Mallari, Juliana S.

International Business and Trade

BSA2A Final Examination

INTERNATIONAL BUSINESS AND TRADE CASE STUDY:

ASIAN YUPPIES-HAVING IT ALL

Young, urban professionals (Yuppies) in Asian markets appear to have found the right
combination for “having it all.” Due to high housing costs, most young people continue
to live with their parents after starting work and even after getting married. Income from
their high-paying professional jobs is therefore available to spend on a wide range of
expensive, upscale consumer items such as cars, clothes, consumer electronics, and
club memberships. Prestigious European brand-name apparel is the most sought after,
such as Ungaro, Hugo Boss, Ermenegildo Zegna and Gianni Versace.

In the Sunrise Department Store of Taipei (Taiwan) Timberland deck shoes sell for $172;
Ralph Lauren shorts for $90; Allen Edmonds shoes for $306; and Giorgio Armani sports
jacket for $1,280. Dickson Concepts of Hong Kong concentrates on luxury brand name
products such as Bulgari and Hermes watches, Guy Laroche and Charles Jourdan
clothing and accessories, and a variety of Ralph Lauren/Polo products. Sales have
grown 50 percent each year for the last five years. Tang’s of Singapore takes upscale
shopping one step further by targeting a subgroup of Yuppies which it calls NOPEs-not
outwardly prosperous or educated consumers- whose goal is to create an understated,
discreet image of wealth and success.

Not all Asian Yuppies are able to spend extravagantly even though they want to project
an upscale image. Seagrams launched a whiskey in Seoul South Korea called “Secret.”
It sold for $9 a bottle and achieved a 5 percent share of the total whiskey market,
against the big-name brands of Chivas Regal and Johnnie Walker Black Label, which
usually sell for about $100 a bottle. Also in South Korea, Hyundai introduced the
flamboyant, brightly-colored Scoupe sports car for $10,000, aimed at those Yuppies
who cannot yet afford a BWM.

Surprisingly, Asian big-spenders may not be considered wealthy by Western standards.

As an illustration, average annual income in 1995 for a 32-year old banker ranged from
$12,000 in Bangkok, Thailand, to
$18,000 in Taipei, $31,000 in Seoul, $32,000 in Singapore and $35,000 in Hong Kong.
Nevertheless, Yuppies’ incomes have been rising in these markets by 15-20 percent
annually in recent years. Other factors that promote big spending are relatively low
taxes, fringe benefits such as company cars, housing allowances, and big end-of-year
bonuses. This relatively high level of disposable income becomes even more significant
when one remembers that there are about a million people in their 20s and 30s in
professional, managerial, or technical jobs in the four markets of Singapore, Hong
Kong, Taipei, and Seoul. In addition, single, young, college-educated women in Japan
are rapidly gaining a worldwide reputation as conspicuous consumers.

CASE ANALYSIS (SIMPLIFIED FORMAT):

I. What is the Problem?:

Many young adults, who have entered the working world and/or tied the knot,
have had to stay with their parents due to the high cost of housing. Also, urban
professionals in Asian markets have discovered the key to 'having it all'; with their
generous salaries, they are able to acquire other expensive things that will give them
conveniency

II. What are the Objectives that you want to achieve?

Long Term: (beyond one year)
- This case study will ultimately provide businesses with valuable insights into
Asian Yuppies' consumer behavior, allowing them to tailor their goods and
services to their needs and wants.
Short Term: (within one year)
- The emphasis is on creating plans for companies to target this demographic and
comprehending the buying power of Asian Yuppies.

III. SWOT ANALYSIS: Identify different factors.

Watch the video: https://www.youtube.com/watch?v=JXXHqM6RzZQ

Strengths-(controllable/positive/inside)
1. Designs from renowned European labels Ungaro, Hugo Boss, Ermenegildo
Zegna, and Gianni Versace are some of the most sought-after pieces of clothing.
2. Asian marketplaces have seen young urban professionals uncover the ideal
balance for 'having it all' and are taking full advantage of the chance.
3. Asian marketplaces have seen young urban professionals uncover the ideal
balance for 'having it all' and are taking full advantage of the chance.
Weaknesses-(Controllable/negative/inside)
1. Approximately one million people aged 20-30 who are employed in professional,
managerial, and technical occupations across the four markets of Singapore,
Hong Kong, Taipei, and Seoul have comparatively high levels of discretionary
income which may be even more remarkable.
 2. Asian Yuppies who spend a considerable amount of money may not fit the
definition of wealthy in Western nations.
3. Even though they have high-paying professional jobs, not all Asian Yuppies can
afford to purchase costly items.
Opportunities (uncontrollable- positive/outside)
1. Single, young, college-educated women in Japan are gaining recognition as
being conspicuous consumers globally.
2. For those young upwardly professionals (yuppies) who are yet to have the funds
to buy a BMW, the vibrant and flashy Hyundai Scoupe Sports Vehicle was
marketed at a price point of under $10,000.
3. For those young professionals who do not have the budget for a BMW, Hyundai
offered their flashy, vividly colored Scoupe sports vehicle, flamboyant, for under
$10,000.
Threats (uncontrollable-negative/outside)
1. It is conceivable that Yuppies may cut back on their spending, leading to a
worldwide economic decline in Asia.
2. It is possible that, as Asian Yuppies' incomes increase, there could be more
competition for luxury items.
3. It is conceivable that inflationary pressures will arise in the economy due to
heightened spending by yuppies.

