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To: Senior Management of Mail Point GmbH From: Raye Kimberlin Date: July 24, 2011 Re: Babyphone App launch in China As you know, the BabyPhone App has been endorsed by many around the world as a great alternative to baby monitors, leading to millions of downloads. With this success in the U.S. and Europe, this app is now scheduled to be introduced in China later this year. China has an estimated population of 1,341,000,000 (NBSC, 2011) (see Appendix Table 1). According to Reuters, cell phone use has skyrocketed with a 67% penetration of the market in China with over 906 million subscribers (Lo, 2011). Entering this new international market at this time is ideal with the rate of smartphone purchases climbing, likewise application downloads in China are expected to increase as well (The Economic Times, 2011). Nielsen also confirms that China is downloading more apps than the U.S. on a monthly basis (Nielsen, 2010). This memo is an overview of our recommendations for this launch of our BabyPhone App including a review of the target market, the product positioning, and the marketing strategy. The Target Market In selecting the target market, the demographics, geographic analysis and psychographic characteristics were researched. In addition, the U.S. consumer market was examined and compared to the Chinese consumer market. Upon reviewing census information and mobile usage data, it was determined that our target market will be men and women 18 to 44 of child bearing age in China (see Appendix Table 2). Both men and women are now active consumers and are exercising their buying power. Women have stepped out of the traditional roles and are becoming decision makers for consumer goods and services. In reference to geographic strategy, we will target the largest metropolitan areas in China including Shanghai, Beijing, Hangzhou, Chengdu, Dalian, Qingdao, Wenzhou, Chongqing, Zhengzhou, and Shenzhen. It is also noted that these 10 areas have the highest levels of spending on luxury products which include technology such as iPhones and smartphones (Red Luxury, 2011). The typical smartphone users in China are affluent professionals, middle class families, and young adults. They view technology as a necessity and embrace new trends. These are the users that are most likely to purchase our product. When comparing customer segments, similarities in the U.S. and in China are that iPhones and smartphones are used by more men than women (see Appendix Table 3). However in the U.S., women are the primary decision maker for cell phone service and products in the household (Holson, 2008). In China, men are the head of household Kimberlin, R., Assignment 4:1, July 24, 2011


and primary decision maker; although, young adult women are earning significant incomes, attending college and are pursuing management careers (Red Luxury, 2011). Although the child birth rates in China as well as in the U.S. are declining according to the recent census reports, the population in China is increasing by a rate of 0.5 percent every 10 years (NBSC, 2011). Because of this slow growth, we have determined that we must position the product in a broad strategy that is also cost effective. Product Positioning With app downloads being dominated by more men than women, the product positioning must be based on this and we find it necessary to target both male and female parents (Martin, 2011). BabyPhone App will be positioned as a high tech and convenient alternative to the baby monitor for as low as 19.5 ĺ…ƒ($2.99) for the download and will save consumers 258.5 -1131.5 ĺ…ƒ($40-$175), the average cost for baby monitors. Most Chinese workers must commute for many hours each day and use technology during those extended travel periods. Technology is important in China and cell phone apps are very popular. Applications that offer an inexpensive and useful service are ones that would be highly favored by this target market. Marketing Strategies Social media has been embraced in China and has been determined to be a cost effective strategy to reach these consumers. There are 3 marketing strategies that are outlined for the introduction of the BabyPhone App to Chinese consumers. The first strategy is to create promotional pages on social networking sites such as Renren, Kaixin001.com, Pengyou, and the microblogging service of Sina Weibo. These are some of the most popular social domains in China with millions of active members. In selecting the sites it is important to understand that these social media applications have distinct user profiles in China (Lukoff, 2011). RenRen is the mainstream social network that is used in 1st and 2nd tier cities, mainly by students and white-collar workers. Kaixin001.com is the prestigious site for white-collars in the 1 st tier cities. Pengyou is a student and white-collar social site for the 2 nd and lower tier cities (see Appendix Table 4). The user profiles for China’s social media applications differ from the U.S. as they are used by different segments based on location and class. To further support this strategy, these promotional pages will be cross promoted on popular female sites such as Yoka, Elle, Rayli, and Pclady (Alexa, 2011) and news sites including Baidu and Xinhua (Danwei, 2005) with banner ads. The second strategy utilizes video advertising on digital displays in buses, taxis, elevators, airports, and the metro (China Confidential, 2009). Within these messages, the viewers will be encouraged to the download the app from ChinaMobile. Logos of the social media sites will also be incorporated in the video to cross promote the BabyPhone App social media pages.

