Pricing the Apple iPad

PRICING THE APPLE IPAD 5

Pricingthe Apple iPad

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Technologicalinnovationshavebroughtabout newandimprovedgadgetsin communication.One of thesegadgetsis theiPad. Severalcompanieshavecomeup with improvediPads, andthishas resultedin a lotof competitionin themarket.One of theseenterprises is Apple, which has innovated severalformsof iPadswith thelatestbeingiPad 5.

Othercompanieslike Google andtheMicrosoft Corporation havealsodevelopedtheir formsof iPads. TheAppleiPadhas its shareof themarketdue to its improvedfeatures.Anotheroutstandingfeatureis its broadrangeof applications.To remainin themarket,Apple has to applya pricing strategyforits iPad. Thecompanymust considersomepricing factorsandbe dynamicto changesthat may forcethemselves into themarket(Kotler&amp Keller, 2012).

Inmarketing,pricingentailsmany considerations.One of theconsiderations,whichthe team should factor out,ispriceadaptation.WhenpricingtheiPad theteamshould adapttheir processto takecareof thedifferentmarkets.First,theywill setthepricebased on geographicallocations.Customerswhoare foundin marketsfarawayfrom theindustrymay gettheiPad at a higherpriceto caterforlogistical charges(Moreau,2013). In doingthis,theteamshould carefullyevaluatethemarketsegmentin variousgeographicalareas.Theproductmay be setat a lowerpricein someregionsto winmanycustomers.Thelowpricewill expandthemarketsegmentof theproduct(Kotler&amp Keller, 2012).

Anotherpriceadaptationstrategytheteamshould employis premiumpricing. In someplaces,thedemandfortheiPad will be veryhighandthecompetitionweak.Theteamshould takeadvantageof themarket stateto increaseits salesandexpandthemarketshare.Accordingto thePimentel (2013), Apple iPad continuesto enjoythelargestmarketshare.Thedemandforthe devices is stillhigh,though with somecompetitionfrom Google andIBM. In North America, the iPad possesses81% of thetablets’ market.Thebigshareshowsthatthecompanyis receivinglittlecompetitionin theregion.Thisimplies that theenvironmentwill be favorablefortheapplicationof premiumpricing strategy(Pimentel, 2013).

TheiPad pricewill haveto be compliantwith theinternationalpricing strategies,as wellas theindividualcountryregulations.Whenpricinga productfordifferentmarkets,theprevailingmarketrulesfordifferentcountriesare considered.Agoodexampleis theresale pricemaintenancethat is observedby manycountries(Terpstra et al., 2012). Theregulationis customized by individualcountriesto suitthelocalmarkets.WhensettingthepricefortheiPad, theteamwill haveto seta pricefavorablefortheindividualcountries.

Onthesamenote,thegroupshould alsousethestrategyfor competitivepricing (Powers &ampLoyka,2010). Theideaappliesin areaswherethedemandfortheiPad is smallandthecompetitionis high.Forexample,theiPhone marketwasfavorablein 2014 compared to tablets. Thesaleof iPhones surpassedthatof Ipad. Theteamshould adjustiPhone’s pricein such a scenarioto increasethesalesofiPad(Moreau, 2013).

Themarketingteamwill haveto makenecessarychangesin pricingtheiPad as dictatedby circumstances.Reductionin costof a substitutedwill affectthepriceof theproduct.Aswehaveseenearlier,Google andMicrosoft are competing with Apple for tabletmarket.Anychangein priceof theothercompanies`tablets will attracta changein priceof Apple`siPad (Powers &amp Loyka, 2010). Itwill be necessaryto maintaintheir originalmarketshare.There is a stiffcompetitionbetween Samsung tablets andApple’s iPads in themarket,althoughApple is stillleadingother companies. AppleiPad accountedfor6.7% of theelectronicmarketin 2014. Samsungfollowed it closelyat 5.1% andGoogle at 2.7%. Itis evidentthatthesaleof Apple iPads will be significantly affectedby anyreductionin priceof Samsung iPads. Theteammust forecastthispossibilityandinitiatethepricechangewhennecessary(Moreau,2013).

Theteamwill alsomakechangesin priceto suitthedifferentmarkets.Aproductis alwayssubjectto pricediscriminationto satisfythepre-set objectivesof thevariousmarkets.Thesechangesare reviewedfrom timeto time.Thepriceof theproductwill differforbothnewmarketsandthealreadyexistingmarkets.Ifthegoalis to establishnewmarketsegments,thepricewill haveto be reducedforthenewmarkets(Powers&amp Loyka, 2010).

Inconclusion, Apple iPad continuesto enjoythelargestelectronicsmarketshare.However,itmay not goon enjoyingthisprivilegeifitdoesnot remaindynamicto theever-changingelectronicmarket.Thecompaniescompetingwith Apple can be bigthreatsin caseof anymiscalculation. Priceadaptationsandchangewill continueto be a primaryfactorfortheApple iPad to continueenjoyinga largemarketshare.

References

Kotler,P., &amp Keller, K. L. (2012). MarketingManagement(14th ed.). Pearson Education, Inc: Boston,

Moreau,J. (2013). Applenew products: Buying Guide.Orange Publishing: Colorado.

Pimentel,B. (5thAugust, 2013). Apple’s iPad still number one but market shareshrinking. Market Watch, 22.Web. Retrieved on January 29, 2015 fromhttp://www.marketwatch.com/story/apple-ipad-still-no-1-but-market-share-shrinks-2013-08-05-121032945

Powers,L., &amp Loyka, J. (2010). Adaptation of marketing mix elements ininternational markets. Journalof Global Marketing,23(1), 65-79.

Terpstra,V., Foley, J., and Sarathy, R. (2012). InternationalMarketing.Naper Publishing Company: Naperville.

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