Apple Pricing Strategies: The new MacBooks not as cheap as some had hoped

Apple launched a completely refreshed line of MacBooks and MacBook Pros last week, to the by now predictable fanfare and guessing-game imbroglio in the blogosphere. I have written previously how this is a deliberate, well-designed Archetype Branding strategy on Apple’s part, using aspects of "The Enigma" archetype among other things.

The MacBooks’ launch did contain the familiar elements of Steve Jobs’ magician stagecraft, though there was a clear attempt to build up several other high-ranking Apple managers in the process, due to recent concerns and rumors regarding Jobs’ health.

But the biggest overall focus in this difficult economic environment seemed to be expected price-cuts and the overall pricing strategy. Specifically, whether the lowest-end MacBook would go below $1,000, or even down to $899.

While the latter hope didn’t materialize, the most entry level "old" MacBook (in white) was indeed lowered to $999, but not the new line of anodized aluminum housing, all-around-upgraded MacBooks. However, you shouldn’t underestimate what Apple has done here:

1) They have now "Air-ized" (after the aluminum housing of the ground-breaking MacBook Air) the entire MacBook/MacBook Pro line except for the close-out model "MacBook White". As Steve Jobs said, they should see some cost reductions from ramping up the novel unibody aluminum frame production in the next few quarters. So taking the entry-level Alu MacBook to $999 might happen sooner than some think.

2) While the cost for the new entry-level MacBooks for now has been kept at $1299, there is a lot of new technology that got pumped into it: iPod Touch multi-touch glass touchpad, led-backlit screen and longer battery life from the MacBook Air, a high-end graphics accelerator, etc. etc. So they’re establishing it as the "must-have-this-thing" item FIRST, in line with their branding as "The Creator/Innovator" archetype among other things, plus their high-end image.

3) The new MacBook line thereby becomes "aspirational", so that even if you can’t afford one right now, you still know you want one (if you were ever open to it at all). Then, when the prices get dropped further (see the iPhone price point development), everyone will think it’s a bargain by comparison.

But to do this you have to first credibly build it up at the higher price levels. I would NEVER expect Apple to forgo their brand equity and introduce brand new technology PLUS lower prices for that new technology at the same time.

With a consumer recession already going on or imminent, the 60+% of people who are truly affected by affordability aren’t Apple’s primary target market. AND they would be likely to delay purchase of ANYTHING right now regardless of price point (ask yourself if they all would buy the new aluminum MacBooks at $999 this instant – I doubt it).

Apple doesn’t need to be in the $400-700 notebook market for now, and if they want to be down the road, it is still advantageous for them to have established the higher price point value proposition. The price "anchor" this creates in the consumer’s mind is worth the somewhat reduced volume now. Then when you "drop in" the price cut at the point of maximum desirability (again, as was done with the iPhone), you are likely to create a feeding frenzy.

Apple’s “Magician” Archetype Branding Revisited: Good News – Bad News

A little while ago I told you about Apple’s carefully crafted Archetype Branding of Steve Jobs as a "Wizard of Oz"-like character, the magician who disappears behind the curtains and reappears with new, ever-more-amazing wonders of technology.

Since then, there have been a number of developments that both prove the power of this form of marketing, as well as its potential pitfalls.

Good news first: Apple’s iPhone has been flying off the shelves at a rate of 3 Million in the first month. And the new iPhone App Store has had very healthy downloads of both free and for-pay applications during that same time frame, to the tune of 60 Million downloads and $30 Million in sales (and all despite the launch weekend hiccups that "melted" Apple’s servers).

Apple is proving that there is real money to be made in an add-on app market, something that has eluded most other players so far, be they Google, Facebook, or MySpace.

So the mix of secrecy ("The Enigma" archetype) and The Magician (sometimes also called "The Change Master" archetype), that equals "The Wizard of Oz", clearly has been working for Apple.

A few weeks ago we were predictably fed more grist for the mill, when Apple made several more secretive yet enticing statements during its Q2/2008 financial reporting re: Q3/Q4 earnings projections, specifically the financial dent that an as of yet unnamed new product or product redesign or possibly significant price drop might make in the results for the second half of the year.

