Description
What is the secret behind the highly success of Apple Inc.? How the Brand has conquered a
considerable proportion of the market share as increased Brand Loyalty with the new Tablet product of
Ipad? The answer is already given: Brand Loyalty. This paper attempts to analyze the principal factors
and activities that conform his Marketing Strategy, and the advantages and disadvantages of a Price
Skimming setup on this kind of market. Price skimming strategy provides an excellent opportunity for
the company to maximize profits from the early stage of the Product Life Cycle (PLC), covering
research and development costs and eventually, slowly decreasing price when is needed, due of sales
reduction.
Proceedings of the 8th International Conference on Innovation & Management
·389·
Price Skimming on a Successful Marketing Strategy: Study of Ipad
Launching as Apple’s Innovative Product
Ma Huimin, Jose Antonio Hernandez
School of Management, Wuhan University of Technology, Wuhan, P.R.China, 430070
(E-mail:[email protected], [email protected])
Abstract: What is the secret behind the highly success of Apple Inc.? How the Brand has conquered a
considerable proportion of the market share as increased Brand Loyalty with the new Tablet product of
Ipad? The answer is already given: Brand Loyalty. This paper attempts to analyze the principal factors
and activities that conform his Marketing Strategy, and the advantages and disadvantages of a Price
Skimming setup on this kind of market. Price skimming strategy provides an excellent opportunity for
the company to maximize profits from the early stage of the Product Life Cycle (PLC), covering
research and development costs and eventually, slowly decreasing price when is needed, due of sales
reduction.
Key words: Marketing strategy; Price skimming; Price setting strategy; Ipad
1 Introduction
Price is perhaps the most important of the four Ps of marketing, since it is the only one that
generates revenue for a company. A Price strategy usually changes as the product passes through its life
cycle. One of the strategies for Price setting of new products consists in set high initial prices to “skim”
revenues layer-by-layer form the market (Kotler, Armstrong). The case of Apple on launching the Ipad
as a relative new product of electronic Tablet is an example.
Apple is well-known for their innovative thinking in terms of marketing, and the strategy for their
newest creation of iPad is no an exception. Part of Apple's marketing strategy is to have their products
appeal to the masses, gathering business customer and entertainment customer both in one market.
[1]
Its
combination of exceptional products, great style and design, great strategy, innovative marketing, sleek
and enticing communications is part of the key. In other words, his Marketing Mix and Strategy for
adding value to customer is translated into an excellent customer relationship and brand loyalty.
We aim to study the Marketing Strategy of Apple Inc. on the launching of Ipad, its Market Mix and
factors affecting the market. We compared the literature review and analyze the Unites States Scenario,
evaluating whether the Price Skimming might be the best alternative or not on this stage of the Product
Life Cycle (PLC). Finally we will enumerate the advantages and disadvantages of this Price Setting
strategy and bring up with some highlights and conclusion.
2 Literature Review
2.1 Marketing strategy and price setting
A Marketing Strategy consists of specific strategies for targeting market, positioning, marketing
mix, and marketing expenditure levels. It outlines how the company intends to create value for target
customers in order to capture value in return. It is on this part where the company plans how each
strategy responds to the threats, opportunities and critical issues spelled out earlier in the plan.
[2]
A critical part of a company's overall strategic planning includes the establishment of pricing
objectives for the products it sells. A company has several pricing objectives from which to choose, and
the objective chosen will depend on the goals and type of product sold by them (in our case the Ipad) to
the market.
2.2 Price skimming strategy
The practice of ‘price skimming’ involves charging a relatively high price for a short time where a
new, innovative, or much-improved product is launched onto a market. The objective with skimming is
to “skim” off customers who are willing to pay more for having the product sooner; prices are lowered
later when demand from the “early adopters” falls.
Proceedings of the 8th International Conference on Innovation & Management
·390·
Figure 1 PLC – Product Life Cycle. Generic Graphic
The success of a price-skimming strategy is largely dependent on the inelasticity of demand for the
product either by the market as a whole, or by certain market segment. High prices can be enjoyed in the
short term where demand is relatively inelastic. In the short term the supplier benefits from ‘monopoly
profits’, but as profitability increases, competing suppliers are likely to be attracted to the market
(depending on the barriers to entry in the market) and the price tends to fall as competition increases.
