TY - JOUR
T1 - Creating demand for foreign brands in a 'home run' market
T2 - tobacco company tactics in South Korea following market liberalisation
AU - Lee, Sungkyu
AU - Lee, Kelley
AU - Holden, Chris
PY - 2012
Y1 - 2012
N2 - Objective: To analyse the tactics transnational tobacco companies (TTCs) used to increase market share in South Korea after market liberalisation in 1988, and the
subsequent impact of TTCs’ activities on the domestic industry and ultimately public health.
Methods: Internal tobacco industry documents were searched iteratively and analysed by keyword related to strategies for increasing market share in Korea since liberalisation.
Results: Following market liberalisation, TTCs faced entrenched cultural and institutional barriers in Korea which hindered increased sales of cigarette imports. TTCs identified population groups more favourably inclined towards imported brands, developed new distribution channels and used promotional activities targeting these groups. The growth in market share by TTCs suggests that these activities were successful at challenging the Korea Tobacco & Ginseng Corporation (KTGC) monopoly. In response, KTGC shifted to a proactive marketing approach and adopted strategies similar to TTCs. This, in turn,
made the Korean market highly competitive. Findings show that, after market liberalisation, there was an upward trend in cigarette consumption and smoking
prevalence among the targeted population groups, notably youth and young women.
Conclusions: Governments engaging in trade negotiations that may lead to the opening of domestic tobacco markets need a fuller understanding of previous
industry activities for expanding into emerging markets as well as how the domestic industry can change accordingly. To protect public health, the adoption of comprehensive tobacco control measures, guided by WHO Framework Convention on Tobacco Control, are needed as part of such negotiations.
AB - Objective: To analyse the tactics transnational tobacco companies (TTCs) used to increase market share in South Korea after market liberalisation in 1988, and the
subsequent impact of TTCs’ activities on the domestic industry and ultimately public health.
Methods: Internal tobacco industry documents were searched iteratively and analysed by keyword related to strategies for increasing market share in Korea since liberalisation.
Results: Following market liberalisation, TTCs faced entrenched cultural and institutional barriers in Korea which hindered increased sales of cigarette imports. TTCs identified population groups more favourably inclined towards imported brands, developed new distribution channels and used promotional activities targeting these groups. The growth in market share by TTCs suggests that these activities were successful at challenging the Korea Tobacco & Ginseng Corporation (KTGC) monopoly. In response, KTGC shifted to a proactive marketing approach and adopted strategies similar to TTCs. This, in turn,
made the Korean market highly competitive. Findings show that, after market liberalisation, there was an upward trend in cigarette consumption and smoking
prevalence among the targeted population groups, notably youth and young women.
Conclusions: Governments engaging in trade negotiations that may lead to the opening of domestic tobacco markets need a fuller understanding of previous
industry activities for expanding into emerging markets as well as how the domestic industry can change accordingly. To protect public health, the adoption of comprehensive tobacco control measures, guided by WHO Framework Convention on Tobacco Control, are needed as part of such negotiations.
KW - tobacco industry
KW - market liberalisation
KW - South Korea
U2 - 10.1136/tobaccocontrol-2012-050534
DO - 10.1136/tobaccocontrol-2012-050534
M3 - Article
JO - Tobacco Control
JF - Tobacco Control
SN - 1468-3318
ER -