Product and Price Strategy of Apple Company

This study discusses the product and pricing strategy of Apple Company, a globally popular name in consumer electronics. It analyzes Apple's product strategy, including its range of premium-priced smartphones, and its pricing strategy, which includes premium pricing and price skimming.

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Product and Price Strategy of Apple Company
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Executive summary
Product and pricing strategy are the essential parts of the marketing mix strategy. This study also
has discussions on the product and pricing strategy of Apple Company. Apple is a globally
popular name in the world of consumer electronics. It holds a global recognition in selling
Hardware, Software and Services. As per the study, the popularity reached a different level with
its series of flagship phones. From iPhone 3G to the latest it continued satisfying the needs of its
target customers. Apple, as found in this study, is different from its competitors in terms of both
the product and pricing strategy. The core feature of its product strategy is offering quality
products. The pricing strategy effectively travels from premium pricing to price skimming
depending on the stages of a product.

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Table of Contents
Marketing Mix Strategy:..................................................................................................................3
1. Product Strategy.......................................................................................................................3
2. Price Strategy...........................................................................................................................4
References........................................................................................................................................7

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Marketing Mix Strategy:
This section analyses the product as well as the pricing strategy of Apple. The assessment
will be based on the findings of the PESTLE analysis of the Apple Company.
1. Product Strategy
Consumer products can be categorized into different categories such as convenience
products, specialty products, unsought products and shopping products. Apple’s products fall
into the category of “Specialty Products”. It is because Apple is famously known for selling
high-quality expensive products. For example, the range of Apple’s smartphones is all premium-
priced. In spite of being very different from its strong competitors like Samsung, Apple is able to
drive the sales. It is because Apple has a good understanding of its target customer (Yang &
Shim, 2018).
Apple does make good utilization of ‘width and depth’ in the product mix. The width of
the product mix has already been stated above. It has been mentioned earlier that Apple offers a
variety of products in three distinct categories like Hardware, Software and Services. Apple
effectively utilizes depth in product mix. It is evidenced by its strategy to offer a series of legacy
phones such as iPhone 3G, iPhone 4, iPhone 5, iPhone 5S, iPhone 6S, etc. (Kim & Lee, 2018)
Apple product portfolio has both tangible and intangible elements. The tangible
elements comprise of all its hardware products such as Mac computers, iPod portable digital
media players, iPad tablets, Apple smartwatch, Apple TV, Computer accessories and iPhone
smartphones. The intangible elements have all its software and services such as iTunes,

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Operating systems, Creativity and productivity suites, Safari, iTunes Music Store, iCloud, App
Store and Apple SIM (Coccia, 2018).
The four stages of the product life cycle (PLC) is less evidenced in Apple's product
portfolio. The global smartphone sector offers a fiercely competitive landscape. Smartphone
maker instead of continuing with one phone prefer bringing a new and an even better a product.
It goes the same to Apple as well. Apple offers its customers one new flagship model every
single year. It is due to this trend in the marketplace, Apple-like other smartphone makers spend
less or perhaps no time on continuing with a product over four different phases of PLC
(Mohammed, 2018).
Apple-like other smartphone brands are good in labeling strategy. The labeling indicates
the basic features of the product. Apple now uses a different other than originally used content in
the development of new products. The process is known as the Apple New Product Process
(ANPP). ANPP is a complete documentation of the processes and resources to be followed in the
making of products. It usually contains elements such as informing the people involved in the
process, their activities in different stages and the time for the project (Trabucchi et al., 2018).
2. Price Strategy
Pricing decisions involve decision-makers in the Company. The pricing decision has less
influence on its competitors’ pricing. It rather influences the demand for phone features. The
prices go up with new products those that have better features from the predecessor models.
Pricing objectives are aimed at delivering value to what customer pays. Even if the products are
high-priced these should value the purchase. Undoubtedly, customers have no complaints about

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the product pricing (Makov et al., 2019). However, the same strategy does not perform equally
well in developing nations like in India as compared to the developed nations. The future might
not be the same for Apple as because the minimum wages are on a rise in China and that the
numbers for middle-income groups are decreasing in the United States (Silva et al., 2018). These
facts are worth noting because Apple is hugely reliant over China for low-cost mass production.
Moreover, the United States is the biggest market for Apple products (Silva et al., 2018).
There is a significant shift in pricing strategy from premium pricing to price-skimming.
The shift is mainly for regions that have been ignorant of Apple's products due to its high
pricing. It includes India as well. The recent price cuts for iPhone XR have doubled the sales
figure for the Company in a year (Kim & Lee, 2018). Value-based pricing is essential to Apple’s
pricing strategy. It makes products, which are of high quality and highly valuable as it tends to
satisfy the growing demands of knowledgeable buyers.
Apple on a broader aspect follows two distinct stages for establishing prices for the
products. At the launch of a product, Apple follows the premium pricing strategy. Once, the
demand is fulfilled or a new product from another company is picking-up in demand, Apple
slashes the prices to ensure that the product remains sellable. In this way, Apple also follows
price discounting strategy to sell higher units of a particular product (Trabucchi et al., 2018).
Apple does take good advantage from its previously-built reputation in assessing the
paying capability of its target customer segments. Apple scores giant sales with its every new
release. This makes people searching for its next flagship model. When they do it they know it of
course that they will have to pay more than they did it now. Over the years, things such as this
have become integral to Apple’s products. The price for each new product is always on a higher
side than its predecessor (Silva et al., 2018). It is worth noting that Apple in the recent few years

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has never failed with this strategy. For example, the demand for Apple X exceeded its supply in
its earlier days (Silva et al., 2018). Apple has been different from its competitors in terms of the
user experience for the products. Android-based smartphone brands offer different user-
experience with each new launch. They sometimes lack the stability and struggle in offering an
enhanced experience with a new launch. On the contrary, Apple does offer similar user-
experience with its every new launch. It performs even well than before with more added
features in the new launch (Yang & Shim, 2018). Things as such these are exclusive only to
Apple. It never compromises with the quality. From product packaging to in-built features Apple
delivers in every aspect of a total product. From the core features of a product to supplemental
features Apple is just awesome.

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References
Coccia, M. (2018). Functionality development of product innovation: An empirical analysis of
the technological trajectories of smartphone. Coccia M, 241-258.
Kim, H., & Lee, C. (2018). The effects of customer perception and participation in sustainable
supply chain management: A smartphone industry study. Sustainability, 10(7), 2271.
Makov, T., Fishman, T., Chertow, M. R., & Blass, V. (2019). What Affects the Secondhand
Value of Smartphones: Evidence from eBay. Journal of Industrial Ecology, 23(3), 549-
559.
Mohammed, A. B. (2018). Selling smartphones to generation Z: Understanding factors
influencing the purchasing intention of smartphone. International Journal of Applied
Engineering Research, 13(6), 3220-3227.
Silva, A. T., Moro, S., Rita, P., & Cortez, P. (2018). Unveiling the features of successful eBay
smartphone sellers. Journal of Retailing and Consumer Services, 43, 311-324.
Trabucchi, D., Buganza, T., Dell'Era, C., & Pellizzoni, E. (2018). Exploring the inbound and
outbound strategies enabled by user generated big data: Evidence from leading
smartphone applications. Creativity and Innovation Management, 27(1), 42-55.
Yang, S. K., & Shim, J. H. (2018). The Effects of Service Qualities on Customer Satisfaction,
Trust, and Behavioral Intention in Smartphone Shopping Malls. International Journal of
Industrial Distribution & Business, 9(12), 31-43.