Tag Archives: Apple

The Apple Discount

Apple does discount – but for selected parts of its range or for specific reasons: change-over on a model, for example. The most important thing is that they don’t give that impression.

Apple’s approach is to treat price as a reliable indicator of value. By not overtly or uniformly discounting, they maintain the value of the brand by making products that excite customers and they continue to charge for them at that level of value until there is a good reason not to do so. In other words, Apple’s ethos is never discount an Apple product while people are most excited about it – no matter whether that is days or years after it was first released.

But while Apple have worked hard to position themselves as a full-price, full value brand, that’s not always the case. As the article points out, “With the exception of the iPhone and the iPad, Apple products are typically discounted within eight days of first hitting the market …” Surprised? I was. But “As for the most in-demand Apple products—iPad and iPhone—there doesn’t seem to be much financial incentive to delay your gratification. The price for either is unlikely to change by waiting a few days, or even a few months … discounts have basically been non-existent until it’s time for Apple to introduce the latest new-new model.”

Even when Apple discounts, the wider motivation seems to be to give customers entry points to the Apple universe. By lowering the price of a laptop, they invite customers into their world, knowing that they will then be pre-disposed to go Apple all the way. At least that’s my theory, and it’s one I think extends to the pricing of their new operating system. Lower the barriers to entry to get people involved, but retain the pricing and the aspiration on the iconic products that people continue to be excited by and around which the world of Apple pivots.

Such an approach seems worlds away from the volume-driven approach taken by discount brands that advertise serial sales to drive up their top line. But as I’ve said many times before, there’s nothing wrong with that model if you’ve built your business and your brand around it. Smart discount brands rely on a very different perception of price though than a brand like Apple. Whereas Apple sees price as proof of value, astute discount brands treat price as a pain point. And they rely on easing perceived pain in order to generate interest. They rely on you paying less in one area but more in others to help balance the load. Just like with Apple, it’s a feel-good balancing act. The difference is that one brand makes itself known for discounting and the other doesn’t.

One truth straddles both approaches. No matter how you choose to use discounting, to use it effectively you need to hard-wire it into your ethos not just your pricing. You need to be very clear too about how it works to protect your margins store-wide.

You might like to ponder that the next time you see a sign advertising “30% off selected lines”. Which lines have been selected…and more importantly, why?

Contributed to Branding Strategy Insider by: Mark Di Somma, Brand ConsultantImage

Innovate around a higher meaning

Creating new value always involves proposing new or unexpected meanings. What matters most to people is not the function or performance of a given product, but their emotional, psychological and cultural connection to what the product means to them.www.devlinmediacompany.com

New value is in the “meaning” not in the physical thing. People don’t just buy product, they buy into a higher meaning. This unexpected idea, unsolicited by user needs, once discovered, turns out to be the very thing people were waiting for, just not asking for. Nobody was asking for an iPod, Facebook, baked potato chips, the Swiffer, or any other product innovation that has redefined or reinvented a category.

Forget user-centered innovation
With so many such examples in every industry to benchmark from, I am surprised most marketers don’t seem to “get it”.  Most are heavily invested in traditional market innovation – finding a consumer need and filling it.

Many marketers are focused on how their new product / service innovation has more buttons and is easier to use, has more features and is cheaper than the leading brand. A radical innovation of meaning rarely, if ever, comes from incremental improvements or user-centered approaches.

Most companies continue to improve incremental performance within existing market concepts they know well– leaving only a few visionary companies to gain competitive advantage (market leadership) by proposing new and different meanings.

The message of hope.

Value creator brands are guided by a higher purpose beyond money-making… they earn and deserve the advocacy of high value customers because they represent an “increase to life” itself. In our post-marketing-social-media world, consumers create communities based on shared values. Brands can’t add values to the world unless they have them.