Return to the Little Kingdom_ Steve Jobs and the Creation of Apple - Michael Moritz [28]
“There are these guys at Apple,” Whitfield said, “who are saying, ‘Let’s make a lot of hay out of price.’ Then the left hand says, ‘Don’t advertise price.’ And the right hand says, ‘Promote the hell out of price.’ We look like idiots if the right hand doesn’t know what the left hand is doing. I don’t think price is an advantage for Apple. The price of the Apple Two isn’t all that low compared to other machines. People don’t know what price means.”
“It’s almost deceptive advertising,” Goldman agreed as he stretched out his legs. “Everybody and his brother has to buy a box, drives, monitor, and printer. It’s plain misleading. The preconception is that they can get into an Apple for thirteen hundred dollars. Then they go into a dealer’s, find they have to spend three thousand dollars, and come out without a computer.” He paused. “And pissed off.”
“It makes it easy for people to price-shop,” Whitfield said, shaking his head in dismay.
“The nineteen ninety-five suggested retail price,” Folley elaborated, “meant a loss of eight percent for the dealers. The dealers are taking it in the shorts.”
“We’ve got fifteen suits against us from mail-order people for price fixing,” said Whitfield as he thumped the table with his fist. “You can see them now trying to convince a judge, moaning about this poor little retailer and this big company. It’s conceivable that a judge could say there was a pattern of price-fixing. We want an image like Sony or IBM. You don’t see those guys running an ad for price.”
“Our whole strategic position,” said Goldman, “is to enhance position for Apple. We have to add brand preference. We’ve got a lot of people who don’t know about PCs. People don’t even know they need these damn things, and we’re trying to sell them something they don’t think they need on the preference of price.”
Whitfield started to complain about Paul Dali, director of marketing for the Apple II, who was keen to advertise the price of computers. “How do you convince him otherwise? He sold thirty-three thousand computers or whatever the hell the number was in July. I’ve racked my brain and we just don’t have enough research to convince him that it isn’t price.”
“It’s cost benefit,” said Goldman.
“He’s got to step back and look at himself as part of an organization,” suggested Goldberg who had his feet propped against the edge of the table.
“How do you say that diplomatically?” asked Whitfield.
“Wake up, schmuck!” Goldberg said as he smoothed his fawn tie. He rephrased the suggestion: “Take a global perspective!”
After the chuckles subsided, Goldberg turned to the greater issue. “Apple has to be careful not to get down and dirty. An Apple means more than just a computer. Apple means plugging yourself into an energy source.”
“We can’t fight it out with the unwashed masses,” Goldman agreed. “We’ve got to show Apple is the brand of choice. Stick in the price and you become the cheapo.”
“Start cutting price,” Goldberg warned, “and you erode position. You can get thrown out at some point. If IBM steps in above you. You get thrown out.”
“How the hell are the unwashed masses out there going to figure out what to do?” Goldman wondered. “Everybody is trying to beat themselves over the head for the current market which is only three percent of what it will be.”
“It’s the whole corporate image,” Whitfield said. “Crocker Bank doesn’t want to buy a computer from a company for eleven ninety-five.”
Whitfield, who looked as if the cares and the future of the company were resting on his shoulders, pointed out, “Apple isn’t like General Foods. At General Foods the Sanka guy doesn’t have to worry about hurting the Jell-O guy. They’re separate. At Apple every brand