Apple-iPhone in Korea
Apple-iPhone in Korea
Apple-iPhone in Korea
Risma
2
3
Yogi
Tri Tunggal
Apples Products
Apple TV
Monitor
Ipod
Laptops
Tablet Pcs
Handy Cam
Product In Focus
Apple iphone
Situational Analysis
Competition Situation
There are 19260 cell phone producer in the world, but there are more than 15 big companies competing at the world level Market.
Products Information
small & Lightweight device Beautiful Designing & colors Multifunctional Device wide touch screen, Camera, Bluetooth, Wap Browsing ,MMS, Email, GPS & Messengers officially went to sale on June 29, 2007
Target Market
Primary customer targets is the middleupper income professionals to coordinate their busy schedules. secondary consumer targets are high school, college and graduate students who need one portable multifunction device. Mainly this market will be replacing their iPod and cell phone with the iPhone primary business target is to partner with large cell phone service providers, AT&T, Verizon, Sprint and Cellular One
Intended Positioning
Customers get the total benefit as they spend the money on the purchasing of product iPhone has captured the first position in the minds of consumers The iPhone will however be the #1 touch screen phone because of their creativity. Innovation n cool features. A company that has the ability to let customers know about new products will always own the mind of the consumer.
What are some of the competitive force that have made the business enviroment for Apple more complex in recent years
The threat of new entrants seems to be the biggest threat for iPhone because as South Koreans are most likely to use mobile phones with the latest technology and features, they are more likely to switch phones. Thus, the customer switching costs and their brand loyalty are very low, which makes it easier for new entrants to compete. Moreover, the Korean Communications Commission has now opened this industry (Ramstad et al, 2009), which makes it easier for foreign companies to enter the market. Consequently, this will allow increasing competition. Another threat for the iPhone is the fact that South Koreans are very quick in embracing new technology. Having done so, local companies will be able to compete with iPhone. The threat of substitutes is linked with the threat of new entrants because their ability to take up the latest technology might lead to cheaper substitutes, and the costs of switching to substitutes seem to be low in South Korea.
Considering the population of South Korea of 48 million people compared to phone suppliers, the bargaining power of buyers seems to be low. However, this is compensated by low costs to switch suppliers. Moreover, Apple might consider selling iPhone through a local phone carrier, which is discussed later on. As the South Korean phone network is driven by an oligopoly of three telecom organizations, the concentration of iPhones direct buyers is quite high. Thus, the bargaining power of buyers is also a threat Apple has to analyse. As the iPhones production settings are mainly based in China, the bargaining power of suppliers is a less important threat for the company when launching the iPhone in South Korea. The intensity of rivalry is also a great threat for iPhone. Protection of local mobile phone manufacturers helped home grown companies like Samsung and LG to sell together about 90% of mobile phones in the country (Ramstad et al, 2009). With the opening up of the industry, competition will increase and prices become more competitive. However, the low switching costs of consumers as well as a differentiated product might be an advantage for iPhone when entering the market.
5-Forces of Competition
1. Consumers market 2. Corporate market
Buyers
Weak
1. VoIP Skype 1. Carriers AT&T
Industry
Rapidly Emerging
Suppliers Strong
New Entrants
Threat
Rivals Strong
Even if South Korea is home to leading hardware manufacturers, a thriving computer-game industry and savvy technology consumers, Koreans are still happy to carry a mobile phone and an MP3 player as separate devices instead of using a one-product-does-all device, and one way for iPhone to outrun this gap regarding culture might be to strongly rely on Koreans avidity for the latest and greatest trends in mobile phone technology and their generally stable and large incomes. The SelfReference Criterion can be a powerful negative force in global business (Keegan et al, 2008), and iPhone should not neglect it, otherwise their market entry could be a failure.
4Ps of Market
Product
The iPhone will have a full year warranty along with an optional three year Apple care warranty. Lower weight and thin G, 3g, 3GS of 4, 8, 16 & 32 GB
3 in one :-Mobile phone, Wild screen Iphone, & Complete internet Device
GPS functionality
best Internet full screen Browsing ever on a mobile phone Larger, removable disk storage capacity
Price
1. 2. 3. 4. 5.
