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Companys (Apple ) Introduction

Founded In April 1st,1976 by Steve Jobs, Steve Woznaik , & Ronald wayne. Headquarters :Cupertino California ( USA )

Industry - Computer software, computer hardware, consumer electronics.

Laptop, Xbox, Ipods, Monitors are the major products of Apple Inc.

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

Selling Record 146,000 units within the first weekend of launch.

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

2. PDA phone Palm

3. Features phone Nokia, LG

Substitute Products Emerged

Industry
Rapidly Emerging

Suppliers Strong

2. OS providers Linux, WM 3. Hardware makers Intel

1. Establish mobile manufacture: LG, Samsung 2. Software giants: Google, MSFT

New Entrants
Threat

Rivals Strong

1. More companies enters 2. Strong brands and finance

Implications for the success of the iPhone in South Korea

1. Politic Korea entered many international organisations such as WTO, OECD, UN etc. (CIA, 2008). These are positive political factors for the launch of iPhone. However, the political situation of its neighbouring country North Korea is of high concern, particularly regarding its nuclear tests which are a threat to the country, and therefore might have negative implications 2. Economic South Korea belongs to the twenty largest world economies. The economical growth was encouraged by close ties between government and business sectors through direct credit and import restrictions (CIA, 2008). The South Korean economy is highly concentrated on electronic and technological development. The mobile phone market is almost saturated. The phone network is driven by a clear oligopoly of three telecom organisations (SK Telecom, KTF, LG Telecom) which provides clear restrictions for market entries. The country ranks 13th in its GDP purchasing power parity. Although the rapid growth rate mitigated after the Asian Crisis (1997-1998), South Korea still embodies an emerging market with high potential for growth (Kotabe et al, 2008). The South Korean mobile phone market is highly influenced and characterized by its oligopoly of three major mobile phone network providers and the strong competition of mobile phone producers. The implications of this highly competitive market are a threat to Apple but can be conquered with the right marketing strategy.

Implications for the success of the iPhone in South Korea

3. Social culture The South Korean culture is characterised by its high homogeneity. Koreans strive for being up-to-date, particularly regarding latest fashion and technology, and moreover inherit big brand awareness as status symbols. Also South Koreas demographical factors are positive for the launch of iPhone, as the product suits a majority of the population, but in return it also portrays a threat, as the product must tick all boxes of the high expectations towards mobile phones. Native Koreans account for most of the inhabitants. 81% of the overall population of 48.6 million people are living in urban areas and 72% are aged between 15 and 64 years (CIA, 2008). 4. Tecnology The technological environment in South Korea is of high standard and is substantial for the mobile phone industry, which accounts for one of the highest mobile phone penetration rates in the world. Moreover, the CIA (2008) points out the outstanding telecommunication networks and technologies, achieving the high standard required and appreciated by the South According to the CIA (2008), there are 45.6 million mobile phones registered in the country, which portrays the high penetration rate. Korean population and its focus on innovation. Therefore, it is essential to offer a product which can keep up with the high standard of the market in order to be successful.

Implications for the success of the iPhone in South Korea

South Korea, a market dominated by two major players, Samsung and LG, carries a demand uncertainty that should likewise be considered before launching the product. Regarding the market size and growth, the perspectives seem encouraging with a GDP per capita of $28,100, GDP real growth rate 2.3% and an unemployment rate of only 3% for South Korea in 2008. (CIA, 2009). The Korean government raised trade barriers on smart phones to protect domestic manufacturers and this probably represents iPhones major constraint for entering the market. The strategy used by the government made Samsung and LG the second and third largest makers of cellphones by units in the world and it helped the country to develop one of the broadest markets for cellphones. So, iPhone should consider facing a hard strife, and tailor the necessary strategies in order to win an important market share in the market. Another issue that iPhone has to take into consideration is the legal environment that may seriously delay their entry to the South Korean market. There are a set of regulatory hurdles regarding the location-based services that iPhone provides for its customers (e.g. maps, direction finders) and that are subject to government permission. As a last aspect that iPhone might consider before entering the South Korean market is the iPhone clones that, in case these are not stopped from popping in the market, will considerably depress its expected sales, as it happened in China.

Aspects to be considered before entering the market

1. 2. 3. 4. 5. socio-cultural distance between home and host country : country risk/demand uncertainty, market size and growth, direct and indirect trade barriers intensity of competition

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.

