“Apple Hangs Up on High Iphone Price”

Topics: Pricing, IPhone, Marketing Pages: 2 (531 words) Published: July 14, 2013
Question 1: What was Apple’s primary pricing objective when it introduced the iPhone? What was its primary objective in cutting the product’s price just two months after introduction? From the beginning, Apple took advantage of its product’s special features in the markets and set a pricing strategy as price skimming with two main purposes. Firstly, they want their product to be determined to have an outstanding position in their customers’ needs as well as being proved to be a breakthrough development among the markets. To illustrate further, an iPhone’s owner is considered to have high symbol status in the modern world; therefore, if the price of the product does not equally match the expected quality of it, the customer will not be satisfy with their attempt to buy the products. Another reason for Apple to rise up the iPhone’s price is that because they want to gain back the production and development costs for creating iPhones. On the other hand, this strategy does not allow the company to maintain that high price for a long time since they would possible face the fact of losing markets in the future. Question 2: How much weight does Apple appear to have given to its evaluation of competitive pricing? If Apple chose to gain market share right from the beginning of introduction the new iPhone, they would have chosen the Penetration Price strategy. In this case, Apple does not give much weight to its valuation of competitive pricing. By using its available reputation and outstanding position, Iphone was more likely introduced to the market with the soaring price in other to generate their profitable sales for the upcoming advancements in the future without worries about expanding their market on the whole. Question 3: Do you agree with Apple’s decision to switch away from price skimming after the iPhone’s introduction? Defend your answer. I do not advocate Apple for its way of abandoning the price skimming strategy after the introduction of iPhone for many...
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