Nationwide Univ students Made in Korea 1 brands Competition cases
Chocopie, melted hold in the hearts of people around
Subtitle: first-class brand, Orion Chocopie localization analysis of marketing
practices
Team Name :Planet of the Apes
Doo-youn Kim
Seong-eun Kim
Alcham-aram Chio
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Contents
1. Case summary: The Legend of payiryu, Orion Choco Pie
2. Introduction: The selection of companies and brands are here, and start
3. Orion's history, challenges, turning points
[1]Birth of Chocopie
[2]China market
[3]Chocopie's growing pains
[4]the world's leading Chocopie
4. Released when the first market conditions, competition, and marketing strategy
[1] the Chinese market
[2] Indo-China / Russian market
5. Including 1. secret to the success of Orion Choco Pie
6. Global Project, Orion proposed strategic direction for the future marketing
[1] Global Project : Orion Choco current situation, diagnosis: 10 year pavement looked
hureul Global Project
[2] Orion Choco proposed plan for future marketing goals and realize
7. The total summary and conclusion
8. References and data sources
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1. Case summary: Orion Choco Pie, the legendary snack
1. History of Choco Pie: Choco Pie is the Orion’s representative product, which has enabled
Orion to have grown into such a large and well-known confectionery company as now. A
confectionery company, Dong-Yang produced Choco Pie in 1974 after merging Pung Guk
Confectionery and changing their company name. Choco Pie was produced solely with the Korean
technology and has been the only snack product that has long life-cycle while most of snack
product has a very short life-cycle in Korean domestic market.
2. Entry to the Chinese Market: China was in the period of change in their society and industry
and did not establish diplomatic relations with Korea yet when Dong Yang tried to enter the
Chinese market. Dong Yang conducted market research and pre-test of the market in order to
analyze the business fluctuation, latent purchasing power and diversification of risks. Orion
decided to export Choco Pie to China and launched a new branch Orion Food in Beijing, China in
September 1993, which was one year after the establishment of the diplomatic ties between
Korea and China.
3. Growing pains of Choco Pie: Choco Pie started to be sold in 1994 and a sales force in the
Beijing branch was extended in 1995 as the export rapidly rose. However shortly after the
extension, Choco Pie faced a crisis. The extremely hot weather in the south of China let Choco
Pie, which had kept its quality without any preservatives, spoil. Orion managed to overcome the
crisis through constant localization. In October 1995, R&D department of Orion concluded to
change the packing materials from a transparent wrapper into an aluminum opaque one, which is
suitable for the weather in China and needs no preservatives.
4. World’s leading snack, Choco Pie: Orion entered the Chinese market aiming for the expansion
to the worldwide market – ‘Dream in Shanghai = Dream to be the World’s Lading Snack’. Orion’s
operations overseas can be analyzed to have substantial growth by the oversea sales of 546
billion won and domestic sales of 597.7 billion won. Orion’s Choco Pie is currently exported to
over 40 countries in the world and very popular especially in China, Vietnam and Russia.
2. Introduction: The Beginning and the Current Status of Company and Brand
[2-1] Orion’s status: Current Position
Orion spreading throughout the world
1)
2)
3)
4)
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Continuous increase in sales achievements in the domestic market
Continuous growth of Orion in Overseas markets
Possibility of ‘Pan Orion’ becoming a listed company
Reduction of debt through disposal of ON-media Co.
In 2010, Orion jumped into a leading position among the world’s confectioneries
• Overseas sales and profits could overtake those of domestic business
Overseas sales and business profits are expected to be respectively 685 billion won and 54.5
billion won.
• Business in overseas markets is expected to keep growing and making more profit.
[2-2] History of Orion: Began as Dong Yang Confectionery
Orion has constantly increased its competitiveness since it was founded in 1956 and survived long
as a firm and influential company. One can see the history of Korean confectioneries through the
history of Orion, the representative confectionery of Korea.
 History of Orion
<pic. 1 – Orion’s logo>
In 1956: A snack producing company was launched with
the name of Dong Yang Confectionery Co. , which became
Orion at present.
In the 1980’s: Dong Yang Confectionery Co. achieved a considerable growth through continuous
effort and trials. It had a great success with its snack brand ‘Cheetos’, so called the myth of
Cheetos. It founded a potato research center and established a revolutionary distribution system,
which led it to jump into the second place among the confectioneries in Korea.
In the 1990’s: Dong Yang Confectionery began to divert its business strategy. It branched out into
the restaurant industry through a franchising contract with Bennigan’s and launched its own cable
channel Toonibus in an effort for the internationalization of business. It stepped up its moves to
expand the business in the late 1990’s and set up Mediaplex Co., Ltd. in June 1999. In November
of the same year it opened a movie theater called Megabox and launched a multi-channel brand
ON*MEDIA.
In the 2000’s: Dong Yang Confectionery (and Orion later) played as a central role in exports of
Korean confectionery and started to enter the entertainment industry as well. In 2003 Dong Yang
Confectionery attempted to break away from the image as a group confined to a confectionery
company and propel its new business ambition to develop into a total entertainment group by
changing its name into Orion.
[2-3] Choco Pie, Orion’s other self
<pic.2 – Orion Choco Pie>
Choco Pie, the best-known pie snack among Koreans
Orion’s Choco Pie is a snack food which has an excellent
combination of marshmallow filling, biscuit layers and chocolate
covering. It has been loved by Koreans as a representative snack
brand of Korea since it appeared in 1974. It has become now a globally loved pie snack. Choco
Pie has been sold in such large quantities as it could cover as many circles of globe as 25.
Choco Pie has a unique brand image with Korean sensibility
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Orion constantly attracted customers’ attention for Choco Pie by the advertisement of ‘Jeong(a
word for warm-heartedness in Korean)’ series, which was a part of the emotional marketing strategy.
Thanks to this sucessesful marketing strategy, customers are reminded of Choco Pie by ‘Orion’
and immediately associate Choco Pie with ‘Jeong’. It has now status as a gift item for people to
express their warmheartedness beyond merely as a tasty snack. Choco Pie is currently exported
worldwide and very popular especially in China, Russia and Vietnam. Orion has an ambition to
develop Choco Pie into such a global brand as Coca Cola.
