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The Apple of Jobs’ Eye: An Historical Look at the Link between Customer Orientation and Corporate Identity

Terry Beckman, Queen’s University, Kingston ON, CANADA Garth Harris, Queen’s University, Kingston ON, CANADA

When a firm has a strong customer orientation, it Marketing literature positively links a customer orientation essentially works at building strong relationships with its with corporate performance. However, it does not customers. While this is a route to success and profits for a elaborate on the mechanisms that allow a customer firm (Reinartz and Kumar 2000), it is only successful if a orientation to function effectively. Through a customer customer sees value in the relationship. It has been shown orientation a firm builds a relationship with the customer, that customers reciprocate, and build relationships with who in turn reciprocates through an identification process. companies and brands (Fournier 1998). However, in This means that the identity of a firm plays a significant forming a relationship with the firm, customers do this role in its customer orientation. This paper proposes that through an identification process; that is, they identify with customer orientation is directly influenced by corporate the firm or brand (e.g., Battacharya and Sen 2003; identity. When a firm’s identity influences its customer McAlexander and Schouten, Koening 2002, Algesheimer, orientation, firm performance will be positively impacted. Dholakia and Herrmann 2005), and see value in that An historical analysis shows three phases of Apple, Inc.’s corporate identity and relationship. While a customer life during which its identity influences customer orientation establishes a focus on customers, there are many orientation; then where Apple loses sight of its original different ways and directions that a customer focus can go. identity, and thus has an ineffective customer orientation; The identity of a firm gives it a long-term focus and then with the return of Steve Jobs, and the re-instatement of direction that contributes to its success; that focus and its original identity, Apple’s customer orientation is once direction could guide and influence the type of customer again potent and profitable. orientation of the firm. Thus, simply focusing on customers, with whatever the firm has to offer may be inadequate in meeting the needs of the customers. The firm’s identity, as Much of marketing thought in recent years has been seen by the customer, is a key consideration as the based on the notion that a market orientation is critical to customer’s identity and experience is enacted through the the overall success of a firm (e.g., Jaworski and Kohli identification with the firm. This suggests that while a 1993), and that there is a “substantial positive effect of a customer orientation is important, it will be most effective if market orientation on the profitability” of businesses it works through an identification process. (Narver and Slater 1990, 20). Kohli, Jaworski and Kumar However, one does not see the role of corporate (1993, 467) claimed that the market orientation “concept identity on customer orientation in the marketing literature. represents the foundation of high-quality marketing Thus this paper attempts to answer the question: How does practice.” Market orientation has been described as an corporate identity impact customer orientation and how do “organizational culture” (Narver and Slater 1990, 21), the two interact to impact firm performance? Answering this which expands marketing beyond just an organizational question will show the role that corporate identity plays in function, and suggests that it is an integral part of the entire customer orientation; that is, how does corporate identity organization (Kennedy, Goolsby and Arnold 2005). At the effect customer orientation? Additionally, answering this root of market orientation is meeting the needs of question will lead us to a better understanding of the firm customers, embedded as “customer orientation” (Lukas and performance implications when the corporate identity does Ferrell 2000; and Im and Workman 2004). That is, the not match the customer orientation focus. customer is the focal point of a market oriented firm; as In order to examine this question, this paper looks at such, much of the existing research indicates a positive link Apple, Inc. over its life. The first section of this paper is the to positive business performance directly from the customer conceptual integration of the customer orientation and orientation component of market orientation (e.g., corporate identity. Then the methodology is described, Deshpandé, Farley and Webster 1993). followed by an analysis of the historical data related to Apple. Next is a discussion of the results of the analysis. As

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with any research there are limitations to this study, Corporate Identity which are reviewed along with suggestions for future research. Closing off the paper is the conclusion section. Corporate identity is an answer to the question “who are we as an organization?” and is more broadly known as THEORETICAL DEVELOPMENT the “mental associations about the organization held by organizational members” (Brown et al. 2006, 4). Cheney This section provides an overview of the key terms to and Christensen (2001, 248) say that the primary reason for be looked at in more detail through the rest of this paper. answering this question is to “control … how the Giving an overview at this point allows for a more logical organization is commonly represented.” Albert and Whetten conceptual integration that guides the data analysis and (1985) maintain that the core organizational identity is what leads to the paper’s conclusions. Thus the salient points of is central, enduring and distinctive (CED) about the customer orientation, corporate identity and customer organization. As such, it is known and held by the senior identification are covered, followed by their integration. managers or leaders in an organization, and it is viewed as a “collective-level phenomenon” (Brown et al. 2006, 5). Market and Customer Orientation Albert and Whetten (1985) suggest that corporate identity is organizationally held, is a property of the organization and Customer orientation has been defined as: “the is first established when the company is formed (or very sufficient understanding of one’s target buyers to be able to shortly thereafter), by the original leaders or founders of the create superior value for them continuously” (Narver and company. Slater 1990, 21). Kohli and Jaworski (1990, 3) found that “a Having and knowing its identity allows a company to customer focus is the central element of a market put together a strong and effective strategy. In particular, a orientation.” Not only is customer orientation fundamental company draws on its identity to present an image, or in market orientation, it is central to the entire marketing images of itself to its various constituents – such as its concept (Webster 1988). The marketing literature contains customers. The identity provides a focus on which many references to the link between a customer orientation organizational members can concentrate and a point around and business success (e.g., Deshpandé, Farley