Apple Inc. Non-Price Competition.

Apple Inc. Non-Price Competition.

Companies utilize various but complementary strategies to increase profits and generate revenue. Pricing marketing strategies involve using the product’s price to draw in new customers while at the same time, maximizing returns from the existing clients. On the other hand, non-price marketing strategies involve the utilization of branding, among others methodologies to appeal to customers without changing the price. Although pricing strategies are universal, Apple has shown to utilize non-price strategy to promote their products even during downturns.

Apple Inc. is a top competitor in the smartphone industry and considered to be in an oligopoly and monopolistic competition market. The double categorization is due to the several competitors in the industry and also Apple’s position in this market. It is highly costly for a new firm to enter the market and compete with Apple Inc. Additionally, the firm’s relatively broad consumer base prevents other firms from entering the market.  However, the general consumer base is not derived from relatively lower prices as one would expect. Instead, it is from Apple’s non-price competition strategies that maintain its coveted market position.

When it comes to marketing their products, Apple Inc. uses other means other than reducing the price of their products. This additional means could be through differentiation, delivery of their services and also the suitability of the location. Apple products have unique features, they are sold at popular places, at a fast and reliable manner and importantly, solidifies the company’s high-status identity. Although buying an Apple I phone may be more costly than acquiring a Samsung, the non-price strategies adopted by the company ensures that the firm still outplays its competitors.

Apple Inc. offers a variety of differentiated products including, macs, ipads, iPods and cellphones (iPhones). These products possess unique and unrivalled features that stand out from their competitors’ products in the same line. For Instance, Apple’s macs are less bulky, slimmer and relatively more comfortable to carry around and thus makes it outstanding if compared with other laptops. This unique and eye-catching feature makes Apple Inc. more appealing to the consumer. Further, the company has several stores in highly populated areas and thus makes it easier for the consumer to access the product. For example, in Los Angeles, the company operates close to twenty stores. The company’s customer services are highly amiable to the public eye. For years, the company has established a reputation always to help customers in need. For instance, the company offers service numbers, manuals and tutorials to better the customer’s understanding of the product. Additionally, Apple has a few in house location services to educate the customers of their products, and the Genius Bar is an excellent example of such in-store services.

In a nutshell, Apple’s non-price competition is a factor of two elements: the company’s advertisements and image. To promote its products, Apple embraces pop culture and uses its art to appeal to the public eye. Often, the company pays celebrities and famous faces to promote their products by showing how high end the products are. Moreover, their logo containing an image of a literal apple is branded in all of their products. Once a consumer observes this logo in a product, it immediately clicks that Apple Inc offers the product. This company’s image is of high reputation, and regularly the customers gravitate around its available products.

Over the years, Apple has continued to prove to be not an only top competitor in price completion but also non-price competition. The company’s services, style, location and advertising strategies have contributed to its immense achievements. Undoubtedly, if the company had failed in non-price game, it would have been overtaken long ago.

However, other companies are also challenging Apple Inc. in non-price competition. Other companies like Hewlett & Packard (HP) have attempted to produce laptops that are thinner and less bulky and even the same mass package as Mac Book Pro. Interestingly the HP laptops have been relatively cheaper than Mac Book Pro, but still, the Macs have not lost to the competition.

Despite the “premium” pricing of Apple products, the company still commands a large market and earns a significant profit as a result. Although “premium” pricing could be argued to be a matter of perception, time and time again, Apple products are priced above the industry average. Along these lines, one’s expectation would be a price reduction on Apple’s products to match the competition. This tendency was evident when AT&T had an exclusive of one of Apple’s products (iPhone). Many people expected that such a private with a multi-carrier distributor would result in slashing of the prices. A similar expectation was also evident in the iPod and Mac ventures, and iPad and Kindle scenario. People expected the price of iPad would reduce with the introduction of Kindle.

However, the reduction in price due to the emergence of “first player” competitive strategies by other firms is far from troubling Apple Inc. The available data on Apple pricing shows clearly that the company hardly concedes to price pressures from its competitors. Over the years, the data shows a moderate price reduction that is caused by various factors other than pricing pressures from competing firms. For instance, moderate price erosion could be a result of a decline in the cost of production.

Apple’s “premium” pricing and its reputable product differentiation go hand in hand. According to the current CEO, the company’s objective has never been to produce a low-priced cell phone. Instead, the company looks for ways to provide the consumer with a cell phone that offers “great experience” at a relatively lower cost. These sentiments are similar to what the earlier CEO, Steve Jobs, held as pillars and strategies for the company. Steve Jobs wanted the company to focus on fewer high-end products that gave the user a halo effect, and thus evoke anticipation for the company’s next product.

Additionally, Jobs prioritized profits over commanding a significant market share. To do this, Apple Inc. often utilizes a “skimming” pricing strategy. This strategy works by ascribing a very high price to a product to increase the profits, with minimal consideration of the resulting “shrink” customer base. In essence, the “skimming” strategy works by skimming the top cream of the market.  However, it is Apple’s unique branding that ensures that this “skimming” pricing strategy works efficiently. Customers get an innate self of identity with Apple Inc. once they purchase a product from the company. According to a recent report, the customers feel that they “members of the Apple family” once they are buying an iPhone, Mac or any other device from the company.

Although Apple Inc. seeks to raise its profits through high pricing of its products, their highly differentiated products have started to gain a notable customer demand. The company’s focus on producing unique and appealing products is the underlying reason behind the recent upward surge in demand. Apple’s Inc. products from time to time have edged competitors through the design of their products. Along these lines, Apple Inc. has been ahead of its competitors by employing non-price strategies such as product differentiation, creative advertising, building brand loyalty, and creating anticipation around the launch of new products.  Through a focus on the customer’s willingness to pay for a higher price through its “premium” pricing, the company has created an entry barrier that hinders new competitors.

Steve Job’s vision for the company always has been to create a top-notch product that is unrivalled and charge a suitable premium price. Although some of the cheapest products from the company are usually midrange, the products offer a uniquely high-quality experience. Apple’s products have uniquely designed user interface and hardware that customers are willing to pay top-dollar and still get value for their money. In any case, a company can only ascribe the “premium” price to a product if they have the competitive upper hand. However, recent analysis shows that Apple Inc. could lose this “aspirational” status soon. The surging competition from Android and other low- price cell phones could end the high-end state associated with Apple’s brand. Nonetheless, iPhone 11 and iPhone 11 Pro are receiving good reviews, and their sales are continuously increasing, according to Apple. While many have doubted Apple’s ability to surge ahead of its peers over the most recent years, the company continues to pull through by adopting non-price competitive strategies.