The problems are that it doesn’t show traffic on the roads, missing the vital Google Street View, which many people complained. Currently, an phone g’s biggest opportunity is the ability to access the G networks in most countries. Smaller rivals will only be able to start marketing the G networks in the autumn Of 2013(Gassier, 201 2), which is a year after the release of the phone 5. External Analysis(Appendix 2) Samsung Galaxy ISIS is OHIO cheaper than the phone 5 (Tech Digest, 201 2) but Apple made more sales of 20 million units during the first 100 releasing days.
Nevertheless, the minor difference between the phone AS and the phone 5 (The Guardian, 201 2) has affected its demand and lured many consumers into choosing the Samsung Galaxy ISIS over the phone 5. The other important external aspect concerning the phone 5 is technological. Many reviews consider the Samsung Galaxy ISIS to be a technologically better smart phone. The battery in the Samsung Galaxy ISIS is capable of lasting for more than 2 hours longer than the phone 5 (Appendix 3). Battery life is a very important for many customers.
However, the ISO system in the phone 5 is significantly easier to use than the Android system (Tiptop, n. D) The Strategy To obtain the objectives and missions, we think Apple should apply market- skimming pricing(Howell, S. , 201 2, up. 236-242). The purpose of this is to maximize sales when there are not a lot of substitute products in the market. Hence, establishing phone 5 with a relatively high price is likely to aim at innovators. This is temporarily not very profitable, however we can lower the price later to increase the consumption and capture desires of the rest of the market.
Every product passes through the product life and the decline stage will naturally come. To avoid this, new price is to extend phantasmagorias and slow down decline in order to maximize profits (Appendix 4) We believe that the phone 5 should be priced at IEEE instead of IEEE. There is a price cut of approximately 5. 67% (BOO). Consumers are rational (More 01 0, Chapter 10 Page 1); therefore, using a psychological price can change customers’ behavior towards their decision on whether or not they want to purchase the product.
Base on the customer-based pricing and competitor-based pricing (Evans & Mouthing, 1 996), IEEE is reasonable and affordable. Furthermore, it is to keep a significant gap with competitors and to target right consumer class. We do not want the consumer to think that as a company we do not believe our product is worth less. Conclusion Overall, the price cut that we have implemented should increase sales of the phone 5 because of its new market range.
There are many internal and external factors that have to be taken into consideration; however the positives far outweigh the negatives and this means that our price cutting initiative should be executed soon. This price drop will not lower the brand image and with the use of psychological pricing, we will be able to attract AR even wider range Of customers. Recommendations: One possible problem that may arise from this Price cutting-initiative is the consumers’ concern about phone g’s quality. Apple must make sure that customers are provided sufficient information about phone 5 at IEEE by AR means of media.