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Marketing Apple’s iPhone in Japan

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Marketing Apple’s iPhone in Japan

  1. Apple’s Mission Statement and Profile

Apple Inc.  is a company that is known across the world for its high quality phones and other electronic devices. The company was founded by Steve Jobs and Steve Wozniak in 1975. In the following decades, the company experienced massive growth in value and its product line. Today it is a multinational company that sells electronic products across all the continents. Apple Inc. shares are traded across all major stock markets in the world. It well known for making high end mobile phones and computers that are rivaled by none in the market. Those people using Apple iPhone consider it prestigious. Apple’s mission statement is, “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad”, (Rowland, 2019).

  • Japan-marketing Apple’s iPhone in Japan
  1. Historical development

Japan has been inhabited by human beings for the past 30000 years. Japan was under control of different emperors before the arrival of modern democracy. It was poorly connected to Asia and people used to do business without extensive interaction with outsiders. Emperor Meiji made the greatest impact by encouraging industrialization and promoting education in the country. From 1870, Japan was able to made huge strides in economic and industrial development. For instance, the first mechanized silk mill was opened in Japan in 1870. This was followed by construction of railway lines and soon education was made compulsory. Japan was actively involved in World War I and II and as such, it suffered heavily because of war. When World War II ended, Japan started making electronic goods and exporting them to USA and other countries. It was not until 1950s and 1960s that Japanese economy experienced exponential growth as a result of exporting electronic goods and vehicles. This contributed to drastic increase in the living standards of Japanese citizens. Today Japan is still a major exporter of electronic goods and vehicles (Columbia University, 2009).

  1. The national business environment
  2. People

Japan in one of the most homogeneous ethnicities countries in the world. It is not open to immigration and those allowed to work in Japan must be highly educated and working in very lucrative jobs. Therefore, Japan remains largely dominated by Japanese and even by-racial children are expected to know Japanese language as well as the culture. This is despite the fact that the child might have been raised abroad. This serves to show how Japanese people are into their culture. The main language in Japan is Japanese which is spoken by everyone. Japan has two major religions, Shinto and Buddhism. Shinto is the oldest religion of the two since Buddhism was imported from outside. The two religions peacefully coexist and usually complement one another. Japanese people are well known for their work culture. Japanese tend to work for long hours and most go out of their way to see that the organization that they are working for flourishes. They have a work culture that demands employees to remain loyal to their company. There have been numerous incidents where an employee was reported to have died while at their place of work due to exhaustion. Japanese tend to live in extended families in rural areas and it is common to see grandchildren living under the same roof with their grandparents. In urban areas, families live in nuclear structures. Just like in many other countries, men and women have different roles in Japan. However, these roles have been changing over the years. Men are expected to be the breadwinners while women are expected to take care of the housework. Majority of the people, 78%, live in urban areas while minority, 22%, lives in rural areas. Japan has one of the highest adult literacy rate in the world, which stand at 99% (Guide, 2019).

  1. Government-marketing Apple’s iPhone in Japan

Japan is both a monarchy and democracy where parliamentary leaders are elected by the citizens via ballot box. This kind of government can be described as a constitutional monarch. The Emperor is bestowed with certain powers but they are limited. The head of the government is divided into three branches, legislature, executive, and judiciary. The current Prime Mister is Shinzo Abe. Japan has been a politically stable country for the past six decades. This has been influential in promoting economic growth in the country. Japanese people enjoy some of the highest standards of living. Japan has a strong judiciary and legal system. The judiciary is independent and in the recent past has sentenced political leader to serve time in prison. Japan is open to direct foreign investment and it also invests in other countries. The currency used in Japan is Yen.  In Japan healthcare is provided free not only to citizens but also to expatriates and foreigners. Social welfare in Japan is provided by both the government and private sector (Insights, 2019).

  • Geography

Japan is a country that is made up of several thousand islands and is neighbored by China, Russia, and Korea. It has different mountain such as Mount Fuji. It is surrounded by North Pacific Ocean and Sea of Japan. The capital city of Japan is Tokyo and 37500000 people live here. There different forests in Japan where people can go for picnics. The cli mate is majorly temperate and hence the vegetation varies from season to season (Guide, 2019).