and Webster which they can coordinate efforts. In turn, the image that the 1993; Narver, Slater and MacLachlan 2000). company derives from its identity and projects to Typically customer orientation is empirically analyzed constituents is what the constituents can identify with, and in the context of existing corporations, and is thought of in through that identification we see outcomes such as loyalty, terms of how well (or poorly) a firm operates in this regard. positive word of mouth, and increased sales (Battacharya However, if one thinks back to the roots and establishment and Sen 2003; Algesheimer, Dholakia and Herrmann 2005). of a firm, it is possible that the founders of the firm primarily had a customer orientation prior to start-up. That Integration of Customer Orientation and is, they had an understanding of a group of people – the Corporate Identity group that would be called “target customers” when the firm became operational. It could be argued that through the Key to this paper is the notion that there is an understanding of the people, and knowledge of the market, identification process that occurs between customers and a the founders recognized a gap, and they thought that by firm. Bhattacharya and Sen (2003) proposed that customers filling this gap they could create superior value for these would identify with a firm if they thought that its identity people. While it is certainly possible that some firms started was both similar to their own identity, and was distinctive. with different orientations (e.g., a product orientation), one Customers engage in this identification process to support could argue that many firms’ operations would not continue and supplement their own self-concept. Corporate identity – or even get started – if they did not recognize the needs of should be a key component in a customer building an their potential customers. Thus even prior to the formation experience and a relationship with a brand (Algesheimer, of, and perhaps the catalyst of the formation of the firm was Dholakia and Herrmann 2005). Thus, by managing its a customer orientation; and if the startup of a firm is driven identity to accomplish this, a firm can create superior value by a customer orientation, it is reasonable to assume that in for its customers (i.e., have a customer orientation). This the early stages of a firm’s life, it remains customer means however, that the customer orientation of the firm is oriented. directly guided and impacted by its identity through the At this point the founders have a vision for meeting the process of customer Identification. needs of its customers and guide the firm in this vision. This Corporate identity is established when the company is is supported by the Kennedy, Goolsby and Arnould (2003) formed by the original leaders or founders of the company. study that showed the importance of leadership in the If, as discussed previously, the formation of the company is implementation of a customer orientation. driven by the customer orientation of the founders, then it makes sense that the corporate identity is closely linked

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with that customer orientation. One could even see a In order to conduct the analysis of Apple, a variety of corporate identity stated in terms of how the firm would types of documents were collected, reviewed and analyzed. understand and create superior value for its customers. Information from 20 books - including five biographies on More specifically, the identity would direct how the Steve Jobs, autobiographies of Steve Wozniak, former customer orientation of the firm was to be realized, or Apple CEOs John Sculley and Gill Amelio, plus books from focused. Thus at the beginning of the firm’s life, one would other former key Apple employees and consultants – were see a high degree of overlap between corporate identity and reviewed. Hundreds of newspaper/magazine articles were customer orientation, and a strong influence of corporate also included in the analysis. Another set of key documents identity on customer orientation. With this close link were internal Apple documents archived at Stanford between the two concepts, it is not surprising that research University on the making of the Macintosh. These include has shown business success as a consequence of each of emails, reports on focus groups, memos, letters, videos, them. documentaries, press releases, promotional videos and Flowing from this integration of customer orientation strategic documents as well as archived interviews with key and corporate identity, one would expect that there would early Apple employees and consultants. The authors also be a strong relationship between the two concepts over time, collected and analyzed transcripts of all of Steve Job’s and that they would be closely synchronized. Thus as the MacExpo speeches from 1984 to 2007, five extensive identity of a firm shifts over time, the focus of its customer interviews with Steve Jobs conducted at various points over orientation would also shift. However, if customers have the last 30 years by history organizations and Business identified with the firm and its original identity, then the journalists, and all of Apple’s print and television ads over customer orientation guided by a different identity is likely its life. to be off the mark. Customers would not respond favourably With this plethora of evidence readily available that to this situation especially if they already have a strong covers the thirty years of Apple’s being, an in-depth identification with the firm, and it is possible that analysis was conducted which included cross-references performance would suffer. Thus, even though the literature between different sources and over time. In particular, the suggests that a customer orientation will lead to better use of multiple sources of data (e.g., from the founders, performance, one could see a situation where performance lower level employees of Apple, advertisements, industry would deteriorate in spite of a customer orientation. commentators) provides a balance so that the bias of one Therefore, this paper proposes that corporate identity source or another would not too heavily influence the moderates customer orientation. Customer orientation is findings. Additionally, the authors compared their own guided by the corporate identity, and it needs to match the interpretations of the information in an iterative process. identification of the customers with the firm. When there is Through this triangulation of data and interpretation, the a match, firm performance will improve, and when there is a validity of the findings was increased. mismatch, firm performance will suffer. As discussed above the research question to be answered is: how does corporate identity impact customer METHODOLOGY orientation and how do the two interact to impact firm performance? From this main question come several related In order to investigate the role corporate identity plays questions of interest. What is the corporate identity of within the customer orientation to performance relationship Apple over its life? What is the primary customer need that it is important to get data on the founding of a firm, and to Apple was meeting through its founding and existence? be able to track the operations of the firm over a