Answered: hy did Samsung keep the prices of its…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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Case Study 2: Apple and Samsung mobile phones: When Apple first introduced the iPhone, its initial price was as high as $599 per phone. The phones were purchased only by customers who really wanted the sleek new gadget and could afford to pay a high price for it. Six months later, Apple dropped the price to $399 for an 8-GB model and $499 for the 16-GB model to attract new buyers. Within a year, it dropped prices again to $199 and $299, respectively, and you can now get a basic 8-GB model for free with a wireless phone contract. In this way, Apple has skimmed the maximum amount of revenue from the various segments of the market. On the other hand, in Kenya, Nigeria, and other Africa countries, Samsung recently unveiled an affordable yet full-function Samsung Galaxy Pocket model that sells for only about $120. The Samsung Pocket is designed and priced to encourage millions of first time African buyers to trade up to smartphones from their more basic handsets. Samsung also offers a line of Pocket models in India, selling for as little as $77. QUESTION: Why did Samsung keep the prices of its phone low in the beginning?

	a	To get maximum revenue from loyal customers
	b	To defeat the competition
	c	To enter new market

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