Apple launched its new iPad on Wednesday (Mar 7) starting at $499. But they kept the existing iPad2 beginning model in the line at a reduced price of $399 – smart move. Marketers call this a flanking tactic. Apple protects the $499 price on the new iPad from competition by pre-empting $399 competitors with its own iPad2. Considering the tough time other tablet makers had profitably competing with the $499 iPad 2 the price drop to $399 spells trouble for iPad’s competitors.
Does your business just use standard markups or do they have a price to win strategy?