period of How do the corporate identity and customer orientation time. This historical longitudinal perspective allows for the change over the thirty years? What is the impact of the examination of customer orientation, corporate identity and changes in corporate identity and customer orientation on firm performance, and how they interact. That is, how Apple’s performance? corporate identity impacts customer orientation and thus performance. APPLE, INC. The firm chosen for this analysis is Apple, Inc. Apple is particularly appropriate as the information on the formation For this analysis the history of Apple is split into three of it as well as almost every aspect of its existence is readily main Phases. On a timeline these are: Phase 1 – 1976-1985, available. Additionally, the founders are still alive and have Phase 2 – 1986-1997, and Phase 3 – 1997-today. The commented extensively on the founding and life of the reason for dividing the history of Apple into these three company. Apple has also been in existence for Phases centers around one of the key founders, Steve Jobs. approximately 30 years, so it has had time to experience Steve Jobs helped to found Apple, then after nine years, he both internal and external changes, and the link between left Apple, then ten years later he returned to Apple. As will customer orientation, corporate identity and performance be illustrated in the following analysis, Jobs was should be apparent. instrumental in Apple’s corporate identity and customer

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orientation, and the company’s performance runs checkbooks, keeping address lists and typing letters.” These parallel to his involvement in these aspects. values were echoed by early Apple employees too; “What we tried to do was make a useful machine that people could Phase One: 1976 – 1985 use without becoming computer jocks. We want it be a useful tool just by itself-- forget about it being a computer, The computer industry of the 1970s catered mainly to it's just something that does a job for you” (Bill Atkinson the hobbyists and “early adopters” who where willing to 1983 Apple Employee from 1978-1990 and inventor of take on the challenge of learning about computers. MacPaint as quoted in “Evolution of a Computer”). Products were introduced with little fanfare and marketing According to both Wozniak and Jobs, the original goal efforts were directed to the trade press and industry insiders of Apple was not primarily profit driven. “Our first (Moritz 1984). News reporters covering the industry at the computers were born not out of greed or ego but in the time recall, “product announcements were very techie; they revolutionary spirit of helping common people rise above focused on bits and bytes and the operating system… press the most powerful institutions” (Wozniak 1996, 48). At the releases were pretty unreadable…. It was just industry beginning, the two Steves were focused on not just meeting insiders; it wasn’t really consumer-focused” (Evelyn the needs of consumers but also merging those with Richards San Jose Mercury News Reporter (who covered technological advances of the future; not just any Apple in the 1980s) 2000). Into this environment stepped consumers, but the ones who wanted to use innovative the key founders of Apple, Steve Jobs and Steve Wozniak. technology to be part of their lifestyle to express their In creating Apple they recognized that there was a group of uniqueness and independence from corporate computing consumers that was looking for some way to tap into technology. The Steves recognized that there were people technology innovations. There was nothing available to the who wanted something special; Apple was founded around average, non-technical consumer to give them access to the that recognition and customer focus. power and productivity promised by the computer revolution. The two Steves understood this need, and could I obviously believed in listening to customers, but not see it being offered by anyone in the market. They also customers can’t tell you about the great thought that they could actually provide what these breakthrough that’s going to happen next year that consumers wanted – and not just provide a specific product; is going to change the whole industry. So you they felt they could create a company that would listen very carefully. But then you have to go and continuously provide superior value for these consumers. sort of stow away, you have to go hide away with Thus they along with Ronald Wayne (who later backed out) people who really understand the technology but created Apple, Inc. on April Fools Day 1976. also really care about the customers and dream up The early mandate of Apple was to address the needs of this next breakthrough. (Steve Job 1985, as quoted the non-techie consumer. One example of this appears in an by Lubenow and Rogers). internal memo dated September 23, 1981 in which Apple expresses this belief by saying. “One person one computer. From the date of incorporation in 1976, until 1985, We make a positive difference in society, as well as make a Apple was focused on merging their knowledge of profit. We have an obligation to make a difference. We are technology with and understanding of their customers. In a creative; we set the pace” (Linzmayer 2004, 82). Their goal 1980 corporate backgrounder given to journalists Apple was to set the pace by meeting the needs of customers The states that Jobs and Wozniak were focusing on “developing documents and memos of the early 1980s also focus on systems and software in direct response to customer “radical ease and learning”, “ease of use”, “One to One needs…. Apple personal computers were designed to grow relationship”, “personal control” and “meeting customer along with the needs of users…. Apple management needs” (Corporate Profile 1980 – “Apple Computer”; recognized the importance of fast response to their Macintosh Product Introduction Plan 1983; Press release customers' needs” Corporate Profile 1980 – “Apple “Apple Introduces Macintosh Advanced Personal Computer Computer”). From these quotes, it was apparent that Apple 1984). This was their vision at the beginning. It flowed from – from the Leaders to the employees saw themselves as a what Jobs and Wozniak perceived, and understood from company that provided a unique, innovative, technology their observation and analysis of their potential customers. driven customer experience for non-techies. “We wanted a personal computer and the computers on the The key products of this phase for Apple were the market were impractical for us to use. We needed a Apple II line (first personal computer) and the Macintosh Volkswagen. The VW owners have personal control of their line (first computer with graphical User Interface). On April car” (Jobs 1981, 8). Reflecting on his days at Apple Steve 17, 1977, the Apple II was introduced, and it took the Wozniak, stated in Newsweek (1996, 48) that back then computer industry by storm because it was the first Apple wanted to build computers that were “usable out of computer designed for the consumer market – the personal the box. Our vision was that people would find computers computer. “The Apple II peeled off the hardware layer. You useful at home, for "people things" like balancing didn't need to know about the hardware to use a computer.