3. History of Orion, Challenges and Turning Point
[1]Invention of Choco Pie
[1]-1. Choco Pie, the Korean snack born as a fruit of passion and effort
Orion’s product Choco Pie was launched in Korea as April of 1974 and more than 14 billion
Choco Pies have been sold for the last 36 years. The number of Choco Pie sold only this year
amounts to about 500 million, which is enough to make a curcuit of the globe 25 times when every
single pies are put in a row. Every Korean ate 280 Choco Pies. Orion recorded 1 billion won in
sales of Choco Pie as a single item for the first time in 2003. It is like ‘drop by drop filled the tub’
seeing that the price of Choco Pie was only 50 won when it was released and it currently costs
250 won. Choco Pie has long survived as a successful brand meanwhile hundreds of brands are
appearing and soon disappearing in a year.
However, it is not that the company (Dong Yang Confectionery) expected Choco Pie to be so
much popular when it was first produced. The production of Choco Pie was rather by chance. In
November 1973 Young Chan, Kim, a team manager, had a chance to observe commercial affairs
when he was invited to Georgia by the State Department of the US. He was impressed by various
types of biscuits and cakes that he had seen for the first time, among which a snack covered by
chocolate caught his eye. “This is interesting.. why don’t we try making such an interesting snack
on our owns?”He started his experiment for that right after coming back to Korea. The other team
members who visited Georgia also committed themselves to the experiment for a long time, but
they were often frustrated while their biscuit was either burned or swollen in the middle. After
hundreds of trials and errors, developing Choco Pie was finally completed in April 1974 through
experiments and development of two years. It was the moment that a Korean snack with a
combination of biscuit, chocolate and marshmallow was born in the world.
◈Problem: A problem with storing pies arose when the moisture ratio of the pie was increased
for taste. Meanwhile the moisture ratio of the pie had to be maintained as lower than 14% for
mass production.
◈Solution: The experimenters found the most suitable ratio as 12% after making hundreds of pies
with different moisture ratio. They let the moisture of marshmallow, which has much amount of
moisure itself, be absorbed into the biscuit through fermentation instead of making the biscu it
hard. This was the secret of Choco Pie’s taste.
[1]-2. Growth Crisis due to Saturation of Domestic Confectionery Market
When Choco Pie was launched in 1974, its price was rather expensive but it was very popular.
Retailers and wholesale dealers often waited in line in front of the factory. One billion won in
sales of Choco Pie was recorded in 1974 and the sales continued to increase gradually - 1 billion
won in 1974, 2 billion won in April 1982, 3 billion won in April 1990 and 6 billion won in March
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1998. Choco Pie reached the best record in sales as a single item of confectioneries. However the
sales decreased from 25 billion to 10 billion since 1988 due to declining demand.
◈Problem: 1 The domestic confectionery market became saturated since the market rapidly
developed for the last 30-40 years. Companies could only share the existing market with no more
possibility of market’s growth. Moreover Dong Yang Confectionery found a difficulty with staking
their all on a single cast, Choco Pie. Many other competing confectionery companies released
similar pie brands such as Big Pie of Crown Confectionery (1984), Oh Yes of Haitai Confectionery
(1985) and even Choco Pie of Lotte Confectionery.
Orion felt a sense of crisis due to the fierce competition and poor sale, and carried out a survey
of customers to figure out the reason of declining sales and find a solution. The result was
stunning. They found out that young customers did not favor Choco Pie anymore / Choco Pie was
not favored by young customers anymore. This survey result made Orion seriously consider
suspending the sale of Choco Pie. In addition to the poor sale, Orion was not sure whether they
could keep up with the consumption propensity of future customers. Won-gi Gang, a director and
a manager of Choco Pie team, said, “There was a rumor going around the company that the time
for Choco Pie was over / it was time for Choco Pie to come to an end. And we actually discuss
the matter about euthanasia of Choco Pie.” They thought it was true that Choco Pie survived
quite long enough while the life-cycle of confectionery was usually very short from 3 years to at
the longest 5 years. It was a moment when our great snack food with international fame almost
disappeared in the mists of history.
◈Solution A-Jeong Campaign: 2 When Choco Pie was loosing its popularity and the sale was
declining, Dong Yang tried different ways to overcome it but the sales were not likely to increase.
They were well aware of the seriousness of the situation and began to make a new advertisement
with resolute determination. But it did not go as easily as they wanted. 60 different continuities /
shooting scripts were made for no shorter than 8 months but they received a poor reception in
their test market. Then one day, Gwang-woo Lee, who was an executive director of ‘Sejong
Culture’ at that time, came up with an excellent idea. His idea was to use a concept of Jeong
(warm-heartedness and closeness among people in Korea), which is always laid in Korean
people’s mind. The result was a smash hit.
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<대학생이 요리한 맛있는 상하이 경제> Lee Jun Won, Choi Moon Young and others 새로운 사람들
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<광고, 욕망의 연금술> Gang Jun Man & Joen Sang Min, 인물과 사상사
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<pic.3 – A-Jeong Campaign >
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Initially the ‘Jeong’ series were based on a true story. The story goes as follows. An
elementary school teacher was sitting alone at classroom being weighed on his mind because he
scolded away his students. When he opened a draw of his desk, he found one packet of Choco Pie
with a letter that the students put as an apology. This advertisement whose story is about warm heartedness and closeness between ordinary people led the sales of Choco Pie jump from 23.5
billion won in 1989 into 31.5 billion won in 1990. The market share, which fell down to 50% once,
also increased to 65%. The element of success was presenting an image of Choco Pie as a special
snack for expressing warm-heartedness through the advertisement ‘Jeong series’ unlike
previous advertisements which were all about the product itself. The advertisement was
successful in moving / touching customers’ mind by reminding them of Jeong in the modern
society and letting them associate Choco Pie with Jeong.