IV.Alternative Courses of Action: (Possible Solutions, Not less than 3)

ACA Number 1: One strategy for companies to consider is offering affordable

options that still allow yuppies to project a luxury image, such as Hyundai's Scoupe
sports car. This example illustrates a different approach that companies can take, such
as emphasizing the products' affordability yet still appealing to those yuppies who want
to make a statement without spending a lot of money.
Advantages: It allows them to attract a wider customer base, as those with a
lower budget will be more likely to purchase goods or services. It also can help to boost
the company’s reputation, as customers will be more likely to recommend the business
to their friends and family. It can also lead to increased sales, as those on a lower
budget may be more likely to purchase multiple items as opposed to just one. In
addition, businesses will be able to enjoy a greater profit margin due to the lower cost of
goods or services. Also help to build a sense of loyalty among customers, as they will
be more likely to return to the business in the future. Increase customer satisfaction, as
those with a lower budget will be more likely to feel that they are getting value for their
money.
Disadvantages: Due to the fact that yuppies often wish to show a sense of wealth,
they are often unwilling to pay a premium for quality goods. As a result, businesses are
often left to lower quality in order to remain competitively priced. This could mean that
there may not be as much demand for these goods. Yuppies typically want to obtain
high-quality items, yet they may not be willing to pay a higher price for the quality they
seek, so the quality of the goods offered here is not guaranteed.

ACA Number 2: Companies might employ a tactic to target yuppies with their goods,
such as designer clothing from Europe. This is a distinct strategy that could involve
forming partnerships with prominent European companies or advertising items with a
similar aesthetic.
Advantages: The first benefit of there being a great demand for these goods is
that businesses may be able to capitalize on this market as yuppies are likely to spend
large amounts of money on items they deem to be of high quality. The second benefit is
that selling these products is relatively simple as yuppies are often influenced by fashion
and the demands of their peers, making it easier to sell a product that is perceived to be
well-liked by this group.
Disadvantages: Due to the high prices of the products, companies may need to
charge higher amounts in order to make a profit when selling to the yuppie target
market, as they are typically willing to pay more for items they perceive as being of
higher quality. The market can become highly competitive regarding these items,
making it difficult to stand out from the other businesses vying for yuppies' patronage.

ACA Number 3: Companies could explore the possibility of selling goods that are
favored by Japanese single women with college degrees. This could involve
collaborating with Japanese businesses or supplying items that are similar to those
brands in terms of appearance.
Advantages: Businesses that target this market have the potential to reap great
financial success due to the fact that these clients are often willing to pay a premium
price for higher quality products. These items have a vast demand, and it is likely that
these consumers can be easily persuaded to purchase a product if it is seen as popular
within their community, as they are greatly impacted by fashion and peer pressure.
Disadvantages: The market for these products may be very competitive. It can be
difficult for organizations to gain an edge over the competition since many are vying for
the attention of these women. Prices for the products could be high, as businesses may
need to charge a substantial amount to make a profit since these women are usually
willing to pay more for items they perceive to be of higher quality.

V. Decision Statement: There must be one and only one final choice.(Explain
what alternative was chosen, why it was chosen, and why not the others)
 Given the current situation, ACA Number 2 is the best option among the other
two alternatives as it specializes in selling yuppie-favored goods. With the yuppie
market already spending a lot of money on products that they deem to be of excellent
quality, it would be easy for the business to capitalize on this by providing new products
with designs that meet the yuppies' demands for taste and quality. This is because
Yuppies in Asian markets are known for having the resources to purchase high-end
goods. Although this solution carries some risk due to the potential for intense
competition in the market, the company would likely be able to benefit from expanding
its customer base.

Option ACA Number 2 was selected in light of the increasing fashion trends from
popular European labels over the past few years. This option is the most beneficial for
the company, as yuppies are not only drawn to the style and aesthetics of European
firms, but also to the quality of their products.

The three potential courses of action all have their own advantages and
disadvantages, yet selecting the second one would be the most suitable for this
particular situation given that the target audience is young urban professionals who are
more likely to prioritize product quality and durability. Option one could lead to company
losses due to the low demand for the products and the questionable quality of the goods
offered. Moreover, option three would likely be unsuccessful in setting the company
apart from the competition, and the products could be costly without necessarily
providing superior quality.

VI. Implementation Program : Discuss the plans or steps of how to put the
decision into action. (at least 5 steps with objectives, activities, timeframe,
budgetary requirements, persons involved and expected outcomes in each step)

1st Step:
In order to gain a better understanding of the purchasing habits of the yuppie market,
research must be conducted. This involves learning what types of goods they are
inclined to buy, how much of their funds they have available, and how they allocate their
money. To collect this data, market research, surveys, and interviews with yuppies can
be conducted.

2nd Step:
For targeting the yuppie market, the initial step would be to devise a marketing strategy.
This would involve recognizing the types of advertising and communication that would
appeal to yuppies and what items they are likely to purchase.
3rd Step:
The third step in the marketing plan would be to implement it. This would involve
creating and disseminating marketing materials, including commercials, brochures, and
websites. Once those materials are created and ready to be distributed, they must be
sent out to the public in order to promote the product or service. Additionally, the
marketing team would have to monitor the effectiveness of the materials to ensure that
they are reaching their intended audience.
4th Step:
The fourth step would be to assess the success of the marketing campaign. This would
include monitoring sales, determining the brand's popularity, and comprehending the
opinions of the yuppies regarding the business and its products.

5th Step:
The fifth step in the marketing strategy is to make adjustments based on the results of
the monitoring. Depending on what has been effective and what has not, this could
mean altering the budget, the products, the channels, or even the messaging. This will
help to ensure that the strategy is up-to-date and that it is reaching its intended target
audience.