Pricing Strategy: Apple and Samsung – Essay Example
The paper "Pricing Strategy: Apple and Samsung" is a marvelous example of a marketing essay.
The constant wars between Apple and Samsung seem not to be ending and with the American Court ordering Samsung to compensate Apple for patent issues, it has become evident that Samsung is spreading the cost to the consumers (Davis Scott, 2002). On Tuesday I made my way to Wal-Mart Supermarket to purchase the new version of Samsung Galaxy S5. I was astonished by the price. The price was too much despite the product being a new entrant into the market. I was asking myself if the company will be able to make many sales of that product with that kind of price only to realize that it is one of the pricing strategies we learned in class this week. The theory Samsung is using is referred to as 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.