How High Will Apple’s Stock Go? Dr. Dan-o in Yahoo Finance

Hola Todos!

A journalist asked me the other day about Apple’s rising stock price and why are buyers willing to pay such a high price for Apple’s stock. The article was post on Yahoo Finance yesterday (click here).  To put it into perspective, since February 14th when Apple CEO Tim Cook came to New York City to speak at the Golman Sachs Technology Conference (click here), Apple’s stock is up over 22%, has hit 27 new highs in 31 trading days, gained nearly $110 in the 31 trading days and its market cap has grown by more than $104 billion (click here).  What’s amazing is that $104 billion is equivalent to approximately one Amazon in market cap. WOW!

My full comments to the journalist are below including Dr. Dan-o “isms” such as “you price what the market will bear” and “consumer’s are voting with their lets.”

 

Best regards

Dr. Dan-o

 

 

 

My name is Daniel M. Ladik and I am as Associate Professor of Marketing in the Stillman School of Business at Seton Hall University.  Your request was forwarded to me as my main areas of teaching and research expertise include marketing strategy and social media/Web 2.0, as well as, personal selling and sales management.  I blog at www.dignuggetville.com.  I am also an Apple aficionado – see previous Apple comments in Forbes Magazine (click here).

When I read your request, two thoughts popped into my head.  First, the most fundamental axiom in marketing theory when it comes to pricing is “You price where the market will bear.” In other words, one should set the price of a product or service at the price where the buyers believe the deal is worth taking.  Toyota does a good job in this area with their Prius cars while GM did not with their comparable Volt car that recently halted production because too many Volts are sitting on dealership lots. The Volt should be a $25,000 car (after the $7,500 government incentive).

Second, and not independent of the first, competition of comparable products have a major impact on price.  That said, for the months of October, November and December 2011, Apple sold 15 million iPads that accounted for 9.15 billion dollars or 20% of Apple’s revenue for the quarter.  The closest competitor, Amazon’s Kindle Fire priced $300 cheaper, sold less than 4 million units during this same time period. Even at $300 more, the iPad is a superior product in every way, shape or form than anything on the market.  By the way, the iPad also outsold more expensive PCs as HP, Dell, Acer nor Lenovo sold more units that iPad for the same three months.

Until competition can come close to the value equation (i.e., you get what you pay for) that iPad offers, Apple can command that premium price. You have to understand, what Apple pays to get the product made and how much margin per unit Apple earns is not relevant to consumers, just analysts. Consumers “vote” with their wallets and it does not appear price is hindering Apple in any way.  By the way, iPad 2 was already significantly better than any other tablet on the market and it is now $100 cheaper.  This was a smart move by Apple as it protects them even more from competition from below.

On a final note, pre-orders for the “new” iPad sold out worldwide in 2 days.  Apple can justify the prices of their products because the market believes they are worth every penny.

If there are any questions or clarifications on any of the thoughts above, please call my cell this afternoon or send me an email.

 

Best regards,

Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

daniel.ladik@shu.edu

 

Social Media Marketing Research – Netnography

Hola Todos!

We all know that social media provides an excellent means for intelligence gathering on customers and competitors.  One excellent ethnographic research method called Netnography was developed by Robert Kozinets, Ph.D., Chair of the Schulich Marketing Department of York University (click here for Professor Kozinets’ bio).

 

A recent post on the Netnography LinkedIn group posted a great video (click here)  on the method by one of Professor Kozinets’ students.  I also found a short video (click here) by a blogger asking Professor Kozinets’ about the strategic uses of Netnography.

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

“New” iPad – iPad HD – iPad 3: Could Something else be in the Pipeline?

Hola Todos!

The other day, I received the following email from a former Seton Hall MBA student Justin Hull asking about the branding of the “new” iPad.  Justin emailed:

 

“Hey Professor! I’m enjoying the blog, thanks for sending.

Question for you.  I was driving in this morning and heard something on the news about the “iPad 3” which made me think, candidly, that Apple maybe didn’t do as good a job branding this version as with the original and the iPad 2.  I’m still confused!  I think it’s the “New iPad” but there’s a lot of reference to the iPad 3 so what’s next, the iPad 3 or the iPad 4?  Maybe there could have been more clarity from Apple.

Thought you might have some good insight – Justin Hull”

 

Thanks for the nice note Justin and to be honest, I am a little surprised by the lack of clarity by Apple myself.  Apple never does anything on a whim as their maneuvers are planned out well in advance.  Without question, the “lack of clarity” on the branding was one of the most talked about issues the day of the launch of the “new” iPad.

