SOUTH KOREA

SOUTH KOREA

South Korea occupies the southern portion of

the Korean Peninsula, which extends some 680

miles (1,100 km) from the Asian mainland. This

mountainous peninsula is flanked by the Yellow

Sea to the west, and the Sea of Japan (East Sea)

to the east. Its southern tip lies on the Korea

Strait and the East China Sea. The country's total

area is 38,462.49 square miles or 99,617.38

square kilometres.

South Korea can be divided into four general

regions: an eastern region of high mountain

ranges and narrow coastal plains; a western

region of broad coastal plains, river basins, and

rolling hills; a southwestern region of mountains

and valleys; and a southeastern region

dominated by the broad basin of the Nakdong

River.

South Korea's land is mountainous, and most of it

is not arable. Lowlands, located primarily in the

west and southeast, constitute only 30% of the

total land area.

Land Area

The total land area of South Korea

PopulationThe current population

of the Republic of

Korea is about 50.004

million people, which

is an approximate

0.45% increase from

the population taken in

the last census.

Based on the total

land area and the total

population, the

population density of

the country is about

1,271 people per

square mile.

ClimateThe climate of Korea

is characterized by

four distinct seasons:

spring, summer,

autumn and winter.

Winter occurs every January with the

temperature ranging from -5 degrees to 5 degrees.

Spring begins during the middle of April in the

central part of the country.

Summer can be divided into two periods;

Jangma, a rainy period which occurs during the

early summer months and Hanyorum, a hot and

humid period which occurs during late summer.

Autumn is the season with crisp weather, much

sunlight and changing autumn leaves.

SOUTH KOREAPeople & Lifestyle

Family Values

The family is the most important part of Korean life.

In Confucian tradition, the father is the head of the family and it is his responsibility to provide

food, clothing and shelter, and to approve the marriages of family members.

The eldest son has special duties: first to his parents, then to his brothers from older to younger,

then to his sons, then to his wife, and lastly to his daughters.

Family welfare is much more important than the needs of the individual.

Members of the family are tied to each other because the actions of one family member reflect

on the rest of the family.

In many cases the family register can trace a family's history, through male ancestors, for over

500 years.

SOUTH KOREAPeople & Lifestyle

Meeting Etiquette

Greetings follow strict rules of protocol.

Many South Koreans shake hands with expatriates

after the bow, thereby blending both cultural styles.

The person of lower status bows to the person of

higher status, yet it is the most senior person who

initiates the handshake.

The person who initiates the bow says, "man-na-

suh pan-gop-sumnida", which means "pleased to

meet you."

Information about the other person will be given to

the person they are being introduced to in advance

of the actual meeting.

Wait to be introduced at a social gathering.

When you leave a social gathering, say good-bye

and bow to each person individually.

Appointments are required and should be made 3 to 4

weeks in advance.

You should arrive on time for meetings as this

demonstrates respect for the person you are meeting.

Individuals who have established mutual trust and respect

will work hard to make each other successful.

South Koreans treat legal documents as memorandums

of understanding.

They view contracts as loosely structured consensus

statements that broadly define agreement and leave room

for flexibility and adjustment as needed.

Sensitive matters may often be raised indirectly through

the intermediary that first made the introductions.

South Koreans are extremely direct communicators.

They are not averse to asking questions if they do not

understand what has been said or need additional

clarification.

This is a culture where "less is more" when

communicating. Respond to questions directly and

concisely.

Since there is a tendency to say "yes" to questions so

that you do not lose face, the way you phrase a question is

crucial. It is better to ask, "When can we expect

shipment?" than "Can we expect shipment in 3 weeks?",

since this question requires a direct response.

Business Relationship & Communication

South Koreans prefer to do business with people with

whom they have a personal connection.

It is therefore crucial to be introduced by a third-party.

Relationships are developed through informal social

gatherings that often involve a considerable amount of

drinking and eating.

SOUTH KOREA

Internet Speed Ranking

SOURCE: Statista, The Statistical Portal

Having the highest percentage of Internetpenetration with a rate of 82.7% suggests thatthe most efficient and effective channel tocommunicate with the audience is through thedifferent online tools and social mediaaccounts where most of the Koreans spend anaverage of 14 hours weekly.

SOUTH KOREAGovernment

The government of South Korea is divided into three branches: executive, judicial, and legislative. The

executive and legislative branches operate primarily at the national level, although various ministries in the

executive branch also carry out local functions. Local governments are semi-autonomous, and contain

executive and legislative bodies of their own. The judicial branch operates at both the national and local levels.

