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- a). A higher introductory price is simply part of life in the technology line
The words of Steve Jobs imply that the iphone market as well as the rest of the electronics markets should be ready to support better products in the future since the pace of technology has to be set higher through marketing dynamics such as pricing. The actual implication of these words is to prepare the market for future products with the same excitement as previously experienced. Perhaps, this was a marketing technique or strategy to condition the consumers of the Apple products for continued innovation such as the smart phone technology well established by Apple (Kunz, para. 2). Apparently, marketing strategy can be very phenomenal in the establishment of a gigantic market share such as the one that Apple has, amid unprecedented technological competition from the mobile phone market such as Blackberry, Samsung, Huawei and Nokia among many others. Psychological conditioning achieved by the delivery of these words to the market can only be the explanation of the marketing technique that Steve Jobs anticipated.
- b) Price of a newly introduced product may not only include the exchange of value
Pricing strategy adopted for entry of new products into the market can be used to make a marketing statement. In terms of brand image and value, the marketer stamps authority in the market by creating the impression that the brand name is worth more in price than competitor brands. In line with brand image and its value, the marketer generates prestige and market differentiation. As an illustration of the prestige element, some products may be completely similar but due to the market target as outlined in the marketing strategy such as segmentation may result to different prices for different consumers. Quality products and service offered by the marketer attracts customers who would be willing to part with a little more money than uncertain competitor products, which enables the marketer to charge for this trust.
- a). Role of product demand in the pricing of the iphone
Apparently, high demand attracts high prices for products due to the direct relationship that demand dynamics have on price. In view of the anticipation created by Apple for the iphone among its consumers, the demand is generally high with figures of orders always surpassing the units in supply. As a result, Apple may be forced to push the prices higher to keep in touch with the forces of the market. Changes in price are not likely to affect the quantity demanded in the short run as the technology keeps advancing and Apple shifts the attention of the market to better products. This cycle has attracted a close following by the customers who are willing to buy the products at the prices that Apple sets.
- b) The influence of high introduction pricing followed by reduced prices two months later
Apple is a market winner in.............
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