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German products enjoy an excellent standing in South Korea

The reputation of Germany and German products in South Korea is traditionally excellent and has improved again in recent years. Germany is an important reference model for Korea on many issues. Examples are the promotion of an export-oriented medium-sized enterprise, dual vocational training and German unity.

German cars, luxury and branded products benefit from this image and at the same time contribute to it. "Made in Germany" also helps with capital goods. Successful sales in Korea (Republic) include, above all, brand and customer care as well as good service. The free trade agreement that has been in place since July 2011 is also helpful.

Germany is very well respected in Korea (Republic). The Federal Republic was one of the first states to help the country after the Korean War. Older Koreans in particular know that many of their compatriots went to Germany in the 1960s to work in the mining industry or as nurses. At the same time, Germany granted the Republic of Korea a loan to build its economy. The country's first motorway between Seoul and Busan was modeled on German motorways. The president at the time was Park Chung-hee, the father of President Park Geun-hye, who has been in office since February 2013.

With President Park's assumption of office, interest in Germany increased again, because Germany is an important reference model for Korea on many issues. Examples are the promotion of an export-oriented medium-sized enterprise, dual vocational training and German unity. The economic success of Germany in a difficult time for Europe is also increasing Koreans' interest in the country.

German products are very popular in Korea (Republic) across all age groups. They have an excellent reputation for quality and reliability. With private consumers and industrial customers they have a bonus of trust.

Despite all the sympathy for Germany, the label "Made in Germany" does not make the products a sure-fire success. Because the second reaction people get when they hear about German products is that they are expensive. Often that is actually the case. This higher price has to be justified, be it through branding or through the long-term benefits of the product.


Branded and luxury products are status symbols


The higher price does not have to be a disadvantage, because South Korea is a very good market for the sale of luxury products and branded goods. Koreans live in a hierarchical society where status is hugely important. Despite all the successes they have already achieved, they have a preference for large projects, rankings and big names. Status can also be partly advertised through products.

Correspondingly, Koreans love brands and luxury and confidently show what they can afford, for example when it comes to durable consumer goods such as cars or smartphones.

In general there is pressure in society not to lag behind neighbors or colleagues. The consumers of luxury goods and branded goods follow many trends and fashions. It is accordingly helpful in marketing if products can be placed in one of the popular television series or popular actors or singers use them.

Numerous German brands are well established in Korea. When it comes to cosmetics, Beiersdorf is not only successful in business with Nivea, but also with the luxury brand La Prairie. In detergents, for example, Persil benefits from the good image of German products. In pharmacies, products "Made in Germany" can sometimes be found with a small German flag on the packaging.

For handbags, Moderne Creation Munich (MCM) has been running a flagship store in Seoul since 2005 with a Korean owner. When it comes to stationery, German writing implements from Montblanc (and outside the luxury segment Staedtler or Faber Castell) are well established. Clothing from Jil Sander, Hugo Boss, Jack Wolfskin and Deuter, for example, have a good reputation, as do optical products from Germany.

Around two thirds of all imported passenger cars are German brands. BMW, Mercedes-Benz, Volkswagen and Audi are the most important foreign brands in terms of numbers. All of them are in the upper price segment in Korea, as is the well-represented Porsche brand.

Suppliers from other industries also benefit. For example, there is hardly a Korean who does not know the Fissler and Zwilling brands. WMF is also well positioned. When it comes to furnishing apartments in the top price segment, Siemens and Miele are well established for white goods, as are Bulthaup for kitchens. Bosch and Siemens Hausgeräte has also been selling coffee machines in Korea since 2012.

In the food and luxury goods segment, German beer, which also enjoys a very good reputation, is establishing itself better and better on the Korean market, and the breadth of the range supplied from Germany is increasing in general. Due to Germany's excellent image in this area, there should also be good opportunities for German sausage products on the Korean market.

In the branded and luxury goods segment, a high price does not have to be a disadvantage. Suppliers of such products should not offer too cheap and cultivate the brand image. If the prices are too low, Korean consumers become suspicious and suspect that the quality is inferior. In the case of consumer goods, it is often better to enter the market at a price that is a little too high and to give discounts every now and then.



Short-term orientation dominates


Commercial and private customers tend to be short-term oriented. In the mentality, acting quickly and successfully is what counts. "Ppalli ppalli" (roughly "dalli dalli") is a popular word in South Korea. Things always have to happen quickly in Korea, so that customers feel satisfied. It is difficult to convince customers of the long-term benefits of a product in cost-benefit calculations. On the other hand, it is helpful to be able to deliver quickly if the customer suddenly wants to order.


Build and maintain relationships with customers


Due to the large cultural differences, it is very important for German companies to develop a good feeling for their Korean employees, partners and customers. Because in South Korea personal relationships are usually more important than the pure short-term cost-benefit considerations. Building and maintaining them are the key to long-term success in Korea.

This also includes an understanding of the work culture in South Korea. Koreans are used to working long hours and rarely taking vacation. That is why it is difficult for them - even if they have more free time compared to before - to understand an automatic notification from their German partner that they are on vacation for four weeks and that they will answer the email when they return.

Koreans are used to quick reactions to inquiries and can understand such a message in such a way that the German partner does not give them sufficient priority. The next time you buy, they may try to find another partner. In general, questions should be responded to quickly, even if the customer's problem cannot yet be resolved.


After-sales service is extremely important


Furthermore, a comprehensive after-sales service must be offered. Here it is not only decided whether a Korean customer will order again, but the satisfaction of one customer will attract the next and, conversely, their dissatisfaction will deter other potential customers.

In general, in most cases it is better to offer the product a little more expensive (including the costs for the accommodating customer service) than to try afterwards to bill the customer for each individual service.