C&B Notes

How Apple Plays the Pricing Game

From Bloomberg Business Week via a post on Farnam Street:

Awesome article from Bloomberg Business Week on how Apple uses decoys, anchoring, and obscurity to make you think those shiny aluminum toys are a great deal.

“Decoys, in marketing, are products, services, or price points that a business doesn’t reallywant you to take, but rather use as a reference to make another product look better.

Decoys explain why Apple often sells each gadget in a pricing series, such as the new iPod Touch’s $229, $299, and $399 price points for different storage capacities. You may gladly spend $229 to get a hot media player, thinking it’s a deal compared with the highest-priced version and not blink that you could instead buy an iPhone 4 at the lower price of $199 with more features.”