Marketing Iphone - 1253 Words

Q1: Apple faced with two main pricing decisions for its range of iPhones. The first one is a skimming price decision and the second one is a penetration pricing decision. 1. Skimming price decision When Apple first launched the new iPhone 3GS, it made a skimming price decision which means it aims to sell to the top of the market and focuses on maximizing profits in short term so it could recover the research and development costs. 2. Penetration pricing decision As the iPhones have moved through their product life cycle (from the introduction to the growth or maturity stage) Apple adopted a penetration pricing strategy which means selling products at very low price to attract more customers. The rationale behind this decision was†¦show more content†¦2. Target costing one type of the demand- based pricing. Apple could first use market research such as consumer surveys to identify the customers’ requirements of the quality and features of the product and their perception of a ‘fair’ price before the product is designed. 3. Trial pricing Apple could price the new iPhone at a low price for a limited period of time to attract customers. This strategy can help the company to get customer acceptance at the initial period and then bring profits by increasing the price. Q4: As far as I am concerned, I would recommend skimming price and trial pricing strategy to Apple during its introduction stage of its product life cycle. When Apple moves into the growth or maturity stage of life cycle, I would recommend the penetration pricing strategy. In terms of a skimming price decision if Apple doesn’t know much about the customer demand for its new product it would be useful. The reason is that it is safer to start with a high price, which can be reduced if customers initially refuse to purchase. In this case, as Apple’s senior vice-president said the new iPhone 3GS has some unique competitive advantages in the phone market such as the wide range of applications and faster load time. These benefits make many customers feel they must have it no matter what the costs, that is to say, during the introductory stage of the new product, the demand is priceShow MoreRelatedIphone Marketing Plan3757 Words   |  16 PagesiPhone marketing plan Market Summary The iPhone targets consumers who need to store information and communicate or people who want entertainment on the go. Apples target segments consist of professionals, students, corporate users, entrepreneurs, and health care workers. Currently, the market for high-end phones like the Apple iPhone is small. Few people want Internet, video, and PDA features in one device because of the high price. 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