Marketing Attractiveness Report: Cider in South Korea

This report includes the marketing attractiveness analysis of South Korea as a hypothetical Australian Cider Producer wants to expand its business operations in this country. The report analysis different aspects like economic, political, cultural, legal and consumer behavior which can affect the marketing strategy of Australia cider producer. The analysis indicates the attractiveness of South Korean market for Australian cider producer.

Running Head: INTERNATIONAL MARKETING 1
Marketing Attractiveness Report: Cider
in South Korea

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Table of Contents
Introduction......................................................................................................................................3
Economic Analysis..........................................................................................................................3
Political Analysis.............................................................................................................................4
Legal Analysis.................................................................................................................................5
Cultural Analysis.............................................................................................................................5
Consumer Behavior Analysis..........................................................................................................6
Conclusion.......................................................................................................................................7
References......................................................................................................................................10

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Introduction
Expanding the business in any new and emerging country plays an important role in the growth
and development of an organization. When a company plans to expand its operations in any
emerging market, it needs to analyze the attractiveness of market. Market attractiveness of the
company can be evaluated by considering different aspects in that country. These aspects include
economic analysis, political analysis, cultural analysis, legal analysis and consumer behavior
analysis. This report includes the marketing attractiveness analysis of South Korea as a
hypothetical Australian Cider Producer wants to expand its business operations in this country.
Cider is an alcoholic beverage that is made of fermented juice of Apples. It is most popular in
commonwealth nations like Australia, Canada and New Zealand. In Australia, Cider is 6th fastest
growing export product (Becot, Bradshaw & Conner, 2016). The cider producer is planning to
enter into South Korea as it is one of the fastest growing international markets of Australia. The
report analysis different aspects like economic, political, cultural, legal and consumer behavior
which can affect the marketing strategy of Australia cider producer. The analysis indicates the
attractiveness of South Korean market for Australian cider producer.
Economic Analysis
Economic Analysis plays an important role in the process of analyzing attractiveness of a
targeted market. It includes different economic aspects of that country which need to be
considered. The economic structure of South Korea is totally supported by the government
policies. Due to strong economic changes, the nation is experiencing stable economic growth.
The country has a strong export factor that is the major reason behind the economic growth in
this country. South Korea is developed in terms of overall economic health and it can provide a
better climate to the cider producer to make investment (Dunning, & Dunning, 2014). The nation
also liberalized the restrictions in the foreign exchange rates and capital that is beneficial for this
Australia cider producer. In this nation, the wages are comparatively higher than other nearby
nations and the workforce is technically qualified and well-educated. It indicates that South
Korea is one of the nations in terms of highest literacy rate. These factors can support the
business of cider producer.

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Furthermore, the economy of the country is expected to witness a major growth during next 5
years and it will be growing to 1.72$ trillion by the year 2018 (Stainkamph, 2016). It will have
positive impact on the growth of Cider Producer Company in South Korea. The steady economic
growth of this country provides higher disposable income encouraged the younger generation to
live active lifestyle. Due to this, people have higher capacity and buying power to spend money
on leisure and entertainment. There is an increase in the demand for beverages with low alcohol
by volume and people are searching for options of alcoholic beverages. They can get Cider as
alternative that can give them taste of both fruit juice and alcoholic beverage. Looking at the
higher purchasing power of people, the organization can use competitive pricing strategy. In the
beginning, it should offer the cider on affordable prices and then it should increase the prices of
product. Eventually, it will increase the sale of Cider in South Korea (Chuljunsung, 2016). Under
this strong economic environment, the company can offer cider by emphasizing on product
development and develop cider in different packages like cans and bottles. Stylish packaging
designs will have important role in increasing sales of this alcoholic beverage over the estimated
period. It will assist the organization in promoting the cider and attracting people towards cider.
Thus, economy of South Korea provides a better economic environment to the Australian cider
producer (Ojha, 2017).
Political Analysis
South Korea had a violent political past that was characterized by the changes in the government
and political freedom. Because of centralization of authority, policy formulation has become
straight forward. In this nation, president is chairman of all committees that makes it easier to
communicate and operate the entire system. In addition to this, South Korea has strong political
support from United States that will be a positive indicator for establishment and growth of cider
in this nation (Jewett, et al, 2015). United States of America is a developed nation that can
support the businesses both financially and geographically. The government in the country is
making investment in improving the country’s infrastructure and businesses (Ho, 2014). In the
country, the government has developed some rules and regulations like alcohol beverage supplier
needs to take license. The political environment of South Korea is beneficial for the sales of
alcoholic beverages with the increase in the number of customers. There is an increase of
international drinks in the convenience stores. The government of country does not have strict

