Question

What is Apple's pricing strategy for the computer market?

Answer 1

Apple Inc. is an innovation and technology-oriented company, which is differentiated by other companies by its brand-value and perception. Apple has various unique featured products such as the Macbook Air, Macbook Pro, Macbook mini, etc which has attracted a lot of consumers in one way or another. High-end technology, simplicity, unique design, and a sense of luxury are some of the significant features consolidated into these products.

Because of this uniqueness in the product, Apple's pricing strategy is based on the skimming pricing method which means pricing the product relatively at a high cost and getting maximum profit through it. But it follows this only in the introduction stage for their products. This strategy is used when a product is in the introduction phase of the life cycle and then Apple reduces the prices slowly as the product lifecycle comes to an end. This strategy is generally used for technological products in the introduction phase in order to target Early adopter consumers in the market who are willing to pay premium price. The product life cycle and target customers at each phase are explained in the below diagram.

Product Life Cycle & Adoption Maturity Decline Growth Introduction Research Development & Sales Stage 1 1 Stage 2 Stage 3 Early Early Adopters Majority Innovators Stage 4 Stage 5 Late Majority Laggards Time