Kimberlin, R., Assignment 4:1, July 24, 2011


The use of QR codes is the third strategy allowing parents the opportunity to download the app, read reviews, and visit various social media sites (Ng, 2010). The QR codes will be strategically placed in parent and children magazines such as Parents Journal, Playtime, Typhoon Club as well as popular magazines Modern Weekly, Ma(n)gazine, and City Pictorial. Additional advertising of the QR codes will also be featured at children’s play areas, changing rooms and napping stations in the major malls including Hong Kong iSquare, Shanghai Grandview Mall, Times Square, Beijing Jin Yuan Mall (Great Golden Mall). Our recommendation is to use these marketing concepts for the most effective strategy when entering this market. With these strategies, the BabyPhone App will have a tremendous buzz in China for the product launch, quickly going viral by utilizing a variety of social media tools.

Kimberlin, R., Assignment 4:1, July 24, 2011


References Alexa. (2011, February 1). +25% increase on China’s top female websites. Retrieved on July 22, 2011 from http://www.linkedin.com/news?viewArticle=&articleID= 634182439&gid=2295002&type=news&item=634182439&articleURL=http%3A %2F%2Fwww%2Eresonancechina%2Ecom%2F2011%2F07%2F14%2Fchinamicroblogs-25-million-tweetsday-from-100mm-users%2F&urlhash=EkYi China Confidential. (2009, August 6). Out-of-home ads – a moving picture. Retrieved on July20, 2011 from http://www.ftchinaconfidential.com/Industries/Media/Digital Advertising/Features/ConsumerChina/article/20090806/f5887086-7c65-11de8bc1-0015171400aa/Outofhome-ads--A-moving-picture ComScore Data Mine. (2010, November 1). Age demographic breakdown of U.S. mobile subscribers vs. smartphone subscribers. Retrieved on July 18, 2011 from http://www.comscoredatamine.com/2010/11/age-demographic-breakdown-of-u-smobile-subscribers-vs-smartphone-subscribers/ Crampton, T. (2011, January 9). Social Media in China: The Same, but Different. Retrieved on July 22, 2011 from http://www.thomascrampton.com/china/socialmedia-china-business-review/ CTIA (2010, December). Wireless quick facts year end figures. Retrieved on July 21, 2011 from http://www.ctia.org/advocacy/research/index.cfm/aid/10323 Danwei (2005, August 5). China media guide. Retrieved on July 23, 2011 from http://www.danwei.org/editorial/china_media_guide.php The Economic Times (2011, July 13). Smartphone use to soar in Asia: Nielsen. Retrieved on July 18, 2011 from http://articles.economictimes.indiatimes.com/ 2011-07-13/news/29769061_1_smartphone-nielsen-mobile-data Holson, L. (2008, June 10). Smartphones now ringing for women. Retrieved July 16, 2011 from http://www.nytimes.com/2008/06/10/technology/10phone.html? pagewanted=1"smartphones%20now%20ringing%20for %20women&sq&st=nyt&adxnnl=1"&scp=1&adxnnlx=1311187420-ShFcB6crpzf %20j6utXqXmTQ Jiantang, M. (2011, April 28). Press Release on Major Figures of the 2010 National Population Census. Retrieved on July 16, 2011 from http://www.stats.gov.cn/ was40/gjtjj_en_detail.jsp?searchword=census&channelid=9528&record=5 Kellogg, D. (2010, June 4). iPhone vs. Android. The Nielsen Company. Retrieved on July 20, 2011 from http://blog.nielsen.com/nielsenwire/ online_mobile/iphone-vsandroid/