As with most stable three-branch systems, a careful system of checks and balances is in place. For instance,

the judges of the Constitutional Court are partially appointed by the executive, and partially by the legislature.

Likewise, when a resolution of impeachment is passed by the legislature, it is sent to the judiciary for a final

decision.

Legislative Branch

At the national level, the legislative branch consists of the National Assembly of South Korea. This is a

unicameral legislature; it consists of a single large assembly. Most of its 299 members are elected from single-

member constituencies; however, 56 are elected through proportional representation. The members of the

National Assembly serve for four years. The Assembly forms 17 standing committees to deliberate matters of

detailed policy. For the most part, these coincide with the ministries of the executive branch. Bills pass through

these committees before they reach the floor. However, before they reach committee, they must already have

gained the support of at least 20 members, unless the president has introduced them. To secure final

passage, a bill must be approved by a majority of those present; a tie vote is not sufficient. After passage, bills

are sent to the president for approval; they must be approved within 15 days.

Executive Branch

The executive branch is headed by the president. The president is elected directly by the people, and is the

only elected member of the national executive. The president serves for one five-year term. The president is

head of government, head of state, and commander in chief of the South Korean armed forces.

Judicial Branch

The judicial branch includes the Constitutional Court, the Supreme Court, regional appellate courts, and local

district, branch, municipal, and specialized courts.

SOUTH KOREAEconomic Data

$1.67TRILLION

GDP

1.1%Inflation

Rate

3.2%Unemployment

Rate

16%Population

Below Poverty

Line

Credit RatingSouth Korea’s credit rating outlook was

raised by Moody’s Investors Service to

positive from stable, boosting demand for

the nation’s assets.

“Very strong and improving fiscal

fundamentals,” were a key reason for the

change, along with resilience in the country’s

external financing position, Moody’s said in a

statement today. The rating remains at A1,

the company’s fifth- highest grade.

SOUTH KOREA

Import Export

Imports in South Korea decreased to 42064

USD Million in February of 2014 from

44822.33 USD Million in January of 2014.

Imports in South Korea is reported by the

Ministry of Trade, Industry & Energy

(MOTIE). Imports in South Korea averaged

10568.33 USD Million from 1966 until 2014,

reaching an all time high of 45614.49 USD

Million in October of 2013 and a record low

of 38.61 USD Million in January of 1966.

South Korea imports mainly oil (23 percent

of total imports), semiconductors (6

percent) and natural gas (5 percent). Other

imports include coal, steel and iron ore.

Main import partners are China (16 percent

of total imports), Japan (12 percent), United

States (8 percent) and Saudi Arabia (7

percent). Others include: the European

Union (9 percent), ASEAN (10 percent) and

Australia (5 percent).

Exports in South Korea decreased to 42,989

USD Million in February of 2014 fror South

Korea has an export oriented economy. Major

exports are high-tech manufactured products

like semiconductors (9 percent), machinery (9

percent), automobiles (9 percent), ships (7

percent), LCD devices (5 percent) and

wireless communication devices (4 percent).

Other exports include: steel (7 percent) and

petrochemicals (10 percent). Major export

partners are China (25 percent of total

exports), ASEAN (14 percent), the United

States (10 percent) and the European Union

(9 percent). Others include: Japan, India,

Brazil and Paraguay. This page provides -

South Korea Exports - actual values, historical

data, forecast, chart, statistics, economic

calendar and news.

SOUTH KOREA

Major economic players have lists of grievances that run into scores of pages. Here is a look at just a few

of the reported trade barriers in South Korea:

BASIC PROBLEMS - Foreign goods and services that run into direct competition with South Korean

offerings are often subject to market access barriers. Both South Korean and foreign goods and services

often face regulatory issues coming from excessive government oversight, which leads to increased costs.

AGRICULTURE - South Korea uses high tariffs to protect its politically important farm sector while farm

activists have used mass protests to target wholesalers and retailers to block sales of imported foods. The

pact with the United States is aimed at cutting out beef tariffs that can range up to 40 percent.

AUTOMOBILES - The deal with the United States is supposed to end a tax on engine displacement that

U.S. automakers have said hurts sales of their products. The EU and United States have complained of

numerous non-tariff barriers to trade in the sector. The EU has complained that South Korea keeps foreign

auto technologies out of the country through regulatory barriers and may not enforce market-opening

conditions in a consistent manner.

