Exhibit 2.1 iPod advertisement (Courtesy of Apple Inc.).
Best known for his Sound Blaster line
of sound card products that dominated the global PC audio market, Mr. Sim Wong Hoo was one of
Singapore’s most celebrated entrepreneurs.
Rising from the humble
beginnings of a computer repair shop, he developed expertise in hardware
design, created devices for a variety of computer applications, and set up
Creative Technology to mass produce these devices for corporations like Apple.
Among its many award-winning gadgets, Creative’s
ZEN range of portable media players was a product that the company believed
outperformed competition. In 2005, competing with the formidable iPod, Creative
invested heavily in a US$100 million advertising campaign that stressed ZEN’s
functional superiority.
That ZEN may not have lived up to Creative’s
expectations had much to do with iPod’s extraordinary brand equity. Yet
one also wonders whether ZEN’s initial campaign presenting a feature-by-feature
comparison with iPod resonated with the majority of teenagers and young adults.
It appeared that at the onset, Creative was marketing a B2C product in a B2B
style. A buyer in a business setting would examine closely the product features
and price of competing products to decipher which one of them offered superior
value. Ordinary consumers however usually do not give as much importance to
feature-by-feature comparisons. For products that reflect their lifestyle, they
are swayed more by intangible associations such as symbols, emotions, imagery
and relationships with the brand.
The teens and young adults, who were the target
market for portable media players, are not the tech-savvy users they are
popularly thought to be. Their market has historically been Apple’s stronghold.
With experience spanning the decades that the company devoted to marketing the
Mac and a host of other devices to schools and universities, Apple knew their
tastes, preferences and needs. The iPod was advertised to appeal to their
senses and leave them intoxicated with the music.
Interestingly when Apple in 1983 launched the Lisa
PC, which at a price tag of US$10,000 was intended for business users, the
company struggled to cater to the requirements and expectations, such as total
solutions and technical support, of the business market. The elements of the
marketing mix undergo considerable change when a company moves from one sphere
to the other. Apple has traditionally excelled in consumer marketing, whereas
Creative’s roots lie in business marketing.
ZEN has since carved out its niche within the high
tech, great value for money, portable media players, and its campaigns are well
targeted for this segment.
It is worth remembering that during its glory days
the iPod was Apple’s leading brand; that in 2006 it accounted for 40% of
Apple’s sales. Brand sales peaked in 2008–2009, and roughly 450 million units
were sold since its launch in October 2001.