The main objective of employing a price-skimming strategy is, therefore, to benefit from high
short-term profits (due to the newness of the product) and from effective market segmentation.
3 Methodology
The study is conduced to analyze the scenario of Apple Inc. on the electronic device’s market,
especially in United States. (USA) Through a qualitative research, we aims to describe its segmentation
and targeting market and how its position on the market makes it or not possible the Skimming Price as
the best alternative for Price Setting for market share. The SWOT Analysis is referred but not presented
as part of the topic study. Likewise we make use of Secondary Data of Journal and book publications,
online business information, websites of Apple and principals competitors, as a previously Price
comparison Study as well.
4 Data and Case Description
4.1 Description of company
Apple is an American multinational corporation, established on April 1, 1976 in
Cupertino, California, that designs and markets consumer electronics, computer software,
and personal computers. The company's best-known hardware products include the
Macintosh computers, the iPod, the iPhone and the iPad. Apple software includes the Mac
OS X operating system; the iTunes media browser; the iLife suite of multimedia and
creativity software; the iWork suite of productivity software, among others.
[4]
Apple has established a unique reputation in the consumer electronics industry. They had gained a
customer base that is devoted to the company and its brand, particularly in the United States. Fortune
magazine named Apple the most admired company in the United States in 2008, and in the world in
2008, 2009, and 2010
[5]
. The company profit was around $8.24 billion closing the year 2009.
[6]
Product: IpadThe iPad is a tablet computer designed and developed by Apple. It is
particularly marketed as a platform for audio and visual media such as books,
periodicals, movies, music, and games, as well as web content. At about 700 grams (25
ounces), its size and weight are between those of most contemporary smartphones,
netbooks and laptop computers. Apple Inc. released the iPad in April 2010 in the United
States, and sold 3 million of the devices in 80 days.
[7]
The iPad works on the same operating system as the iPod Touch and iPhone,
though a slightly older version. It can run its own applications as well as ones developed for the iPhone.
Without modification, it only will run programs approved by Apple and distributed via its online store.
Like iPhone and iPod Touch, the iPad is controlled by a multitouch display sensitive to up to
eleven fingers— a break from most previous tablet computers, which used a pressure-triggered stylus.
The iPad uses Wi-Fi or a 3G mobile data connection to browse the Internet, load and stream media, and
Proceedings of the 8th International Conference on Innovation & Management
·391·
install software. The device is managed and synced by iTunes on a personal computer via USB cable.
Media reaction to the device has generally been neutral or positive, with more positive reaction after the
device was launched.
4.2 Marketing strategy and marketing mix
The Marketing strategy for Ipad leads the effort of Apple Inc. to concentrate its resources on the
greatest opportunities in order to increase sales and achieve a sustainable competitive advantage.
[8]
It is
centered on the key concept that customer satisfaction is the main goal. His target market is as follow:
Figure 2 Ipad Segmentation and Targeting Market
The segmentation of the market is based on Age, Income and geographic criteria. (Refer to figure 2
about segmentation and targeting market). According to age, we suggest that the target for Ipad is
situated on Youth and medium age (for the entertainment and business utility of the product). According
to income, is located on medium and high level (for the acquisition price); and the geographic
concentration of the market is focus on North America, Europe and some countries of Asia, on this first
Stage of the PLC respectively.
Table 1 Ipad Marketing Mix for US Market
4.3 Potential competitors
Although the tablet electronic device is relatively new on the market, it has some competitors firms
contending for market share and leadership. Among them we can enumerate Hewlet Packcard with the
HP Slate, which continue in state of develop and proof; JooJoo with 4 GB of memory and 12 inches;
Lenovo U1 with 16 GB and 11.6 inches, Archos 7 with Android OS, 8 GB of memory and 7 inches;
Dell Mini 5, among others. The possible prices for each of them are the following:
Figure 3 Comparison of Potential Product Competitors.
