Iphone 5C price decision

We think that companies should calculate their break-even point for their goods and services and to charge the prices according to that figure. This way, they can make sure that their price covers their expenses. In case of AT&T’s text messaging they are charging much more than the cost. But because there are only four national carriers in United States and they control 90 percent of the market, and text messaging had become widely popular, they can afford high prices. They are considering the demand of the service and pricing the product according to demand and supply.

When trying to determine the correct price, a number of factors must be considered: the market and its segments, the size of each segment, the ability to reach each segment, what distribution channels to target, whether to vary price by segment, the usefulness of promotional offerings, and whether the goal is to skim or penetrate each market.

Current research shows that it costs Apple $236 to produce and put together their 16 gig iPhone 6s Plus and they are selling it on their website for a whopping $749 (Soergel). That means the company is making over $500 in profits from just one phone! While it might baffle you that Apple is marking up their prices to that extreme it’s even more surprising when you realize that they legally aren’t doing anything wrong at all. The company is simply taking advantage of their low competition and the fact that customers will pay large sums for these new phones (Soergel). Apple has proved to an innovative leader throughout the past and now has the largest market share of any phone manufacturer both in the United States and China (Soergel).

    This article discuss how supply and demand function in sales and business. In Apple’s case they feel their numbers for demand are not a fair representation for the true demand of iPhones. Apple has decided to not show sales because, they think these numbers will only reflect their available supply. If supply for pre-order is limited then the demand will appear low because, it will only reflect the limited quantity of iPhones available for pre-order. Other factors are cited for possibly decreasing demand such as; people taking time to buy the new iPhone because they are trying to decide if the costly upgrade is worth it. Apple’s blackout of prices is due to their conclusion that consumer demand for their product will not be reflected by the early sales so, sharing them with the public is counterproductive.

On the other hand, if the company increases the cost of X6 tablet to $450 and R&D to 40% it would mean that the customers pay the same for the tablet as they pay for other competing tablets in the market. In that case, it would call for a decision on the side of the customer based on their loyalty for them to purchase the tablet. In so doing, the organization will register a sale volume of $1, 854, 036 in 2014 and $2, 337, 247 in 2015. If the company will increase the price further to $470 and increase R&D to 45%, then tablet X6 will be less expensive for customers to buy than competing tablets. With that change, the company will make sales of 2, 337, 247 in 2014 and 1, 180 751 in 2015. The reason for the decline will be because the product will have reached the shakeout stage where the number of new customers will progressively decline (Calvin, 2002).

Nonetheless, there were some positive comments because the iPhone 5 C model came in an array of colors. This is because of it had colors such as blue yellow, and pink.

Consumers are willing to pay a premium for items that reflect their personality. Motorola did a spectacular job with the mobile 'Moto X'. It is Motorola's flagship phone, priced appropriately for a flagship device. Compare this to other flagship devices from Samsung, Nokia, HTC or even LG, all these phones are competing on higher specs of their flagship devices. But Motorola, with its Moto X did not play the specs game like its

Looking at the iPhone 's ability to meet and exceed customer needs, currently, it meets and exceeds all needs of its consumers, as one of the most recent needs was that of a bigger screen, and the iPhone 6 and 6 plus surely delivered on this need. In future models of the iPhone, a need is yet to be prominent, so in order for Apple to continue to achieve great success in this market, a need must be created and met. As far as providing value goes, it could be easy for any cost conscious consumer to see the pricing of the iPhone and scoff at the possibility that the product could be worth it, but with 500 million iPhone owners worldwide the value is clearly seen. (Bailey, 2016). It is unlikely that Apple will be dropping the prices of their iPhones anytime soon, so expect the future models of iPhone to be striving to provide value at top dollar once again. The final critical success factors for Apple go hand in hand as their ability to gain employee commitment is directly related to their focus on creativity and innovation. As the article mentions, Apple continues to roll out new technology, not exclusively just with their iPhones, but with innovations such as Apple Pay, Apple Watch and Apple Music to name a few. Apple’s strongly committed employees and

So all the other major players have to keep the prices lower than iPhone, because iPhone has the most market share and has a strong customer brand loyalty.

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.

On the other hand the quantity demanded will also increase. Regardless of the price and assuming that the phone meets the need of its market properly the increase in income would mean an increase in disposable income which can be used to purchase the more phones of the A-Phone brand. The graph will thus show an increase in demand with a constant price regardless of how high or low the price may be because the market will be comfortable to purchase the A-phone at any price.

The price most of the time determines how well the product sells for example; you have a

There is a high level of demand for iPhones because the quality is excellent; there is a range to choose from (4, 4s, 5, 5c, 5s, 6 and 6+); with every new release, there is a new feature (innovation); the prices are reasonable. Apple is competing fiercely against similar businesses to itself such as Samsung in order to gain customers.

Some firms fix the price of a product based on the demand, instead of fixing the price on the basis of competitors price or costs. Demand oriented pricing is based on an estimate of how much sales volume can be expected at various prices which can be paid by different types of buyers. If the demand is high the price will be higher and if the demand is low the price will be lower. In such situation, price is fixed neither based on the cost nor on the price of competitors. There are two methods adopted for fixing the price in such situations. They are:

The importance of price in the modern economic system not be overemphasized. However, to set the right price for any commodity or service, some parameters or determinants come to play. Among the determinants of factoring price are:-