Smartphone Market Trends With Pest Analysis In Korea

The Korean telecom company called KT has published that the major customer of smart phone is men and women in their 20s and 30s who live in capital area. They have a need to buy new mobile phone when their existing phone is out of order or behind in fashion. Even some Macolytes who is enthusiastic in apple products tend to be dissatisfied at not getting new iPhone. After recognizing problems, they get loads of information about new mobile phone from their friends, relatives, internet community and media.

As the number of smartphone users is increasing, many smart phone companies have been trying to penetrate Korea’s smartphone market. Apple’s biggest direct competitor is Samsung. While Apple sells only iPhone series, Samsung keeps a rich assortment of goods. Samsung sells cheaper mobile phone targeted at teenagers or a little bit expensive mobile phone which includes a lot of functions aimed at adult and CEO. Like this, Samsung does not overwhelm with material superiority but targets segment market. Therefore, customers can make a choice what they want in their price category.

As I mentioned earlier, Samsung sells various kinds of smartphone for different age groups. The Left targets at teenager and the Right aims at adults. Contrary to existing galaxy series smartphone, galaxy pop offers various color and it can satisfy young people’s desires and their personality with inexpensive price. A celebrity who is popular with teenagers appears in commercial advertisement, and the ad encourages young customer to buy it. On the other hand, galaxy s4 is equipped with the latest and the best performance. Samsung installs a lot of billboards to advertise the product. The company offers flip cover with discounted price only for several days and even gives voucher which can enjoy mobile TV.

Smartphone market Trends with PEST analysis in Korea.

Political Factor – Abolition of WIPI obligation

WIPI (Wireless Internet Platform for Interoperability) is a platform used in South Korea. It is basic software which is same function as OS used in personal computer. Korean mobile communication companies made their own wireless internet platform in a different ways and lots of contents manufacturers had to make same contents in various ways. Therefore it caused unnecessary waste. Government carried out regulation to reduce waste to a minimum. However, Apple, Nokia and other companies made their mobile phones with their own platform. So that companies had to change their platform to entry Korean mobile phone market. With these difficulties, many companies are reluctant to penetrate Korean market. Eventually, Korea government abolished the WIPI obligation. After Multinational manufacturer entering Korean market, mobile market became more competitive. Especially, Apple affected various positive effects for existing apple customer and this affirmative response continued.

Economic Factor – Consumption Promotion

With the smart phone, more and more people use mobile contents which called application program. In application market, there are lots of categories so consumers are able to buy what they want. As people are using smartphone, loads of applications are activated naturally. Even some people develop their own application program and create profits. At the same time, they make a great contribution to mobile contents market. Eventually smartphone is one of the main factor which promotes application consumption and makes mobile market more active.

Social Factor – consumer trend, various age groups

Originally, only young people who can accept change quickly prefer to use smartphone. As time goes by, however, various age people started to use smartphone. At first, they are not familiar with using smartphone and application, but now many people get accustomed to utilizing their smartphone. Another factor is consumer trend. Many people want to get loads of information in real time. Even in public transportations like metro or bus, consumer search latest information. Customers want to get a lot of information as soon as possible.

Technology Factor – Camera, GPS,

People consider Camera as important factor in smartphone. They don’t have to carry their own camera when they want to take pictures and they can just take pictures with high pixel camera in smartphone. With GPS, consumer can know where they are now and how to go to their destination. Consumers are no longer afraid of getting lost due to GPS.

Apple Analysis

Organization

Figure Apple organization structure.

Apple organization is so simple and not conventional. It is vastly different from other companies’ organization chart. At first, Apple doesn’t have committee and organization management. The company only has CFO which controls profit and loss. Most of companies tend to regard profit and loss as ultimate result of management responsibility however, in Apple, only CFO pays attention to their profit and loss. As a result, workers can share their ideas with bottom up not top down.

Brand Strength

Figure Apple ranked as World’s most valuable brand

Apple’s strengths are retail stores, customer service, leading innovator and financial reports,

First of all, Apple opened own retail stores all over the world. It is estimated that about 280 stores in 10 countries. Most of retail stores are a success because consumers have an opportunity to learn and use about the product in stores. Second, Apple is known for good customer service. Apple is home to many sales representatives who are trained customer service and information. Apple also offers free online chat function and replies the answer to consumers’ inquiry.

The Third strength is leading innovator. Apple is regarded as most innovative company. The company can produce innovative products and its’ innovation affects another mobile company. Final strength is financial reports. The financial performance of apple is better than many companies. It has high gross profit margin.

Positioning

Apple offers various applications and service through iTunes and app store. This is main positioning of apple and that’s why the company’s main consumers are in their 20s and 30s who have strong purchasing power.