◈Solution B-Orion found a possibility of the entry to the Chinese market: Orion wondered
about the huge increase in sales of Choco Pie in Busan, the largest port city located on the
southeastern most tip of the Korean peninsula. They found out that Russian merchants was buying
large amount of Choco Pies. Choco Pie gained its popularity among Chinese and Russians, whose
sugar intake is relatively high. Orion tried to find a way out of their difficulties through exports of
Choco Pie. They devised strategies to advance into foreign markets and oversea sales of Choco
Pie began in earnest. At that time, China had no diplomatic ties with Korea and the moves of
reform were spreading in China. Orion believed that they should first see if the export to China
would be feasible and decided to gather information on Chinese market. They sent one member of
the staff to China and let him conduct a field survey. It turned out that pumpkin seed or some nut
products were all about snack food in China and there were no such types of snack (brands) as
those in Korea at all. They realized that the Chinese market was the place of opportunity for them
and decided to examine business fluctuations through market research. The only member of the
staff in China was given tasks to determine what kinds of standardized product to make and how
to establish the distribution network. All that he could do was to taste every single snack food in
China and figure out what pleases Chinese’ taste. After 6 months, he reported that Choco Pie
would be most suitable for export as the first product. Orion started to focus on export of Choco
Pie and set up a local branch office in Beijing in September 1993, one year after the
establishment of the diplomatic relations between Korea and China.
[2]Entry to the Chinese market
Dong Yang Confectionery implemented strategies particularly devised for the Chinese market
through exhaustive market research instead of insisting on the marketing strategies that were
proven to be successful in Korea.
[2]-1. Change of the brand name
Dong Yang Confectionery, the former company name of Orion, was concerned about the name
‘Dong Yang’. ‘Dong Yang’ was also a part of the name for Oriental Development Company, which
was Japanese national enterprise, built as one of colonial exploitation policies towards many
countries in East Asia including Korea and China. There is still strong anti-Japanese sentiment
among Chinese and the company name ‘Dong Yang’ would remind Chinese of the Japanese
colonization, which would accordingly affect their image negatively. Hence they decided to make
a new name for Orion Choco Pie taking export to China as an opportunity for a change. The new
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< 상상 + 경제학 블로그 > Won Young Chan, 당대
name is Hao riyeo wu, which means ‘good friends’ in the Chinese language. They created a new
brand name which means sharing friendship by Choco Pie with ‘Hao riyoe wu’ and ‘Hao pyoeng
wu’ as the slogan.
[2]-2. Color Marketing-4‘Made for China’
The color red is a symbol of wealth and lucky sign for Chinese and it is no exaggeration to say
that red is a representing color of China. This fact made Choco Pie whose packing color had been
always blue in Korea for decades change into being packed with a red wrapper. The color change
of the wrapper helped Choco Pie to be easily recognized and remembered by Chinese customers
and also to present a good and unique image. This led to the dramatic increase in sales of Choco
Pie in China.
<Pic.4 – Color Marketing of Choco-Pie>
[2]-3. Tasting Marketing
Free tastings are normally considered as one of the most effective marketing ways for a
product which is not well known by people yet. Dong Yang Confectionery held Choco Pie tasting
events in China on the 10 th of February 1995, but it turned out to be total failure, which they
experienced for the first time. The idea of food tasting was completely unfamiliar and even
strange to Chinese. They were doubtful about the free offer and assumed that they would have to
buy something when they tasted food. So no one tried tasting Choco Pie or paying attention in the
first tasting event, and the following second, third and forth tasting events also ended in failure.
◈Solution: How they could ensure that the image of Choco Pie gets imprinted on Chinese
customers’ mind was the urgent topic discussed in the meetings for establishing measures. They
held free tasting events touring all over China and put up a large standing signboard in Tienanmen
square, for which their one year’s budget was invested. It was such a phenomenal advertisement
at that time because there had not been any advertising board in large size on the street where
many people walk for their commute.
[2]-4. Trash Marketing
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After succeeding in attracting people’s attention by the large advertising board in Tienanmen in
Beijing, Dong Yang (Orion later) held their biggest free tasting event in the same places. They
intentionally hid all the trash bins in the square as the marketing strategy. A multitude of people
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< Global Brand ‘`Made for China’` Competition> 한국경제
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< 대학생이 요리한 맛있는 상하이 경제 > Lee Jun Won, Choi Moon Young and others, 새로운 사람들
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who tired Choco Pies packed in a red wrapper and found no trash bin around them threw away the
pie wrappers on the ground. The wrappers thrown away were not just trash on the ground but
played as a role of advertisement. The thousands of wrappers of Choco Pie made a great
spectacle covering Tienanmen Square with the red color, which would remain impressively in
people’s mind. This was the highlight of Trash Marketing.
[2]-5. Advertisement suitable for Chinese sentiment
The advertisement in China became popular by casting Chinese stars, which helped the
advertisement be successful. But the main success element was the content of the advertisement
made suitably for Chinese sentiment triggering emotional move. Even without famous advertising
models, the advertisement appealed to people with familiar contents such as stories about
friendship, motherhood, love between a man and a woman. Another element is the consistent
commercial songs that have been used in the advertisement since the first time in the 1990’s until
present. They have made different versions of the song for every advertisement so that the
melodies and the lyrics become familiar to the Chinese customers.
[3] Choco Pie’s Growing Pains
Dong Yang began to sell Choco Pie since 1994 and increased the commercial sales force for the
office in Beijing according to rising export to China in 1995. At that time, they could sell only via
Hong Kong to Santou in the south of China because direct dealing was hardly possible. Despite
this difficulty, they managed to build effective distribution network and the sales quadrupled the
average annual sales recording ten million dollars in the amount of export. However they were
soon threatened by a crisis.
[3]-1. Spoilage of Choco Pie
◈Problem: Choco Pie had been well kept without preservatives in Korea, whereas it spoiled in
hot weather of the southern China. The problem was the fact that 8 months were taken for
transportation of exports in addition to the humid and hot weather in China. The measures for
solider distribution network were supposed to taken since the export was increasing, but Dong
Yang recalled all of the Choco Pies in China and disposed of them by burning. It was shocking to
them because they did not expect that they would be in trouble with such problem while Choco
Pie had been all fine in four different seasons in Korea. People who got food poisoning by spoilt
Choco Pie threatened to spread the case to the press. Dong Yang got to the stage where they
would have to shut down the Chinese branch office.
