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Apple Pricing and Retailing Strategy

Apple Pricing and Retailing Strategy

In any marketing environment, setting an optimum price of products can be extremely challenging. Before setting an optimum price, various issues should be considered, such as the competition, market, and prospective customers. Whether the aim of the company is to make profits or increase market share, price setting should be a careful process. In addition, the right optimum price of a product should ensure that the company realizes profits and leaves customers satisfied. In this respect, Apple Inc uses the “optimum pricing strategy” to market its products (Ignatiuk, 2009).

The optimum pricing strategy entails comparing its prices with other market players. This has helped the company to set prices that have not made their products attractive to customers. The company uses forces of demand and supply when pricing its products. Therefore, the price corresponds to the intersection of the demand and supply curve. In addition, the company’s sales department fixes the prices by considering production costs and the projected level of profits. As a result, company increases the potential of breaking even at the point of sale.

Research has shown that, when introducing new products in the market, an organization should use picing to gain a market share strategy. When Apple Company develops new products, it adopts optimum pricing strategy by setting lower than those of the competition. This helps in developing a positive customer relationship and persuading them to purchase their products. Besides, setting low prices has enabled Apple Company to gradually realize profits, thus building on its market share (Huang, 2001). However, the company has been cautious not to set its prices too low to avoid eliciting doubt from customers about the quality of its products. As a result, the company has remained a market leader in the consumer industry.

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Retail Strategy

A retail strategy has been defined as a component in a marketing plan, which illustrates how a company intends to display its products on its retail outlets. Other key components of a retail strategy include incentives, price discounts and location of premises to attract and appeal to consumers. The primary retail strategy used by Apple Company to market its products is “controlled distribution”. The company has opened up various retail outlets in capital cities for easy accessibility of its products by its customers. In the USA for instance, Apple opened 284 stores, so as to enlarge its market share. In adddition, Apple is advertising and selling its products through Amazon which is one of the largest online retailers (Tosics, 2008)

Through the numerous Apple stores which are conveniently located worldwide, customers are able to experience a stimulating and personalized value of the Apple brand. Customers are able to discover a wide variety of Apple products, try them out and get practical guidance from the Apple staff that is quite informative and ready to sort out any problem. The company has also strived towards the removal of competition from the point of sale. This was achieved through the provision of a variety of products and services in its stores, products that were elegantly packaged, appealing and affordable, hence wooing the consumers to buy more (Huang, 2001).

   

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Another vital retail strategy used by Apple Inc is forming strategic alliances with other companies like AT&T, Best Buy and Wal-Mart. For example, it has partnered with HP to enhance the distribution of the iPod, consumer PCs and laptops. Additionally, it partnered with Harvey Norman to sell its Apple Macintosh systems in an effort to reach its online customers (Ignatiuk, 2009). As a result of Apple’s effective retail and pricing strategies, it has remained competitive in the market.

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