. It also introduced the McVeggie in India and the EBI­Fillet­O

shrimp burger in Japan.

McDonald’s also chooses convenient locations for all of its franchises. This includes malls, airports

and local neighborhoods. These marketing strategies have confirmed to be effective, indicated by the

company’s 7% increase in profit margins over the past four years (Mourdoukoutas, 2012). However,

McDonald’s has made every effort to improve them through recent marketing initiatives with respect to the 7Ps. McDonald’s has begun to renovate its eateries,

going from a plastic look to a more brick and wood design in an effort to maintain a contemporary image (Mourdoukoutas, 2012). They have also decided to

“re­image” themselves in their ads by incorporating a hip­hop theme with teen icons such as Justin Timberlake and Lee Hom in China as a means to attract

teenagers. In addition, the company has begun to offer healthier food products, such as oatmeal, given consumers are more health conscious.

Conclusions

The frequent subject in international marketing in whether companies should plan for a standardized or customized marketing approach is extensively debated in

the academic literature and is a concern for every multinational company and marketing persons. Supporter of the standardized approach argue that the global

market has become homogenized therefore multinational companies can market their products and services the same all over the world. Using identical

strategies will result in lower costs and higher margins. On the other hand, supporters of the adaptation approach emphasize the apparent dissimilarities between

the markets of different countries, especially those for consumer goods, and prefer using international differentiated marketing programs.

This research identified the advantages and disadvantages of each method stating that the solution to a successful market approach lies between the two

extreme approaches. Companies can build a strong global marketing strategy with the proper structure, mindset and operating behaviors that achieve a

successful balance between standardization and adaptive initiatives. Multinational companies should not treat the world as one single market. Instead, they

should embark on market research and determine their customers, their needs and wants. Evenly, they need to recognize their distinctive external environmental

constraints and benefits of standardization. Also, each element of the marketing mix and market has to be considered and studied in order to understand the

merits and shortcomings of each element. In conclusion, the identification and implementation of the right degree of integration is essential to a multinational

company’s success as it increases the chance of remaining competitive and marketing orientated within the company’s business structure and international

markets.

Market research

There are many purposes of market research.

Gathering information in order to be able to generate new ideas for a product

Evaluating the market potential of products at various stages of development

Developing ideas into products to suit market requirements

Identifying suitable promotional strategies

Gathering information relating to demographics

Gathering information relating to family roles

Collecting data relating to economic trends

Taking into account technological trends and scientific advances

Gathering information about consumers

Considering consumers’ reactions to technology and green design and the subsequent impact on design development and market segmentation

Students need to be aware of these purposes and relate them to their own project work.

Understanding that market research is a key element of the

design project, students need to select from a range of

strategies that will help them find out what the client wants and

needs. It is important to note that often, what the client thinks

they want and what they need can be very different things.

There are many strategies for the student to identify the need,

which include:

literature search

expert appraisal

user research

user trial

perceptual mapping

environmental scanning

Expert Appraisal Expert Appraisal is the evaluation of a product or service by someone who has the professional training or experience to make an informed judgement on the

design. Ideally, this person should not be biased by former involvement with the project because familiarity with any product or task makes it seem simpler and

easier. Expert appraisal can identify possible causes of design exclusion, suggest improvements to reduce this exclusion, and increase user satisfaction. Expert

appraisal depends on the availability of suitable experts and their knowledge of the users, the product and of the context in which the product is being used. It is

preferable that the expert be an internal 'user champion' present throughout the design process, rather than an external 'hired help' who may only be contracted in

for occasional assessments because of the cost of hiring them (typically charged per hour rather than per project).

User Research Research techniques can be incorporated before, during, or after the design solution is established. If done before or during the design phase, these techniques

are collectively known as user research; if after, they’re known as user testing. User research attempts to answer questions like “who will use this design?” and

“how does this concept work in the context of our users’ workflow,” whereas user testing seeks to answer: “how effective is this design?”

User Trials User trials, sometimes called task analysis exercises, are simulations of product usage in which subjects are asked to fulfil specific tasks using a product or

product simulation. 'User Trials' are normally carried out with a prototype product or used to evaluate a complete or existing product with real users in a relatively

controlled environment. They are simpler and less costly than field trials though lack the contextual information.

A simple way to collect data is to get participants to think aloud or talk through their interactions and for an observer to make notes on problems identified. The

tests need at last 6 users and it should take between 2­3 hours. One of the results from a user trial is a problem list that guides in the redesign of the product.

Perceptual Mapping A brand’s position is the set of perceptions, impressions, ideas and feelings that the consumers have

for the product compared with competing products. Marketers plan positions that give their products

the greatest advantage in selected target markets, and they design marketing mixes to create these

planned positions.

