south korean export business plan
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By: Denece Oplinus
South Korean Export Business Plan
Table of Contents Introduction Michele Cosmetics: Our Product South Korea: Our Target Market Basic Needs Potential Exchange Rates Import Restrictions & Price Controls Government & Public Attitude The Competition Cultural Attitudes & Beliefs Language & Education Marketing Strategies Promotions Conclusion References
IntroductionOur product chosen to export is our makeup
lineSouth Korea is the target marketStable exchange rates with the U.S. dollar
and the Korean WonKoreans want the American lifestylePositive government and public attitudesNo import restrictions for American productsMarketing and promotional strategiesFinal recommendations
Michele Cosmetics: Our ProductFull line of low priced designer makeupProducts are tested on artificially grown
skinSpecialized product categories
Moisturizer lineAnti-aging lineAcne line
Current packaging is acceptable: red case with gold lettering
South Korea: Our Target MarketTerrain has mountains, deep valleys, and
cultivated plainsClimate is temperate with heavy summer
rainfallsPopulation is 48.3 million with annual growth
rate of 0.26%Capital is Seoul with population of 10.3 millionGDP purchasing power parity for 2007 is $1,201
trillionGDP growth rate for 2007 is 5%Market Segment: over 17 million females ages
15-64 (U.S.D.S. 2008)
Basic Needs PotentialPer capita GNI was $20,045 in 2007 (U.S.D.S. 2008)
U.S. government says cosmetics are wanted in South Korea (U.S.C.S. 2008)
Exchange RatesCurrent exchange rate is 1$ to 1,483.45
South Korean Won (OANDA Co., 2009)
Exchange Rate Trends for the KRW and US Dollar (OANDA Co., 2009)
Import Restrictions & Price ControlsNo Import restrictions for U.S. companiesNo price controls for U.S. companiesSouth Korea has a 10% sales tax (U.S.C.S. 2008)
Passage of KORUS-FTA lifts current tariffs & barriers (U.S.T.R. 2007)
Government & Public AttitudeU.S. and South Korea have relations since
1953 (U.S.D.S. 2008)
Structural reforms in 1998 improved access to markets (U.S.D.S. 2008)
U.S. and South Korea have concluded negotiations for FTA (U.S.C.S. 2008)
Koreans are fascinated with the American lifestyle (U.S.C.S. 2008)
Koreans place a high quality on American products (U.S.C.S. 2008)
The CompetitionSeveral chain stores with cheap
alternativesMain competition on our level is AvonAvon’s total gross sales in 2007 were $9.8
billion (Avon 2007)
Avon’s Asian sales in 2007 were $850.8 million (Avon 2007)
Avon has a very high debt ratio of 87.6% (Avon
2007)
Avon only sells door to door
Cultural Attitudes & BeliefsSelf sufficiency is valued by KoreansEthnic majority is Korean with 20,000
Chinese minorityHalf of Koreans practice religionKorea’s two major religions are Christianity
and BuddhismA quarter of all Koreans practice Buddhism
(U.S.D.S. 2008)
With Buddhism, material things are frowned upon (Ball et al, 2006)
Language & EducationNational language is Korean (U.S.D.S. 2008)
Language barrier & established social circle require Korean representation (U.S.C.S. 2008)
English is widely taught in elementary and high school (U.S.D.S. 2008)
Korean literacy rate is 98% (U.S.D.S. 2008)
Marketing StrategiesSame marketing plan is usedExchange rates determine the price of
productUse Korean representative for distribution
within existing department stores (U.S.C.S. 2008)
Product name needs to be translated (Ball et al,
2006)
Hire local legal counsel to file for trade name license (U.S.C.S. 2008)
PromotionsSame product with the same message (Ball et al, 2006)
Michele Cosmetics – Beautifying Women Everywhere
Must register with authorities in order to advertize in South KoreaAdvertize online! Korean E- commerce sales over
$400 billionAdvertize with the nine television stations and
shopping channels (U.S.C.S. 2008)
Advertize with the three major newspapers (U.S.D.S. 2008)
Use dollar-off coupons to promote our product (Ball et
al, 2006)
Public relations are important in South Korea (U.S.C.S.
2008)
ConclusionSouth Korea is our allyKORUS-FTA reduces red tape and increases
profitAvon is our main competition at home
Let’s hit them in their international markets too!
References Avon (2007). 2007 Annual report. Retrieved March 13, 2009 from the Avon Web site at
http://www.avoncompany.com/investor/annualreport/pdf/annualreport2007.pdf
Ball, D. A., McCulloch, W. H. Jr., Frantz, P. L., Geringer, J. M., & Minor, M. S. (2006).
International business: The challenge of global competition (10th ed.). New York: McGraw-
Hill.
OANDA Co. (2009). FX History: Historical currency exchange rates. Retrieved March 14, 2009
from the FX History Web site at http://www.oanda.com/convert/fxhistory?date_fmt=us&date=03/09/05&date1=03/09/04&exch=USD&expr=KRW&format=HTML&lang=en&margin_fixed=0
United States Commercial Service. (2008). Doing business in Korea: A country commercial
guide for U.S. companies. Retrieved March 14, 2009 from the U.S. Commercial Service Web
site at http://www.buyusainfo.net/docs/x_3151071.pdf
United States Department of State. (October 2008). Background note: South Korea. Retrieved
March 15, 2009 from the U.S. Department of State Web site at
http://www.state.gov/r/pa/ei/bgn/2800.htm
United States Trade Representative. (June 30, 2007). United States and the Republic of Korea
sign landmark free trade agreement. Retrieved March 13, 2009 from the U.S. Trade
Representative Web site at http://www.ustr.gov/Document_Library/Press_Releases/2007/June/United_States_the_Republic_of_Korea_Sign_Lmark_Free_Trade_Agreement.html
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