Apple Is Set to Unveil Bold Ad Campaign In Big Push Into Office Computer Market

By Patricia A. Bellew, Staff Reporter
The Wall Street Journal

November 1, 1984

Apple Computer Inc. believes that selling computers is a lot like selling cars. That is, hearts -- and wallets -- are won faster by the purr of an engine than a salesman's showroom spiel.

So this week the company will kick off a $10 million advertising campaign that takes its cue from Detroit. The theme is "test drive a Macintosh," and over the next three months Apple will urge potential buyers to do just that: Take a Macintosh personal computer home overnight and experiment with it. By morning, Apple officials reason, the machine will have sold itself.

Apple hopes the campaign will spur sales of the Macintosh in the critical Christmas selling season. But the campaign's brash gimmickry is also part of a calculated challenge to the personal-computer industry and, in particular, to arch-rival International Business Machines Corp. as it seeks to break into the office computer market. "We intend to change the marketing ground rules for this industry," says John Sculley, Apple's president and chief executive officer, adding, "Apple is launching an era of brute-force marketing."

Apple's heightened concern about marketing is understandable. While the company has posted comfortable real gains in sales and earnings in fiscal 1984, researchers estimate that Apple's 9.5% share of the personal computer market is the same as its 1983 level, and is just one percentage point above its 1982 stake. In contrast, InfoCorp, a market research firm, says IBM's share of the $43.4 billion market has risen to 14.6% in 1984 from 10.4% a year ago.

"Apple is holding its own in the market," says Jan M. Lewis, a senior analyst with InfoCorp. "But for an ambitious company, that's not enough." Apple officials also concede that if the company fails in its goal to crack the office computer market with Macintosh, the company's share of the personal computer market will gradually diminish as more and more computer users adopt machines and programs based on an IBM-set standard.

Sales of the Macintosh have been strong since it was introduced last January, but the machine has not yet won a significant stake in the office market. For corporate America, "the Macintosh is like a Dior gown," says Esther Dyson, an industry analyst. "People like to look at it, but not a lot are buying."

Thus, this year and in 1985, the Cupertino, Calif.-based company will spend $200 million to advertise its computers, more than double what it spent in the previous two years. InfoCorp says it believes Apple is outspending all other personal-computer manufacturers but IBM. And it believes that Apple may be matching IBM almost dollar for dollar.

Apple is raising the stakes not only on advertising expenditures but on shock value as well. Increasingly, the company is focusing its efforts on bold, even at times bizarre, statements in its commercials and print advertisements. The goal, says Mr. Sculley, is to be the "most talked-about" advertiser in an industry better known for dull but determined sales pitches and earnest product endorsements by famous people.

The test-drive program should generate a "little thunder and lightning," Mr. Sculley says. Over the next few weeks, Apple will offer its dealers moderate discounts on Macintoshes -- four per store -- to insure machines will be plentiful for customers to borrow.

Designed to lure even the most cowardly to its personal computer, the program will allow any potential buyer with a major credit card to take a Macintosh home overnight for free. Included are several popular software programs and a primer on computing. A basic Macintosh sells for $2,195.

The program reflects in part Apple's frustration at the difficulty of converting the legions who are intimidated by a glowing screen. Says Michael Murray, director of marketing for the Macintosh division, "Salespeople talk at 60 miles per hour in a language no one understands. A person's first experience with a computer should be painless and without embarrassment."

Apple anticipates that a successful test-drive program will help sell more than 100,000 Macintoshes over the next three months, Mr. Murray says.

But one dealer, James Ferolie, co-owner of a small computer-store chain in Englewood, N.J., says Apple "is taking the warm-puppy approach to selling. I guess Apple thinks that once you get it home and settled in, you won't want to ever take it back to the store."

Apple intends to flex its marketing muscle in other areas, as well. Company officials are well aware that competition for retail shelf space -- and for recommendations from retail salespeople to potential buyers -- grows more heated every day. Thus Apple this week began a sales contest in which 12 top-producing salespeople will each win the use of a 1985 pearl-white Porsche for one year, and $3,000 in cash to cover gas and other expenses.

The company is also pouring millions into attention-grabbing advertising to fuel sales. Next week, for instance, Apple plans to pay an estimated $3 million to buy every inch of advertising space in a special election-week issue of Newsweek.

That effort illustrates Apple's increasingly heavy emphasis on what it likes to call "event marketing." Apple believes promotional campaigns and new product announcements should be daring and glitzy enough to generate something akin to media rubber-necking by consumers.

During last year's Super Bowl, for instance, Apple aired a commercial that featured a beautiful female rebel throwing a sledgehammer in the face of a Big Brotherlike screen character as scores of stoop-shouldered drones looked on.

Early next year, Apple will make another bid to gain a toehold in the market for office computers now dominated by IBM. Apple's earlier attempt to enter the market with its pricey Lisa computer proved disappointing. Apple has said it expects to introduce a low-priced office network capable of linking its Macintoshes with other personal computers in a system that would allow many microcomputers to share data.

Competitors are intrigued by Apple's novel approach to marketing, but most are reluctant to comment. Not so Ed Juge, director of market planning for Tandy Corp. of Fort Worth, Texas, which makes Radio Shack computers. "The trouble with Apple is that promotion is more important than product," he says. Although he agrees that Apple has "written the textbook" on promotion, he asks, "But will it sell product? That's the bottom line. Look at Coke. A few years ago, it had a commercial that won awards all over the world. But while everyone was talking about the commercial, Coke was losing market share to Pepsi. Sculley ought to remember that." Mr. Sculley used to be president of Pepsi-Cola Co., the U.S. soft drink unit of PepsiCo Inc.