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BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication Table of contents 1. 2. Introduction ..................................................................................................................................... 2 1.1. Thesis statement ..................................................................................................................... 3 1.2. Research questions.................................................................................................................. 3 1.3. Theory of science and methodology ....................................................................................... 3 1.4. Theoretical framework ............................................................................................................ 4 1.5. Delimitations ........................................................................................................................... 6 1.6. Structure .................................................................................................................................. 7 The theoretical disciplines of branding and relationship marketing ............................................... 7 2.1. The fiscal focus (David Aaker).................................................................................................. 8 2.1.1. The brand identity planning model ................................................................................. 8 2.1.1.1. Strategic brand analysis ............................................................................................... 9 2.1.1.2. Brand Identity ............................................................................................................ 10 1.1. The relationship focus (Susan Fournier) ................................................................................ 12 1.2. The loyalty focus (Christian Grönroos) .................................................................................. 16 1.3. Part Conclusion; What defines successful retention of consumers in relation to brand relationships? .................................................................................................................................... 19 2. Discourse analysis .......................................................................................................................... 20 2.1. Introducing the Iphone advert .............................................................................................. 20 2.1.1. 2.1.2. The ideational metafunction ......................................................................................... 21 The interpersonal function ................................................................................................ 21 2.1.2.1. 2.1.3. 2.1.4. Modality markers ...................................................................................................... 23 The textual metafunction .................................................................................................. 23 Sound features............................................................................................................... 24 2.1.5. Part conclusion; How does the “under the cover” video communicate a wish to retain current customers? ........................................................................................................................... 24 3. Discussion – Apple, branding and retention of consumers ........................................................... 26 4. Conclusion ..................................................................................................................................... 29 Works cited ............................................................................................................................................ 31 Appendices ............................................................................................................................................ 33 Page 1 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication 1. Introduction February 11, 2011 Nokia’s CEO announced that Nokia would create an alliance with Microsoft to increase their chances to compete with Apple’s iPhone products: "Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward," said Stephen Elop, Nokia President and CEO. "Today, we are accelerating that change through a new path, aimed at regaining our Smartphone leadership, reinforcing our mobile device platform and realizing our investments in the future” (App 1). In addition, “Nokia expects mobile devise industry gross margins to come under pressure due to competitive factors” (App 1). Also in February 2011, rumors stated that a 5th edition of the iPhone would see the market (App 2). So far, observers will note that Apple has shown ability and capability to arouse interest about upcoming products. Every time the company launches a new product, a massive hype is created getting the attention of the whole world. A good example was when the company in 2010 put the then new iPhone 4 into production. The world found out about the news through YouTube, generating over 4.2 million hits (App 3). Apparently someone had left the iPhone 4 prototype at a bar and it fell into the hands of an It-specialist who rated it in a viral video that was posted on YouTube (App 4). Assumably this was a media stunt created by Apple to create awareness about the new iPhone 4. Throughout the years other publicity stunts similar to the one with the iPhone 4 have been made. Nevertheless, the cardinal point of interest is to understand how Apple can maintain a leader position in a dynamic and competitive market and retain their customers. According to the latest annual report Apple had an increase in the net sales of their iPhone and other related products by 93% (App 5) where Nokia only had an increase by 5 % in their devices and services from 2009 to 2010 (App 6). Thus, the thesis will examine how Apple can retain their consumers in such a competitive market. The purpose and advantage of retaining customers for any brand is long term sales, differentiation, competitive advantage and customer relations (Payne 54-6). Retention of customers is in this thesis defined as loyalty/commitment towards a brand and the entire product portfolio. In this context the thesis will examine the advertisement “Under the Cover” (App 7) in terms of visual persuasive means of discourse analysis in order to delimitate the scope of the thesis and offer even more concrete conclusions to the thesis statement besides the findings through branding and relationship marketing theory. Page 2 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication 1.1. Thesis statement With an outset in three different paradigms of branding and relationship marketing, how can the Apple brand retain their customers and to which degree does this affect their ability to compete in the dynamic market of Smartphones? 1.2. Research questions In order to answer the thesis statement the following research questions will be answered in order to guide the structure of the thesis. 1: What defines successful retention of customers in relation to brand relationships according to; A) David Aaker and his fiscal oriented paradigm. B) Susan Fournier and her relationship oriented paradigm. C) Christian Grönroos and his commitment/loyalty oriented paradigm. 2: How does the Apple advertisement “Under the Covers” communicate a wish to retain current Apple customers? 3: To which extend does the Apple advertisement “Under the Covers” affect the company’s ability to successfully retain customers? 1.3. Theory of science and methodology This thesis holds the world view of social constructionism. Following the paradigms of social constructionism means that the world cannot be seen as ‘Tabula Rasa’, like the thoughts held in positivistic paradigms. Since the results of branding are interactions between a brand and its users, the phenomena itself is a social constructionist paradigm. “Social constructionism cautions us to be ever suspicious of our assumptions about how the world appears to be” (Burr 3). The social constructionist paradigm is rooted in the thought that “our ways of understanding the world come not from objective reality but from people, both past and present” (Burr 6). The methodology of this paper will be based on classical hermeneutics as the thesis seeks to understand the different branding Page 3 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication and relationship marketing theories while applying these theories to the interpretation of the Apple advertisement. Hermeneutics is the art of understanding through interpretation and Schleiermacher argues that “we understand something by comparing it to something we already know” (Palmer 87). Since this thesis attempts to understand how Apple can retain their customers in the dynamic market of smartphones, the hermeneutic approach and the hermeneutic circle are useful tools. This thesis will use the classical approach to Hermeneutics as