Start by asking what students know about Apple, and how their experiences with Apple fit with the opening vignette. Next, give the students a feel for the company by visiting its website at You can also enter the company name on e and check out several of their videos. Once you have captured the essence of the online experience for Apple, you can discuss the pricing strategy. Discussion Questions 1. What pricing strategies does Apple use? Review Figures 10.1 and 10.2 in discussing Apple's pricing strategies. (Do product costs matter more than consumer perceptions of value in setting prices for these companies? Or not? Explain.) 2. What factors must Apple consider when setting prices in China, where it went from the top-selling phone to the fifth behind fast-growing, low- priced local competitors such as Huawei and Xiaomi? (Discuss what differentiates Apple's products from competitive products and how it influences consumer willingness to pay. The answer is its focus on the Apple user experience. Apple users swear that their products work better and are easier to use. They love the style. And Apple ensures that customers know they are the focus, and that its customers are at the front of the crowd. All this leads people to feel so strongly about Apple and its products and their quality that they are willing to pay a premium.) 3. Is Apple's image of "cool" sustainable? How does this image and its focus on the customer experience allow the company to earn premium prices on its products? (It is likely that Apple's image is sustainable for a number of years. Apple loyalists will not easily be swayed to other companies' products, even if the cost is favorable.)