Pricing it Right: Three Caselets in Pricing

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Case Details:

Case Code : MKTG187
Case Length : 13 pages
Period : 2006-2008
Pub Date : 2008
Teaching Note :Not Available
Organization :; Apple, Inc.; F. Hoffman-La Roche Ltd.
Industry : Travel; Consumer Electronics; Pharmaceutical
Countries : Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Caselet 2: Apple's Pricing Strategy for iPhone in The US

On September 5, 2007, Steve Jobs (Jobs), CEO of Apple Inc.25 (Apple), announced a steep price cut on Apple's much hyped iPhone. The price cut, coming as it did within 10 weeks of the product's launch, angered the early adopters who had bought their handsets at a premium price.

Some of these customers had waited in queues before Apple stores for days to buy the phone as soon as it was launched. While Apple justified its price cut saying that it wanted to make the iPhone more affordable, some analysts felt that such a steep price cut within a few weeks of its launch was nothing short of a public relations (PR) fiasco for the company...

The iPhone, which was launched on June 29, 2007, was available at a premium price of US$599 for an 8GB version and US$499 for a 4GB version.

Before the launch of the iPhone, many analysts were of the opinion that Apple had overpriced the product, which reportedly cost the company just US$281 (for the 8GB version) and US$246 (for the 4GB version) to produce.26...

Caselet 3: Roche's Pricing Strategy for Fuzeon - Next Page>>

25] Apple Inc., headquartered in Cupertino, California, USA, is a leading designer and manufacturer of consumer electronics and software products. For the year ending September 29, 2007, its net sales totaled US$24,006 million.

26] Shawn Collins, “Marketing the iPhone,”, June 25, 2007.


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