the paper seeks to interpret the meaning between sender and text. Schleiermacher states that “understanding as an art is the reexperiencing of the mental processes of the text’s author” (Palmer 87). Through the discourse analysis of an iPhone advertisement the thesis seeks to interpret Apple’s meaning with the text, hence what are they communicating and why. The notion of the hermeneutic circle will be used as the thesis tries to grasp the whole before understanding the parts. Schleiermacher states that “we must understand the whole and the parts together” (Palmer 87) which will be expressed in this thesis through the notion of shared understanding. Specifically this means that the author of the thesis expects, like expressed through the hermeneutic circle, the readers to have knowledge about the topics in the thesis. “One must already have, in some measure, a knowledge of the matter being discussed” (Palmer 87). The objective of the thesis is to provide the reader with valuable information of how branding strategies and relationship marketing can help companies to retain their customers. Specifically, this means that the thesis will try to understand theories through interpretation and apply these theories to the discourse analysis of the iPhone advertisement later in the thesis. This thesis uses in-text citations followed by parenthesis with author name and page number as suggested by the Modern language association, MLA (Fowler 647-60). In situations where authors are cited in more than one work, the first word in the title will be included in the parenthesis. 1.4. Theoretical framework The main authors to be used in this thesis will be David Aaker, Susan Fournier, and Christian Grönroos. They all work in the field of branding and relationship marketing but have different paradigms of thought. Page 4 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication David Aaker was in 2007 named one of the world’s top five gurus in branding and marketing theory and he has published many books and scientific articles based on his research in the field of branding (App 8). Aaker seems to hold a consumer oriented view to branding which is seen through his brand equity model and his brand identity model. However, in his early work Aaker defined brand equity as “a set of assets (and liabilities) linked to a brand’s name and symbol that adds to (or subtracts from) the value provided by a product or a service to a firm and/or that firm’s customers” (Aaker 8). This definition is based on accounting terms (assets and liabilities) and since Aaker states that brand identity “is central to a brand’s strategic vision and the driver of one of the four principal dimensions of brand equity: associations …“(68) it is argued that even though the end goal of the brand identity model appears to be a brand-customer relationship his perspective of branding is still fiscal, meaning that, for him, branding has a monetary end-result. Based on his guru status and experience, Aaker was chosen as one of the key authors in this thesis even though he cannot be considered to follow the scientific paradigm of social constructionism. It is argued that David Aaker belongs to a more post-positivistic school of thought as he seeks to find one universal truth to brand building. Susan Fournier, on the other hand, works only within the paradigm of relationships, hence that branding should create a relationship between the brand and the customer. In her work, Consumers and their brands, Fournier argues about the importance of her relationship paradigm; “The brand has no objective existence at all: it is simply a collection of perceptions held in the minds of the consumer” (345). This specific view is an interesting diversity compared to Aaker which is why Fournier has been chosen as one of the key authors used in this thesis in order to provide the reader with a thorough insight to branding and relationship marketing theory. Fournier has been a professor at Harvard Business School and Boston University and has received many best article awards from her work published in numerous scientific journals (App 9). Christian Grönroos also works within the paradigm of relationship marketing, hence with the notion that branding strategies and marketing initiatives fosters loyal customers which then establishes a brand-customer relationship. The real difference between Grönroos and Fournier is Fournier’s notion about brand-as-partner which seems to be a much stronger customer-relationship orientation than the one held by Page 5 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication Grönroos. Grönroos was chosen as one of the key authors in this paper due to his work in service and relationship marketing which holds, what this paper calls a loyalty focus. Grönroos has been awarded for his publications about service, management and relationship marketing in scientific journals and for his books (App 10). The reason why this thesis includes these three different paradigms of thought is related to the theory of scientific methods. Through the theoretical chapter the thesis will go through key concepts in branding and relationship marketing theory in order to understand the whole as suggested by the methodology of the hermeneutic circle. 1.5. Delimitations Due to a limited number of characters this paper will only analyze the Apple advert “Under the Covers” through the analytical tools suggested by Kress and Van Leeuwen. This means that other theorists such as Roland Barthes, Ferdinand de Saussure, Charles Sanders Pierce, Ernst Gombrich and Rieck Iedema have not been used in this paper even though their contributions would have benefitted the paper. In addition to this, the paper will not analyze any textual features of the communication from Apple. This would, however, give an even more thorough analysis of the brand and create an understanding of how they try to retain their customers. This thesis will not apply all the provided theory from the theoretical chapter to the Apple brand to the fullest, due to the scope of the paper. It would be interesting to look at the Apple advertisement through philosophical hermeneutics, hence to interpret the relationship between text and receivers however that is not within the scope of the thesis. Finally, it is acknowledged that there are many other ways, used by Apple, which might improve their chances to retain their customers than the ones found in this thesis. Page 6 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication 1.6. Structure The following model was developed by the author of this thesis and it portrays the structure of the paper which also reflects the theory of science and the methodology of the thesis, hence that everything is interrelated. 2. The theoretical disciplines of branding and relationship marketing The following chapter will examine three different viewpoints related to branding and relationship marketing theories. This will create a broader understanding of different practices and lead to a point where a more thorough answer to the problem statement is possible. This chapter will also relate the empirical findings to the Apple brand in order to create a link between the analysis of branding and relationship marketing theory and the specific Apple case. Page 7 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication 2.1. The fiscal focus (David Aaker) In order to answer the first research question, which was, what defines successful retention of customers in relation to brand relationships according to Aaker, it is important to get an overview of his key work. In 1991 Aaker developed his model on brand equity which was determined as a set of assets which needed to be invested in, in order to create and enhance value (Aaker 8). Around 1996 Aaker then developed his brand identity model and stated that brand identity was the driver of brand association which was one of the five types of assets that could create value for a brand according to the brand equity model (Aaker 68). In 2000 Aaker published, in cooperation with Erich Joachimsthaler, a book on brand leadership. According to Aaker and Joachimsthaler brand leadership is part of the core identity for many brands (66). This means that all of Aakers branding models are interrelated with a focus on building a brand identity with strong value propositions. The brand identity planning model defines how a brand successfully can attract and retain customers in order to gain profit and create a brandcustomer relationship. This thesis will therefore go through the model in order to provide the reader with an overview of the fiscal focus held by David Aaker. To elaborate on this perspective in a critical manner this report will use theory of Jean-Noel Kapferer who has developed a similar model called the Brand Identity Prism. 