Does Apple's Pricing Strategy Work for All?

In: Business and Management

Submitted By zeynepwang
Words 1030
Pages 5
Global Pricing– Does Apple’s Pricing Strategy Works For All?

Background Apple Inc. is established on April 1, 1976 in Cupertino, California. Different than other technology companies that are mostly focused on solely hardware or software, Apple Inc. designs, manufactures and markets communication and media devices and personal computers for both the hardware and its operation systems. Having the ability of developing its own operation system makes Apple a big ecosystem, a platform all your Apple products can communicate and sync with each other smoothly and efficiently, and makes Apple’s ecosystem the biggest and most successful one in the market. Apple’s innovation, unique and attractive design successfully gained the company great amount of loyal customers and kept their dominance in the competitive markets of mobile appliances for the past decade.
Premium Pricing Strategy Being a market leader, Apple maintained their business strategy of providing high-quality product and extraordinary user experience to their customers hence retained their reputation and gives them the power of setting prices. The former CEO of Apple, Steve Jobs pointed out 4 strategy pillars of Apple of keeping high differentiation: offering small number of products, focusing on the high end, giving priority to profits over market share and creating a halo effect that makes people starve for new Apple products. Based on these, Apple conducted “premium pricing strategy” all over the world by keeping their products, especially cellphones, most premier item available in the markets.
In order to manage the price and avoid falling into the price war between retailers, Apple at one hand offers only a very small percentage of margins to resellers and dealers for an Apple product, so that they don’t have too much intention to offer significant discount to end users. At the other hand,…...

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