By: Denece Oplinus South Korean Export Business Plan

Table of Contents Introduction Michele Cosmetics: Our Product South Korea: Our Target Market Basic Needs Potential Exchange Rates Import Restrictions & Price Controls Government & Public Attitude The Competition Cultural Attitudes & Beliefs Language & Education Marketing Strategies Promotions Conclusion References

Introduction Our product chosen to export is our makeup line South Korea is the target market Stable exchange rates with the U.S. dollar and the Korean Won Koreans want the American lifestyle Positive government and public attitudes No import restrictions for American products Marketing and promotional strategies Final recommendations

Michele Cosmetics: Our Product Full line of low priced designer makeup Products are tested on artificially grown skin Specialized product categories Moisturizer line Anti-aging line Acne line Current packaging is acceptable: red case with gold lettering

South Korea: Our Target Market Terrain has mountains, deep valleys, and cultivated plains Climate is temperate with heavy summer rainfalls Population is 48.3 million with annual growth rate of 0.26% Capital is Seoul with population of 10.3 million GDP purchasing power parity for 2007 is $1,201 trillion GDP growth rate for 2007 is 5% Market Segment: over 17 million females ages (U.S.D.S. 2008)

Basic Needs Potential Per capita GNI was $20,045 in 2007 (U.S.D.S. 2008) U.S. government says cosmetics are wanted in South Korea (U.S.C.S. 2008)

Exchange Rates Current exchange rate is 1$ to 1, South Korean Won (OANDA Co., 2009) Exchange Rate Trends for the KRW and US Dollar (OANDA Co., 2009)

Import Restrictions & Price Controls No Import restrictions for U.S. companies No price controls for U.S. companies South Korea has a 10% sales tax (U.S.C.S. 2008) Passage of KORUS-FTA lifts current tariffs & barriers (U.S.T.R. 2007)

Government & Public Attitude U.S. and South Korea have relations since 1953 (U.S.D.S. 2008) Structural reforms in 1998 improved access to markets (U.S.D.S. 2008) U.S. and South Korea have concluded negotiations for FTA (U.S.C.S. 2008) Koreans are fascinated with the American lifestyle (U.S.C.S. 2008) Koreans place a high quality on American products (U.S.C.S. 2008)

The Competition Several chain stores with cheap alternatives Main competition on our level is Avon Avon’s total gross sales in 2007 were $9.8 billion (Avon 2007) Avon’s Asian sales in 2007 were $850.8 million (Avon 2007) Avon has a very high debt ratio of 87.6% (Avon 2007) Avon only sells door to door

Cultural Attitudes & Beliefs Self sufficiency is valued by Koreans Ethnic majority is Korean with 20,000 Chinese minority Half of Koreans practice religion Korea’s two major religions are Christianity and Buddhism A quarter of all Koreans practice Buddhism (U.S.D.S. 2008) With Buddhism, material things are frowned upon (Ball et al, 2006)

Language & Education National language is Korean (U.S.D.S. 2008) Language barrier & established social circle require Korean representation (U.S.C.S. 2008) English is widely taught in elementary and high school (U.S.D.S. 2008) Korean literacy rate is 98% (U.S.D.S. 2008)

Marketing Strategies Same marketing plan is used Exchange rates determine the price of product Use Korean representative for distribution within existing department stores (U.S.C.S. 2008) Product name needs to be translated (Ball et al, 2006) Hire local legal counsel to file for trade name license (U.S.C.S. 2008)

Promotions Same product with the same message (Ball et al, 2006) Michele Cosmetics – Beautifying Women Everywhere Must register with authorities in order to advertize in South Korea Advertize online! Korean E- commerce sales over $400 billion Advertize with the nine television stations and shopping channels (U.S.C.S. 2008) Advertize with the three major newspapers (U.S.D.S. 2008) Use dollar-off coupons to promote our product (Ball et al, 2006) Public relations are important in South Korea (U.S.C.S. 2008)

Conclusion South Korea is our ally KORUS-FTA reduces red tape and increases profit Avon is our main competition at home Let’s hit them in their international markets too!

References Avon (2007) Annual report. Retrieved March 13, 2009 from the Avon Web site at Ball, D. A., McCulloch, W. H. Jr., Frantz, P. L., Geringer, J. M., & Minor, M. S. (2006). International business: The challenge of global competition (10 th ed.). New York: McGraw- Hill. OANDA Co. (2009). FX History: Historical currency exchange rates. Retrieved March 14, 2009 from the FX History Web site at HTML&lang=en&margin_fixed=0 HTML&lang=en&margin_fixed=0 United States Commercial Service. (2008). Doing business in Korea: A country commercial guide for U.S. companies. Retrieved March 14, 2009 from the U.S. Commercial Service Web site at United States Department of State. (October 2008). Background note: South Korea. Retrieved March 15, 2009 from the U.S. Department of State Web site at United States Trade Representative. (June 30, 2007). United States and the Republic of Korea sign landmark free trade agreement. Retrieved March 13, 2009 from the U.S. Trade Representative Web site at Trade_Agreement.html Trade_Agreement.html