  1. Market and Size Potential
  2. Economy-marketing Apple’s iPhone in Japan

Japan’s gross domestic product (GDP) stood at $4,971,930 million in 2018. GDP per capital of Japan is 38,428.10 USD. This is among the best GDP per capita in the world, a reflection of the high living standards enjoyed by Japanese. According to World Bank, Japan’s labor force was 66427585 in 2017. The unemployment rate in Japan was 2.3 percent in February 2019. The inflation rate is 0.5 percent. Japan main imports are raw materials used in its industries such as oil, iron ore, copper, and aluminum. It exports mainly manufactures goods like vehicles, electronics, and machinery. The main industries are automobiles, electronics, computers, and semiconductors. Japan has a large middle class, which mean that the income distribution is fair. The inequality in income distribution is usually affected by education and marital status. Japan has some trade restrictions that applies to products such as those used in the health sector (“Japan Labor Force Total”, 2019).

ii Infrastructure

Japan has advanced infrastructure that is also well maintained. To begin with, Japan has an excellent network of road that connects one part of the country to another. It has a network of railway that is 23670 kilometers long. Half of this railway network is electrified. Japan has an international reputation of having very fast trains. There are many ports and harbors in Japan. Some are classified as large like Osaka, Kobe, Oita, Shimizu, and Nagoya among others. There are several airports in Japan but the most important airports for the country are Narita Airport, Kansai Airport, Haneda, and Central Japan Airport.  The housing sector in Japan is well advanced and majority of people with employment are in a position to own a home through mortgage. In recent there was news about Japan vacant homes that were being given free.  The channels of distribution are well established in Japan. Depending on one’s needs, a person can choose, air transport, water transport, railway transport or road transport. Different modes of transportation make distribution and delivery of goods within and out of Japan a very smooth experience (JapanGov, 2019).

iii Media and Technology-marketing Apple’s iPhone in Japan

Japan has vibrant media and technology sectors.  There so many radio and television channels that air in Japan. On outstanding television channel is NHK World that broadcasts in English and reports events happening across the globe. This channel was created to extend reach other people in the world who do not necessary speak Japanese. Other television networks are TV Japan, Fuji TV, TV Tokyo, and Nippon TV among others.  Some of the radio stations include NHK FM, Joau FM, Shonan Beach FM and J-Wave FM. Cellphones are most common and young people do not bother to buy land-line phones. Today people prefer to communicate using mobile phones because of their efficacy and effectiveness in communication. Japan had 101 million internet users. Majority of the internet users in Japan are the young people who enjoy buying every latest version of the phone they use. Smartphone penetration is more than 100% another reason that contributes to the high number of internet users. In Japan, traditional media such as newspapers, magazines, television are very powerful. The public still rely on them and they are more powerful than online media. Media in japan consists of television, radio, newspapers, magazines and online media, and social media (Kobayashi, Lai & Sato, 2019).

  1. Competitive Environment
  2. Three Major Competitors to Apple’s iPhone

Japan in a center for innovation and many electronic companies that sell electronic products to different countries are based in Japan.  Therefore, Apple will face direct and fierce competition from local firms and it must be prepared to take the bull by the horns. The first main competitor is Sony Mobile that also makes high end mobile phones and exports from Japan to other countries. Sony Mobile is a domestic company and many people when faced with two phones of the same value will go for the one they consider made by a domestic company. Another competitor is DoCoMo, which also makes mobile phone gadgets and holds the largest share of Japanese mobile phone market. Apple will have to dislodge this domestic giant from its firmly held parch. The last company that Apple has to compete with directly is Sharp. It also makes mobile phones and other electronics and just like Apple, it wants a share of the pie. In relation to all the three competitors, Apple Inc. holds an advantage over all of them. For instance, no company among the three can match the quality of phones that Apple make. Everyone wants to own an Apple iPhone because they are made of the best technology in the market. Thus, Apple will not start at a disadvantage but will have an upper hand in the run to capture and control the Japanese mobile phone market (Kyodo, 2017).

