global marketing strategy- iope

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!!MKTG8462

Global Marketing Strategy Semester 1, 2012 !

Global Marketing Plan: Maximising Revenue Opportunities & Strengthening Our Brand Power

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Submitted by: !Chao Zhang 20863308

Pavish Ploenchitt 20881427 Rifki Aditya Primanda 20981271

Stella An 20959372 Xiaoxiao Li 20841865

Global Marketing Plan - 2012

May 2012 Crawley !!

Executive Summary !The objective of this report is to identify the possibility to introduce the Korean cosmetic

product IOPE into the Australian market. Market potential and different aspects of analysis

will be demonstrated in the report, which illustrates the Australian market as a promising

market for IOPE.

!The IOPE is a brand under the Amore Pacific Corporation which is one of the largest

cosmetics and beauty companies in the Korean cosmetics industry. However, IOPE

Aircushion sunblock is a new product in the Australian market. Based on the research on

Australian environment, good political level and stable financial situation are confirmed.

Additionally, the SWOT analysis of IOPE examined itself to have its own positioning prior to

the introduction in the Australian market. Moreover, the risk analysis and fine grained

analysis investigated the market risk, market attractiveness and relative competitive strength.

!A thorough assessment evaluated the product life cycle in Australia. Hence, product’s

position, brand has been decided and adapted different communication ways to promote.

Besides, based on the possible factors affecting price decision, the final price of product is

AUD 35. Furthermore, aiming to build brand image and establish good relationship with

customers, diverse routines for distribution and advertising will be addressed in details.

!!!!!!!!!!!!!Maximising Revenue Opportunities & Strengthening Our Brand Power Page � 2


!!!!!!!Table of Contents 1. INTRODUCTION 5

2. CORPORATE ANALYSES 5

3. TARGET COUNTRY ANALYSES 6

3.1 Political Environment 6

3.2 Economic Environment 6

3.3 Sociocultural Environment 6

3.4 Technological Environment 7

3.5 Risk Analyses 8

3.6 Fine Grained Analyses 8

4. TARGET MARKET ANALYSES 9

4.1 Market Segmentation 9

4.1 Market Targeting 10

5. SWOT ANALYSIS 11

6. AIMS AND OBJECTIVES 12

6.1 Marketing Objectives 12

6.2 Financial Objectives 12

7. MARKETING STRATEGIES 14

7.1 Market Entry Strategy 14

7.2 Product and Brand Strategy 14

7.2.1 Product Attributes and Core Benefits 14

7.2.2 The Product Life Cycle 15

7.2.3 Product Communication Mix 16

7.2.4 Product Positioning 16

7.2.5 Branding Decisions 16

7.3 Pricing Strategy 16

Maximising Revenue Opportunities & Strengthening Our Brand Power Page � 3


7.3.1 Factors Affecting Pricing Decision 16

7.3.2 Terms of Pricing 17

7.3.3 Terms of Payment 17

7.4 Distribution Strategy 18

7.4.1 Factors Affecting Channel Decisions 18

7.4.2 Structure of the Channel 18

7.4.3 Screening and Selecting Intermediaries 18

7.4.4 Managing Logistics 18

7.4.5 E-Commerce for Distribution Decisions 19

7.5 Communication Strategy 19

7.5.1 Communication Objective 19

7.5.2 Budgeting Decisions 19

7.5.3 Message Decision 20

7.5.4 Media Decision 20

7.5.5 Localization vs. Standardization 20

7.5.6 Sales Promotion 20

7.5.7 PR and Sponsorship 20

7.5.8 Direct Marketing 20

7.5.9 Personal Selling 20

8. IMPLEMENTATION AND CONTROL 21

8.1 Structure 21

8.2 Implementation 21

8.3 Control and Feedback 22

8.4 Contingency Plan 22

9. CONCLUSION 23

10.REFERENCES 24

11. APPENDIXES 27

!List of Figures

Figure 3.1 Hofstede Cultural Dimension 7

Figure 4.1 Arrivals and Departures Trend 10

Figure 6.1 Break Even Analysis 13



Figure 7.1 Air Cushion Sunblock 15

Figure 7.2 Product Life Cycle 16

Figure 8.1 Organizational Structure of Amore Pacific 21

List of Tables

Table 3.1 Risk Analyses 8

Table 3.2 Market Attractiveness 8

Table 3.3 Market Competitiveness 9

Table 5.1 SWOT Analysis 11

Table 7.1 Price Model 17

!1. INTRODUCTION

!This report examines the selected item-IOPE Air Cushion Sunblock. IOPE is a subsidiary

brand of the Amore Pacific Corporation. The SWOT analysis will identify the product’s

strengths, weaknesses, opportunities and threats followed by the assessments on the

Australian market. The report will provide a general marketing entry strategy which will help

the company to successfully enter the Australian market.