Here’s a few thoughts: (1) perhaps Apple is reverting back to their past branding conventions.  We’re on the 2nd or 3rd version of the MacBook Air and it’s always been called the MacBook Air.  When the iPod first came out, later updates were just called iPod.  (2) The branding convention changed for iPod, however, when new versions arrived such as the Mini, Nano, Touch, etc arrived.  Could we be seeing a different iPad model in the near future (e.g., less than 12 months?)

I have been ranting in class all semester that Apple needs to have an iPad Lite or iPad mini or iPad cheap.  Not only do they need to protect themselves from the lower end of the market such as the Amazon Fire, but also – if Apple is serious about their digital textbook initiative (and we know they are), the cash-strapped school systems and their respective financially challenged parents’ need a lower-end iPad to use for those digital textbook.

Yes I was happy to see iPad 2 stick around at $100 less than previously but at the same time, Apple traditional expands their product lines (both lower and high price points) around the three-year mark as they did with iPod. They did it with iPhone and we now have 3GS (free with a 2 year contract), iPhone ($99 with a 2 year contract), and iPhone 4S ($199 with a 2 year contract).

Finally, Apple is on a two-year major update cycle with both iPhone and iPad with an evolutionary step in between.  That said, iPhone 4S was an evolutionary step and the “new” iPad was an evolutionary step.  If Apple stays to convention (which I believe they will do), we will see a revolutionary new iPhone this year sometime around September with it going on sale in October.  At the same time, we should also see a revolutionary new iPad or iPads) in March 2013.

The most logical response for Apple confusing us now is they are setting us up for what’s coming in the future.

Thanks again for the interest in dignuggetville.com – keep the questions rolling in…

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

Leadership – Steve Jobs says, “You can’t connect the dots looking forward”

Hola Todos!

I’ve been reading (and listening) to a lot of Steve Jobs over the past few weeks and the following quote from Mr. Jobs was spot on:

“Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”

I get a lot of questions from students about planning for their future career and the students are looking for “the answer” – an expectation to exactly what their future will be.  That answer doesn’t exist – we do not have crystal balls and can predict the future.

I always say, make a plan that you feel makes the most sense, given one’s strengths and weakness, and most importantly one that you are passionate about. Then you adjust as you go along given what you learned along the way.  A BHAG (big-hairy-audacious-goal) here and there never hurts either.

Go forward, just do, make adjustments, plan forward to the best of your ability and I bet the dots will connect looking backward.  Just have faith that they will going forward.

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

“New” iPad Takes 5% of all iPad Traffic – Dr. Dan-o on Forbes.com

Hola Todos!

In interesting report was published on Forbes.com yesterday detailing that in the first 48 hours of its sale, the new iPad consisted of 4.6% of all iPad traffic in the US. Data for this article was provided by Chitika and I was quoted in the post (click here).

“Daniel M. Ladik, associate professor of Marketing at Seton Hall University for example, says there are differences between this event and previous Apple launches. “The launch was preceded by 9 days of pre-orders that Apple had described as “off the charts” while iPad 2 had no pre-orders.” Also, he said the new iPad went on sale at 8 a.m., as opposed to 5 p.m. the day before launch for the iPad 2.”

What I find interesting about the flurry of iPad numbers that were released yesterday was it totally contradicted the blogoshpere chatter over the weekend.  Some of the “talking heads” were flat out wrong as a few stories were floating around that Friday was not the usual “Apple Zealot Mania” which than was erroneously translated to “iPad sales disappoint.”

However, the data tells another story.  First, in the Apple conference call Monday morning (click here) announcing its first dividend since 1995, Gene Munster of Piper Jaffray asked:

Munster: Any color on iPad?

Cook: Record weekend, and we’re thrilled with it.

Then we found out about later on Monday that AT&T set an iPad record (click here) and then, Apple made it official with their own press release (click here).

The reasoning for “the talking heads” being wrong is simple.  Apple’s hype machine was more low-key than those in the past.  Besides the 9 days of pre-orders that would reduce the hype, new iPad also went on sale at 8 a.m., as opposed to the later (as well as – longer line creation as people stood outside all day) of a 5 p.m. launch for the iPad 2.  Moreover, Apple released the new iPad in more the 2-dozen counties at the same time.  Every few Apple zealots needed to fly into NYC or elsewhere to get their hands on their new favorite device.

If anyone was still wondering, there is no question now – Tim Cook and his personality is firmly in control at Apple.

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

Is Google+ “Killing” Google?

Hola Todos!

