Conquering South Korean golf market
Turnaround strategy and market entry plan for Top-10 global footwear brand
The opportunity
South Korean golfers make up the 3rd largest golf market in the world (behind only the USA and Japan). It remains one of the most challenging and yet at the same time most attractive golf markets globally.
The challenge
A global footwear manufacturer entered South Korean golf shoes market with the ambition to quickly secure a leading position in the sector. Five years later, the results had been unsatisfactory. Despite superior product quality and large marketing budgets the Company was suffering from weak sales and shrinking market share.
Waveup was asked to diagnose the root causes of these challenges and identify viable strategies to quickly turnaround sale
In South Korea we were operating through the long-term distribution partner. They kept saying sales would pick up but quarter after quarter we didn’t see any positive dynamics. That’s when we decided to involve Waveup to do the initial analysis of the situation. We needed someone to assess our position in the market and point us in the right direction, and we needed that analysis real quick – we had merely a month before the next board meeting.
HEAD OF SALES, APACOUR APPROACH
Situation dive-in
Deep dive in on the market and Company’s positioning through the market research, financial analysis, interviews with distributors, end customers and influencers – all with the goal of analyzing brand’s performance through the entire value chain. Based on the analysis conducted, four major issues became evident:
DISTRIBUTION
Selected distribution partner has secured a contract with only one major mass footwear chain; with the products being absent online or in the specialized outlets.
PRICING
Product pricing was 30%+ higher than the closest competitors, encouraging counterfeit product sales and sluggish in-store sales performance.
POSITIONING
Wrong definition of the customer demographics, with the original product developed and priced for the premium segment, and yet marketed for the mass audience
MARKETING
Company’s marketing efforts were primarily focused on adapting global advertising campaigns to the local market; resulting in very little popularity with the target audiences.
OUR APPROACH
Analysis summary
Despite having strong expertise in the shoe sector, the distributor lacked knowledge of building the right distribution and marketing operation for a premium brand in a luxury sports segment – prioritising short-term discounts and operational margins over long-term brand building and player collaborations.
All of the issues that would surface in our analysis would point to one root cause of the challenges: Wrong distribution partner choice
The next vital step was therefore to make a decision on the best way to move forward. Having analysed the available strategic options, we had a firm understanding that Company needed a reliable partner in the market with strong expertise in the golf and shoe market, and established success track record. Through interviewers and analysis we have built a map of the possible partner targets; ranking each on a variety of factors including:
Pricing
Distribution network
Celebrity access
Customer support etc.
We have also put together a comprehensive turnaround plan for the new partner to quickly rebound performance
Our impact
After the recommended distributor change the company in partnership with new local partner has set a course to reconstruct the brand and ensure its attractiveness for the Korean customer
01
PRICING
Adjusted pricing levels resulted in long-term sale volume increase of +25%
02
NEW PRODUCTS
Added new product lines to penetrate the market across categories
03
ADS
Invested in print and TV ads; as well as exclusive direct corporate sales program
04
COLLABORATIONS
Signed collaborations with 2 major local golf star – producing also a local celebrity inspired golf shoe that was an instant sales hit
05
NETWORK
Drastically increased distribution network to add more touch points with the customer, including online and specialist brick-and-mortar locations
15%
market share, up from <5% in a year prior
100+
new distribution points within 12 months
$160M
in retail sales within with over 65,000 pairs sold