Tag Archives: research paper

Case Study Apple Inc. 2015 

Introduction

This case study will include an overview of Apple’s past, present, and future market position in computer hardware, software, smartphones, and digital content.  The case study focuses on Apple’s strong market presence in high-end electronics and their leadership role in the computer and communication industry.

Analysts wondered what would happen to Apple with Steve Jobs gone.  Despite their success, some observers worried that Apple had become overly dependent on iPhone sales and pondered how long Apple would sustain its growth without the introduction of truly innovative new product.  CEO Tim Cook claims that Apple watch, Apple Pay, Apple TV, and corporate customers were big growth areas for the company.  Cook confidently exclaimed that Apple’s product “pipeline” was the strongest he had ever seen.  With a high rate of innovation and emphasis on excellence in product design, Apple succeeds with its relatively high selling prices.  This position indicates Apple’s effectiveness in using its generic strategy and intensive growth strategy.

However, Apple’s current market position has investors concerned because of Apple’s no growth in revenue and declining sales. With the smartphone market maturing and Apple still looking for its next big thing, Apple needed a new product segment to boost company profits. Apple’s new CEO Tim Cook took the company into the wearable technology market.  Cook aimed high for new product success but entering a market that was already in competition was not to Apple’s strength to gain success. It’s clear they are losing innovation in the electronic and becoming dependent on past products.  Consumers and investors were disappointed in overall unit sales after the introduction of Apple’s new product the Apple Watch.

Depending on the industry segment, Apple’s competitors include Samsung, Amazon, Microsoft and Google. Throughout most of 2013 and as of 2014, Apple’s main competitor in the smartphone market is Samsung’s line of Android-powered phones. Another competitor is Google who developed the Android software and is a major competitor of Apple in the smartphone operating system market.

 

Economic Positives

  1. In the final quarter of 2014 Apple posted record profits of $18 Billion, the largest quarterly profits in corporate history. Spurred by the release of the iPhone 6 and sales were strong in China.
  2. Apple’s iPhone accounted for 69% of its revenue.
  3. Apple generated $10.2 billion in revenues from the sale of music, book, videos, and applications. Over time Apple also paid out more than $25 billion to developers for the 75 billion apps downloaded to iPhones, iPods, and iPads.
  4. Apple generated more than 60% of the cell-phone industry’s total profits in 2013. With only 8.3% unit market share.

Negatives

  1. In 2008 iPod sales start to decline.
  2. iTunes store experienced a decline as much as 13% in the first half of 2014. And in response launched iTunes radio an ad supported streaming service.
  3. Ipod sales have been falling for 7 straight years and iPad had suffered a significant decline in sales, down 22% from Q4 in 2013.
  4. Personal Computer’s sales have been slowly declining as market saturation increases. However, Apple has a large market share in the over $1000 Pricing segments for consumers and it has been a strong factor to their success. Also, after industry innovations in featured based approaches a PC’s life expectancy has been increasing and therefore creating longer gaps of purchases for consumers.

Social Culture Positives

  1. Apple is a well trusted computer technology brand in the market. After 2001 when the Mac iOS X was introduced it was perceived as an industrial-strength OS favored by computer professionals.
  2. Apple doesn’t have to buy users it already has over 750 million, and those users have all paid to use Apple’s product; $650 per person to get a new iPhone.
  3. Apple’s digital hub strategy debut was with the iPod in 2001, follow by the iPhone in 2007, then iPad in 2010. Integrating Apple’s iTunes desktop software and music store completed their vision for an online entertainment hub. 2003 Windows PC compatible.
  4. July 2008 the App store was an addition to Apple’s digital hub. The app store was the first outlet that made it easy to distribute, access, and download applications directly into the iPhone. By the end of 2014, over 1.4 million applications were available.

Social Negatives

  1. Online music stores Amazon.com, Napster, and Walmart.com and challenges from a variety of online music of online music streaming services, such as Pandora, Spotify radio, Rhapsody. In some markets, music labels made more money from spotify than iTunes.
  2. Apple not only wanted consumers to directly look at the eye-catching Macintosh designs, but also wanted people to use and experience Apple’s software inside their retail stores and it account for 12% of their sales.

Legal Positives

  1. By 2014 Apple won two large judgements against Samsung in U.S Courts.
  2. By April 2012 , Amazon’s market share in e-books had fallen to 60% because of Apple’s push into the e-book market content.

Legal Negatives

  1. Intense competition in the smartphone industries led to numerous lawsuits on design and intellectual property which creates a patent wars.
  2. The court ruled that Apple’s pricing strategy for digital books had in fact colluded with five publisher to raise prices, and in late 2014, agreed to pay %400 million in damages.

Rivalry among Existing Competitors

  • Apple’s direct competition in the smartphone software market comes from Android, an open and free platform developed by Google and Windows from Microsoft Corp. As more manufacturers entered the market, innovation on the Android platform exploded.
  • In 2014 Android-based phones controlled 81% of market share compared to Apple’s 15%. The share for Apple’s iOS fell gradually with the growth of Android, from its peak of nearly 19%.
  • After Google announced “AndroidWear” in 2014, extending the Android platform to watches, LG, Motorola, and Samsung subsequently introduced watches based on the software platform.

Threat of New Entrants

  • Among headset manufacturers, Samsung Corp. was Apple’s most direct competitor. Samsung is a huge company that make chips, PC’s, TVs, and appliances as well as phones.  Samsung became a volume leader in 2011 with the introduction of its Android-based Galaxy handset and remained the market leader in 2014 with 24.5% share.
  • Lenovo had emerged as the third largest player in the smartphone industry holding 7.4% of the handset industry
  • A new player from China called Xiaomi, which brought it first smartphone to the market in 2011 and entering into 2015, it had cracked the top five in smartphone sales.

Threat of Substitute Products

  • In a broad sense, all firms in an industry compete with industry producing substitute product. For Apple they cover a broad range of computer electronic products leaving them subject to a wide range of product substitutes. But for the smartphone industry its substitute would be the personal computer and iPads.

Bargaining Power of Suppliers

  • The supplier that captured most of the value in smartphones was Qualcomm, which largely controlled the two most important protocols for wireless service.
  • Three companies dominated the ARM CPU business in smartphones in 2014. Qualcomm had about 54%, Apple roughly 15%, and MediaTek from Taiwan had just under 14%.  Jobs bought two ARM microprocessor design companies for $400 million between 2008 and 2010.

Bargaining Power of Buyers

  • Apple has a lot of buyers in the market ranging from Corporate suppliers to retail consumers.
  • Apple has a high end pricing model but it focuses on key features that differentiate the company and its products from competitors. They do not use pricing but instead these key features including seamless connectivity, and cutting edge aesthetics in design.

Identifying and describing the root cause

The Case study focuses on Apple’s stagnations of their revenue streams in the software, smartphone, personal computers, and digital content markets.  Apples has always been a leader in innovation when it comes to computer technology but industry competitors are copying Apple’s industry standards.

Problems

  • A clear problem for Apple is Android delivering fast and fresh ideas at a regular clip, putting Apple’s iOS on the defensive and causing its critics to complain that Apple’s platform was looking dated and old. Several products in Apple are starting to loose their revenue stream because of competition from companies like Samsung, Amazon, and Google are developing similar products at lower costs in the market.

Issue

  • In 2014, the Apple Watch, Apple’s entry into the wearable technology. Apple was not the first in the category, but it was expected to be the largest.  The Apple Watch had to be charged every day, it only worked with iPhones, and it was expensive.  Prices started at $349 for the basic model.  Moreover there was already significant competition in the market offering a similar product at lower costs.  Competitor Pebbles sold for $150.

SWOT Analysis

Strengths

  • Apple’s vertical integration gives them a competitive advantage because it allows them to innovate in software, hardware, and services. It owns chip manufactures, controls manufacturing, follows extremely strict software standards, and operates in a nearly closed ecosystem of retail stores to control their costs.
  • Apple’s development environment is superior to the competition because they can predict what customers want in the market. Productivity applications with their user interface was designed with simplicity in mind.