◈Solution: To continue to try localizing the business! Research on new packing material for
Choco Pie began in the research center for product development. Since it was impossible to put
preservatives into Choco Pie, Dong Yang tried to alter the packing material into the one suitable
for the weather in China. They found out that non-transparent wrapper helped to keep oxygen
and water vapor from going inside. At last they made a big change of the wrapper by enormous
investment bearing the increase in production cost. With the new packing, Choco Pie became able
to endure the temperature variation of 70 degree Celsius throughout China from Yunnan Province
to Heilong Jiang.
[3]-2. Middlemen’s rejection of Choco Pie
◈Problem: Dong Yang attempted to find its spot in the Chinese market again immediately after
changing the packing material, but the market disappointed by them once was not open any more.
Middlemen rejected to accept sales of Choco Pie whose brand status already dropped. Salesman
from Dong Yang let the middlemen see them eating Choco Pie on the spot to convince that Choco
Pie was completely safe. They tried to rebuild the network promising to make compensation for
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any problem in an amount ten times more than the loss. Despite all of these efforts, the
production of Choco Pie for export ended up being discontinued.
◈Solution A-To set up factories in China: Dong Yang concluded to build local factories for the
production and made a contract with the city Langfang (A factory of Orion Food Co., Ltd. began to
be constructed in Langfang, China in April 1996.) The city Langfang is exclusive industrial zone
and adjoins a major city being located two hours away from Beijing. Moreover it had LPG storage,
which was necessary for the transportation to ports, airports and near areas. The construction of
a factory in Shanghai was also completed in September 2002.
◈Solution B-To procure ingredients in China: The teams organized for developing pies played a
major role in making the pie have the exactly same taste as Korean Choco Pie by procuring more
than 30 kinds of ingredients in China. The major concern was how they could ensure the pie
keeps its form while having soft texture. The problem was in wheat flour. The flour in China was
of very poor quality and not the proper type for making Choco Pie. The team members tried
developing new ingredients by themselves by mixing different types of flour whose consistency
varies. Through constant and strict evaluations done by experts, they finally succeeded in making
the exactly same pie as Korean Choco Pie!
< Pic.5 - The
factory in China >
completion
completion
of
of
the
Orion
Orion completed the construction of their factories in May 1997 spurring its continual growth in
China and started to work for public relations. Their main target customers were women whose
children were elementary school-age students and emphasized the ‘good friends’ of the pie. This
helped the sales increase by 30 percent per year. The team of Haori yoe wu did not follow the
differed payment system, which had long been practiced in Chinese commercial dealing, and stuck
to the prepayment system. They could accomplish their goal to make a successful Chinese
enterprise equipped with the local factories in deed as well as in name.
[4] Choco Pie, the world’s best pie brand
Following the success in domestic market, Orion started to expand their business to overseas
markets since the beginning of the 1990’s unlike other competing companies in Korea and has the
highest record in overseas sale. Some domestic confectioneries exported their products in small
quantities in the 1980’s, but Orion was preparing themselves for localization of their business in
overseas markets in those periods.
Orion determined to enter China, Russia and Vietnam
in full scale in the early 1990’s and developed
strategies on careful and strict examination of the
markets in each nation. The market research and
exports of Orion’s products were already done even
before this decision. The particular reason why Orion
chose these three countries is to be on an equal
footing with other global food companies, who would
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compete with Orion later. Markets in America, Europe and Africa were already dominated by a
number of global food products, which took the advantageous position. Orion chose new market
places for their first overseas market in orde
glocal
glocal
strategy
Glocalization
to
< Pic.6-Orion’s
strategiy overseas >
have more success and devised more active and aggressive master plans for export. Since 1993,
they have switched their profit-oriented strategy of the short term into the strategy of export as
investment in the long term.
Orion’s successful business in the Chinese market is regarded / credited as having reached a
plateau through the localization strategy. Following the success in China, they are extending and
strengthening the local networks in the East-European bloc with Russia as the center and in
Southeast Asia with Vietnam as the center.
[4]-1. Shanghai Dream of Choco Pie came true
Orion’s ultimate goal of entering the Chinese market was to become a leading company in the
world through success in China – ‘Shanghai Dream = Dream to be the World’s Top Company’. It
was obvious that success in Shanghai, the core place for commercial supremacy of China, would
prove the fruitful outcome of their business in the Chinese market.
◈Problem: Orion checked into consumption propensity in Shanghai toward the 2000’s and found
that Choco Pie was still sold but the sales had been down. People living in Shanghai had cautious
spending habits because Shanghai was overflowing with various kinds of products from all over
the world.
◈Solution: Orion stuck to the localization through improving the methods of sales and the quality
of the product. They did not repeat the same strategy used in Beijing and developed a new
strategy only for the market in Shanghai. They made a new packing box filled with 6 pies (the
original box had 12 pies inside.) to make customers be more likely to choose and try the pie and
to improve customer satisfaction. At the same time, they completed developing the insoluble
coating paper of Chocolate after a year of work. In January 2007, they became equipped with the
capacity of producing Choco Pie whose annual value amounted to $100 million by building a
factory in Shanghai. Strict quality control was carried out by elimination of germs and bacteria
(Green zone: the elimination of germs and bacteria can be more effectively done through applying
no heat and shutting out outside air.). Orion jumped into the leading company in the world
producing 100 million Choco Pies annually.
[4]-2. Choco Pie, one of the most favored snack food in Russia
Russia has turned to be in the limelight as a new market since the declaration of moratorium.
While the US and other western nations are competing to enter the Russian market, the number of
Korean products popular among Russians is not high yet. Russia has drastically changed into the
land of opportunity where there was no possibility of export a few years ago. Korea’s Orion is
now standing as their favored snack brand in the heart of Russia.
