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Itunes Differentiators : Pricing and Product Quality at Work

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  1. iTunes has utilized several strategies for marketing its music merchandise.
  2. How does the supply and demand relationship work in Apples' iTune model?
  3. What is Apple's pricing strategy with iTunes? How can it fine-tune its base price of 99 cents per song?

The iTunes Music Store is an epitome of the success of effective pricing strategy. It has been launched by Apple in 2003 and since then has been a phenomenon in terms of the sales of digital music. Originally, the store has been opened for Macs running OS X with an archive of 200,000 songs; to date, iTunes has evolved into the most widely acknowledged online music seller. It boasts of around 700,000 songs from both popular and autonomous labels (Bangeman 1).

[...] This dispute over the pricing strategy has also lead to the pull out of BMG from iTunes in Japan and Australia (Kafka 1). The issue on pricing has been one of contention among the top honchos of labels. One perspective banks on the practices of other retail entities, citing that none of them have adopted a one ?price structure. They adopt different prices for various products. While most label executives perceive that a tiered pricing strategy would bring more to their coffers, it is perceived as a threat by some. [...]

[...] At the end of the day, the consumer ought to have both value for money and quality products. Both differentiators will spell continued success for iTunes. III. What is Apple's pricing strategy with iTunes? How can it fine-tune its base price of 99 cents per song? iTunes' offerings heavily reinforces simplicity, beginning from installation, to daily use. The ease of setting up an account, enjoyable search and buying of music, and speedy service, coupled with a 99 cent price per song has made it the online music retailer phenomenon that it is today (Adams 2005). [...]

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