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The next step was the transition from the Apple II to pursuit of perfectionism; a feeling that people could make a the Macintosh, which peeled off the computer-literacy layer, difference and drive the industry. The then Apple CEO if you will. In other words, you didn't have to be a hacker or John Sculley (1987, 165) in his book Odyssey recounts a a computer scientist to use one of these” (Jobs 1989, 3 as story from the early Mac days: quoted by Gendron). The Mac was Steve Jobs’ vision for the next computer Little details obsessed Steve. Time and time again, as a small appliance for the masses – an innovation of a the engineers would come back to him, saying they more humanistic kind. “Appliances deliver great utility, are couldn’t design a piece of plastic to conform to the easy to learn and master, increase productivity, take up less odd shape of the Macintosh computer case, which space and are priced for personal (as opposed to shared) Steve insisted had to be all one piece. Its use” (Macintosh Product Introduction Plan 1983). Many construction represented a manufacturing people had visited Xerox before Steve Jobs, and had seen breakthrough. Xerox’s graphical user interface. But when Jobs saw it he ‘Steve, we can’t do it. It’s too complex’ one of the began jumping around and shouting “Why aren’t you doing industrial design engineers told him. anything with this? This is the greatest thing! This is ‘I don’t buy that.’ He snapped. ‘If you can’t do it, revolutionary!” (Linzmayer 2004, 75). Steve Jobs later told I’ll find someone else who can’ the Rolling Stone Magazine (June 16 1994), “You could Eventually, it was done – but it took something argue about the number of years it would take, you could like 15 separate forming tools to make one piece of argue about who the winners and losers in the terms of injection moulding for the case.” companies in the industry might be, but I don’t think rational people could argue that every computer wouldn’t This illustrates how passionate Jobs was about work this way someday” (Goodell 1994, 78). This illustrates providing value to the customer. The Macintosh how Jobs was customer oriented – even to the extent of Introduction Plan (1983) called for one box where you anticipating future customer needs. Also this customer could take it out, plug it and play with it right-a-way so that orientation was guided by Apple’s identity of providing a it fit on your desk and into your life. Jobs wanted simplicity unique, innovative, technology driven consumer lifestyle and elegance. Despite the “expert” advice of his engineers, experience for non-techies. The result was the radical Jobs was not about to be satisfied with a Macintosh Macintosh – fondly referred to by many people as the computer that compromised on what the customers needed. “Mac”. That would be contrary to who Apple was, and if the Regis McKenna who worked as a consultant on the engineers did not understand how important that was to Macintosh project commented in 1991 that Apple marketers Apple’s identity and to its customers, then he would find in the 1980s loved to say that Mac offers radical “ease of engineers who did. use”. The Macintosh Introduction Plan (1983) identifies However, Jobs knew he could not compete with IBM in Apple as a “marketing driven” company and speaks of terms of features and benefits listed on charts and “Radical ease of learn and ease of use” with the key specification sheets – these were the blue behemoth’s message being that, “Macintosh fits. On your desk and in strengths in which they had decades of experience and your life.” success. “The only chance we have of communicating is According to the Mac product design team member with a feeling…. we say, it’s a cult, and then we say, hey Terry Oyama, “even though Steve didn’t draw any of the drink this Kool-Aid…we want to create an image people lines, his ideas and inspiration made the design what it is. will never forget. We’ve got to build it and we’ve got to To be honest, we didn’t know what it meant for a computer build it early” (Jobs quoted by Moritz 1984, 115). Jobs to be “friendly until Steve told us” (Cruikshank 2006, 30). recognized that a cult was all about uniqueness, being This statement by Oyama provides a hint of what would different and special. So he set out to create a cult of Apple. happen when Jobs left Apple a few years later. It was Jobs He did this in a number of ways. The Macintosh who knew what the customer wanted; it was Jobs who knew Introduction Plan (1983) called on Apple to capture the who Apple was; it was Jobs who provided the interpretation “hearts and minds” of the customer. The strategy was to of customer needs and Apple’s corporate identity to the make the Mac so unique and innovative that customers employees. “You have to go hide away with people who would be romanced into using it (McKenna 1991). really understand the technology but also really care about There were a number of strategies to do this. The first the customers and dream up this next breakthrough, “ (Steve line of the Apple product development plan was: “print the Job 1985, as quoted by Lubenow and Rogers). It was Jobs T-shirts”. Strange as it seems, the first line was not about who linked the customer’s needs with Apple’s Identity as, product specifications or design; it was about something technology driven consumer lifestyle. As long as Jobs was that would help build a visible community around the Mac – there, Apple was well grounded, and the link between that is, an experience and identity which the Mac would customer orientation and corporate identity was facilitate. Second, Jobs’ strong sense of aesthetic design synchroSteve Jobs instilled in the company a relentless helped to differentiate the Macintosh. This met the need for

