Apple Put a Fix Price

¶ … apple put a fix price for its iPhone and how it affects the consumer behaviour

The iPhone will grow and transform into a new product accommodating new features. This will have two sets of reactions among the consumers. Firstly the existing customers would want to upgrade to the newer version, and second the market that did not come into the iPhone section because of the cost factor now will enter the old iPhone market with the old phones being sold at throw away prices by the market that is upgrading. The reason is that the desirability of owning a gadget with such market hype is high. It is akin to the need to own an Audi over other cars, mainly because it enhances prestige.

Consumer Behaviour:

It is noting this that Apple created such hype over the iPhone. Back in 1979 the change in consumer behaviour was noted by Gabor, (1979). He noted that the price for the consumer is the best indicator of quality, the consumer bent on a purchase always has two price limits in mind and the price image of the product along with the purchasing behavior caused by the perception of the link between the price and the quality or benefit is what makes the consumer go in for the iPhone, both of which are of the best quality and coming from the world's master craftsman Steve Jobs himself. Some of the aura surrounding the new product that Apple may release is bound to wear off because we no more have the Steve Jobs attraction. However the company has a standard that would still be respected. Therefore a higher price would not affect the consumer much. The cost of the differentiated products can be seen from the table 1 below.

It is shown that the products are placed at the higher end of the price structure. According to Kotler (2008) the pricing of the product has to follow the customer value. That can be translated to mean that the product must have a value in terms of satisfaction to the customer -- which can be translated to a value that is the price. Premium products like the iPhone and iPad can command higher prices and still be attractive to the customer, because of customer value and expectations. The expectations of the customer when fulfilled create more demand. To this end the advertising and the way the product will be positioned has to be considered. Thus based on these the pricing of the new versions ought to be done. Looking at consumer behavior it can be seen that the price rise has not decreased the sale of the iPhone. (NDTV, 2012)