Figure Past iPhone campaign history

The iphone3 campaign is simple. Apple just emphasizes price and speed. Actually many people thought that there is no big difference between iPhone3 and iPod. But after releasing iPhone 4, the campaign is totally different. Apple introduced new function which called face-time. iPhone4 users could call their family or friends with face to face. The most important factor that apple emphasizes about iPhone 4s is Siri. Consumers can order action with their voice and the product takes an action. Like this, the past iPhone campaign is quite innovative but it isn’t useful in real life. For example, Siri is not offered on the Korean iPhone therefore it is hard to use Siri for Korean consumer. Another failure is face time. Because lots of Korean mobile phones have already offered video call, Korean didn’t think it is special. Therefore considering this failure, the most important iPhone 5 campaign slogan is “Innovative but Practical”

iPhone 5 communications objectives.

Make iphone5 faster than before.

Add the ability to watch TV in everywhere.

Extend the battery life

Make up for yellow gate and camera.

Target audiences

The existing target audience is men aged 18-35 however now it would be changed. The main iPhone 5 target audiences are in their early 20s and mid-30s. These groups of people have strong purchasing power and they are very sensitive to the changes. The reason that I exclude teenagers from target audiences is they tend to buy their mobile phone according to the situation and they don’t have any income so it is hard to make them as long-term customers.

Many people including existing users were dissatisfied at the short battery life. Showing the main problem-solving, Apple persuade consumer to buy the product. This is helpful to leave positive images which Apple is trying to communicate with consumer. Consumer in their 20s and 30s are very sensitive to the latest trends and sometimes they feel depressed when they cannot have latest product. People want to buy not only products but also the brands’ name. Apple has to understand the character of target audiences, and make them feel .superior.

Promotional tools

Advertising

Media – broadcast, print, outdoor, in store

Blogs – upload information about new iPhone and draw intention.

Broadcast – emphasize the iPhone 5 speed.

Print – Print new slogan

Public relations

Press release – updates every month

Video news – Make iPhone channel at Youtube and upload regularly

Direct Marketing

Email – Send emails to all apple consumers with introduction of iPhone 5

Personal selling

Trained sales person provides information and spend time with new customers.

Create long relationships between seller and buyer

Persuade to purchase new product

Sales Promotions

Discounting price – Offer discounted price to student and existing users who bring their iPhone series.

Samples – Retail stores allow consumers to try the iPhone5

Voucher – When customers buy iPhone 5, Apple give voucher

Suggestions for relevant media

Social Network Media

According to the research graph, more and more Korean people are getting use their own social network. With using social network, the company can attract a lot of social network users.

For example, on Facebook, most of users’ age is from 18 to 35 which is our main target audience. So If the company target on Social Media such as facebook, twitter etc, the company can attract a lot of main target consumer. Customers will be interested in new iPhone, and they could express their own opinion on Social network. The best advantage using this media is the company can communicate with the consumers and advertise effectively with a small charge.

TV commercial advertisement.

The TV commercial is the easiest way for customers to get new information about iPhone. During for only 2-30 seconds, the commercial could effect on customers. Nowadays, it becomes more and more important to choose advertising background music. With using TV ad music, it also can emphasize the product’s various advantages. TV commercial advertising expenditure is most expensive than other advertisement, but it is one of effective means to inform the public.

Creative Strategy

Emphasize the better battery and offer portable chargers.

Many Korean people think that the most disadvantage of iPhone is the battery. Contrary to other competitors, iPhone has a built-in battery. So the company has to extend the battery life, and emphasize the major improvement. And the company will offer free portable chargers for consumer during specific period. Apple sticks to make iPhone with built-in battery. Instead of making portable battery, offering portable chargers could be differentiation strategy and it also conserves iPhone’s unique design. Like this, if the battery life is longer, lots of customers would satisfy the new iPhone and they will also suggest their friends or family.

Advertising with new function

The new function of iPhone is DMB(Digital Multimedia Broadcasting). As I target at Korean mobile market, launching iPhone with DMB could draw consumers’ interest. In Korea, during commuting hours, lots of workers tend to spend their time with watching TV in metro or buses. Previously, because Apple didn’t add this features, many Korean apple users used to experience discomfort. Combining with 4:3 screen ratios and Apple’s Retina Display, the company would provide target audience with crystal clear images.

In summary, new slogan of iPhone is practical and unique. I will adhere to existing unique design and make up for shortcomings. The main objectives of iPhone 5 marketing is to emphasize the better battery life, new DMB functions and higher speed than before. To target main audience, I will advertise on Social Media and TV commercial advertisement in priority. With this advertising, the company is able to attract major consumers. I also want to stretch more budgets for advertising and sales promotions than before. With promoting consumers about the extended battery life, the company can offer free portable battery charges as sales promotions. Using this promotional tool appropriately, the company would be successful on iPhone5.