BEVERAGES - The EU says South Korea has five government agencies overseeing labelling, with

foreign liquor companies are asked to provide 18 pieces of information for labels. The layers of

bureaucracy add significant costs.

CONSTRUCTION - An import tax of 8 percent on building materials hurts foreign firms who use the

materials more.

MOBILE PHONES - Up until April, South Korea required all mobile phones sold to contain Korean-market

specific technology, which led many firms to avoid the country due to re-engineering difficulties. Those who

try to enter face stiff competition due to to market saturation by LG and Samsung handsets.

INTELLECTUAL PROPERTY - While South Korea has made progress in addressing intellectual property

infringement, the EU has complained of lax enforcement of existing laws.

COPYRIGHT AND TRADEMARKS - South Korean data indicate that Hollywood loses at least $1 billion a

year due to pirated movies and TV shows distributed over the Internet. Luxury goods makers have charged

South Korea-based operations with making illegal knock-offs of their products, which has undermined their

brands.

OTHER INDUSTRIES - The list of sectors complaining of trade barriers includes: banking, chemicals,

cosmetics, financial services, insurance, legal services, media, medical devices, pharmaceuticals and real

estate

Barriers to Market Entry

SOUTH KOREA

Bilateral relations between South Korea and the Philippines was established

on March 3, 1949 upon the recognition of Republic of Korea as a sovereign

state by the Philippines. The Philippines was the fifth state to recognize the

Republic of Korea and the first ASEAN country to established relations with

South Korea. The relations were cemented when the Philippines aided South

Korea in the Korean War by sending the Philippine Expeditionary Force to

Korea.

South Korea is the sixth biggest trading partner of the Philippines, while the

Philippines is the third most attractive Southeast Asian country for South

Korean investors in 2011. South Korea also provides the biggest tourist

market for the Philippines. Most tourists who went to the Philippines on 2011were South Koreans, followed by Japanese and Americans.

Philippines & South Korea

SOUTH KOREAProposed Import to SK

Import Export

$42,064M $42,989M

*Import and Export of SK for the month of February 2014

SugarWith a lack in natural resources, South Korea has a

high dependence on import of capital goods, raw

materials and industrial supplies.

In 2005, the Philippines is the 9th

largest sugar producer in the world and 2nd largest

sugar producer among the ASEAN countries second

to Thailand according to Food and Agriculture

Organization of the United Nations Statistics Division.

At least 17 provinces located in 8 regions of the Philippine archipelago have grown sugarcane crops, of

which Negros island accounts for half of the country’s total production. As of Crop Year 2009-2010, 29 mills

are operational divided as follows: 6 mills in Luzon, 13 mills in Negros, 4 mills in Panay, 3 mills in Eastern

Visayas and 3 mills in Mindanao.

Most of these mills are located in the island of Negros. Sugarcane is not a sensitive crop and can be grown

on almost all type of soils, from sandy loams to clay loams and from acidic volcanic soils to calcareous

sedimentary deposits. The harvest period begins from October to December and ends in May.

SOUTH KOREA

Philippine Sugar Supply-Demand & Trade

for the Past 10 Crop Years

Philippines Sugar Industry

Self-sufficient in sugar for the past 3 years

100% allocated volume for US Quota

Exported to the world in the past 3 years, at more than the target

Capacity of 35% of mandated ethanol volume

Two mills and two distilleries exporting electricity. Four more are on various stages of development

SOUTH KOREASugar Production in the Philippines

SOUTH KOREACompetition

1. Brazil: Annual production: 37,800 metric tonnes

2. India: Annual production: 29,750 metric tonnes

3. China: Annual production: 13,065 metric tonnes

4. Thailand: Annual production: 10,850 metric tonnes

5. USA: Annual production: 7,779 metric tonnes

SOUTH KOREAMarketing

Television

Television is the second most popular method of advertisement in South Korea.

Advertisements take place during commercials between each television

programs. An interesting fact about television advertisements in South Korea is

that “junk food” advertisements have been prohibited to air at the primetime

schedule, which is between 5pm to 7pm.

Newspaper

The newspaper is approximated as to be the second most important medium for

advertisements. Just like the television, advertisements are also frequents in

Korean newspapers. However, this form of advertisement is now threatened

since Internet has become more popular in streaming or publishing

advertisement.