Aspects to be considered before entering the market

South Korea, a market dominated by two major players, Samsung and LG, carries a demand uncertainty that should likewise be considered before launching the product. Regarding the market size and growth, the perspectives seem encouraging with a GDP per capita of $28,100, GDP real growth rate 2.3% and an unemployment rate of only 3% for South Korea in 2008. (CIA, 2009). The Korean government raised trade barriers on smart phones to protect domestic manufacturers and this probably represents iPhones major constraint for entering the market. The strategy used by the government made Samsung and LG the second and third largest makers of cellphones by units in the world and it helped the country to develop one of the broadest markets for cellphones. So, iPhone should consider facing a hard strife, and tailor the necessary strategies in order to win an important market share in the market.

Aspects to be considered before entering the market

Another issue that iPhone has to take into consideration is the legal environment that may seriously delay their entry to the South Korean market. There are a set of regulatory hurdles regarding the location-based services that iPhone provides for its customers (e.g. maps, direction finders) and that are subject to government permission. As a last aspect that iPhone might consider before entering the South Korean market is the iPhone clones that, in case these are not stopped from popping in the market, will considerably depress its expected sales, as it happened in China

4Ps of Market

Apple iphone's Marketing Mix

Global product strategy

The first step Apple need to pay attention to is its global product strategy. Should the company aim for a standardized or adapted product strategy? Adaptation of the iPhone means considering differences in customers needs in South Korea. Consequently, appropriate changes are made to match local market conditions (Kotabe et al, 2008, p.353). Apple also has to consider legal conditions in South Korea such as taxation. Adapting the iPhone to local needs will increase customer satisfaction but also leads to higher production costs. The market is not only characterized by protection of local phone manufacturers (Ramstad et al, 2009), but Apple must also carefully consider technological issues next to South Koreas unique environmental and marketplace conditions. Consequently, Apple should consider the product adaptation approach when entering South Korea, taking into account local conditions and wants in order to boost customer satisfaction, and hence increase sales. They might modify the iPhone by augmenting the core product and product attributes with localized support features that cater local market conditions. Samsungs and LGs smart phone sales have been limited due to high prices and the lack of Korea-language software applications (Ramstad et al, 2009), although there is a high degree of English literacy in South Korea. E.g. Apple might adapt the language or raise the ring volume so phones can be heard on crowded South Korean streets (Kotler et al, 2008), and offer shiny features to stick them on the phone etc.

Global product strategy

Having made the decision about its global product strategy, Apple has to decide on whether to enter South Korea with an advanced version of the iPhone before launching it anywhere else. As a consequence of stiff local competition, time might be a key success factor for Apple when entering South Korea. The market is almost saturated, and Apple will enter it late because it has already embraced 3G technology. As South Korean consumers are quite tech-savvy and most likely to use mobile phones with latest technology and new features, they are very likely to switch mobile phones. Consequently, entering the market with an advanced version of iPhone might create a competitive advantage for Apple and probably results in gaining market share more quickly.

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

Improved camera & Wifi

Significantly longer battery life

best Internet full screen Browsing ever on a mobile phone Larger, removable disk storage capacity

Global pricing strategy

Kotler et al (2008) differ between two global pricing strategies/objectives: market skimming/financial objectives (Appendix B) and penetration pricing/nonfinancial objectives. Penetration pricing may be used by Apple to gain a market position in South Korea by setting a low price, and hence attracting a large number of buyers. Apple might consider penetration pricing due to the intensive local competition from Samsung and LG in South Korea whose selling price for phones is almost twice as high as it is outside the country iPhone is advised to respond to competitive and market conditions, and should consider the geocentric approach in connection with penetration pricing when entering South Korea, because this will enable Apple to quickly penetrate the market and gain market share from its strong local competitors in the short term, and lends global competitive advantage while Apples global strategic objectives are supported rather than the objective of maximizing performance only in South Korea. Having gained a stable market share in the country, local costs plus ROI will characterize the iPhones price in the long-term.

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

Online Purchasing from Apple Online Stores.

Only available In Major markets.

Have a proper Delivery networked channel.

Aiming for massive position worldwide at all decent major retailers online. Eye catching displays will be found at all physical stores

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.