Pricing Strategy: Apple and Samsung - Essay Example

The theory Samsung is using is referred to as a creaming or skimming strategy (Balmer, 2003). The skimming strategy is usually common to electronic goods and in this case, Samsung was using it in their phones. In this case, the prices are set at a high cost so that the few goods sold are able to help in break even. I believe the additional cost in the price of this phone was meant to cover the initial cost of investments and original research of this phone. I also believe that the use of this high price is to lure the early adopters who would wish to be in tandem with the latest technology.

It is the practice of many companies to employ this strategy to their newly launched goods. However, with time I will not be astonished if someone purchases a similar phone at half the price I used to buy the phone.