Apple or Lemon?

Student ID: 213544241

The iPhone could quite conceivably be the most profitable product in history. Apples Q2 earnings demonstrate profit for the 3 months ending June 30-16 far exceeding Facebook’s entire revenue for the same period. Apples Q3 revenue summary tallies the iPhone accounting for 57% of revenue, however highlights unit sales down by 15% and revenue down 23% year on year. With margins under pressure the company needs big results from its newest iPhone to impress shareholders. Some institutional investors are reported to be shedding stock leading up to the September 7 Apple event, so this party really needed to rock.

The after party however seems to have ended with a banging hangover. Day one post iPhone 7 announcement and the stock price plummeted 2.62% down wiping $15.3b off the companies market cap (qty common stock issued x stock price). Day 2, another 2.57% lost, a staggering $27.64b in two days fleeced from the pockets of shareholders.



So let’s take a moment to consider the theory, what’s gone wrong under the hood and why are some investors running? Integrated Marketing Communications (IMC) is a process driven by, and responsive to stakeholder data and perceptions harvested from both traditional and emerging channels. IMC stitches together activities across departments utilising skills and knowledge of specialists and non-specialists alike to bring stakeholder messaging together into a unified and supplementary suite of communication packets. Like a continuous pounding of swell against a sea wall, coordinated brand messages continuously move consumers along a plane from awareness to purchase. A firms IMC capabilities are argued to directly impact any communications campaign effectiveness and subsequent market value.


Apples advertising coverage is constant across all traditional and digital mediums. Infact the company provides an exploratory demonstration of how to integrate advertising through your distribution chain. The handset is available same day online, in apple stores and from telco carriers and advertising for all channels is perfectly consistent.

A classical success metric will be Gross Rating Points (GRPs), reach x frequency. The percentage of the target market exposed to the campaign multiplied by the number of times exposed. Although some commentators argue GRPs are an outdated measurement, and new behavioral measurements are providing further insight, there is evidence of its ongoing importance and relevance in a world of increasingly diversified content delivery.

The ditching of the 3.5mm headphone jack will likely result in third party manufactures having to pay licensing fees to get on board the ‘made for apple’ accessory market.  Taking the resource based view of the firm, this is an effective IMC strategy, using external resources and internal capabilities to achieve maximum results. Whilst all the manufactures pay to play, apple scores free advertising thanks to the multitude of accessory makers.

Personal Selling

It’s no secret Apple holds personal selling as one of its highest priorities. In 2012 Apples secret handbook designed for the apple store ‘genius’ was leaked and found to contain teachings and company procedures for psychological mastery, banned words, roleplaying and more.

Apple goes so far in its 2015 10-k (US SEC reporting) to state the “Company relies primarily on the innovative skills, technical competence and marketing abilities of its personnel” and describes this as more importance than the patients upon which company success is built.


Public Relations

Consider for a moment this statement by Akamai who streamed the September 2016 apple event.

Now Akamai also streamed Rio 2016, I guess this apple PR event was bigger than the Olympics. By any standard that’s an enormous reach and is surely the envy of many competitors.

How then can the success of such a large PR event be measured. Brian Solis proposes the conversation prism, a comprehensive visual map showing digital channels for listening, learning and adapting. Google search data also provides the world’s largest unbiased consumer panel which can be mined to measure consumer response.

Listening via twitter, a stream of sarcasm was pumped into the #AppleEvent feed during the event however little evidence of a loss in confidence could be noted.


However as the sarcasm was being flung, industry commentators came out in support of apples courage to reinvent.



So where was the billion dollar problem! Check this out, the day after the launch apple stated:


What! Where is the courage sprooked by apples chief of design for the entire afternoon prior?  Why for the first time since 2007 will apple not release its first weekends sales. IMC generally fails due to one of four reasons, miscommunication, compartmentalization, loss of trust, and decontextualization. Perhaps this message was miscommunicated or poorly timed, and conceivably missing context but it’s undoubtedly lost the trust of investors.

IMC is deeper than the advertising, personal selling and PR discussed and also involves a study of correlations between external stimuli, sociological variables, communication and consumer behavior. However this simplified look at IMC shows how one announcement clearly not integrated with all other communications of a firm can quickly impact both consumer sentiment on investor confidence.

References and sources:

Burmann, C., Jost-Benz, M., & Riley, N. (2009). Towards an identity-based brand equity model. Journal of Business Research, 62(3), 390-397. doi:

Fulgoni, G. M. (2015). Is the GRP really dead in a cross-platform ecosystem? Why the gross rating point metric should thrive in today’s fragmented media world. Journal of Advertising Research, 55(4), 358-361. doi: 10.2501/JAR-2015-019

Lescop, D., & Lescop, E. (2016). The Apple Twist. Communications & Strategies(102), 13-35,155,157.

Luxton, S., Reid, M., & Mavondo, F. (2015). Integrated Marketing Communication Capability and Brand Performance. Journal of Advertising, 44(1), 37-46. doi: 10.1080/00913367.2014.934938

Oancea, M., & Elena, O. (2015). The Model of Integrated Marketing Communication: Who has the Role to Influence Consumer Behaviour. Acta Universitatis Danubius: Oeconomica, 11(1), 22-31.

Ots, M., & Nyilasy, G. (2015). Integrated Marketing Communications (IMC): Why Does It Fail? Journal of Advertising Research, 55(2), 132-145. doi: 10.2501/JAR-55-2-132-145

Ratnatunga, J., & Ewing, M. T. (2005). The brand capability value of integrated marketing communication (IMC). Journal of Advertising, 34(4), 25-40.

Reid, M. (2005). Performance auditing of integrated marketing communication (IMC) actions and outcomes. Journal of Advertising, 34(4), 41-54.

Reinold, T., & Tropp, J. (2012). Integrated marketing communications: How can we measure its effectiveness? Journal of Marketing Communications, 18(2), 113-132. doi: 10.1080/13527266.2010.489334

Schultz, D. E. (2014). Reaching for What? Marketing Insights, 26(3), 14-15.

Venkatraman, V., Dimoka, A., Pavlou, P. A., Vo, K., Hampton, W., Bollinger, B., . . . Winer, R. S. (2015). Predicting advertising success beyond traditional measures: New insights from neurophysiological methods and market response modeling. Journal of Marketing Research, 52(4), 436-452. doi:

Yoon, K., & Sims, J. D. (2015). Re-conceptualizing relational integrated marketing communications from the perspective of social CRM Marketing and consumer behavior: Concepts, methodologies, tools, and applications, Vols. 1-4. (pp. 2102-2134). Hershey, PA, US: Business Science Reference/IGI Global.


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