This topic was broight to my mind by Paul Colligan and Alex Mandossian of Marketing Online Live, two guys that have a Podcast related to their Marketing Online magazine.
iPods aside, ask anyone in the business or marketing world, 'What business is McDonald's in?', and they will reply, 'Real Estate'. Most people will say, 'I thought they sold hamburgers and plastic toys and... fruit.' Oh no, my unknowing friend, think about it:
- Franchise owners will buy more land than they need, and sell the remainder to other businesses like mini malls. The street corner grows up around the McDonald's
- McDonald's owns more land than Disney. For kids from Florida, that means something.
- Much like a realtor will sign up with a national firm like Watson, an entrepeneur will spend millions of dollars just for the right to use the name of McDonald's.
All that other stuff is mostly there to intice you, the consumer, to want to go to the real-estate and spend your money, and come back to it many times, because you trust the product. You can get the product anywhere—a hamburger, a spongebob toy, a playground, and a clean place to sit. You want the product, but you are investing your time in that piece of real estate.
Now, let's take the iPod. What are Apple and Steve Jobs really selling here? Music? Digital freedom? Podcasts? Photos? No way. If you haven't noticed, when you buy a new iPod, it is empty. You have to buy the content, or rip it yourself. Without good content, your iPod is worth nothing. However, you paid $300, bitch. Why?
You're buying a brand. A brand that is so damn exiting that HP didn't even bother to make their own, they freakin' re-sell Apple's! The thing doesn't even play video! WHY? Because they have got your loyalty. They are McDonald's. Not only do they control your real-estate and your brand loyalty, they also control the means of distrobution.
The smartest thing they ever did was give me something for free. Every week, the iTunes music store gives away two or more songs. In order to download these songs, I have to sit my butt in the seat, open their application, go to their music store (which I can only open from their application), and download the free songs. Now, I don't exactly have to walk in the front door, because I can link to it directly from outside the application, but I am already there. They've got me. And you know what? The songs you buy on iTunes can only be played on an iPod. That means you need to visit their real-estate to use their product.
The same can be said of McDonald's. The only place to get a happy meal is underneath the Golden Arches.
I would love to hear your thoughts on this. There is a handy comment form below.