The growth of business in Russia means great success given that it was blowing away the
competition among a number of international food corporations. Like China as the largest market
in Asia, Russia or more precisely Moscow, is the gateway to Europe. It is sort of Test Bed where
the true winner as a leading company in the world would be determined since business in the
Russian market will make it possible to have an influence in Europe, America and Asia. Orion
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Choco Pie deserves to be appreciated considering the fact that the Russian market was already
shared by many global food companies including Nestlé and Danone as well as the Russian
companies that have existed for over 100 years.
Orion’s success was only possible through the painstaking effort and struggle of ‘Choco Pie
Men’. Russian merchants and vendors came to Korea soon after the establishment of diplomatic
relations between Korea and Russia, and they began to have tea with Choco Pie, seen as the
black bread in Korea, instead of their own black bread that they used to eat in Russia. Finding out
this, the marketing team of Orion hastened to enter the Russian market and made a hit. Orion
opened the first Russian branch in Vladivostok in 1993 and accomplished its big run to Moscow by
one million long TSR (Trans-Siberian Railroad) route. All of these would not have been possible
without the sincere effort of the team members.
◈Problem: The distribution network was destructed because the price of imported products
soared quadrupling the previous price after Russia declared a moratorium in 1998.
◈Solution: Jong Hyun Park, the manager of the Russian branch, and other Choco Pie Men
traveled Moscow and Vladivostok by a truck loaded with 100,000 boxes of Choco Pies, which
would be the amount of 100 containers, in order to meet directly with wholesalers and sell even
small amount of Choco Pie when they found them – they named it as ‘legwork strategy’. Dong Il
Lee, the branch manager of Novosibirsk, is in charge of sales in Siberia is selling 11,150,000
Choco Pies per year and recording sales of $15 million. He even visits the natives to promote
Choco Pie. 17 staff members sent from Korea divided the target groups by four regions in Russia.
It was at the beginning of 2005 that Moscow became the main market for Choco Pie. Most of
sales had been done in the far eastern Siberia and Moscow took over the position as the main
market accounting for 65% of the entire sales.
Furthermore, the strict quality control was another success element. In the beginning of 2006,
Joeng Su Kim, who established the foreign branch, ordered to dispose of all Choco Pies in 23,000
boxes, which amounted to roughly $ 250,000. The staff members strongly opposed his order and
insisted on selling them, but he pushed ahead with the disposal of the Choco Pies that he thought
did not meet their criteria for the quality. The story about this happening was spread out among
confectioneries in Russia and it greatly improvee the image of Orion. Since then, more and more
stores with the name Orion appeared and even existing bakeries competed to sell Orion Choco
Pie. Choco Pie began to be called ‘Korean burger’.
[4]-3. Choco Pie, taking roots in the Vietnamese confectionery market
In the current Vietnamese market, Choco Pie’s market share accounts for 60% (AC Nielson,
August) and Choco Pie is almost monopolizing the pie market. It is said that most of Vietnamese
know Choco Pie even if they don’t know Korea. Choco Pie is regarded as a food product at the
high level while being offered as one of the food for the ancestral rites ceremony and even in
temples and ancestral shrines.
Orion’s sales in Vietnam as the year of 2010 amounted to 100 billion won. Orion is expected to
jump into the top confectionery with its sale in the Vietnamese market. Orion’s sale recorded
$ 700 in 2005 and has been rapidly growing. The export volume is almost same as before the
financial crisis. Orion is dominating the Vietnamese pie market as a first mover with other
multinational corporations including Nestle and Perfetti and the local company Kkindo.
◈Problem: Korean confectioneries including Lotte and Crown were competing each other in the
Vietnamese market when Orion entered the market in the mid 90’s. However, the Vietnamese
government banned import in 1997 and in 1998 due to the economic crisis in Asia. All the global
companies as well as the Korean companies chose to shut down the branch offices in Vietnam.
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◈Solution: The ‘Orion’s pie-men’ remained in Vietnam even though all the other global
companies closed the offices and left Vietnam. They decided to stay to continue their distribution
even in small quantities since they believed in the potential of the Vietnamese market and were
sure about their success. As a result, Orion could expand their market share with Choco Pie as
their main product. The Vietnamese companies took the place in the market where the Korean
confectioneries left. The competitive landscape has changed and the current market is shared by
Orion and Vietnamese companies such as Kindo and Pham Nguyen.
For the success in Vietnam, the marketing strategy pursuing
Vietnamese own sentiment also played a major role. Orion began
‘ Choco Pie Tinh’ Marketing since May 2009 in Vietnam. ‘Tinh’
means freewill love in the Vietnamese language.
Orion believes that the warm image of Choco Pie associated with
Tinh appealed the Vietnamese customers while Tihn is the
sentiment that lies in the mind of most Vietnamese.
Currently Orion has its production facilities in Ho Chi Minh
City and Hanoi, Vietnam. The factory in Ho Chi Minh City is for
distribution in the southern area and for export, and the factory
in Hanoi is for supplying pies to be sold in the northern area and
producing biscuit. Orion began operating the local production in
2006 in Ho Chi Minh City and tried to strengthen their position in
Vietnam by operating another factory in Hanoi for sales
< Pic.7 - Choco Pie in Vietnam>
in the northern area which was the main market of pie and biscuit. Procuring the products
directly from Hanoi instead of delivering them from Ho Chi Minh City allowed Orion to reduce the
price for distribution by 5% and the products to remain in fine condition. Orion said, “Sales in
Vietnam increased by more than 2% compared with the previous year because after setting the
factory in Hanoi. We plan to establish a bridgehead to Malaysia, Singapore and Thailand and hope
to continually expand our market areas worldwide.”
[4]-3. Choco Pie, the snack that opened Indians’ mind
The Indian market with 1.1 billion populations was such a great place of business to miss for
Orion, who experienced a huge success in China with Choco Pie. Orion anticipated that Choco Pie
would be welcomed by Indians, who love sweet snacks and food. Buyers told them that snacks
containing whole grains and low fat would appeal female customers. It turned out that Choco Pie
became popular in India and some other Korean confectioneries are setting up their factories in
India.
