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New-Product Pricing Strategy: Ipad Report (Assessment)


The introduction of the iPad to the market came at the backdrop of a successful launch of the iPhone. The iPhone was barely out of the introductory stage when the iPad 1 was launched. The second generation iPad has recently been launched. Sometimes it is hard to define the stage in product life cycle apple products are.

This is because their entry is characterized by huge success and massive reception by consumers. Experts note that it is possible to skip some stages in the product life cycle (Armstrong and Kotler, 2011). I would say that is what happened with iPad.

All characteristics surrounding the second generation iPad confirm the fact that it is at the introductory stage, apart from the massive consumer use it is already enjoying in the market. I would say it is in the growth stage. The marketing pricing strategies that Apple Inc should employ are not clear.

The market penetration pricing strategy, according to me is not a good option. This is because the market reception is already quite positive. Therefore, riding on this euphoria that has been generated by all the talk about the iPad, the company will recoup its investment quite fast.

The second generation iPad was launched in 25 other countries (apart from USA where it was originally launched) just last month (Apple Inc., 2011). Initial indications showed that those markets were waiting for the product to arrive. This means that no matter the price, consumers will focus on the value addition of iPad 1 (Satariano, 2011).

The other reason the company should not adopt the market penetration pricing strategy is that competition is almost nil. The most formidable competitor Motorola xoom is still in competition with iPad 1.

The CEO of Apple Inc Steve Jobs noted during the launch that competitors are struggling to catch up with the first generation iPad while the second generation is already launched. This underscores the variability that is there in market share with the closest competitor (Armstrong and Kotler, 2011).

The second generation iPad is an improvement to the iPad 1. This is terms of camera quality, sexiness, Wi Fi capabilities and horse power capabilities (Topolsky, 2011). These features are also way competitive compared to Motorola xoom. This means that majority of consumers will see xoom as just an imitation of the iPad. They will go original (Johnston, 2011).

Another reason is the fact that apple has had other successful launches before. The iPhone which entered the market in early 2007 received so much reception in the market. There was actually no competition for some time. Banking on that success, the company should simply introduce the product in the market at a high price. The target market can also be a determiner in overall pricing.

In this case it is evident that iPad is not meant for lower end market. It is for the high end market. This means that its price should be high. The company should listen to the consumers for improvements and value addition propositions (Armstrong and Kotler, 2011).

It is evident that my proposal is that Apple should employ market skimming pricing to introduce iPad. Because of the favorable past quality and successes of its products, it will easily recoup its costs and make profits. Afterwards it should shift to market penetration pricing strategies. This is what the company did when launching the iPhone in 2007. Focus, in the short run, should be awareness and value addition (Armstrong and Kotler, 2011).

Reference List

Apple Inc. (2011). Ipad 2 Arrives In 25 More Countries This Friday. Web.

Armstrong, G. & Kotler, P. (2011). Marketing: An Introduction. New York, USA: Pearson Prentice Hall.

Johnston, C. (2011). . ARS. Web.

Satariano, A. (2011). . Bloomberg. Web.

Topolsky, J. (2011). . AOL Tech. Web.

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1. IvyPanda. "New-Product Pricing Strategy: Ipad." May 25, 2020. https://ivypanda.com/essays/new-product-pricing-strategy-ipad-assessment/.


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IvyPanda. "New-Product Pricing Strategy: Ipad." May 25, 2020. https://ivypanda.com/essays/new-product-pricing-strategy-ipad-assessment/.

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IvyPanda. 2020. "New-Product Pricing Strategy: Ipad." May 25, 2020. https://ivypanda.com/essays/new-product-pricing-strategy-ipad-assessment/.

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IvyPanda. (2020) 'New-Product Pricing Strategy: Ipad'. 25 May.

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