Weakness

  • With the loss of CEO and founder Steve Jobs stakeholders company has big expectations even with aftermarket adaptations by Google, It’s clear that Apple no longer has total control of their critical technology that would drive Apple’s differentiation in the market.
  • There is a crowded field of cross-platform alternatives to Apple’s offerings: Microsoft’s  Skype, Facebook WhatsApp, and a variety of other third party tools, resulting in a lot of apps with overlapping functionally.

Opportunities

  • Apple announced a partnership with IBM to design enterprise app enlisting IBM’s sales force and business connections to sell apple mobile devices to enterprise customers. CEO Tim Cook pointed out, iPhones and iPads were present in 90% of Fortune 500, but rate of participation was low, providing Apple with an opportunity to advance mobility in the enterprise.
  • Samsung has had recent trouble with their Note and Galaxy handset product lines. Their batteries have been overheating and in some cases exploding causing harm to users.

Threats

  • Apple had at least three potential serious competitors for tablet: (1) manufacturers using Google’s version of Android software; (2) Amazon, which used a modified version of Android; and (3) Microsoft Windows-based tablets, and by the end of 2014 Android had capture 70% share.
  • Currently, Google, Microsoft, and Amazon have entered the fray by setting up their own ecosystem, including devices, books, games, music, and storage services.

 

Analysis and Decision Making

Strategic decision making is an ongoing process that involves crafting strategies to achieve goals and altering strategies based on reviewed outcomes.  Apple’s goal is to increase their revenue stream in the smartphone industry.

Generating alternatives

  1. Leverage their current strength, Apple should focus on their premium smartphone brand, the iPhone.
  2. Continue to improve and innovate the Apple Watch.
  3. Increase their research and development spending.
  4. Focus on improving digital media content in China.

Evaluating alternatives

#1 – Leverage their current strength, Apple should focus on their premium smartphone brand, the iPhone.

  • By focusing on customers willing to pay more and maintaining a premium price at the cost of unit volume, Apple sets up an artificial entry to barrier to competitors.
  • Taking into account that premium smartphones are the minority in global smartphone sales by volume, they provide the bulk of profit. Each iPhone Apple makes costs somewhere around $200, and is sold for over $600. The profit margins are far better for premium smartphones than nearly any other segment of electronics.  That is why it is significant for Apple to widen its gap against competitors like Samsung.
  • Apple must perform two tasks. (1) Apple needs to continue to improve their iOS software for users.  Creating new tools and interface features for every iPhone launch. (2) Apple’s must ensure proper vetting and marketing messages when introducing new iOS software into their products.

#2 Continue to improve and innovate the Apple Watch

  • Becoming selective in what products to improve is very tough. I feel that Apple has established a presence in the wearable technology which a huge market to consider.  The Apple Watch product is designed to become an intricate part in people’s daily lives.  This is a new product category for Apple and I consider them to still be in the learning stages of the product life cycle.  Apple should push the product into the realm of consumers to feel that they cannot live without this product because it’s doing so much for them and then it will continue to be adopted by consumers.
  • Apple Watch will continue to be a flop until they can establish a 4G connection and make it a stand alone device.

#3 Increase research and development spending 

  • Compared with its resources Apple has remained relatively quiet It spent just 3.5 percent ($8.1 billion) of its $233 billion in revenue in fiscal 2015 on research and development, a lower percentage than every other large U.S. technology company, data compiled by Bloomberg.
  • Under CEO Tim Cook, Apple leans heavily on advances made by suppliers, focusing on crucial technology such as semiconductors, according to Ram Mudambi, a business school professor at Temple University in Philadelphia.
  • Apple can’t rely on its suppliers for everything. Expanded research outlays significantly over the next three years, to $8.1 billion in fiscal 2015, up from $6 billion in 2014 and $4.5 billion in 2013. This would display to investors its commitment to innovate and evolve new technology that enhances and expands its existing product range.

#4 Focus on improving digital media content access in China

  • Apple must not abandon the Chinese market because of its lack of market share. The volume of sales alone justifies Apple’s presence in the smartphone market.
  • The company must reestablish its iBooks and iTunes Movies services in the country. Earlier in 2014 after less than seven months of operation following pressure from regulators Apple was asked to shut down their online market presence, which is a problem.

Action Planning

Goal: Increase growth in revenue stream and look for opportunities in new product development.

Action Step Responsible Person Deadline Necessary Resources Potential Challenges Results
#1) Improving iOS software for iPhone. Software Engineers and Marketing department Within 6 -12 months Advancements in suppliers and advancement in software tools.   Intellectual property protection Lack of consumers adopting the new software Looking consumer adoption in the smartphone industry
#2) Invest more in Research and Development to extend product lines. CEO, CFO, and chief engineers and design firms. Within 3-6 months Using capital funds to absorb competing firms. And reinfusing revenue into R&D No breakthrough in new product category development New product to market.

 

Measurements

Lifetime value of the customer – Revenue x Gross margin x Avg number of repeat purchases.

Cost of customer Acquisition – Total marketing investment x total number of customer acquired.

Sales Growth – Measuring your sales growth is, however, vital to the long-term health of your company. Not only does it serve as a good indicator when it comes to strategic planning, but it also allows for identification of growth trends and share this information with employees.

Conclusion

Cooks thoughts echoed those of his predecessor, Steve Jobs, whose strategy for Apple had four pillars. Offer a small number of products, focus on the high end, give priority to profits over market share, and create a halo effect that makes people starve for new Apple products.

Steve Jobs, Apple’s former CEO and Founder created a trusted company brand when it comes to personal computer technology.  Jobs inspired Apple’s management to become a cultural force with the focus on what consumers in the electronics industry wanted.  Apple’s marketing helped associate the band to be perceived as a product of personalization. Phrases like “Think Differently” inspired creativity within their users because their product could create documents, personalized music playlists, and Apple included several different colors and data storage sizes that worked around the user’s budget.  A study by GfK in 2011 “showed that over 70% of consumers felt features and seamless access to content are major factors for continuing with their current mobile OS This allowed Apple’s iPhone product to become cultural industry standard with their consumers when it comes to communicate, create documents, playing games, and getting online.

We can learn so much from Apple’s marketing strategy because they staked their claim, amplified their messages, and impacted the world for the better. Apple’s marketing and branding strategy had the ability to invoke an internal response from their tech savvy consumers with their marketing messages. Steve Jobs knew that for a business’s product to be “remembered” there must be a clear message for them to remember and identify with. With Apple’s 2007 launch of the iPhone they “Reinvented the phone” by integrating software breakthrough with the design of the user user in mind.  Apple was a pioneer in the personal computer and electronic industry they told their consumers that creativity was at their fingertips.

 

 

Sources

 

http://www.nasdaq.com/article/6-reasons-why-investors-should-take-a-bite-into-apple-cm740431

 

https://www.macrumors.com/2016/05/02/cook-mad-money-great-innovation/

 

http://marketrealist.com/2014/02/apples-premium-pricing-strategy-product-differentiation/

 

http://bgr.com/2017/02/03/apple-vs-samsung-sales-2016/

 

http://marketrealist.com/2014/02/ecosystem/

 

http://bgr.com/2017/02/03/iphone-vs-android-comparison-customer-service/

 

http://panmore.com/apple-inc-generic-strategy-intensive-growth-strategies

 

https://www.bloomberg.com/news/articles/2015-11-30/apple-gets-more-bang-for-its-r-d-buck

 

France: Wearable Technology Market

Company:   Ultra Inc.

Company product profile: Violet and Violet Plus sensor helps prevent premature aging, reduce the risk of skin cancer, and promote the benefits of natural Vitamin D production. With advanced technologies, combined with a biomedical approach that personalizes it to consumers activities.

Production Introduction:

  • Violet® Plus (Personal ultraviolet sunlight sensor)

  • The Violet® App (Software application)

Company History and Founders:

Nattapon Chaimanonart
CEO @Ultra, Inc. • Co-Founder
Innovative Skin Health Solutions

Nabyl Bennouri
CEO @Ultra, Inc. • Co-Founder
Innovative Skin Health Solution

Founded in 2014, Ultra Inc. is a technology and data company focused on innovative skin health solutions for consumers. We are dedicated to creating highly accurate, scientifically-based solutions that users can fully depend on and trust. Nabyl’s sister has Lupus which makes her skin photosensitive. Having a device that warns her before the ultraviolet rays worsen her symptoms can be very helpful. And Nabyl had an episode of severe vitamin D deficiency that was misdiagnosed and lead to several months of sickness. So the idea to work on UV exposure and sun generated vitamin D tracking was born.  Using a mobile or wearables device, we help health-conscious people make good choices around sun exposure. This product is considered the first wearable device that tracks your UV exposure and vitamin D intake in the market. Interpreting the intensity of the sun is not easy because it’s too common to be surprised with a sunburn. If you use an Ultraviolet (UV) sensor, you can have more information about the sun’s intensity, but just knowing the UV number is not enough to manage your time in the sun.

