GIRALDO MESA, VALERIA CASE STUDY 2

REYES, RANDOLPH BSBMKG523

MICROSOFT ROBOT LAUNCH IN SOUTH KOREA AND JAPAN

MARKETING COMMUNICATION BRIEF

a) Information on Microsoft, the annual sales

The sale of robots had increased by 15 percent in 2017 compared to the previous year,
that is a tangible issue, we are talking about 2.5 million industrial robots per year until
2019, growing at 12 percent per year. Then, the better human capital companies have, the
lower the unemployment rate, but this will depend on the degree of specialization of their
workers. That’s why Microsoft is designing Robots to focus on duties as cleaning and
security and Humans can invest better time on studying and developing new and
sophisticated skills.
What is happening in South Korea is that the unemployment rate is low because the
economy is more automated and the human capital is more advanced for new jobs, in the
context of robotization. Founded in 1975 by Bill gates, Microsoft, the American MNC is the
technology giant which is making the life of the people around the globe convenient,
comfortable and advanced through its various offerings in personal computers, consumer
electronics & computer software and Artificial Intelligence tools.
It manufactures, develops licenses and provides supporting services for the products &
services in its portfolio.
The tech giant uses mix of demographic & behavioural segmentation strategies to
segment the market in groups with similar characteristics. Demographic segmentation is
used for products like Operating systems and Office products which are applicable to
everyone. Behavioral segmentation is used for products like Microsoft Windows server
operating system or for the Windows mobile phones. It has presence in large number of
hardware & software businesses ranging from operating system to mobile manufacturing
& selling.

Due to having a wide product & service portfolio Microsoft uses mix of differentiated &
undifferentiated targeting strategy. In office and Windows or overall in operating systems,
the population is homogenous and the target is the complete world which has access to
computers. However, in mobiles and developer tools, Microsoft needs to have a
differentiated target as these products have a lot of competition and the market is divided
based on the features offered.
From rebranding its products & services to logos; company underwent a turnaround
recently to reposition itself as a value based company mean to enrich the life of the
individuals worldwide. If we talk about the positioning of Microsoft, then its operating
systems and several software are simply top of the mind positioned in the market.
Because of the brand value of Microsoft, any product it launches gets a good positioning.
But in some cases, it might not be the top of the mind positioning. Example – Microsoft
mobiles phones vs Samsung or Apple in the smart phone market.

b) Details of the unique selling idea of this robot

The household robot will learn its surroundings and the individual inhabitants of the
home, adapting its behaviour over time. “Right now it’s like a child, but we will continue to
grow its capability so that it grows from a child to an adult,
One key feature of its machine learning is the ability to recognize thousands of different
objects and return them to the appropriate place, so a child’s teddy bear won’t end up in
the parents’ bedroom. The robotic arm allows it to pick up and manipulate objects with
precision. It also connects to household IoT networks such as Google Home or Amazon
Alexa, and it’s continuously updated.
The robot could even help find lost objects by remembering where it saw them last.
The robot may also be an invaluable companion for the elderly or handicapped. Using
“posture recognition,” it could identify when a person has fallen or is facing a medical
emergency such as a seizure and call for assistance.
INSIGHT: The robot will cost less than a family vacation overseas.

c) Details on the target market which is wealthy consumers in South Korea and Japan

SOUTH KOREA
South Korea remains a global case study for economic development. Known as the
“Miracle on the Han,” South Korea’s record-breaking industrialization turned it from one
of the world’s poorest states to a global economic power with per capita GDP of $30,000
(in purchasing power parity terms). It is the first nation to go from a recipient of
Organisation of Economic Co-operation and Development aid to becoming an OECD
donor. It has weathered the financial crisis better than most developed economies and
remains a global leader in ship building, LCD screens, mobile handsets, and memory chips;
it is the fifth-largest automaker.
JAPAN
About 953,000 households, or 1.8% of Japan’s total, can be classified as affluent—with
savings, property and other assets valued at ¥100–500 million. In addition, some 54,000
households worth more than ¥500 million account for the rarefied 0.1% super-affluent
sector of society. Their lifestyles and spending patterns, in sharp contrast with those of the
hoi polloi, are eagerly studied by marketers seeking to meet their demands.

Consumer Profile

 Growing Sectors
Education and training services, healthy products (food, nutritional complements),
household consumer goods, housing decoration, computer software, medical equipment,
new energy power generation, pharmaceuticals, fashion & luxurious goods, “silver
services”, and travel & tourism.

 Consumer Behaviour
South Korean consumption behaviour has been increasingly following the developed
economies' consumption patterns. South Korean consumers tend to be concerned with
the brand naMe and health attributes of a product, but also seek impeccable after sales
service. Tech-savvy Korean consumers typically research products online, especially
through social media, before shopping and enjoy being well informed when purchasing a
product. Consumers are becoming less concerned with buying products made in South
Korea and are increasingly inclined to purchase non-domestic products, often at much
lower prices. In recent years, slow growth and high levels of personal debt have made
some South Korean consumers watchful with their spending; however, high-end luxury
shoppers are still spending at elevated rates. South Koreans are now in the brink of
materialism and aspire for lifestyles that are being portrayed by the media. They are
increasingly viewing money as the representation and sign of success and put greater
emphasis on publicly-visible items because of their attached symbolic meanings and
values. Young South Korean consumers purchase apparel and other fashion items in which
they can use to express their individuality amidst a rather uniform society. They believe
that they can express it using foreign brands with scarcity value. Increasingly, South
Koreans of all ages and genders view their appearance as something that can be improved
through ever developing. Not being fashionable or not knowing the latest fashion trend is
considered negligent, ignorant and tasteless.