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uniqueness of Apple’s customers. Third, Apple defined This is not the way we want computers to go. This the Macintosh as an “advanced personal productivity tool is not the legacy we want to leave. This is not what for knowledge workers”. Guy Kawasaki (1990 p.78) we want our kids to be learning. This is wrong and (former Apple employee who worked with distributors) saw we are going to show you the right way to do it and the benefits in that definition: here it is. It's called Macintosh and it is so much better. It's going to beat you and you're going to do Knowledge workers delineated the target market it (Steve Jobs as quoted by Morrow 1995, 14). for Macintosh. Frankly, the phrase is marketing malarkey, but it worked because it made people Jobs felt that Apple stood for the individual, not Big feel like part of a small elite group. The phrase Brother. Jobs had tapped into the desires of consumers who caused people to align themselves to Apple’s were striving for something different. They did not what be marketing and they persuaded themselves to buy slaves to the technology (like the skinheads in the Macintoshes. After all, who would want to be an commercial) but have technology enhance their life ‘ignorance worker’? It is easier for the market to experience. He was able to orient Apple to these align itself than for you to do it. consumers, and shout to the world “This is who we are! Come join us!” And the people did just that; they bought the Labelling the community as knowledge workers Macintosh, and they bought into Apple (Belk and Tumbat facilitated an identification with Apple by its customers. 2005). They formed the cult of Apple – a brand community Along with that, the campaign for the Macintosh that wanted a life experience through unique, innovative emphasized stories/experiences of the engineering team (or technology and with which consumers strongly identified knowledge workers) that designed Apple. This made Apple with (Muniz and O’Guinn 2001). Apple succeeded: it grew a human company that built products that could be part of a in market share, and in 1983 it had $1 billion in sales, with consumer’s lifestyle experience and a company a non-techie $100 million in profits. could identify with. For Apple and Steve Jobs it was about In that success of Phase 1, though, the core values of the human experience and relationship with a revolutionary Apple were embodied in and held by Steve Jobs. He had product – superior value for their customers. the keys to Apple’s identity and showed them with their According to employees that worked at Apple in the hard work and sacrifice they would change the world and early years, Steve Jobs was incredibly difficult to work they were changing the world through a customer focus with, but at the same time he was very motivational. “Steve guided by Jobs’ vision of Apple’s identity. Jobs (1983 as had an incredible ability to rally people towards some quoted in “Evolution of a Computer”) said, “So we are common cause by painting an incredibly glorious cosmic gambling on our vision and we would rather do that than objective” (Lisa Hawkins Manager of Marketing, quoted in make me-too products. Let some other companies do that. The Journey Is the Reward , Young 1988, 187). Steve Jobs, For us it’s always been that dream.” But it was Jobs’ vision, “was the person who had the imagination and drive to and Jobs’ dream was the identity of Apple. As soon became translate dreams into profit…. He was the bridge between evident, without Steve Jobs, the vision and dream did not bottom line profit and top-of the mountain ideas… that seem to provide adequate guidance to Apple’s customer Apple always wanted to incorporate into their product line orientation. (Young 1998 p 7). Again it is apparent that the vision for Apple comes from Jobs. He guides, directs, motivates and inspires the company according to his view and perception of the identity of Apple. Job’s goal for Apple was to change the way the world Phase Two: 1986 – 1997 views computers, and as stated in an advertisement “welcoming” IBM in 1981, “change the way people work, In 1985 Steve Jobs left Apple. Whether he was forced think, learn, communicate, and spend their leisure hours.” out, or decided it was time to leave is still a matter of some Apple’s core values and spirit during this time period are debate. However, this signals the beginning of a new Phase exemplified by the famous ‘1984’ commercial in which an for Apple. Jobs was one of the original founders. It was his athletic young woman (representing Apple) threw a sledge understanding of the potential customers that led to the hammer at, and smashed, a movie theatre sized television formation of Apple. It was his vision and orientation to screen showing an Orwellian type face indoctrinating an those customers that formed the identity of Apple. It was the auditorium full of nearly identical, monochromatic people. identity of Apple that helped its customers to identify so closely with Apple, and to form a passionate, devoted and You saw the 1984 commercial. Macintosh was dedicated brand community. But was the complete basically this relatively small company in corporate identity of Apple truly understood by anyone Cupertino, California, taking on the goliath, IBM, other than Steve Jobs? That is, did the other members of and saying "Wait a minute, your way is wrong. Apple – in particular the senior managers – know the full

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and detailed identity of Apple? An analysis of what Newton and iMac) joined the company in 1992, he clearly Apple did after the departure of Jobs provides insight into saw that Apple had strayed from its original consumer this question. customer experience focused identity, “The company During this Phase Apple had three separate CEOs: John seemed to have lost what had once been a very clear sense Sculley (1983-1993), Michael Spindler (1993-1996) and of identity and purpose. Apple had started trying to Gil Amelio (1996-1997). When Steve Jobs left Apple, Jean compete to an agenda set by an industry that had never Louis Gassee became Head of New Products Division; he shared its goals” (Ive 2003). and CEO Sculley were determined to drive up Apple’s Sculley and Gassee thought that they were being margins, partly on the success of the Jobs inspired customer oriented with incremental innovations and Macintosh. Gassee didn’t subscribe to Job’s notion of considered Apple to be a computer company in a appliances styled (and priced) for the masses. Instead he technology industry (Sculley 1983, Deutschman 2000). But encouraged engineers to build more bells and whistles into the corporate customer that they were oriented towards, was the Mac. This actually demonstrates a shift from the original not the Apple customer of Phase 1, nor was it the customer target customers of Apple – i.e., the general consumer that had identified with Apple in Phase 1. The shift in target versus the corporate consumer. The general consumer was customer and identity brought Apple into head-to-head interested in the experience Apple could provide – through competition with IBM and Compaq – the powerhouses of innovative technology, whereas the corporate consumer the corporate world. But this competition was one that wanted a functional tool to perform specific