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Promotion and Price Strategies for the Apple Ipad

The following involves the analysis of the introduction phase/ stage of the Apple Ipad. Due tot the fact that the product is in the introductory phase, recommendations are based on the three main marketing mix of pricing, promotion and place. Two target market segments, primary and secondary segments, are identified in the introductory stage/ phase and are recommended as sub-topics under each of the three (pricing, promotion and place) marketing mix elements. The final section includes recommendations and conclusions that are based on all the findings of pricing, promotion and place of iPad.

Introduction

This paper reviews the introduction stage of the i-pad by the Apple Company which aims at seeking more innovations on a daily basis and discovering more strategies to be applied so as to ensure that its products are acquiring the required worldwide standards. The primary market segment includes individuals who utilize the internet, games, TV shows, and Music and also have the means of purchasing this kind of technology. The secondary market segment includes people who need to be early adopters of technology and may not have the personal means of buying the product though they act as the influencers through the relationship of the buyer or/ and the decision maker. The early adopters make up 16% of those who ultimately adopt the technology. They are also the late adopters of the technology after the launch in the market. The iPad is designed for browsing the web, email, playing games and even reading e-books (Simpson & Jiao, 2006).

Introduction stage

Place

Apple Company has many products already in the market, it should maximize on using the channel relationships that are already in place. This could be through the many outlets or retail shops that are close to 300 that have been advertised on their website.

Primary market

Its primary market includes the age of 16 and above. As the Apple Company is strategically set and growing as it has previous products in the market, it could use the selective distribution. This would mean that the manufacturer, in which case it is the Apple Company would retain control and it would also cut down on the distribution cost. It would help to gauge the perception of people towards the new product as only a small number of retail outlets will first distribute the product. Apple Company should continue to use their channels of relationships in the marketing of the i-Pad product in the market. As this happens to be a new product, training should be provided to the staff and the retailers on how best to utilize the product. They should also be ready to answer any questions by the customers. It also targets the publishing industry and advertisers.

Secondary market

The secondary target market of i-Pad involves people who do might have had experiences with an earlier version of either i-phone or the i-pad. They will be influenced mainly by decision makers. The product aims at appealing to the greater percentage who might not be interested in technology as a way to win them over with the new gadget. Majority of people around the world are still using standard windows PCs and the Apple product may be just what they need.

Promotion

In the introductory phase, the main objective should be the creating of awareness in the dealers and early adopters of the product and also the use of massive and heavy sales promotions. Apple Company has a reputation to uphold in which it has developed it over the years due to production of quality products. There are many ways of promoting the iPad product in the market. Among the options the best way to promote the product has been to have the customer have a first hand experience. According to Kotler and Keller (2009), the promotional tools of advertising, events and experiences, and publicity are most cost effective in the introduction stage.

Primary market

The best and most obvious promotion strategy would be through advertisement through the internet. Through this way they would also be marketing other products that they have by people visiting their websites. In this way they will get to view what specs are there and additional features that might be included. It also proves a better way of providing customer feedback. Another strategy would be through utilizing retailer channel strategy whereby there would be live demonstrations of how the product works. In addition I would suggest the promotion through print media whereby the ads should be targeting internet users especially in areas of socializing such as facebook, twitter, youtube among others. It should also target movie and sports enthusiasts as the available applications in the product also cover these basic areas.

Secondary market

The strategy for the secondary market segment remains similar to that of the primary market segment. It however includes live demonstration of music, movies, internet use, and games among others. While the current promotion is based on the properties of the ipad content, future promotion should include the ability to multitask, presence of a camera, USB slots and flash supports. The reinvention or adding of these features will ensure that the product caters to all demands in the market. The secondary market could also be targeted through the incorporation of marketing strategies that involve other companies. For this example, the Touchstone Saunas were in collaboration with iPad where they gave out free iPads purchase of a Touchstone Far Infrared Sauna. This kind of promotion provided a unique opportunity for consumers to enjoying the health benefits that a Touchstone Infrared Sauna provided while at the same time, getting one of the hottest new technology products for free. It was a combination of free shipping where the customers got a value of $750 which was a huge saving on the customer’s side.

