‘Mr. Apple, how do I stop the evil Haxors?’

‘Don’t worry Jimmy, buy an Apple product!’

One phrase that always got to me was the phrase ‘Macs never get viruses!’. The only possible reason I could think of that explained this was the fact that at the time not many people used Macs. Thus, individuals that created viruses would only create them for Windows, as more people used Windows. However, all that has changed now. 51% of American households own an Apple product and 1 in 10 of these households plan on buying one in the next year. With more people buying Apple products, including Macs, this diminishes the concept that Macs cannot get viruses. For example, a recent virus that affected around 600,000 mac users was the Flashback Trojan. Apple did release an update to fix this trojan but this proves Macs can get viruses, even if it is rare.

This is one example of another key ingredient to Apple’s famous recipe of their success. This ability to install the perception of high product value. The question is how do Apple establish this make-believe built to last image in their products? Why do consumers believe this image?

There are numerous elements that Apple employs to ensure consumers believe product stability. Kenneth and Agarwal (2000) state that price, brand name and store name can significantly influence the customers perception of product stability and quality.

Let’s take the first element into consideration, price. We all know Apple products are overly expensive. The new iPad mini is £269, the new iPhone 5 is priced at £529! The cheapest MacBook Pro is £999! The specs MacBook has a 13-inch screen with a 2.5GHz processor. Whereas, the Samsung series 3 laptop has a 15.6 inch screen with a 2.9GHz processor and it costs £499! That has significantly better specifications at half the price! Furthermore, Apple products are manufactured in warehouses, in China, just like any other products on the market today. What can explain this high pricing?

This high pricing induces the belief that the product is of high quality because high quality products cost more to produce (Lichtenstein et al., 1988). Therefore, the high pricing elicits the perception of a product that is high quality. Even if there are other products out there, with similar or higher, specifications consumers still perceive Apple products as being of a higher quality as the product pricing is significantly higher. Additionally, pricing effects consumer’s perceived product value independently from any other product quality cue (Kenneth and Agarwal, 2000).

To draw this blog to a close, we can conclude that price is a key influence on consumers perception of the product’s value. Furthermore, consumers believe this price is ‘fair’ for the standard of the Apple product (Bolton et al., 2003). Apple’s technique of high pricing has created their image of stable products. The high pricing has also ensured loyal customers and constant sales. Does this mean all companies should aim to increase their prices?

High prices means high quality!  . . .  or is it?

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2 thoughts on “‘Mr. Apple, how do I stop the evil Haxors?’

  1. A new company enter into a new market or existing company enter into a new market, it also needs to plan a rational strategy to achieve its objectives. Niven (2012) points out that ‘strategy is more important than ever because in a fast-paced, change-filled landscape all organizations must possess the ability to quickly ascribe meaning to what is taking place around them and that meaning can only be gained through context. Strategy provides context that leads to meaning.’ Strategy includes many aspects; the marketing strategy plays an important role in it. Furthermore, there are four Ps: product, price, promotion and place. Each company has its own specific market position, and sometimes it not only focuses one sector. For example, L’OREAL Company has many sub-brands: LA MER, HR, which are the high price brand; while AVON and Olay also belong to L’OREAL Company, but they are cheap price brand. Therefore, a organization can has many products to meet different consumers’ needs and wants. Price could depend on the target customers’ income.

  2. I like the topic of pricing around Apple! I am a fan of Apple’s design and especially the iPhone. However, I find their products simply overpriced. When I wrote a law paper about Foxconn in China I researched the product’s production costs leave alone the production circumstances. The production does not justify the high price!
    It seems as if Apple is is pricing according to price-quality effect. According to the book “The Strategy and Tactics of Pricing” by Thomas Nagle and Reed Holden, the effect sets in when the higher price also signals a higher quality to the consumer as this makes him or her less sensitive to the price difference. As Apple’s design is very exclusive-looking and different from other products (I know we could argue about the uniqueness now) it is perceived as an exclusive product. So it seems, even though, as your comparison showed, there is often no real difference in the capacity, the design advantage of Apple is the real difference, and that sets Apple so far apart from others. Even though I am complete fan of my (4 year old) iPhone, I personally look skeptical when people tell me they just spend 1000 Pounds on a Mac, just because it is “better”…

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