 Consumer Profile and Purchasing Power

Median age of South Korea's population is 41.8. Increasingly, middle- and working-class
consumers have begun to shop in outlet or discount stores to obtain a better value for the
money they are spending. South Korean consumers have shown a willingness to make on-
line purchases direct from a company's non-South Korean website in order to save money.
Many would prefer to wait two weeks for a product to arrive if it means significant cost
savings. Many South Korean households have a large share of disposable income, and
consumers are willing to pay for big-name brands and quality products. Wealthy women
have been the traditional core market for luxury brands, however men are another
emerging market segment thanks to pervasive media advertising messages. Latest fashion
trends are very important and taste-makers (pop-stars, celebrities, actors, etc.) have a
large influence over consumer preferences. The share of single-person households has
increased 500% over the past 30 years and represents the most common type of
household (27,2% in 2015). For more detailed updated information on the South Korean
consumer profile, you can access to this report by L.E.K. Consulting.

d) The benefits of the robot to consumers

First, greater security in complex tasks. Because robots perform tasks that are dangerous
for humans, a spatial separation is made with the areas where workers produce,
therefore, workers to stop performing hazardous tasks have increased the overall rates of
job security. According to the report of the Institute of Global Employment, security is not
only achieved because the man stopped performing dangerous tasks, also because
humans can enter the area of robots when they are unplugged.

Secondly, although there is no active interaction between the two, the relationship
between people and robots is one of cooperation. For this reason, robotization in Korea is
not seen as an invasion, but as a process of assistance to workers and support for ordinary
people. For example, in the health area, where you can find nursing assistants to get
people out of wheelchairs or help blind people find their way.

