1. Strategic Pricing -Premium pricing

The idea of premium price initiates with the very positioning strategy approached by the market players. People are willing to pay a premium price for your product if their perception is that of a market leader. If the company succeeds in positioning itself as a leader in the mind of the consumers, then the market is willing to pay that price.

There are multiple examples in this cluster in various industries ranging from Hi-Tech, Media to Manufacturing, Automotive, CPG, etc.

I previously shared the example of Samsonite, but I believe the most common one is APPLE – also intensively mentioned on the discussion board.

Interestingly, APPLE is a company that never produced a mobile phone before. Still, with iPhone1 they succeeded to ‘destroy’ the leader of the market at that time – Nokia. Since then, at each and every new launch of an iPhone – the prices go up and so is the number of units sold + the turnover. Not to mention the queues.
So, what Apple did was to induce in the mind of the consumers the idea of an innovation leader. The innovation came from something that no one had seen before, a phone with only one button.

The marketing strategy addressed by Apple is of a market leader; each product is better than the previous one, but they never refer to competing products.
The 2nd player on the market now – SAMSUNG – is just following and keeps comparing its products with the leaders.

Obviously the chosen pricing strategy cannot be successful in isolation. A link between the perceived value of the product, in-depth market/ competition analysis and specific marketing strategy is also needed as they all influence the buyers’ purchasing behavior.

I believe there is no such thing as a good or a bad pricing strategy. When strategizing on pricing – there should be an alignment with other company goals. At Apple