?Data From Web Research, Drawing by the Author?
Proceedings of the 8th International Conference on Innovation & Management
·392·
4.4 Price skimming strategy
As we mentioned, on the launching of Ipad there was a big segment of customers willing to acquire
the new device.
[9]
On this life cycle of the product, the price elasticity of demand tended to be low. In
other words, innovators and early-adapter customers were less price sensitive preferring another
influences factors of value, as brand empathy, status, fashion, position; and other part, technological
changes and competitive utility.
In a perfect competition market the consumer surplus is usually a benefit for the buyer of the good.
As we know, it consists on the maximum amount a consumer will be willing to pay for a good, minus
the amount the buyer actually pays for it. However when those customers buy the Ipad at the skimmed
price, they are transferring this value to the Company. This strategy depends on the factors already
explained in the literature review. The advantages and disadvantages are presented on the next section.
Figure 4 Skimming Price on demand and supply curve. General Theory
5 Highlights
5.1 Advantages of price skimming
Cause the research and development costs of an innovative product as Ipad are likely to be high, as
are the costs of introducing the product to the market via promotion, advertising etc., the practice of
price-skimming allows for some return on the set-up costs.
By charging high prices initially, Apple can keeps build a high-quality image for its product.
Charging initial high prices allows the firm the luxury of reducing them when the threat of competition
arrives. By contrast, a lower initial price would be difficult to increase without risking the loss of sales
volume.
Price skimming helps in segmenting the market. The price can be lowered to suit each segment and
thereby the demand of each segment is satisfied. That might allow Apple to make maximum profit from
each of them.
In Apple logistic, the product is distributed via retailer stores. The high price of the product brings
huge benefits for the retailers as well. Since the prices are initially high the manufacturer has the liberty
of lowering it when competitors knock at the door.
Because the Ipad had started to have the expected position, its buyers are more prestige conscious
than price conscious. Expensive goods easily attain the tag of being luxury items.
5.2 Disadvantages of price skimming
This policy is workable only when the product has an inelastic demand curve. If in the long run
demand curve turns elastic then market equilibrium will be attained by quantity changes instead of price
changes.
Skimming attracts competitors. The high margins compel them to enter onto the market as soon as
possible.
Skimming results in a slow rate of stuff diffusion and adaptation. This results in a high level of
untapped demand. This gives competitors time to either imitate the product or leap frog it with a new
innovation. If competitors do this, the window of opportunity will have been lost. A Critic wrote in a
research article: "The iPad prices and gaps in functionality are likely to leave the door open for other
media tablet vendors.”[10]
The process of Lowering of price for Ipad product should be done at an appropriate time. If
lowered too soon early customers could feel cheated. As a result the company and its brand name could
suffer. In other sense, if customers had waited a little longer before buying Ipad product, this would
have helped them to make a better deal.
High margins may turn the firm inefficient. There will be less incentive to keep costs under control.
Inefficient practices will become established making it difficult to compete on value or price.
Proceedings of the 8th International Conference on Innovation & Management
·393·
6 Conclusion
We have seen and overview of the Marketing Strategy of Apple Inc. and his marketing mix of how
it had made possible a positioning on the market, especially in the United States. Due to the Brand
Loyalty that Apple had acquired and taking into account their strengths and weaknesses, the company
has been able to take advantage of market opportunities and adapt to environmental threats, such as the
range of competitors, among others.
For the launching of Ipad on April 2010, the company made use of Price Skimming on this new
stage of the PLC. It is a useful strategy and could be done when:
-There are enough prospective customers willing to buy the product at the high price.
-The high price does not attract competitors.
-The high price is interpreted as a sign of high quality, status, technological utility, etc.
-Lowering the price would have only a minor effect on increasing sales volume and reducing unit
costs.
