The South Korean market Is an excellent opportunity for Visa to Introduce new products, communicate a new facet of Its brand, tap Into the lucrative East Aslant economies, and partner with many successful multinational Korean firms.
Not only Is credit card use prevalent in the country but the advanced technological infrastructure and adaptability of the culture to innovation sets the stage for Visa to introduce new products and even improve the brand. In a mature market like South Korea, Visa must set itself apart from competitors through innovative product offerings and partnerships.
Where in Brazil and Russia Visa will have to focus more on brand recognition and product trial, instead Visa will have a chance to work on a facet of its brand that it wants to improve: innovativeness. In a country where more than half of private consumption is settled via credit cards; the government encourages Its citizens with tax break Incentives to use them; and, businesses In a wide range of Industries offer promotions for the specific use of credit cards, many are educated about what electronic payments are and Interact with Visa products on a dally basis.
Partnerships: Partnerships will be extremely important to set Visa apart from its competitors as well as engage with users through merchant incentive programs.
With cards everywhere, the challenge is choosing the right mix of partners in a wide range of industries to tap into their incentive programs as well as differentiate the Visa brand. The first company we recommend partnering with is the major conglomerate, CO Group. The company comprises of numerous businesses such as biotechnology, home shopping and logistics, food and food services, and entertainment and media.
Within these businesses, the company owns hundreds of different retailers that each millions of consumers on a dally business. For example, Touts less Sours, a bakery chain, can be found all over Asia and even the United States. In addition, Co’s entertainment and media business produces Korean films as well as manages many of the K-Pop stars that appeal to young adults and teenagers around the world.
Like the Walt Disney partnership, partnering with CO gives Visa access to a powerful Asian entertainment business.
Co’s global reach is comparable to VISA’s and with a partnership; Visa will have a presence in a wide range of industries and markets to target consumers and offer incentives. The second company we recommend Visa partner with is Samsung.
Samsung is known for its high standard technology products and most recently its mobile phones which are Apple phone’s biggest competitor. However being on the Android system Samsung phones are equipped with a chip known as Near Held Communications (MFC) which Is the medium for mobile payment capability.
If Visa truly wants to communicate that It can also be an innovative company, partnering with Samsung to introduce a mobile payment app or at the 2018 Olympics in South Korea would be a timely move for Visa to expand and innovate. As mobile payment options are arising and challenging the card system, Visa can move into this space and stay equally dominant as it has in the last 10 years.
Partnering with Samsung would communicate Visa’s initiative to be more innovative as well as tap into the global reach that both companies have.
Third, we also recommend sponsoring one of South Koreans popular teams to show the country and the people that Visa supports them at a personal level as well. The team or athletes we recommend Visa sponsor are the speed skaters. They are the most likely to win in their sport and are possibly the most popular to bring home gold for South Korea. When the country watches hopefully for their favorite speed skaters to win, Visa will get the airtime for sponsoring the team and athletes. Finally, South Koreans geographic position is also an important opportunity for Visa.
Tourists to the country come from all over the world and especially the other Asian countries. Zenith is a travel agency in Korea that focuses on inter-Asian travel that will make traveling from Korea to the rest of Asia seamless and affordable for tourists. We believe incentives travel through Zenith can give Visa a competitive edge in the industry throughout Asia. Each of these partnerships represents a unique opportunity for Visa but most importantly is their global reach, their ability to promote innovation and new products, and finally their access to the South Korean population.
Visa’s Marketing Mix and Role in South Korean Tourism: In order to make the biggest impact possible during the 2016 Olympics in South Korea, Visa must ensure that they have the proper marketing mix in place.
Due to the fact that South Korea is a mature market, there are certain aspects of this sponsorship opportunity that they should focus on. Upon entering a mature market, s stated in the case study, Visa must focus on its presence in South Korea, their partnerships with local powerhouse companies, its useful and innovative products, and alternative media outlets to promote their brand.
South Korea has been experiencing consistent tourism growth in recent years and have initiated such promotions like “2010-2012 Visit Korea Year”, a two year program sponsored by the government. Additionally, airline companies such as Asians Airlines have started a “Grand Welcome” campaign in which members of their staff officially greet tourists upon their arrival in the airport terminal. To promote tourism, South Korea, China, and Japan and other countries have agreed to support the SEAN five-year tourism strategy.
The intent of this strategy is to improve the quality of travel into Asia as well as attract investments for the tourism sector. The tourism sector in South Korea is drastically improving and provides great opportunities for future growth. While in South Korea, tourists are in good hands as they can make secure and convenient payments with their Visa card. In 2010 alone, $1. 7 billion USED were spent by international visitors in South Korea using Visa cards.
South Korea is also trying to remote itself to the world as a “Shopping Heaven” by putting on events such as the “Seoul Grand Sale” which draws countless international travelers.
Visa is delighted to work with a country that is promoting such an image and there is great potential for growth as more money is spent by shoppers. Visa can potentially gain a great amount of business in the Asian region through its sponsorship of the 2018 Winter Olympics in South Korea. Cash and checks capture the largest PACE percentages world-wide. However, in South Korea, out of the country’s total PACE of $219 billion in 2012, the percentage of PACE which were cash and heck payment based amounted to 36% and the percentage of PACE which were electronic payments based amounted to 64%.
This large market of electronic payments presents a great opportunity for Visa. By sponsoring the 2018 Olympics, Visa can promote its brand in South Korea, and capture a larger share of the large volume of electronic payments which occur in the country. Furthermore, since the country’s trend has been to increasingly pay for transactions electronically, the percentage of PACE which are electronic will increase in the future as the percentage of PACE which are cash and check payment decreases.