2.1.1. The brand identity planning model David Aaker suggests that the ultimate goal of the brand identity system is to build a strong brand – customer relationship (77). He continues by stating that “brand identity should be strategic, reflecting a business strategy that will lead to sustainable advantage” (70). Sustainable advantage is here assumed to refer to monetary gains. Hence, a strong brand identity should lead to an increase in sales for the company which is agued to be the end goal of any branding initiative. The brand identity planning model consists of three main steps to consider when developing a brand identity. The first step is the strategic brand analysis where the customer, the competitor and the brand/company is analyzed (Aaker 79). The second step of the process is the creation of a brand identity system. This includes an analysis of the brand identity in terms of the core and the extended core of a brand and the determination of the value proposition and credibility in relation to competitors which all should lead to a brand – customer relationship in order to create sustainable advantage (Aaker 79). The third and final overall step of the brand identity planning model is the brand identity implementation Page 8 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication system. This step includes the brand position, execution and tracking (Aaker 79), however, the thesis will not go through implementation as it is not in the scope of this thesis. 2.1.1.1. Strategic brand analysis Step one in David Aaker’s brand identity planning model is to develop a strategic brand analysis. This concept includes customer analysis in terms of trends, motivation, needs and segmentation (Aaker 79) which might help the brand to understand their customers and hence a better ability to establish a brand-customer relationship. The strategic brand analysis also includes competitor analysis which encompasses brand image, strengths and vulnerabilities (Aaker 79) which might help the brand to differentiate themselves from competitors. Finally, the strategic brand analysis should also include a self-analysis of one’s own brand (Aaker 79) which can Source: Aaker, Brand, 79. help the brand refrain from falling into what Aaker calls brand identity traps. When looking at Apple’s annual report from 2010 it is obvious that the company has made these considerations. A good example is the statement that; “the principal competitive factors include price, product features, relative price/performance ... the company expects competition in these industries to intensify significantly as competitors attempt to imitate some of the Iphone and Ipad features … or, alternatively, collaborate with each other to offer solutions that are more competitive …”(App 5). This statement indicates that Apple has thought about the competitive factors which also relates to the context of this thesis, hence that Nokia and Microsoft has made an agreement to collaborate with each other in order to compete with Apple. Jean-Noel Page 9 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication Kapferer agrees to a large extend with Aaker’s strategic brand analysis and his thoughts will be included later. 2.1.1.2. Brand Identity The reason why this report deals with brand identity and not brand image has to do with the theory of science used. Dealing with brand image would relate to a philosophical hermeneutic interpretation, to interpret the customer’s perception of the brand, and since this thesis deals with the meaning of the sender, only brand identity theory will be interpreted. “Brand identity should help establish a relationship between the brand and the customer by generating a value proposition involving functional, emotional or selfexpressive benefits” (Aaker 68). David Aaker argues that the brand identity structure contains a core identity and an extended identity (Aaker 86). “The core identity, which is central to both the meaning and success of the brand, contains the associations that are most likely to remain constant as the brand travels to new markets and products” (Aaker 86). For Apple, the core identity is argued to be reliable, easy-to-use personal computers, mobile communications and media devices that make the users ‘Think Different’(ly) which is the slogan. The core identity should, according to Aaker, capture the soul of the brand along with fundamental beliefs, and core competencies (87). The extended identity of a brand is then the outer layer of the onion, so to speak. “It fills in the picture, adding details that help portray what the brand stands for” (Aaker 87-8). Aaker determines four main identity types; brand-as-product, brand-as-organization, brand-as-person and brand-as-symbol (79). Brand-as-product, he claims, is often the core element of a brand’s identity and it includes directly related attributes of a product, e.g. quality, value and user associations (Aaker 80-1). Brand-as-organization holds, according to Aaker, a focus on the organization of the brand. This can be innovation, quality, people etc (82-3). Brand-as-person is the personality of a brand. This type of identity defines a brand through human characteristics such as fun, caring, innovative, creative or youthful (Aaker 83). This concept can easily be related to Susan Fournier’s argument about anthropomorphization, i.e. to provide the brand object with human characteristics which will be exemplified later. Aaker argues that “a brand personality can create a stronger brand in several ways … it can help create a self-expressive benefit that becomes the vehicle for the customer to express his or her own personality” (83). Page 10 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication Aaker uses Apple users as an example and states that “an Apple user might identify himself or herself as casual, anti-corporate, and creative” (84). Brand-as-symbol, the fourth personality type, David Aaker argues, “can provide cohesion and structure to an identity and make it much easier to gain recognition and recall” (84), For Apple, this would be their recognizable logo, the apple. It is argued that the Apple brand’s extended identity can be seen as having all the four before mentioned benefits but the most interesting one, in relation to the scope of this thesis, is brand-as-person. Aaker argues that “brand personality can be the basis of a relationship between the customer and the brand” (84). In the Brand Personality Scale (Aaker 144) and through the author of this thesis’ own observations, Apple could fit into the sincere and/or the exciting brand personality which can be characterized by Apple’s friendly, cool and innovative personality. Jean Nöel Kapferer has also developed a brand identity model, and argues that there are six facets of a brand’s identity as shown below (99). The model resembles the brand identity planning model of David Aaker. The physical facet and the personality facet can be compared to what Aaker calls brand-as-person, organization, product and symbol. The culture facet, relationship facet, the reflected consumer facet and the selfimage facet can all be compared to Aakers value proposition; functional benefits, emotional benefits and self-expressive benefits (Aaker 79). The real difference between the two models is the fact that Kapferer puts great emphasis in separating the external facets from the internal facets and he also puts great emphasis on the concept of culture which Aaker does not mention anywhere. For Aaker, a value proposition “is a statement Page 11 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication of the functional, emotional and self-expressive benefits delivered by the brand that provide value to the customer. An effective value proposition should lead to a brandcustomer relationship and drive purchase decisions” (95), hence increased sales. What both of these theorists agree on is that a brand’s identity is what it communicates, and that an effective identity communication should lead a brand-customer relationship which should retain consumers which leads this paper to the interpretation of the relationship focus held by Susan Fournier. 