Marketing Mix: Marketing mix refers to the selection of appropriate mix of product, price, place and promotion while planning to market a product or service. Pricing mix includes appropriate pricing strategies are selected by the marketer. Under price element, there are several pricing strategies skimming strategies, penetration strategies and comparable pricing strategies that company can use according to suitability to product. Under penetration strategy, Company set low prices to attract customers. In contrary to this, in skimming pricing, companies only target people, who are not price sensitive and set high prices for the product.
For instance, Apple also incorporated several different pricing strategies at the same time. Apple unveiling a new technology favours setting high prices to maximizing market skimming. Apple deals in various advanced electronic items like smart iPhone, Wi-Fi devices, IPod, etc. Clearly there is a certain buyers’ expectation linked to Apple’s pricing, because the company has created a high quality image with a relatively high price level. Products priced using a price-skimming strategy is perceived as high-quality products. So, Apple used this strategy to establish its brand based on quality or status in order to reach its target markets. Along with price being equated to quality of its products, consumers, who are status conscious, purchase these higher priced products for prestige.
Apple focuses on new innovations in its products to grab the early adopters in the market due to not having any competition. This strategy enables the company to recover its research and development costs of new products. Apple is known to improve its products in short intervals adding new features while keeping the prices constant rather than dropping them. Due to high good value of products, customers will immediately purchase the products as Apple launches them in the market even at higher prices.
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