Our team of bioengineers and software developers have a deep understanding of how UV works, and have transformed UV raw data into meaningful insights, interpreting the sun’s intensity to each individual. Backed by multiple granted patents, our proprietary algorithms carefully measure the daily accumulative impact of UV exposure, matching to a person’s skin sensitivity as defined by the dermatology community. While the software technology is thoroughly based in biomedical research, offered solutions can be effortlessly used by anyone.

Through clinical trials and laboratory studies, Their goal is to eventually evolve the Violet Plus into a near-medical device endorsed by the medical community.

Currently in collaboration with universities, medical organizations, and skincare companies to further develop our technology and provide user behavior and UV exposure feedback to them. a great idea and product by combining personal technology with personal health .  He truly believes that society will be enthusiastic and intrigued with integrating technology into humans.  This UV sensor is a great accessory for people by providing the user with knowledge about sun exposure and what’s their current skin condition.  

 

THE FUTURE OF WEARABLES AND UV SENSING

 

Country Overview: France

National name: République Française

Land area: 210,668 sq mi (545,630 sq km);

Total area: 211,209 sq mi (547,030 sq km)

Capital City: Paris

France is about 80% the size of Texas. In the Alps near the Italian and Swiss borders is western Europe’s highest point—Mont Blanc (15,781 ft; 4,810 m). The forest-covered Vosges Mountains are in the northeast, and the Pyrénées are along the Spanish border. Except for extreme northern France, the country may be described as four river basins and a plateau. Three of the streams flow west—the Seine into the English Channel, the Loire into the Atlantic, and the Garonne into the Bay of Biscay. The Rhône flows south into the Mediterranean. For about 100 mi (161 km), the Rhine is France’s eastern border. In the Mediterranean, about 115 mi (185 km) east-southeast of Nice, is the island of Corsica (3,367 sq mi; 8,721 sq km).

18 Régions:

Auvergne-Rhone-Alpes, Bourgogne-Franche-Comte (Burgundy-Free County), Bretagne (Brittany), Centre-Val de Loire (Center-Loire Valley), Corse (Corsica), Grand Est (Grand East), Guadeloupe, Guyane (French Guiana), Hauts-de-France (Upper France), Ile-de-France, Martinique, Mayotte, Normandie (Normandy), Nouvelle-Aquitaine (New Aquitaine), Occitanie (Occitania), Pays de la Loire (Lands of the Loire), Provence-Alpes-Cote d’Azur, Reunion

note: France is divided into 13 metropolitan regions (including the “territorial collectivity” of Corse or Corsica) and 5 overseas regions (French Guiana, Guadeloupe, Martinique, Mayotte, and Reunion) and is subdivided into 96 metropolitan departments and 5 overseas departments (which are the same as the overseas regions)

Largest cities in France

Commune Department Region Pop. 2012 census Rank
Paris Paris Île-de-France 2,240,621 1
Marseille Bouches-du-Rhône Provence-Alpes-Côte d’Azur 852,516 2
Lyon Rhône Rhône-Alpes 496,343 3
Toulouse Haute-Garonne Midi-Pyrénées 453,317 4
Nice Alpes-Maritimes Provence-Alpes-Côte d’Azur 343,619 5
Nantes Loire-Atlantique Pays de la Loire 291,287 6
Strasbourg Bas-Rhin Alsace 274,394 7
Montpellier Hérault Languedoc-Roussillon 268,456 8
Bordeaux Gironde Aquitaine 241,287 9
Lille Nord Nord-Pas-de-Calais 228,652 10


Social Institutions & Education

Time Zone: Central European Time

Literacy rate: 99% (2011 est.)

Higher education costs (research)

Living Conditions

Population (2016 est.): 62,814,233 (growth rate: 0.45%);

Birth rate: 12.49/1000;

Infant mortality rate: 3.31/1000;

Life expectancy: 81.66 years

Family structure:

The majority of the regions with Mediterranean climates have relatively mild winters and very warm summers.

Political system

  • France Governmental consisted of a Chamber of Deputies and a Senate to form the legislative branch of government and a president to serve as head of state.
  • France has a tradition of highly centralized administrative oversight of its essentially market-based economy.

Religion & Aesthetics

Religions: Christian (overwhelmingly Roman Catholic) 63-66%, Muslim 7-9%, Jewish .5-.75%, Buddhist .5-.75%, other .5-1.0%, none 23-28%

Ethnicity/race: Celtic and Latin with Teutonic, Slavic, North African, Southeast Asian, and Basque minorities

Languages: French (official) 100%, rapidly declining regional dialects and languages (Provencal, Breton, Alsatian, Corsican, Catalan, Basque, Flemish)

 

Country History

Early Government

The French Constitutional Laws of 1875 defined the composition of the Third Republic.  The period from the start of World War I to the late 1930s featured sharply polarized politics, between the Democratic Republican Alliance and the more Radical socialists. Issues over the re-establishment of the monarchy dominated the tenures of the first two presidents, Adolphe Thiers and Patrice de MacMahon.

Feb 1875: Series of parliamentary Acts established the organic or constitutional laws of the new republic. At its apex was a President of the Republic. A two-chamber parliament was created, along with a ministry under the President of the Council, who was nominally answerable to both the President of the Republic and Parliament.

Adolphe Thiers called republicanism in the 1870s “the form of government that divides France least” Third Republic endured for seventy years, which makes it the longest lasting system of government in France since the collapse of the Ancien Régime in 1789

1905 –  the Chamber declared that “the attitude of the Vatican” had rendered the separation of Church and State inevitable and the law of the separation of church and state was passed in December 1905.

1939-45 – World War II – Germany occupies much of France. Vichy regime in unoccupied south collaborates with Nazis. General de Gaulle, under secretary of war, establishes government-in-exile in London and, later, Algiers. Rise of French Resistance.

Liberation

1944 – Allied forces land at Normandy leading to liberation of France. De Gaulle sets up provisional government. Purge against former collaborators.

1946 – De Gaulle resigns as provisional president, replaced by Socialist Felix Gouin.

1946-58 – Fourth Republic is marked by economic reconstruction through the Marshall Plan and the start of the process of independence for many of France’s colonies.

The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative to aid Western Europe, in which the United States gave over $12 billion  (approximately $120 billion in current dollar value as of June 2016) in economic support to help rebuild Western European economies after the end of World War II. The plan was in operation for four years beginning April 8, 1948. The goals of the United States were to rebuild war-devastated regions, remove trade barriers, modernize industry, make Europe prosperous again, and prevent the spread of communism.

The Marshall Plan aid was mostly used for the purchase of goods from the United States. The European nations had all but exhausted their foreign exchange reserves during the war, and the Marshall Plan aid represented almost their sole means of importing goods from abroad.

The Marshall Plan aid was divided amongst the participant states roughly on a per capita basis. A larger amount was given to the major industrial powers, as the prevailing opinion was that their resuscitation was essential for general European revival.    .

The initiative is named after Secretary of State George Marshall. The plan had bipartisan support in Washington, where the Republicans controlled Congress and the Democrats controlled the White House with Harry S. Truman as president. The Plan was largely the creation of State Department officials,

1951 – France joins West Germany and other European nations in the European Coal and Steel Community (ECSC) – leading to the formation in 1957 of the European Economic Community (EEC)

The Fifth Republic

1958 – De Gaulle returns to power on back of Algerian crisis and founds the Fifth Republic, with a stronger presidency.

1995 – Jacques Chirac elected president, ending 14 years of Socialist presidency.

