Marketing Test Assignment
The organization which operates at the international level has to face different challenges that are absent in the case of domestic firms. During the time of expansion, companies face a number of issues. The marketing condition and the issues are immense and are difficult which is not in the case of domestic marketing. The organization which is selected in this is "Apple computers, Inc". The market condition which is observed in the case of the international market are uncertain and are filled with several challenges. The market issues which are prevailing currently in the international economy are challenging, dynamic and uncertain. Some of the significant areas which create issues for foreign business are the political state and the diversity in culture. The constraints related to the geographical area are also considered in the discussion. This study focuses on the marketing problems which are mainly faced by developing countries. The countries under BRICS are discussed with the developed economies of the world.
Background of the organization
Steve Jobs and Steve Wozniak established "Apple computers, Inc" on April 1st, 1976. They proposed a vision to change the view people think about computers, Steve Wozniak and Steve Jobs desired to make small computers enough for individuals to have it in their offices and home. Simply they wanted user-friendly computers. Wozniak and Jobs launched Apple I, which they sold without a keyboard, monitor or a casing (they added it in 1977). By the introduction of color graphics in The Apple II it revolutionized the whole computer industry and the sales hiked to $117million in 1980 from $7.8 million in 1978,and Apple becomes public after some time Jobs renovated computers and launched iBook later he also launched mp3 playerS(iPod) and media player software (iTunes).
The challenges which are faced by Apple in the BRICS countries are because of failed marketing strategies. The BRICS countries are considered as developing nations and have limited financial resources. The emergence of Android devices in BRICS countries has become one of the most significant issues for Apple. The developing nation market is covered by android devices mainly band ios has little share in the market share. Apple is facing marketing issues in emerging countries because the economic growth of BRICS countries is slower than the US and Japan which is considered as developed countries. People in the emerging market are sensitive towards the product price and this is the major reason why Apple is failing to flourish in the BRICSS countries.
The advancement of technology in the business economy has not made marketing issues less. Currently, international marketers are still facing major challenges while operating in the developing countries which come under the BRICS. The issues which are most often faced by Apple in BRICS countries are listed below:
Tariff barriers: The duties and taxes on imported products are referred to as tariff barriers. The international marketers like Apple find it troublesome to import its goods and function in the host countries which are BRICS countries in this case.
Administrative policies: the procedures of administration along with bureaucratic rules make it extremely difficult for foreign marketers to operate in the BRICS countries (Alon et al. 2016).
Diversification: The culture and preferences of people are different in each country. International marketers face challenges in recognising the preferences of customers. It becomes difficult to understand other cultures and simultaneously fulfill the demand of the consumers.
Political instability: Political conditions of the foreign countries which are BRICS countries in case of Apple is considered as real challenges. The political environment and authorities impose a certain condition which makes it hard for an international marketer.
Diversification in the geographical area: Expansion of business in foreign countries is difficult as the business person has to go through a different process of exporting and importing goods and all the other requirements to transfer the products safely.
Exchange rates of currency: The exchange rates of different countries are different. Trading in business activities requires financial transaction which becomes a problem in the case of high variance in the currency rate of two countries operating in the business transaction.
Business ethics: Globalisation has made business ethics much easier by implementation of certain universal laws. Apart from that, each country has different ethics and practices which are seen in the regulation of the country. International marketers have to observe ethics so that they can sustain the economy (ijsr.net, 2019).
Other challenges: Apart from the above-mentioned issues and problems faced by international marketers in BRICS countries other climatic changes occur due to global warming. The inadequate participant of agencies in controlling and regulating trade in the international market also states case major challenge.
FIG 1: Challenges in International market
Marketing issues which are faced by Apple in Brazil is the intense competition with the launch of android devices. Apple has successfully built its business in developed nations like Japan and USA but in emerging market, Apple is facing a hard time to gain a substantial share in the smartphone market. Competitors like Xiomi in china are having intense competition with Apple as it has gained the market share in less time. In case of Brazil, iPhones are costlier easier when compared to the USA as the addition of tax is more because of overseas manufacturing (Soares & Eduardo, 2016). Russian currency variation with the US dollar was one of the major challenges which Apple faced in marketing its products. A high rate of the currency makes it difficult for the companies in settling the transaction amount. The massive fluctuation was observed in rouble which stopped Apple to market its product on Russian website. The fluctuation rate in the rouble to dollars was huge and rouble lost its value to approximately 20 percent. According to the government of Russia data of Apple users are forcefully handed to the government agency. Apple has to comply with the regulations of Russian government by providing the customer data so that it can be saved on the server of the company (Lages, Pfajfar & Shoham, 2015). These are some of the political challenges which are faced by Apple while conducting its business in Russia.[Referred to Appendix 1]
Apple faced marketing challenges in India also which impacted the sales growth as India is a potential market for smartphones and is emerging. Apple had to face difficulties in achieving the consent of TRAI, the telecom regulator of India for using an anti-spam app of government. Apple battled for the approval and used the app for two years (Dant et al. 2016). Non-compliance with the same would result in Apple derogation from India’s network. Secondly, different brands namely Samsung and Xiaomi have launched high feature phones at a low price. This made Samsung and other brands in creating profits and gaining a considerable size of the Indian market. The launch of affordable phones by other brands in the emerging markets of India created a huge challenge for Apple in selling its innovative product. Price was regarded as a significant factor in the decreased growth of Apple as people of developing nations are highly sensitive towards the price (Beeson & Zeng, 2018). Tax breaks are not in the hands of Apple which would have made the organisation expand easily in the local area. Apple wanted to receive tax concession by the government so that manufacturing of product can be done locally which will ultimately reduce the cost of Apple products (businesstoday.in , 2019).