Kimberlin, R., Assignment 4:1, July 24, 2011


Lo, C. (2011, May 20). China mobile subscriber total rises to 906.8 mln in June. Reuters. Retrieved on July 22, 2011 from http://uk.reuters.com/article / 2011/07/20/china-mobile-idUKL3E7HL04W20110720 Lukoff, K. (2011, March 18). What makes China’s top 4 social networks tick? Retrieved on July 21, 2011 from http://mashable.com/2011/03/18/china-top-social-network/ Martin, R. (2011, May 20). China’s iPhone users are older, surf the internet less. Retrieved on July 20, 2011 from http://www.penn-olson.com /2011/05/20/chinaiphone-survey/ Ng, C. (2010, November 12). QR Codes: the next big thing in social marketing? Retrieved on July 20, 2011 from http://www.penn-olson.com/2010/11/12/qrcodes-social-marketing-2/ Phillips, S. (2010, August 4). Mobile Internet More Popular in China than in U.S. Retrieved on July 23, 2011 from http://blog.nielsen.com/nielsenwire/ global/mobile-internet-more-popular-in-china-than-in-u-s/ Resonance China. (2011, June 23). Empowered women driving Chinese market. Red Luxury Blog. Retrieved July 21, 2011 from http://www.linkedin.com/ news?viewArticle= &articleID=43256063&gid=2295002&type=member&item= 62644401&articleURL=http%3A%2F%2Fred-luxury%2Ecom% 2F2011%2F07%2F18%2Ftop-10-chinese-cities-with-the-largest-luxuryconsumption%2F&urlhash=Tkle&trk=group_most_popular-0-b-shrttl

Kimberlin, R., Assignment 4:1, July 24, 2011


Appendix Table 1 - Census Data Demographics United States¹

China²

2010 Population

308,745,538

1,339,724,852

Women

50.8

48.73%

Men

49.2

51.27%

Under 18

24%

------

18 – 44

36.4%

------

45 and over

39.4%

------

14 and under

------

16.60%

15-59

------

70.14%

60 and over

------

13.26%

¹Source: U.S. Census (2010). ²Source: National Bureau of Statistics of China, April 2011 (Jiantang, 2011)

Table 2 - iPhone & Smartphone Subscribers Comparison

Demographics

United States¹

China²

18-24

17%

37%

25-34

28%

47%

35-44

23%

9%

TOTALS

68% of all subscribers

93% of all subscribers

¹Source: comScore MobiLens, 3 Month Avg. Ending Sep 2010 (comScore, 2010). ²Source: iResearch, survey ending March 2011 (average of iPhone and Smartphone users) (Martin, 2011).

Table 3 - Total Mobile Phone Subscribers Country

No. of Mobile Phones

Population

5% of population using mobile phones

No. of Smartphone Users

Gender

United States

302,947,0981

310,866,000

96

143,000,0001

54% men3

Kimberlin, R., Assignment 4:1, July 24, 2011


46% women3 906,800,0002

China

1,341,000,000

30,000,0002

67.1

51% men4 49% women4

1

Source: ²Source: 3 Source: 4 Source:

CTIA (2010). Lo (2011). The Nielsen Company, Q1 2010, Mobile Insights, National (Kellogg, 2010). The Nielsen Company (2010).

Table 4 - User Profiles of China’s Social Media Social Media Sites Age Active Users

Location

Renren

25

95m

1st & 2nd tier cities

Kaixin

30

40m

1st tier cities

Pengyou

20

80m

2nd & lower tier cities

Qzone

12-18

190m

2nd & lower tier cities

Source: Lufoff, 2011

Kimberlin, R., Assignment 4:1, July 24, 2011

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