Pricing strategy and Channel Distribution for Apple - Essay Example

Pricing strategy and Channel Distribution for Apple Outline…………………………………………………………………………..2 Pricing strategy………………………………………………………………….3 Penetration………………………………………………………………3 Pricing tactics……………………………………………………………………3 Line pricing…………………………………………………………….

3 Value pricing…………………………………………………………….3 Differential pricing………………………………………………………4 Legal and ethics in pricing……………………………………………………….4 Marketing distribution analysis…………………………………………………..4 Discussion of distribution strategy……………………………………………….4 Conclusion………………………………………………………………….…….4 References………………………………………………………………………..5 Pricing strategy and channel distribution provides a mechanism of penetrating competitive market and owning large market share.

Marketing of a product depends on the strategic pricing approach taken by the marketing firm. Many people gauge the prices in the market before settling to a buy a product. Some firms invest their time and money in developing strategic pricing strategy that would yield more sales to their product. Distribution of products in the market is dictated by the market prices. Evaluation of the competitive demand in the market would help in setting prices of the product. This paper explores the pricing and distribution strategy of Apple firm.

Apple firm evaluate various methods, which would help them to penetrate the market. Pricing strategy is one of the approaches that they evaluate before rolling their products into the market. This helps them to avoid extra cost that would result from uncalculated moves. Penetration or skimming is a pricing strategy that involves creating lower price for a product by a firm with an aim of dominating the market (Sliwinska, Jani, and Kardava, 2008). For instance, if the market price of a product is $40, another rival firm may opt to sell the product at $37.

7 in order to command a large market share. Apple firm would come up with pricing tactics that would make their firms command the market share. When a firm owns a large market share, its probability of making profit is quite high as compared to another business that does not command the market (Daly, 2002). Product line pricing tactic involves creating more features to a product in order to increase its viability in the market. For example, a phone is a primary product, but some features such as camera, music and radio would make the phone features to attract more people in the market.

In value pricing, the firm can opt to sell high quality products at a slightly lower value. For example, Smart phone has several features that make it very expensive. When Apple firm lowers its price but retain its quality, then the firm has adopted the value pricing strategy. Differential pricing strategy provides a room for the firm to adjust its market prices according to market situation. The firm may decide to offer discount or coupons, depending on the nature of customers. Pricing of products by Apple firm may be subject to legal or ethical concern because some of its competitors may feel threatened by its pricing strategy.

Legal concerns in pricing strategy promote healthy competition among firms. It dictates against any discriminatory acts that would lead to unfair completion. It is not right for the firm to come up with a pricing strategy that would dupe the market. For example, low quality product should have a price that is fair to both the consumers and the competitors with similar products. Marketing distribution channels create a ladder which producers like Apple firm would use to market their products.

Apple firm would adapt the following distribution channels. The products of the firm would follow this channel; distributor, wholesaler, retailer to consumers or distributor to retailers and then to the consumers. Distributors would be large firms that stock the Apple products in various countries or outlets. Wholesalers would acquire their products from the distributor and lastly the retailers would buy their products from the wholesalers. The above distribution strategy would fit Apple Company because it would make the firm to penetrate the market in many regions (Sliwinska, Jani, and Kardava, 2008).

Distributors command a large region, thereby promoting the products in large region. In conclusion and recapitulation, the objective of Apple Company is to expand its marketing. Through this, adoption of pricing strategy by Apple firm would lead to it command a large market share. Work cited Daly, J. L. (2002). Pricing for profitability: activity-based pricing for competitive advantage. New Jersey: John Wiley and Sons. Sliwinska, D., Jani, R. and Kardava, I. (2008). Marketing International: Apple’s Pricing Strategy.

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