Apple 's Position And Marketing As A Premium Brand

By making their products differentiated from the competition, Apple can establish their own price. Apple believes that people will pay some more money if they know that what they are buying is better and more reliable. That is also the reason why Apple sells the same products all over the world, making no selection or differentiation depending on where the market takes place. The high costs of Apple’s products are the one of the reasons why Apple Inc. preferred to be

Price skimming is a strategy which firms often using when starting enter into the market, which offers high price at the introductory stage of the production cycle and lowering the price when competitors have been attracted by the high profit margin to enter the market (Ma & Hernandez 2011).

This occurs when a business charges the highest price for a product during the introduction stage of its lifecycle. This is typically used when introducing a new, unchallenged product into the market, ensuring high profits before the product has competition. For example, Apple set its price for its iPhone 6 plus exceptionally high due to its advanced features and lack of competitors. This ensured that Apple received high-profit levels before the iPhone 6 plus was challenged by other products. Additionally, this has seen Apple have a high product position and helped cement its brand image, as these higher prices are typically associated with a higher quality product. This has subsequently improved market share and profits.

Apple was established as an IT company dealing in exclusively in computers. However, competition in the technology sector forced the firm to focus on other consumer products. The diversification strategy has seen Apple’s sales grow tremendously in the last decade, earning the firm the No. 1 brand position at Forbes. The Apple brand is recognized on an international scale and enjoys a strong recognition thanks to its aggressiveness when it comes to creativity and innovation (Tar, 2013). It has a large number of loyal customers who would purchase the new products regardless of the market price, which guarantees profits from the new division.

Never really paid attention to “Skimming” but, it’s the introduction of a product at a high price for fluent shoppers then the price decreases when the market becomes saturated. Then if you look at two products are kind of the same your “Psychological” impulse takes over. For example, if something is $9.99 and the other is $10.00 your most likely going to buy the cheaper because the price looks better. This is what happen with the Shark floor cleaner one had it advertised for $119.00 and the other advertised it for $109.00. Of course as a consumer you usually shop around for the better deal.

Apple came back from near extinction to become one of the most revered technology companies in recent memory. They achieved this status by developing innovative design products and pushing the limits of their marketing prowess. Apple is known for their ability to listen to consumers and revolutionize market segments by providing modern design laden and feature rich alternatives to the target markets. They employ strategies that might contradict normal convention by keeping their prices high to build a brand image of prestige and promote their products through word of mouth. The impact on marketing is hugely noticeable by other companies following suit with store models

Jobs also changed the pricing strategy and focused on value-based pricing that provided customers with premium products at a premium price. Product pricing has specifically set Apple apart from its competitors. Apple believed that they could create demand for their products which would give the company “power over prices through product differentiation, innovative advertising, ensured brand loyalty, and hype around the launch of new products” (Nair, 2014).

Even though Apple has encountered many setbacks, it continues to bring new and improve products to the market. Apple’s competitive strategy has been innovation. They have made an extraordinary effort developing, implementing, and executing its very unique strategy through innovation which has resulted in new product, and the enrichment of the existing ones. More specifically, Apple attempts to meet and supply the needs of a global market, by offering eager and enthusiastic consumers with innovated and high-quality products and services. Apple has employed a differentiation strategy linked to innovation with its three core products (computers, personal media player, mobile phones, tablets and other accessories). A key piece of their strategy involves meeting the needs of the converging digital electronics and computer markets. Apple has elected to implement its strategy by designing and developing proprietary operating systems and software technologies, thus allowing for strict protection of its intellectual rights.

Apple Inc. is a successful developer of both computers and consumer electronics. The company’s most popular products include Macintosh computers, iPod mp3 players, iPhone smartphones and most recently the iPad, which is a hybrid of a tablet computer, and an eReader. Apple’s Macintosh computers, iPods, iPhones, and iPads all share characteristics that make them part of the general information technology industry. However, since they are very different products each belongs to a more specific industry. The Macintosh computers are included in the personal computer industry, iPods in the personal media player category and, depending on the model, the mobile internet device (MID) market and iPhones to the smartphone and MID industry. The iPad

was renamed Apple Inc. on January 9, 2007, to reflect its shifted focus towards consumer

The company started off as “Apple Computer,” best known for its Macintosh personal computers (PCs) in the 1980’s and 1990’s. Despite a strong brand, rapid growth, and high profits in the late 1980s, Apple almost went bankrupt in 1996 (Kim & Yoffie, 2010, p.1). This can be explained that Apple has become larger and more significant than other competitors put together in 1980. Because Apple failed to innovate in 1996, the company almost went bankruptcy but eventually Steve Jobs took Apple from bad situation to the company that can make billions of dollars through promoted itself as a hip alternative to other computer brands. Apple highlighted its computers as the world’s “greenest lineup of notebooks” that were energy efficient and used recyclable materials. The goal was to differentiate the Macintosh amid intense competition in the PC industry (Kim & Yoffie, p.4).

Diversity in products and their prices helps Apple remain an inelastic company, regarding their demand. If a price rises for one of their products, there is sure to be another product that moves into that previous product’s price range that is still comparable in design and quality. There will always be people to buy the more expensive items not only because of Apple’s positive brand recognition and loyalty, but because Apple consistently produces quality and innovative products; including, if Apple finds a defect or fault, they fix the problem for free or replace the product altogether.

Apple Inc. uses the Apple brand to compete across several highly competitive markets. Apple 's brand has evolved as it has expanded its range of products and services. Originally starting in the late 1970s with desktop computers and then laptops in the 1990s, it took over 20 years before the company expanded into its first major new product area with the launch of the iPod in 2001, followed by iPhone in 2007, iPad in 2010, and now Apple Pay and Apple Watch in 2014.

Apple, Google, and Microsoft each develop, design, and market a variety of software, services, and devices. In this technology market, these firms face aggressive competition in serving single customers and various small, medium, large companies. Within this segment, the competitive forces exert pressure, which influences strategy development and execution and a competitive advantage. As such, the competitive forces are the power of suppliers, power of buyers, threats of substitutes, threats of new entrants, and existing rivalries (Rothaermel, 2017).

After a half circle of product life cycle Apple refreshes its offer with new features and decreases the price of the previous offer. Thus the market skimming has become the strategy and thus practicing market leadership in product-quality will cover the high cost and R&D. Thus the each year apple enthusiasts are getting the higher value of high quality and advanced features in the closely same price which actually comprises everyday less-price as well.