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Apple uses a fantastic array of social psychology when pricing their products. You may have noticed a few more: Price Anchoring At most of their keynotes when

Apple uses a fantastic array of social psychology when pricing their products. You may have noticed a few more: Price Anchoring At most of their keynotes when they release a new product, they often anchor the minds of the press and buyers. Apple do this by showing a price of £X00 and then saying it's actually much less than that. Look at the transcript of the iPad release: "If you listen to the pundits, we’re going to price it at under $1000, which is code for $999. Up on the screen comes a huge $999 price. Then: "I am thrilled to announce to you that the iPad pricing starts not at $999....but at just $499." The much cheaper price now feels like a bargain. It's an excellent sales technique in action. Decoy Effect Similarly, when showing the pricing metric for the iPad, Apple went with showing all the price dimensions together. This highlighted two things: 1) the highest price of the WiFi+3G 64GB model; 2) more importantly, the relatively bargain-worthy price of the entry level model. Value Based Pricing / Emotional Benefits Apple's marketing is mostly excellent. They rarely show the features of the product and more often focus on the emotional benefits of using their products. The famous example is of course using their iPad showing how grandparents can have a video chat with their children and grandchildren. Bandwagon / Social Proof Apple's branding and unique design is perfect for social proof. When you use an Apple product, it's fairly obvious that it's an Apple product. Therefore when potential buyers see this, they think: "All these other people are buying an Apple X, I should get one. They must be very good as so many people can't be wrong". The Nibble Similar to warranties, apple care and other 'add-ons', Apple have employed the wonderful 'Nibble Technique'. Once you've paid for a high price item such as an iPad, a relatively low priced item seems inconsequential. That's why tailors get you to purchase a suit before offering you a tie to go with it. Apple use this technique at the checkout process offering you accessories such as an iPad Smart Cover or an iPhone case. These tend to be low cost items with very high margins - they seem cheap to you, the buyer, as you've just spent so much on the something else. These add-ons can significantly increase sales and more importantly profits.

pretoriusB 14y ago
>At most of their keynotes when they release a new product, they often anchor the minds of the press and buyers. Apple do this by showing a price of £X00 and then saying it's actually much less than that. Look at the transcript of the iPad release: "If you listen to the pundits, we’re going to price it at under $1000, which is code for $999. Up on the screen comes a huge $999 price. Then: "I am thrilled to announce to you that the iPad pricing starts not at $999....but at just $499." The much cheaper price now feels like a bargain. It's an excellent sales technique in action. Indeed, with 2 caveat: 1) Pundits DID predict a $999 price for the iPad. 2) At $499 not only it REALLY was a bargain, but competitors had a hard time for 2-3 years to offer anything as powerful for the same money. Competiting tablets were in the $699 - $899 range.
- UnoriginalGuy 14y ago
  1) I'm sure pundits predicted a lot of things. 2) That's nonsense. The only thing the iPad had was its screen, otherwise it was already inferior when it launched. Didn't stop people lapping it up.
  - ececconi 14y ago
    The iPad didn't just have a screen, it brought a whole new experience to interacting with a large screen. This was also due to the software behind the screen. Ever try to use a touch screen the size of an iPad before the iPad? It was terrible. It was more than just an object, it was an experience. It's an experience that other tablet manufacturers and software developers are still trying to get right. The iPad was inferior for many computing tasks. It made interacting with the internet and a computer feel totally different. It's hard to quantify that in terms of megahertz and ram.
  - pretoriusB 14y ago
    >1) I'm sure pundits predicted a lot of things. Cheap cop-out. The most widespread prediction was that the iPad would be expensive in the "around $999" region. 2) That's nonsense. The only thing the iPad had was its screen, otherwise it was already inferior when it launched. Now, that's nonsense, if I ever read one. For over a year there was no competition to the iPad worth mentioning. Point to anything if you have. Prepare to be ridiculed. Android wasn't even ready for tablets back then.
  - joeguilmette 14y ago
    As others pointed out, you are plain wrong. The can be made (maybe) that new Android tablets are overtaking the iPad in performance. The fact is, Android tablets didn't really exist when the iPad was released, and the few that were on the market were laughably awful (like the original G1 compared to the iPhone).
- jmduke 14y ago
  > 2) At $499 not only it REALLY was a bargain, but competitors had a hard time for 2-3 years to offer anything as powerful for the same money. Competiting tablets were in the $699 - $899 range. Things that are 'really a bargain' are hard to quantify as such. What do you mean by this?

pretoriusB 14y ago

>At most of their keynotes when they release a new product, they often anchor the minds of the press and buyers. Apple do this by showing a price of £X00 and then saying it's actually much less than that. Look at the transcript of the iPad release: "If you listen to the pundits, we’re going to price it at under $1000, which is code for $999. Up on the screen comes a huge $999 price. Then: "I am thrilled to announce to you that the iPad pricing starts not at $999....but at just $499." The much cheaper price now feels like a bargain. It's an excellent sales technique in action. Indeed, with 2 caveat: 1) Pundits DID predict a $999 price for the iPad. 2) At $499 not only it REALLY was a bargain, but competitors had a hard time for 2-3 years to offer anything as powerful for the same money. Competiting tablets were in the $699 - $899 range.

UnoriginalGuy 14y ago
1) I'm sure pundits predicted a lot of things. 2) That's nonsense. The only thing the iPad had was its screen, otherwise it was already inferior when it launched. Didn't stop people lapping it up.
- ececconi 14y ago
  The iPad didn't just have a screen, it brought a whole new experience to interacting with a large screen. This was also due to the software behind the screen. Ever try to use a touch screen the size of an iPad before the iPad? It was terrible. It was more than just an object, it was an experience. It's an experience that other tablet manufacturers and software developers are still trying to get right. The iPad was inferior for many computing tasks. It made interacting with the internet and a computer feel totally different. It's hard to quantify that in terms of megahertz and ram.
- pretoriusB 14y ago
  >1) I'm sure pundits predicted a lot of things. Cheap cop-out. The most widespread prediction was that the iPad would be expensive in the "around $999" region. 2) That's nonsense. The only thing the iPad had was its screen, otherwise it was already inferior when it launched. Now, that's nonsense, if I ever read one. For over a year there was no competition to the iPad worth mentioning. Point to anything if you have. Prepare to be ridiculed. Android wasn't even ready for tablets back then.
- joeguilmette 14y ago
  As others pointed out, you are plain wrong. The can be made (maybe) that new Android tablets are overtaking the iPad in performance. The fact is, Android tablets didn't really exist when the iPad was released, and the few that were on the market were laughably awful (like the original G1 compared to the iPhone).
jmduke 14y ago
> 2) At $499 not only it REALLY was a bargain, but competitors had a hard time for 2-3 years to offer anything as powerful for the same money. Competiting tablets were in the $699 - $899 range. Things that are 'really a bargain' are hard to quantify as such. What do you mean by this?