When the Skimmed Price tends to slow, Apple may change from Price Skimming to
Optional-product Pricing Strategy, offering accessories along with Ipad, such as chargers, adapters,
cases, cables, among others. Also is good to mentioned that the business of Apple does not only consist
on their devices selling (laptops, Mac, ipod, ipad, iphone, Apple TV) but on the selling of media (music,
books, software, applications and other services) through the net.
Reference
[1] 6FigureJobs.com News Desk Apple's Marketing Strategy for the iPad Puts Business Executives and
Consumers in Same Pool,2010,08
[2] Philip Kotler. Gary Armstrong. Principles of Marketing[M]. Pearson Education Inc / Prentice
Hall,2009
[3] The Sun Herald. Apple Launches iPad[R]. Retrieved, 2010,1(27)
[4] Encyclopedia online Wikipedia. Definitions and History of Apple Inc. and Ipad device
[5] Fisher Anne. America's Most Admired Companies[J]. Fortune, 2008,157 (5): 65–67
[6] Apple Inc. Revised Request Quarterly Income Statement[R]. Retrieved.2010,1(25)
[7] Apple Inc. website.Apple Sells Three Million iPads in 80 Days[R]. Cupertino, California.2010,6(22)
[8] Apple Inc. website. Apple Sells Three Million iPads in 80 Days. Cupertino, California. Churchill, G.
A., and Peter, J. P. (1998). Marketing: Creating Value for Customers, 2d edition. Boston:
Irwin/Mcgraw-Hill, 2010,6(22)
[9] Mac Rumors. Apple Tablet Media Event Today: "Come See Our Latest Creation".
Retrieved ,2010,1(27)
[10] Kit Eaton, Noah Robischon. The iPad's Biggest Innovation: Its $500 Price.2010,1(27)
[11] Boone, L. E., and Kurtz, D. L. Contemporary Marketing. 7th Edition. New York: Dryden/Harcourt
Brace,1992
[12] Journal Edibleapple. Behind Apple’s iPad marketing blitz,2010,4(6)
[13] Eric Lai. Apple iPad Versus Netbook: Features Compared. PC Advisor, United
Kingdom,2010,1(28)
doc_566697664.pdf
What is the secret behind the highly success of Apple Inc.? How the Brand has conquered a
considerable proportion of the market share as increased Brand Loyalty with the new Tablet product of
Ipad? The answer is already given: Brand Loyalty. This paper attempts to analyze the principal factors
and activities that conform his Marketing Strategy, and the advantages and disadvantages of a Price
Skimming setup on this kind of market. Price skimming strategy provides an excellent opportunity for
the company to maximize profits from the early stage of the Product Life Cycle (PLC), covering
research and development costs and eventually, slowly decreasing price when is needed, due of sales
reduction.
Proceedings of the 8th International Conference on Innovation & Management
·389·
Price Skimming on a Successful Marketing Strategy: Study of Ipad
Launching as Apple’s Innovative Product
Ma Huimin, Jose Antonio Hernandez
School of Management, Wuhan University of Technology, Wuhan, P.R.China, 430070
(E-mail:[email protected], [email protected])
Abstract: What is the secret behind the highly success of Apple Inc.? How the Brand has conquered a
considerable proportion of the market share as increased Brand Loyalty with the new Tablet product of
Ipad? The answer is already given: Brand Loyalty. This paper attempts to analyze the principal factors
and activities that conform his Marketing Strategy, and the advantages and disadvantages of a Price
Skimming setup on this kind of market. Price skimming strategy provides an excellent opportunity for
the company to maximize profits from the early stage of the Product Life Cycle (PLC), covering
research and development costs and eventually, slowly decreasing price when is needed, due of sales
reduction.
Key words: Marketing strategy; Price skimming; Price setting strategy; Ipad
1 Introduction
Price is perhaps the most important of the four Ps of marketing, since it is the only one that
generates revenue for a company. A Price strategy usually changes as the product passes through its life
cycle. One of the strategies for Price setting of new products consists in set high initial prices to “skim”
revenues layer-by-layer form the market (Kotler, Armstrong). The case of Apple on launching the Ipad
as a relative new product of electronic Tablet is an example.
