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The Cultural Marketing Trap
By Tom Coyner
Korea Times
August 23, 2006
The experienced expat international marketing
manager may have worked in someplace resembling Korea. As a trained professional,
he or she thus looks for signs by which to classify problems and
opportunities. These signals can give the marketer clues as to whether the
company's products are properly positioned. Yet, encountering the Korean
marketplace can be confusing. For example, if the marketing manager
concludes the sales force is doing its job well and yet the sales results
are disappointing, is it simply a matter of product positioning – or
is there some other, hidden factor? Could the problem be a cultural
difference?
There may be a cultural "gotcha," but too
often foreign marketing professionals have prematurely jumped to that
conclusion. It seems that a "cultural wand" is being waved about
whenever there is a need to explain why sales are not up to standard. Foreign
managers can be sorely tempted to pigeonhole the cause of their problems as
"Korean culture" when there may be a lack – or
misapplication - of marketing diligence.
If you wish to ruthlessly interrogate the cultural
alibi, simply ask anyone to specifically define what is the cultural
pattern and how does it affect the marketing strategy. Then let both
your brain and gut determine whether the explanation makes sense. More
often than not, you are not going to be satisfied.
This is not to say there is no cultural impact –
of course, there is. However, the cultural issue tends to be overblown by
both business professionals and academics, when actually there has been a
lack of fundamental marketing analysis.
At the same time, "doing one's homework" does
not mean doing the same market analysis one might have done in Los Angeles or London.
It may be a good starting point to let go of MBA jargon, such as product
life cycle, market penetration, etc., and consider what factors truly
define success criteria in Korea.
For example, "positioning" may presuppose that the Korean
consumer will evaluate products or brands according to single dimensions,
when in fact there may be multiple dimensions. And, quite possibly,
dimensions such as performance or convenience, which are important to North Carolina
consumers, may be of little relevance to buyers in Busan.
Product life cycles may be much shorter in Korea since
the country is still, in many ways, a rapidly developing society. While
Korea is no longer a "developing country," there are many facets
of the market that are rapidly catch up with advanced economies – and
even expanding faster than all other nations when it comes to broadband
Internet applications and services. A "mature market" or "mature
product" phase seems to last only a few months before it declines in
the face of the next worthy competitor.
"Market share" may be similar in definition
to other nations' markets, but in Korea it can be critical to
differentiate between foreign products' market share and total market
share, as in the case of luxury automobiles. Given that strong prejudices
-- and even social penalties -- can influence consumers' selection of a
foreign good or service, it may not be appropriate to apply a "one
size fits all" market share analysis.
All the traditionally important marketing analysis
matrices may also need to be recalibrated to effectively measure the Korean
market. To cut to the quick, analyses and assumptions need to be tested
before basing your marketing and promotion resources upon them. Yes,
this may take more up-front time and money, but the long-term cost savings
can be significant.
Coming
to Grips with the Cultural Component
Though there is the danger of
declaring culture as being the primary issue without doing adequate marketing
spadework, culture remains a legitimate factor. While marketing may be
reactive and adjusting, if one can get most -- or at least some -- of the
critical factors right at the beginning, one is more likely to achieve
one's targets.
In Korea, there are different
approaches for different companies. One model is to start with the
expectation that people react according to their environment. That is
translated into marketing as a mix of promotion, distribution, prices, etc.
But just how this model responds depends on the target group's general
tendency in a given market. If all factors are fairly equal in weight
over the targeted demographic, then one may say that the model is not out
of sync with any deviating cultural factor.
A market as ethnically and
financially diverse as the US
can form a pretty flat, evenly distributed population when graphed, given a
balancing portfolio of a very large number of consumers that constitute
huge averages. For example, Harley-Davidson sells motorcycles to both the
Hells Angels and retired citizen cycling clubs in the U.S. The two market segments
may have different and even conflicting consumer factor sensitivities, but
the two segments can be averaged out to summarize the American motorcycle
market. In that sense, one may say that overall the U.S. motorcycle market could be
expected to be fairly stable given the wide diversity of consumers.
When dealing with smaller,
ethnically homogeneous populations, however, one can expect less diversity in
tastes and acceptance of products. Furthermore, consumers tend to be more
sensitive to how other consumers may respond to a product or service. As a
result, we often see the "herd mentality" - be it with cheap
consumer products or multi-million dollar capital expenditures. Once the
lead purchasers take on a new direction, it is quite likely the rest of the
herd will follow.
Another aspect of this herd
mentality is what some foreign wags refer to as "keeping up with the
Kims." If a product's or service's consumption is associated with the
"right" kind of consumer or social stratum, there is a very
strong urge by the rest of the market to follow, with consumers regularly
spending beyond what other societies may consider to be prudent.
Consequently, sales trends or
fads are not limited to low cost or even consumer products. These fast
appearing and disappearing shifts are characteristic of Korea's tight-knit society.
While "word of mouth"
advertising is most highly valued anywhere, it is extremely powerful in
Korea's close-knit society of large, extended families and affinity groups,
where extensive personal networking is a matter of basic survival. The
impact of branding on this vibrant network has yielded some surprising
developments for foreign marketing professionals.
For example, Korean consumers in
the lower economic levels often have a better knowledge of high end luxury
brands than their American counterparts. At the same time, the
sophistication of those consumers who can easily afford luxury brands is
often decidedly less than that of their Western peers. The result is a
Korean market that continues to be flooded with counterfeit products.
Consumers apparently make little effort to differentiate between the
luxurious quality found with genuine goods and the simple social status of
a luxury product's brand mark – counterfeit or real.
The marketer must often contend
with the horizontal factor of a homogeneous population that consumes in a
relatively herd-like fashion – and with the vertical factor of wide
brand awareness across economic classes.
Particularly when it comes to
established products (as opposed to new products), one may try to identify
some kind of consumption function. To determine whether a cultural factor
is present, one first needs to determine the non-cultural factors. Foreign
marketers too often ignore or disregard basic factors, such as
distribution, and rush to blame poor sales on "culture." After
analyzing all relevant, conventional factors, such as pricing, product,
promotion, etc., if any other non-marketing factor still remains, then one
may identify it as possibly being "cultural." Upon
isolating that non-traditional marketing factor, it may again be wise to
try to define and explain it in a purely cultural context. If you
can't satisfactorily do so, there is a good chance you have missed
something in your prior, conventional marketing analysis.
The importance of this exercise is
this: simply "recalibrating" your market analysis tools may not
be enough. You may still come up wanting. In such a case, you need to
ask if you have done enough to adjust your analytical tools for the
market. If the answer is "yes," then consider if you have
done an adequate analysis in one or more non-cultural factors. Only
after answering "yes" once more should you focus on a cultural
factor.
Tom Coyner is a long-term resident in Korea and
runs consulting firm, Soft Landing Korea. Coyner can be reached on
softlandingkorea.com.
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