This increase in electronic payments provides Visa with a great opportunity to increase its business in South Additionally, by sponsoring the 2018 Olympics, Visa can increase its Korea. Brand awareness in neighboring country Japan as there exists a great deal of interactions between these Asian countries. This will also set Visa up for its sponsorship of the 2020 Olympics in Japan and allow it to maximize its sponsorship of the 2020 Olympics.
Unlike in South Korea, electronic payments made up 40% of Japan’s PACE and cash and check based payments made up 60% in 2012.
However, Japan’s total PACE, $1806 billion, is significantly higher than South Koreans total PACE, $219 billion. 2 Therefore, there is a lot of potential for Visa to penetrate the Japanese electronic payment market. Visa should also be aware of the emergence of debit cards. Debit presents the largest portion of cradle opportunity as there exists over $5 trillion in cash and check in the world.
In the U. S. , Visa has already penetrated the debit card market to a great degree as it has a 61% share in the debit payment market in the U. S.
However, the company only has a 7% share in South Korea and less than 1% share in Japan. There exists a great potential of business in these two countries for Visa in terms of debit payments.
By promoting its brand through its sponsorship of the 2018 Olympics, Visa can gain market share in the debit payment market of these countries. Another trend which Visa must keep track of is the emergence of mobile payment platforms. This trend has the potential of taking away business from Visa. The company has responded to this development by accelerating its innovation and improving its technology.
This strategy in the U. S.
Has paid off as it has gained a 47% market share in commerce and mobile payments. 4 Visa can carry his strategy over to South Korea and the broader Asia region. Its sponsorship of the 2018 Olympics will allow it to further promote its innovation and technology as South Korea is a very innovative and technology driven country. The company can further shape its brand image as being technology oriented and innovate through partnerships with innovative Korean companies such as Samsung. The 2018 Olympics will provide Visa with these opportunities.
Visa’s main competitors are Mastered, American Express, and Discover. In terms of sports sponsorship, American Express and Discover have only made investments in small events. However, Visa’s biggest competitor, Mastered, has sponsored big time events, such marketing techniques in previous Olympics to compete with Visa. In the 2012 Olympics in London, 20% of surveyed British people mistakenly believed that Mastered was an official sponsor of the 2012 Olympics, while 27% correctly identified Visa as an official sponsor. Clearly, Masterpiece’s ambush marketing has been effective in the past.
Visa must take into consideration its competitor’s actions in the sports sponsorship space and plan safeguards to deal with ambush marketing from its competitors. Activation Strategy: In the current global marketing landscape, simply sponsoring the Olympics is no longer enough to break through the clutter which surrounds the average consumer. There is a growing necessity to increase interaction with customers and merchants in order to see returns on large marketing investments.
For Visa, with an approximate $MM expenditure for a four year exclusive sponsorship of the Winter and Summer Olympics, creating a marketing strategy that resonates with their target audience and abides by their global corporate goals, is crucial to generate a positive ROI. 6 As stated earlier, in accordance to Visa’s sponsorship development cycle for mature markets such as South Korea, the main focus is upon presence, products, partnerships, and alternative media. Visa must therefore place its marketing efforts in agreement with these selective goals and create a meaningful activation.
Given that Visa’s annual marketing budget is around $MM in 2012, it can be expected to increase to over $1 B by 2018. 7 With the activation costs for the Olympics at about three times the sponsorship cost, Visa must ensure that they touch on each of the four points necessary to make their investment positive, the first of which is resent. Observing the London Olympics, a market which is also mature, Visa was extremely effective with its on-site execution. The company had 250,000 total POS pieces across 34 venues.
In addition, there were 3,200 contactable enable POS devices available at merchants in venues.
To increase the consumer experience, eight customer service booths were available to address questions and issues. 8 Applying this strategy to South Korea is a smart idea as it was effective in promoting Visa’s new technology offerings and increasing awareness. South Korea is a developed economy with a Tech-Saws culture. This is the perfect arrest for Visa to introduce and endorse its products which will be fully functional by 2018. Among the many offerings, Visa’s focus is on promoting V.
E, a streamlined online shopping tool, Visitant, a mobile money platform, and Visa Ready, a mobile POS. 9 Visa needs to leverage its on-site presence and its partnerships in order to increase awareness and use of these products. Visa is a company that is constantly seeking new ways and forms of technology to revolutionize payments, but without partnerships they would not have the ability to reach consumers. Financial institutions are the pillars of Visa, as they issue cards. As they have in the past, these institutions need to be able to use the Olympic platform in their own promotions.
In addition to banks, Visa has had lasting relationships with Olympic teams, athletes, and organizations.
The continued success of Team Visa is a great way for fans to connect to their favorite athletes while simultaneously connect to the brand. As relationships with Samsung, a Korean company, Visa can create similar promotions to those of the last Olympics where a limited number of Samsung phones were equipped with Visa enabled mobile payment applications which could be used throughout 140,000 retailers. 0 Tying this all together comes down to social media and alternative media.
In addition to the television spots and print ads, Visa needs to continue their success online and on mobile devices. Susan Bolt’s “Flow Faster” campaign promoting the speed of Visa’s offerings, as well as the Go World campaign which ran throughout 70 countries were talked about throughout all main social media channels. Al Referring to Team Visa, fans sent over 60 million virtual “cheers” to athletes, some of which were featured in commercials.
12 In order to increase their mobile application awareness, however, returning to a promotion, Visa
Championships, used in the 2006 Torsion Olympics could prove useful. The concept would be a mobile game application in which users compete on courses that are those used in the 2018 Olympics. The top scores could possibly win a trip to the Olympics or the newest Samsung device. The application would be sponsored by V. Me, Visitant, or Visa Ready in order to increase awareness. The key to Visa’s success will be incorporating all four channels, presence, technology, partnerships, and alternative media, in order to seamlessly interact with the consumer and therefore create value from the investment.