Marketing Iphone

The price strategy defines the initial, base price and the appropriate strategy depends on the pricing objectives. There are three basic pricing strategies for pricing a product or service: price skimming, penetration pricing and status quo pricing. Effective marketing involves the price being set to equal the perceived value of the product, a backpack, to the target market, university students. The following sections discuss the alternative pricing strategies, the advantages and disadvantages of these and the most appropriate strategy for a new backpack entering the market.

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

When CEO Steve Jobs announced in January 2007 that Apple would be releasing a revolutionaryiPhone five months hence, consumers waited with bated breath for a phone that would deliver all the features of their iPods as well as a smart phone. Anticipation grew, just as Jobs knew it would, as Juneapproached. The launch would become one of the most heralded technological product splashes Apple,known for its masterful media build-up, had ever planned. How the iPhone was developed, priced, promoted, and distributed is lesson for marketers around

 The iphone is such a popular phone to have . the demand for this product would be high when a new one comes out and the demand would be low when people stop buying the phones.

Apple’s position and marketing as a premium brand is based on their strategy of not competing on price. Apple operates on premium pricing and price skimming. Premium pricing is a strategy in stitch products are introduced and kept at high prices in order to encourage a level of exclusivity and luxury among consumers. The high prices of Apple products, in comparison to their competitors, is reflective and representative of the quality and exclusivity of their products. Through this pricing strategy, Apple has successfully build a brand equity and value around their brand and products which in result means consumers are willing to pay the extra amount of money for their products, instead of going to competitors with lower prices.

Companies can choose many ways to set prices, skimming price strategy where a company sets a higher price than normal and a penetrating price where low initial price is set. “Pricing

The first steps in the mobile phone market let us understand once more what the key points in Apple strategy are. Innovation and Exclusivity go together, a higher-than-the-average price place the new device as a cult and trend object, something everybody want to have, a real status symbol. In few words Apple probably believes that a key concept in Innovation is the creation of a need. Along with the innovation in design, Apple is a pioneer and a leader as well in Environmental issues, another innovative approach that is granting more and more importance among customers of any product and people in general, due to very sensitive issue like Global Warming and home safety.

| Within the framework of a break-even analysis, an examination of is conducted to determine the quantity at which the product, with an assumed price, will generate enough revenue to start earning a profit.Answer

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).

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).

The iPhone was introduced in two versions, 8 GB and 4 GB model. The 8 GB model was priced $ 599 while the 4 GB iPhone was worth $ 499. The iPhone buyer also got a two-year contract with AT&T costing $59.99 per month (minimum). The 4 GB model of iPhone was discontinued while the price of the 8 GB model was cut down by $ 200 (to $ 399) in September 2007, barely two months after its initial launch. Consumers who had bought the product were dissatisfied at this price cut within such a short period of time. Steve Jobs took notice of the growing indignation and in an open letter to all customers, announced a $100 store credit to all iPhone customers not receiving any rebates etc.

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. entered the smart phone market in 2007 with the launch of a basic 4GB and 8GB iPhone. Since that time, the iPhone has revolutionized the smart phone market and redefined the idea of meeting consumer demands. Apple has been introduced a new model of its successful iPhone each year and consistently achieves higher market share than its competition. This essay examines the Apple iPhone from an economic perspective. It will explore the supply and demand of the iPhone and examine the rationale behind Apple’s cost structure and production costs which have allowed the iPhone and Apple to thrive in the oligopoly of the smart phone market.

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.

Penetration Pricing is opposite from price skimming, it is off the idea that a company compromises their prices to be set low so that they may maximises share of the market as much as possible. This is usually