!2. CORPORATE ANALYSES

!Amore Pacific Corporation is one of the largest cosmetics and beauty companies in the

Korean cosmetics industry. Its reputation is remarkably increasing for the sustainable

manufacturing to minimize waste and pollution. The product-line structure is divided into

two segments which are Cosmetics and Mass Cosmetics & Sulloc (Amore Pacific, 2012).

!The products range from skincare products, make up products and fragrances and personal

care products. Due to its growth, the company is already operating globally in 9 countries

such as France, Hong Kong, China, Singapore, Vietnam, Taiwan, Thailand, Brunei and the

United States (Amore Pacific 2012).

!The company has conceptualised and aims to measure firm performance against corporate



ideology which has three main elements. These are an epithet of Asian Beauty Creator,

embracing the values of openness, innovation, proximity, sincerity and challenge and lastly,

becoming one of the world’s top ten largest-selling premium cosmetic brand by 2015 (Amore

Pacific 2012).

!According to the management performance in 2011, the company had a growth rate of

12.4%, resulting in a market penetration rate of 34.9% in the domestic cosmetic market

(Amore Pacific 2012). Despite rising inflation, the sales revenue of cosmetic products

accelerated through the brand diversification to meet the needs of different market segments.

It also achieved customer satisfaction by providing customized solutions that classifies

premium and affordable brands.

!!Considering the current growth and practice in satisfying domestic consumers, the company

has proven its creativity by introducing a product line called IOPE Aircushion Sunblock that

was introduced to the market in 2009.

!!

3. TARGET COUNTRY ANALYSES

!3.1 Political Environment

Australia is a federal parliamentary democracy with a view of market liberalism. The multi-

party cooperation within the structure of Australian government implies a political stability

with a low level of corruption (Australian Trade Commission, n.d).

!The Australian legal system is based on English common law (CIA factbook, n.d). A minimal

political risk and an open market create favorable conditions for attractive foreign

investment.

!3.2 Economic Environment

!Maximising Revenue Opportunities & Strengthening Our Brand Power Page � 6


Australia is one of the world’s high-income economies with per capita income of US$ 46,200

in 2011 (World Bank, 2011). According to the Australian Bureau of Statistics (2012), there

was an average increase of 4.4% in the income level over a year. The increasing wealth

reflects the high purchasing power of the Australian consumers. This tendency implies a

high-potential target market.

!3.3 Socio-cultural environment

The increasing immigration has resulted in creation of diverse culture and lifestyle among the

Australian communities (The people of Australia,n.d). In general, Australia has a low-context

culture that prefers direct communication style and deal oriented work. Individuals also

expect to be independent and egalitarian (Hollensen, S 2010).

Based on the Figure 3.1 Hofstede’s cultural dimensions, the Australian culture has a relatively

low power distance, moderate uncertainty avoidance and a strong degree of individualism

and Masculinity within the society (Hofstede, n.d). In addition, Australian businesses are

short-term oriented for the profit maximization compared to South Korea. The

!Figure 3.1 Hofstede Cultural Dimension

!!!!!! !Source: www.Geert-Hofstede.com

!4. Technological Environment

!Australia has an efficient transportation system and provides advanced telecommunication



services including internet. By encouraging the use of advanced technologies, the time for

information process is reduced that overcomes the distant communication barriers (Newton,

Brotchie & Gipps 1997).

!According to Gilding and Critchley (2003), Australians comfortably adopt new technologies

in their life. In 2011, the internet service was provided to around 6.7 million households.

Moreover, 68 percent of them used the internet to purchase goods and it is expected to rise

(Australian Bureau of Statistics 2011).

