Korean firms’ brand power improves

By Park Si-soo

The brand power of the Korean business sector has improved this year thanks largely to customized marketing and promotional campaigns, according to a survey by the Korea Productivity Center (KPC), which gave improved grades to 26 of 59 local industries.

The KPC said that many firms here have taken advantage of advanced technologies and new media outlets such as social network services to reinforce brand competitiveness.

The KPC’s National Brand Competitiveness Index (NBCI) showed that the county’s industries collectively scored 67.8 points this year, up 0.9 points from last year’s 66.9.

The manufacturing industry sector won 67.8 points, down from 68.1 last year, while the service industry sector marked 67.8 points from 65.7 points last year.

Tablet PC; Kimchi refrigerators, which are specialized to preserve the staple Korean side-dish of spicy, seasoned cabbage; food containers; and milk were picked among products with the strongest competitiveness.

In the services sector, department stores, Internet shopping malls, discount retailers, and multiplex cinemas got high marks.

The intensifying competition between companies on developing new products and services and advancing technologies are helping them improve their brand value, which are crucial in times of economic uncertainty, the KPC explained.

A company’s success increasingly relies on its ability to convince customers to take a leap of faith on new products, and on developing a reputation for innovation in technology.

The KPC uses the NBCI to encourage a management mind-set centered on brand value, thus, stimulating goodwill competition and providing proper purchasing standards for consumers

The NBCI is an index produced as a sum of brand awareness formed through marketing, brand image and relationship on a scale of 100. It indicates the area to be invested in by each company, identifies a level of brand competitiveness in the industry concerned, and furthermore improves brand competitiveness.

This year’s survey covered 59 industries and 212 brands and targeted 112,280 users and non-users in 5 metropolitan cities ㅡ Seoul, Busan, Daegu, Daejeon and Gwangju.

Risers and fallers

In the survey, 26 industries out of 59 or 44 percent posted growth from a year ago. Water purifiers saw the biggest growth of 8.1 percent to score 67 points.

Apartments and digital televisions have rapidly gained footing with 4.5 percent and 3 percent growth, respectively. Food containers and laptop computers also saw a 2.9 percent and 1.5 percent growth, the KPC said.

The Tablet PC ranked top on the NBCI index in its first year of being subject to the survey. The KPC said the unusual debut of the PC to the index indicates excessive marketing and promotion campaigns by its manufacturers in a market without dominant player.

Two-door refrigerators saw the biggest drop of 5.6 percent in the NBCI index to 68 points, a dramatic reversal from last year’s glory of being labeled as the strongest competitiveness in brand.

Climbing tools also posted the same drop of 5.6 percent, followed by tires with 4.3 percent, mid-sized sedans with 3 percent, MP3 players with 2.9 percent, and Kimchi refrigerators with 2.7 percent.

In the services sector, multiplex cinemas and general hospitals saw the biggest rise of 7.7 percent to equally score 70 points. Gas stations came next with a 6.2 percent rise, followed by door-to-door delivery services, life insurance and securities with 4.8 percent.

Among services with a moderate rise of more than 4 percent are high-speed Internet (4.5 percent), TV home shopping (4.5 percent), family restaurants (4.5 percent), and Internet shopping malls (4.4 percent).

Home-schooling material was the only declining segment in the service industry with a 1.4 percent drop to 68 points.

Forecast for 2013

The KPC said in its forecast for 2013 in terms of the auto industry that Hyundai and Kia Motors will maintain their strong position.

It said Hyundai will take the upper hand in large-size sedans while Kia is expected to show a strong performance in mid-sized and sport utility vehicle segments.

It added cash-strapped Renault Samsung will continue to suffer a decline in sales next year, indicating the company’s further drop in the NBCI index. Renault’s SM3 and SM5 equally scored 67 points.

The KPC expected that rice cooker Cuckoo’s dominant position in the industry will remain intact next year. It said Samsung Electronics will take the upper hand in the fields of digital TVs, two-door refrigerators, Kimchi refrigerators, air conditioners and drum washers, with LG Electronics being the biggest challenger.

In the telecommunications industry, SK will maintain its dominant position in wireless communications, while KT will keep its leading position in fixed line, it said. An explosive increase of long-term evolution (LTE) users could lead to a major change in the industry, it said.

The distribution industry is likely to be affected by inflation, the unstable financial market and global economic fluctuations.