◈Problem: Orion did manage to enter the Indian market with Choco Pie, the product that
contributed greatly to the exporting business in 2007. However the outcome was a billion won in
sales, which is not as profitable as the case of other overseas markets like China. Orion was
blamed of using the green label indicating food for vegetarians for the packing of Choco Pie,
which contained animal fat. They should have conducted the market research more precisely.
◈ Solution: 6Have you ever heard of Vegemellow Choco Pie?
‘Vege Choco Pie’ is the product especially made for the vegetarians in India in the consideration
of their religion and it still tastes same as a normal Choco Pie. Orion calls the marshmallow used
6
<There isn’t marshmallow in Choco Pie of The Indian > Newsis
13
for making the vegetable Choco Pie Vegemellow (vegetarianism + marshmallow), which means
the marshmallow for vegetarians. Vegemellow is made by mixing milk protein with powdered
Karagenan(one of complex polysaccharides) extracted from Ceylon moss.
▪ It was necessary to develop a new Choco Pie for vegetarians in India for Orion, who wanted to
place Choco Pie in the Indian market as high quality snack food and present premium marketing.
▪ Orion Research Center succeeded in developing the new product after a two year study. One of
the researchers said that Vege Choco Pie tastes exactly same as a normal Choco Pie and he could
not find any difference with it.
▪ A person in charge of Orion’s global marketing said that the trend in the food products was to
reduce animal fat more and more after incidents relating to animal such as avian influenza, mad
cow disease, SI and so on occured. Vege Choco Pie fits this trend and they plan to launch Vege
Choco Pie for exporting worldwide after seeing the result in the Indian market.
4. Previous market situation, competition and marketing strategies
[1] The Chinese Market
◈ The first product and package
Brand name: 好朋友∙派
Brand concept: Good fiends
Package color: Red
Target: to establish the premium image by targeting the
upper-middle classes
< Pic.8 - Choco Pie in China >
◈ Motivation of Orion’s entry to overseas market and the situation of competition at that time
The primary motivation and situation: at the time when Orion entered the Chinese market
1) The limited domestic market: If the domestic market is small compared to economic size of
production, companies are likely to turning into export to new markets abroad to solve the
problem of unused equipment.
2) To seek the production efficiency: Companies seek economy of scale, experience curve effect
and cost reduction through a large purchase and mass transport.
3) To extend lifecycle of products: Companies who reached maturity phase try to enter overseas
markets in growth phase.
4) To diversify the risk in export: The risk of companies that operate various business activities
in several countries becomes more diversified than the companies operating a single business
activity.
14
The accompanying motivation and situation: the continual growth after the successful entry to
China
1) To intensify the local marketing: Companies need to intensify the marketing activities for
customer satisfaction and manufacture the products in the overseas market through direct
investment in order to maintain their position in the market.
2) Low cost production and procurement abroad: Companies in the maturity phase where the a
production method become standardized set up a manufacturer by directly investing in low-wage
countries for price competitiveness.
3) Diversification of international companies’ business: Multinational corporations try to invest in
foreign markets or diversify their business by entering different types of business with no
connection for vertical- and horizontal international specialization.
4) Technical cooperation: Multinational corporations seek to direct foreign investment in order to
obtain cutting-edge technology and management techniques of advanced countries.
5) To establish an international network of business operation: It is important to establish an
international network of business operation for corporations given that a nation could be a
manufacturing base and another nation could be a base for procuring raw material for them.
6) To hold the competitors in check: Orion has become one of the leading companies but still
continue extending their business in order to keep the following companies like Lotte in check.
◈ Target market and positioning strategy
It was not easy for Chinese customers to buy foreign confectioneries since the income level
was low and the price of foreign confectioneries was too high in China until the late 1980’s.
However the purchasing power increased as a personal income increased along with the
economic growth of China in the 1990’s.
It was a period when foreign confectioneries started to enter the Chinese market in earnest.
The pie market was formed at that time. Pie was classified as luxury confectionery and sold as
special snack food in cities beside large cities such as Beijing and Shanghai.

Analysis of customers in the confectionery to take over the Chinese market
# Distribution of customers
The number of customers who could afford to buy confectioneries among the entire population:
around 700 ~ 800 million
The number of customers who could afford to buy pies among those above: around 1 million
# Major customer group
- Main customers groups were mostly in large cities on the coast.
The income level of Customers in costal areas was relatively low compared to the one in inland
areas.
- Pie belonged to the favored product family and customers regarded pie as a luxury food product
rather than a snack they eat when they feel hungry.
Foreign products were also favored as their quality was valued.
15
# Consumption characteristics by regional groups
Northern regions on the cost: Pie with chocolate in a large sized package is favored.
Southern regions: Cream cake is favored rather than Choco Pie. (Choco Pie is not suitable for
the areas in the north where the pie melts by the hot weather.) Small package is favored.
# Impression of Korean brand in the confectionery market of that time: unique and impressive
(Before sales of Choco Pie began in earnest)
Young respondents: They think Korean food products are well packed and hygienic.
They find Korean pie products impressive and tasty.
Parents who have buying power: They did not pay much attention to the fact that the products
were made in Korea. They make a decision of purchase based on the characteristics of the
product itself such as the quality and best-before date.
◈ Analysis of marketing strategy of that time
Drastic changes of existing market platform were made from nation to the core regions, the
brand rather than the product itself, and market oriented management rather than importer
oriented management.
Product: Development and production of products with quality competitiveness
Pie-men have improved the product quality by continuous development of products focusing on
the market needs. The element that enabled Orion Choco Pie to be popular for the last 50 years is
the unique and excellent taste. The unique shape and taste that are not easily imitable is the
competitiveness of Orion.
In addition, Orion produced pies in the boxes of different size, which vary from box with 12
pieces to the box with 6 pieces or 4 pieces. They could appeal customers by adapting their
products and marketing to each market while maintaining the core value of the product.