1.1. The relationship focus (Susan Fournier) Even though Susan Fournier shares some viewpoints regarding successful branding with David Aaker, her focus is still very different from his. Fournier argues that what really differentiates one brand from another is the ability to establish lasting relationships with the customer. Even though Aaker states that the brand-customer relationship is the bottom line of the brand identity model (103), his focuses is still more on the path to get there, hence the brand identity and the value proposition. In Fournier’s work, Consumers and Their Brands, she also states that consumers form relationships with the brands they know and use, which is why, she argues, one must understand the consumer-brand interactions in everyday life (344). Fournier argues that “For a relationship to truly exist, interdependence between partners must be evident: that is, the partners must collectively affect, define and redefine the relationship” (Consumers, 344). Susan Fournier argues about the brand-as-partner notion which, she states, can be seen in the way brands are humanized and animated (344). She continues, by stating that “consumers show no difficulty in consistently assigning personality qualities to inanimate brand objects, in thinking about brands as if they were human characters, or in assuming the perspective of the brand in order to articulate their own relationship views” (Fournier, Consumers, 344-5). Fournier’s notion of brand-as-partner can to a certain degree be compared to David Aaker’s brand-as-person in the brand identity system, which was elaborated in the previous paragraph. Aaker’s brand-as-person also portrays an identity with human characteristics. However, the work of Fournier focuses, to a much larger extend, on understanding the partnership between customers and their brands because it leads to a broader understanding of the customer. Consumers accept the fact that marketers and branding experts tries to humanize brands and respond positively to it because of the Page 12 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication human need to become “members of the relationship dyad” (Fournier, Consumers, 345). Apple could for instance be an example of a humanized brand with the human characters like friendly, cool and innovative. Fournier bases her work on theories of animism and notes that there are three process mechanisms that constitutes these theories and argues that these three animistic mechanisms needs to be understood and considered when creating a successful brand that can retain customers. “The first animistic form involves instances in which the brand is somehow possessed by the spirit of a past or present other” (Fournier, Consumers, 345). The first step, Fournier argues, can be examples of the use of spokespersons in branding, but can also be a memory of a brand used by ones grandmother or another spirit from the past or the present (Consumers, 345). When looking at the Apple brand one could argue that Steve Jobs might perform the job as a spokesperson too, which according to Fournier, is another way to humanize a brand. “Another form of animism involves complete anthropomorphization of the brand object itself, with transference of the human qualities of emotionality, thought, and volition” (Fournier, Consumers, 345). This second step, Fournier argues, is seen in branding where the brand symbols have human traits, for instance the Apple logo; an apple with a bite taken could portray the human traits of sincerity and irresistibility and somehow relate to the Garden of Eden. “For the brand to serve as legitimate relationship partner, it must surpass the personification qualification and actually behave as an active, contributing member of the dyad”(Fournier, Consumers, 345). The key words here are interaction with consumers and also addressability (Fournier, Consumers, 345). According to Susan Fournier, these are some of the factors that successfully can retain customers. However, she argues, “all observed behaviors are translated into trait language and (that) these traits form the basis for the evaluative concept of the person” (Consumers, 345). This means that in the traditional marketing mix decisions are personality traits and behaviors of the brand (Consumers, 345) which relates to Grönroos’ argument that the traditional marketing mix is outdated, which this thesis will return to later. Fournier states that “with a focus on brand behavior, one can articulate a theory of how the brand relationship role is constructed and begin to see ways in which the brand, acting as an enlivened partner in the relationship, contributes to initiation, maintenance, and destruction of consumerbrand relationship bonds” (Fournier, Consumers, 345). Page 13 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication Fournier continues by arguing that “understanding a given relationship requires a mastery of the meanings the relationship provides to the person who engages it” (Consumers, 345). She states that there are three important sources of meaning; psychological, sociocultural and the relational meaning (Fournier, Consumers, 346). Through her work with brand-consumer relationships, Susan Fournier has developed a model of brand relationship quality and its effects on relationship stability which is shown below; The first step in the model is the notion that the meaning creation, elaboration and reinforcement processes between brand behaviors and consumer behaviors are reciprocal exchanges, hence a circular process that involves exchanges between active and interdependent relationship partners (Fornier, Consumers, 344). The second step in the model determines which type of relationship the consumer can have with a brand. Fournier has Source: Fournier, Consumers, 366. established six types; love/passion, selfconnection, commitment, interdependence, intimacy and brand partner quality which all lead to the third step, which are the different affects of these types of relationships. Fournier proposes fives affects; accommodation, tolerance/forgiveness, biased partner perceptions, devaluation of alternatives and, attribution biases which Fournier argues to be factors that lead to relationship stability and durability (Consumers, 366). These factors can be compared to Aaker’s value proposition which describes the functional, self-expressive and emotional benefits of the relationship, as stated earlier in this thesis. Fournier argues that “once a significant relationship is established, the meaning of the brand becomes inseparable from the value of the product class per se” (Fournier, Consumers, 368), hence a possibility to retain customers and thereby increase sales. It is observed, that in relation to the Apple brand, many users feel a strong commitment to the product and owners of an Iphone often also have a MacBook, an IMac or an IPad (App 11) which is argued to be Page 14 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication an instance of devaluating alternatives which leads to relationship stability and durability according to Fournier’s model (Consumers, 366). In another study by Susan Fournier, Jennifer Aaker and Adam Brasel the researchers also determine that “research has shown that relationships are influenced by the personalities of the partners involved” (When, 2) which again be related to Steve Jobs and his enthusiastic and trustworthy personality. According to these researchers, there are many personality factors that can make or break a relationship, for instance, whether failures are avoided, problems resolved and dependability, reliability and trustworthiness are also important factors in sustaining relationships with consumers” (Fournier, Aaker and Brasel, When, 2). Fournier et al argue that there are two main types of brand personalities. These are the sincere and the exciting brand personalities (When, 2). It is argued that the Apple brand can be put under the category of an exciting brand personality due to the fact that Fournier et al determine an exciting brand personality as brands that “attempt differentiation trough unique and irreverent advertizing, atypical brand logos, and hip language” (2). An exciting brand personality is also “seeking differentiation against incumbent market leaders” (Fournier, Aaker and Brasel, When, 2). An example that proves Apple to have an exciting brand personality is their Get a Mac campaign which ran virally and in television from 2006 to 2009 and used hipness and irreverent advertizing to promote their superiority towards Microsoft (App 12). “A second factor often singled out for its determinant effects on relationship strength is the commission of a transgression, which refers to a violation of the implicit or explicit rules guiding relationship performance and evaluation” (Fournier et al, When, 3). According to these researchers transgressions serves as salient factors when determining relationships as it provides opportunities to learn about the qualities of the relationship partner (When, 3). Fournier et al argues that all transgressions are significant and can affect the relationship progress despite of differences in severity (When, 3). For a brand like Apple, this means that in the occurrence of any kind of transgression the company needs to handle it with care and remember Source: Fournier et al, When, 3 that the way they handle the Page 15 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication transgression reflects the brand quality held by the consumer. The model rests on the premise that consumers make assumptions about a brand based on observations of the behaviors over time which creates assessments for the possible role as a relationship partner (Fournier el al, When, 3). “These partner quality inferences allow development processes to occur, thereby governing reactions to interrupt events such as transgressions” (Fournier et al, When 3). In relation to the Apple brand which earlier was argued to be an exciting brand, Fournier found that transgressions in an exciting brand would lead to increased interdependency and increased commitment to the brand, hence a stronger partner quality, as opposed to sincere brands where transgressions would damage the relationship (Fournier et al, When, 13). Even though Susan Fournier suggests that ”brand relationship quality is similar in spirit to brand loyalty: both constructs attempt to capture the strength of the connection formed between the consumer and the brand toward a prediction of relationship stability over time” (Consumers, 367), this thesis now moves to the brand loyalty focus held by Christian Grönroos in order to provide the reader with a thorough overview of the discipline of branding and relationship marketing. 