In planning their positioning, marketers often prepare perceptual maps that show consumer

perceptions of their brand versus competing brands on attributes that are important to the consumer,

whether functional or symbolic.

Uses of a perceptual map Assessing strengths and weaknesses relative to competing brands along certain criteria

important to the customer.

This is revealed by the positions of the marketer’s brand and competing brands

along the axes.

Identification of competitive advantage for the brand

Perceptual maps show differentiation among products in the customer’s mind.

For example, in a perceptual map representing the car market based on two dimensions, “conservative “ vs. “sporty” and “classy/ distinctive” vs.

“practical/affordable,” Porsche will probability be seen as the classiest and sportiest of the cars in consumers’ minds, providing the brand with a

strong competitive advantage. Assess opportunities for new brands, as well as for repositioning existing brands.

Identifying market opportunities

Empty spaces near an ideal point (meaning an attractive market segment) on the perceptual map represent potential market opportunities.

See how ideal points are moving

In addition, perceptual maps show how ideal points shift as markets mature, and therefore a brand might shift its positioning in order to retain or

gain a competitive advantage.

Environmental scanning Environmental scanning ­ the collection and examination by a company of information about events

outside the company that might affect its future:Your research must cover your suppliers, their product

characteristics, and other aspects of environmental scanning.

Students need to draw from the above list when identifying a design opportunity and, prior to this,

must have developed an understanding of these strategies. To this end, they should consider the

advantages and disadvantages of the research strategies listed above in relation to the nature, reliability and cost of the research and importance to the

design development process.

Branding

A brand is a recognisable name; term; symbol or design that allows customers to identify the goods and services offered by businesses and differentiate them

from competitions. Brands are very important to businesses, generating high revenue, promotion, repeat purchases and inspiring brand loyalty.

Many of the most successful brands are the first in the market; the first products to reach a target market or to utilise new technology, for example. This may also

mean taking advantage of a gap in the market or of new developments.

Choosing the right brand name is an important aspect of the branding process, needing to be easily spelt and pronounceable (for foreign markets); short and to

the point, in order to be easily remembered; able to indicate something about the benefits of the product or its uses; be identifiable to the customer and be

distinctive and different so that it can be trademarked.

Another fundamental way brands are successful is with a unique selling point (USP), differentiating them from other products and ensuring sales. The brand

must be positioned in the right place on the market in order to be successful.

The role of the designer varies when taking into account brand image/identity depending on the position of the new design within the innovation cycle. There are

many different brands that are appealing to different market segments and use different methods to promote loyalty, which students should be able to identify.

Branding forms a product’s identity that is extremely valuable to a product and can

help promote sales; therefore, brand image becomes a commodity that needs to be

protected as intellectual property. Infringements of trademarks and registered designs

is quite commonplace for a wide range of products and some designers use their

creativity to attempt to subtly disguise the infringement.

Students need to understand the differences between a trademark and a registered

design and how they are applied in terms of branding.

A big challenge for designers is to maintain or improve the brand image while creating

an innovative new product—this is sometimes achieved through the corporate strategy

of diversification.

Students should consider how brand image can be affected by positive and negative publicity and its implications for a company and be able to identify

products that have been subjected to this publicity.

It is important for companies to communicate their brand identity strongly and clearly on products and at the point of sale. This is mainly done through packaging.

Packaging design for a product may be an integral part of the work of the company design team or it may be outsourced to specialist packaging designers once

the product has reached the end of the design cycle.

Students need to consider the role of packaging for different products, which contributes to brand identity.

Market research on a global scale may be a time­consuming and expensive exercise, which is a major problem for innovative new companies, especially those

reliant upon the internet for selling their product(s). Students will need to consider the effects of global impact of branding for a range of consumer goods.

Suitable strategies for market research are important in gaining appropriate information for redesigning products. When designing a brand it is important to

identify the needs and wants of the market segment the product is aiming towards. A product may require a different brand identity depending on the market

segment they are targeting.

On occasion, products will be rebranded for different segments based on:

geographic location

age

gender

culture.

Students should be able to identify a product that has been branded differently for different markets and need to consider the positive and negative effects of

product branding on different market segments.

Corporate Social Responsibility (CSR)

Corporate social responsibility is a form of self­regulation for a company and centres around the development of

goals related to three areas:

economic

social

environmental

Corporate Social Responsibility (CSR) refers to operating a business in a manner that accounts for the social and

environmental impact created by the business. CSR means a commitment to developing policies that integrate

responsible practices into daily business operations, and to reporting on progress made toward implementing these practices.

Companies that consider corporate social responsibility as a goal need to assess the impact of their operations in relation to these three areas in order to

maximize the benefits and minimize the disadvantages.

