A division of Soft Landing Korea Ltd.
Who Wields the Won? - Housewives
By Tom Coyner
August 16, 2006
This week, we focus on the reality that not all consumers are purchasers. So, let's address the ultimate question:
WHO WIELDS THE WON?
To discover who controls the purse strings, one must enter the Korean housewife's domain. Also, more recently, young single adults and kids have become significant purchasers as well as consumers.
To those familiar with traditional society, it comes as no surprise that the housewife does most of the purchasing. In the past, division of labor cast this role upon women. Today, the custom continues in many industrial societies such as Korea -- even when more and more women are working full time.
Research has shown that housewives make as many as eighty percent of supermarket purchase decisions -- in addition to selecting household durables such as electric rice cookers, microwave ovens and washing machines. For items such as televisions, PCs and audio equipment, they split the decision-making with their spouses. Since most Korean housewives are not in the job market, they have ample time for daily shopping. in addition, the media bombard them with vast amounts of commercial information. The result is a consumer alert to marketplace conditions, and a consumer who determines purchasing by quality as well as by price.
Children and young adults
Another major influence on Korean housewives' purchasing is the degree to which they favor their children. It is common in patriarchal societies for the female to derive considerable power from child upbringing -- especially of sons. Consequently, children are pampered. Korean families will make great sacrifices for their offspring's welfare.
In many circumstances, it's the children who dictate the buying decisions for various consumer products. They are quick to adopt new and novel products, concepts and styles. One should remember that approximately nineteen percent of the nation's population is under the age of fourteen. And for good or evil, minors often get hold of their parents' credit card information to purchase goods and services over the Internet.
As young people increasingly delay marriage, those singles in their twenties and early thirties are among the nation's most aggressive consumers. They live a relatively carefree lifestyle often with substantial discretionary spending money.
Focusing on young adults, housewives and children
Since a great deal of purchasing power is in the above-mentioned consumers' hands, they are quite naturally among consumer marketers' prime targets. This simple fact propels women's magazines' variety, quality and large circulation -- and now the same is influencing many Internet web sites and blogs. At the same time, the marketer needs to know as much as possible about the Korean housewife, her wants, needs and purchasing motives. Marketing appeals directed at the housewife emphasize her comfort requirements and her self-image.
It also pays the marketing manager to keep abreast of the latest mobile phone and Internet trends. Top marketing professionals try to anticipate which leading edge wireless consumer technologies are likely to succeed, and how consumer patterns will be impacted. Increasingly, fashions and tastes are changing literally at Internet speed.
Influencing consumer behavior with caution
By what mechanism does a consumer group come to accept corn flakes over rice for breakfast? No one knows for sure. The variables are far too complex to answer this question with anything more than a set of assumptions.
One fact, however, is certain: Korean society is undergoing a rapid transformation, accepting many foreign concepts relative to life's basics, including food, clothing and shelter. Given these conditions, it is far better to ride the changing currents' tide than to invite disaster by attempting to divert trends too quickly to one's objectives.
Consider the introduction of sanitary napkins into Korea. They were virtually unknown here until female U.S. Peace Corps Volunteers introduced them in the 1960s. Riding the waves of Western fashions and convenience, they were a huge success. The timing was right.
In contrast, for years, foreign companies have tried to change Koreans' breakfast menus. Enormous advertising and production investments have generated disappointing results. Only a minor percentage of Korean households have adopted simpler Western style breakfasts. It is difficult to say why most have resisted the change. Perhaps it has been a case of too much, too soon. On the other hand, how many typical Americans substitute Japanese instant miso soup for cornflakes each morning -- or place a helping of kimchi along side a cup of coffee to start off the day?
Building a good company image
Company image is a major factor in consumers' perception of quality. A good name goes a long way, especially in the selection of household durables. In the pharmaceutical industry, many over-the-counter drug purchases are based on perceived manufacturer reliability. Consumers develop strong product and brand name loyalties. A strong company image offers an additional benefit: subsequent products tend to enjoy a favorable consumer reception as well.
Using a variety of approaches
Given its population and income level, Korea is regarded as a major market for consumer as well as other products. Accordingly, advertising billings in Korea are third largest in Asia. Twenty-five years ago, to reach consumers nationwide required at least a million-dollar advertising budget per year. Today, one can spend a quarter of that alone on a one-week promotional campaign in a major newspaper. This level of expenditure may be beyond the pale of many smaller companies whose products have smaller potential markets. In such cases, direct mail advertising -- including via email -- to a selected audience may be considered. Other options include advertising in specialty publications and with special campaigns. Targeting selected audiences is not an easy task, especially when under budgetary constraints. Imaginative marketing managers, however, will find all the necessary tools at their disposal in Korea.
Adapting your products to consumers taste
History is rich in cases of marketing managers who forgot that their mission's success depends heavily upon their products' ability to satisfy local customers' needs. Often they find themselves caught between the competing demands of the local market and of the distant head office. Expecting the local market to conform to the dictates of predetermined policy is, in many cases, a sure path to frustration.
That frustration can often be avoided by simply adapting to local tastes. A slightly sweeter soft drink or a spicier tomato ketchup has often saved the day. Such modifications to suit Korean consumers' tastes and needs in design, color, size and flavor can contribute to marketing success.
Doing consumer research
Marketing in rapidly changing Korea demands solid market research. Consumer research is no longer a developing area in Korea. The number of its practitioners is growing steadily. One economical way to gather information is to use the omnibus studies from a market research company. For a minimal investment, one can get a considerable amount of information on market as well as consumer behavior. In any case, today the top international market research firms are active in Korea, along with small, local agencies.
The Tail Now Wags the Dog
Today major retailers demand -- and get -- additional discounted pricing and promotions from manufacturers. No longer do suppliers call the shots. About twenty-five years ago, major discount store and convenience store chains appeared in Korea. Things did not really change, however, until after the IMF crisis when both groups' sales began to skyrocket. Today, they dominate the supply chain. The tail is now wagging the dog. More recently, home television shopping channels and Internet Cybermalls have also created important, large retail groups capable of winning special concessions from suppliers.
Korea has marketplaces that are hundreds if not thousands of years old. Yet in the past ten years, Korea has also proven to be a world-class leader in consumer marketing on the Cyber frontier. Competing in the Korean market is not for the faint-hearted. But for those marketers willing to address old, traditional buying habits, but also to use new, leading edge retail channels, Korea can be one of the most exciting environments in which to compete.
Tom Coyner is a long-term resident in Korea and runs a business consultancy Soft Landing Korea. Coyner can be reached at http://www.softlandingkorea.com.