Marketing and Primary Pricing Objective
Individual Report
Case 2
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? Apple’s primary pricing objective when it introduced the iPhone is set high pricing at $599 in order to reinforce the brand’s high-end positioning and special cachet and also make profit from from the very start of iPhone’s life. The primary objective in cutting the product’s price just two months after introduction is the company believing that setting a more affordable price in the last quarter of the year would put the iPhone within reach of a larger number of gift-giving buyers and it may have an opportunity to close in on its goal of selling 10 million iPhones world wide within 18 months of the product’s launch.
2. How much weight does Apple appear to have given to its evaluation of competitive pricing? I think Apple doesn't appear to have given too much weight to competitive pricing. Since they are not as close in price as they should be. They should take another look at their pricing.
3. Do you agree with Apple’s decision to switch away from price skimming after the iPhone’s introduction? Defend your answer. I agree with Apple’s decision to switch away from price skimming after the iPhone’s introduction. Firstly, I think the Apple Company had considered deeply before they made this decision. Secondly, the aim of Apple made this decision is just to make more profits and increase the customers who want to buy this product. Also, the time that they made this decision is on the last quarter of the years which means if they cut off some price, it may increase the customer because there are many gift-giving buyers at this time and they may willing to buy the iPhone which has lower price compared with the price before. It seems that this decision provoked an angry response from customers who protested that they had overpaid, but in the
Case 2
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? Apple’s primary pricing objective when it introduced the iPhone is set high pricing at $599 in order to reinforce the brand’s high-end positioning and special cachet and also make profit from from the very start of iPhone’s life. The primary objective in cutting the product’s price just two months after introduction is the company believing that setting a more affordable price in the last quarter of the year would put the iPhone within reach of a larger number of gift-giving buyers and it may have an opportunity to close in on its goal of selling 10 million iPhones world wide within 18 months of the product’s launch.
2. How much weight does Apple appear to have given to its evaluation of competitive pricing? I think Apple doesn't appear to have given too much weight to competitive pricing. Since they are not as close in price as they should be. They should take another look at their pricing.
3. Do you agree with Apple’s decision to switch away from price skimming after the iPhone’s introduction? Defend your answer. I agree with Apple’s decision to switch away from price skimming after the iPhone’s introduction. Firstly, I think the Apple Company had considered deeply before they made this decision. Secondly, the aim of Apple made this decision is just to make more profits and increase the customers who want to buy this product. Also, the time that they made this decision is on the last quarter of the years which means if they cut off some price, it may increase the customer because there are many gift-giving buyers at this time and they may willing to buy the iPhone which has lower price compared with the price before. It seems that this decision provoked an angry response from customers who protested that they had overpaid, but in the