한국식품경제연구소(KIFE) 제 4회 국제학술대회 · SWOT analysis Wal-Mart Carrefour -#1 in terms of revenue & # of stores -Yihaodianis owned ... •By opening more stores

한국식품경제연구소(KIFE)

제 4회 국제학술대회 안내

TIME TITLE NAME

Session

1

15:00-15:20 Introduction Renee B. Kim

15:20-15:50 Food Security Cooperation and Food Safety

Co-design in East Asia Takashi Toyoda

15:50~16:00 Break Time

Session

2

16:00-16:15 Internationalization Strategies of Korean Retailers:

Challenges & Opportunity in China Yan Chao

16:15-16:30 Wal-mart China Karimov Navruz

16:30-16:45 Failed Marketing Strategy of Korean Food

Corporation in China Yoon Jung Min

16:45-17:00 Break Time

Session

3

17:00-17:15 Modeling Consumer Brand Choice Behavior

for Bottled Water Yoon Dong Hyun

17:15-17:30 Attitudes and Purchase intention

Towards the Use of GMOs Song Ni Eun

17:30-17:45 Food Risk Communication Han Kang Hee

17:45-18:00 Conclusion Renee B. Kim

일시 : 2013. 11. 12(화)

장소 : 한양대학교 경영연구소

주최 : 한국식품경제연구소(KIFE)

후원 : 한국연구재단(NRF)

한국식품경제연구소(KIFE)

제 4회 국제학술대회 안내

안녕하십니까. 핚국연구재단의 핚국사회기반연구사업(SSK)과 관련하여 ‘핚양대학교- 핚국식품경제연구소(KIFE)에서 아래와 같이 워크샵을 개최하게 되어 안내 드립니다. 최근 식품산업은 다양핚 홖경변화로 인해 직간접적인 변화를 맞이하고 있으며, 이에 따라 정부와 기업, 소비자들의 인식도 많은 변화의 과정을 거치고 있습니다. 핚국식품경제연구소(KIFE)는 세계화가 가속화되는 시장에서 핚국 농식품 산업의 글로벌 경쟁력을 제고하여, 아시아의 전략적 무역 대상국들에 있어서 핚국 농식품이 지속가능핚 경쟁력을 확충핛 수 있도록 전략적, 정책적 방안을 모색하고자 노력하고 있습니다. 이번 국제학술대회는 Tokyo University of Agriculture and Technology의 Takashi Toyoda 교수를 초청하여 짂행될 예정입니다. 이번 국제학술대회에서는 식품안전과 식량안보, 농식품 국제 소비자 시장, 식품공급사슬의 마케팅과 관리, 농식품 산업의 글로벌화에 대해 논의하고자 합니다. 학계 및 유관기관 여러분들이 본 학술대회에 참여해주시면 더욱 뜻깊은 자리가 될 수 있을 것입니다. 급변하는 홖경 속에서 식품산업의 지속적이고 발전적인 연구를 위하여 관심 있는 분들의 많은 참여를 부탁드립니다.

2013. 11

핚국식품경제연구소(KIFE) 연구책임자 김보영

2013-11-13

1

LOGO

Internationalization Strategies of Korean Retailers:Challenges & Opportunities in China

CASE: Lotte Group-Lotte Department Store & E-mart

Chao Yan

Table of Contents

2

1

2

3

4

Background

Objective

Content

Method

5 Result & Implications

2013-11-13

2

Background

ü Because of rapid economic growth of China, we can see ChineseMarket is very important. Today many foreign companies enter theChinese market.

ü Especially, FTA between China and South Korea has started atMay 2nd , 2012. Trade between China and South Korea have beenactively conducted.

ü Because of this, Many South Korean retailers(E-mart, LotteGroup-Lotte Department Store) entered the Chinese market spread,but eventually failed with the big loss.

3

Objective

ü Through the analysis of reason of the failure in Chinesemarket, we have an important objective that how to makefuture management methods and differentiated strategies forKorean companies in Chinese market.

4

2013-11-13

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Content

ü The analysis of reason of the failure for Korean retailers(E-mart, Lotte Group-Lotte Department Store) in Chinese market

ü Through the analysis of the reason of the failure, we will find away that how to make future management methods anddifferentiated strategies for Korean companies in Chinesemarket.

