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Apple Pricing Strategy

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A. Market Position

The Indian smartphone market is dominated by Google’s Android OS, capturing 97% of the market. Apple faces stiff competition from Samsung, the market leader, and domestic companies like Micromax and Intex. This has made it difficult for Apple to attract customers compared to its rivals.

B. STEEPLE

By investing in India, there are potential legal and economic opportunities. However, there are also social threats related to this decision.

i. Legal Restrictions

Apple faces several legal restrictions in India and setting up their own factory there, could present it with an opportunity to overcome them.

Firstly, the local governments ‘Made in India’ program puts a restriction that 30% of products need to be sourced locally …show more content…

The people are frugal as on average they earn a lower salary. This means that they have a very limited buying capacity. In 2015, 86.5% of all smartphones shipped into India retailed under $200 and this shows that the Indian smartphone market focuses on cheaper smartphones which makes it difficult for Apple to sell its iPhone. Hence, even if they can lower the average selling price, it may not be still enough and effective in drawing more customers. By setting up a manufacturing facility, Apple might still not be able to meet the demands of the majority of the local population. This will result in Apple wasting the investment in India without much …show more content…

Use of Marketing Mix

Marketing mix will be used in this analysis to review the marketing strategies of Apple in India.
i. Price and Place(Distribution)

Apple’s success in India has been hampered by the high price of its products. Apple uses a price skimming strategy across all of its markets in selling its iPhones. This has created a unique and prestigious image for its products. However, this strategy has failed in India due to the frugal attitude of the customers in India. The initial selling price in India has also been affected by several other reasons.

Smartphones in India are mainly sold off-contract, without subsidies, and through a large number of small retailers. This results in the customers having to pay the full price at the time of purchase. The customers may not be able to afford the full price of the iPhone. The average price of an Apple iPhone in India is $612 which is much higher than Samsung, $173 and Micromax, $86. Hence, customers tend to prefer cheaper premium phones such as those provided by Samsung.

Figure 4: Channels of

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