!As a result, the demanding use of smart phones and Social Media is growing in Australia.

iPhone controlled 60.5 percent of the Australia’s mobile phone market share in 2010 while

the Australia’s highest social media usage was 89 percent for Facebook users in 2011 (Sensis

e-Business Report 2011).

!!!!5. Risk Analyses

!Table 3.2 Risk Analyses

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!6. Fine Grained Analyses

!A thorough assessment of market attractiveness and competitiveness in the Australian market

for 2012 can be referred to the following tables:

Table 3.2 Market Attractiveness

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Table 3.3 Market Competitiveness

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The Australian market attractiveness and competitive strength is assessed which indicates a

score of 79 for the market attractiveness and 77 for market competitiveness. This implies that

the Australian market is not fully sufficient to support various marketing activities.

4. TARGET MARKET ANALYSIS

!4.1 Market Segmentation

!Australia is in proximity to the ozone hole and although the size of hole is shrinking, the

continued ozone depletion imposes the health risks of the UV radiation on Australians,

resulting in the overexposure to the sun (Department of Sustainability, Environment, Water,

Population and Communities, n.d). In particular, skin cancer is associated with UV exposure

that is of particular concern for young women in Australia.

!In support of this view, women in the ages of 25 and 44 years are more likely to have used

solarium than men. Solarium use such as tanning increases the UV exposure and increases

the risk of skin cancer. Appendix B demonstrates the urgency of the issue and furthermore

distinguished the market segments.

!4.2 Market Targeting

Primary Market

The characteristics of the primary market would be females aged between 24 to 40 years old.

This segment is considered because the product characteristics meet the needs of regular

workers or anyone who is sensitive to skincare treatment.

!The price is set to a reasonable price due to the high risk of product feasibility as a result of

its unique characteristics. Further looking at Appendix B; consumers that of Asian descent are

advisable to be another primary target.

!Secondary Market

The secondary market will target the rest of the age range, for over 40 and anyone ranging



from 19 to 24 years of age. It is considered feasible to target female who are still studying in

college as well as other senior aged women who require frequent outdoor or recreational

activities.

!The secondary market also accounts tourism; the number of frequent visits by tourists in

airports throughout Australia reflects the level of internationalism in Australia. The following

figure shows the statistics of visitors’ arrivals and departures that shows an increasing trend

of internationalism in Australia.

!Figure 4.1 Arrivals and Departures Trend

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!

Source: ABS 2012 Source: ABS 2012

!!5. SITUATION ANALYSIS (SWOT)

Table 5.1 SWOT Analysis



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!!!6. AIMS AND OBJECTIVES

6.1 Marketing Objectives



1. Generate an annual increase of 35 percent in average sales.

2. Increase market penetration every quarter

3. To elevate the brand equity of the cosmetics maker in the moderate to high-end

market.

4. To promote inner beauty through beauty foods in the moderate to high-end

market.

5. To nurture its powerful brand image

6. Realize a successful growth in introducing a unique product design of beauty

gallery and spa shop that provides after- sun skin care services in targeted cities.

6.2 Financial Objectives

1. To achieve an increase in the average sales by 35 percent each year

2. Reduce the Long-Run Average Cost by 1% per quarter.

3. Secure the largest market share in department stores by attracting younger

customers.

4. Acquire a market share of 0.04 to 0.05 percent in the first year

5. Acquire market share and attract potential investors by listing its name on the

Australian Stock Exchange by 2019.

!According to Austrade, the market value for the cosmetics and toiletries is about $ 5

billion. This indicates that there is a lucrative business opportunity exists in the Australian

market. Assuming that the market value for cosmetics is $2.5 billion, $1 million worth of

sales in the first year will be equivalent to 0.04-0.05% of the market value.

!!!

Figure 6.1 Break Even Analysis



!

!The Break Even analysis was performed on a yearly basis. As shown above, the yearly

Breakeven is attained at the output level of 5,958 units. The value of each output includes

one unit of Sunblock and complementary facial treatment. The selling price per unit is

$35 for the Sunblock and $35.75 per skincare or facial services. The average percent

variable cost is 36.70 percent of the monthly selling price per unit.

