Apple Inc.: Price Strategy in India

In 2021, Apple Inc. (Apple), the global manufacturer and seller of consumer electronics, computer software, and online services based in California, was considering entering the domestic market in India. With Tim Cook as leader, the company sold some of the world’s most popular products, including iPad, iPhone, iPod, MacBook, iTunes, Apple Watch, Apple Smart TV, and Apple Music. The company sold its products both through online and physical retail stores across the world, as well as distributing its products through third-party wholesalers and resellers. In India, Apple operated only through third-party partners and authorized resellers, which meant that it was not taking advantage of the government’s foreign direct investment opportunities by operating directly within the Indian retail market. The main challenge Apple faced was the price sensitive Indian consumer, which contrasted with the company’s premium pricing strategy. Cook was eager to enter the lucrative and fast-growing Indian consumer technology segment. However, the company would have to make a decision, especially with strong competitors such as Samsung Electronics Co. Ltd. (Samsung) already dominating the Indian market. Should Apple retain its premium status and pricing strategy or lower its prices to appeal to more price sensitive Indian consumers?

This case provides students with an understanding of the challenges a business faces when expanding to sell directly into a foreign market where the company previously operated only through third-party partners or authorized resellers. It also discusses how to conduct business operations in an emerging market economy that consists of vast rural and urban consumers. After completion of this case, students will be able to achieve the following objectives:<ul><li>Understand the challenges of entering a foreign market where the company’s current presence is through a third party.</li><li>Discuss how to conduct a business using both physical and online retail in India.</li><li>Adapt an existing successful pricing strategy to cater to a price sensitive market.</li><li>Understand how to sustain and compete in an emerging market such as India.</li></ul>

• Strategy
• Retail
• Customer value
• Pricing strategy
• International Marketing