Apple Corporate Responsibility

“To make truly great products, we feel it’s crucial to build them in ways that are ethical and environmentally responsible.

All over the world, people are building Apple products. And we want to make sure that each person is treated with dignity and respect. This

is why we create programs that educate and empower workers, and help preserve our environment’s precious resources for future

generations. It’s a massive challenge — one where our work is never done. But each year we implement meaningful, lasting changes

across our supply chain.”

Corporate Social Responsibility: Apple is one step ahead

Posted on 1.5.14 / Categories: blog , Carlotta Werth , CSR

Apple is one step ahead. Right, it hasn’t been the first company in its sector to launch an environmental campaign. But it has been the first one to transform it

into its core mission. The company’s new goal is to make its sustainability “better”– as the “Better” video states. On Earth’s day, 22 April, the Cupertino based

firm disclosed to the folks of the world its new strategy. “There are some ideas we want every company to copy” has been printed on several newspapers,

over an inviting picture of a solar array. Now, take a minute to observe your exquisite, beloved Mac. I bet you didn’t know that its OS X has been developed to

maximize energy saving. When the machine is not at hard work, the operating system puts its hard disk to sleep and runs the processors in an ultra low

power mode. On the other hand, when it is hard working, the OS uses less energy for apps that are open but not visible, while it idles the processor as you

are typing.

In the last six years, the average total power consumed by Apple products has dropped by 57%. The world’s most energy­efficient desktop computer is Mac

mini. Today’s iMac uses 97% less electricity in sleep mode than the first iMac. The 11­inch MacBook Air consumes the least total energy in its class. As a

matter of fact, on the website, Apple boasts its entire product line not only meeting, but exceeding ENERGY STAR guidelines.

Now, take your iPhone out of its shiny cover. You should feel free to hold it in your hand: some of the most harmful toxins (mercury, lead, arsenic, PVC,

BFRs, Phthalates) have been entirely eliminated from the whole range of Apple products. Before letting it go, consider for a moment the impact of having

reduced the 5s packaging mass by 26%. If it doesn’t impress you, keep in mind that now 60% more iPhone boxes can be packed in each airline shipping

container. This saves one flight for every 416,667 units shipped. Apple measures the carbon footprint (the total amount of carbon dioxide and methane

emissions) of its production processes not only in terms of the facilities it owns, but of the whole supply chain. The footprint of its products is measured

throughout their entire life: including emissions from manufacturing, transportation, use and recycling.

At this stage, Apple couldn’t but surprise us with the buildings. 73% of all facilities (including all of the data centers and 86% of the corporate campuses) are

powered by renewable energy. The same is true for 120 retail stores in the US. The energy sources include solar, wind, geothermal (the heat of the earth),

water (micro­hydro system) and biogas fuel cells. On top of that, to save water, the company employs an irrigation system that monitors local weather

conditions and soil moisture.

In Cupertino Apple will open its huge and revolutionary campus. Here, 80% of the site is going to be green, with thousands of shade and fruit trees and

drought­tolerant plants. The source of energy will be solar, while natural ventilation is to be employed for most of the year, through air flowing freely between

the inside and the outside. Employees will reach the campus thanks to biofuel buses, public transit, carpools, bicycles and their own feet. The campus is

going to be equipped with hundreds of electric vehicle charging stations. Apple aims to power all its offices, retail stores and data centers entirely with energy

from renewable sources.

At this point, the options are two. If this article has been so effective that it has made you want to substitute any device in your house that does not have an

apple impressed on it with one that does, I will tell you: wait a minute. While you’re on the way to the Apple store, don’t forget to bring the old device. They will

recycle it for you. Over 90% of the material Apple recycles is not its own. If, on the other hand, you couldn’t care less about all this environmental chit­chat

and this long article has only made you feel like throwing your iPad in the bin, I’m telling you: don’t do it. For your own sake. Take the device and bring it back

to the Apple store. If it has monetary value, you will be given an Apple Gift Card. Later on, Apple will recycle the products, but always in the region where the

waste is collected. 85% is the company’s recycling collection rate of the total weight of products sold.

You may have never thought it possible, but be aware that now, by purchasing that iPhone, you have become a stakeholder of an environmental campaign.

It’s only a matter of time, and then, again, the firm will set a new trend. But this time, its color is not going to be white. It appears more natural. It’s going to be

green: green as an Apple should be.

Let me add one remark. In order to make this article as impartial as possible, I have done some research to find out whether Apple’s sustainability campaign

is really as spotless as it looks like. The only information I found is Greenpeace’s ClickingClean report, where Apple is the only company to be awarded with a

Clean Energy Index of 100%.