1.2. The loyalty focus (Christian Grönroos) Like Fournier, Christian Grönroos is part of the relationship marketing school. However, Even though Grönroos argues for relationships in his work in service marketing, his focus and end goal of relationship marketing is loyalty or commitment as he calls it. Kapferer argues that “Service is by definition relationship” (103). Grönroos defines relationship marketing as “a process of identifying and establishing, maintaining, enhancing, and when necessary terminating relationships with customers and other stakeholders, at a profit, so that the objectives of all parties involved are met, where this is done by a mutual giving and fulfillment of promises” (Love, 47). This definition can be resembled with the relationship argument held by Fournier which stated that “… the relationship contributes to initiation, maintenance, and destruction of consumer-brand relationship bonds” (Consumers, 345). Grönroos argues that “the uppermost goal of relationship marketing is to create customer commitment” (Love 47), which to a certain degree resembles Fournier’s notion that what really differentiates one brand from another is the ability to establish lasting relationships, as stated earlier. Grönroos also shares some viewpoints with David Aaker and his notion on sustainable Page 16 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication advantage, for instance, Grönroos states that “establishing a relationship, for example with a customer, can be divided into two parts: to attract the customer and to build the relationship with that customer so that the economic goals of that relationship are achieved” (From, 327). Grönroos believes that the traditional marketing mix, the 4 P’s, is outdated and that relationship marketing is the future. Thus a different viewpoint than the one held by Fournier who argues that the 4 P’s can be seen as behavioral traits of a brand (Consumers, 354). Grönroos states that “the simplicity of the model (Marketing Mix) seduces teachers to toolbox thinking instead of constantly reminding them of the fact that marketing is a social process with far more facets than that” (From, 333). Grönroos suggests that “what marketing deserves are new perspectives, which are more market-oriented and less manipulative, and where the customer, indeed, is the focal point…” (From, 333). He continues by predicting that “today, it (relationship marketing) is still an exotic phenomenon on the outskirts of the marketing map. In the future, this will change” (Grönroos, From, 333). Christian Grönroos has therefore developed a marketing strategy continuum which is shown below. Source: Grönroos, From, 329. This continuum determines the advantages in relationship marketing over old school transaction marketing. One notable issue in the continuum is the part about price elasticity. Grönroos argues that when you have attracted your customers and have built a relationship with them they will not be as sensitive to price (From, 329). This is an Page 17 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication interesting discovery when relating the continuum to Apple’s products which are always much more expensive than the competing prices (App 13). Adrian Payne agrees with Grönroos and argues that “marketing is now increasingly concerned with relationship marketing – the business of attracting, retaining and enhancing long-term client relationships” (Payne 53). Grönroos and colleagues have determined that “the basis for any type of relationship is the initial attraction towards a product” (Love, 50) and argue that there are two levels of relationships, the relational mode and relationship proneness (Love, 49) (See model below). The model should be interpreted as a continuum beginning with the passive relational mode at the top and ending with the most committed/loyal relationships, called relational proneness. colleagues determined, Grönroos and trough their research, that initial attractiveness is needed to form a relationship, and that different cues creates attraction (Love, 51). “Visual product cues, such as design, aesthetics, or store design, may contribute to this attractiveness, alongside the products functional characteristics, such as functionality, durability, or reliability” Source: Grönroos et al, Love, 51. (Grönross et al, Love, 51). This can to some extend be compared to Fournier’s argument about the importance of customer involvement which was determined earlier in this thesis; Grönroos states that involvement is present after the purchase of a product and is defined as “a consumer’s enduring perception of the importance of the product category (personal relevance) that results from the consumers values, needs, and interests” (Grönross, Love, 51). From here, the customer can be passive or active in the relationship depending on his or her level of involvement. “The passive relational mode is established when the physical product is consistently of high quality, and is often established after the initial purchase of a product. It evolves into an active relational mode, when the customer starts developing a relationship with the product” (Grönross et al, Love, 49). Page 18 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication Relational proneness, the second relational level, is the most committed consumer. According to the researchers this relational level occurs “when consumers wish to be involved with the firm, and repeatedly purchase from that firm across a range of products” (Grönross et al, Love, 49) which can be related to some Apple consumers who repeatedly buy different Apple products (App 11); This has the effect of increased sales for Apple which is the goal of any marketing initiative. Grönroos and colleagues acknowledge the fact that “product involvement can thus directly develop into satisfaction without the need for engaging in a relationship with a firm. This … route … is likely to be taken by customers who are more functionally than emotionally oriented…” (Love, 53). Adrian Payne argues that if a company wants customer retention and thereby long-term relationships, there are three steps to take towards achieving that goal (Payne 57). “Measurement of existing customer retention rates is the first critical step in the task of improving loyalty” (Payne 57). “The second step … involves the identification of the underlying causes of why customers defect” (Payne 59). “The third and final step involves undertaking corrective action aimed at generating improved customer loyalty” (Payne 60). In addition to the before mentioned framework, Adrian Payne also argues, that “a good retention strategy should try to identify and build barriers that stop customers from switching to the competition no matter what inducements the competition is offering” (62). One way to build barriers, he argues, is by strategic bundling. This phenomenon, he argues, is “groups of associated products or services (that) are offered to the customers with the advantage of convenience and/or cost savings (Payne 62)”. This is also a very interesting perspective that easily can be related to the Apple brand; Apple products are observed as offering convenience for the customer as the operating system of e.g. a Mac computer communicates better with the iPhone than it does with the operating system from Microsoft, i.e. Windows. This leads this report to a sub conclusion about how branding strategies can retain consumers of smartphones. 1.3. Part Conclusion; What defines successful retention of consumers in relation to brand relationships? It is evident that there are many ways to retain customers according to the above cited researchers. Aaker, Fournier and Grönroos all put great emphasis on brand-customer relationships if a brand wants to retain customers. There is an apparent shift in the art of branding with a stronger focus on consumer relationships than earlier. In a way this Page 19 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication shift resembles more a Japanese style of doing business than it resembles a European or an American style, and this perspective will be discussed further in the discussion chapter. The focal point of interest is how these theorists suggested a brand could achieve customer retention; Aaker’s brand identity planning model showed how brand identity, value proposition and credibility all leads to a brand-customer relationship (Building, 79). Fournier argued that the brand-as-partner notion would lead to relationship durability, hence retention, according to her brand relationship quality model (Consumers, 367). Grönroos and colleagues developed a relationship model which determined that relational proneness occurs when the customer of a brand has the highest commitment level. This means repeatedly purchase across the whole product portfolio. Before moving on to the discussion this thesis now provides the reader with a discourse analysis of the Apple iPhone 4 advertisement “Under the Covers”. 