Reasonable Price as for as Features are concern Apple decided to lower the prices to Apple iPhone 3GS 32GB 79,990 ensure the Apple iphone 3G 16GB 56,000 establishment of market dominance Apple iphone 3G 8GB 49,000 in as short of time as possible Apple iphone 8GB 35,000
Apple iphone 16GB A good Resale Value Their Prices justify the Products
41,000
Distribution strategy
Apple should rather consider selective distribution, which means using more than one but fewer than all of the intermediaries who are willing to carry (Kotler et al, 2008, p.325) the iPhone. This will allow Apple to develop good working relationships with selected channel members and expect a better-than-average selling effort (Kotler et al, 2008, p.325). Moreover, by using selective distribution, the market will be more covered with iPhone compared to exclusive distribution, and it will give the company more control over prices and promotion than intensive distribution does. Apple is advised to sign distribution contracts with approximately two to three phone carriers in South Korea which enables to enter the market profitable and successful.
Place
Available in More than 79 Countries for example Pak, India, America, Europe, Australia, etc
Promotion Strategy
Apple might decide to use nonpersonal communication channels such as print media (newspapers) and broadcast media (television) to reach as many consumers as possible. Although advertising and public relations within the marketing communications mix are more expensive than other tools, especially PR creates awareness and interest in iPhone before its launch. An original but tasteful TV campaign, that pays particular attention to iPhones performance and design features, will finally lead to desire and action (buying the iPhone) when iPhone is launched. Especially opinion leaders will be affected by this communication. They will carry messages to people who are less exposed to media, so that finally personal communication will be stimulated through word-of-mouth (Kotler et al, 2008). Furthermore, it has to be discussed whether to standardize or adapt Apples promotional strategy. Because advertising is based largely on language and images, it is mostly influenced by the sociocultural behaviour of consumers in South Korea. As iPhone has no market share in South Korea yet and is therefore an unknown product, the company is advised to react to the market, and adapt its advertising in a way that emphasizes iPhones performance and design features. Also language has to be adapted. Consequently, the initial high spending on its promotion strategy will pay off in the long-term because Apples global strategic objectives are supported. However, standardization allows the realization of economies of scale in the production of advertising materials, reducing advertising costs and increasing profitability (Hollensen, 2010, p.606).
Promotion
Apple promotes iphone through Internet, www.apple.com Print & Electronic Media
Companys Website
Sales persons working to guide the products features to the general public.
Building Good Relations with Various Publics by Obtaining Favorable Unpaid Publicity After sales service warranty
integrate our message of revolutionary communications and audio/visual experience together in all of our media
advertisements
Monitoring
The success of Apples market entry depends on its concrete goals and objectives. These will influence marketing performance measures and standards. Regarding its product strategy, possible market performance measures will be numbers of sales of its advanced model compared to other markets in which the iPhone was launched and compared to competitors (so far information available), sales growth rate within a certain time, market share gained after a certain time, percentage of total profits, return on investment, and by the monitoring criteria listed by Sargeant and West (2001): the actual sales achieved against the budget, the actual costs incurred against those budgeted, the overall strategic direction that the organisation is taking i.e. will the overall corporate objectives be achieved in a manner commensurate with the organisation's mission? In terms of iPhones promotion strategy in South Korea, possible performance measures will be the advertising effectiveness like the awareness level achieved, cost per contact with target audience, sales per territory relative to its potential Measures to control the performance of iPhones pricing strategy will be the response time of competitors to iPhones selling price, margin structure relative to marketing expenses, margins relative to channel member performance.
Monitoring
Regarding iPhones distribution strategy, possible market performance measures will be sales, expenses and contribution margin of Apples distribution contracts, percentage of stores carrying the iPhone/market coverage, sales relative to market potential of each phone carrier, percentage of on-time delivery, expense-to-sales ration of each partner, order cycle performance of each carrier (Hollensen, 2010). If nothing else, the success of iPhones market entry can also be measured by behavioural control such as reactions about the iPhone launch in newspapers etc.
conclusion
Taking into account all the aspects debated, IPhones launch in South Korea will be profitable and successful when : Apple adapts iPhone to local market condition and customer wants to a certain amount, and introduces an advanced version of its product, chooses a geocentric pricing approach while penetrating the market with lower prices compared to competitors in the short term, promotes the iPhone through PR before launching, and through an adapted TV campaign at the time of launch while emphasizing on the products performance and design, distributing the iPhone through two to three selected local phone carriers. To which extend the iPhones entry into the South Korean market has been successful can be monitored by regular control of output, like profits, sales figures and expenditures as well as by behavioural controls.