Some market observers argue that Apple’s distribution and sales strategy in India was flawed from the word go. “To begin with, the company licensed the iPhone to two service providers (Airtel and Vodafone) who didn’t have any experience in the retail selling of handsets, which is a complex business in India involving different strategies for different income groups. Second, these service providers decided to sell the handset only at their outlets, thereby limiting its availability. Also, they antagonized the big organized retailers in the process (the Top 10 organized retailers are estimated to have a 50% share in total sales). Third, selling not being their core area of expertise, these companies couldn’t pitch it to the potential consumers aggressively,” says the executive from the rival firm who did not wish to be named.
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Nupur Singh Andley, senior research analyst—connectivity at Springboard Research, an IT market research firm, agrees: “IPhone’s availability only through the retail outlets of specific operators has been a main inhibitor to its adoption as India continues to be a predominantly retail-driven market.”
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She points out that the service providers’ strategy to sell it with a lock-in clause may not have gone down well with consumers. “This meant iPhone buyers cannot retain their handset should they wish to switch operators despite having paid the cost of the handset upfront.” This condition was a big dampener, especially because from next year, Indian consumers will have the freedom to change service providers without having to change their number or handset.
The other most evident flaw, and according to advertising experts, a critical reason for iPhone’s failure in India, was its inability to strike a connect with consumers. Unlike in the US, where a month-long marketing and advertising blitz preceded the debut of the iPhone, Apple didn’t run any of its own campaigns in India. All the marketing communication was left to the two licence holders. What consumers saw was a round of print advertisements on the launch date that announced the arrival of iPhone and a few billboards in key cities. While Airtel ran commercials outsourced from Apple for four weeks on a few TV channels, Vodafone used the envelopes of the mobile phone bills sent to customers to tell them about iPhone’s entry into India.
“All we saw were a few TV ads and some hoardings taken out by service providers. Even if you’re selling a niche product, the communication needs to be there on what’s on offer and to get (make) people curious. Otherwise buyers won’t be enthused,” says Tejaswini Aparanji, assistant vice-president, branded entertainment, P9 Integrated Pvt. Ltd, the entertainment marketing arm of Mumbai-based Percept Holdings.
“People who buy high-end products buy them either for their technological advantage or to enhance their status. So, marketers promoting a high-end product must bring out the technology and exclusivity factors in a vibrant manner,” says Devashish Das Gupta, chairman, marketing department, Indian Institute of Management, Lucknow.
Ambiguous positioning
Some advertisers say iPhone’s positioning in the market was ambiguous. “IPhone was positioned as a lifestyle product but in India, the company or its licence holders did nothing to make it seem aspirational,” says Suthan. “On the contrary, Nokia did a smart thing by positioning N96 as a convergence product. It immediately struck a connect with its target consumer for the communication was focused on its attributes.”