PRICE RANGE OF PRODUCTS

PRICE RANGE OF PRODUCTS Above is the price range of all Apple products between the years of 1975 to present. Steve Jobs manufactured products that were not just far advanced than other products in the same category, but they were also out of reach for most consumers. When Apple Computer launch its Apple II in 1977, it cost $1,298 and if you wanted a more powerful version it would cost you a twice that amount. In 1984, Apple Computer released the Macintosh at a price of $2,495. At these prices many consumers could not afford to own a Macintosh.Upon Steve Jobs return to Apple Computer in 1984, Apple products price drop allowing most price conscious consumers to own a Macintosh. The new iMac carry a price of $1,300 which would cost $1800 in today’s current dollar value. As technology advance, the price of Apple Computer products continued to decline. Since 1996, Apple had released the MacBook Air for $900 and MacMini for $600. (Felix Salmon, 2011) Apple now offers products in add ition to Macintosh products. These products have been very profitable for Apple Computer.The products below are sold on Apple store online: Computer technology has enable manufacturers to build cheaper, higher-quality and more powerful computers that are also more accessible and affordable to the average consumer. For example, the iPad 2 has been compared to the 1980’s Cray supercomputer, but at a price that millions of people can afford. Steve Jobs realized that technology had advance to a point that he could now make products that could not just deliver high quality but also be â€Å"price accessible to the broad non-geek middle classes.He could not make his â€Å"NeXT workstation which was value at $6500 in 1990, or $11,267 in 2011 â€Å"which was placed on many workstations across the world† at price that many not only be affordable but hard for competitors to match. For example, the iPad 2 price is $499 and the IPhone 4s is price at $199, both sold at competitiv e price that is hard to competitors to match and within the price range of most consumers. (Felix Salmon, 2011) PRICING OBJECTIVE S OF BRANDAccording to Steve Jobs, â€Å"Apple is breaking the rules in terms of its pricing model,† he told Reuters by telephone. â€Å"It's doing what luxury brands do, where the higher price the brand is, the more it seems to underpin and reinforce the desire. † â€Å"Obviously, it has to be allied to great products and a great experience, and Apple has nurtured that. † (David Cowell, 2012) After all Apple is a luxury brand that demand a premium price and Apple customers do are not looking to save money but to get the highest quality product in the market.This adds up to three main factors that help Apple keep the iPad and other Apple products price so low: 1. Apple stores – Apple makes a large chunk of its iPad sales directly to its customers through the Apple retail stores and the online Apple store, which enables the comp any to keep even more of the profits. While running retail stores are expensive, Apple runs one of the most profitable retail businesses in the US and these direct sales give Apple the ability to directly follow up with customers to entice them with future upgrades. 2.Supply chain – As others have explained, Apple has a major supply chain management advantage. That means that it controls the components that go into its product (and the price it pays for them) better than its rivals do. Apple makes the software, designs the chips, and buys flash memory and LCD displays in huge quantities (in combination with iPhones and iPods). That significantly whittles down the raw cost of each iPad. 3. The 3% factor – Apple sells the iPad to retail partners at a minimal 3% discount (which is likely much lower than competitors).Because of the strength of Apple’s brand and the customer demand of the iPad, retailers are willing to take very little profit on iPad sales in order t o drive store traffic and make money on add-on purchases like accessories and extended warranties. (Jason Hiner, 2011) Apple has been so successful by opening their own stores which has made a huge impact for iPad, when iPad2 was released CEO Steve Jobs said: â€Å"One of the things that enabled us to roll out this technology so fast was our Apple retail stores. They were built for moments like this.They were built to take new technology and roll it out and educate customers about it and be there when they have questions and issues. We have hundreds of Apple stores now, as you know. This is one of our newest ones in Chicago [pointing to a slide]. And, without these stores I don’t think we would have been as successful either. † [ (Jason Hiner, 2011) ] Alternatives tablets from other competitors have not be able to compete with Apple iPad and have had to cut their prices to retailer. Apple has taken notice and has taken advantage of its pricing strategy and has lowered the iPad price to its retailer.Motorola and Samsung may sell their tablets at 97% at retail price but if the product is not as desirable as the iPad the 97% may not make any difference. The margins are more like 5-15% off retail price for competitors. [ (Jason Hiner, 2011) ] DISCOUNT/ALLOWANCES Apple is not currently offering any discount for the iPad but has in the past offer student discounts. For example, it has offered students a discount of $200 for MacBooks. In 2011, Apple also offered a back to school promotion in which students could save about $229 and get a â€Å"free iPOd Touch 8GB with the purchase. (Andrew, 2010) ] Apple student pricing for iPad is $499, just like regular buyers GEOGRAPHICAL PRICING In May 28th 2010, Apple broaden their market to outside of the United States by offering iPad’s to nine other countries which included Canada, Germany, Australia, France, Japan Italy, Switzerland, Spain and United Kingdom. Pricing for these countries were â€Å"the suggested retail price in UK has been confirmed and for WiFi-only model – the 16GB version will be available at ? 429, 32GB version for ? 499, 64GB version for ? 599, while for the WiFi + 3G 16GB model will be available at ? 29, 32GB version for ? 599 and 64GB version for ? 699. † Apple will continue to add more countries by July 2010 by adding Austria, Belgium, Hong Kong, Ireland, Luxembourg, Mexico, Netherlands, New Zealand and Singapore to the mix. The price of the iPad was not disclosed but it’s was suggested that pricing for iPad would be slightly higher than the United States pricing. Apple is also trying to expand into the Asian market where tablet are being sold much cheaper than the Apple IPAD. (Wong, 2010) APPLE PROMOTIONAL PRICINGApple continues to offer back to school promotions in 2011, Apple offered free $100 iTunes gift certificate with a purchase of Mac computers. Apple offers are not as generous as most consumers would like them too be but itâ₠¬â„¢s better than nothing at all. Apple offers discounts for MacBooks desktops and laptop every year for students. Apple has created a special Education store link on Apple online which shows current offers and discounts that can range between 8 and 10% of the regular price for MacBooks. [ (Andrew, 2011) ] Works Cited Andrew. (2010, April 23). Is there an Apple Ipad Student discount.Retrieved from Student buying guide: http://www. studentbuyingguide. com/2010/04/apple-ipad-student-discount/ Andrew. (2011, September 16). Last Weekend for Apple Back to School 2011 $100 Gift Card Promotion. Retrieved from Student Buying Guide: http://www. studentbuyingguide. com/2011/09/last-weekend-for-apple-back-to-school-2011-100-gift-card-promotion/ David Cowell. (2012, April 17). Apple Passes Google To Become World's Most Valuable Brand. Retrieved from Huffing Post Business: http://www. huffingtonpost. com/2011/05/09/apple-google-most-valuable-brand_n_859265. html Felix Salmon. (2011, June 06).Reu ters. Retrieved from Reuters. com: http://blogs. reuters. com/felix-salmon/2011/10/06/chart-of-the-day-apple-price-edition/ Jason Hiner. (2011, March 11). The iPad's other big advantage: Retailers only get 3% off. Retrieved from Tech Republic: http://www. techrepublic. com/blog/hiner/the-ipads-other-big-advantage-retailers-only-get-3-off/7880? tag=content;siu-container Wong, S. (2010, May 8). Apple's iPad International Pricing and Availability on May 28th. Retrieved from My Digital Life: http://www. mydigitallife. info/apples-ipad-international-pricing-and-availability-on-may-28th/