21st Century

2002 May – January – Euro replaces franc, first minted in 1360.

2003 March – Constitution changed to allow devolution to regions and departments of powers over economic development, transport, tourism, culture and further education.

2007 May – Nicolas Sarkozy, the former interior minister and leader of the ruling conservative UMP, wins a decisive victory in the second round of the presidential election.

2008 October – European governments pledge up to 1.8 trillion euros as part of co-ordinated plans to shore up their financial sectors, hit hard by the global financial crisis. France says it will inject 10.5bn euros into the country’s six largest banks.

 

Self -Reference Criterion

Three well-known analyses of intercultural management by Edward Hall, Geert Hofstede and Philippe d’Iribarne illustrate the differences between American and French management styles :

According to Edward T.Hall, intercultural differences in communication are based on the context, on time and on space.

French global companies are not very different from their American counterparts but some ” traditions ” may resist.

France Appearance

  • The French are very conscientious of their appearance.
  • Dress conservative and invest in well-tailored clothing.
  • Patterned fabrics and dark colors are most acceptable, but avoid bright colors.
  • French businessmen do not loosen their ties or take off their jackets in the office.
  • Women should also dress conservatively.  Avoiding bright or gaudy colors is recommended.
  • Women should also avoid any glitzy or overpowering objects, such as flashy jewelry.

France Behavior

  • Punctuality is treated very casually in France.
  • France is a highly stratified society, with strong definition and competition between classes.
  • The French handshake is brief, and is accompanied by a short span of eye contact.
  • Always shake hands when meeting someone, as well as when leaving.  French handshakes are not as firm as in the United States.
  • The French have a great respect for privacy. Knock and wait before entering into a room.   Additionally, do not “drop in” unannounced. Always give notice before your arrival.
  • Business can be conducted during any meal, but lunch is best.
  • The French do not organize meetings to reach a decision : they meet to exchange information, then the person in charge takes the decision.
  • The French are highly polychronic
  • The French do not like clear procedures : they want to maintain some form of “grey zone ” and do not believe that it is right to use always the same and only way to do the same things; organizational charts and objectives are not clear.
    • Top-down management : for the French, the Boss is the Boss and management is very authoritarian

 

  • French contracts tend to be short (in physical length, not time duration) as much of the information is available within the high-context French culture.

 

France Communications

  • French is the official language in France.
  • Don’t start a conversation in English
  • If you do not speak French, it is very important that you apologize for your lack of knowledge.
  • Most individuals in business speak English.
  • The French have a great appreciation for the art of conversation.
  • The French frequently interrupt each other, as the argument is a form of entertainment.
  • The French often complain that North Americans lecture rather than converse.
  • Eye contact is frequent and intense, and can often be intimidating to North Americans.
  • Only written commitments are serious : nothing oral is really binding and lying is no big deal .

 

The French are considered both arrogant and weak. Arrogant because, in a meeting, they love to ask destabilizing questions, show they know a lot and have understood better. Weak because in the French culture, if you give too specific and clear directions, it means that you do not acknowledge the professionalism of the staff. In a French company, after a meeting, an American can never tell if a decision has been reached or not : for the French, ” deciding ” is giving the broad lines without getting into implementation ” details “. In addition to that, contrary to the British, Americans do not respect French culture.  

According to Geert Hofstede, there are five dimensions to assess cultural differences:
Figure 1.1

 

An evaluator must remember that it is the perception of product characteristics by the potential adopter, not the marketer, that is crucial to the evaluation.  A market analyst’s self-reference criterion may cause a perceptual bias when interpreting the characteristics of a product.  Therefore evaluating product characteristics from the foreign user’s frame of reference.

Economy Analysis

Population

Total: 62,814,233

urban population: 79.5% of total population (2015)

rate of urbanization: 0.84% annual rate of change (2010-15 est.)

Major urban areas – population:

Paris (capital) 10.843 million; Lyon 1.609 million; Marseille-Aix-en-Provence 1.605 million; Lille 1.027 million; Nice-Cannes 967,000; Toulouse 938,000 (2015, CIA).

Age Structure

0-14 years: 18.59% (male 6,354,241/female 6,070,971)

15-24 years: 11.8% (male 4,035,407/female 3,853,153)

25-54 years: 38.04% (male 12,799,923/female 12,625,781)

55-64 years: 12.44% (male 4,011,853/female 4,303,261)

65 years and over: 19.12% (male 5,510,337/female 7,271,227) (2016 est.)

 

Population growth rate:  0.41% (2016 est.)

 

Gross Domestic Product

(Data Gathered from CIA.gov)

2009 2010 2011 2012 2013 2014 2015 2016 2017
Real Economy (change in percent)
Real GDP -3.1 1.7 1.7 0.2 0.7 0.2 1.1 1.7 1.9
Domestic demand -2.6 1.6 1.7 -0.4 0.5 1.2 1.3 1.3 1.5
Nominal GDP (billions of euros) 1886 1937 1997 2042 2095 2161 2244 2334 2433
Gross national savings percent of GDP 17.6 17.7 18.7 18.5 21.5 21.5 22.1 19.3 19.8
Gross domestic investments (percent of GDP) 18.9 19.3 20.6 20 19.7 19.8 19.9 20 20.1

Health expenditures:  11.5% of GDP (2014)

Education expenditures:  5.5% of GDP (2012)

GDP (purchasing power parity):

$2.647 trillion (2015 est.)

$2.617 trillion (2014 est.)

$2.612 trillion (2013 est.)

note: data are in 2015 US dollars

country comparison to the world: 11

GDP – per capita (PPP):

$41,200 (2015 est.)

$40,900 (2014 est.)

$41,000 (2013 est.)

note: data are in 2015 US dollars

country comparison to the world: 39

Exports (CIA.gov)

$510.5 billion (2015 est.)

$584.5 billion (2014 est.)

country comparison to the world: 7

Exports – commodities:

machinery and transportation equipment, aircraft, plastics, chemicals, pharmaceutical products, iron and steel, beverages

Exports – partners:

Germany 15.9%, Spain 7.3%, US 7.2%, Italy 7.1%, UK 7.1%, Belgium 6.8% (2015)

Imports: (CIA.gov)

$537.5 billion (2015 est.)

$631.1 billion (2014 est.)

country comparison to the world: 7

Imports – commodities:

machinery and equipment, vehicles, crude oil, aircraft, plastics, chemicals

Imports – partners:

Germany 19.5%, Belgium 10.7%, Italy 7.7%, Netherlands 7.5%, Spain 6.8%, US 5.5%, China 5.4%, UK 4.3% (2015)

Minerals and Resources

Production – Mineral and metal industries generally maintained production and other activities at about the same or slightly decreased rates as those of 1999. Government and private companies continue to produce minerals and mineral products, conduct research, and explore for new domestic and international mineral resources.  The real gross domestic product was expected to grow by 3.5% in 2000.

 

Lead and Zinc.—Mining of lead and zinc has completely ceased in France. In 2000, two companies operated primary zinc plants by using imported ores and concentrates.

Steel.—Usinor Group produced about 21 million metric tons (Mt) of crude steel in 2000 and ranked third in the world as a producer of steel in terms of crude steel production and second in terms of sales from steelmaking activities, after Nippon Steel Corp. of Japan

Coal.— CdF envisioned the final stoppage of all coal mining in France by 2005 in accordance with the National Coal Pact signed in 1994 (European Commission, September 20, 2000, State aid to the French coal industry, accessed November 30, 2016, via URL http://www.europa.eu.int).

Natural Gas.—State-owned monopoly Gaz de France announced that it would comply with the EU directive to open the gas market to competition. France chose to open its market to the strict minimum allowed under the EU directive—20% of the total market

Petroleum.—In 2000, onshore petroleum production was mainly from the Aquitaine and the Paris Basins. Because production had started to decline in these areas, the Government initiated a program to encourage exploration for new deposits in other areas thought to have potential; the Jura Basin was one area under consideration. Companies that operated refineries in France included BP Amoco plc, Mobil Corp., Royal Dutch Shell Group, and Total/Elf, as well as other smaller companies.   France was a net importer of petroleum products.

Gypsum.—France was one of Europe’s largest producers of gypsum. Two-thirds of the production was from the Paris Basin. Four companies produced about 95% of the output. S.A. de Materiel de Construction was the largest company.  

