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Pricing Strategy: Apple and Samsung - Essay Example

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The paper "Pricing Strategy: Apple and Samsung" tells that the constant wars between Apple and Samsung seem not to be ending and with the American Court ordering Samsung to compensate Apple for patent issues it has become evident that Samsung is spreading the cost to the consumers…

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Subject: Marketing
Type: Essay
Level: Undergraduate
Pages: 1 (250 words)
Downloads: 1

Extract of sample "Pricing Strategy: Apple and Samsung"

The theory Samsung is using is referred to as a creaming or skimming strategy (Balmer, 2003). The skimming strategy is usually common to electronic goods and in this case, Samsung was using it in their phones. In this case, the prices are set at a high cost so that the few goods sold are able to help in break even. I believe the additional cost in the price of this phone was meant to cover the initial cost of investments and original research of this phone. I also believe that the use of this high price is to lure the early adopters who would wish to be in tandem with the latest technology.

It is the practice of many companies to employ this strategy to their newly launched goods. However, with time I will not be astonished if someone purchases a similar phone at half the price I used to buy the phone.

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