Professional Documents
Culture Documents
Pricing Case Study
Pricing Case Study
Submitted By:
MARCH 2019
i. TIME CONTEXT
The Apple watch’s big pricing problem was first observed on a Friday, 10 th
of April 2015 when the company began to accept pre – orders for its new
product. Consequently, the company was able to make their watch available to
The study will be set according to the point of view of the company’s
Pricing Manager for the reason that he/she is the one who’s knowledgeable
regarding this matter, given the fact that the Pricing Manager has the ability to
company prepares to roll out new products and services, the Pricing Manager
production departments to learn how much they cost to make, as well as working
Based on the provided case, there’s a person who, in this condition and
situation, can be a potential buyer of Apple’s Watch Series. On the other hand,
the person talking in the provided case seems to have a problem with regards to
how the watches were being priced which according to him is too wide and
success.
2) What should Apple do to create a design that would make the watch
The following are internal and external factors to recognize and scrutinize
to further evaluate the state and condition of the Apple Watch Series:
A. STRENGTHS
technological company, Apple Inc. – a company who has already established its
their journey, Apple is again trying the same by giving people a reason and a
product to look forward to the next big thing through this watch.
same and is supporting the watch which can be used to better integrate multiple
devices.
4) The watch has a variation of styles which means that consumers has a
lot of options to choose according to their own fashion and style preferences.
B. WEAKNESSES
2) The watch can eat up Apple’s own products in long run – This is a
the watch which can directly ruin the already set market of a product like iPhone.
3) Do customers really need this watch? – this is one such product where
Apple has not been very sure whether customers are ready to use this product or
not. This uncertainty keeps the product in a hang and if that stretches too long, it
C. OPPORTUNITES
1) High brand awareness – The kind of brand value Apple enjoys is the
product in different ways and geographies to make sure it reaps benefits for
them.
3) Consumers who want to try the product over its existing competing
brands.
different and more innovative products. The kind of proposition the Apple Watch
is trying to make may fit somewhere there. Just need to hit the right spots of the
customers today are more willing to experiment or try new products in the
market.
industrial productivity. This can help Apple Watch to significantly innovate and
D. THREATS
competitive like anything. The competition can come from any side of it –
watchmakers, phone makers, none of them. This makes it all the more important
2) Cheaper watches but has an excellent quality and is already well known
3) Consumers who prefer to purchase the usual watch over the Apple
Watch.
4.) The influence of the loyal consumers of the usual watch towards other
way?”
Alternative Course of Action 1.1 Even though there are people who are
against how expensive the Apple Watch is, the company and its Pricing Manager
Alternative Course of Action 1.2 Because there are people who are
against the Apple Watch’s price, since the product is still new to the market (in
this case) and Apple already had enough and sufficient funds from the income
that they were able to generate from their famous products (like iPhone), it would
be better if the company, together with its Pricing Manager will agree to narrow
down the price range to $239 to $1,999 that will surely knock out other competing
brands and will also offer a monthly payment plan. The buyer can avail a
payment plan and can pay it for of $19.9 per month in a year to make the watch
Alternative Course of Action 1.3 Because there are people who are
against the Apple Watch’s price, the company, together with its Pricing Manager
will agree to make the price rate higher than its original price.
Problem 2. “What should Apple do to create a design that would make the
unnecessary ornaments, details and watch cases made of authentic and real
gold, brass, etc., Apple should just stick to the materials that they’ve used with
their previous gadgets (like iPhone, iMac, etc.) for it provides its buyers a more
aesthetically appealing and timeless approach with its minimalistic, sleek and
clean design. With that being said, the price of the timepiece wouldn’t be so
expensive since it wasn’t adorned with gold and other costly materials that would
aside from the 18 karat gold case, Apple should also add ornaments and intricate
details made from authentic gold and silver which can add elegance and class to
the timepiece.
Alternative Course of Action 2.3 Apple t will not take action about this
matter since they only care about their loyal consumers who can afford their
that reason, Apple’s top level management must immediately take action to
and the Alternative Course of Action 2.1. It is important to note that these two
alternative courses of actions should go hand in hand for it to achieve its creative
powerful, concrete and solid fix towards the dispute and that is through fixing the
lapses of the watch when it comes to pricing and its overall look.
VIII. RECOMMENDATIONS
Action 1.2 was the chosen solution for the major problem while the Alternative
Course of Action 2.1 was chosen on the other hand for the minor problem. These
major problem since the main dilemma here is the watch’s costly price which is
they would normally believe that they’d just spend the money somewhere around
the midpoint ($8,500 for example) to get a watch that has a good quality and has
almost the same characteristics as the Apple Watch. Aside from that, they should
really consider the fact that they’re still new in the market realm that they entered
(fashion industry). Apple should always remember that they’re not the only one
who’s selling watches that have numerous competitors with so much to offer too
that could possibly reach the level of their product in an affordable price. On the
other hand, the Alternative Course of Action 2.1 was chosen to make the watch
look timeless and worth the price that will make the timepiece a lot easier to
compete with other competitors. The truth is the watch’s purpose is the same no
matter what the price. With that being said, the price differential is only based on
the expensive various metals and adornments being put in the watch which are
obviously not necessary. Apple should just stick to the materials that they’ve
used with their previous gadgets (like iPhone, iMac, etc.) for it provides its buyers
a more aesthetically appealing and timeless approach with its minimalistic, sleek
problem.