Impact of Penetration Pricing Strategy on Customer Attraction: A Study on Apple Inc.

SELECTION OF PENETRATION OF
PRICING STRATEGY IN A
BUSINESS OFF APPLE INC
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Abstract
The main purpose of this dissertation is to determine the major impact of penetration pricing
strategy in attracting customers towards new product or services of Apple Inc. There are
different activities used for completing current dissertation in systematic manner. Introduction
was first activity that was done by developing aim and objectives. Literature review is another
activity that was completed by using secondary sources i.e. articles, books, magazines etc. These
sources helped investigator in gathering of secondary information and attainment of research
aim. Research methodology is one of the main activities that were done by using different types
of methodologies including deductive approach, quantitative research choice, questionnaire etc.
These are main methodologies that helped researcher in collecting of appropriate information
about the topic. Quantitative data was analysed via frequency distribution analysis. At last
conclusion and recommendation was done by explaining entire information in systematic manner
that result in attainment of all objectives in successful manner.
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Contents
Abstract............................................................................................................................................2
Chapter 1: Introduction....................................................................................................................4
Overview of the title....................................................................................................................4
Background of an organisation....................................................................................................4
Research aim................................................................................................................................4
Research objectives.....................................................................................................................5
Research questions.......................................................................................................................5
Rationale of the research.............................................................................................................5
Significance of the research.........................................................................................................5
Chapter 2: Literature review............................................................................................................6
Chapter 3: Research Methodology..................................................................................................9
Chapter 4: Data analysis and interpretation...................................................................................15
Chapter 5: Conclusion and Recommendations..............................................................................23
Conclusion.................................................................................................................................23
Recommendations......................................................................................................................23
REFERENCES..............................................................................................................................25
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Chapter 1: Introduction
Overview of the title
Penetration pricing strategy refers to the marketing strategy applied by an organisation,
with aim of attracting larger base of customers towards new services or products offering a lower
price or cost during its initial offerings. This is essential for an organisation because it will help
an innovative service or products penetrate the market as well as attract customers away from
competitors. There are different advantages of using penetration pricing strategy for an
organisation. These are: increased customer interest, reduced competition, more brand loyalty,
increased sales and many more (Roma, Panniello and Nigro, 2019). All these are main
advantages of penetration pricing strategy that will be beneficial for an organisation in
attainment of competitive advantages in successful and within minimum time period. Along with
this, penetration pricing strategy is a type of pricing strategy which is applied to speedily gain
market share through setting an originally low price to induce customers to buy. Such kind of
pricing strategy is mainly applied by new entrants into a market. There is different rationale
behind selection of penetration pricing i.e. capture market share, develop brand loyalty, switch
customers from competitors, drive competitors out of market, create significant demand etc.
There are different advantages of penetration pricing for an organisation including high adoption
and diffusion, marketplace dominance, economic of scale, increased goodwill, high inventory
turnover and many more. These are major advantages of penetration pricing that will help a
business organisation in attraction of maximum customers within less time period.
Background of an organisation
Apple Inc. is a chosen organisation for this project. This is an American multinational
technology company that is specialising in selling of Smartphones and tablet. Company was
founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne and headquartered in
Cupertino, California. The product of Apple is available at hire cost that only attracts high
income class people. There is requirement for company to also attract middle class people by
using penetration pricing strategy. By using this pricing strategy, Apple Inc. can easily attract
larger number of customers. This pricing strategy helps them in selling of their products at
minimum cost. For this apple can introduce new features in smartphones and tables at minimum
rate. This turn to impact in increasing of their sales and customer base within minimum time
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period. Main purpose of Apple Inc. is to increase customer base that is only possible by using
penetration pricing strategy.
Research aim
“To identify the impact of penetration pricing strategy in attracting customers towards
new product or services. A study on Apple Inc.”
Research objectives
 To develop basic understanding regarding the penetration of pricing strategies in context
of an organisation.
 To determine the significance of penetration pricing strategy for Apple Inc.
 To examine the relationship between penetration pricing strategy and customer attraction.
Research questions
 What is penetration of pricing strategy in an organisation?
 What is the significance of penetration pricing strategy for a company?
 What is the relationship between penetration pricing strategy and customer attraction?
Rationale of the research
Main rationale behind selecting this topic is to identifying the issues of lack of customer
base within an organisation. This is a main reason behind doing this investigation and for this
penetration pricing strategy will be used because it will support an organisation by incurring
customer base. High customer turnover is not good for the growth and success of an organisation
because it reduces brand value in marketplace (Chan, Fung and Ng, 2018). This research is
related to Apple Inc because this will help them in identifying the significance of using
penetration pricing strategy. By identifying this, Apple Inc can easily attract larger customer base
that turn to impact on their sales and profitability in positive manner.
Significance of the research
Current research is significant for an individual, organisation and many other stakeholders.
For individual, this dissertation help researcher by enhancing their different types of research
skills such as literature review, time management, communication, data collection and so on.
With the help of all these skills, researcher can easily complete each activity of dissertation in
systematic and successful manner. For organisation and other stakeholders, present investigation
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helps them by improving their knowledge about penetration of pricing strategy along with its
effectiveness in attraction of larger customer base.
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