tasks. Bells and Apple was not in a position to succeed at. whistles would increase Apple’s appeal to a corporate After Sculley and Gassee left, Michael Spindler (1993- audience, but they were not designed to provide a better 1996) became CEO and a new strategy was implemented experience for general consumers. with the company being focused on the mass market (Amelio 1998). Time-to-market was emphasized, What ruined Apple was values. John Sculley innovation was put through the screen of affordability, and ruined Apple and he ruined it by bringing a set of growing market share was seen as key. As a consequence values to the top of Apple which were corrupt, and Apple attempted to attack every product niche, and ended corrupted some of the top people who were there, up with a bewildering assortment of minutely different and paid themselves collectively tens of millions of models which led to consumer confusion (Linzmayer 2004). dollars and cared more about their own glory and Gil Amelio, an Apple Director under Spindler, believed that wealth than they did about what built Apple in the the mass-market strategy of Spindler was counter to Apple’s first place – which was making great computers for original identity “Michael’s team was applying a strategy people to use. They didn't care about that anymore. that makes sense in a commodity business, while the They cared about making a lot of money so they Macintosh still depends on a buyer understanding its had this wonderful thing that a lot of brilliant distinctive qualities.” (Amelio 1998, 4). The focus of people made called the Macintosh and they got innovation during Spindler’s reign was again on very greedy and instead of following the original functional/technology performance improvements with the trajectory of the original vision – which was to PowerPC chip and the PowerMac. The PowerMac was make this thing an appliance , to get this out there introduced in March 1994 and at the time, was the fastest to as many people as possible--they went for personal computer ever. However, before the end of 1994 profits and they made outlandish profits for about Wintel machines that out-performed PowerMacs, and cost four years (Steve Jobs as quoted by Morrow 1995, $1,000 less, arrived on the market. 12). Again, the consumer lifestyle experience guided customer orientation of the founders (Phase 1) was missing, By the end of Sculley’s term as CEO profits were on and the products at that time showed this problem. Apple decline back to around $100 million (the level when he seemed to be drifting without an identity, and without its came in) and Apple had moved away from the all-in-one identity, it did not even know who its customers were nor appliance design of Jobs and was trying to be the BMW of did the customers know who Apple was. computers. Sculley viewed Apple as a computer company in The advertising in this period also went away from the a technology industry. “Technology companies are only cool, daring and cutting edge, innovative commercials like superficially in the same category as consumer product “1984” to a Peforma (low end Mac) advertisement showing companies….. High tech could not be designed and sold as a grandfatherly type using his computer to “troll for babes” a consumer product (Sculley 1987 275). Sculley and online (Kelby 2002). Inconceivably most of the ads of this Gassee neglected Apple’s original identity of a technology period focused on the power of the computer (hence the consumer lifestyle experience company and went after the Performa name) and rarely showed products being used and corporate customer; they milked the cash cow of the experienced, which logically would have been a user- Macintosh with incremental functional innovations. When friendly computer’s strong suit. industrial designer Jonathan Ive (designer of the iPod,

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Sculley-Spindler had focused on incremental most mangers, design their own versions. Everyone innovations for corporate customers and then the mass pursues his or her own goals rowing frantically, but market and had gotten away from the Apple core identity of each pulling in a different direction (Amelio 1998, a company that sets the pace and provides a unique, 25). technology driven, consumer lifestyle experience. Market share had peaked in 1992 at 12 percent, but by 1996 it was According to Amelio, Apple’s customers felt lost and down to 5 percent and Apple had a billion-dollar write-off did not know the business direction of Apple. In fact many of all those niche market low-end computers that nobody of Apple customers during Phase 2 no longer identified with bought (Cruikshank 2006). Under Spindler’s 3 years of the company and felt abandoned (Belk and Tumbat 2005). leadership Apple lost $200 million – but that was only the Amelio put a committee together to develop a coherent beginning of a downward spiral for the company. strategy but the members of the committee were unable to It was during this time that one can see that nobody in maintain a clear idea of what Apple should focus on Apple’s senior management team knew what their identity (Amelio 1998). Through a series of CEO’s, Apple’s identity was. According to Amelio who became CEO in 1996 he seemed to get lost, and instead of setting the agenda and wanted to get a handle on how well Apple’s senior pace, they were running around in many different directions managers understood the company’s strategy and direction. trying to catch up. Steve Job’s original dream of a user- There was no coherent answer. “People in manufacturing friendly appliance for the masses was gone. That is, the focused on lowering costs and achieving shorter production guidance for his original customer orientation for a specific cycle times. In R&D many of the projects were not customer need of a lifestyle experience was forgotten, and synchronized into a product road map nor related to any the awareness of who Apple was had become fragmented direction the company might take” (Amelio 1998, 66). As a and confused for both the customer and Apple. The result, they had also lost sight of who their true customers resultant performance difficulties show of a customer were. They thought they were being customer oriented, but orientation without a strong guiding corporate identity. that perception only came about as they did not have a clear notion of what Apple’s corporate identity was. As a result Phase Three: 1997 – Today they tried to be all things to all people – not just to their core customers. With Apple in serious trouble – essentially on the brink When Gil Amelio (1996-1997) came in the damage to of bankruptcy, Steve Jobs returned. It did not take long for Apple had already been done. During his 500 days at Apple, Jobs to reinstate the corporate identity and the matching Apple lost $1.6 billion, which wiped out the profits from customer orientation that had been in place in Phase 1. 