Finally, robotization has led to alleviating the strenuous tasks of workers, so they have
more time for interaction with other people, in addition to having more free time.
Likewise, absences related to diseases caused by physical tasks have diminished, so that
work has become more and more specific and efficient.
f) Details any legal or ethical constraints
Ethics and law are inextricably linked in modern society, and many legal decisions arise
from the interpretation of various ethical issues. Artificial intelligence adds a new
dimension to these questions. Systems that use artificial intelligence technologies are
becoming increasingly autonomous in terms of the complexity of the tasks they can
perform, their potential impact on the world and the diminishing ability of humans to
understand, predict and control their functioning. Most people underestimate the real
level of automation of these systems, which have the ability to learn from their own
experience and perform actions beyond the scope of those intended by their creators.
This causes a number of ethical and legal difficulties that we will touch upon in this article.
The Main Problems Facing the Law
The legal problems run even deeper, especially in the case of robots. A system that learns
from information it receives from the outside world can act in ways that its creators could
not have predicted, and predictability is crucial to modern legal approaches. What is
more, such systems can operate independently from their creators or operators thus
complicating the task of determining responsibility. These characteristics pose problems
related to predictability and the ability to act independently while at the same time not
being held responsible.
Robotic technologies blur the boundary between human subjects and technological
objects. In doing so, they do not only have societal implications which can be ethically
evaluated, but they also affect the central categories of ethics: our concepts of agency and
responsibility, and our value frameworks. Given the increasing autonomy of robots, the
question arises who exactly should bear ethical and/or legal responsibility for robot
behaviour.
• Job Displacement
• Privacy
• Mistakes of AI
• Robot Rights
Should robots have rights? If we think of a robot as an advanced washing machine, then
no. However, if robots were able to have emotions or feelings, then the answer is not that
clear. One of the pioneers of AI, Marvin Minsky, believed that there is no fundamental
difference between humans and machines, and that general AI won't possible unless
robots have self-conscious emotions. A suggestion in the debate around robot rights is
that robots should be granted the right to exist and perform their mission, but this should
be linked to the duty of serving humans. There is a lot of controversy around this area.
 1. CONSUMER BEHAVIOUR
South Korea and Japan are countries closely located to each other. Both countries are
considered emerging world leaders in the world. They are considered super power when it
comes to having advance technology, economy, import and export, and manufacturing
industry. Consumption behaviour among these countries have been increasing, according
to a study done by Societegenerale, consumers from South Korea and Japan tend to be
concerned with the brand name and health attributes of a product, but also seek
impeccable after sales service. With the improvement of the interest or world wide web in
the 20th century, consumers from both countries rely more on researching on the web
before making a purchase or deciding on what to purchase. Social media also made an
impact into decision making as most brands trust the effectivity, reliability and
affordability of promoting a product on this platform. Consumers are known to be
becoming less concerned with buying products that are made from their own country. In
recent years, slow growth and high levels of personal debt have made some consumers
from both countries to be watchful with their spending; however, high-end luxury
shoppers are still spending at elevated rates. In South Korean, they are now in the brink of
materialism and aspire for lifestyles that are being portrayed by the media. They are
increasingly viewing money as the representation and sign of success and put greater
emphasis on publicly-visible items because of their attached symbolic meanings and
values. Young South Korean consumers purchase apparel and other fashion items in which
they can use to express their individuality amidst a rather uniform society. They believe
that they can express it using foreign brands with scarcity value. Increasingly, South
Koreans of all ages and genders view their appearance as something that can be improved
through ever developing. Not being fashionable or not knowing the latest fashion trend is
considered negligent, ignorant and tasteless. According to the website McKinsey,
Japanese consumers have behaved differently unlike their counterparts from Asia, Europe
and United States. They are known to have celebrated for their willingness to pay for
quality and convenience and usually uninterested in cheaper products. Japanese
consumers are now flocking to discount and online retail shops. The fundamental shift in
attitudes and behaviour of consumers from South Korea and Japan are likely to persist,
irrespective of any economic recovery. They tend to change stems not just from the
recent downturn but also from deep-seated factors ranging from digital revolution to the
less materialistic younger generation.
2. MEDIA USED BY TARGET AUDIENCE
In recent study by CMF Trends, South Korea focuses on television and online platform for
promoting and getting information for certain products. South Korea boasts the world’s
highest level of internet penetration at 90% and fastest internet speed in Asia. Currently,
South Koreans production companies create approximately 75 drams per year and
domestic channels air about seven hours of drama shows per day. Approximately 14.5
million cable TV subscribers and almost two dozen cable operators in South Korea.
Augmented Reality and Virtual Reality is expected to increase from a current US$7 billion
to a whopping US$40 billion by 2020. In addition to traditional promotion and advertising
channels, digital marketing and social media offer many opportunities.
Reports from Japan Trade Promotion Advertising, Japan’s media are arranged primarily for
placements by working with advertising agencies and do not deal directly with advertisers
directly. Due to advertising being expensive in both Japan and South Korea, as a result
local firms and distribution partners often look for some type of cooperation from their
overseas suppliers or look for alternative advertising channel.
With current generation spend most of their time using their mobile phone, a huge
percentage of the media focus for Microsoft Robot will be on Social Media like Facebook,
Instagram, WeChat, SnapChat and WhatsApp. With great concentration on these media,
more that 60% of the targeted audience of Microsoft Robot. The promotion that is
channelled in Social media is believed to reach the target audience aging from 25 – 40
years old. While 32% of the target audience will be reached through television and radio
commercial or guesting. Another 8% will be promoted using print media, in a form of flyer
distribution, posters in shopping centre and market, and sponsorship on related events.
POSSIBBLE MEDIA FOR MICROSOFT ROBOT CAMPAIGN IN SOUTH
The benefits of using the following media: Social Media, TV & Radio in South Korea is it is
easily accessible for people in Korea. According to a study, 72% of 6,000 individuals that
were part of the survey, most of the working professionals in South Korea access new
information online, while 47% of their purchases is done online. They prefer the
accessibility and convenience of doing research and purchases online. TV and radio also
holds huge part of the pie due to the traditional approach of the infomercial and
entertaining factor it gives to its audience. However, the downside of the Social Media or
online information is it accuracy of product details, the delivery time it arrives to buyers
and the rise of bogus sellers or counterfeit items.
POSSIBLE MEDIA FOR MICROSOFT ROBOT CAMPAIGN IN JAPAN

Japan prefers to use the traditional media, such as TV, radio, and print. According to 459
respondents from a survey done in Tokyo, Japan, majority of the people whom responded
on a survey answered that they get new information about a product from traditional
media. While the rise of social media or also known as online media gives a huge impact in
giving awareness or information to its target audience, however, it does not always
converts in sales. The downside of the traditional media is that it is expensive and the
return of investment takes time.
RECOMMENDATION FOR MEDIA USE IN SOUTH KOREA AND JAPAN
As part of the Microsoft Robot Campaign, a proper media channel should be finalised and
approved for product awareness, promotion and sales. Due to Microsoft Robot being a
new product from an established company, given its budget, Microsoft Robot will be
promoted using Online Media, with 55% of the total budget because it is known to be
effective in reaching a lot of its target audience and giving accurate information. Followed
by the tradition media, television guesting and sponsorship will be given 20% of the
budget, next is the radio mentions and sponsorship with 14% of the budget. And lastly,
11% of the budget will be disbursed for print media and event sponsorship that is related
to technology, home and leisure improvements, travel events.
ARGUMENT FOR MEDIA USE
Advertising can be quite expensive in both South Korea and Japan. As a result, local firms
and distribution partners often look for some type of cooperation from their overseas
suppliers. Willingness to support this effort sends a strong signal of commitment and
willing to work as a team to both markets. A well-researched advertising media for the
Microsoft Robot must be done in order to reduce or minimise mistake in investing on
channels to be used.