COMM296 Prestige Pricing Strategy

Louis Vuitton, as one of the most valuable brand in the world, is well-known for no discount price like Chanel (if we exclude a duty-free shop). As far as I know, the company has never offered a discount for more than one hundred years, even though other luxury brands like Prada and Gucci annually give customers a chance to buy their products at discount prices. Despite the fact, Louis Vuitton generated approximately €2.7 billion in the previous year, which is higher than any other luxury brands. Then, why are customers so crazy about the company’s extremely expensive products? It is because, as we learned in today’s class, the customers perceive its brand value that much! It’s not just about the cost, but value.

I believe that Apple is the company just like Louis Vuitton. The only difference is the company sells different types of products. When I read the article about the cheaper version of iPhone, therefore, I couldn’t see any reasons that Apple wanted to go for low pricing. Instead of lowering the price, the company might want to offer better services to keep its existing customers more loyal to the company. Like classmates said in the class, people buy Apple because it’s APPLE, no matter what the price is. In addition, if Apple lowered the price of new iPhone as a strategical pricing (long-term), it could hurt its brand image, which was my first thought of the article. For example, once customers got used to the cheaper price, they wouldn’t want to buy Apple’s expensive products any longer (like Whopper example in the class). it is aslo likely that they might think Apple were no longer the prestige brand. Moreover, since price is an indicator of quality, lower price could be considered that the new version of iPhone might be less valuable than the previous models or might have some problems.