A monthly fixed cost of $22,230.00 is estimated to account for fixed expenses: rent,

electricity, advertising and insurance. There are two main areas of income: Skin- care and

aesthetics retail and the reseller sales. Skincare services are $65 per service minimum,

with 55% of that going to the company. The basis for the sales projections is

a conservative estimate of 7 services per day in the first month and 53 services per day by

the end of the first year. At 53 services per day, the company would still only be operating

at 75% of the full capacity with 7 treatment rooms operating 7 days a week, 8-10 hours

per day.

The expected sales forecast at which the breakeven point is attained is $595,800 ($100 x

5,958).

Sales Forecast

Sales for the first year will be equal as the breakeven value; therefore the first year profit

is expected to be zero. From the second year onwards, sales is expected to grow 35 per



cent average as shown in appendix C.

Expense Forecast

In the first year, expenses are expected to be the same as sales value. It is expected to

grow by 10 per cent in the second year as shown in appendix C.

!7. MARKETING STRATEGIES

!1. Market Entry Strategy

!Direct export mode:

A direct entry mode is chosen through an export agency. The most suitable export agent

will be chosen from someone has the relevant expertise and experience in the local

market. The advantages and disadvantages of the chosen entry mode can be referred to

Appendix D.

!2. Product and Brand Strategy

!2.1. Product Attributes and Core Benefits

IOPE is a premium brand, targeting the higher end of the market. In 2012, the Aircushion

Sunblock was rewarded as the best product of the technology innovation within the

category of household items (Amore Pacific,2012). The item has integrated sun protection

and liquid foundation in a powder and provides a functional water-proof and sweat proof

solution.

The core benefits of a product include the air-cushion technology and a fresh moisturizer.

The product also provides heat blockage and cooling function which maximize the

cooling effect.

!It is designed for frequent travellers to use without finger tips when applying makeup.

Sunscreen with liquid foundation is absorbed into the sponge and one squeeze by a brush

sponge pumps the liquid. The multifunctional product gives convenience of mobility for

customers to use and the uniqueness of product provides competitive advantage over



other supplies and opens more growth opportunity for the group to enter the global

market.

Figure 7.1 Air Cushion Sunblock

!

!!!!!!7.2.2 The Product Life Cycle

For the first time, the Aircushion Sunblock was introduced into the Korean market in

2008. During the 2009-2010 period, the company adopted heavy sales promotions to

increase sales. As a result of sales boost in 2011, the product is in the growth stage

(Amore Pacific,2012).

In Australia, it will take four to five years to enter the maturity stage. The product

marketability requires around 6 months to improve brand awareness. Through the

implementation of intensive sale promotions, it is expected that the product will reach

the growth stage in 2014.

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Figure 7.2 Product life cycle



!

7.2.3 Product Communication Mix: promotion adaptation

The product communication mix will be based on promotion adaptation due to the

product’s adaptation into the Australian market. English will be used as the

intermediary language and use popular promotion media in Australia, such as TV,

internet, Facebook, apple application.

7.2.4 Product Positioning

IOPE is a new product, targeting active women who engage themselves in social

activities. The product’s positioning will be in the middle market by emaphsizing its

quality on prestige, uniqueness, convenience and affordability.

7.2.5 Branding Decision

IOPE will be retained as the name of product which will launch in Australia. In

Korea, the IOPE brand has already achieved a reputable image. Moreover, IOPE is

not hard to pronounce and easy to remember. Furthermore, the logo of IOPE looks

concise and elegant.

!3. Pricing Strategy

!3.1. Factors Affecting Pricing Decision

Big Mac index was taken into account in the pricing strategies in order to measure the

purchasing power between two countries which have different currencies. Basically,

US dollar has been used as a standard of currencies around the world. Therefore,

compare to US dollar, currencies should be indicated that they are overvalued or

undervalued. According to reports from The Economist (2012), purchasing power for

Australian people is higher than Korean so, in average, ability of Australian



consumers to buy Korean products does not highly affect the firm’s pricing strategy.

The price is also influenced by many external factors such as commission fees for an

agent, tariff and GST. These factors should raise prices up when products are sold in

foreign countries. Consequently, prices of our products have been set in 35 AUD

dollars, approximately, as our decision is to enter the medium-class market.

3.2. Terms of Pricing

Price is set based on the local price of the Air cushion sunblock in South Korea which

is approximately AUD 30. By shipping the product overseas, there will extra costs

imposed as shown in the price model below; therefore to compensate all extra costs,

consumer will pay AUD 35. By analyzing the Big Mac index, the purchase power

parity in Australia is higher than in South Korea; therefore the price has been set

accordingly to adjust the foreign market.

