III.

PRICING STRATEGIES USED BY THE COMPANY

When talking about electronic gadgets, Apple Inc. is one of the leading brands and

notorious for its luxurious and classic products that reach many people across the world.

According to Apple CEO Tim Cook in the interview of Bloomberg Business

Week 2013, “We never had an objective to sell a low-cost phone. Our primary objective is to

sell a great phone and provide a great experience, and we figured out a way to do it at a lower

cost.” This shows that the company exclusively markets premium products and offers a high

quality gadgets that became and often seen as a status symbol in the society. They also

became successful to create a halo effect that makes every individual starve for new Apple

products even though it have an expensive price. Apple Inc. take time to get their product

pricing right that act as a powerful growth lever and became a way to achieve what they have

now. The following are the pricing strategies used by the company:

 Differentiation Strategy – Apple attempts to increase market demand for its products

through differentiation, which entails making its products unique and attractive to

consumers. They are able to create and generate value, which lead to customers’

willingness to pay a premium price for the gadgets offered by the company. Apple

have always been designed to be ahead of the curve compared to its peers. Despite

high competition, Apple has succeeded in creating demand for its products that allows

the company to have a power to offer over prices through product differentiation,

innovative advertising, ensured brand loyalty, and hype around the launch of new

products. Through this, Apple also set up an artificial entry barrier to competitors that

make them different and able them to distinguish itself from the other manufacturers

in the business.
  Premium Pricing – Apple is a well-known electronic brands for its premium price.

The company justifies the higher price tags on its products to pinpoint and portrays

value of the products they offered. Consumers are willing to pay more because the

brand represents exceptional quality and reliability. In fact, the brand became a

symbol of wealthy that make every individual to extremely desire to purchase Apple

products. The company’s products are fundamentally considered luxury consumer

electronic products that provide a sense of extravagance that draws consumers into a

positive emotional experience.

PARAPHRASE

After its peak in 1990, Apple's market share and sales decreased slowly and In 1996, it is

believed that Apple will be vanish in the market. But in 1997, Apple Inc. was desperately in

need of an operating system,that it bought out NeXT Software which is Steve Job’s company

which lead the board of directors to a decision to ask some help from an old friend, Steve

Jobs. From then on, Jobs became an interim CEO and he officially became the CEO of Apple

Inc. on 2000. Jobs decided to create some adjustment around Apple. He forged an alliance

with Microsoft to create a Mac version of its popular office software. Not long after this

decision was the turning point for the company. Jobs redeveloped the computers and

introduced the iBook, a personal laptop and followed by iPod, an mp3 player, which became

market leader.