Price strategies

As with the case of most new technologies in the market by Apple Company, the pricing has been set high. Price skimming plays a role as early customers use price as a proxy for value. (Reed K Holden and Mark Burton) but it is due to drop in order to attract late adopters early enough. The price skimming ensures that is they get the most value for their product as they as the pioneers in the tablet slate industry. As posted in their marketing mix, an i-Pad 16 GB without the 3G connectivity was priced at $499 while the 64 GB with the 3G connectivity was priced at $829. After a period of six months since its launch the pricing dropped to $599 for the 64 GB and $399 for the 32 GB as shown in figure 2. The competitor’s price, features and cost should be critically analyzed. Customer reviews and Brand reputation should be included as an influencing factor in pricing as it is important in the customer’s purchasing decision. Among the pricing strategies would include price skimming.

Primary market

I-Pad product from the Apple Company is a state of the art kind of product. Its slickness, simplicity and portability among many other features should be a pricing factor that reflects on these qualities of the i-Pad product. Competing tablets slates include those from the HP, Dell streak, Asus Eee Tablet, Compal Tablet, Notion Ink Adam, MSI, Quanta, ICD Vega, and Google and HTC. According to the PC Technology news and Analysis (figure 1), it proved that the iPad was more popular than the competition tablet slates despite its shortcomings. With technical specifications being nearly equal, customer reviews, brand reputation, and customer service are of most significance in establishing differentiation. These shortcomings have been detailed by the consumers which show that they understand the use of the product and would require that some aspects and specifications be incorporated into the existing version of the iPad. Consumers are less sensitive to the items that they buy infrequently and thus Apple Company should not shy away from maximizing on the pricing. Due to the past experiences with previous Apple products, the high quality and excellent customer service, customers may be influenced into paying a little more for the product than that of the competition.

Secondary market

Majority in the secondary market target do not actually make the purchase though they influence the purchasing through relationship of the buyer or/ and the decision maker and therefore the pricing factor remain constant as that of the primary market target. A high price should initially be set as earlier shown, as is appropriate to the new technology in the introductory phase and competitively proportionate to the currently limited competition (Boyer & Verma, 2009).

Recommendations and conclusions

There are foreseeable threats in the horizon for the Apple Company iPad. As a way to keep off the voluminous and increasing completion, the iPad should be reintroduced once more into the market while having the missing and important applications installed. In this way it will keep its market share of the customers as it will focus on all aspects of its customers.

It should ensure through the introduction stage, the product relates to the needs of the people on the ground and ensures that it deals with every need if not all, of the customer. A detailed and analytical review should have been done before the release of such a revolutionary product.

Although its pricing reflects the quality of their products in the market, iPad should not have their pricing too high as this will discriminate other users and customers. As a result, the completion could draw in on the shut out customers who according to research are close to 60% of its customer data base. The promotion would also include giving away free samples to customers. In this way it ensures that the customers and the market in general keep up with the inventions and it also becomes a better way of getting feedbacks before the product is rolled out to the market. This can be seen through the example of the Touchstone Saunas.

Apple iPad should take full advantage during the introduction phase as it is the first in the market, utilizing existing channel partnerships, employing a market skimming pricing strategy, and emphasizing promotions that create product awareness and enticement to trial.

Conclusion

The ipad is definitely one of a kind in it creation and to ensure that it remains significant in the market and that it is not also overtaken by the competition, the above recommendations should be looked at. The introduction phase is in consistence with the previous Apple Company products and it has ensured that the quality is top notch. Apple iPad should prepare to be part future generations by continuing to invest in research and development, and discovering more strategies as always.

Figure 1.

Figure 2 Pricing scheme

WiFi Model

16 GB - $499

32 GB - $599

64 GB - $699

3G Model

16 GB - $629

32 GB - $729

64 GB - $829

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