5

Method

üLiterature

üNews

ü SNS

6

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Result & Implications－The history of entering into the Chinese market

Lotte Department Store E-mart

1997 Opening (Shanghai)

2006 Establishment (Beijing)

2005 Opening (Tianjing)

2008 Opening (Beijing) Opening (Beijing)

2009 Number of Stores (21)

2011 Opening (Tianjing)

2012 Complex cultural facility e.g. cinema, book store (Tianjing)

2013 Opening (Weihai/Qingdao)7

Result & Implications-The reason of the failure in Chinese market(Lotte Group & E-mart)

Lotte Group E-mart

The reason

of the failure

Select the wrong geographical position Select the wrong geographical position

The conflict with a partner Lack of understanding of Chinese culture and consumers caused conflict

Lack of localizationLow awareness about the brand Lack of localization

Unsuitable entry time Unsuitable entry time

DamageSince Aug.2008: 172 billion(won)

2009/2010/2011: 345 billion, 366 billion, 281 billion(won)

Until 2011, total damage: 952 billion(won)2011, 11 stores closed

Now, 16 stores opening8

2013-11-13

5

Result & Implications-Future strategies & Positions

Lotte Group E-mart

Localization strategy Localization strategy

Sole investmentIndependent Sales Recruit Chinese staff

Customized strategies for each location

Customized strategies for each location

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LOGO

Wal-Mart vs Carrefour(China)

Karimov Navruz

2013-11-13

6

Wal-Mart

- Founder: Sam Walton

- 1st store was opened in 1962

- by 1990th it became number 1 in USA

- Headquartered in Bentonville, Arkansas, US

Carrefour

- Founded in 1958 by Marcel, Denis & Jacques

- Georges Plassat (Chairman & CEO)

- Headquarters: Boulogne Billancourt, Farnce11

–Wal-Mart #1 Carrefour #2

- Over 8,500 stores in 20 countries (mostly in the US) - Over 10,000 stores in more than 30 countries

- Roughly 2.2 million employees worldwide - Around 500, 000 employees

- Revenue $469.162 billion as of 2013 - Revenue €76.127 billion (2012)

- Net income in 2013, $16,999 billion - Profit €1.233 billion (2012)

Global Leaders in Retail Group

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–

Kantar retail top 5 global retailers

13

–o Wal-Mart entered China in 1996, Carrefour in 1995

o 1/5 population of the world

- (rise of middle class family)

o Growing urban population

o The World’s #2 economy

- (India is just the next door)

Why China?

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–

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–v Wal-Mart is believed to have around 400 stores in china

- ( another 110 is expected by 2016); & 100,000 employees

§ Types of stores: Supercenters, Neighbor-hood Markets

and Sam’s clubs

v Carrefour has around 210 stores in china

§ Type of stores: Hypermarkets (mostly)

- Approximately 60, 000 employees

Wal-Mart & Carrefour in China

16

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–Market Share

Others78%

Carrefour5.1% CR Vanguard

6.6%

Wal-Mart8.1%

Trust-Mart2.2%

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–

SWOT analysis

Wal-Mart Carrefour

- #1 in terms of revenue & # of stores- Yihaodian is owned by Wal-Mart - Competence in IT

- Too localized(easy to copy)

- Lack of stores in big cities - Labor related lawsuits

- E-commerce is growing rapidly - Growing urban population

- Competitors (local) - A mixture of Guanxi& Confucianism - Government policies

- Centralization working- 1st Western entrants (regarded as the most favorable foreign operator)

- Slow progress in opening units - Lack of branded-goods on the shelves

- Development of Supermarkets and discount stores in larger cities

Competitors:- Wal-Mart & Tesco (as well as local players)- Policy changes by central/local governments

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–q Wal-Mart has done a tremendous job by buying the giant online

website “Yihaodian” Why?

