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This report will consider the opportunities and restrictions involved in exporting a single premium malt whisky such as Glen Sporran into the Korean alcoholic beverage market.

Extracts from this document...

Introduction

University of Westminster Business School Peter Hill International Marketing 4MBS634 Product: Glen Sporran Country: South Korea Judy Ng W00144716B International Business with language Table of Contents 1.Republic of Korea. Page 3 1.1.Introduction Page 3 1.2 The Geographic's of South Korea Page 3 1.3 The overview of the Korean economy Page 4 2. Culture Page 5 2.1 Korean commercial and cultural characteristics Page 5 2.2 Drinking culture in Korea Page 6 2.3 Healthy trend in alcoholic consumption Page 7 3. Trade relations Page 7 3.1 Trade relationship between Republic of Korea and the United Kingdom Page 8 4. Whisky Page 9 4.1 The premium single malt whisky Page 9 4.2 Whisky in Korea Page 9 4.3 Impact of whisky restriction in Korea Page 10 4.4 The major giants of Whisky in Korea Page 10 5. Restrictions Page 11 5.1 Import Duties Page 11 5.2 Economic impact on whisky in Korea Page 11 6. Glen Sporran potential Competitors Page 12 6.1 Soju Page 12 6.2 Traditional alcoholic drinks Page 12 6.3 Direct Competitors Page 13 7. Target Market Page 13 8. Advertising in Korea Page 13 9. Image of Glen Sporran Page 14 9.1 Packaging of whisky Page 14 9.2 Labelling Page 15 9.3 Price Page 15 10. Distribution Page 16 10.1 Distribution methods from UK based companies Page 16 10.2 Locating Partners and Agents Page 17 11. Free Trade Zones Page 18 12. Future Page 19 12.1 Economic Forecast Page 19 13. Conclusion Page 20 14. Limitations Page 20 15. Appendices Page 21 16. Bibliography Page 24 1. Republic of Korea 1.1 Introduction This report will consider the opportunities and restrictions involved in exporting a single premium malt whisky such as Glen Sporran into the Korean alcoholic beverage market. A number of factors will be considered when entering into the market, such as cultural differences, traditional customs and the Korean business etiquettes. The economic condition and situation of Korea will also be examined, as this has great effect on consumer consumption and expenditure. ...read more.

Middle

They are Allied Domecq and Diageo and they are both UK based companies. Allied Domecq is the biggest whisky company in South Korea. Allied Domecq distributes brands such as Ballentine's, Canadian Club, Courvoisier and Kahlua.27 5.0 Restrictions 5.1 Import Duties Import Duty is levied on Scotch whisky and other spirits and liqueurs at 20% ad valorem, these discriminatory rates are higher in comparison to those applied in other industrialised countries. The Scottish Whisky Association (SWA) are seeking to eliminate all import tariffs in Korea.28 5.2 Economic impact on whisky in Korea 2003 started with a gloomy outlook for the South Korean economy. Most economist report low consumer sentiments and affected alcoholic drinks in a varying manner.29 Whisky imports have fallen by 30%; this may be due to the continuation of Korea's economic slump. In June Korea imported $15.76 million (approx �9.3) worth of whisky, however in May it imported $20.7million (approx �12.17). It is the first time that whisky imports have marked a double-digit fall since July 2001. According to industry experts, the reduction in imports resulted in a drop in consumption of premium whisky due the slow moving economy. Many companies have instructed their employees not to go to expensive bars when they meet their clients. "Whisky consumption responds to business fluctuations" an official at the commerce, Industry and energy Ministry Said "diminishing whisky imports are likely to continue for the time being". Whisky consumption has fallen over four successive months, from January to April, for the first time since the 1997 financial crisis. 30 As a result there has been an increase in Soju consumption and a decline in whisky consumption.31 This can be seen from the quantity of whisky actually delivered into Korea, which fell by 50% from March to April. Soju on the other hand increase its sales with 16% during the same period.32 33 South Korea's whisky consumption is a barometer of how confident the country's 48 million people re feeling about their economy. ...read more.

Conclusion

72 Iron and Steel 87 58 -33% 8. 39 Plastics and Articles Thereof 72 58 -19% 9. 90 Optical, Photographic Instruments 62 52 -17% 10. 89 Knitted or Crocheted Fabrics 40 44 9% 14.2 Appendix 2 UK TOP 10 EXPORT ITEMS TO KOREA UNIT: US$ MILLION (HS) COMMODITY AMOUNT INCREASE (%) 2000 (Jan to Dec) 2001 (Jan to Dec) 1. 71 Pearls, Precious Metals 559 508 -9% 2. 84 Nuclear Reactors, Boilers, Machinery 319 314 -2% 3. 85 Electrical Machinery 259 253 -2% 4. 22 Beverages, Spirits, Vinegar 178 200 12% 5. 90 Optical, Photographic Instruments 154 174 13% 6. 29 Organic Chemicals 102 84 -18% 7. 30 Pharmaceutical Products 61 79 29% 8. 28 Plastics and Articles Thereof 45 71 58% 10. 38 Tanning or Dyeing Extracts, Colouring Matters 50 53 7% 9. 39 Miscellaneous Chemical Products 51 49 -5% 14.3 Appendix 3 Table 2 Delivered Quantity of Alcohol in Korea by year Production Delivered Quantity of Alcohol 98/4 99/4 00/4 01/4 02/4 03/4 04/4 Beer 119,723 130,241 140,848 151,263 168,578 165,705 167,430 Diluted Soju 70,903 81,449 68,091 77,448 78,736 82,752 98,247 Distilled Soju - 5 31 4 1 2 2 Chongju 1,874 2,024 3,304 1,488 1,315 1,454 2,002 Whisky 915 957 1,074 1,724 1,602 1,089 548 Brandy 24 2 10 3 2 3 2 Liquor 711 1,102 1,048 634 434 335 250 Fruit Wine 409 680 492 759 799 936 1,125 Others 30 65 75 71 96 100 110 Sprites 19,790 22,951 19,422 24,210 22,769 23,445 26,061 Information from http://www.kalia.or.kr www.american.edu/TED/soju.htm 14.4 Appendix 4 Tax Rates by Price of Liquor (1) Takju (Alcohol content 3% or more) 5% (2) Yakju (alcohol content 13% or less): 30% (3) Beer (alcohol content 1% or more): 100% (4) Chungju (alcohol content 14% or more): 30% (5) Fruit wine (alcohol content 1% or more) : 30% (6) Distilled soju (alcohol content 1% or more): 72% (7) Diluted soju (alcohol content 1% or more): 72% 8) Whiskey (alcohol content 1% or more): 72% (9) Brandy (alcohol content 1% or more): 72% (10) General distilled spirits (alcohol content 1% or more): 72% 16. ...read more.

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