Recently the Korean government in the body of the Ministry of Commerce, Industry and Energy (MOCIE) has been promoting a Korean Premium brand of products at various conferences and exhibitions around the world. They have also been using traditional mass media advertisements such as television commercials and newspaper advertisements to promote these products. The goods, while in a number of different industries and markets, share things in common -- they were made in Korea, and they are already performing very strongly in their respective markets.
Both high-technology items such as memory chips and low technology items such as motorcycle helmets share the honor of being referred to as Korea Premium products by the governmental marketing strategy.
For instance, DRAM from Korea accounts for 47% of the world market share, with domestic production taking up US$12.4 billion out of the US$26.3 billion worldwide market. TFT-LCDs also account for 51% of the world market share with domestic production of US$17.2 billion among the total US$33.5 billion world market share. Both of these products are considered Korea Premium products by the MOCIE.
This idea is relatively uncommon in the global market, but not new. It is simply government-level marketing. A government agency analyzes the status of the national image as a whole through the eyes of foreign consumers. Something like a national brand management center then attempts to improve the image of the nation and all its products in order to help the national economy through increased exports. However, there are a few major obstacles, major properties of the global marketplace, which make some problems for this plan.
When asked about technology products, consumers are quite knowledgeable about which ones are the best, which ones are most affordable, and which ones they should avoid. Technology users and those in the hardware industry know that Samsung memory is the highest quality and most reliable on the market. Many people also make it their business to know that Western Digital makes the most reliable hard drives, and AMD makes processors faster and cooler than any other manufacturer. But when asked where these products are manufactured, most can't say.
In fact, when questioned about the origin of Samsung memory, many international customers might say Taiwan or Japan before they would say Korea. Many technology customers know that East Asia is the land where computers are born, but if they are pressed to name a specific country they give vague, puzzled responses.
Of course, it is true that many Korean products are high quality. Samsung's displays, memory, and cellular phones are well known in their market sectors. Kia and Daewoo are popular car brands in many countries due to their reliability and affordability. Outside of the technology sector, Korean shipbuilding is second to none. And the whole world is familiar with the high networking quality of LinkSys products.
It can also be said that there are instances when designating a product as a Korean-made brand will increase its market share. The phrase Made in Korea has a strong pull in one specific instance. This is within Korea itself. Korean consumers are known to be fiercely nationalistic, regularly choosing Korean brands over brands from overseas. There are even Korean television shows that examine the houses of contestants to see if they own a 100% Korean household. Samsung and LG have made a fortune supplying Korea with brand-name products in almost every market, even though technology mogul Japan is right across a narrow sea. The loyalty of Korean customers to Korean businesses is a great factor in Korea's economic growth over the past thirty years.
The same can be said for the citizens of other countries, but it is not Korean products and Korean companies to which they are loyal. It is their own. Citizens of other countries don't really care where they get their imports, as all foreign countries are usually equal in their eyes. Country-based marketing only works on the citizens of that country with the products of that same country. Nationalism is a strong emotion, and can always be counted on to market domestic products to domestic consumers. But to the people of many countries, each foreign import is the same as every other.
This can be illustrated by looking at country-based marketing programs elsewhere. China entered the world market in exhibitions and trade shows trying to market Chinese products separately from the products of other countries. When Chinese companies entered a trade show such as CeBIT, they especially arranged to be close together, making an exclusively Chinese area in the trade show. However, this meant their products were absent from their respective areas, so if a buyer was looking for all the computer monitor manufacturers in the world, the Chinese companies would be conspicuously absent.
It is true that over time, some countries can gain a reputation as experts in a particular area. For instance, the world agrees that French wines are the best, German cars are the best, and Italian leather is superior. However, these are exclusive luxury items, and their reputation has been building for over a thousand years. And because they are rare luxury items, they are not enough to grow a national economy. It might be that after a thousand years Korea could be best known for the finest in exclusive luxury computers, or that five hundred years from now Korea's cellular phones will be part of the exclusive domain of the rich and famous. However, this is a very long-term investment that may not pay off for generations.
But for now, in the rapidly changing face of the global marketplace, most customers care about quality, about price, and about the capability of the products that they buy, and little else. This is the third and largest obstacle to the country-centric brand marketing idea. When shrewd consumers are looking at a wide selection of cell phones on the market, they first consider the features and prices available. Consumers who really know their products will do research on the reliability and reputation of a given company. Experienced consumers may develop a level of brand loyalty to a given manufacturer. However, the customer experience rarely, if ever, extends to country loyalty, nation awareness, or country-based decision making.
If the Korean government wants to spend taxpayer money on free marketing for its domestic industries, there is nothing wrong with that. But it might choose a more effective marketing strategy than the very difficult national brand idea. It could offer subsidies to the existing marketing departments of existing businesses. Startup companies always have financial troubles, and effective marketing is a powerful tool in selling new products. Governmental subsidies in marketing could mean the difference between the life or death of a brilliant new technology company in the Daedeok Innopolis.
The government could also use the same funds to create marketing education. This could take many forms, from subsidizing the marketing departments of existing educational institutions to creating marketing exhibitions and forums for existing marketing professionals to meet and increase their skill set.
In conclusion, while the Korean government's heart is in the right place in its desire to increase the Korean economy with effective marketing, the execution of this idea with the Korean Premium product strategy is out of touch with the global consumer mindset, and will not be effective. The funds can be more effectively used in subsidizing existing marketing efforts of Korean companies and also subsidizing the ongoing education of Korean marketing professionals.