Iron Ore.—The iron ore basin of northern France stretches from Lorraine northward into Belgium. The high phosphorus and low iron content of the ore limited its desirability, and production has been declining for several years.

 

Outlook

Having one of the world’s most developed economies, France was an advocate for the EU and the European single-market concept. The country has had to make considerable changes in the structure of its industries, particularly those mineral industries controlled by the state. Several state-owned companies have taken the initiative to become leaders in their respective industries. Others have been forced to make additional adjustments under restructuring schemes proposed by the EU or the French Government. The depletion of mineral resources and the cessation of subsidies for uneconomic operations have had impacts on local communities and their economies. France will have the advantage of plentiful electrical power to attract industrial facilities that require skilled work forces and good access to markets in Europe.

 

France Labor Statistics, 2010-2014 (Information accessed at the Bureau of Labor Statistics

National Statistics

Unemployment rate

(Percent of civilian labor force)

Total  – 10.0%

Youth (under 25) – 23.9%

Men – 9.9%

Women – 10.0%

 

Labor force participation rate

(Percent of civilian working-age population)

Total – 55.9%

Men – 61.1%

Women – 51.2%

 

  • Opportunities for the development of expanded skills and responsibilities are available.  As indicated in the “Mind the Gap” research paper conducted by Boston College.  Younger employees are more likely to agree that their job provides them with learning and growth opportunities, with 38.9% and 22.7% of them ( agreeing/strongly agreeing) with this statement. Comparatively, older employees were most likely to strongly disagree, (21.9%), while midlife employees ranked the highest in disagreeing with the statement (14.1%). (Mind the Gap).
  • In 2014, the International Monetary Fund calls on France to lower its labour costs and halt tax hikes to boost both growth and its competitiveness, or else face a widening gap with its European neighbours.

Provence-Alpes-Côte d’Azur Statistics

The region’s employment has two main characteristics: A higher concentration of seniors than in the rest of France (respectively 27.1% and 24.1% in 2013); A high unemployment rate of 10.8% in 2013 (the national rate was 10.3%). With more than 80% of the regional employment in services in 2010, the regional economy is mostly oriented towards service activities, above the national average of 76.3%.

 

Trade Policies

  • Import duty and taxes are due when importing goods into France from outside of the EU whether by a private individual or a commercial entity. The import duty and taxes payable are calculated on the CIF value, i.e. the sum of the value of the imported goods and the cost of shipping and insurance.

 

International Trade Statistics

  • The Government maintains its efforts to focus the country’s trading patterns toward the countries of the Organization for Economic Cooperation and Development while encouraging the development of new markets, particularly in Asia and Latin America.
  • Strong commercial relations continued between France and the United States, and Germany.
  • In 2011, France was the fourteenth largest host country for U.S. foreign direct investment abroad with investments valued at $89 billion, making the United States the largest foreign investor in France.
  • France was the second largest foreign investor in the United States and the fifth largest investor on a historical cost basis. French-owned companies employ about half a million workers in the United States while another half a million employees work for U.S. companies established in France.
  • The international activity of French banking groups is a factor of diversification of risks.  Total foreign claims are significant for the French banking system, amounting to about €2.7 trillion as end-June 2011.(IMF)
  • Tourism makes an essential contribution to France’s foreign trade. Since 1999, it has accounted for the main balance of payments surplus. The tourist trade has shown a marked progression, achieving a balance of nearly €13 billion in 2012, as compared to €7.5 billion in 2011. Longer stays and more nights spent in commercial accommodation have led to increased spending by foreign tourists in France, amounting to a total of €35.8 billion.

 

Tourism

  • 83 million tourists, 7% of French GDP
  • France is the world’s top tourist destination with the dynamic tourism sector boasting an economic surplus and is rapidly transforming under the combined effect of a new, emerging clientele and a broader range of things to offer international tourists.

 

Country Infrastructure

Infrastructure represents those types of capital goods that serve the activities of many industries.  Included in a country infrastructure are paved roads, railroads, seaports, communication networks, financial networks, and energy supplies and distributions, which are all necessary to support production and marketing.  The quality of an infrastructure has a direct correlation with the ability an enterprise to engage effectively in business   

 

Transportation

Figure 2.1 – Railway Channels

Railways: total: 29,640 km (2011).  

Mostly operated by French National Railway Company is France‘s national state-owned railway company and manages the rail traffic in France and the Principality of Monaco.

The French railways are subsidised by the state, receiving €13.2 billion in 2013.

The railway system is a small portion of total travel, accounting for less than 10% of passenger travel.

 

Roadways: total: 1,028,446 km; paved: paved: 951,220 km (including 10,490 km of expressways); unpaved: 0 km (2011).   

Waterways: 8,500 km (1,686 km accessible to craft of 3,000 metric tons) (2011).

  • The French merchant shipping fleet is the world’s ninth largest in total tonnage (flags of convenience excepted), about the same size as Italy’s and half the size of Britain’s. In tonnage handled, including oil, grain, and other bulk cargoes.
  • Marseille is the world’s eighth-largest port and Le Havre the 13th largest.

 

Ports and harbors: Bordeaux, Calais, Dunkerque, La Pallice, Le Havre, Marseille, Nantes, Paris, Rouen, Strasbourg.

major seaport(s): Brest, Calais, Dunkerque, Le Havre, Marseille, Nantes,

river port(s): Paris, Rouen (Seine); Strasbourg (Rhine); Bordeaux (Garronne)

container port(s): Le Havre (2,215,262)(2011)

cruise/ferry port(s): Calais, Cherbourg, Le Havre

Airports: 464 (2013 est.).

 

Financial Strength

 

France’s financial system is large, sophisticated, and integrated both vertically and internationally.  With Frances integration into the European Union creates a multinational market region with a universal goal for “Economic benefits for the participants and the associated peace between and within countries.” Multinational market groups form large markets that provide potentially significant opportunities for international business.

Real bank institutions (name) and International banking facilities

Currently, France is dominated by five banking groups that are regionally and globally systemic and among the largest in the world.  “Four have been identified as global systemically important banks (G-SIBs).”(IMF)

  • France has one of the largest insurance markets in the world.
  • Second largest mutual fund industry in Europe in number of funds and the first in Europe in terms of the number of management companies
  • Well developed securities markets and infrastructures that are fully integrated into Europe.
  • The regulatory and supervisory regime for banks, insurance and securities markets, and market infrastructures is of a very high standard.

France has a high level of compliance with the Basel Core Principles for Effective Banking Supervision (BCPs). Autorité de Contrôle Prudentiel supervisory practices are of a very high standard, incorporating many high-quality processes. ACP operates an extensive, detailed, and in-depth program of onsite inspections and high-quality off site supervisory processes that monitors the individual major bank’s financial situation and risk management and control practices on a consolidated basis, building on constructive home-host relationships

 

Payments and funds transfer capability

All French payment and securities clearing and settlement systems settle in central bank money in accounts held with the Bank of France. Oversight of these systems, Article L 141-4 of the Monetary and Financial Code (Code Monétaire et Financier – CMF) gives the Bank of France broad competence to ensure the smooth operation and security of payment and securities clearing and settlement systems. It also confers statutory powers vis-à-vis the issuers of means of payment regarding security matters.

In addition, to carry out its task of overseeing means of payment, the Bank of France is authorised by law to gather any necessary information. Since 2007 the infrastructure of payments and securities has been transformed in France. This is due to European integration of means of payment and transfer systems, with the start of the implementation of the Single Euro Payments Area (SEPA) and the launch of new European exchange platforms that have replaced the former infrastructures used on the Paris financial market.

Communications

Telephones: main lines in use: 38.929 million (2015);   

general assessment: highly developed

domestic: extensive cable and microwave radio relay; extensive use of fiber-optic cable; domestic satellite system.

Mobile cellular: 62.28 million (2012).

Internet hosts: 17.266 million (2012). Internet users: 56.367 million (2015).

Internet usage 84.7% of population (CIA) Internet social media: Facebook, Twitter, Viadeo

Radio: France operates 7 national networks, a series of regional networks, and operates services for overseas territories and foreign audiences; Radio France Internationale (RFI), under the Ministry of Foreign Affairs, is a leading international broadcaster; a large number of commercial FM stations, with many of them consolidating into commercial networks (2008).