Table 7.1 Price Model

!3.3. Terms of Payment

All transaction cost in this venture will be paid in AUD and the currency risks will be

borne to the firm. Letter of credit (L/C) will be used as payment method. With the L/

C, bank will act as a third party to guarantee a payment between buyer and seller if

the agreements have implemented. Therefore, it should be a good method and have a

less risk for trading across countries.

!4. Distribution Strategy

Price model

Firm’s net price $8.00

Shipping + insurance $0.80

Tariffs 10% $0.88

Importer’s margin 10% $0.97

Retailer mark-up 229% $24.35

Retail price (GST exclusive) $35.00



!7.4.1 Factors affecting channels decision

Out of the five external factors that may affect the distribution channel, the nature of

the product plays a major role. Since the IOPE brand is set at a mid-level pricing and

also offers exclusivity although it is not a luxury brand, the product cannot be

distributed at any given location. Although there is a high competition in the

Australian cosmetic market, mid-level products should be widely perceived and

easily introduced to consumers.

7.4.2 Structure of the channel

Based on the selling price and the nature of the product, choosing a selective

distribution approach is seen to be the best method of distribution. The aim of this

strategy is that it can keep brand image while the products would still be achievable

for consumers. Branding control will also be manageable since this method can

reflect the brand image; not to mention the pricing control as with this method, the

company can avoid an over-supply of product to the market where the potential could

happen by choosing the intensive distribution approach.

7.4.3 Screening and selecting intermediaries

By using the selective method of distribution, the decision to own two stores and

open counters in big department stores such as David Jones and Myer is considered

to be an effective way to reach the consumers. Department stores are seen to be able

to provide brand positioning as they also sell competitor products of the same tier. By

lining up with other mid to high end cosmetic products, brand image of the IOPE

brand will increase and have better positioning.

7.4.4 Managing Logistics

As the group established only a specific store and distributed places, the most

significance criteria for an appropriate agent are a strong connection with the

shopping centers and efficient distribution network. A chosen agent will have a

responsibility to provide an efficient exporter. For logistic supply, water

transportation should be the best choice for transporting the products overseas as the

products can be transported in huge amount. Although water transportation usually

takes longer time than air freight, the products can be stocked in Australia as the



products’ life span is quite long and the company plans to own their own stores.

7.4.5 E-commerce for distribution decisions

The cost-effective method of distribution will be promoted through online. A timely

response to the customers’ orders will be processed by creating an application for

smart phones used by different age groups. In order to promote the e-commerce

distribution, we will be offering the special discounts for the created orders via

online.

Furthermore, an account under the company’s own brand will be created on Mobile

Messengers such as WhatsApp This will frequently give update information on

products and delivery modes. A personalized customer service care will be provided

through the non-verbal means of communication. The use of online messenger allows

the company to be one step closer to a networked business with customers.

!5. Communication Strategy

!5.1. Communication Objective

The company’s promotion objective is focused on improving the customers’

awareness about the product and building a brand image of ‘natural beauty’ for IOPE,

as this is the first year to introduce Air cushion Sunblock and South Korea brand to

Australia market.

5.2. Budgeting Decisions

Marketing budget will be set by using a percentage of sales; the company will

allocate $2 for every unit sold for the advertising budget, and $1.20 for the

promotional package budget. The marketing budget will increase accordingly and

consequently with the number of units sold as shown in appendix C.

5.3. Message Decision

A unique selling proposition will spread our core message ‘staying beautiful is easy’

for Australian customers. Simultaneously, it aims to establish a natural and premium

brand to attract customers to use and accept the product.

5.4. Media Decision

Based on the positive effect of promotions discussed in Appendix E, the company



will promote the product through newspapers, magazines, internet, mobile software

applications and cinemas. Modes of advertisement can be referred to appendix F.

5.5. Standardization vs. Localization

A localization strategy is designed to match the local market characteristics, which is

based on Australian lifestyle.

5.6. Sales Promotion

Sales promotions will be offered in gift packages. This offer includes complementary

products from the same brand that has a value. This approach offers the opportunity

for our customers to know more about other products and shows our appreciation

towards their contributions to the products.

