Marketing the XO Computer in South Korea: Cultural Research and Marketing Plan

1. Seorak Mountain, Seoul,Virtual grocery store in
subway, “Gangnam Style,” and Samsung Galaxy

2.  Earliest Pottery: ~8000 BCE
 Proto-Three Kingdoms: 238
BCE-108 BCE
 Three Kingdoms: 57 BCE-668
CE
 Unified Silla and Balhae: 676-
936
 Goryeo: 936-1388
 Joseon: 1392-1896
 The Korean Empire: 1897-1910
 JapaneseColonial Rule: 1916-
1945
 PostWWII (Separation of North
and South Korea): 1945-Present
 KoreanWar: 1950-1953
Ancient Korean Art
Korean Empire
The KoreanWar

3.  Continent: Asia
 Location: Below the
38th parallel on the
Korean peninsula
 Size: 37,421 square
miles, slightly larger
than the state of Indiana
 Capital: Seoul
 Climate: Temperate,
Cold winters, Monsoons
&Typhoons
 Topography:
Mountains, River Basins

4.  Nuclear family
 Extended family
 Family dynamics
 Parental roles
 Marriage and courtship
 Gender roles
Traditional masculine culture

5.  Crucial component to
success
 Six days a week until
2012
 High speed internet in
all schools
 Traditionally split by
gender
 Same curriculum for
boys and girls
 Literacy rate = 99.8%
The most connected schools in the world

6.  Primary education
 English begins in third grade
 Secondary education
 Academic or vocational
school after ninth grade
 High school is not mandatory
 97% graduation, the highest
of any country
 Higher education
 400 higher education
institutions
 4,000,000 students
 Seoul National University,
Korea University andYonsei
University
Seoul National University
Male vs. Female Literacy (‘90-’98)

7.  Political system
 The Republic of Korea
 Executive, legislative, and
judicial branches
 Power of the president is
dominant
 Relatively stable democracy
 Legal system
 Civil Code law
 Similar to both Germany and
US
▪ Combination of European civil
law, Anglo-American law, and
Chinese classical thought
 No jury; a court of one or
three judges hears the cases
South Korean Supreme Court
South Korean Flag

8.  Religion:
 No affiliation-46%
 Buddhist-26%
 Christian-26%
 Confucianist 1%
 Language:
 Korean
▪ Chinese Characters
 English
Confucius

9.  Visual arts
 Bold colors, pottery, and
calligraphy
 Music
 Traditional: slow and
somber; represents the
plight of the working class
peasants
 Modern: K-pop
 Performing arts
 Women dance in costume
 Men tell the story known
 Elaborate costumes and
masks, knots, embroidery,
and fabric screens
 Traditional dress:
 Hanbok
Traditional performance in Hanbok
Calligraphy K-pop

10. South Korea n Profile

11. South Korea n Profile
US Profile

12.  Lower-ranking individuals bow first
 Bow to each person individually when leaving
 It is essential to be introduced by a third party
 Business relationships are developed through
informal social gatherings
 Very broad view of legal documents
 Never criticize someone in front of others
 South Koreans are very direct- be concise in
business dealings
 Appointments are required and should be
made 3 to 4 weeks in advance
 Arrive on time for meetings to show respect to
the person you are meeting
 Do not remove your jacket unless the most
senior South Korean does so

13.  48,860,500
 83% Urban
 Seoul ~ 10 million
 Homogenous Korean
Society
Age Distribution
0-14 Year
15-64
65+

14.  GDP:$1.574 trillion
 13th in the world
 Personal income per
capita: $32,100
 Ranked 40th
 Income Classes
 Upper Class (Chaebol): 1.5%
 Middle Class: 53.4%
 Lower Class: 45.2%
▪ The lowest 10% consume 2.7%;
highest 10% consume 24.2%
▪ Poverty among the old is 45%,
3x the rich nation average

16.  US-Korea FreeTrade
Agreement (KORUS
FTA 2012)
 Total Exports: $556.6
Billion
 Total Imports: $524
Billion
 Ranks 16th in BoP
 IT & Smartphones
 ~1,110 KRW per US
Dollar
Korean Won (KRW)

17.  One of the world’s
most connected
countries
 40%+ own a
Smartphone (2011)
▪ ~ 52 million
 11th in the world in
internet usage
▪ Broadband in all homes
and schools
▪ Over 39.4 million users in
(2009)
Internet Cafe

18.  Television
 Radio
 Print
 Newspapers
 Internet
 Mobile
 Outdoor
Seoul City Hall covered with a billboard
Mobile AdsTV Network concert sponsored by Google
TV & Radio
Broadcasting

19.  Relative advantage
 Compatibility
 Complexity
 Trialability
 Observablity

20.  Acer
 Apple
 Dell
 HP
 Hyundai
 Samsung
 Sony
 Toshiba
 And more…
 Tablets (Galaxy Note, iPad)
 E-readers (Kindle, Nook)
 Smartphones

21.  Internet addiction
 Hypermarkets
 E-commerce
 High tech
 Move to mobile
 Domestic companies
have the advantage
 Price
 Relationship
 Relationship-oriented
culture
Electronics Store in South Korea

22.  Seniors
 11%+ population is over
65
▪ More women than men
▪ Higher rate of poverty
among the elderly
 Only 4% 55-64 use
internet
 Total market ~ 5 million
▪ 1% share = $12.5 million in
sales
Elderly Korean
woman &
Jitterbug phone

23.  Traditional vs. Modern
 Young vs. Old

24. Strengths Weaknesses
Opportunities Threats
The XO

25.  Core component
 Too childish looking
 Eliminate unnecessary
features
 Packaging component
 White, blue, red
 Logo/Brand name change
 Support services
component
 Phone-based customer
service 24/7
The Imported XO
vs.The Domestic
Samsung

26.  Objective
 Get seniors to buy product
for themselves
 Media mix
 Newspaper, radio
 Senior fair
 Direct response
advertising
 Direct mail
 Message
 Still the head of the family
 My son and grandson may
live far away, but I can still
be there for them

27.  Objective
 Buy XO for mom, dad, or
grandparents to stay
connected
 Media mix
 Digital/Mobile ads
 SEO
 Direct response
 Message
 Live guilt free… stay
connected to parents from
far away
 Easy to use system
 Respect your elders in a
whole new way

28.  Optimistic Outlook
 1% market penetration
Year One
 10% growth rate
 Potential Profit = $1.8
Million inYear 5
 Good?
 Samsung may be a $400
Billion dollar company
by 2020
$0.00
$1,000,000.00
$2,000,000.00
$3,000,000.00
$4,000,000.00
$5,000,000.00
$6,000,000.00
$7,000,000.00
$8,000,000.00
$9,000,000.00
$10,000,000.00
Total
Revenue
Year 1
Year 2
Year 3
Year 4
Year 5

29.  Bridge the gap between traditional and
modern
 Focus on relationships
 Make seniors feel special and superior
 Keep costs down
 Get in and out… fast!