Television broadcast stations: 584 (plus 9,676 repeaters).

Broadcast media: A mix of both publicly operated and privately owned TV stations; state-owned France Televisions operates 4 networks, one of which is a network of regional stations, and has part-interest in several thematic cable/satellite channels and international channels; a large number of privately owned regional and local TV stations; multi-channel satellite and cable services provide a large number of channels; public broadcaster

 

National Channels: For advertising

Owners/Company Number of Channels  (45 Total)

  1. France Television (State Owned) 6
  2. Canal+ Group 7
  3. M6 Group 3
  4. TF1 Group 5

Regional Channels 18 Region’s Total

Satellite Television

  1. M6 HD
  2. TF1
  3. TMC (Turner Classic Movie)

Canalsat

  1. M6 Music
  2. Disney Channel
  3. Canal+ Sport

Channels of Distribution

Distribution channels include methods of selling as well as locations. Methods include direct sales, wholesalers and retailers. The four functions for distribution channel is to optimize sales volume, cost of sales, profits, and Brand.  France possesses a diverse and comprehensive retail network, which increasingly resembles that of the United States, from the largest department store chains to the smallest individual proprietorships.

 

  • One of the challenges for U.S. SMEs interested in breaking into the French market is dealing with highly concentrated retail distribution chains and networks.
  • French global manufacturers/suppliers that have strong control over the retail networks they are using.
  • In many sectors, independent wholesale/retail outlets are disappearing rapidly and being replaced by retail distribution chains and networks that have significant market shares in France.

Hypermarkets – Hypermarkets are defined as stores with a minimum selling area of 2,500 square meters. French hypermarkets offer 25,000-40,000 products for sale at competitive prices, of which 3,000-5,000 food items and 20,000-35,000 non-food articles. Generally located in suburbs, they cover a total sales area of 11.1 million square meters. As of 2015, there were 2091 hypermarkets, employing over 330,574 people.

The top five hypermarket companies are

Leclerc, Carrefour, Intermarché, Système U, Casino, and Auchan.  (export.gov)

Supermarkets (Supermarchés)

Convenience (Magasins de proximité)

Department Stores (Grands magasins)

Hard Discounters (Magasins discounts)

Large Specialized(Grandes spécialisées)

 

Multi-Channel Retail Groups (Groups de distribution multicanaux)

The distinctions made above between hypermarket chains, supermarket chains, etc., are becoming blurred. In recent years, major multi-channel retail groups owning chains of different types of stores have emerged.  Pinault-Printemps and Nouvelles Galeries Réunies fall into this category, because they own chains of specialty and convenience stores. (export.gov)

 

Central Buying Offices (Centrales d’achats)

In addition to contacting the largest store chains listed above, introducing products via central buying agencies is an excellent distribution method.

E-commerce

The global e-commerce industry is boosted by wider internet penetration, with about 2.5 billion people using the internet in 2012. Business to consumer e-commerce growth in the U.S. is forecast to slow over the years to come while growth in other regions will gain momentum, particularly in Central and Eastern Europe, where sales are estimated to reach approximately 69 billion U.S. dollars.  

E-commerce will be used to market B2B services in France and execute customer services.  Its marketing function involves direct marketing methods for the UV sensor to reach the users.  

Market Audit & Competitive Analysis

Product Introduction: Global market for wearable medical devices is booming. According to a range of studies it is expected to register a double-digit compound annual growth rate (CAGR) over the next 5 years, reaching USD 7.8 billion by 2021.  Wearable medical devices can be defined as devices which are attached to the human body, monitoring a range of vital signs and/or providing specific treatments.

 

Violet® Plus (Personal ultraviolet sunlight sensor)

The Violet® App (Software application)

Product analysis

  • Relative advantage is the degree to which an idea or product is perceived as better than existing standard.  What makes the product stand out?
    • GREAT FOR FAMILIES – because it can independently track multiple users.
    • SKIN DAMAGE ALERT – The Violet® App finds personal skin-type, tracks real-time UV exposure and alerts you when your skin exposure is no longer safe.
    • SUNSCREEN REMINDER – The sun is a major contributor to skin aging. The Violet® App notifies you when it’s time to apply and reapply sunscreen.
    • VITAMIN D MONITORING – Tracks in real-time your natural Vitamin D production and the minutes you need to reach the recommended daily dose.
    • SMART EXPERIENCE – Sensor automatically syncs with the Violet® App but also works without the app
    • CLEAR MESSAGE – Gentle vibration alerts notify and help users enjoy the burn-free sunshine
    • MULTI-USER MONITORING – Notification and tracking for each user
    • ELEGANT DESIGN – Aircraft grade aluminum, waterproof, lightweight, and fashionable; wear it as a wristband or clip anywhere

 

 

  • Compatibility The higher the similarity with existing norms, the better the chances of adoption.  Is this type of product a cultural norm in France?  
    • The reality today is that beauty, fashion and technology are merging into one social movement that targets personal health during sun exposure.  This product is similar to many other products available in the French health and beauty market.  Many companies invest large amounts of money for the development of new products in accordance with recent market trends and the latest research findings with UV sensors.
    • French beauty and health industry leader L’Oréal Group’s leading dermatological skincare brand, La Roche-Posay is quickly adopting UV sensor as a profitable product globally.  
    • The new UV sensor technology “Arrives at a time when sun exposure has become a major health issue, with 90% of nonmelanoma skin cancers being associated with exposure to ultraviolet (UV) radiation from sun* in addition to contributing to skin pigmentation and photoaging. (L’Oréal).

 

 

  • Complexity – Will frustrations or confusion arise in understanding the innovation’s basic idea?
    • The Violet Application is user friendly with three simple Features.
    • CREATE AN ACCOUNT with their smartphone
      Keeping record of their information across multiple platforms; Self-Managing  preferences including daily Vitamin D goals, UV intake updates, and sunscreen application reminders.  
    • PERSONALIZE YOUR EXPERIENCE (settings)
      The Violet® App will guide users through the necessary information to help calculate their sun exposure experience. Information gathered is privileged and confidential and will not be shared or released to any organization or business entity
    • TAKE CONTROL OF YOUR SKIN’S HEALTH
      The Violet® App will automatically locate your current weather and coaches the user on how to protect their skin from damage and premature aging.
    • While the software technology is thoroughly based in biomedical research, offered solutions can be effortlessly used by anyone.

 

 

  • Trialability – How easily can the trial portions of the product be purchased and used? The more we allow potential users or patrons to test the product, the more likely consumers will adopt it.  
    • The Violet® App (Software application) software is compatible with any android smartphone and Apple ISO’s.
    • The application is free to download online.  
    • Mobile cellular: 62.28 million (2012).
    • Access to the UV Sensor is easy to purchase in retail stores and on E-commerce websites.    
    • Final price influences users perception.

 

 

  • Observability – How easy is it for the user to see the benefits of using the product?  When new products are highly visible, it drives more consumers in the market to share it and increase the likelihood of mass adoption.   

 

    • Users can instantly access and obtain information from the UV sensor when reading measurements reminding users to apply sunscreen.
    • Does it work? Realworld demos.
    • This type product is currently blogged about on websites such as wordpress, wearable.com, linkedIn, and Invetech.com to name a few
    • The product is unique and new to the market therefore, companies have the potential to generate and start a following through online communities

Potential Problems & Resistance to Adoption

  • Competition – Large multinational companies are currently in the sun care market
  • Demand  Users want health and fitness monitoring, and they want wearable devices that act as extensions of their smartphones. However, there’s no real demand from consumers for environmental sensors. Adoption of environmental sensors such as humidity and UV devices is being pushed by sensor suppliers and other wearable OEM’s.”
  • Retail Logistics and Distribution Price of these marketing functions could eliminate profit margin.  Possibly paying for “slots” in retailers shelving could limit product exposure because of costs over time.  

The Market To Conquer

Geographic region Total population – 4,935,576

The Provence-Alpes-Côte d’Azur (PACA) region of France is a renowned international tourist destination which opens on to the Mediterranean and has much to recommend it: exceptional cultural and natural heritage, a broad range of landscapes, a pleasant climate, a wide variety of accommodation, modern infrastructure.

