This week I want to touch on the pricing strategies of three different products within different consumer markets. I cannot get over the fact that one marketing strategy for a given company can be entirely different than for another. It really truly is an art; allow me to elaborate.
http://androinica.com
For a product in the mature stage, there are limited strategies towards what you are able to do as a company. It takes huge capital investment to enter a market like this and there is lots of competition within trying to defend themselves. An example of a company that attempted to increase market share is Dell within the PC market in 2001. Dell was the #2 computer maker worldwide and #1 in the United States at that time but they had to realise the apparent threats within the market. Round Rock (a Texas based tech company) was attempting to gain massive amounts of market share by slashing prices. Dell replied in kind by reducing their own prices in the short term, increasing their market share by stealing it from others. Margins were a lot lower for the company in their quarterly return thereafter, however in the long term they gained valuable consumers in a market with a steady and unchanging demand.
https://s3.amazonaws.com/
Similar to that pricing tactic but for different reasons, the iPad was priced very aggressively when it was first put into the market. At $499, you could have the newest apple product and have a very sleek multi-tool. This differs from the Dell example because Apple practically established the tablet market. There was not very much competition and they priced very low in order to attract many first time users and keep them as loyal customers. The market is currently in the development stage but new entrants have to create a product around what the iPad has developed in order to meet consumer preferences.
Both of these strategies are similar, however they arose from very different circumstances. This is just another interesting observation within the world of marketing that shows how creative and original you must me to remain competitively advantageous.