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Strategic Marketing - Strengths & Weaknesses of Apple's iPhone

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Explain the Strengths and/or Weaknesses of Apple's iPhone 4S and Opportunities and/or Threats to the financial future of Apple's iPhone 4S.

(1) Review the pricing strategies described in the Background readings. Given Apple's iPhone 4S positioning and targeting strategy for your product,which of the pricing strategies described in the readings, makes the most sense? Why?
(2) Discuss the role of discounts in Apple's strategy. What would you advise the company that owns your product in terms of discounts and specials?
(3) Briefly explain the distribution strategy for your product. How does it fit with the designated target market? Does the distribution of the product seem to fit the product's target as well as harmonize with other elements of the marketing mix?
(4) Now refer to the brand extension we discussed in SLP 4. For instance, suppose ALPO created a new food for large dogs - a dry form and a canned form. Would the company need to modify its pricing and distribution strategies? What would be changed and what would stay the same and why?
(5) Explain the Distribution Strengths and/or Weaknesses of Apple's iPhone 4S and Promotional Opportunities and/or Threats to the financial future of Apple's iPhone 4S
(6) Explain the Pricing Strengths and/or Weaknesses of Apple's iPhone 4S and Promotional Opportunities and/or Threats to the financial future of Apple's iPhone 4S.

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Solution Preview

Apple Inc has built a strong brand image in the IT industry with the help of its strong R&D department that enables it to produce qualitative product and to gain high profit margins (Apple Inc., 2012). This paper discusses Apple's product iPhone 4S in terms of pricing strategy and distribution strategy. This paper also discusses the role of discount in Apple's strategy and SWOT analysis of its pricing and distribution strategy.

Apple iPhone 4S
Apple use skimming pricing strategy to sell its product to customers in the market. Under skimming pricing strategy, companies sell a product at higher prices to customers. Their main purpose is to gain high profits while sacrificing sales. Apple uses this strategy in order to target early users of its product or services as they are less price sensitive than others. In contrast to this, for iPhone 4S, Apple's pricing strategy is different in comparison of its other products. This is because the company wants to increase its sales volume. This move of company shows that it wants to grow its market shares by competing with other firms such as HTC and Samsung. The iPhone 4S 16GB will cost $199, the 32GB $299 and the 64GB will cost $399 (Apple iPhone 4S pricing designed to widen its appeal, 2011).

Apple's changing pricing strategy is more sensible because it provides an opportunity to increase its market shares by targeting the mid-price customers and attracting first time smart phone users. It also provides an opportunity to the company to give competition to other smart-phone providers ...

Solution Summary

The solution gives a 950-word analysis of Apple's iPhone marketing strategy, including a brief background of the product, the reasoning behind their pricing, the role of discounts, distribution strategies, brand expansion and promotional threats and opportunities. Many references included.