I guess last week was the week of weeks to throw a venomous rant at a former employer.  First, there was an ex-Goldman Sachs employee who posted his corporate venom in the Op-Ed of The New York Times.  By the end of the week, James Whittaker, a Microsoft-turned-Google engineer who then switched back to Microsoft, unloaded on a Microsoft blog about his “thoughts” on Google (click here for full post – click here for CNNmoney.com commentary.).  Here’s a sample:

“My last three months working for Google was a whirlwind of desperation,” wrote Whittaker, who headed an engineering team for social network Google+. “The Google I was passionate about was a technology company that empowered its employees to innovate. The Google I left was an advertising company with a single corporate-mandated focus.” Whittaker, who joined Google in 2009 and left last month, described a corporate culture clearly divided into two eras: “Before Google+,” and “After.”

In my eyes, Google+ is an oddity as no social network has scaled as fast as Google+ has but at the same time, the interface and usability of the social network is suspect at best.  In addition, metrics on the use of Google+ is very low in industry comparisons (read: Facebook) and Google+ is the butt of a multitude of Twitter/Instagram jokes.

Perhaps most damming is that Google+ is trapped between the twin 800-poung gorillas of the social networking world:  Facebook on one side with users connecting with all their friends and family members and LinkedIn on the other side with users connecting with all their colleagues and business associates.  Google+ does not have a stronghold in either of these two areas and to put it politely, is adrift in the social networking space due to its lack of a clear position in the market place.

People like to complain about Twitter and its challenges.  I feel the issues at Google+ run much deeper and will be significantly harder to fix in the near future.

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

The “New” iPad: Reviews from Tech’s Finest Journalists

Hola Todos!

Today is the “new” iPad release day with lines literately all over the world (click here for videos).  For those of us who deciding whether to go with iPad 2 or (try to find) the “new” iPad, click here for a set of excellent reviews from the industry’s best tech journalists.   And for good measure, click here for a solid review on the updated Apple TV and its new killer feature.

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

The Power of Story: Another View

Hola Todos!

My nugget-radar is always up searching for information on the strategic use of storytelling.  While going through the multitude of LinkedIn groups posts the other day, I found a solid nugget from Stanley K. Ridgely, Ph.D., a management professor at Drexel University who also runs a professional blog centered around delivering business school presentations (http://www.ihatepresentations.com/).

In a recent blog post titled, “Science Backs Storytelling?…Yes!”  (click here for full post), Professor Ridgely offers a few tips for adding storytelling elements to a presentation to make them more effective.

What caught my attention in the blog post was the mention of a book by Kendall Haven called Story Proof: The Science Behind the Startling Power of Story I had not heard of.

In his blog post, Professor Ridgely details, “In this book, Haven compiles a wealth of sociological stories that inform us exactly what is meant by “story,” the source of its power, and then makes a compelling case that stories work so well because our brains are hardwired to learn most effectively from story-based narratives.  The mind-boggling and extraordinary truth is that each and every one of thousands of original sources agrees that stories are an effective teaching and learning tool.”

Check out the full blog post when you get a chance.  I’m going to get my hands on a copy of that book.

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

Leadership: The Power of Storytelling

Hola Todos!

Mr. Mike has a solid nugget for us via John Maxwell’s book The Time of Your Life.  Our experiences and those associated memories define who we are.  One of my Dr. Dan-o axioms goes something like this, “Just our DNA creates the blueprint our physical or biological self, stories and/or narratives we select as our own acts as the blueprint for our psychological self.”

As per the text below, we select what stories from which experiences that will shape our character, values, beliefs, etc., – in essence, who we are as a person.

Mike, the floor is yours…

 

To:  The Great Leaders Who Have a Passion for Continuous Learning

In a recent article, The Time of Your Life, John Maxwell writes that our lives are not primarily shaped by those huge “notable occasions” that create wonderful memories.   Rather it is those “unremarkable days which shape our character and values.  The hours, minutes, and seconds in a day literally are the time of our lives.  How we use them shapes who we are.”  What a magnificent thought to remind us of the magic, beauty and power of each moment and the thoughts, actions and words we present that are the footprints of our life.

Maxwell suggests three simple steps to help us make the most of our days… the most of our life.  The first is to have clarity about our purpose in life.  He quotes Dr. Edward Banfield of Harvard University who “after more than fifty years of research, concluded that “long-term perspective” is the most accurate single predictor of upward social and economic mobility in America. Long-term perspective turns out to be more important than family background, education, race, intelligence, connections, or virtually any other single factor in determining your success in life and at work.” The next step is to set our priorities: “Prioritization means giving focus and energy to those things that give the highest return.” It is always asking the question of everything we do, big or small: Does this add value to me, my business, my community, my people, my family?  The third step is to have a schedule for accomplishing our goals and to stick to it.  Firm discipline is needed to keep us on track and to effectively manage those many activities that compete for the scarce resource of our time.

