Korea as a Comparative Business Marketing System: Review and Prospects

Abstract

Purpose: South Korea is now considered to be one of the major players in the global business arena. Along with its economic progress, the Korean business market has also been growing steadily for the past 40 years. Despite the prominence of Korean business, research on Korean business and in particular Korean marketing has been less systematic. This is especially true of business-to-business marketing (B2B) in Korea, which is a well-established area of study in most other developed countries. The purpose of this study is to therefore review and categorize the articles published in a broad range of B2B marketing research involving Korea. In so doing, we intend to provide a desirable agenda for the development of B2B marketing in this country.Methodology/approach: This article analyzed 50 Korean B2B marketing articles, which were published in international leading journals during the period 1990–2012. The descriptive data were reported and then a contents analysis was performed. The contents analysis was divided into two frameworks: (1) Intra firm dynamics and (2) inter firm dynamics. Each part was then analyzed more deeply from cultural and relationship perspectives.Findings: This article enables a deeper understanding of Korea’s B2B research situation and provides direction as to what we should study in the future. In the descriptive analysis, Korean B2B articles account for only 4% of marketing-related research, and 70% of the articles used Korean data only, whereas 28% referred to data from abroad. In the contents analysis, the articles mainly addressed the cultural differences between the East and the West as well as the differences in the perception regarding B2B relationships. In particular, Koreans consider the special relationship regarding education (Hakyoen) and region (Jiyeon) as being significant factors.Originality/value: This research addresses a unique phenomenon, Chaebol, in the Korean economy. Chaebols, conglomerates originating from Korea, are defined as business groups consisting of formally independent firms under the single common administrative and financial control of one family. Chaebols have had a tremendous impact on the Korean economy. Chaebols have successfully transformed themselves from being exporters of cheap products to now being major global players. Thus, Chaebols have been regarded as a driving force of the Korean economy. Firms affiliated with Chaebols tend to generate higher profitability than independent firms in some circumstances. However, buyers in group-affiliated companies do not generate positive outcomes because they often support loss-making parts suppliers by paying higher-than-market prices. This research also introduces the most unique phenomenon, the North Korean economy. The fundamental principle of distribution in North Korea is to systematically distribute goods through the national distribution network as established by the state. However, the recent distribution trend in North Korea seems to not be in suppressing commerce itself, but in tightening the regulation of public market activity while absorbing the deviated distribution demands through the state-operated store network. The authorities have also created an organization that integrates company production, distribution, and sales; however, there have not been sufficient resources or time for this model to succeed. To address this challenge, North Korean authorities are actively seeking unprecedented changes in order to deal with their distribution problems and are aggressively reorganizing the entire producer and consumer goods sectors.