As fall approaches, Duck hunting season begins. Every year, between early October and late January, willing hunters travel to the marshlands of Maryland with their guns in one hand and decoys in the other. They strategically place their decoys in the mucky water and then wait for that unassuming duck to come near. And I think we all know what happens next. Like so, Apple uses price and product decoys to trick consumers into buying goods that are not necessarily the best deal for them.
Apple’s founder, Steve Jobs is not only successful because he creates some of the most popular gadgets in today’s society, but also because he can convince buyers into purchasing his products at a higher price even once they’ve become obsolete. For instance, an Iphone, that can do everything an Ipod Touch does plus make phone calls and has a camera, costs less. How is that possible? Apple uses pricing series. So instead of buying the Ipod Touch with slightly better features at almost four hundred dollars, customers will spend three hundred on the media player with less capacity thinking it’s a great deal. However, Consumers neglect to realize that buying an Iphone in not only cheaper, but also has better technology because they’re too distracted by finding a “good” price for their Ipod Touch. Furthermore, the four hundred dollar Ipod Touch is really just a decoy set in place to shade your senses and judgment. Apple wants you to buy the three hundred dollar Ipod touch, but still wins even if you decide to go with the more expensive one. In addition, Apple artificially inflates its starting prices on new products so that than when prices do decrease, customers believe they are getting a bargain. Apple also uses less desirable products like the 7-inch Ipad, due before Christmas, as reference items to trick customers’ into buying more expensive products.
Apple is the hunter and we’re the naïve duck floating closer and closer to that decoy. Steve Jobs has mastered the art of blurring consumers’ judgment and creating obscure pricing mirages. Like the duck, we’re fooled into not making the best decision for ourselves, but rather we simply walk into the hands of the eager and sometimes greedy huntsman. Once again, Apple has proved my theory that if consumers perceive something to be true then it is.
http://www.msnbc.msn.com/id/38980367/ns/business-bloomberg_businessweek/
http://www.msnbc.msn.com/id/38980367/ns/business-bloomberg_businessweek/
I've enjoyed reading your analogy between Apple's pricing tactics and duck hunting. I must admit that Apple's marketing techniques are in my opinion the reason for the company's survival, and the company's overwhelming growth. Apple, which started as the underdog, and remained so for many years, became the market leader, offering people various gadgets beyond the computer systems it sells. Apple has become a very well established and an extremely desirable company. Despite coming out months ago, the iPhone 4 is still very hard to find and purchase.
ReplyDeleteMy only remark about Apple's pricing module you presented is this:
Although the consumer may "only" pay $199-$299 for an iPhone, it's very important to watch for the hidden costs. When a customer walks into an Apple store, and is lucky enough to find that they have one in stock, he is faced with a credit check and a contract of 2 years. The reason for iPhones being cheaper than iPod touches is that the cell phone providers subsidize the iPhones. If a customer wishes to buy a phone without a contract, he would have to pay a whooping $500-$700 for an iPhone.
Thanks again,
Michael Milner