Internet

South Korea has a high world Internet penetration rate of 82.7% recorded in

2011. Most of its users spend an average of 14.7 hours a weekly and almost half

of this group spends more than 14 hours or more. That being said, Internet has

been proven to be the most effective way to reach potential customers within the

country.

Product Placement

Product placement or the practice of strategically placing the company’s products

or their logo within a film, video games and television programs is said to be one

of the rising advertising tool in South Korea. Due to its success, the price for

product placement has been raised by different agencies in the country.

SOUTH KOREAAdvertising Agencies

Daehong Communications is a marketing

communication partner that knows the

contact points of lifestyles and culture,

from distribution such as department

stores and marts to various services such

as food, beverage and hotels. Daehong

Communications has firmly established

theirposition as the best marketing partner

through various success advertising

campaigns. Daehong Communication is a

very diverse company that offers their

clients a wide variety of services such as

marketing strategic solution, creative

solution, media solution, BTL solution,

digital solution, and design marketing

solution.

SK Planet, established in October 2011 as a

wholly owned subsidiary of SK Telecom, leads

the revolution of online and mobile service

platform with its Digital Contents, Integrated

Commerce and Advertising & Marketing

Businesses. Through its merger with SK

Marketing & Company on February 2013, the

new SK Planet became a truly integrated

service platform that encompasses both the

online and offline marketing channels.

Direct selling in South Korea is expected to increase in constant value at a CAGR of 1% over theforecast period. Beauty and personal care direct selling, consumer health direct selling and mediaproducts direct selling are all expected to record healthy growth rates during the forecast periodas there is a marked preference among South Korean consumer to purchase these productsthrough direct selling. The loyalty of South Korean consumers to their favorite direct sellingcompanies is stronger in these categories. On the other hand, home care direct selling and otherdirect selling are two categories which are expected to decline in South Korea over the forecastperiod as store-based retailing channels such as hypermarkets, variety stores are expandingrapidly, while the development of internet retailing in South Korea, especially through mobiledevices such as smartphones remains very dynamic. Many South Korean consumers are likely toprefer store-based retailing channels or Internet retailing due to the diversity of productsavailable through these channels.

SOUTH KOREA

Distribution Mediums

Producer-Customer

This is the simplest and shortest channel in which

no middleman is involved and producers directly

sell their products to the consumers. It is fast and

economical channel of distribution. Big firms adopt

this channel to cut distribution costs and to sell

industrial products of high value. Small producers

and producers of perishable commodities also sell

directly to local consumers.

Producer-Retailer-Customer

This channel of distribution involves only one

middleman called 'retailer'. Under it, the producer

sells his product to big retailers who in turn sell to

the ultimate consumers. This channel relieves the

manufacturer from burden of selling the goods

themselves and at the same time gives them

control over the process of distribution. This is

often suited for distribution of consumer durables

and products of high value.

Distribution Channels

SOUTH KOREAReferences

"Philippines-South Korea Relations". Philembassy-seoul.com. Retrieved 2013-06-10.

http://www.korea.net/NewsFocus/Policies/view?articleId=113844

"PH welcomes 1 millionth Korean visitor this year". ABS-CBN News. 2012-12-27. Retrieved 2013-

06-10.

http://www.korea4expats.com/article-business-practices-etiquette.html

http://www.euromonitor.com/sugar-in-south-korea.html

http://www.sra.gov.ph/annual-report-accomplishments/

https://www.cia.gov/library/publications/the-world-factbook/geos/ks.html

http://www.indexmundi.com/south_korea/demographics_profile.html

http://en.wikipedia.org/wiki/List_of_free_ports

http://in.reuters.com/article/2009/11/06/korea-trade-idINSEO27897920091106

http://www.bloomberg.com/news/2012-04-02/korea-s-credit-rating-outlook-raised-to-positive-by-m

oody-s-1-.html

http://en.wikipedia.org/wiki/Government_of_South_Korea

http://en.wikipedia.org/wiki/Sugar_industry_of_the_Philippines

http://www.kwintessential.co.uk/resources/global-etiquette/south-korea-country-profile.html

http://www.southkoreagovernment.com/government.htm

http://www.euromonitor.com/direct-selling-in-south-korea/report

http://business.gov.in/manage_business/channels_distribution.php

http://www.tradingeconomics.com/south-korea/inflation-cpi

http://www.slideshare.net/etorr021/mmc3602-south-korea-presentation

SOUTH KOREASubmitted by:

AFABLE, ALLAN

VICEDO, NOAH

VILLANUEVA, INNA