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

A Brief History of Korea

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 Japanese Colonial Rule: 1916-

1945 Post WWII (Separation of

North and South Korea): 1945-Present

Korean War: 1950-1953

Ancient Korean Art

Korean Empire

The Korean War

Geography

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

The Korean Family: Traditional vs. Modern

Nuclear family Extended family Family dynamics

Parental roles Marriage and

courtship Gender roles

Traditional masculine culture

Education

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

Education

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 and Yonsei University Seoul National University

Male vs. Female Literacy (‘90-’98)

Political & Legal

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

Religion & Language

Religion: No affiliation-46% Buddhist-26% Christian-26% Confucianist 1%

Language: Korean ▪ Chinese Characters

English

Confucius

Aesthetics

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

Hofstede’s Dimensions

South Korea n Profile

Hofstede’s Dimensions: A Comparison

South Korea n Profile

US Profile

Business & Social Practices 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

Population

48,860,500 83% Urban Seoul ~ 10 million Homogenous

Korean Society

Age Distribution

0-14 Year15-6465+

Economic Statistics

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

Chaebol

International Trade

US-Korea Free Trade 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)

Communications

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

Media

Television Radio Print

Newspapers Internet Mobile Outdoor

Seoul City Hall covered with a billboard

Mobile AdsTV Network concert sponsored by Google

TV & Radio Broadcasting

XO Computer

Relative advantage Compatibility Complexity Trialability Observablity

Competition

Acer Apple Dell HP Hyundai Samsung Sony Toshiba And more…

Tablets (Galaxy Note, iPad)

E-readers (Kindle, Nook) Smartphones

Marketing Technology

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

Target Market

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

The Dichotomy of South Korea

Traditional vs. Modern Young vs. Old

SWOT

StrengthsWeaknesse

s

Opportunities

Threats

The XO

Product Adaptation

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

Advertising: To the senior 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

Advertising: To the child/grandchild

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

Pro forma Financials

Optimistic Outlook 1% market

penetration Year One 10% growth rate Potential Profit =

$1.8 Million in Year 5 Good?

Samsung may be a $400 Billion dollar company by 2020Total

Rev-enue

$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

Year 1Year 2Year 3Year 4Year 5

Marketing the XO Computer in South Korea

Bridge the gap between traditional and modern

Focus on relationships Make seniors feel special and

superior Keep costs down Get in and out… fast!