Price: Strategy of gentrified Product
As a strategy of ‘High Price Point’, Orion set the upper class (Opinion Leader of residents in large
cities) as their main target and tried to create the image of Choco Pie as a high-priced item. As
Choco Pie got the image of a luxury snack item, it gained the brand loyalty. In spite of the high
price, Choco Pie recorded 43% of buying rate and 92% of brand loyalty.
Promotion: Focus on raising brand awareness by the first large signboard and Trash Marketing
Orion focused on raising brand awareness to redeem the failure in the first tasting event. They
invested the one year budget for advertisement into setting up a large standing signboard to be
easily recognized and strongly remembered by people.
16
Moreover, Orion came up with the creative idea of impressing people with the pie packages
thrown away on the ground by removing trash bins on the tasting event spot.
Later, the brand image could be more improved through the advertisement casted by Korean
stars such as Dong-Goen Jang alongside with Korean Wave. Effort for promoting the image has
been constantly made.
Place: 1. Stabilization of distribution and production, and strategy of strict Glocalization
Orion went through with recall when the pie spoilt by the hot and humid weather and solved the
problem by changing the pie package and setting up the local factory. After overcoming the
difficulty, Orion could speed up the production in China and make great progress in their business.
2. Establish the distribution network in a foothold of regions
Orion tried to export their products to China via Hong Kong. The first foothold was Swatow to
distribute their products in general agencies in China. Their business began in two foothold
agencies of north & south. Then the area expanded into three agencies of north & middle & south
and developed into four cardinal directions of China. This allowed them to secure the stable
network of distribution and purchase products easily. Also indirect sales groups were managed
directly through separating the role of each group.
[2] Markets in Indochina / Russia
◈ The First product and package
Indochina
Brand name: Choco Pie
Brand concept: O! Smile
Package color: Red
Target: To establish the Premium Image
by targeting the upper-middle classes
Russia
Brand name: Choco Pie
Brand concept: Cool Friend
Package color: Red
Target: To establish the Premium Image
by targeting the upper-middle classes
◈ Motivation of Orion’s entry to overseas markets and the competition of that time
● Indochina – the Global Strategy
Motivation: Orion experienced success and gained confidence through the Chinese market. Orion
set a production base in Russia as the foothold of the Asian market with large populations in order
to speed up their global strategy.
Market Situation and Result: The share of Choco Pie in the Vietnamese pie market was 84% and
the annual amount of sale was 84 million. Orion opened OFV (Ho Chi Minh, August 2006) for
localization of their production. Choco Pie gained huge popularity in Vietnam, which led
Vietnamese say “Even though some of us don’t know Korea, all of us know Choco Pie.”
Choco Pie is regarded as one of the best snack food in Vietnam. It is even used as food for
ancestral ceremony and dedicated to Temple and the ancestral shrine. Around 20 kinds of ‘MeToo’ products are released in Vietnam as in China.
17
<Pic.9 – Market of Indochina>
● Russia – the Ambitious Project
Motivation: Orion entered the far eastern area with Russia as a foothold for the strategic reason.
Orion aimed at securing a bridgehead for Europe and the production base in the foothold of
premium Europe
Market Situation and Result: The Russian market was already dominated by powerful
multinational companies such as Danone and Nestle, and the Russian companies such as Bolshevik
that had existed for over 100 years. Orion decided to expand their business toward the western
nations.
- Orion’s business expanded to the west since it began in Vladivostok, located near Korea. In
1996 Orion opened the branch office in Moscow and their cultivation of the western market was
speeded up.
◈ Analysis of Marketing Strategy at that time
Product: The color of the package is always red and all descriptions are written in Russian and
English for better understanding.
Promotion: Success of the street marketing
Orion held tasting events in distribution centers and in central areas of Russia, which proved
Choco Pie’s potential for success. The police were dispatched because of a crowd of people in
the events. In 1997 TV commercials were also made.
Place: Sales on a pick-up truck
Orion’s customer oriented marketing such as making different packages for each distribution
channel was successful in Russia, where such marketing was not common yet. When the sales
drastically declined because of a moratorium in 1998, Orion overcame it by a creative idea, ‘Sales
18
on a pick-up truck’. They visited buyers and sold Choco Pie being paid in cash while traveling by
a pick-up truck.
Price: Selling products at a low price by taking crisis as a chance
A number of international companies discontinued export to Russia and the sales of foreign snack
products in Moscow greatly declined. However Orion remained in Russia and kept the price as
same as before the moratorium. This led Orion gain trust of customers as well as buyers.
The Result: Orion has 90% market share of the pie market in Russia. The brand awareness is 75%
and the annual sales volume is 270 million. Orion established OFR localization of production and
even Nestle released Me-Too product. Choco Pie has been now one of the representative snack
foods in Russia.
5. Key to Success of Orion
Orion has pursued marketing and management adjusted to the times and regions and continued to
develop new products and cultivate new markets. It is no exaggeration to say that Orion has
become legendary among global corporations of Korea.
The key to success of Orion can be put into three key phrases- ‘products differentiated from
competitors by the most Korean style (Joeng)’, ‘Glocalization and various marketing strategies’,
and ‘trust and idea’.
Orion’s success is significant in the sense that it was made by Korea’s technology and with the
Korean sentiment ‘Joeng’. Choco Pie is regarded as a luxury snack food being used for dedicating
to temples and ancestral shrines. Vietnamese are saying, “Even though some of us don’t know
Korea, all of us know Choco Pie.”
‘Joeng’ Marketing is a strategy that arouses the feelings of affection and humanism including
friendship, love, and closeness among neighbors. Choco Pie made only with the domestic
technology is the only product that has long survived while a short life cycle was the common
trait of confectioneries. It has strengthened its position as the representative snack brand of
Korea for 37 years and jumped up as a global snack brand. For such a long time, it has kept its
original characteristics remaining same. Choco Pie belongs to a few evergreen snack brands that
have not changed any element of their products.
Orion’s attempts of various marketing ways – sensibility marketing of Choco Pie ‘Joeng’, party
promotion, ‘Joeng’ time, color marketing, trash marketing - and the continuous effort to develop
those marketing strategies should be appreciated.
