Korean consumers can be surprisingly demanding. One reason this came about is that Korean providers used to make up for inferior service by offering exceptional follow-up service. Today, Korean quality has improved, but immediate after-sales support is still provided. Foreign companies often fail in the area of customer service.
To succeed in the Korean market, foreign companies need to be competitively different than local companies. Coyner says the questions to ask are: “What do you have to offer? How does that stack up against what the Koreans already have, or can they easily reverse-engineer or copy, and what is your differentiator vis-à-vis local competitors?”
The iPhone is a good example of a foreign product that has succeeded in Korea by being different and better. The mainstream media, heavily dependent on advertising from Korean producers, predicted that the iPhone wouldn’t meet the needs of consumers in Korea.
“Many of them (younger Koreans) don’t read newspapers,” says Coyner. “Where were they getting information? They were getting it from blogs ... from email messages.”
Koreans today are relatively free spenders and make buying decisions based on getting ahead – or at least, not falling behind – socially. Koreans will spend based on social pressures, at least as much as based on functionality.
Coyner says a key advertising theme for the Korean market is: “This is the good life, this is what modern Korea is all about. You should participate in it like everyone else, so don’t be left behind because everyone else is moving forward.”
Experiences of foreign companies in the Korean market
A key question that determines whether a foreign company is successful in Korea: Does home office give the expatriates working in Korea the authority and means to adapt their products and services to the Korean market?
“Once upon a time Korea was truly a developing country, and people were happy to get what they could,” says Coyner. “Those days are long gone, and now, if you want a particular product or service, you often have a choice – and today consumers vote with their pocketbooks.”
The Korean market has, over the last 10–15 years, become very consumer-driven, and is what Coyner refers to as “the tail wags the dog”.
“Koreans today are relatively free spenders and make buying decisions based on getting ahead – or at least, not falling behind – socially”
Marketing strategy and market entry in Korea
Korea is less risky than a number of other truly Asian markets. “Truly Asian” means those markets without a legacy of being British or American colonies.
“The advantage of Korea is that it is very much a country ruled by laws of the land, and that the court system is reasonably consistent and fair, and not necessarily just pulls towards the natives or the foreigners,” says Coyner.
He says the questions to ask when considering investing in various markets are: “Have you actually done any real marketing or investing in ‘real Asia’; in the real centre part of Asia? And if you have not, why are you looking at one market over the other? Have you considered among your peers who have actually been able to repatriate money as opposed to simply invest?”
It is relatively easy to invest in Korea and to repatriate profits. There are a lot of English-speaking business professionals and most market opportunities and resources are centralized around Seoul.
“Korea is a good place to get your basic learning skills on how to do business in Asia proper, before going onto China – and possibly Japan,” says Coyner. “You’re going to have a really strong sense of what are your corporate and sometimes personal core values as you steer your operations in Korea.”
Advertising and PR in the Korean markets
The selection of advertising media depends a great deal in Korea, as elsewhere, on the product and demographic. However Coyner believes the power of the internet cannot be underestimated. “I would dare say it doesn’t matter if you are selling automobiles, banking services or T-shirts – you can’t ignore the importance of the internet,” says Coyner. “People in their 40s, 50s, and even 60s, really do make much of their purchasing decisions based on what they find from their PC screens or on their cell phones.”
With regards to advertising and PR in Korea, it is important to use both traditional and new media. “I think you need to actively participate in going to blogs and so on,” says Coyner. “If you look at magazines and stuff, you still have a lot of newspapers here, but they are generally being read by people who are usually 40 years and older. You have young people looking at small magazines, but these tend to be fairly expensive.”
When selecting a local Korean advertising company, Coyner advises to make sure the account manager is not just the best English-speaker person on staff, but insist on someone who is more mature and has credentials with publishers and editors.