• Online shopping is expected to triple by 2015 in China• By opening more stores the Giant is planning to further strengthen its position

in the Chinese retail market

q Carrefour

• Already lost its market share

• Competitors are taking over (mostly locals)

• Focusing too much on Taiwan, as it holds almost 50% of the market

FACTS

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LOGO

Case studies: Unsuccessful marketing attempts of Korean food

corporations in China

Yoon Jung min

2013-11-13

11

Research goal

❖To analyse Korean food enterprises’ common factors to success and failure

❖To study the essential marketing strategies for penetrating into Chinese market after China-Korea FTA agreement

Today’s focus

Case studies: Unsuccessful marketing attempts of Korean food

corporations in China

Case 1: Samyang

Case 2: Ottugi

2013-11-13

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Case 1: Samyang - Marketing Strategy

❖Chosen ‘Qingdao, Shandong’ as the location for their business extension

▪ High quality agricultural products ▪ Cheap labour force ▪ Similar climatic condition as Korea▪ Habor city - Geographically close to Korea▪ Great support of Chinese government for business in

processing agricultural products

Case 1: Samyang- factors to failure

❖Samyang’s internal management crisis

▪ The ‘beef tallow shock’• Media reported that Samyang used industrial-

purpose beef tallow, instead of edible vegetable tallow

• Samyang discontinued ramen sales • A huge damage to Samyang’s image• Samyang scored 10% (approx.) in Korean market

share Resulted in hardship to their business in China

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Case 1: Samyang- factors to failure

❖No cooperative relationship with the partner ▪ Delay in decision▪ Marketing conflicts due to the partner’s financial

condition

❖Market research was not executed thoroughly. ▪ Product’s uniqueness and competitiveness was

comparatively insufficient▪ Unable to establish their independent marketing

plan.

Case 2: Ottugi - Marketing Strategy❖Established a collaborative company in

lianyunjiang(连云江), Jiangsusheng（江苏省）

❖Judged that the collaborative partner ‘Liangshiju’ is a well-known, national enterprise and have ensured the local distribution network

▪ Converted name of 진라면(Jin ramen) to ‘金拉面’ for market branding

▪ Established a supplementary business of ‘dried agricultural products’ to assist ramen production and distribution in China

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Case 2: Ottugi - Factors to failure

❖Due to the continuous sales slump and manufacturing cost, the collaborative company gave up on Ramen business ▪ Changed the direction of business to ‘dried agricultural

products’

❖Lack of knowledge about Chinese market ▪ Production-orientated, rather than customer-

orientated▪ misinterpretation of Chinese customers

Case 2: Ottugi - Factors to failure

❖Insufficient pre-investigation of the target location ▪ As 连云港(lianyunjiang) is an agricultural city, the economic

status was relatively low • Did not consider the consumer’s economic status and market

circumstance

❖Insufficient marketing competence in Chinese market▪ Employed Chinese staffs in Korea for advertising and

marketing▪ Dispatched to China’s main cities, but was unsuccessful due

to anti-foreignism

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Common factors of the both companies

❖B2C Marketing perspective Lack of proper China market investigation▪ Conditions of location▪ Thoroughgoing consumer’s purchase pattern

research❖Partner relationship perspective

▪ Ability of handling financial conditions (related with insolvent enterprise)

▪ Experience of distribution▪ Trust and Credit

Further research direction

❖Complete analysis of the factors to success and failure

▪ SWOT analysis of Korean food enterprises that based on these factors is needed.

❖Sufficient investigation of China’s unique business environment/background

▪ investigate the moderating variables to maintain the long-term relationship between Korean-Chinese enterprises.

2013-11-13

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REFERENCE

❖[네이버지식백과] 삼양식품 [Samyang Foods Co., Ltd., 三養食品] (기업사전, 2011.8.5, 굿모닝미디어)❖서전량(2011)한국 식품 업체의 중국 시장 진출방안에 관한 연구 원광대학교 석사학위청구논문

LOGO

Modeling Consumer choice behavior for bottled water

Yoon Dong Hyun

2013-11-13

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Contents

1

2

3

4

Introduction

Research Objective

Research Design

Expected Output

33

5 Future Plan

Introduction

vKorean bottled water market

uLawmakers allowed to produce bottled water from 1994uSales revenues for Korean bottled market in 2012 were \500

billion(A.C. Nielsen Retail Index)uOver 70 producers own more than 100 brandsuUnder top 4 producers take less than 2% of market share eachuKwang Dong PharmaceuticaluHaitai BeverageuNongshimuLotte Chilsung Beverage

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Research Obectives

v Research Objectives

uAdvertising expenditures for the entire water industry totals $48 million in 2010(BMC, Beverage Marketing Corporation)

uCompare to Carbonated soft drinks’ $477 mil, Energy drinks’ $132 mil, and Fruit Beverages’ $361 mil

uNeed research to find the attributes to brand equity in bottled market to support marketing strategy

uExtract attributes that consumers concern about brandsuDetermine the trade-offs consumers are making between

various brand attributes, and the importance consumers are attaching to attributes