Apple is well-known for their innovative thinking in terms of marketing, and the strategy for their
newest creation of iPad is no an exception. Part of Apple's marketing strategy is to have their products
appeal to the masses, gathering business customer and entertainment customer both in one market.
[1]
Its
combination of exceptional products, great style and design, great strategy, innovative marketing, sleek
and enticing communications is part of the key. In other words, his Marketing Mix and Strategy for
adding value to customer is translated into an excellent customer relationship and brand loyalty.
We aim to study the Marketing Strategy of Apple Inc. on the launching of Ipad, its Market Mix and
factors affecting the market. We compared the literature review and analyze the Unites States Scenario,
evaluating whether the Price Skimming might be the best alternative or not on this stage of the Product
Life Cycle (PLC). Finally we will enumerate the advantages and disadvantages of this Price Setting
strategy and bring up with some highlights and conclusion.
2 Literature Review
2.1 Marketing strategy and price setting
A Marketing Strategy consists of specific strategies for targeting market, positioning, marketing
mix, and marketing expenditure levels. It outlines how the company intends to create value for target
customers in order to capture value in return. It is on this part where the company plans how each
strategy responds to the threats, opportunities and critical issues spelled out earlier in the plan.
[2]
A critical part of a company's overall strategic planning includes the establishment of pricing
objectives for the products it sells. A company has several pricing objectives from which to choose, and
the objective chosen will depend on the goals and type of product sold by them (in our case the Ipad) to
the market.
2.2 Price skimming strategy
The practice of ‘price skimming’ involves charging a relatively high price for a short time where a
new, innovative, or much-improved product is launched onto a market. The objective with skimming is
to “skim” off customers who are willing to pay more for having the product sooner; prices are lowered
later when demand from the “early adopters” falls.
Proceedings of the 8th International Conference on Innovation & Management
·390·
Figure 1 PLC – Product Life Cycle. Generic Graphic
The success of a price-skimming strategy is largely dependent on the inelasticity of demand for the
product either by the market as a whole, or by certain market segment. High prices can be enjoyed in the
short term where demand is relatively inelastic. In the short term the supplier benefits from ‘monopoly
profits’, but as profitability increases, competing suppliers are likely to be attracted to the market
(depending on the barriers to entry in the market) and the price tends to fall as competition increases.
The main objective of employing a price-skimming strategy is, therefore, to benefit from high
short-term profits (due to the newness of the product) and from effective market segmentation.
3 Methodology
The study is conduced to analyze the scenario of Apple Inc. on the electronic device’s market,
especially in United States. (USA) Through a qualitative research, we aims to describe its segmentation
and targeting market and how its position on the market makes it or not possible the Skimming Price as
the best alternative for Price Setting for market share. The SWOT Analysis is referred but not presented
as part of the topic study. Likewise we make use of Secondary Data of Journal and book publications,
online business information, websites of Apple and principals competitors, as a previously Price
comparison Study as well.
4 Data and Case Description
4.1 Description of company
Apple is an American multinational corporation, established on April 1, 1976 in
Cupertino, California, that designs and markets consumer electronics, computer software,
and personal computers. The company's best-known hardware products include the
Macintosh computers, the iPod, the iPhone and the iPad. Apple software includes the Mac
OS X operating system; the iTunes media browser; the iLife suite of multimedia and
creativity software; the iWork suite of productivity software, among others.
[4]
Apple has established a unique reputation in the consumer electronics industry. They had gained a
customer base that is devoted to the company and its brand, particularly in the United States. Fortune
magazine named Apple the most admired company in the United States in 2008, and in the world in
2008, 2009, and 2010
[5]
. The company profit was around $8.24 billion closing the year 2009.
[6]
Product: IpadThe iPad is a tablet computer designed and developed by Apple. It is
particularly marketed as a platform for audio and visual media such as books,
periodicals, movies, music, and games, as well as web content. At about 700 grams (25
ounces), its size and weight are between those of most contemporary smartphones,
netbooks and laptop computers. Apple Inc. released the iPad in April 2010 in the United
States, and sold 3 million of the devices in 80 days.