5.7. PR and Sponsorship

The consequence of establishing public relations is building brand image and loyalty.

Considering IOPE as a new brand in Australia, the company will take sponsorship

into consideration upon its initial success.

5.8. Direct Marketing

In order to increase brand awareness, internet marketing plays a vital role. Facebook

is the largest social network (Sensis e-business report, 2011). For this reason, the

company will set up its official page on Facebook to establish a friendly and

approachable image. This approach allows the company to receive constant

customers’ feedback.

5.9. Personal Selling

A face-to-face in-store introduction and service will demonstrate the new product to

customers. Customers will have a chance to try IOPE and give feedback.

!8. IMPLEMENTATION AND CONTROL

!8.1.Structure

Figure 8.1 Organizational Structure of Amore Pacific



!

The venture in Australia will be directly monitored by the corporate headquarter through

the International Business Unit. Therefore, the Australian venture unit will be headed by

an overseas representative manager that will directly report to the head office.

!8.2.Implementation

!Analyzing global accounts Long-term benefits will be gained from a chosen agent whose recruitment is dependent

upon the competency of an agent. The same common interests, trust and loyalty between

two companies are the essential criteria that need to be taken into account for choosing a

proper agent.

!Selecting suitable strategies for the global accounts Lower costs of operations and a commission-based payment for agents will be used as

incentives to maintain a mutual relationship. The commitment will encourage an agent to

find the cost-effective ways to distribute.

!Developing operation level capabilities To have a spontaneous resolution, the store manager has an authority to make a decision

and cope with several in-store problems aside from being a corporate representative to

communicate and exchange information with other representatives from other global



accounts. Email and other network might be used as tools to streamline consultation from/

with the corporate HQ in Korea.

!8.3.Control and Feedback

!A monthly review of budget will assess the financial performance against the expected

sales revenue. Based on the results of payback period in appendix C, it will take less than

3 years for IOPE to achieve a return on investment.

Moreover, the firm’s performance and problems can be detected and controlled using the

“Feedforward control” which provides some indicators as follows (Holenson 2011):

- Inventory shrinkage

- Sales volatility

- Customers’ complaint

- Competitors’ sudden behaviour

-Increase in returns of goods

!8.4.Contingency Plan

!A developed contingency plan will be executed were the events such as lacking in

demand or under-performing sales occurs. The first step involves adding promotional

packages followed by reductions in the sales price which will result in a longer Break-

Even point. The time limit for the operation is set to a three-year period. If the venture

fails in Australia, the operations will cease and the leftover items will be sold at discounts

through resellers.

!9. CONCLUSION

!The unique product attributes and the unavailability of complete substitutes in the

Australian market pose the growth opportunity. Due to the lack of consumer knowledge

about the product, the role of increasing brand awareness is crucial. Considering a limited

budget with potentially high risk at an early-stage, the cost-effective promotion is

preferred through Social Media advertising and local dissemination. The implementation



of successful marketing strategy will ensure the company to achieve its goals.

!!!!!!!!!!!!!!!!!10. REFERENCES

Albaum, GS, Strandskov, J & Duerr, E 2002, International marketing and export management, 4th edn, Prentice Hall, Harlow. !

Amore Pacific 2011, Annual Report 2011. !Amore Pacific (2012) Amore Pacific. Available from: <http://en.amorepacific.com/about/

about_ceo.jsp>. [9 April 2012]. !Australian Bureau of Statistics 2011, Household Use of Information Technology,

Australia, 2010-11. Available from: <http://www.abs.gov.au/AUSSTATS/[email protected]/Latestproducts/8146.0Contents2010-11?opendocument&tabname=Summary&prodno=8146.0&issue=2010-11&num=&view=>. [18 April 2012]. !

Australian Bureau of Statistics n.d., Statistics. Available from: < www.abs.gov.au>. [24



March 2012]. !Australian Custom and Border Protection Service 2012, Working Tariff 2012, Australian

Government. Available from: < http://www.customs.gov.au/tariff/tariff2012.asp >. [4 May 2012]. !

Australian Government 2012: About Australia. Available from: <http://australia.gov.au/about-australia>. [18 May 2012]. !

Australian Trade Commission n.d., Democratic and Politically Stable. Available from: <http://www.austrade.gov.au>. [24 March 2012]. !

