Compared to other developed countries in the west-east countries are showing brisk and rapid growth even though it’s belated. As an example, Korea has been attracting investment networks with a globally and frankable management policy compared to a closed administration policy from the past. Because of this, a variety of foreign companies enters Korea, and domestic companies advance overseas. When it comes to overseas expansion, the most important thing is to realize the region’s culture and characteristics, which becomes the form of specific localization. No matter how much the product is good domestic, if it’s useless or doesn’t appeal to overseas people, advance would mean nothing. I will talk about examples of localized cases like this.
Jinro
Spiritous liquor is the main part of a staple in the liquor market at the west. One hard liquor, called Soju which is diluted distilled water, is indispensable. Korea’s represented soju company ‘Jinro’ has been making the highest sales in Korea. In 1976, due to policy for raising the import processing ratio of raw materials according to the performance of liquor, exports have accelerated exporting liquors produced in domestically. Simultaneously in the middle of the deteriorating economic environment in 1979, Jinro decided to enter Japan by exporting Jinro. The reason for the advance to Japan was because Japan had four times bigger liquor market than Korea, and the location was geographically close enough which made easy to manage and regulate the business. Before the entry, Jinro had done market research and its promotional strategy. But unfortunately, not even their first supply was sold, so they had to pile up the supplies and just dust off.
The company had to return to the starting point to study and make new soju that would suite to the Japanese taste. Finally, Jinro has created a new soju that suits Japanese taste. New Jinro’s soju was dryer and had less alcohol than the original soju. In Korea, if the impression of soju was meant for common people with low price without any difficulty on the other hand the impression, in Japan changed into the advanced image.
The design of the bottle has transformed to let consumers recognize Jinro soju as one of the high-end liquors from the west. In addition, Jinro initiated a strategy, which was visiting all the bars to find consumers directly rather than sitting down and waiting for consumers to find them. This aggressive and meeting-in-person strategy has slowly increased market share in Japan. Furthermore, the company expected Korean residents in Japan are the ones who are first and most familiar with Korea, so they focused on positioning them as main clients. Through Korean residents in Japan, they passed down orally about Jinro’s soju which played a Catalyst role in Jinro’s Japan entry. Despite Jinro’s effort, there was still a hurdle.
Japan’s distribution network was based on respect for long-established relationships of trust, so no matter how the foreign product good Japanese wouldn’t willingly deal. Nevertheless, Jinro never stopped trying. They continuously strive to maintain a good relationship with the wholesalers they contracted at first. After 20 years of supporting the distribution network, Jinro has finally changed the sense of difference from a foreign country into credibility, and trust. As a result, Jinro has overcome Japan’s exclusiveness and closure.
Orion
One of the long-term established corporations ‘Orion’ in Korea, has become successful in developing global markets as a leader in globalization through their major work product named ‘Choco-pie.’ Choco pie is a simple cookie sanded with simple bread with chocolate covering marshmallow inside. How did this simple snack enter the global market? Through Choco-pie, Orion has successfully entered the market in Russia, China, Vietnam etc. Orion has captivated the hearts of the world due to its thorough localization strategy. In1997, Orion constructed a production factory in China and entered the business in full-scale, and 2006, in Vietnam and Russia, production factory was also constructed and entered the market based on manufacturing.
Orion realized in China, people drink tea with high-quality confectionery, and that fact takes a lot of part in China. Targeting this fact, Orion chose to focus and stick with the most basic product rather than diversify products. To focus on China, Orion changed the colour of the existing wrapper paper from blue to red to match the sentiment of China. Also, as Orion focused on Guanxi culture in China, they changed the product’s name the meaning ‘good friend’, which is more locally suited. Choco pie’s trade-mark was packaged and written in Korea’s vibrant culture keyword called Jung(情). Jung is Korean meant affection. On the contrary, Orion changed their trademark into another word that suits Chinese sentiment. Even though they may change the word, it still had a similar meaning.
This marketing strategy helped the brand image approach Chinese people with a heart and tried to fix the appearance of a genuine brand. As a result, in China, major events like weddings, Choco pie was appreciated for its value and even used as a gift for the occasion. Moreover, Choco pie won 1st place in the Chinese pie category in 2015. Showing another example of Orion’s localization, Orion becomes a success in other countries too.
In Russia, Russians love making jams from berries, so Orion made berry flavour Choco pie to target Russians. They were starting by releasing berry flavour Choco pie and receiving a good reaction from Russia. Then in Vietnam, Orion put Tinh on their package, which had the same meaning as Jung. Also, based on the culture of Vietnamese consumers who prefer the strong and deep flavors of chocolate, Orion launched Choco pie with lots of cacao which brought huge popularity and success in Vietnam. Even now, Choco pie has been so popular that people offered on the tables at memorial service ceremonies. Like wisely, the strategy of Choco pie’s localization has become the successful result of the global integration R&D department. To strengthen the competitiveness of global products, the Korean corporation became a headquarter and established a research and planning team and integrated global management is in full swing.
How did this simple product become a huge success? The reason for it would be sales strategy, distribution and marketing strategy based on a thorough on-the-spot investigation and planning. In conclusion, Orion maintained identification of existing product strategy while permeating into the country natural. Furthermore, while Orion was entering their business in another country instead responding to standardization or passively to the external environment under exhaustive investigation and plans showing active management attitude in localization has made a good example of success in localization business.