Cue the rumor mongering…

But maybe it has been working too well: Besides the launch hiccups already mentioned, there have been issues reported with the iPhone 3G’s battery life in 3G mode, as well as with Apple’s only tangentially related MobileMe storage/synching service that was supposed to replace Apple’s previous .Mac service.

A Bridge Too Far?

This latter change on top of and simultaneous to the 3G launch and the firmware update for the 1st generation iPhones may have proved the proverbial "bridge too far". The new service has been resoundingly panned, including by people that easily qualify as Mac/Apple enthusiasts (such as Walt Mossberg of the WSJ Tech Department).

And while hardware and other issues with the iPhone and other Mac products have been mostly annecdotal (read Michael Arrington of TechCrunch on his experiences here), the MobileMe issues are so universally acknowledged that Apple has been voluntarily adding several months of free service (usually priced at about $100/year) for users, along with strong mea culpa statements.

And therein lies the pitfall of successful Archetype Branding: Once you have "imprinted" your archetype or mix of archetypes upon the mind of John Q Public, you have to deliver on the promise or the associations that where developed at this point. Otherwise, you run the risk of offending more resoundingly, precisely because you bonded with your customers and prospects at a deeper, more meaningful level.

People’s Unconscious Minds (their "Inner Child") may respond with outright indignation or anger when the cherished association is broken up. "You really aren’t a Magician after all… ".

If your success outpaces your ability to deliver (in Apple’s case delivering working marvels of technology to a rapidly growing user base), you have a real problem. One would hope that Apple understands this and avoids too many repeats of this dilemma in the future. Else its stellar brand could be in serious jeopardy.

What the iPhone and Steve Jobs have to do with “The Magician”

Apple’s second-generation iPhone 3G is set to hit the market Friday to the by now customary camping lines and fanfare, and, more importantly, high sales expectations.

And while it’s fun to partake in all of the speculation and hand-wringing over specific features (iPhone App store, enterprise IT compatibility, battery-life), the truly important underlying dynamics can often get lost in the fray.

One such factor: The ingenious marketing employed by Steve Jobs and Co.

And it’s here that "The Magician", or more specifically, "The Magician" archetype comes into play:

As I first heard this pointed out by Rich Schefren and Jay Abraham in one of their "Maven Marketing" teleconference calls from earlier this year:

Steve Job’s is perfectly, and, we must assume, somewhat deliberately positioned as a "Wizard of Oz"-like character in the consumer electronics space, the magician who disappears behind the curtains and reappears with new, ever-more-amazing wonders of technology.

While I had studied archetype branding myself for a while, I must admit that I had never heard the Steve Jobs/Magician analogy used up to that point. And when the unveiling of the new iPhone 3G occurred June 9, Rich and Jay’s brief remark snapped right back into focus for me.

Here he was, Steve Jobs, "The Magician" on the stage of the WWDC (Worldwide Developers Conference).

Mind you there is a vast amount of orchestration going into this feat. From Apple design philosophies (their "clean" design could be seen to evoke "grail"-like associations!), to purposefully withholding detailed product information until the timed announcements at Mac conferences, to Steve’s own stage-craft in triumphantly unveiling the new gadget of the day.

Everything has to be just right to fully support the archetype. But in doing so, whether consciously or unconsciously, Apple and Steve Jobs are occupying a very valuable space in the minds of a fickle public. And "The Magician" image serves both an extremely useful guide-post (does this next action fit our archetype branding?), as well as a uniquely powerful marketing device in this respect.

It is a brand quite literally burnt deep into the neural networks of consumers world-wide, in a way that even the valuable Apple brand never will be:

Nothing sticks better in the mind than these largely unconscious, archetypal patterns, the original building-blocks of the human mind. At that level, you don’t have to explain very much at all. It’s simply understood, and universally so (archetypes hold true across all cultural contexts).

Many marketers and small business owners ignore this fact each and every day at their own peril, "leaving" the proverbial "piles of money on the table."

Photo: MacRumors