1. Case study 10 :
Yoon-Choi Corporation
DEMARQUAY THIBAULT
POLI ALEXANE
FILLON LAURA

2. Overview
Yoon-Choi Corporation
 Korean Corporation
 Founded in the 1950s
 Machinery, electric, electronic and textile manufacturing
 Exports electronic product to the United States
 Problem with US market
 Has to change its distribution systems
The company

3. Overview
 Woo-Young Jun : International Marketing Director, Yoon-Choi Corporation
 Phyllis Stevens : Senior Marketing Analyst, Pembroke Marketing
Management associates
Characters

4. Overview
Dates and positions
1950 : Yoon-Choi Company is
founded
1960 : Export priority
initiative of the
gouvernment
1970 : begin of the
exportation to the
US
1983 : Yoon-Choi
hire a consultant
to study the
situation of US
market

5. Overview
 Dialogue between Woo-Young Jun and Phyllis Stevens
 Problem: the US market
 Cause :
 “We started Late”
 “Only recently did we start our own manufacturing of electronic products”
 “The distribution”
 Solution proposed by Ms. Stevens: “An attack on all fronts”
Dialogue

6. Overview
 Profit : 625 300 US$
 Gross margin: 10.9%
Exhibit 1
Average Per Unit Cost for All Models Black and Car
(in Actual US$) White TVs Radios Stereos
Production costs (including labor and
materials)
29.10 11.00 22.96
Overseas transportation and duties 12.20 4.60 10.61
Warehousing and distribution 4.23 2.17 3.45
Local salaries (warehouse help and
representatives)
9.06 5.23 8.17
Average markup to dealers (11.0%) 6.00 2.53 4.97
Price after average markup 60.59 25.53 50.16
Actual Sales
Total sales (in millions of US$) 2.67 1.81 1.22
Gross profit (in actual US$) 301,040 196,328 127,932
Production and marketing costs for Electronic products in the US (1982)

7. Overview
 Proposed organization :
 All the retailers, wholesalers and manufactures depend on the Marketing service in the US
 T he Korean firm doesn’t sell directly but only with the marketing service of the US
Exhibit 2
Current and proposed Distribution Systems in the US

8. 0
200
400
600
800
1000
1200
1971 1972 1973 1974 1975 1976 1977 1978 1979 1980
Exports of Electronic products from Korea
Korean Exportation Exportation to US
Overview
 Most of electronic products exported from Korean go the the US
 The percentage of Korea product in US importation increase continuously
Exhibit 3
Korean Share of Total US Consumer Electronic import
0
1
2
3
4
5
6
7
8
9
10
1971 1972 1973 1974 1975 1976 1977 1978 1979 1980
Korea Share in US importation

9. 0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
1971 1972 1973 1974 1975 1976 1977 1978 1979 1980
Dependency in B&W TVs
Dependency in Color TVs
Depedency in Radios
Overview
 The dependency in Color TVs is not important
 Whereas US depends on importation for Black and White TVs and Radios is
Exhibit 4
Import dependency of the US Consumer Electronics Market

10. Overview
 Distribution : Specialist marketing subsidiary in the US
 Products
 Continue dual brand policy
 Give priority to low-end products
 Pricing : Volume oriented strategy
 Promotion :
 more advertisement in journal, for dealers, in media
 Intensive utilization of trade fairs
 Change Yoon-Choi to an American name
Exhibit 5
Summary of Stevens’ Report

11. Existing situation
Communication/Advertising
Strengths Weaknesses
Company founded in the 1950s The name « Yoon-Choi » in US
Already knew in US Not many ads at this time
No real allowances for dealers
Communication between Yoo
Choi Corporation and dealers in
US

12. Existing situation
Marketing/Pricing
Strengths Weaknesses
40 percent of its sales are overseas Lot of competitors
Trading division branch in San
Francisco
No marketing subsidiary in the US
Good profits Marketing strategy not clear
US imports the big part of their
B&W TV and radios
Not enough marketing channels
and import modes
Korean Share in US exportation is
growing up
Profit oriented strategy
High-end products
Started late