1991 to 1996. What he observed was a company with a Steve Jobs returned to Apple as CEO on July 7 th 1997 and product line so fragmented that it was completely the first thing he did was realize, unfocused. Amelio (1998, 70) concluded that Apple employees “live only in the present and are so wrapped up Lots of companies have tons of great engineers in the present, so totally engrossed in fighting today’s and smart people. But ultimately, there needs to be battles, that they live unaware of the past and the future. All some gravitational force that pulls it all together. today, no yesterday, no tomorrow.” Apple was in full Otherwise, you can get great pieces of technology survival mode and only had enough cash for 100 days. all floating around the universe. But it doesn't add According to Amelio, Apple had forgotten what had made up to much. That's what was missing at Apple for them successful in the first place, which was design and a while. There were bits and pieces of interesting consumer experience . There was a “serious lack of things floating around, but not that gravitational understanding of how the company made its profit” (Ameilo pull. (Steve Jobs 2004 as quoted by Burrows) 1998, 66). Engineers, “were so tuned in to performance, features, operating systems and speed” (Amelio 1998, 135) That gravitational pull was the corporate identity, lived that they neglected to ensure that it should all add up to a through Steve Jobs and embodied by him. It was all about a consumer lifestyle experience (the identity of Phase 1). customer lifestyle experience augmented by technology. To Amelio concluded that the primary reason for this was reinstate Apple’s original identity he needed to get the because: company focused again on its core values of bringing “very high technology to mere mortals in a way that surprises and Apple had no clear corporate strategy, no delights them and that they can figure out how to use it” statement of direction that could be used as a basis (Steve Jobs 2005 as quoted by Schlender, 74). In Apple’s of deciding which businesses the company should case a successful customer orientation results from it being be in and which not, which markets we should be in sync with its original identity; one that both employees pursuing and which ignoring. Apparently, Apple and customers have come to expect and religiously identify had never had an official statement of strategy – with (Belk and Tumbat 2005). According to Jobs (1989 which inevitably means that every executive and Inc), “really great products come from melding two points

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of view -- the technology point of view and the say what Apple is about (a consumer experience) and can customer point of view. You need both.” According to form that emotional attachment and identification that Apple designer Jonathan Ive (2003) “By re-establishing the drives the success of the company and its customers core values he [Steve Jobs] had established at the The CEOs of phase 2 did not understand the beginning, Apple again pursued a direction which was clear importance of identity and identification in enhancing the and different from other companies’.” Jobs wanted Apple customer orientation to performance link. According to and its customers to remember who they were. They were Wozniak (2006, 299) Apple is again a success because, “It artists creating and living an experience. turned around in a way so in line with our early values. Those values were about excellence in product design - so When I got back here, Apple had forgotten who excellent that people would drool over the idea of a having we were. Remember that "Think Different" ad that product. Those values were about an emotional feeling campaign we ran [featuring great innovators from - a feeling of fun. “ By getting back to its core values and Einstein to Muhammad Ali to Gandhi]. It was identity Apple has fostered an identification by its certainly for customers to some degree, but it was customers. This identification goes deeper then just the even more for Apple itself. You can tell a lot products its an emotional attachment that is embodied by about a person by who his or her heroes are. That Jobs and drives the success of its customer orientation and ad was to remind us of who our heroes are and financial performance. This has returned Apple to financial who we are. We forgot that for a while. health, earning a combined $3.2 billion in profit over the Companies sometimes forget who they are. last two years. Sometimes they remember again, and sometimes they don't (Steve Jobs 2004 as quoted by DISCUSSION Burrows). In analyzing the history of Apple, in particular with a The renewed focus on the consumer experience at view of Apple’s customer orientation and corporate identity, Apple led them and Jobs back to the original vision of an several key findings emerge. First, it is apparent that the appliance all-in-one computer for the masses: the iMac. customer orientation and corporate identity fluctuate quite The iMac was meant for consumers that were not computer dramatically across the three Phases of Apple’s history. In savvy and needed a way to surf the Internet. But they did Phase 1, Apple produced technologically innovative, not fit the mold of the coropate and technical consumers lifestyle experiences for their customers – through products who wanted flexibility and expandability. The iMac was like the Apple II and the Macintosh. Steve Jobs recognized the computer for the rest of us. According to Steve Jobs, that average people were not “computer geeks”, and were Apple designed the iMac to “deliver the things consumers not comfortable with seemingly complex technology. He care about most – the excitement of the Internet and the understood that there was value in technology for simplicity of the Mac” (iMac introduction in Cupertino, consumers, but only if the technology could be oriented to Calif., 1998). Within the first six-weeks Apple sold a total their non-technical lives and enhanced their life experience.. of 278,000 iMacs, making it the fastest selling Macintosh As Jobs understood the customers, he built a company that model ever and 30% of those buyers had never owned a was all about meeting the needs of those