How Dose Apple Adopt Pricing Strategies
APPLE: Premium Priced and Worth It
Continuing the last one uploaded — The customer value based pricing. I would love talk about pricing strategy today. I am very willing to use Apple Ltd as a prototypical case for deeply thinking and analysing how about its advanced price strategy.
It must be accepted that Apple as the trend leader of technology in 21st Century frequently motivate the products purchase. Simultaneously, it gradually designs and invents the latest devices with attractive applications , and special functions what can bring the fantastic using experiences to customers. Whether it is an iPhone, iPad, Mac laptop, or Apple Watch, customer would love to pay more once it announces. Therefore, compared with Android smartphones(ex. Samsung) and laptops(ex. Dell, HP), Kotler and Armstrong (2013)states that Yet despite such sky-high prices, Apple’s products continue to fly off shelves, as eager customers get in line to snap up the latest models.
How does Apple pull it off…
For apple, Kotler and Armstrong(2013) concedes that “its success has never been price”.Compared with Apple, many companies just are responsible for making products tasks rather than deeply thinking to make more efforts for combine the products design with consumers’ wants. Apple creates users experience, demonstrates what sort of company does, and build people enthusiasts. Accordingly, life-feel-good as the mission or main purpose can give customers very simple and clean first attractive impression, and Apple depends on its own devices with simple work and easy to use to make customers gather together. Besides, Apple knows what buyers want, it designs the beautiful wrapping to fascinate users and frequently produces cutting-edge products after another. Apart from stunning use experience and products updated, Apple also catches the psychology to build enthusiasts towards customers, when buyers pay for the Apple products, they will join the community that there are so many hard -core fans crowded. They are fond into the superiority of Apple and often pay more attention each cutting-edge product because of its worth and customer value. Therefore, such this enthusiasm and support can affect other buyers’ purchase behaviour and expand Apple products’ popularity. That is why people want to trust in the quality and service of Apple products, and pay more even if Apple has premium and high price.
However, even all the success, the Apple’s premium price strategy still tracked in risks with high price, compared with other smart phones with lower price and fast speed of development such as Xiaomi and Huawei in China local market. Xiaomi as the Chinese market leader, they invents the low-cost products segments with thriving potential technology and smart designs. In addition, within the temptation of lower price, there are sort of young people and some people under the average incomes who can only offer the available price rather than the Apple’s premium price, because Xiaomi is still able to rapid faster its own stunning iTune clone to satisfy customers needs and wants, which can supply apps, games and other content. Besides, Xiaomi expands widely its other emerging markets even in India and Brazil. By contrast, lower cost and price are not fit into Apple’s premium price strategy and even Samsung’s due to their precious accessories, higher standard and operation style. Therefore, the top-of-line apple is suitable for more-affluent people because there are price people who want to buy expensive products.
Pricing strategy can be changed according to market tendency and challenge of setting price. There are two new broad pricing strategies generated, there are market-skimming pricing and market-penetration pricing. Apple’s products also adopt the price skimming to set up the initial high price with each new models of Apple iPhone, iPad, Mac computer. After that until the next generation of Apple products publish, previous products will reduce to low price. Whereas, the reasonable market skimming used is under some limited conditions. First, it would be better to make balance between quality and high price of products. I mean that high price should be matched the advanced the quality and service, and there are relatively huge volume of purchasing from buyers. Second, the cost of generating the small volume should not be very high once company delete the advantages, they will charge more. Finally, “market competitors should not enter the market simply and undercut the high price.”(Kolter and Armstrong, 2013. P334).
To sum it up, Apple is a very clever leader to guide the tech market and handle the market tendency. Of course, I just share a part of pricing strategies of Apple in this essay based on Principles of Marketing, I would love to read book Apple’s history and share more feelings about how does Apple bring such amazing temptation.
If you are happy to give me suggestion, I would love to wait patiently and listen carefully.Thanks for reading❤️
Reference
[1]. Kotler, P & Armstrong, G., (2013). Principles of Marketing (16th Global Edition).