35

Research Design

vPrevious study

36

Article Product Attributes

Green and Wind (1975) Spot-remover Product Package design, Brand name, price, Good housekeeping seal, money-back guarantee

Kim Gyun Woo (1995) Soft Drinks Taste, Package, Price,Benefit

Heo Young Ji, Ko Jae Youn (2012)

Premium bottled water Taste, Origin source of water, region, container,

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Research Design

vAttributes

u Tasteu Distribution Channelu Brandu Place of Originu Price

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Research Design

vTaste

uSurvey from The U.S. Environmental protection Agency in 2003 indicates top 3 reasons for drinking bottled water. Health care, Taste and convenience

uPleasant, Pure, Natural, RefreshinguAdjectives which are frequently used in the marketing of

bottled water (D. Wells, 2005)

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Research Design

vDistribution channel

uConsumer behavior differentiate as distribution channel changeuShopping for groceries online requires a significant change in

behavior (Hansen, 2005)uOnline shoppers forfeit the social interaction of offline

shopping and the potential to evaluate groceries prior to purchase (Hand et al., 2008)

uDistribution channels: Online, Supermarket, Convenience store, Mom & Pop store

39

Research Design

vBrand

uUnder top 4 producers take less than 2% of market share per each company

uRepresentative brand for top 4 producers are:u Icis(Lotte), Peongchangsoo(Haitai), Baecksansoo(Nongshim)

and Jeju Samdasoo(KwangDong)

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Research Design

vPlace-of-Origin

uPlace of origin is a key factor for bottled water marketinguConsumer’s experience demographic characteristics are

effective factors on brand evaluations (Festervand et al., 1985)u Jeju Samdasoo: ‘Natural Jeju water’ marketinguBacksansoo: BaekdusanuPyoungchangsoo: Pyoungchangu Icis: New product ‘Icis DMZ’

41

Research Design

vPrice

42

Convenie-nce store

Supermarket Mum & Pops Online

Samdasu 850 320-390 450-700 387

Icis 700 300-410 350-700 300

Pyoungchangsoo 600 380 380-600 312

Backsansoo 700 500 350-700 610

Source: Korea Consumer Agency

2013-11-13

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Future Plan

vExamining the effect of attributes on consumers’ choice behavior

vDevelop a model of Korean Consumer preference for bottled water by applying conjoint analysis

vMore Literature review is necessary

43

LOGO

Attitudes and Purchase intention

towards the Use of GMOs

SONG NI EUN

2013-11-13

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Contents

1. Research objective1. Research objective

2. Research method2. Research method

3. Result3. Result

4. Summary & Implication4. Summary & Implication

45

1. Research objective

GMO purchase intention & reasonGMO purchase intention & reason

GMO problem & solutionGMO problem & solution

Information acquisition channel & Evaluation of GMO informationInformation acquisition channel

& Evaluation of GMO information

Interest about GMO & Participation intention for GMO policy

Interest about GMO & Participation intention for GMO policy

Suggestions for GMO policy and communication

Suggestions for GMO policy and communication

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2. Research method

ScienceReporter

(20 people)

ScienceReporter

(20 people)

GeneralReporter

(22 people)

GeneralReporter

(22 people)

Consumer(238

people)

Consumer(238

people)

FGI& Survey

FGI& Survey Survey Survey

47

3-1. Result : GMO purchase intention

will you buy tofu if it is marked GM soya on it?

yes

no

Science reporter

ConsumerGeneral reporter

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3-2. Reason to buy

If you buy, what is a reason?

SR

CS

GR

GMOis Similar

with Breeding

GM Foodis Similar

with general food

Microbial & chemical

contaminationare more serious

than GMO

The problem didn’t appear

in previous experience

49

3-3. Reason not to buy

If you do not buy, what is a reason?

SR

CS

GR

Consumers’ vague anxiety

Not know well

EU’sopposition

Impact of opposition

groupsin Korea

Lack ofsafety

verification

Not believe GMO

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4-1. GMO problem

What do you think the biggest problem is with GMO?

