Environmental Influences on Pricing and Marketing
During product pricing, managers do consider several factors, some of which are internal to the production environment. There are, however, other factors present in the marketing environment that influence price setting strongly. These factors must be considered; otherwise, the company may lose its price competitiveness in the market. Below is a discussion of the environmental factors behind pricing and marketing efforts of Apple Inc.
First, the technology industry is very competitive, and hence price setting for most technology gadgets are influenced by competitive behaviour (Keegan & Green, 2015). In its market of operation, Apple Inc faces intense competition from rivals such as Samsung and LG. These companies, among other giants in the technology industry, presents competitive aggressiveness in their marketing design, their rapid innovation and product imitation (Fergusson, 2019). With products cheaper than Apple’s, these companies are a threat to Apple’s product pricing. In 2019, for example, its iPhone had recorded a 15% price drop due to consumers conviction that the newer version was as good as their old ones (Nielson, 2019).
Secondly, apple sells its products globally. As such, the inflationary environments affect the prices for its products in each market segment (Keegan & Green, 2015). With price fluctuations in a particular consumer country, the consumers may divert their funds to other resources leaving only the top class consumers in the market for Apple Inc’s products. The effects are particularly profound in countries whose currencies have depreciated (Keegan & Green, 2015). Besides, the company makes good use of currency fluctuations to set its retail prices (Keegan & Green, 2015). With most consumers aware of the high prices in apple products, retailers make use of fluctuations to maintain high rates and incite consumers with a discount (Tabini, 2013).
Currently, though government regulations, controls and subsidies have not had a significant impact on Apple’s product pricing, the upcoming changes in the global retail policies could (Keegan & Green, 2015). Such enactments as the discount law and the Free Gift Act have the potential to see retail prices for products by Apple, among other companies, standardize their prices. Currently, retail prices for most of Apple’s products follow the retailer (Tabini, 2013). With the enactment of the Discount law, these prices could change. On the other hand, such policies would see Apple improving its marketing behaviour, as it always has maintained a high-end profile in the markets.
To conclude, Apple remains competitive in its market, with a few external market environment factors seriously affecting its pricing and marketing strategy. Competitiveness has influenced Apple’s pricing and marketing, were facing stiff competition; Apple has developed newer and more diversified products. Secondly, inflation and fluctuations in local markets have influenced retail prices for the product. Finally, government regulations, subsidies and controls pose a challenge to Apple’s future pricing and marketing.
References
Fergusson, E. (2019, February 22). Apple Inc. Five forces analysis (Porter’s model). Panmore Institute. https://panmore.com/apple-inc-five-forces-analysis-porters-model-case-study
Keegan J., & Green, M. C. (2015). Global Marketing (8th ed.). Pearson.
Nielson, S. (2019, November 27). Apple’s premium pricing strategy, product differentiation. Market Realist. https://marketrealist.com/2014/02/apples-premium-pricing-strategy-product-differentiation/
Tabini, M. (2013, January 14). How Apple sets its prices. Macworld. https://www.macworld.com/article/2024257/how-apple-sets-its-prices.html