Brand Strategy from the Big Leagues: How Apple’s Pricing Drives Sales and Loyalty

BIG LEAGUES:BRAND STRATEGY

BIG LEAGUES:from BRAND STRATEGY

How apple’s pricing drives sales and loyalty

Why apple is exceptional among PCs

the

How iPhones Prove the Power of Version PricingVersion pricing is a pricing strategy that includes different versions of the same product

to appeal to different customer segments and their individual willingness to pay.

Why Apple’s Price Discrimination Works:

INTRODUCTION GROWTH MATURITY DECLINE

PROD

UCT S

ALES

Apple prices products higher at time of launch because Early Adopters are willing to pay more to get their hands on technology.

Why Apple Can Command A PremiumDuring launches, Apple regulates inventory, giving more exclusivity to those who

are able to snag one and keeping demand high.

Apple products with more memory carry a larger price tag.

Secretive product launches and press events build enough buzz tokeep consumers in line for hours.

The high price point is consistent because discounts are rare. There is little incentive to sellbelow MAP, since resellers don’t receive much of a discount on bulk orders.

“With the 5C in place as a fighter brand, the 5S is now better positioned to customers who highly value the handset and can continue to command a premium.”

Rafi Mohammed

PRICE BASED ON VALUE

CREATES FERVOR FOR THEIR PRODUCTS

KEEPS PRICES AND BRAND VALUE CONSISTENT

Innovators EarlyAdopters

EarlyMajority

LateMajority

$599

$499

$399

$299

$199

$99

Apple introduced the 5C starting at $99, a lower price point compared to the 5S, which goes all the way up to $399*.

1st gen 3g 3gs 4 4s 5 5s 5c

26.5%22.8% 13.7%PC Market Share

$ $$ $$

$

$104.3billion $104.3billion

Apple is the #1 mostvaluable brand

#1

Apple sells

only 28% of

HP’s volume!

Are resellers undercutting your brand value by selling below MAP?Monitor them and improve your brand perception.

MSRP Watchdog for BrandsPr i c i n g Pe r fe c te d.

http://appleinsider.com/articles/14/01/09/apples-domestic-mac-sales-surge-285-as-overall-pc-market-shrinks-75

http://appleinsider.com/articles/11/06/24/apple_may_make_more_profit_selling_one_mac_than_hp_does_from_7_pcs

http://wallstcheatsheet.com/stocks/apples-sales-are-nothing-special-but-look-at-those-profit-margins.html/?a=viewall

http://blogs.hbr.org/2013/09/apples-iphone-pricing-strategy/

Sources:

442 Post StreetSF, CA, 94102

1.855.469.4737info@wiser.com

computer$370.55 /

Apple pocketsnearly 20% of

its revenueas profit

Apple makes more profit from selling one Mac than HP does

from selling 7 of its computers!

Apple sells 5%of the

world’scomputers

*These prices are based on two year contracts.

BUT MAKES

45%OF THE

INDUSTRY’S

PROFITS