Australian Trade Commission 2012, Cosmetics and Toiletries overview. Available from: <http://www.austrade.gov.au/Cosmetics-and-Toiletries-overview/default.aspx>. [29 April 2012]. !

Central Intelligence Agency n.d, The World Factbook. Available from: <https://www.cia.gov/library/publications/the-world-factbook/geos/as.html>. [11 May 2012]. !

Department of Sustainability, Environment, Water, Population and Communities, The ozone layer. Available from: <http://www.environment.gov.au/atmosphere/ozone/ozone.html>. [19 May 2012] !

Gilding, M and Critchley, C (2003) Technology And Trust: Public Perceptions of Technological Change in Australia. Australian Journal of Emerging Technologies and Society, 1 (1), p.52-69. !

Hewer, A 1990, ‘Cosmetics in Australia: foreign brands a big factor’, Drug & Cosmetic Industry, Vol.146(2), p.33(3). Available from: Proquest [05 May 2012]. !

Hofstede, G n.d, What about Australia. Available from: <http://geert-hofstede.com/australia.html>. [5 May 2012] !

Hollenson, S. (2011), Global Marketing: A Decision-Oriented Approach, 5th ed, Pearson Education Limited, Harlow. !

IOPE Air Cushion Sunblock EX, 2012. Available from: <http://www.shopatkorea.com/servlet/the-979/IOPE-Air-Cushion-Sunblock/Detail>. [5 May 2012]. !

Johansson, JK 2006, Global marketing: foreign entry, local marketing & global



management, 4th edn, Mcgraw-Hill Irwin, Boston. !Newton, P.W., Brotchie, J.F. & Gipps, P.G. (1997), Cities in Transition: Changing

Economic and Technological Processes and Australia’s Settlement System. Available from: <http://www.environment.gov.au/soe/1996/publications/technical/pubs/cities.pdf>. [18 April 2012]. !

Reserve Bank of Australia 2012, Financial Stability Review. Available from: <http://www.rba.gov.au/publications/fsr/2012/mar/pdf/overview.pdf>. [25 April 2012]. !

Richardson, A 2012, Cosmetics and Toiletry Wholesaling in Australia, IBISWorld Industry Report F4798. Available from: <http://clients.ibisworld.com.au/industryau/default.aspx?indid=1874>. [25April 2012]. !

Sensis e-Business Report (2011). The Online Experience of Small and Medium Enterprise.Sensis. !

Socialmedianews (2011), Mobile Browser Market Share Australia – July 2011. Available from: <http://www.socialmedianews.com.au/mobile-browser-market-share-australia-%E2%80%93-july-2011/>. [18 April 2012]. !

The Economist 2012, Daily chart: The Big Mac Index. Available from: <http://www.economist.com/blogs/graphicdetail/2012/01/daily-chart-3>. [10 May 2012]. !

The People of Australia,n.d., Australia’s Multicultural Policy. Available from: <http://www.immi.gov.au/media/publications/multicultural/pdf_doc/people-of-australia-multicultural-policy-booklet.pdf>. [18 May 2012]. !

Terrill, R 2011, ‘Diversity in Australia. (immigration)’, The Medical Journal of Australia, vol.174, no.1, pp.4(2). !

!!!!!!!Maximising Revenue Opportunities & Strengthening Our Brand Power Page � 26


!!!!!!!!11. APPENDIXES

Appendix A

Hofstede ’s cultural dimension

Power distance Low power distance means people in Australia prefer to have

egalitarian relationship in working and business environment.

Managers and employees prefer to share information frequently.

Communication is informal, direct and participative.

U n c e r t a i n t y

Avoidance

Middle level of uncertainty avoidance means Australians has less

concern about ambiguity and uncertainty. People are fairly relaxed and

not adverse to taking risks. The individuals do not prefer formal rules

and fixed pattern of life (Geert Hofstede, n.d).

Individualism Australia is a highly individualistic society where people are expected

to be self-orientated and look after their immediate families.

They value independence than rely on others.

People in Australia focus on personal goals (Hollensen,2011).

Masculinity Most of the people in Australia value competition, achievement and

success. Be proud of successes and achievements in life, and the goal

is to win. Offer a basis for hiring and promotion decisions in the

workplace. Conflicts are resolved at the individual level (Geert

Hofstede, n.d).