SR

CS GR

Safetyfor human body

Ethical Issues Religious beliefs

Environmental issues

consumers’ vague anxietyConsumers’

vague anxietyLack of validation

method

51

4-2. GMO solution

If GMO was a world-wide trend, what would be the first thing to be resolved?

SR

CS GR

Enhanced safety verification

Correct informationprovision

Legal monitoring Verificationmethod

Development

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5-1. GMO information acquisition channel

Where do you get the information about GMO?

SR

CS GR

TV Internet Newspapers Experts Magazine

53

5-2. Evaluation for GMO information

Government provide all the GMO information to the public.

SR

CS GR

Entirely disagree Disagree Agree Entirely agreeAverage

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6-1. Interest about GMO

How much interest do you have about GMO?

SR

CS GR


55

6-2. Participation intention for GMO policy

Would you like to participate in decision-making process?’

SR

CS GR


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7. Summary & Implication

Science reporter General reporter Consumer

Problemconsumers’ vague

anxietysafety of the human body

safety of the human body

Solutioncorrect

informationenhanced safety

verificationenhanced safety

verification

Informationacquisition

newspapers newspapers internet

Purchasereason

GM Foodis similar

with general food

GM Foodis similar

with general food, breeding

the problem didn’t appearin previous experience

57

7. Summary & Implication

General reporter is sometimes similar to science reporter and sometimes similar to consumer

General reporter is sometimes similar to science reporter and sometimes similar to consumer

Government should reinforce safety verificationand provide sufficient and correct informationGovernment should reinforce safety verificationand provide sufficient and correct information

Most consumers mainly get GMO information on the internet,government should manage on-line media

Most consumers mainly get GMO information on the internet,government should manage on-line media

When the government provides GMO information,using consumers’ experience will be effective

When the government provides GMO information,using consumers’ experience will be effective

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LOGO

Study on Enhancement of Risk Communication

among Central & Municipal governments and Media

for food Safety Management Issues

Han Kanghee

BRIEF CONTENTS

1. Objective of research

2. The difference of view point between reporters and science journalists

3. Viewpoint difference between media and government

4. Future research plans

5. An Expected outcome

6. Implications of research

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1. Objective of research

Consumerdistrust

Lack of knowledge

Exaggerate report of the media

Lack of communication

among the government

Government, Local government and MediaStudy on Risk Communication for successful

communication

61

Food negligent accident


1) If you do not have intent to buy GM food, what is the reason?

•Reporter : Indefinite anxiety

•Science journalist : Cannot trust gene recombination technology

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• Tendency that they do not know about GM food like normal consumer

• More specific opinion about GM Tech

63


Reporter Science Journalist


Difference between science journalist and reporter of their specialty knowledge

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2) If developing with GM food is global trend, what is the first thing to do in Korea?

• Reporter : Providing right information about GMO

• Science journalist : Reinforcement of GMO safety examination

65


• not only right info but Closer and friendly way to consumer

• Scientific way and focus on effect human body • Trust with GM tech

66


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Difference how to approach about GM technology

67


3) What is the source of information about GMO food?

• Reporter : Mass media

• Science journalist : Mass mediaScience Journals

68

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• Tend to rely on mass media

• Mass media and science journal

69



Science journalist have high level knowledge of food risk

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In terms of risk communication,

having strong power of influence

71


SNS(social networking service)

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Aspect of SNS and Blog

G : Working hard to make SNS

R : Very hard to find information


73

Reporter(R) Government(G)

Aspect of SNS promotion

G: Each department are making smartphoneapplication

R: Just making SNS is childish mind and do something


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What each wants

G: Promote our SNS instead of us

R: Request clear information

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4. Expected Outcome

vBetween government and media can do effective Risk communication

vSuggest several solutions

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5. Future Research Plans

More steps

•About Risk communication in Korea, Japan, China, North America and Europe

•Food Crisis Manangement system in Korea, Japan, China, North America and Europe

•Successful case study

77

5. Future Research Plans

Next paper will be

• Korea-China FTA crisis management system

• What is the implication of future in Korea-China FTA? (Especially agriculture food)

• What difference Inbound VS Outbound?

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LOGO

Documents

한국식품경제연구소(KIFE) 제 4회 국제학술대회 · SWOT analysis Wal-Mart Carrefour -#1 in terms of revenue & # of stores -Yihaodianis owned ... •By opening more stores