  • Foreign visitors account for one fifth of this tourism.  Drawing in 31 million visitors each year. The region has a huge amount to offer, including accommodation to suit all tastes and budgets; original and delicious traditional food; a rich and varied programme of cultural events; majestic mountain ranges; legendary seaside resorts and landscapes.
  • The region has a Mediterranean coastline, on which the majority of its population lives.

 

Consumer buying habits

The favourable weather conditions continued into the summer, and sun care products saw high demand, peaking during the July heatwave. Strong tourism figures, both internal (7% increase in tourists travelling inside France) and visitors to the country (potentially being the highest ever, at 85 million in 2015) boosted demand for sun care in 2015 (euromonitor).  Identify social habits like local traditions and communities of  the target market and know that consumers can be a member of various categories over their lifetime.  Ultra Inc, can see what content media market segment they want to pursue and provide samples, product brochures and marketing promotions to in order to promote and expand the  exposure of  their wearable technology to the a select population of prime users in the  sun care audience.

Advertising and Promotions

Online and web marketing

Google search engine optimization will be the focus of Advertising and promotions in the E-commerce operations.

  • PPC advantages is the ability for marketers to become the most relevant search term for a webpage online.  Ultra.Inc can do this by paying per click, this method becomes an effective short term boost in web traffic to the Violet plus sensor. A clear disadvantage for this method is that PPC marketing methods will be constrained by budget factors for the business.  Therefore when the budget runs out so does Ultra Inc. online marketing in PPC.
  • An advantage for SEO with the business is it can be more efficient in the cost per click overtime after the webpage is established with an authoritative page ranking.  Some disadvantages are the high upfront costs in building website content and for the long term benefits and it gaining the attention of consumers.

 

Picking the Right Keywords

Funneling your keywords from broad and general into specific and detailed is the focus when generating your keyword database for the Ultra Inc. webpage and its UV sensor.  Mr. Beck mentioned how there are over 200 ranking factors for a keyword term with google.  In one example mentioned how a plural to singular word term impacted a search result by 600 clicks.  He recommended that when choosing a keyword SEO developers should research their industry competition and target keywords with high search volume and low competition

 

Social media and Facebook

The company Ultra.In is currently active and has 611 followers to the page.  This is a great channel for the company to reach consumers and interact with them and it’s effective for pulling in new followers through the word of mouth marketing.  

Continuity scheduling spreads media spending evenly across months. With an annual budget of $44,000 a year, continuity scheduling would allocate exactly $4,000 per month. This method ensures steady brand exposure over each purchase cycle for individual consumers. It also takes advantage of volume discounts in media buying.  

This model is primarily for non-seasonal products and some seasonal products. Advertising will run steadily with little variation over a campaign period. There may be short gaps at regular intervals and also long gaps—for instance, one ad every week for 50 weeks, and then a pause. This pattern of advertising is prevalent in service and packaged goods that require continuous reinforcement on the audience for top of mind recollection at point of purchase.

Advantages:

  •         Works as a reminder.
  •         Covers the entire purchase cycle.
  •         Cost efficiencies in the form of large media discounts.
  •        Positioning advantages within media.
  •         Program or plan that identifies the media channels used in an advertising campaign, and specifies insertion or broadcast dates, positions, and duration of the messages.

 

Preliminary Marketing Strategy

Target markets

  • Solar protection for consumers is one of the key drivers behind the fast-growing Sun Care market. In 2013, the global sun care market generated 5.6 billion U.S. dollars from its sun protection products segment. (statista).  
  • CCS Insight has updated its outlook on the future of wearable tech, indicating that 411 million smart wearable devices, worth a staggering $34 billion, will be sold in 2020.  The analyst claims the industry will hit $14 billion this year, with wrist-based devices – such as smartwatches and fitness trackers – continuing to dominate.
  • Driven by rising demand for fitness and health monitoring features as well as by improved user interfaces, shipments of sensors used in wearable electronic devices will rise by a factor of seven from 2013 to 2019, according to IHS Technology (NYSE: IHS).

Target audience

  • The primary target market to males and females between the ages of 24-52. These consumers have college education, a annual income of $40,000 per year, and account for around 38% of the population (24-28 million).
  • The region has a total GDP (2012) of €142.4 billion (US$183.1 bn), the third highest in France. It has a Per Capita GDP of €28,861 (US$37,121), slightly higher than the French average. According to a recent survey, a person living in Provence-Alpes-Côte d’Azur has an average annual income of about €37,489 (US$45,755).

 

Analysis of key supply-side and demand trends

  • The worldwide market for sensors in wearables will expand to 466 million units in 2019, up from 67 million in 2013.
  • Shipments of sensors will climb much more quickly than the market for the wearable devices themselves. Wearable devices will increase to 135 million units in 2019, less than three times the total of 50 million in 2013.

 

Detailed segmentation of international and local products

UveBand. – product collects specific UVA and UVB rays (which are the rays that damage your skin the most). UveBand gently vibrates on your hand to remind the wearer that it is time to put a sunscreen on. It recharges itself as it actively monitors the sun’s UV rays. You can turn it off by simply removing it from your wrist.

Raymio is a wristband that lets you know when your UV exposure level is too high and advises you to seek out shade or apply sunscreen.

UVBee is a French company called Zoxxon. A UV sensor which can be clipped to your clothes or can be worn as a wristband as well.

SunFriend is very simple to use gadget that also measures UV rays but has had poor reliability

CliMate – is measuring HUT (Humidity, UV and Temperature ) around you. It can be a wearable, attached to your shirt or backpack, or you can attach it on a metal stand and use it at home.

 

Biggest Competitive Challenger

L’Oréal unveiled My UV Patch allows consumers to measure individual UV exposure.

Beauty Giant’s dermatological Skincare Brand, La Roche-Posay,

  • First-ever stretchable skin sensor designed to monitor UV exposure

 

Historic volumes and values, company and brand market shares

Company sales objective is to gain 9% of the market (population) share in the region of Provence-Alpes-Côte d’Azur by the year 2020.

 

Projected Five Year forecasts of market trends and market growth  

Sales Forecast 2016 2017 2018 2019 2020
Units sold 30,948 72,818 88,662 94,223 108,195
Market Share %1 / +.01 %3 / +.02 %5 /+.02 %7 / +0.2 %9 / +0.2
Sales (U.S $$) $2,475,530 $5,824711 $7,092,073 $7,536,897 8,654,518

 

Profit Forecast 2016 2017 2018 2019 2020
Sales $2,475,530 $5,824,711 $7,092,073 $7,536,897 $8,654,518
Fixed costs $511,000 $562,000 $613,000 $664,000 $715.000
Variable Costs $1,171,422 $1,456,000 $1,733,000 $1,884,224 $2,163,629
EBITDA $1,304,108 $3,806,711 $4,764,073 $4,988,673 $5,775,888


SWOT analysis

Strength

  • When designing lightweight wearable devices in the past, there was always a trade-off between portability and data accuracy. When you make things small and non-intrusive you can often trade out quality of data. This is starting to change. (Kolser)
  • Smaller players which have developed a low price strategy, such as Cosnova and Kiko, or were positioned as natural, such as Aesop France and Natura Europa, achieved more success in 2015. (euromonitor).  

Weaknesses

  • It requires both the app and and the UV sensor to interact and acquire information regarding the user’s sun exposure
  • Up to 6 months battery life with one replaceable battery
  • Tough to clearly define the purchasing consumer market for UV sensor wearable technology

Opportunities

  • The competition at retail level, coupled with the emergence of new brands, is also expected to put pressure on prices and to reduce the potential for value sales growth. The best performing categories are expected to be skin care, oral care and sun care. There is also some room for growth for niche brands.

Threats

  • L’Oréal, Gemey Maybelline Garnier and Laboratoires LaScad, which are all subsidiaries of L’Oréal Groupe, led beauty and personal care in France in 2015.
  • Another band that measures UV level is UveBand. It doesn’t just detect sunlight- it also collects specific UVA and UVB rays (which are the rays that damage your skin the most). UveBand gently vibrates on your hand to remind the wearer that it is time to put a sunscreen on. It recharges itself as it actively monitors the sun’s UV rays.
  • Spinali Design, based in France, is now selling a bikini that helps to prevent sunburn.