IV Entry Mode Selection

The entry mode will be indirect exporting the iPhone to Japan. Apple will sell its phones to agents who will then sell the phones to customers. Many companies especially the ones dealing with phones usually prefer exporting phones. This is the best method since it has low risk and will enable Apple to only concentrate on making the device. The weakness of this method is that there is no presence of the company in the country where it is exporting the product. Apple will lack the advantage that comes because of having presence in the market.

The second entry mode is opening a wholly owned subsidiary in Japan. The strength of this mode of entry is that Apple will have immediate presence in Japan. It can open multiple stores across Japan, which will be selling iPhone. The weakness of this entry mode is that it is expensive and if the market does not respond well to the product Apple will make huge losses.

  1. Target Market
  2. Market Description

Apple’s target market is that of young people who live having high end phones. The majority of people owning smartphones in Japan are young people and this market is expected to grow. Therefore, Apple will take this market as its primary target and all the advertisements and marketing will be done to reach people in this segment of the market. This market does not differ from most other countries because majority of people who like smartphones are young people and middle aged people. Those people who will purchase iPhone will benefit from having the fastest phone in the market. They will also enjoy the highest form of security and an operating system that is well integrated with hardware. Unlike android phones that use software that is used by all other phone manufacturers, Apple is the only company that uses iOS operating system (Lipsman, 2007).

  1. Critical External Environment Issues

Recycling of electronic waste will be a huge topic of discussion. Apple should prepare for ways of collecting iPhone that are no longer used and recycle them. It can also liaise with other companies that recycle electronic waste.

There is also the risk of culture and starting to sell products in a new market is always a difficult task. Japanese culture is different the one in the united states and expectations of the community will also be different.

VII. Marketing Objectives-marketing Apple’s iPhone in Japan

The first objective is to make a profit margin of 30% in the first year. This will be achieved through indirect export of the phones. Currently, Apple is able to make mark up of about 53% on iPhone. However, if the iPhone will be a success in Japan, Apple will open stores after two years to make even bigger margins of about 53%.  Apple will also be involved in charity, for instance Apple staff and brand ambassadors will be visiting the elderly homes every end month with some gifts (Lipsman, 2007).

  1. Marketing Strategies
  2. Product Strategies
  3. Innovative of the iPhone

IPhone is a special phone and it is the best in the market. It has software that is well integrated with hardware to improve functionality of the phone. It is secure and no one can access the owner’s information once the owner blocks his or her iPhone account.

  1. Product adaptations

Apple’s iPhone has in-built features that cater for people with disabilities. Not many phones can rival iPhone on this platform. It can be personalized by the user to make it easy to use and manage the content.

iii. Compared to competitors

When compared to phones made by Sonny Mobile, Sharp, and DoCoMo, iPhone is of superior quality. On international market, iPhone only competes with high end Samsung S-series. Thus, it will outdo the competitors in terms of quality and functionality aspects of the phone.

  1. Pricing Strategies
  2. Customary markups

Apple does not have standard markups but it varies with each phone released into the market. The gross markup is usually from 40% and can go to as high as 64%. This is a salivating margin, which is not matched by any other company in the market.

  1. Discounts available

Apple can offer discounts to agents who purchase iPhone in bulk. The discount can be offered at 5% per handset bought above the 100 mark. Another form of discount that can be offered at Apple stores and should be offered at 3% of the price. Finally, during clearance sales the phones can be sold at a discount of 10% to create room for next batch of the phones.

  • Compared to competitors

In terms of prices, the iPhone will cost about 350$ just like its competitors. In Japan the price will be lower than in the US or Canada in order to get more customers to buy the phone. This pricing will make competing with other phones be on a level ground since no brand will be holding any advantage because of having significant lower prices.

  1. Promotion Strategies
  2. Media to be Used

In order to penetrate the smartphone market, Apple will use a variety of marketing channels. To begin with, television advertisements will be the main method of advertising. Newspapers and magazines will also be used. In Japan, traditional media is respected and as such, Apple will use these channels to reach to potential customers. Social media will also be used to reach to new customers. Facebook and Instagram are going to be highly used as most young and middle aged persons spend a lot of their time online.