Short term

orientation

Most of people in Australia concentrated on personal stability or

happiness for the present life. Australian businesses measure their

performance on a short-term basis (Geert Hofstede, n.d).



!!Appendix B

Rationale for Market Segment

Research found that solarium attributes to skin ageing and wrinkles. There are already

many cosmetic products that exist in the market. These include pressed powder

foundation and liquid foundation with a sunscreen. However, these products give

inconvenience to women who are already outside and pressed for time when they need to

reapply after several hours.

!This implication raises the need for a beauty product that provides hydration and

miniaturization of women’s skin and hence providing their skin look young and lowers

their risk for skin cancer that gives convenience for their healthy lifestyle.

!Furthermore, almost over 8 percent of the Australian population is of Asian descent and it

is expected to increase due to the flexible policies in relation to the new immigration law.

As IOPE earns over 67.32 per cent of its consolidated sales revenue from Asia, its

successful position in the Asian market attracts more recognition when targeting the Asian

consumers in Australia. A potential market by targeting the major city such as Sydney,

IOPE can segment the Australian market by gender and age.

IOPE global revenue share from the consolidated sales revenue

!

!

Source: Amore Pacific 2011

26.66%

3.50%

29.17%

40.66%

ChinaFranceUSRest of Asia



!Rationale for Primary Market

As the other complementary products such as skincare products under the same brand is

valued highly for its quality and expensiveness, the reasonably affordable price of

Sunblock is positioned as a marketable product in the position of a premium brand image

that attracts those working women in the middle class to buy the rich culture into their

atmosphere.

!Appendix C

Projected Income Statement

�

*The payback period will be in the third year.

!Appendix D

Entry Mode

Advantages

For IOPE product, it is a first-mover into Australian market. Choosing direct export mode

can assist the Amore Company to access to potential local contacts and accumulate more

local market experience. In addition, Amore can obtain more control of this market, such

as undertake market research, design marketing mix strategy and provide local selling

support service by the company itself. Through this directing exporting process, the

company can get more Australian market knowledge and change the marketing strategy

2013 2014 2015 2016595,800 691,128 884,644 1,194,269+234,567 272,098 348,285 470,185++++361,233 419,030 536,359 724,085

34,046 39,493 50,551 68,24420,427 23,696 30,331 40,946217,360 223,881 230,597 237,51575,000 77,250 79,568 81,95514,400 14,832 15,277 15,735

0 4,000 4,000 4,000361,233 383,152 410,323 448,395

0 35,879 126,036 275,6890 10,764 37,811 82,707+++++++

0 25,115 88,225 192,983++++

Promotional+packageSalariesRentUtilities+&+maintenanceDepreciation

Total+operating+expenses

Operating+expenses:Advertising

Earnings+before+taxTax+expense+(30%)

Net+Income

SalesCost+of+SalesGross+Profit



accordingly the products’ success and problems.

!!Disadvantages:

For the disadvantages of direct exporting, using agent may have unexpected delays in

delivery of goods. Secondly, the company need to invest more capital in sales

organisation of Australian market. Lastly, the important one is cultural differences

between South Korea and Australian, different language and business customs causing

communication problems.

!Overcome entry barriers:

The IOPE is lack of product competitive advantage because the unawareness of product

by Australians, the company need to plan a suitable communication strategy such as

advertising, sales promotion and personal selling to reduce local fierce competition.

!Appendix E

Media Decision

Newspaper Printer advertisement: Lower cost, accessible by readers through city

newspaper and free community newspaper, maybe other language

(Chinese) newspaper published locally, most of the urban areas

population read it every day. Primary medium of local advertisers.

Magazine Pictures and article advertisements in professional make up

magazines and fashion magazines. It is targeted girls and women

who using make up products to be aware.

Internet Facebook webpage advertisements. The impact of facebook website

has covered wide range of people. The company can open an

account to communicate with customers in use and potential

customers. Two way communication.

Mobile

application

Create apple application and android application for customers to

use and be familiar with the new information about IOPE products.



!Appendix F

Advertisements

!

!

!

Cinema The advertisement before the movie is another effective way to

promote our products. It has truly captive audience.


global marketing strategy- iope

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