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rules and regulations against drinking alcoholic beverages that can increase the sale of Cider. It
has a high level of drink driving incidents because heavy drinking is very common there due to
dominant drinking culture at social gatherings and events. The company needs to emphasize on
promotional activities through convenience stores and hypermarkets as awareness of cider is
very low among South Korean people (Ojha, 2017).
Legal Analysis
In South Korea, one of the major attractions for investing companies is different incentives
which are offered by South Korean government. Among OECD nations, South Korea gives
foreign investors with the best incentives. In this country, the government has implemented anti-
bribery law in the year 2016 that weighed on the on-trade sales especially on the alcoholic
beverages like beer, wine etc. In this country, Cider producer needs to comply with the new laws
and regulations of government. A decrease in the frequency of business meetings in business
premises may also affect the sale of cider in the country. There is one benefit for the organization
that advertising of cider is allowed in South Korea under specific conditions. Promotion of
products with alcohol content of 17% or over is prohibited and promotion with less than 17% is
constrained between certain hours (Fabien-Ouellet & Conner, 2017). The Australian Cider
producer can take the benefit of this as Cider contains a large content of fruit i.e. apple. In order
to attract more foreign direct investment, the nation has adopted favorable tax policies. There are
various Fortune Global 500 companies which have invested in South Korea. The major reason
behind this is its relaxed tax policy (Pollock, 2015). The high export earning of country makes its
one of the most attractive place to export or make investment in. Thus, the legal environment
will be moderate for Cider producer to expand business operations in South Korea as there is no
any strict policy for beverage industry.
Cultural Analysis
Under the business expansion of Australian Cider producer, cultural analysis can play a
significant role in South Korea. In Korean businesses, social gatherings and meetings are
generally in bars or restaurants. Drinking is the major part of Korean culture as the people think
that drinking assists them to develop bonds with their colleagues and relatives. If any offered
drink is refused by another person then it is considered to become rude so no one refuses to drink

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(Zastrow, 2016). As mentioned above, Cider is an alcoholic beverage that is made from fruit
juice and generally from the apples. The people can serve it as fruit juice also that can increase
the sale of Cider in country. In addition to this, country has highly educated work force which
will assist the organization in developing its business in South Korea. Urbanization and
industrialization of this nation have made changes in the life style of Korean people. The people
have started to go outside and enjoy their life. Some of the people prefer to drink low-alcoholic
and cocktails and these are very famous among young adult customers. The popularity of these
drinks has increased the demand for fruit beverages and non-alcoholic beverages. It has
increased the sales of these drinks by 18% (Euromonitor International, 2017). Cider can be the
best alternative to these people who prefer to drink low-alcoholic and cocktails. The culture of
South Korea will definitely assist in increasing the sales and revenues of Australian Cider
Producer.
Consumer Behavior Analysis
Consumer behavior analysis is the study of groups, individuals and organizations and their all the
processes which are related to the purchase, usage and disposal of products and services,
including customer’s mental, behavioral and emotional responses which follow and precede
these processes. It is very important to understand the way people purchase and reasons behind
their purchases. Before expanding the business, Cider manufacturer will analyze the customer’s
behavior and interest in South Korea (Lea, 2015). It will evaluate their buying patterns towards
alcoholic beverages and other drinks.
From the analysis, it can stated that in South Korea, young adult people from 20 to 34 years is
the largest customer group and this market segment covers 22% of the total population of the
country (Euromonitor International, 2017). This is the major group that purchases and consumes
alcoholic beverages as legal drinking age in the country is 19 or over. In addition to this, South
Korean people drink twice as much beverage as Russians and more than four times as much as
American people. Considering the health issues and concerns, people are shifting to low
alcoholic, cocktails and non-alcoholic drinks. Under the popularity of lower alcoholic content in
beverages, cider manufacturer can actively renew the drinks containing lower alcohol (Sa, et al,
2015). The organization can target the young customers under this business expansion. By
targeting this group, fruit drinks and juices are predicted to enhance in both off and on-trade

