1. © 2014, KnowledgExcel Services. All rights reserved.
iPhone6 Pricing Research in India
Done by: Deepak Gaur in association with KnowledgExcel Services.
Summary:
Total numbers of mobile phone subscribers have reached 904.51 million as of April 2014, and it is increasing at a rate of
1.05 million per month, telephone subscriber base expanded at a CAGR of 26.8 percent during 2008-13 and still growing
[source:www.trai.gov.in]. Also, the telecommunication industry is growing with a very good rate that added into the value
added services i.e.: Internet from mobile and other services, also an upcoming younger generation eager to get their
hands on Smartphones and internet, which leads to the demand of smartphones in India. Everyone is trying to invest or
capture this profitable market; same is the case with apple.
We have done this pricing research (price sensitivity), kept in mind the awaited “iPhone6” handset by Apple. How much
price customers are willing to pay for this new handset, assuming quality of the product according to the product price?
People already have an idea about anticipated features and look of this new handset, and other competitors in market.
Also, they are aware of other handsets and services provided by apple in past.
Terms Used In Research:
PMC (point of marginal cheapness): The point of intersection of “Too Cheap” and “Expensive”. Price lesser than
this value, associated with “quality compromise or poor quality” by
customers.
PME (point of marginal expensiveness): The point of intersection of “Value for Money” and “Too Expensive”. Price
level beyond this value, considered as “Too much price” for such quality
product, by customers.
RAP (Range of Acceptable Prices): Most useful result is the Range of Acceptable Prices by customers for this
product.
Too Cheap It is considered as the price that is too low for the product & service,
assuming the quality of the product & service including other feature. For a
customer price below than this is a sign of poor quality and compromise in
conformance of the product & service.
Value for Money It is considered as the good for bargain price, customer could purchase
product & service at any time at this price, no need to think twice, this would
be the best available investment in market for customer, considering the
quality of the product & service.
Expensive This price is expensive for the product & service, but customer can still give a
chance, product & service is getting expensive, but considering qualities of
the product & service, customer might purchase the product & service.
Too Expensive Price is beyond the limits of the customer. This price is too much, considering
the qualities of the product and service. Customers definitely look for other
alternatives for product & service.

2. © 2014, KnowledgExcel Services. All rights reserved.
Research Results:
Overall Response by Respondents:
So, the acceptable price range for iPhone6 handset is 40K-60K (RAP). Beyond 60K (PME), product is considered as too expensive and fall in, out of
range of customers, while below 40K (PMC) customers consider product too cheap, and consider the same as poor quality stuff.
*For definitions and explanation of PMC, PME and RAP. Kindly have a look at descriptions given above in “Terms Used in Research” section.
Owners (Already used or still using apple iPhones):
For owners of IPhone, acceptable price range for iPhone6 handset is 38K-67K (RAP). Beyond 67K (PME), they consider the product is too expensive,
while below 38K (PMC) customers consider product too cheap and poor quality stuff.
*For definitions and explanation of PMC, PME and RAP. Kindly have a look at descriptions given above in “Terms Used in Research” section.
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Too Cheap
Value for money
Expensive
Too Expensive
PMC
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Too Cheap
Value for money
Expensive
Too Expensive
PME
PMEPMC
RAP
RAP
In Thousands (INR)
In Thousands (INR)

3. © 2014, KnowledgExcel Services. All rights reserved.
Indenters (who want to purchase iPhone6):
For intenders, acceptable price range for iPhone6 handset is ~42K-60K (RAP). Beyond 60K (PME), they consider the product is too expensive, about
50% and more consider product as too expensive beyond 60K, while below 38K (PMC) customers consider product too cheap and poor quality.
*For definitions and explanation of PMC, PME and RAP. Kindly have a look at descriptions given above in “Terms Used in Research” section.
Key Findings:
After having an overview of graph from overall responses, then we can easily figure out that the acceptable price range
for new upcoming handset is in between 40K-62K, and beyond these limits handset would be considered as poor (< 40K)
and too expensive (> 62K). While, when we split respondents into “Users-Already use and using” and “Intenders-Want
to purchase the product”, then owners of the iPhone are willing to pay more to have new handset, interestingly 5% of
the owners think that more than 80K price would be good for bargain or value for money, considering the qualities of
the product. Point of marginal expensiveness is on the higher side for owners, as compare to results for overall
respondents and intenders. But, there is no major difference between the acceptable ranges given by different graphs.
Further Research:
PSM research only gives an idea about the acceptable price range for a product or service among people, but it will not
give you details about the demand of this product related to the price, and tradeoffs between other features and
conditions that might be important for a respondent, and firm’s competitive edge over competitors on a particular
feature. So for such information, in next phase we shall do a more comprehensive research on this product by including
competitors and other features for tradeoff analysis.
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Too Cheap
Value for money
Expensive
Too Expensive
PME
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In Thousands (INR)