customers through computer before (Linzmayer 2004). bringing previously inaccessible technology to consumers in The iPod is another example of how Apple returned to a easy to use manner. That was who Apple was – a company its core values of producing innovative solutions to that facilitated an innovative, technology driven experience customer problems and in so doing providing a consumer for the consumer. Consumers identified with this identity experience which consumers can identify with. Mp3 and bought into the Apple vision. The corporate identity of players on the market prior to the iPod were seen as slow, Apple was a key component for the customers and helped to clunky and had limited capacity (Linzmayer 2004). But the provide superior value for its customers. The corporate 6.5 ounce iPod changed all that with seamless and elegant identity through Phase 1 enhanced Apple’s customer design. According to Wozniak (2006, 297) a company like orientation and as a result, Apple became a successful Apple, “Largely depends on strong passions and company. However, it seemed that only Steve Jobs commitment of its customers. Steve (Jobs) was able to stand understood the key components of the corporate identity up there on a stage (with the Ipod) and talk about Apple and and customer orientation. It was Jobs who kept Apple on really restore the loyalty that people had all along…to get track during Phase 1. people excited again. The iPod family of products Phase 2 was characterized by a grasping for product dominates the Mp3-player market; and importantly, the ideas and identity by Apple. Sculley saw Apple as a trademark “Apple combination of Zen-garden austerity and technological company in the non-consumer products cutting-edge tech swagger … stirs the soul and opens the computer industry.. Spindler saw Apple as a mass-market wallets of cool-seekers and gadget freaks” (Levy 2005, 58). company and focused on the corporate customer with Employees and the cult of customers can now once again incremental innovations on functional performance. Apple’s

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phase 2 leaders did not know that they were the multiple firms. Additionally, it be would useful at this stage company that provided a technology lifestyle experience for to use a more rigorous tracking method to compare consumers. They had also lost sight of who their target corporate identity and customer orientation with financial customers were and what their needs were.. By abandoning performance. This would facilitate the expansion of this their true core customers, these customers were unable to work to multiple firms. identify with Apple and enhance their consumer lifestyle experience. These customers no longer knew the identity of CONCLUSION Apple and therefore could no longer receive superior value from Apple’s customer orientation. Not only did Apple, end Within the marketing literature the customer orientation up competing for a corporate customer that did not identify concept holds a position of high importance. In the with them, but they lost their core life style experience organizational strategy literature, corporate identity also customer as well. The resultant performance difficulties holds a position of importance. This paper proposed that a show the devastating impact of a customer orientation customer orientation needs to be guided by a corporate without a strong guiding corporate identity. It seems that identity because corporate identity is a key component in a almost in desperation, and possibly with a recognition of his customer building an experience and a relationship with a insights, Steve Jobs was asked back. firm through identification . Thus, by managing its identity The return of Jobs signaled the beginning of Phase 3. It to accomplish this, a firm can create superior value for its is apparent from the change in direction of Apple that Jobs customers (i.e., have a customer orientation). This means brought something with him. While it could be argued that that the customer orientation of the firm is directly guided he was simply a good leader, there are a number of and impacted by its identity and as a result a firm’s instances where his leadership style is harshly criticized. performance would also be positively impacted. To examine Certainly it is a point that could be debated. But with this proposition, an historical analysis of Apple, Inc. was certainty, he brought back his understanding of the conducted. The three Phases of Apple’s life shows that customers, and how Apple was supposed to meet the needs when Apple has fostered an identity that allows customers of those customers. He stripped out the products that were to identify themselves with Apple and also guide its not providing an experience for the consumers, and then customer orientation it has superior Financial performance. helped to drive the introduction of new products that When the CEOs of Phase 2 failed to recognize and support became part of consumers’ lives and lifestyles: the iMac Apple’s identity, customers were unable to identify with and the iPod. Once again, Apple was a company that Apple and Apple’s financial performance suffered. facilitated an experience for consumers – an innovative Therefore, this paper has provided initial support for technology experience. Jobs was able to focus the company the idea that customer orientation is influenced by corporate on the identity that he knew so well, which in turn enabled identity, and it needs to match the identification of the Apple customers to once again form an identification with customers with the firm’s identity. This contributes to the Apple and enhance Apple’s ability to provide superior customer orientation literature, and by association, the customer value through its customer orientation. market orientation literature, plus it contributes to the Customer orientation is influenced by corporate corporate identity literature. Although the existing literature identity, and it needs to match the identification of the from marketing and organizational strategy do not explicitly customers with the firm. When there is a match, firm link corporate identity to customer orientation, the findings performance will improve, and when there is a mismatch, of this exploratory study show support for this linkage. As firm performance will suffer. suggested in the paper, further studies can expand these findings, and perhaps contribute to the alignment of the LIMITATIONS AND FUTURE RESEARCH market and organizational strategy disciplines.

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