Strategy Lessons African SMEs can learn from Apple’s I Phone X

Recently Apple turned a lot of heads during the launch of its latest phone; I phone X or Ten largely due to its outrageous price that broke the 1000 USD barrier.

Many people have been questioning and trying to figure out what kind of justification Apple would have to price the I phone X above 1,000 USD given that competing smart phone makers even its other models; S8 and S8 Plus are both below 800 USD.

Apple deployed an old differentiation strategy of using premium price to signal to the consumers mind that they have ramped up its quality and they are unrivaled when it comes to excellence.

Premium pricing strategy to signal quality is always at play in many of Africa’s business eco system.  Companies such as Safaricom, Crown Paint, and MRM have successfully used it in their various product offerings.

Such a pricing strategy is not only used to portray premium value of product but also to place in the mind of consumers; spirit of excellence.

Before adopting any price strategy; SMEs must understand that their product price is not for maximizing profit only but is also used to defend existing markets, enter new markets, increase market share among many other reasons.

Premium pricing is one among many pricing strategies SMEs can adopt to differentiate themselves from the pack. Depending on various factors such as competition, cost of production, government regulation among other an SME can decide which of the various pricing strategy it can adopt to give it an advantage.

Other pricing strategies include Bundle pricing in which multiple products are sold at a lower rate than if they were to be purchased individually, Price Skimming designed to help companies maximize sales of new product or service by starting with a high price then lowering gradually as competitors appear and the most popular is Penetration pricing which is aimed at attracting new customers through rock bottom prices.

SMEs need to be careful in ensuring that the price strategy they adopt produces the desired result. For more insight on  differentiation strategies you can contact victor@viffaconsult.co.ke

https://viffaconsult.co.ke/strategy-lessons-african-smes-can-learn-from-apples-i-phone-x/