2. Discourse analysis This thesis will now conduct a discourse analysis based on the Apple iPhone 4 advert and through the analytical tools established by Kress and Van Leuween. This method is based on a multimodal approach with means that categories of different behaviors are used to analyze communication. The analysis is based on Kress and Van Leuween’s work which was adopted from Michael Halliday called metafunctions. Halliday uses this term in relation to written and spoken language, however, Kress and Van Leuween states that “they apply to all semiotic modes and are not specific to speech or writing” (42). The three modes are called the ideational metafunction, the interpersonal function and the textual metafunction (Kress and Van Leuween 42-3) which all will be taken into consideration in the analysis. 2.1. Introducing the Iphone advert The “Under the Covers” advert was on TV in December 2010 promoting the new FaceTime feature on the Iphone 4. The tagline of the advert was “Facetime lets you easily enjoy video-calls with people you really care about …. Such as Santa Claus” (App 14). The video shows a young boy receiving a video-call from Santa Claus who really is his father calling him from the garage. The video puts a lot of emphasis on emotions and is clearly targeted at people with children who can relate to the family oriented feeling Page 20 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication which the video portrays. The video is a 30-second long video containing only images of the storyline and the famous Christmas song “chestnuts roasting on an open fire” is played. The following analysis will provide the reader with a thorough understanding of the video through 9 still photos captured from the video which can be found in the appendix (App 7). 2.1.1. The ideational metafunction According to Kress and Van Leeuwen the ideational metafunction is the relationship between structures and the participants and they distinguish between the conceptual process and the narrative process (Kress and Van Leeuwen 42-3). The whole video is argued to be a narrative process because of the very obvious vectors that are represented. The constant vector in all the 9 still photos is the eye-line vector which links the son to Santa Claus. According to Kress and van Leeuwen the participants linked by a vector “are represented as doing something to or for each other” (59). The eye-line vectors represent a conversation of some kind. “When the vector is formed by an eyeline, by the direction of the glance of one or more of the represented participants, the process is Reactional, and we will speak … of Reacters … and of Phenomena” (Kress and Van Leeuwen 67). The eye-line vectors connects the two participants in what Kress and Van Leeuwen calls a transactional process which is why the father and the son can be categorized as the Reacter and the Phenomenon. The phenomenon is what is being looked at and the Reacter is the one looking. This means that in this advert, the Reacter and the Phenomenon shifts between the father and the son. Both of them are smiling which is a reaction of their conversation. In essence then, the ideational metafunction portrays the farther and the son as happy people who look lovingly at each other. This specific part of the advert can be related to many communication models, such as the one conducted by Shannon and Weaver who represent communication as a chained process with a beginning and an end (Kress and Van Leeuwen 68), which is portrayed in the video with the goodbye wave. 2.1.2. The interpersonal function In the ideational metafunction the relationship of the visually depicted representations of interactions was established, now, moving on to establishing the relations between the participants and the viewer (Kress and Van Leeuwen 114). Through an analysis of the interpersonal function it is possible to determine the underlying message of the Page 21 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication visuals. The gaze, the size of frame and the perspective can reveal this (Kress and Van Leeuwen 116-48). According to Kress and Van Leeuwen the absence of gaze at the viewer means that “the viewer’s role is that of an invisible onlooker … it offers the represented participants to the viewer as items of information, objects of contemplation, impersonality, as though they were specimens in a display case” (119). The absence of gaze is found in most of the still photos taken from the video, these are then called offer pictures (Kress and Van Leeuwen 119) However, in the “Under the Covers” advert there are two instances of direct gaze at the viewer. This can be seen in image 2 and 5. This is called a demand picture because the represented participants are demanding something from the viewer (Kress and Van Leeuwen 116-7). The direct address to the viewer creates a visual “you” involving the viewer to participate and “demands that the viewer enter into some kind of imaginary relation with him or her” (Kress and Van Leeuwen 118). It is therefore argued that the advert is trying to get the viewer to relate to the situation and with the smiling faces to “enter into a relation of social affinity with them” (Kress and Van Leeuwen 118). Hence Apple is trying to create a relationship with the viewer through the social interaction implied in the visuals. The size of the frame varies in the still photos and this can determine the social distance in the image. Image 1, 6, 7 and 9 portrays the full figure of the represented participants which Kress and Van Leeuwen calls close social distance (125) which means that the relation between viewer and represented participants are impersonal. Image 1, 6, 7 and 9 are all images that do not portray the loving interaction between the represented participants and they are also all offer pictures. The rest of the still photos are close shots of the father and/or the son. This gives a sense of intimacy and Kress and Van Leeuwen states that “the distances people keep depend on their social relation” (125) which can be determined by the context. This means that the advert is trying to communicate a feeling of intimacy to and for the viewer. “There is yet another way in which images bring about relations between represented participants and the viewer: Perspective … the selection of angle, a ‘point of view’ … implies the possibility of expressing subjective attitudes towards represented participants, humans or otherwise” (Kress and Van Leeuwen 129). Since the perspectives in all of the still photos from the “Under the Covers” advert are taken in a frontal angle Kress and Van Leeuwen argues that they are subjective photos that tries to Page 22 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication portray involvement (129-31). This means that the advert is trying to involve the viewer making him or her, a part of their word. 2.1.2.1. Modality markers Modality deals with the reliability of an image, whether what is seen is real or fictional (Kress and Van Leeuwen 154). Modality cues are interpersonal rather than ideational which means that they do not express absolute truths or falsehoods (Kress and Van Leeuwen 155). According to Kress and Van Leeuwen they provide the viewer with shared truths that arises from our social reality (155) which is a compatible notion with the theory of scientific methods used in this thesis. Modality markers can be color saturation, color differentiation, color modulation, contextualization, representation, depth, illumination and brightness (Kress and Van Leeuwen 154-74). The still photos from the “Under the Covers” advert are very real in terms of all of these elements. Hence the images are fully colored with a maximized diversified range of colors and the colors are also fully modulated. According to Kress and Van Leeuwen this means that the advert is communicating credibility and truth (155). “It serves to create an imaginary ‘we’. It says … these are the things ‘we’ consider true” (Kress and Van Leeuwen 155). 