Interesting to look at the iPhone price cut from a brand standpoint. An analysis I hear on a Harvard Business Review podcast today was spot on. Essentially the point was that the $200 downward move was not true to the Apple brand in form or function.
Apple has been very much about being different and in control. Their products are stand out, unique; and they have thrived on closed systems that they control. However, they reacted to slower than expected sales by slashing price.
Some points:
As Apple, should they allow sales numbers to dictate pricing so quickly? Probably not:
- What was the message this sent to folks who paid $600 bucks? Not a good one.
- Do they look in control here? Or, do they look a little reactive? I argue the latter.
So they reacted. OK. But was the reaction at least in line with the brand? It seems not:
- This is what many brands do when sales are weak, cut price. Nothing original here.
- The cut itself was not interesting, it was a normal offer.
- Why only ½ the difference?
So some trade-offs to consider, that maybe Steve did not this time:
How will your action make your most loyal and profitable customers feel?
Are you sure a sales bump is worth stepping out of brand?
If you must react, are you doing so in a way that will help your brand and your bottom line?
J
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