First is the decision around the price tag: Should it be $74.99 or $80? But just as important are the types of pricing plans or how customers pay. Every manager needs to realize their company’s “pricing strategy” is composed of two key components: the actual price and how customers pay. There’s a strategy here that other companies can learn from. (And just for the record, I do own some Apple stock.) Apple understands new pricing plans can generate growth – in this case, by promoting more frequent upgrades. If this weekend’s sales hadn’t handily beat last year’s 10 million marker, the new iPhone would have likely been deemed a failure. These closely watched “opening weekend” sales jumped to 4 million in 2011 and climbed to 10 million last year. For the first few iPhone generations, first weekend sales of 1 million units were the norm. Why did Apple offer this new pricing plan? The multinational technology company suffers from what I call a “curse of awesomeness” – it’s under tremendous pressure to continue breaking sales figures. Plus, the phone is unlocked, meaning purchasers can select whichever cellular carrier is the cheapest and switch at any time. Doing so resets the agreement clock, meaning the buyer is on the hook for 24 more payments. However, after 12 months of payments, the buyer has the option to upgrade to a new phone. After the 24 payment commitment is fulfilled, the purchaser owns the phone. This pricing plan provided another purchase option to consumers and, just as importantly, made Apple more of a rival to the cellular carriers that sell its smartphones.Īpple’s iPhone Upgrade Purchase Plan combines the retail prices of both a selected iPhone 6S and its AppleCare+ enhanced warranty – then divides this total amount into 24 equal monthly payments, with no interest added on. While strong reviews fueled consumer interest, credit should also be given to Apple’s new iPhone Upgrade Purchase Plan. Apple announced over 13 million units were sold during that first weekend. What other company incites such a frenzy when it releases an updated version of its product? The recent iPhone 6S release went as expected: winding lines of eager consumers at Apple stores and fevered media coverage.
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