2.1.3. The textual metafunction In terms of the textual metafunction Kress and Van Leeuwen have established three interrelated systems that relate to the composition of the image, these are the information value in the image, the salience and the framing (177). In the “Under the Covers” advertisement all images are somehow polarized. Polarized compositions are either composed with a given/new or an ideal/real angle (Kress and Van Leeuwen 17984). Since none of the images have any particular composed feature in the top or the bottom of the image, it is argued that all the images have a Given-New composition. This means that the information value lies in the right side of the image (Kress and Van Leeuwen 179) which is the new information. This is obvious when looking at the placement of the product, the iPhone 4, is placed on the right side in all the images, except number 8. In all other images the Iphone is place on the right side which also has something to do with salience. In visuals, salience is measured through specific elements that draw specific attention; these can be color, tonal, values, sharpness, definition etc (Kress and Van Leeuwen 202). It is argued that the most salient feature of the composition is the feeling of coziness that the viewer senses while watching the video. Page 23 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication The sense of Christmas spirit, family feel and all the smiles are the most salient features which creates happiness in the minds of the viewer. Hence, again is Apple trying to promote a brand identity that relates to the consumer hence the viewer. One final thing to analyze in terms of the textual metafunction is how the composition is framed (Kress and Van Leeuwen 203). Framing is about the so called rhythm in the image, hence are there elements that are separated from one another or are they all connected (Kress and Van Leeuwen 203). Frames are very obvious and can be frame lines or empty space between images which is not the case in the “Under the Covers” advert. This means that the elements in the images are visually joined and since it was established earlier that the image contains eye-line vectors in every image, the connected framing argument is valid. 2.1.4. Sound features The video “Under the Covers” has a soundtrack so to speak. The underlying music is the famous Christmas song written by Nat King Cole in 1944, “Chestnuts roasting on an open fire” also known as “The Christmas Song”. The song is one of the most loved holyday songs, and it is even in the Grammy Hall of Fame (App 15). The music is argued to be very important to the visuals because it also creates a sense of relation with the viewer. The loving feeling that is created through the visuals are thereby confirmed through the music which indicates, to an even larger extend that Apple is communicating love, family and a very obvious brand-customer relationship. 2.1.5. Part conclusion; How does the “under the cover” video communicate a wish to retain current customers? The video clearly communicates a wish to retain current Apple customers. The video puts strong emphasis on the partnership values which Fournier states as being important. The video is at the same time communicating a brand identity with a value proposition containing emotional and functional benefits for the consumer as stated by Aaker. Finally, the video portrays visual product cues which Grönroos argued would establish initial attractiveness. Through the discourse analysis it was determined that; the video offers information to the viewer which was determined through the absence of gaze. It was also determined that the video at the same time tried to engage the viewer through the direct gaze and the frontal angle which was analyzed as an attempt to involve the viewer in the storyline, hence retain the relationship through social Page 24 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication interaction. Another finding through the analysis was Apple’s attempt to communicate intimacy and credibility to and for the viewer through the modality and the close up shots. The determination of the creation of an imaginary ‘we’ was also established as an attempt to retain relationships. Again it can be observed how the field of branding is moving towards a more consumer oriented focus which will be discussed further in the next chapter. “Reality is in the eye of the beholder” (Kress and Van Leeuwen 158) and it is acknowledged throughout this thesis. Page 25 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication 3. Discussion – Apple, branding and retention of consumers This section of the thesis will be a discussion about the specific theories held up against the Apple brand and the context of the thesis. The model shows the conclusions made through the understanding and interpretation of the theory used in the thesis. The focal point of interest, however, is to determine how all of this relates to the Apple brand and the context in which this thesis operates. The fiscal focus; The relationship focus; •Brand-as-partner -> devaluation of alternative brands ->stable and durable relationships. •Humanizing brands (anthropomorphization) -> retention of customers. •All behaviors are traits. •Focus on brand behavior -> construction of relationship role ->retention (maitenance) •Interaction with customers -> retention. •Strong brand identity -> sustainable advantage. •Value proposition and credibility -> brand customer relationship. •Brand-as-person -> selfexpressive benefits -> stronger brand. •Awareness of competitive factors -> strong brand identity. •Effective identity communication -> retention of customers. The loyalty focus; •Customer commitment = ultimate goal in marketing. •Strong relationships -> loyalty (committed customers) -> less sensitive to price. •Initial attractiveness is important to form a relationship. •Relational proneness = loyalty. •Associated products -> customer loyalty. ? Through the theoretical chapter it was observed that all three main authors put emphasis on creating a brand-customer relationship which they all argued could create retention or brand loyalty. Aaker states that brand-customer relationships can be attained through a strong brand identity communication with an effective value proposition that drives purchase decisions. The brand-as-person notion as an extended Page 26 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication identity creates self-expressive benefits for the customer thereby contributing to a brand-customer relationship. Aaker also states that through customer and competitor analysis a brand can differentiate themselves from competitors while creating a brandcustomer relationship. Fournier states that the brand-as-partner notion would lead to a customer-brand relationship that would contribute to maintaining the relationship bond. She also argues that a strong relationship bond can lead the consumer to devaluate alternative products from competitors. Trustworthiness and dependability were argued to be partner qualities that can sustain relationships. Grönroos states that the uppermost goal of relationship marketing is to create customer commitment and that building a strong relationship can lead to achieved economic goals. The customer is the focal point, Grönroos argues and has a long term client orientation. Through the above mentioned theory observers will note that there seems to be a tendency to move away from transactional marketing and traditional branding. There truly appears to be a shift in the branding paradigm, a shift that resembles a Japanese business style and mentality rather than a European or American one. Chung et al state in their research, that “long term orientation is expected in every relationship in Japan as a socially institutionalized norm” (56) which can be related to the brand-customer relationship focus held by the main authors used in this thesis. Kapferer’s cultural focus in his Brand Identity Prism is determined as “the core of the brand” (101) and can create relationships and reassurance for the customers (102). In terms of branding culture he argues that; “Apple was the product of Californian culture in the sense that this state will forever symbolize the new frontier. Apple was not interested in expanding geographically but in changing society … Even in the absence of Apple’s founders, everything carried on as if Apple had still had some revolutionary plan to offer to companies and humankind. This fruit symbol is a source of inspiration which is manifested not only in Apple’s original products and services, but also in its way of communicating” (Kapferer 101). Douglas Holt agrees with Kapferer’s notion about the importance of culture and argues strongly about including a consideration of the company’s culture into branding. “A brand becomes an economic asset for the firm when people come to count on the brand Page 27 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication to contribute to social life, when it is embedded in society or culture” (Holt 300). This interestingly enough seems to interrelate with the relationship focus held by the theorist used in this thesis. If this thought, that branding resembles Japanese culture, is valid, it is also relevant to discuss how this relates to the fact that the Japanese culture puts great emphasis on long-term profit and increased market share (Lewis 5). Since it has been established that there seems to be a culture shift in the way companies needs to brand themselves, it is interesting to discuss how all of this relates to sales since a company cannot survive on relationships alone. The Smartphone market is dynamic and highly competitive according to the latest statistics from Euromonitor (App 16) and in