Consumer behaviour patterns and analysis

¶ … Branding Strategies of Apple and Wal-Mart on Consumer Behaviour

The intent of this paper is to analyze the effects of Apple's unique branding strategy vs. competitors on consumer behaviour. Wal-Mart's unique and evolving brand is also analyzed relative to competitors and then evaluated in terms of its impact on consumer behaviour as well. Both of these companies have unique market positions and also have a significant number of highly loyal, repeat customers as well. The loyalty of Apple customers is legendary and considered amongst the strongest of any manufacturer. Wal-Mart's core customer is also highly loyal, often shopping at Wal-Mart due to both convenience and economic necessity to get the low prices and help make financial ends meet. The paper begins with a brief analysis of the Apple branding strategy and follows with one of Wal-Mart, concluding with a series of lessons learned.

Apple's Unique Branding Strategy

Apple's concentration on ease of use, simplicity of product design and user interface, and free integration between all products immediately differentiated the brand from its IBM PC and compatibles competitors. More than the integration aspects was the product design that exemplified the core values of the most loyal customers found so attractive in the Apple brand and the Apple products. Approachability, simplicity, ease of use, a good does of individuality and non-conformity further differentiated the Apple brand from IBM initially and now Lenovo. Most striking of the differences between Apple's brands and its IBM PC-compatible competitors was the formers' adherence to more innovation over price reduction, greater concentration of being transparent and communicative to its customers over blindly launching a new product every year or eighteen months, and a high level of concentration on creativity over procedural approaches to using their PCs. As a result of all these factors, Apple has successfully concentrated its efforts on creating a brand that is price insensitive, where loyal customers are willing to pay the premium for their favoured products. Not focusing purely on features and functions and instead of the benefit of giving consumers the opportunity to unleash their creativity has helped Apple to also gain and consistently grow the most loyal customer base in the personal computer industry.

The implications of this from a consumer behaviour standpoint are clear. First, the Apple consumer base is called "the cult of Apple" as these select customers look at the Apple systems and products as extensions of their own identities; this has been made possible by the concentration Apple has made on giving its customers as many opportunities as possible to customize not only the systems but also the software and processes inherent in each. Apple has also always strove to be completely transparent and trustworthy with customers, a key differentiator regarding their brand relative to IBM PC and compatibles competitors. The elements of approachability, transparency and trust are all critical in Apple maintaining the high level of customer loyalty gained through decades of consistent practices.

Wal-Mart Branding

Wal-Mart's brand is actually comprised of several smaller brands, signifying the thousands of suppliers the company partners with to provide over 30,000 products in any of its stores globally. The overarching brand of the store is coordinated with these sub-brands to accentuate breadth of selection and an aggressive direction on Everyday Low Price (EDLP) positioning. Wal-Mart's influence on its supply chain partners, the ability to continually drive down costs and increase quality, and its use of EDLP on Black Fridays (the shopping day after Thanksgiving in the U.S.) have continually reinforced the brand and also created a significant competitive advantage vs. competitors K-Mart Corporation and Target. K-Mart's positioning on EDLP historically has been to concentrate on low-priced leadership through its blue light specials throughout the store. In 2001, in an attempt to counteract the effects of Wal-Mart on its brand and market position, K-Mart initiated the "Blue Light Always" program to further underscore their EDLP strategy on 30,000 items, primary comprised of food, consumable and other high-frequency items. Consumers however did not equate the Blue Light Always campaign as being as competitive as the prices at Wal-Mart, specifically the latters' Sunday Specials and extensive use of loss leaders during the selling period between Black Friday and the holidays occurring at the end of the year. Instead, EDLP for the K-Mart brand connoted a lack of quality and lack of competitiveness relative to Wal-Mart products and the strategy eventually led to financial losses.

The effects on consumer behaviour of K-Mart attempting its own EDLP strategy showed that the strength of loyalty to Wal-Mart based on pricing and availability far overshadowed the tactical approaches of K-Mart. It also showed that in discount retailing is not a tactic, it is a strategic direction and it takes years of brand equity to create sustainable and trustworthy EDLP positioning in consumers' minds. The failure of Blue Light Always also shows that consumers who trust their low-price mass merchandiser are not easily swayed even with Sunday Specials or special programs.