Maria Edgeworth, author, wrote: “If we take care of the moments, the years will take care of themselves.”  Clarity of purpose, priorities and a schedule give shape to those precious seconds, minutes and hours of our life.  Live each moment with passion and excitement in fulfilling your life’s purpose and be more than you ever dreamed that you could be.  Remember always the words of Johann Wolfgang von Goethe: “Nothing is worth more than this day.” Life is so very beautiful.  Enjoy the journey and have fun along the way.

Have a beautiful day and a magnificent week!!!

Mike

 

Contact Information:

Michael M. Reuter

Director, Center for Leadership Development

Stillman School of Business

Seton Hall University

Tel: (Office) 973.275.2528

Email: Michael.Reuter@shu.edu

 

MAKE Your New Years Resolution Stick! – Update: March Edition

Hola Todos!

With leap year, we got an extra day out of February so we were 1/29 or 3.5% more effective last month right?  If we think of this year in terms of months, we are 2/12 or 16.66% of the way through the year.  How are we doing?

February is a challenging month. In January, it’s easier to stay focused because goals we made just a few weeks ago.  By February, these goals can seem like a distance memory unless you stay on top of them and ALWAYS place your BIG ROCKS FIRST (click here for full blog post).  February also brings many unanticipated obstructions, issues, and challenges that one needs to find a way to work around and overcome.

That said, here’s the update on my big five goals.

#1 – Focus & Simplify – Its harder to say NO in February as many, many, many new things pop up.  As we get very busy in February and tasks start to pile up, it’s easy to forget about the “Big Rocks” and get lost in the NOW.  And I know this was the case for the last two weeks in February as I kept using the expression “I have a number of emergency fires to put out first.”  We cannot let the “emergency fires” dominate our schedule because then we will not have any time for the big rocks.  Again, the key to focus & simplify is to (a) say “no” more often, (b) try not to add anything additional to the Big Rock lists and (c) review those Big Rock lists more often to stay on top of them. If I were to add a 4th item, I’d say get help to put out those intrusive “emergency fires.”

#2 – I need 2 academic research articles published this year – Again, of these 5 goals, this one is the most important.  Before the end of February, the first of two articles was submitted to the review process.  This is a positive step in the right direction.  Academic articles need 45 to 60 days to be double-blind reviewed by the Editor and 2 or 3 reviewers.  I should know, sometime in April if this article is viable or not.  At the same time, I have been active on a second article and the goal is to have this one under review by the end of March (or at least Easter); the sooner, the better.  If I need two academic articles published, the safe strategy is to put 3 or 4 articles in the review process.  I hope to have that 2nd one in sooner rather than later so I can start working on the 3rd.

#3 – Run the Broad Street Run – Of the 5 goals, this is the one that I have made the most progress. I have been maintaining my Long Slow Distance (AKA LSD) runs. The 10 Mile Broad Street Run is a 90-minute race and my last LSD run in February was 66 minutes. So far, so good!  In a similar “getting in shape” front, I started playing in a Sunday morning mens soccer league.  Soccer and running use totally different muscle groups and I’m hurting.  Plus any soccer skills I might have had are long gone.  We are off to an 0-2 start dropping our first two games and I was one the field for 3 of the 5 goals scored against us (I play defense too so that’s not good).  I love soccer but the goal is to not get hurt, as I want to continue my running program for Broad Street.

#4 – Take a Deep Dive into Twitter – of the five goals, this one I worked the least on in February.  In January, I sent a lot of time hanging out in Twitter and I would easily log on daily.  In February, I got much busier and I could go 3 or 4 days without hanging out.  I would still Tweet meaningful stuff now and then and I still go through my followers/following lists on a regular basis but major time on the platform – no.  The funny thing is – I’m not sure I missed anything or at least I do not feel any pressure that I missed something.  Twitter is not email so I guess if you miss 99% of it, so what? We’ll see what happens in March.

#5 – Double my DigNuggetville Traffic – You know, I actually had some progress on this goal.  I examined my Google Analytics metrics at the beginning of March and each month (e.g., December, January, and February) my monthly numbers averaged higher.  I had the highest one-day spike in the history of the blog in February.  Moreover, some of my older posts from November and December are starting to get some consistent SEO Google-juice.  I also am following a consistent strategy of trying to get quotes or stories in the popular press.  In Feburary, I had a solid placement on Forbes.com (click here) and MSNBC.com (click here); both of which help pull in traffic.

Thank you all for listening.  Stay tuned for the next update around Easter.

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University