[7]
The iPad works on the same operating system as the iPod Touch and iPhone,
though a slightly older version. It can run its own applications as well as ones developed for the iPhone.
Without modification, it only will run programs approved by Apple and distributed via its online store.
Like iPhone and iPod Touch, the iPad is controlled by a multitouch display sensitive to up to
eleven fingers— a break from most previous tablet computers, which used a pressure-triggered stylus.
The iPad uses Wi-Fi or a 3G mobile data connection to browse the Internet, load and stream media, and
Proceedings of the 8th International Conference on Innovation & Management
·391·
install software. The device is managed and synced by iTunes on a personal computer via USB cable.
Media reaction to the device has generally been neutral or positive, with more positive reaction after the
device was launched.
4.2 Marketing strategy and marketing mix
The Marketing strategy for Ipad leads the effort of Apple Inc. to concentrate its resources on the
greatest opportunities in order to increase sales and achieve a sustainable competitive advantage.
[8]
It is
centered on the key concept that customer satisfaction is the main goal. His target market is as follow:
Figure 2 Ipad Segmentation and Targeting Market
The segmentation of the market is based on Age, Income and geographic criteria. (Refer to figure 2
about segmentation and targeting market). According to age, we suggest that the target for Ipad is
situated on Youth and medium age (for the entertainment and business utility of the product). According
to income, is located on medium and high level (for the acquisition price); and the geographic
concentration of the market is focus on North America, Europe and some countries of Asia, on this first
Stage of the PLC respectively.
Table 1 Ipad Marketing Mix for US Market
4.3 Potential competitors
Although the tablet electronic device is relatively new on the market, it has some competitors firms
contending for market share and leadership. Among them we can enumerate Hewlet Packcard with the
HP Slate, which continue in state of develop and proof; JooJoo with 4 GB of memory and 12 inches;
Lenovo U1 with 16 GB and 11.6 inches, Archos 7 with Android OS, 8 GB of memory and 7 inches;
Dell Mini 5, among others. The possible prices for each of them are the following:
Figure 3 Comparison of Potential Product Competitors.
?Data From Web Research, Drawing by the Author?
Proceedings of the 8th International Conference on Innovation & Management
·392·
4.4 Price skimming strategy
As we mentioned, on the launching of Ipad there was a big segment of customers willing to acquire
the new device.
[9]
On this life cycle of the product, the price elasticity of demand tended to be low. In
other words, innovators and early-adapter customers were less price sensitive preferring another
influences factors of value, as brand empathy, status, fashion, position; and other part, technological
changes and competitive utility.
In a perfect competition market the consumer surplus is usually a benefit for the buyer of the good.
As we know, it consists on the maximum amount a consumer will be willing to pay for a good, minus
the amount the buyer actually pays for it. However when those customers buy the Ipad at the skimmed
price, they are transferring this value to the Company. This strategy depends on the factors already
explained in the literature review. The advantages and disadvantages are presented on the next section.
Figure 4 Skimming Price on demand and supply curve. General Theory
5 Highlights
5.1 Advantages of price skimming
Cause the research and development costs of an innovative product as Ipad are likely to be high, as
are the costs of introducing the product to the market via promotion, advertising etc., the practice of
price-skimming allows for some return on the set-up costs.
By charging high prices initially, Apple can keeps build a high-quality image for its product.
Charging initial high prices allows the firm the luxury of reducing them when the threat of competition
arrives. By contrast, a lower initial price would be difficult to increase without risking the loss of sales
volume.
Price skimming helps in segmenting the market. The price can be lowered to suit each segment and
thereby the demand of each segment is satisfied. That might allow Apple to make maximum profit from
each of them.
In Apple logistic, the product is distributed via retailer stores. The high price of the product brings
huge benefits for the retailers as well. Since the prices are initially high the manufacturer has the liberty
of lowering it when competitors knock at the door.
Because the Ipad had started to have the expected position, its buyers are more prestige conscious
than price conscious. Expensive goods easily attain the tag of being luxury items.