Apple has to create products about the economic conditions of BRICSSS countries. These are emerging markets and have demands for phones but people are sensitive towards the price (Fuchs, 2015). Innovative products with low prices can make the operation of Apple successful in BRICSSS countries. The consideration of economic condition along with compliance with governmental laws will make the business sustain in this competitive market.
In the above report selected organisation is Apple, which is famous for its innovative products worldwide. The maximization of profits along with business sustainability is achieved in the organisation with a smooth functioning of business activities. Apple as an international marketer of ios devices faces certain issues BRICSS countries which hold the organisation to make profits and grow in the developing countries. The challenges have created a stagnant position for organisation as the maximum growth rate is observed in the developing countries. In this study background of Apple is discussed so that a clear idea about the company's working is known. The issues which are faced by organisation in the marketing of its product in foreign countries as international marketers are discussed in the report. The issues which are faced are mentioned to BRICSSS countries.
The countries which fall under BRICS are considered to be emerging markets and business operations are a bit difficult for Apple due to its political and economic condition. The practical issues which are dealt with by Apple in BRICS countries are depicted to understanding the impacts of marketing challenges. Marketing issues in emerging market creates steep downfall in sales of Apple products which makes the international sales low and ultimately leads to low profits.
Alon, I., Jaffe, E., Prange, C., & Vianelli, D. (2016). Global marketing: contemporary theory, practice, and cases.UK: Routledge. Retrieved from: https://moodle2.units.it/pluginfile.php/197131/mod_resource/content/1/7_PRICE%20DECISIONS.pdf, [Retrieved on 15.07.19]
Soares, A. M., & Eduardo, F. S. (2016). Being Successful in International Markets: The Role of International Marketers’ Competencies. In Entrepreneurship, Business and Economics-Vol. 1 (pp. 515-524). Springer, Cham. Retrieved from: https://www.researchgate.net/profile/Oyku_Iyigun/publication/318130559_Is_Franchising_an_Efficient_Tool_for_Entrepreneurship_in_the_Knowledge_Economy/links/5a0a392aa6fdcc2736dea6b9/Is-Franchising-an-Efficient-Tool-for-Entrepreneurship-in-the-Knowledge-Economy.pdf#page=514, [Retrieved on 15.07.19]
Dant, R. P., Jin (Jean) Jeon, H., Mumdziev, N., & Windsperger, J. (2016). A cross-national comparison of brand perceptions of global franchise chains in the BRICS. Journal of Marketing Channels, 23(4), 196-216. Retrieved from: https://im.univie.ac.at/fileadmin/user_upload/proj_windsperger/Publikationen/Dant_et_al._2016.pdf, [Retrieved on 15.07.19]
Beeson, M., & Zeng, J. (2018). The BRICS and global governance: China’s contradictory role. Third World Quarterly, 39(10), 1962-1978. Retrieved from: https://www.researchgate.net/profile/Jinghan_Zeng/publication/323866069_The_BRICS_and_global_governance_China%27s_contradictory_role/links/5ab3fa64458515ecebf0f5a8/The-BRICS-and-global-governance-Chinas-contradictory-role.pdf, [Retrieved on 15.07.19]
Fuchs, C. (2015). The MacBride Report in twenty-first-century capitalism, the age of social media and the BRICS countries. Javnost-The Public, 22(3), 226-239. Retrieved from: https://westminsterresearch.westminster.ac.uk/download/dc12c08a3bf6df02b83bb32678342e8b91fe87f167702ca42adbfd9717d861d8/255226/Fuchs_2015_author_manuscript.pdf, [Retrieved on 15.07.19]
Lages, C. R., Pfajfar, G., & Shoham, A. (2015). Challenges in conducting and publishing research on the Middle East and Africa in leading journals. International marketing review, 32(1), 52-77. Retrieved from: http://centaur.reading.ac.uk/38698/1/Manuscript_08_12_2014_no_title_page.pdf, [Retrieved on 15.07.19]
ijsr.net, (2019), International marketing issues, Retrieved from: https://www.ijsr.net/archive/v4i8/14081504.pdf, [Retrieved on 15.07.19]
businesstoday.in, (2019), Apple challenges in China, Retrieved from: https://www.businesstoday.in/technology/news/apple-cuts-sales-forecast-as-china-sales-weaken-iphone-pricing-in-focus/story/306382.html, [Retrieved on 15.07.19]
Appendix 1: Apple in BRICS