Month: September 2011

Why are products from Apple so much more expensive than similar products from other brands? Microsoft has even accused apple of imposing an “apple tax” on those who choose a Mac over a PC. How is Apple able to remain competitive yet still maintain its high prices? With this question in mind, I searched for ‘apple brand positioning’ on google and found a great commentary called Understanding Apple’s positioning.

The answer to my question, according to the article, lay Apple’s premium product positioning. Using a strategy called “needs-based-positioning”, Apple’s line of products are targeted to a consumer base that is less price sensitive. Drawing from micro 101, with a more inelastic demand curve, it would be a better choice for Apple to maintain its current pricing. Moreover, Apple`s brand image is one that sets itself apart from other products through innovation and quality. If Apple did indeed lower its prices to appeal to all segments of the market, it would break the ‘promise’ made by its brand and cause confusion among consumers.

Apple’s marketing strategy, in fact, is just as innovative as its product line.  Instead of directly competing with other products, it has successfully created a ‘barrier’ throughout the years to prevent its competitors from entering into its territory. By continuously increasing pricing on newer generations of its products, Apple has acquired a position in the market as the leader of innovation and quality. If other brands wished to compete with this position, they would have to undergo expensive marketing campaigns and product redesign  while running the risk of losing their more price-sensitive consumer base.

Apple’s higher pricing is not only indicative of its premium quality, but also part of its successful strategy of assuming a particular niche within the market and maintaining an intact brand image.

Photo Credit: http://www.joyoftech.com/
Credit: http://switchtoamac.com/site/understanding-apples-positioning-part-1-a-premium-brand-at-a-premium-price.html

In an article I recently read called Wall Street’s Economic Crimes Against Humanity, a very good issue was brought up regarding the root cause of unethical and often dehumanising practices that corporations commit in order to maximize their profits. Are these practices brought on by ineffective organization or individual moral breakdowns? The arcticle addressed the immoral conducts of financiers of AIG, who irresponsibly completed transactions for the sole purpose of increasing shareholder value. These executives received millions of dollars in bonuses because they were awarded based on the exchanges they achieved, not on the destructive consequences of the after effects.

The circumstances that brought about their actions were two-fold: first, as according to Friedman’s model, the executives who made these decisions were so far detached from their ‘social responsibilities’ that they had no concern for the people whose lives were devasted by their actions; second, the structure of the business itself rewarded them solely for their short-sighted achievements, thus making their actions temporarily ‘morally correct’. As according to the UN Commission on Human Rights, “transnational corporations and other business enterprises, as organs of society, are also
responsible for promoting and securing the human rights set forth in the
Universal Declaration of Human Rights.” I believe that in order to achieve this, executives should be held accountable to make correct personal choices, not only to satisfy short-term business goals, but also to complete their first and foremost social responsibility to humanity.

Photo Credit: http://www.usfst.com/news/aig-sells-asian-unit/
Credit: http://www.businessweek.com/managing/content/mar2009/ca20090319_591214.htm