Apple's anchoring effect in their marketing strategy

The Anchoring Effect: The Marketing Strategy That Sells iPhones Every Year

Anchoring Effect in marketing is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions. Apple has used this to its advantage for it’s “i” products sales for years. 

Let’s look at how Apple has used this on us and why it’s one of the reasons we keep buying a more expensive iPhone each year a new model comes out. 

iPhone 7 was released in 2016. The pricing for the different models are as follows:

  1. 32GB - $649
  2. 128GB -$749
  3. 256GB - $849

By position the pricing with these options, the 128GB would outsell the other two choices. This is how the anchoring effect plays out. 

  • Apple knows it’s not going to sell its 256 GB in great numbers, but it’s just there as a decoy to set the bar on its price ceiling. 
  • The anchor point is its 32GB model being priced at $649.
  • When you compare the 128GB to the 32GB, it looks like a very good bargain. The thought that runs through the average consumer’s mind is: “Wow.. if I pay $100 more than the 32GB model, I get 4x the memory. Let’s do it!”

Things got interesting when Apple introduced the iPhone 8 and iPhone X. The iPhone 8 looked exactly like the iPhone 7. There was a lack of enthusiasm all around from Apple fans on the launch date. Apple anticipated this was going to happen because for their marketing strategy, the iPhone 8 was just a decoy. 

Apple was strategic by spacing out the launch dates of the iPhone-X by 2 months. When iPhone X was introduced to the market at the launch event, Apple stores didn’t carry display units for the iPhone X. By delaying the launch date, they built anticipation and curiosity for the product. 

This allowed Apple to raise their price ceiling for their flagship 5x inch from $849 to $999. Apple did this to mentally prepare the market to pay an extra $150 for any major design upgrade. This was a clever marketing strategy by Apple. They understood consumer behaviour and how choice works.

Do you think the iPhone X would have been able to command the $999 price tag if it as a standalone product? 

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