order to survive a company must be profitable. Douglas B. Holt argues that “branding is a core activity in capitalism” (300) and in 1970 Milton Friedman stated, in an article in the New York Times, that the social responsibility of business is to increase profits (Friedman, The, 1979). In 2002, in a revised edition of his 1962 book called Capitalism and Freedom, he stated that the business of business is business (Friedman, Capitalism, 2002). This can be related to branding and marketing initiatives because, in spite of the above mentioned tendencies to form relationships with customers, a company still needs to survive, they still need to make a profit which is recognized by Holt (300-12). In relation to the Apple brand and the theories used in this thesis, it is interesting to discuss how retention of consumers can lead to an increase in sales, since, at the end of the day, this is the bottom line. If retention is attained through brandcustomer relationships and the Japanese culture hypothesis is valid, this automatically means that by building long-term relationships in interrelation with the brand and the customers, economic gains will be increased. The value in retaining customers lies, not only in the increase in sales, but also in terms of increased profitability. Amortization of sales and marketing costs is likely to happen when having a longer customer lifetime (Payne 56). Customers that already engage in a relationship with a brand does not need any marketing efforts to be convinced about a new product, hence the company saves money which might have a huge impact on Apple and all other brands. The intentions of the video which was analyzed in the previous chapter can only be based on assumptions and interpretation in relation to the hermeneutic method. Obviously, Apple is communicating to their customers, but a pressing discussion is whether these customers are the current customers or new customers, hence is Apple Page 28 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication trying to attract or retain customers? Apple is doing well and their revenue is higher than ever, according to their annual report (App 5). Each time they launch a new product a massive hype is created. This thesis therefore argues that Apple is retaining their customers through the video, and because this specific video promotes a new feature that the Iphone 3 did not have, it is argued that it is targeted at the current customers and hence promoting a wish to retain their customers. Other videos, however, promotes all the features of the Iphone 4, which is why they are considered as videos made to attract new customers. Apple has made five videos that all start with “If you don’t have an Iphone, you don’t have … “ (App 7) and these videos are considered to target new potential customers. Grönroos states that retention of customers also can be re-sale of the entire brand portfolio (In, 9). This means that the retention hypothesis is even more valid since the “Under the Covers” video might also attract customers who may not have the Iphone 3, but other Apple products, such as the MacBook laptop. Luckily this video probably has a positive side effect for Apple because it could also potentially attract new customers as well. Aaker determines that the reason why Apple is a successful brand is because of “their flair for cool design, the encouragement of surrounding apps, the perfecting of the user experience, the credibility and visibility of Steve Jobs, the passionate customer base, the brand …. and the ability of Jobs to get the timing right (App 17). 4. Conclusion The observer will note that the Apple brand is doing a good job in retaining their customers and competitors are aspiring to be able to compete with Apple. Many Apple users feel a strong commitment towards the brand and repeatedly purchase other Apple products. Through theory it can be concluded that the main reason why Apple can retain their customers is their ability to create a brand-customer relationship. The contribution of David Aaker suggested that a strong brand identity communication and a value proposition that promotes self-expressive, emotional and functional benefits can create a brand-customer relationship which leads to customer retention for Apple (Building, 79). Through the contribution of Susan Fournier it can be concluded that the brand-aspartner notion suggests Apple to humanize the brand which leads to relationship durability, hence retention, according to her brand relationship quality model (Customers, 367). Specifically this means that Apple should interact with their Page 29 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication customers and be addressable in order to retain them. The contribution of Christian Grönroos leads to the conclusion that Apple should aspire to attain relational proneness which occurs when the customer of a brand has the highest commitment level. This means repeated purchase across the whole product portfolio, hence the customer is retained. Adrian Payne’s small contribution to this thesis determined that Apple can achieve customer retention by building barriers of convenience. The observer will note that Apple appears to have done most of the suggested things in order to retain their customers which gives them the ability to compete in the dynamic market of smartphones. It cannot be concluded to which degree retention affects their ability to compete in the dynamic market of smartphones, as this would need a concrete measurement of their customer base in relation to re-purchase of the brand portfolio (Payne 58). Through the discourse analysis of the “Under the Covers” video it was established that Apple is clearly communicating a wish to retain their current customers. The video puts strong emphasis on the partnership values which Fournier states as being important. The video is at the same time communicating a brand identity with a value proposition containing emotional and functional benefits for the consumer as stated by Aaker. Finally, the video portrays visual product cues which Grönroos argued would establish initial attractiveness which means that there is a correspondence with the video and what the theorists suggested could retain customers for Apple. Page 30 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication Works cited Books; Aaker, David A. Building strong brands. Simon & Schuster UK Ltd, 2002. Aaker, David A. and Joachimsthaler, Erich. Brand Leadership. The Free Press, 2000. Dietch, Betty Mattix. Reasoning and writing well. A rhetoric, research guide, reader and handbook. McGraw-Hill, 2006. Fowler, Ramsay H. and Aaron, Jane E. The little brown handbook. Pearson education, 2007. Friedman, Milton. Capitalism and Freedom. Chicago university press Ltd, 2002. Grönroos, Christian. In search of a new logic for marketing. –foundations of contemporary theory. John Wiley & Sons, Ltd, 2007. Kapferer, Jean-Noël. Strategic brand management. Creating and sustaining brand equity long term. Kogan Page Ltd, 1998. Kress, Gunther and Van Leeuwen, Theo. Reading images. The grammar of visual design. Routledge, 2006. Lewis, Richard D. Cross culture, The Lewis Model. Richard Lewis communications, 2000. Payne, Adrian. Advances in relationship marketing. Kogan Page Ltd, 1997. Pickton, David and Broderick. Integrated marketing communications. Pearson education limited, 2005. Articles and Journals; Burr, Vivien. Chapter: introduction what is social constructionism? In: An introduction to social constructionism: pp. 1-38, Rothledge 2001. Chung, Jae-Eun. Sternquist, Brenda and Chen, Zhengyi. Japanese retail-buyer-supplier relationships: does performance matter? Asia Pacific Journal of Marketing. Vol. 20. NO. 1, 2008. Page 31 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication Fournier, Susan. Consumers and their brands: Developing relationship theory in consumer research. Journal of consumer research. Vol. 24, March 1998. Fournier, Susan. Aaker, Jennifer and Brasel, Adam S. When good brands do bad. Journal of consumer research, Vol 31, No. 1, June 2004. Friedman, Milton. The social responsibility of business is to increase profits. New York Times magazine, September 13, 1970. Grönroos, Christian. From marketing mix to relationship marketing – towards a paradigm shift in marketing. MCB university press, 35/4, 1997. Holt, Douglas B. Toward a sociology of branding. Journal of consumer culture. Vol 6, NO 3, 2006. Palmer, Richard E. Chapter 7: Schleiermacher’s project of General Hermeneutics. In Hermeneutics, interpretation theory in Schleiermacher, Dilthey, Heidegger, and Gadamer. Northwestern university press, 1969. Sääksjärvi, Maria. Hellen, Katarina. Gummerus, Johanna and Grönroos, Christian. Love at first sight or a long term affair? Different relationship levels as predictors of customer commitment. Journal of relationship marketing, Vol. 6 (1), 2007. Page 32 of 33 Christina Holm Clausen BACHELOR IN LANGUAGE AN BUSINESS COMMUNICATION 05.05.2011 Degree in Marketing and Management Communication Appendices Page 33 of 33 Christina Holm Clausen