Only last week I blogged about Tim Cook's announcement that Apple was going to make China it's "number 1 market". However, my point was that it created a marketing conundrum. (http://streamabout.blogspot.ie/2013/01/apple-sees-china-as-their-number-one.html)
If Apple stayed premium priced (as it is) then few Chinese could afford it. If it dropped prices, then that would have a global affect on the brand as it re-positioned itself more downmarket. It suffers hugely from lower priced competition anyway in the form of Samsung who outsell the Iphone 4:1.
So it was an interesting marketing issue.
Today we have the answer. What Apple have done on its China website is to let buyers pay for products in instalments and mostly, over two years. So the price remains the same, but the payment plan is structured to be affordable. Good solution, leave it to Apple.
It's only for purchases been 48 usd and 4,800 usd and some additional fees are paid at the end, presumably to cover the cost of credit. An Iphone in China is 850 usd, well outside the average Chinese salary (averages 577 usd per month) and dreams but this way, it puts it into affordable reality.
Apple is currently the 6th biggest player in China but only starting.
This is a great solution and great marketing.
Simple yes, but then you have to think of it and implement it.
I wouldn't have.
Apple for once, seems to be in a bit of a marketing bind. Their CEO Tim Cook, currently on a visit to China, said China will be "Apple's number 1 market in the future" even taking over from the US. And who would argue with that.
In fact China is going to be the biggest market in the world for most brands in the future, full stop. Remember too, there are Chinese technology companies (I can name 5 already) of note who will also have an impact outside China - this is not a one-way street.
The problem Apple have in tackling China and indeed, in competing globally with Samsung (who outsell Apple 4:1) is price. Apple is and always has been, the premium brand ($400/$500) but China needs a low cost brand (under $200). The winning formula for Samsung was of course, to do it better (or copy) than Apple and sell it cheaper - that's proved a winner. The problem with China is they don't have the incomes en masse to support Apple's current pricing. So they simply won't be able to buy Iphones and Ipads in massive numbers at current pricing.
Never mind just China, with a worldwide recession, Apple needs to consider its pricing anyway.
If Apple reduce their pricing, it will shift the brand values worldwide into a place where I'm sure it doesn't want to go - cheap rather than premium - and affect every market in which it trades.
Although interesting isn't it, that a brand can be premium in one market and cheapest in another? Corona beer in Mexico is the 10 cent, cheapest, downmarket beer. In Ireland and the UK it's $4 and premium. Same beer, same bottle, different markets.
If Apple don't reduce their pricing but try the old marketing trick of developing a new "low cost" brand - The "A Phone" or something - it will be absolutely transparent and have exactly the same impact. Apple will be cheapened.
Of course a cheapened brand is not a bad thing in recession - not at all. One only has to look at Irish Airline brand 'Ryanair' and sees them sweeping across Europe. Cheap and nasty but a huge success.
So it's a brand conundrum and a particular problem with a brand as established as Apple. My view is the way out is to move towards value add. In other words, retain the existing pricing (more or less) but then give something with the brand - buy one get one (bogof) or possibly a loyalty scheme (Apple club) giving massive rewards and so on. Subsidise the upfront cost.
We will see what Tim Cook does. Already Apple have indicated that they will not be reducing prices....but we'll see. If they're going to crack China, whatever about competing with Samsung, they have a problem and it's not going away.
But then I'm talking about Apple and we know they'll find a way, they always do. But it will be interesting marketing to watch.
I've mentioned before that countries want to censor the Internet (http://streamabout.blogspot.ie/2012/09/india-turkey-start-to-ban-social-media.html).
We know India tried it, Turkey did and more recently, Syria. Even the Russians are at it now. All the great bastions of democracy.
If they curtail Social Media usage, they curtail protests so they want to be able to control it. To delete websites, to deny access, to shut Social Media.
Now they have all come together under the euphemism of a Conference - The World Conference on International Telecommunications and a lot of it is behind closed doors.
Google have stated that its purpose is to "increase censorship and regulate the Internet" and it is. Russia is using overt proposals to help them censor it. One proposal is about definitions because if they can redefine "Internet" or "Internet traffic" as something else, they can control it under different, existing legislation.
Secondly, they're trying to move control away from private bodies such as ICANN and into The United Nations where all the countries have control. The Russians, long known for their freedoms for citizens (not), call for "national governments to have sovereign rights to regulate the national Internet segment". Which would allow surveillance just for starters.
China, surprise surprise, supports them, The USA does not.
Of course, the Internet works and as they say, if it ain't broke, don't fix it but this is about Governments exercising control over the web.
We should be against it.
And we should show it up for what it is.
The Internet has allowed people in these maniacal countries, to express their freedoms and their opposition. It's a lifeline for them and more important perhaps, gives the world a voice.
Needs to be stopped.