The connected bikini is equipped with a waterproof, removable UV sensor that monitors the time a user spends in the sun.

Product adaption/modification

Core component  TECHNOLOGY LICENSING Ultra Inc. software technology  designed to be integrated into any connected hardware such as a wearable, phone, clothing, or many other IoT devices. Our technology makes any UV sensor become a smart sensor, giving advice to users on how to balance their time in the sun. If you are interested in licensing our software.  

Secondary Component – UV Sensor Violet Plus

Packaging type – Environmentally friendly packaging and a promotional package design

Material – Cardboard and paper.

Size – 5x4x4in

Service Support – Online based through e-mail.

Promotion mix

Product Strategy – Violet app is not just another app to generate data. It is designed as a tool to encourage behavioral change toward a better health by reducing the risks while harnessing the benefit of sun. The goal is to motivate the user to get outdoors and safely enjoy the sun without fear it, and to Live Ultra Healthy!

Pricing strategy – Penetration price –  Staying at a lower competitive price with other wearable UV technology devices in the market. Therefore, the retail pricing for the Violet Plus UV sensor is $79.99 US.  With a volume marketing objective Ultra Inc. gains market share to keep out competitors and build high obstacles for market entry.  .

Alternate strategy – promotional pricing strategy to boost volume not profit.   

Promotion strategy – Ultra Inc. will use a mix of push and pull promotions to generate product and brand awareness in the Provence-Alpes-Côte d’Azur Région.  

Push Methods

Trade shows

Personal Selling (local nationals)

Promotional packaging design (seasonal)

Point of sale (short term)

Pull methods

Advertising

Branding

Content Marketing (word of mouth)

Sales promotion/ Discounts

 

Distribution

Modes of distribution

  1. Shipping Internationally from United States to France.
  2. Shipping entrance to Port of Marseille.
  3. Provence-Alpes-Côte d’Azur regional transportation after port of entry will be by high-speed railways. The region is served by 13 high speed trains stations and can enter into all four major warehousing locations
  4. Ultra.Inc will be targeting Hypermarkets in the coastal cities after product is secured into warehousing.   
  5. Transportation by trucking freight to retail vendors in the region.  

 

Transportation and logistics

Logistically targeting the largest cities in the region which are Marseille (administrative capital city of the region), Nice, Toulon, and Aix-en-Provence, each with a population exceeding 100,000 inhabitants at the 1999 census. Along with Marseille, Nice is the second most important city in the region with a city proper population of about 350,000 and an urban population exceeding 1 million.

 

Documentation required

  • Contacting the Regional Council of Provence-Alpes Côte d’Azur is the transport authority and defines the services in all region for product transportation.
  • Writing up distribution contracts with hypermarket vendors and central buying offices.  

 

Types and number of retailers, import/export agents, warehousing.

  • 1 warehousing/office locations- Marseille (administrative office of the region), Nice, Toulon, and Aix-en-Provence including a commercial administrative offices building at each location.  Building size 50x100ft.
  • Each location has 6 staff members

They will be coordinating retail efforts with several:

  • Hypermarket distributorsLeclerc, Carrefour, Intermarché, Système U, Casino, and Auchan. 40 retail locations in the region
  • Central buying offices (Centrales d’achats)
  • E-commerce  – Amazon, Google, and Ultra Inc.com

 

Price determination

Fixed Costs

  • Amortization. This is the gradual charging to expense of the cost of an intangible asset (such as a purchased patent) over the useful life of the asset. N/A
  • Depreciation. $35,000
  • Insurance. $1,000,000.00  all liability. Cost per month $500 annually $6000
  • Interest expense. 5 year $300,000.00 loan.  Annual interest rate 15%
  • US Corporate Tax.  35% of annual sales. COG Year 1 $ 194,972.00
  • Warehouse contract – $24,000 per year
  • Salaries. $200,000 annual budget
  • Utilities. $500 per month

 

Variable Costs

  • Direct materials.
    • Plastic housing, PCB, light sensor, attachment band, fasteners… $8.00 per unit year 1 $248,000
  • Assembly labor annually $120,000
  • Warehouse logistics – $1.00 per unit. Year 1 $31,000
  • Point of sale retail expense: 10 hypermarket locations $120,000
  • Travel expense. $12,000.00
  • Marketing and entertainment.  $135,000.00
  • Sales commissions 17% * $2,475,540.00 Year 1 $420,840.00
  • Credit card fees. 3% * $2,475,540.00 Year 1 $75,256.00
  • Sea Freight shipping: New York to Marseilles bi-annually: $4,800 annually $9,600
    • Sea Freight, port handling, documentation, duties, delivery, and taxes

Terms of sales and methods of payment

  • Point of sale Online, retail outlet
  • 30 day warranty
  • Cash, credit cards, check.

 

Appendices

Cited Sources/ References

 

http://www.infoplease.com/country/france.html?pageno=16

 

https://www.understandfrance.org/Business/Intercultural3.html#ancre1778403

 

http://www.liveultrahealthy.com/company/index.html

 

https://www.linkedin.com/pulse/uv-sensor-market-analysis-used-detecting-intensity-avinash-gogawale

 

http://www.instapressrelease.com/united-states-uv-sensors-industry-study-growth-factors-types-applications-market-forecasts/

 

http://2016.export.gov/France/index.asp

 

Shanyuan Foo and Ariane Ollier-Malaterre (2010) “Mind the Gap France Employee” Boston College.  agework @bc.edu

http://www.bc.edu/content/dam/files/research_sites/agingandwork/pdf/publications/MTG_France_Employee.pdf

 

Harold R. Newman “The Mineral Industry of France – 2000”

http://minerals.usgs.gov/minerals/pubs/country/2000/9414000.pdf

 

BBC News Online “France profile – Timeline

http://www.bbc.com/news/world-europe-17299605

 

International Monetary Funds “France: Financial System Stability”  Washington D.C., December 7, 2012.  Prepared by the Monetary and Capital MArkets and European Departments.

https://www.imf.org/external/pubs/ft/scr/2012/cr12341.pdf

 

“Payment, clearing and settlement systems in France”

https://www.bis.org/cpmi/publ/d105_fr.pdf

 

The World Fact Book: Europe, France, CIA online

https://www.cia.gov/library/publications/the-world-factbook/geos/fr.html

 

http://www.loreal.com/media/press-releases/2016/jan/loreal-debuts-first-ever-stretchable-electronic-uv-monitor

 

https://www.siliconrepublic.com/innovation/loreal-pch-stretchable-sensor-beauty-tech-interview

 

Magnus Ahlstrom, “Observation from Medica 2015: Trends in Wearable Medical devices” 19 December 2015.  Publisher: Invetech.

http://www.invetech.us/newsroom/viewpoints/medical-device-trends-medica-2015/

 

Spela Kosir, “ Wearables for healthy skin!” publisher: wearable technologies

https://www.wearable-technologies.com/2015/08/wearables-for-healthy-skin/

 

http://www.wearable-technologies.com/2015/02/wearable-tech-detecting-invisible-threats/

 

http://www.wearabletechnologyinsights.com/articles/7964/connected-bikini-with-uv-sensor

 

Beauty and personal care in France

http://www.euromonitor.com/beauty-and-personal-care-in-france/report

 

http://www.euromonitor.com/sun-care-in-france/report

 

© Statista 2016

 

https://www.statista.com/topics/1990/sun-care-industry/

 

Sam Ashe-edmunds “The Major Function of a distribution channel”  Chron.com

http://smallbusiness.chron.com/major-functions-distribution-channel-59769.html

 

http://www.diplomatie.gouv.fr/en/french-foreign-policy/tourism/tourism-a-major-french-asset/article/tourism-drives-the-economy-of-the

 

https://en.wikipedia.org/wiki/Provence-Alpes-C%C3%B4te_d’Azur#Demographics

 

http://news.ihsmarkit.com/press-release/technology/wearable-sensor-market-expand-sevenfold-five-years

 

Beck, B. (2016). Introduction to SEO. Stukent.com. Retrieved from: https://www.stukent.com/expert-sessions/introduction-to-seo/