The very high growth of emerging markets has created huge opportunities for a wide range of global companies: the implementation of a product or a service into such a market has extraordinary potentialities for their international development and their global success. Therefore, marketers face a challenge of primary importance which consists in developing an implementation strategy for the brand in new countries and new markets while at the same time integrating local social, economic and cultural differences in order to turn those opportunities into global strengths.
Apple has recently faced that issue in order to distribute its products in China, which has known the world’s largest growth over the past few years. It has just started to market its products through a couple of retail stores it has created in China 1, and the growth of Apple’s sales in that country has exponentially increased up to generating one fifth of the company’s global revenues. However, its market share is still very limited in China, whereas the sales of electronic devices are expected to grow in huge proportions in the future, essentially because of large increases in people’s revenues and an increasing appeal of high- technological products.
Therefore, Apple’s future success in China may greatly benefit from an important effort in communication and marketing, consistently with its position as a problem child on the BCG matrix: given the size of the potential market, its success depends on its ability to distribute its products to a large proportion of people and to maintain the quality of its products at the same time. In that perspective, some aspects of the Chinese culture must be integrated into Apple’s communication, mainly including:
• a social importance of appearance and the symbolic value in society of a product
• the high degree of collectivism on Hofstede’s cultural scale, which leads to the importance of the community on people’s behaviors. As a result, friends’ recommendation and word-of-mouth may be more valued than advertising
Those facts are generally consistent with the brand as it has been established in the United States and in Europe but they may make more challenging the objective of the company to substantially increase its market share in China.
As a result, I would recommend to Apple to keep on distributing high-quality and premium products, in order to maintain the attractiveness of its products. Indeed, in that context where social appearance has such a big impact, its products must remain objects of desire for people. As a consequence, even though the share of the smartphones is still limited in the whole cellphone market, Apple should not develop at all costs a more basic phone which may be directly affordable to a larger majority of Chinese people. Rather, the expected growth in people’s revenues and the related growth of the sales of technological products should let Apple substantially increase its sale volume. At the same time, its communication strategy should emphasize the social links created by its products; for instance, it could show in an advertisement a couple of friends connecting and communicating with each other with their iPhones and sharing documents between their different electronic devices. As well, it could show business people making deals on Apple products – or alternatively Apple devices being offerred as corporate gifts to satisfied partners. By creating a sense of community based on its products, Apple would increase the appeal of its products to emerging Chinese consumers and at the same time benefit from network externalities. Last, it should also seek wide adoption through an emphasis on more affordable products such as the iPhone and the iPad which may spread more broadly and more rapidly than desktop computers and laptops.
By doing so, Apple would maintain the high quality of its products on which its worldwide successes are based and also create a desire of Chinese consumers which would eventually lead to an increase of the company’s market share in a high-gowth market. In such a market in which opportunities are so huge, global marketing is an essential managerial tool to turn the international development of the company into a global success.
This blog post answers the article on The Next Web