Apple Tries New Marketing Strategy in India

128px-Apple_Logo.svgThe high cost of new iPhones has made it difficult for Apple Inc. to succeed in emerging markets. For example, an iPhone 5s can cost as much as 53,500 rupies ($874) in India—a hefty price tag in a nation where most people live on less than $2 a day. The company is currently trying out a new strategy in the country that appears to be working: Selling older models, such as the iPhone 4 and 4s, at affordable prices.

Apple has managed to double sales while competing against the American company Samsung Electronics and domestic makes Micromax Informatics Ltd. and Karbonn Mobiles India. Experts predict that if the strategy continues to prove effective, Apple will expand it into other larger emerging markets.

Zintro expert Karen Kerski has worked with small and large companies to develop branding, packaging and marketing tools. Kerski shares her opinion about Apple’s strategy. “Apple is still being watched closely to see how it will maintain a successful business after Steve Jobs. Their marketing and pricing format is designed to retain brand image as a leader and trendsetter. Controlling their product sales is supporting that model. So it makes sense to manage sales of refurbished older phones.

“Apple has a secure following in major markets like the U.S., so devising a formula to build brand loyalty in emerging markets like India is a smart move. Competing with Android and Samsung requires innovative strategy since Apple is not competing on price. Apple has worked relentlessly to craft a brand image that is enviable. The choices they make in marketing, sales and product development all play a part in retaining that brand iconic status.

“I am an Apple loyalist because the products meet my business needs: power, performance, ease of use, and lower IT costs for my business. I hope they can continue as an innovative leader. That requires Apple keeps growing its market share.”

James Davis and his wife (also his company partner) have over 30 years of combined cellular and telecom experience. She was a Senior Level Marketing and Events Manager for one of the largest Korean cell phone and electronics manufacturers in the world and Sony Ericsson. He has an engineering and operations background– having worked for Nokia, Microsoft, Sony Mobile, Lenovo and others.

Davis says, “Emerging markets for Western countries have always proven to be exceptionally difficult to break in telecom—Nokia being the exception for many years as they developed phones for an emerging China and India. The strategy Apple is taking is difficult for them because it’s not part of their brand DNA. They are, at least these days, a marketing powerhouse for developed countries because they know how to serve up the right messaging.

“Marketing in India is far too complex when a brand like Apple is attempting to not degrade their brand. It’s very, very difficult for them, because if they took the same route other device makers have, with developing lower cost devices, by default it tarnishes the brand for Apple.

“The only way for Apple to truly gain any kind of market share will not be in direct sales. It will be through grey markets, which eventually get users into the Apple store anyway. This is not too dissimilar to luxury automakers that have attempted to put out lower end autos for the American market. Their prices were just out of reach for upwardly mobile types, so they created lower cost models. While still carrying the luxury brand, it backfired because everyone knew it was the cheap version of the luxury brand.”

Steven Ruterman is the principal of a consultancy providing independent expert advice to institutional investors on credit underwriting, operational risk and credit control issues. He explains, “Twenty years ago Apple wasn’t known for its marketing. It was known for consistent consumer product shortages due to self-inflicted supply-chain problems. While supply shortages resulted in high prices relative to competition, Apple’s market share flattened out and then declined, leaving the former market leader in the role of pricey niche player.

“Two decades later Apple seems to have solved its supply-chain problems, at least with respect to iPhone 4 and 4s, and Apple iOS sells for almost twice the average price of its competitors. With product supply unconstrained by unforced errors, its new marketing strategy has a chance of improving Apple’s market share prospects.”

Zintro has experts in every industry sector, across every job function, in every geographic region. Recently, some of the following topics have seen inquiry activity: