Pricing Competitively in Today’s Tech Craze

By: Vishal Chollera, Shuntong Lei, Samantha Ramos, and Christina Zhu

In today’s tech gadget obsession, companies such as Apple and Google are able to provide an image of who they are by marketing to specific demographics. The fight to gain consumer’s interests, and more importantly, their money, is one of the top priorities of tech companies to show that their product is “cooler” than those of their competitors. In order to stand out from their competition, tech companies need to efficiently market their products to certain demographics by pricing competitively in context.

            A great example of this would be Google’s infamous product, Google Glass, a product that is designed to create smartphone-like visuals onto the consumer’s glasses, which will display useful information such as the time and weather, and even take pictures. However, where Google failed was not in delivering the brand image and product to Google’s target demographic of “16 to 24 year olds” with over “60% finding it appealing” (Bold). Google failed in effectively selling their product because of the high price tag that came along with it. When the price tag is high, Google and other tech companies are forced to sell their expensive, wearable tech to “an older, more affluent audience” (Bold). Instead of helping them sell their product, Google’s high price point has only limited them in their ability to effectively price their product to their consumers.

In an attempt to market to a less luxurious demographic, Apple designed the new iPhone 5c, which is a variety of their famous iPhone, but is a much cheaper version due to its plastic casing. By creating a less expensive product in their line of iPhone, Apple hoped to gain consumers who otherwise would not buy their product due to the expense. Along with the release of the 5c, Apple also announced the iPhone 5s, which is much more costly than the 5c. This way, Apple could seek to keep “those who would pay more without losing those who will only pay less” (Worstall). This strategy of marketing is referred to as positioning, wherein a company adheres to the needs of different subgroups in the market by providing more of a variety in products. However, where Apple went wrong is that they over-estimated the demand of this cheaper 5c product. Since its release, Apple has had to cut back on production on the 5c and increase production on the 5s (Worstall). This exemplifies that the average Apple consumer will not settle for less than the greatest product available at the time.

            However, from others’ perspectives, the iPhone 5c does have a great effect in selling the 5s. In the last several years, when Apple would release a new iPhone, they would still offer the old one with a reduced price. This year, however, the new strategy is that they offer a new iPhone 5c with colorful plastic case at a cheaper price altogether. The difference is that the iPhone 5c can stimulate people to an imagination and expectation that 5s is more powerful and beautiful. Therefore, “it’s no coincidence that this is when the company decided to unveil a gold case”(Thier). Besides, with people’s expectation, new technology of fingerprint identity and the high price of the 5s, Apple will not damage its high-end brand. As Dave Thier said in his article, “people have worried that a cheaper iPhone will ultimately damage Apple’s brand, but I think in a strange way, it actually reinforce it while picking up larger market share at the same time” (Thier).

Overall, it is clear that marketing is a vital process utilized by technological companies in promoting their products. In our modern society, there are constant advancements in fields of technology and companies, such as Apple and Samsung, who largely spearhead these developments. Apple recently hired Nike’s Fuelband designer, Ben Shaffer, triggering rumors of a possible iwatch in the market (Gamet). From this, it is visible that hiring the high profile designer itself may just be enough to enhance the value of Apple’s product, before it’s even released. However, competition in the industry is so stern that Samsung launched its own smart watch, entirely based on rumors that Apple would enter the market.

            From these articles, it is easy to conclude that marketing and pricing competitively is crucial to selling products effectively and capturing your target market’s imagination. Although it is not an exact science, and sometimes may backfire -- as seen with the Google Glass -- more often than not, it succeeds. Competitive pricing is vital to getting a customer’s attention, and perhaps more importantly, their money.

Works Cited

Bold, Ben. "Wearable Tech Such as Google Glass 'too Expensive' for Target Audience."Marketing.  N.p., 31 Oct. 2013. Web. 21 Nov. 2013.

Gamet, Jeff. "Apple Hires Nike’s Ben Shaffer, but He Isn’t a Wearable Tech Guy." The Mac Observer. N.p., 30 Sept. 2013. Web. 21 Nov. 2013.

Thier, Dave. "Apple's IPhone 5c Is Great Marketing For The IPhone 5s." Forbes. Forbes Magazine, 21 Oct. 2013. Web. 20 Nov. 2013.

Worstall, Tim. "Apple's Market Segmentation Difficulties With The New IPhones." Forbes. Forbes Magazine, 20 Oct. 2013. Web. 18 Nov. 2013.