Amore pacific.

QUIZ #3

1. Please elaborate on the main differences between Korean women and their French and American counterparts with respect to skin care and make-up products.

The main difference between Korean woman and their counterpart on the western is:

• Fragrances account for more than 30% of the western cosmetics, for the Asian markets is just 1%, because Asians are more focused on skincare

1. What were the consequences of the weakening of the Korean economy in late 2002 (2002 Asian Financial Crisis) for cosmetics multinationals in Korea which relied mostly on imported products?  
   

The consequences of the weakening of the Korean economy were:

• The Korean beauty products market was contracted in 2003 and 2004.
• The new manufacturer-controlled door-to-door networks came under particularly heavy pressure.
• Many of the newly recruited door-to-door saleswomen turned out to be significant credit risks.
• Traditional multi-brand specialty stores started to lose share precipitously to chain stores controlled by various manufacturers.

1. As a result of the complexities and high resistance to penetration of the Korean distribution system, what were the consequences for multinationals in Korea in terms of the distribution channels used?

The consequences for multinationals in Korea is term of distribution channels used were:

• The high-end cosmetics manufacturers had to rent space from department store owners instead of simply selling them products.
• They also complained about tariff rates of 8%, that were higher than the tariff inside the other countries of the OCDE

1. What do you think are the potential consequences for foreign companies of initiatives such as the Korean Cosmetics Industry Association’s “Made in Korea products are good for Koreans” campaign, which featured a study comparing Korean-made cosmetics with foreign ones and hinted that “overseas goods may be harsher on the skin.”? Is that considered a trade barrier? If yes, what kind of trade barrier is?
   

The potential consequences are:

• The Korean are not going to buy foreign products because they are going to think that those products are going to hurt them (due to what the campaign wants people to believe)
• For the previous reason the sales are going to decrease in a huge amount, making the company lose money

It is consider a trade barrier, known as nationalism and is a non-tariff barrier

1. What purpose do you think is behind the development and release of three different brands under the umbrella of Amore Pacific: Hera (1995), Iope (1996), and Sulwhasoo (1997)?

The purpose of this three brands were to catch more clients, because this brands were designed for different target markets, so when they developed these brands they wanted to cover more markets in Korea.

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