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terms over the forecasted period. For Australia Cider producer, it will be better to expand in
South Korea as there are very few players which are serving apple cider to the customers
(Solomon, et al, 2014). In this country, The Hand and Apple is the organization that first
launched the apple cider in South Korea. Australian cider producer can provide four types of
cider in South Korea considering different demands and preferences of Korean customers. These
types of ciders may be Hard Apple cider, Pecan Cinnamon Apple cider, Hopped Apple cider and
Raspberry Apple cider.
To understand the customer attitude towards cider, the organization can conduct survey of
customers of South Korea. On the basis of this information, it can be said that drinking is the
major part of Korean culture. The above analysis shows that cider will be major choice of the
customers among different brands of alcoholic beverages. Australian Cider producer needs to
initiate it business by developing different marketing strategies that can assist in expanding the
promotion of products in different regions of South Korea. Moreover, pricing is also an
important factor that determines the brand preference of customers in competitive market
conditions (Sungwon, 2017). As mentioned above, the company can charge higher prices for
ciders as there are not many players in the same industry. Under promotion strategy, the
company needs to consider four different components which affect the attitude of customers
towards ciders. These factors are such as advertisement, effective pricing, packaging and
promotional schemes. It will assist the Australian cider manufacturer in establishing its business
in South Korea.
Conclusion
This is hereby concluded that South Korea will provide a favorable external environment to
Australian Cider Producer. Political and economic analysis of the company shows that there is
stability in the political and economic environment of South Korea. It is the good indicator for
cider business in South Korea. Strong financial and economic reforms assist in countering the
downturn and put back the nation on a growth path. Legal factors of the company are moderate
for this business. Cultural analysis is the most favorable for thee cider business as drinking is one
of the major component of South Korean culture. This is the major factor that will contribute to
the establishment and growth of cider business in South Korea. From the above analysis, it can
be concluded that this organization should enter into South Korea and operate its business in the

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country. The external environment of this country will support in enhancing the business of cider
and making awareness about this beverage. By the use of effective marketing strategies, the
organization will be able to establish its brand image in the country that will assist it increasing
its cider’s sales in South Korea.

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References
Becot, F. A., Bradshaw, T. L., & Conner, D. S. (2016). Apple market expansion through value-
added hard cider production: Current production and prospects in
vermont. HortTechnology, 26(2), 220-229.
Chuljunsung. (2016). Korea's first craft apple cider. Retrieved from
https://www.timeout.com/seoul/bars/koreas-first-craft-apple-cider.
Dunning, J. H., & Dunning, J. H. (2014). Economic analysis and multinational enterprise. UK:
Routledge.
Euromonitor International. (2017). Alcoholic Drinks in South Korea. Retrieved from
http://www.euromonitor.com/alcoholic-drinks-in-south-korea/report.
Euromonitor International. (2017). Beer in South Korea. Retrieved from
http://www.euromonitor.com/beer-in-south-korea/report.
Fabien-Ouellet, N., & Conner, D. S. (2018). The Identity Crisis of Hard Cider. Journal of Food
Research, 7(2), 54.
Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), 6478-6492.
Jewett, A., Shults, R. A., Banerjee, T., & Bergen, G. (2015). Alcohol-impaired driving among
adults—United States, 2012. MMWR Morb Mortal Wkly Rep, 64(30), 814-7.
Lea, A. (2015). Craft cider making. UK: Crowood Publications.
Ojha, S. (2017). Pestle Analysis Of South Korea. Retrieved from
http://www.sachdevajk.in/2017/09/08/pestle-analysis-of-south-korea/.
Pollock III, P. H. (2015). The essentials of political analysis. US: CQ Press.
Sa, J., Seo, D. C., Nelson, T. F., Lohrmann, D. K., & Ellis, N. T. (2015). Binge drinking and
drinking and driving among South Korean international college students in the
USA. Health Education Journal, 74(1), 84-95.

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Solomon, M. R., Dahl, D. W., White, K., Zaichkowsky, J. L., & Polegato, R. (2014). Consumer
behavior: Buying, having, and being. UK: Pearson Education.
Stainkamph, M. (2016). Australian cider industry to be worth more than $404 million in 2021:
Research. Retrieved from https://www.smartcompany.com.au/growth/australian-cider-
industry-to-be-worth-more-than-404-million-in-2021-research/.
Sungwon, Y. (2017). Globalization and language policy in South Korea. In Language policy,
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