  1. Sales Promotion-marketing Apple’s iPhone in Japan

Apple will offer lucky followers on Facebook and Instagram a free iPhone for sharing Apple’s posts with friends. TV and newspapers audiences will also be provided with a chance to win free iPhone on during the promotion period.

  • Value of Personal selling

This benefit will be enjoyed after two years from the day of entry. Apple will be able to win customer loyalty by offering after sale services in terms of free airtime.

  1. Compared to competitors

Apple competitors are also using TV and social media to advertise. The competition will be tough since Apple will be fighting for the same share of the market that the competitors are holding.

  1. Distribution Strategy
  2. Port Selection

Apple will not use port to transport phones because water transport is usually slow and can lead to delays.

  1. Mode of Transport

The main mode of transport will be air. Phones are light and those who purchase them usually want to have them within two to three days. Air transport is both fast and reliable in terms of meeting urgent orders.

  • Packaging

The same packaging used by Apple in US will be used to package the iphones exported and sold in Japan. The packaging will include battery charger and earphones. The package will be made attractive to catch the eye of potential customers.

  1. Documentation needed

The documents needed are export certificate and inspection document. In Japan Apple will need license certificate to open stores across the nation.

  1. Typical retail outlet

Apple will only have retail outlets after two years of exporting. When the stores are opened, they will be located in major cities across Japan.

  1. Product sale by middlemen-marketing Apple’s iPhone in Japan

Right from the start Apple will be exporting iPhone to agents who will then sale to customers and intermediaries in Japan. Middlemen are important at the initial stage when testing the waters to see if entry will be successful.

  • Competitors distribution

Since Apple’s competitors are based in Japan, they will have a shorter channel of distribution. They also already have stores but some are closing their stores such as Sony Mobile an indication that the smartphone market is not working for them.

  1. Final Recommendations

I would recommend Apple to enter the Japanese market because of the high opportunity it offers. Based on the standards of iPhone, Apple will be able to get a good chunk of the smartphone market. Japanese love high quality products that are also affordable. This is exactly what Apple will be offering through iPhone. The pricing should be carefully done to match that of competitors since for a new company entry price of its products can decide whether it succeeds in the market or not. Holding all factors constant, Apple should dive into this Market as the signs are positive and it is not a high risk move.

 

 

 

 

 

 

 

 

 

References

Columbia University, C. (2009). Japan’s modern history: an outline of the period | Asia for educators | Columbia University. Retrieved from http://afe.easia.columbia.edu/timelines/japan_modern_timeline.htm

Guide, J. (2019). Japan – language, culture, customs and etiquette | global-etiquette | resources. Retrieved from https://www.commisceo-global.com/resources/country-guides/japan-guide

Insights, G. (2019). Japan: Government. Retrieved from https://globaledge.msu.edu/countries/japan/government

Japan Labor Force Total. (2019). Retrieved from https://tradingeconomics.com/japan/labor-force-total-wb-data.html

JapanGov, J. (2019). Infrastructure with Japan | the Government of Japan – JapanGov -. Retrieved from https://www.japan.go.jp/technology/infrastructure/

Kobayashi, H., Lai, D., & Sato, T. (2019). Japan – The Technology, Media, and Telecommunications Review – Edition 9 – The Law Reviews. Retrieved from https://thelawreviews.co.uk/edition/the-technology-media-and-telecommunications-review-edition-9/1178013/japan

Kyodo, K. (2017). Fujitsu looks to sell struggling mobile phone business | The Japan Times. Retrieved from https://www.japantimes.co.jp/news/2017/08/22/business/corporate-business/fujitsu-looks-sell-struggling-mobile-phone-business/#.XMIzldhS_IU

Lipsman, A. (2007). Consumers in the 18-to-24 age segment view cell phones as multi-functional accessories; crave advanced features and personalization options. Retrieved from https://www.comscore.com/Insights/Press-Releases/2007/01/Cell-Phones-and-18-24-Year-Olds

Rowland, C. (2019). Apple Inc.’s mission statement and vision statement (an analysis) – panmore institute. Retrieved from http://panmore.com/apple-mission-statement-vision-statement