13. Existing situation
Marketing/Pricing

14. Existing situation
Marketing/Pricing
Strengths Weaknesses
40 percent of its sales are overseas Lot of competitors
Trading division branch in San
Francisco
No marketing subsidiary in the US
Good profits Marketing strategy not clear
US imports the big part of their
B&W TV and radios
Not enough marketing channels
and import modes
Korean Share in US exportation is
growing up
Profit oriented strategy
High-end products
Started late

15. Existing situation
Marketing/Pricing
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
1971 1972 1973 1974 1975 1976 1977 1978 1979 1980
Dependency in B&W TVs
Dependency in Color TVs
Depedency in Radios
0
1
2
3
4
5
6
7
8
9
10
1971 1972 1973 1974 1975 1976 1977 1978 1979 1980
Korea Share in US importation

16. Existing situation
Marketing/Pricing
Strengths Weaknesses
40 percent of its sales are overseas Lot of competitors
Trading division branch in San
Francisco
No marketing subsidiary in the US
Good profits Started late
US imports the big part of their
B&W TV and radios
Profit oriented strategy
Korean Share in US exportation is
growing up
High-end products

17. Existing situation
Production/Distribution
Strengths Weaknesses
Own manufacture Bad distribution methods in the US
No factory in the US
No TV color
Not enough marketing channels
and import modes

18. Statement of the problem
How can Yoon-Choi make
more profits in the US ?

19. Solutions
1. Continue without changes
2. Follow Phyllis Stevens point of view
3. Focus on Color TV
4. Merge with an American company
5. Leave the US market share

20. Solutions 1
 Perhaps, in the long term, the disappearance of
Yoon-Choi corporation in the U.S.
 Our opinion : The company can’t continue
without changes because it’s the current
strategy and it doesn’t work well enough
according to Yoon Choi corporation.
Continue without changes
Advantages
Cost nothing
Keep the company image
No risk
Disadvantages
Failing sales in the US: loss of profit
More competitors
Keep the distribution problem

21. Solutions 2
 Distribution : specialist marketing subsidiary in the
US
 Products :
 Continue Dual Brand policy
 Low end product
 Pricing : volume oriented strategy
 More promotion with advertising, etc..
Our opinion : Strategy with lot of changes and risks.
But the best way to reorganize the business of the
company
Follow Phyllis Stevens point of view
Advantages
Should get more incomes
More visibility
Reputation in the US market
Drawbacks
Short term solution
Risk with volume oriented strategy ad
low-end products
Improve relationship with retailers

22. Solutions 3
 Currently Yoon Choi doesn’t sell color TV.
 Sell to an other company the US market division
Our opinion : The company can not be absent in the US
market on Color TV, it’s a growing market. But the
dependency in the US or Color TV is low.
Focus on Color TV
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
1971 1972 1973 1974 1975 1976 1977 1978 1979 1980
Dependency in B&W TVs
Dependency in Color TVs
Depedency in Radios
Advantages
Don’t miss this field
Compete with others brands
Clearer picture : trendy company
Hard to make a name
Drawbacks
No dependency for the US in TV color
Build a new factory
Do research
Long term solution

23. Solutions 4
 Merge with a company specialized in the US
market
 Depends on the contract of this merge
Our opinion : Could be dangerous, because the is
risk is that Yoon-Choi products and brand in the US
disappear.
Merge with an American company
Advantages
Can improve the sell
More notoriety
Faster solution
Drawbacks
Risk of disparition of Yoon Choi brand
No more independent
Risk of intercultural differences

24. Solutions 5
Our opinion : Not recommended because we have to
take a part of these exportations. We must not miss this
opportunity. If you come back in the future, it’ll too late.
Stop the US market
0
1
2
3
4
5
6
7
8
9
10
1971 1972 1973 1974 1975 1976 1977 1978 1979 1980
Korea Share in US importation
 The Korea share in US importation is growing up
Advantages
No risk taking
Concentration on Korean market
No distribution cost increase
Drawbacks
Short term solution
Profit loss solutions
Stop the company expansion

25. Our recommandation
 Follow Phyllis Stevens point of view
 Merge with an American company

26. Questions ?
1. Continue without changes
2. Follow Phyllis Stevens point of view
3. Focus on Color TV
4. Merge with an American company
5. Leave the US market share