5.2 Disadvantages of price skimming
This policy is workable only when the product has an inelastic demand curve. If in the long run
demand curve turns elastic then market equilibrium will be attained by quantity changes instead of price
changes.
Skimming attracts competitors. The high margins compel them to enter onto the market as soon as
possible.
Skimming results in a slow rate of stuff diffusion and adaptation. This results in a high level of
untapped demand. This gives competitors time to either imitate the product or leap frog it with a new
innovation. If competitors do this, the window of opportunity will have been lost. A Critic wrote in a
research article: "The iPad prices and gaps in functionality are likely to leave the door open for other
media tablet vendors.”[10]
The process of Lowering of price for Ipad product should be done at an appropriate time. If
lowered too soon early customers could feel cheated. As a result the company and its brand name could
suffer. In other sense, if customers had waited a little longer before buying Ipad product, this would
have helped them to make a better deal.
High margins may turn the firm inefficient. There will be less incentive to keep costs under control.
Inefficient practices will become established making it difficult to compete on value or price.
Proceedings of the 8th International Conference on Innovation & Management
·393·
6 Conclusion
We have seen and overview of the Marketing Strategy of Apple Inc. and his marketing mix of how
it had made possible a positioning on the market, especially in the United States. Due to the Brand
Loyalty that Apple had acquired and taking into account their strengths and weaknesses, the company
has been able to take advantage of market opportunities and adapt to environmental threats, such as the
range of competitors, among others.
For the launching of Ipad on April 2010, the company made use of Price Skimming on this new
stage of the PLC. It is a useful strategy and could be done when:
-There are enough prospective customers willing to buy the product at the high price.
-The high price does not attract competitors.
-The high price is interpreted as a sign of high quality, status, technological utility, etc.
-Lowering the price would have only a minor effect on increasing sales volume and reducing unit
costs.
When the Skimmed Price tends to slow, Apple may change from Price Skimming to
Optional-product Pricing Strategy, offering accessories along with Ipad, such as chargers, adapters,
cases, cables, among others. Also is good to mentioned that the business of Apple does not only consist
on their devices selling (laptops, Mac, ipod, ipad, iphone, Apple TV) but on the selling of media (music,
books, software, applications and other services) through the net.
Reference
[1] 6FigureJobs.com News Desk Apple's Marketing Strategy for the iPad Puts Business Executives and
Consumers in Same Pool,2010,08
[2] Philip Kotler. Gary Armstrong. Principles of Marketing[M]. Pearson Education Inc / Prentice
Hall,2009
[3] The Sun Herald. Apple Launches iPad[R]. Retrieved, 2010,1(27)
[4] Encyclopedia online Wikipedia. Definitions and History of Apple Inc. and Ipad device
[5] Fisher Anne. America's Most Admired Companies[J]. Fortune, 2008,157 (5): 65–67
[6] Apple Inc. Revised Request Quarterly Income Statement[R]. Retrieved.2010,1(25)
[7] Apple Inc. website.Apple Sells Three Million iPads in 80 Days[R]. Cupertino, California.2010,6(22)
[8] Apple Inc. website. Apple Sells Three Million iPads in 80 Days. Cupertino, California. Churchill, G.
A., and Peter, J. P. (1998). Marketing: Creating Value for Customers, 2d edition. Boston:
Irwin/Mcgraw-Hill, 2010,6(22)
[9] Mac Rumors. Apple Tablet Media Event Today: "Come See Our Latest Creation".
Retrieved ,2010,1(27)
[10] Kit Eaton, Noah Robischon. The iPad's Biggest Innovation: Its $500 Price.2010,1(27)
[11] Boone, L. E., and Kurtz, D. L. Contemporary Marketing. 7th Edition. New York: Dryden/Harcourt
Brace,1992
[12] Journal Edibleapple. Behind Apple’s iPad marketing blitz,2010,4(6)
[13] Eric Lai. Apple iPad Versus Netbook: Features Compared. PC Advisor, United
Kingdom,2010,1(28)
doc_566697664.pdf