‘Orion Choco Pie Joeng’ has a strong identity ‘Joeng’ which has not ever considered as a concept
for snack by other companies. Orion’s unique marketing strategies made it possible to imprint
‘Orion Choco Pie = Joeng’ and ‘Joeng = Orion Choco Pie’=’ in people’s mind. The sensibility
marketing gave Choco Pie a strong character and created the new brand value.
In addition, Orion implemented glocalization marketing strategies by which the color of the Choco
Pie package was changed into red, the color adored by Chinese, and the brand name was changed
into ‘Hao Riyoe Wu’ meaning good fiends.
The last strength of Orion is the continuous trials and active effort to overcome difficulties that
they met. When they were in trouble with spoilt pie and recall, they never gave up and
successfully overcame it by changing the brand name and the package material. Orion did not
evade but faced crisis by admitting their problem and trying to fix it. Even more, they took it as
an opportunity for improvement and further development.
6. Global Project, the direction of further marketing strategies for Orion
19
[1] Analysis of Orion Choco Pie’s current situation: Global Project as groundwork for the next 10
years
Orion has actively implemented marketing strategies for growing into a global company since the
domestic market lost potential for growth and the business condition in the world became feasible
for globalization after communist nations opened their markets. Having reacted quickly to the
changing environment and experienced trials and errors, Orion has its own philosophy of
‘globalization strategy’ differentiated from other overseas affiliated companies.
1. First One & Best One 2. Culture 3. Marketing philosophy of glocalization
Before suggesting the strategy of global projects for the next 10 years, the analysis of Orion
Choco Pie’s current status using SWOT tool is stated below.
Strength: Orion has their own knowhow about products and markets gained in the Korean
domestic market. They are able to produce all of the main ingredients for the products on their
own. The anticipation about the entry to overseas markets was of great success with glocalization
strategy. Continuous training of the employees and strict management of distribution were
another competitiveness of them.
Weakness: The big size of products and packing and the long distance of delivery caused high
cost of production and PLC is also shorter than the products of other companies.
Opportunity: Orion has a large consumer market and high potential for cultivating new markets.
The growing economy of China has made the Chinese consumers have more buying power.
Besides, the promotion of the brand is expected to be more effectively done thanks to the
increasing influence of Korean Wave.
Threat: There are an increasing number of look-alike products in China, which makes Orion be
more careful and strict about the product quality. The technology protection is also in danger of
being transfered. Moreover the Chinese government is stepping in to affect business in China by
making regulations.
Strength
Weakness
• Accumulated knowhow
• High price of transporting big products
• Correct prediction of successful Glocalization • Short PLC
• Training of employees
• The original confectionery business is
• Technique of producing main ingredients
becoming not primary
Opportunity
Threat
• Potential for cultivating new markets
• Look-alike products, stricter quality control
• Potential for a substantial growth Asisa
• Unwanted technology transfer
• Maximizing the effect of business activities • Fierce competition in domestic and foreign
through the increasing power of Korean Wave markets
• Expansion of the market by FTA with Europe • Government regulations and interference
• Change of target marketing due to products
heading north might cause reduction in sales
S - O: Coming closer to be the world’s top brand, Orion is ready to found Orion World.
S - T: Pursue Glocalization marketing strategy, but strengthen the core value of Choco Pie.
20
W - O: Devise a new strategy of promotion vitalizing the local production factories for a new
market.
W - T: Establish the brand value by using the effect of Korean Wave rather than focusing on
sales of the product itself.
[2] Next goal of Orion Choco Pie’s marketing and strategy for accomplishment
The next goal of marketing:
“Choco Pie has become the world’s top snack food, now it’s time to become the world’s top
brand.”
[2]-1. Orion World
<Pic.10 - Autostadt>
According to Christian Mikunda, the architectural design
based on experience makes ‘the third place’ become
conspicuous. A certain place can only attract people’s
attention when its existence is noticed by people and
regarded as something or somewhere interesting or
important. Otherwise, no one would try going near or
enter that place. It applies to all types of places no
matter for which purposes they exist. Hence, the third
place should be turned into a place as ‘land mark’.
A notable example of the third place is ‘Autostadt’, the
land of the famous German brand. Autostadt is a theme park located right next to the head office
of Volkswagen in Wolfsburg, Germany and, in this one place, production and release are
conducted. A number of tourists have been visiting Autostadt since Ferdinand Piëch, the former
chairman and CEO of Volkswagen Group, completed in founding for customers in 2000. Autostadt
provides customers with chances to experience designing cars by themselves through computer
simulations. It also offers various programs related to cars such as programs of getting driver’s
licenses and training courses of safe driving and economic driving. Shuttle buses are run for
customers to take a tour of the production factory site.
Therefore, we would like to suggest an idea of creating ‘Orion World’ with Choco Pie as the main
product. A theme park combining an amusement park and facilities of hands-on experience will be
a place that imprints their image in the mind of children and their parents, who are the main
customers of confectionery. The confectionery factory complex created as the factory in the
movie ‘Charlie and the Chocolate Factory’ will be a great tourist attraction not only for Koreans
but also foreign tourists.
21
<Pic.11 - Charlie and the Chocolate Factory>
According to Christian Mikunda, people ‘buy’ feeling and consciously enjoy their feeling as
necessary. If one can buy happiness, it would be like ‘medicine that doesn’t require prescription’.
It is not easy to know the exact moment of happiness but it would be possible to create an
atmosphere that makes people feel unexpected happiness. For people who are exhausted by work
or study, Orion World would be like an oasis where they can refresh themselves by pleasant
feeling and take a rest having some snacks. Orion will be able to provide people with a great
pleasure of fun experience as well as good taste. People will have a relaxing and pleasant time in
Orion World where various kinds of snacks with colorful decorations sweet smell are all around.
In the book < The forbidden place or the enacted enticement> of Christian Mikunda, it is said that
desire causes an enormous curiosity and interest, creates a certain feeling and makes people
absorbed in a particular object. Thus, we should use the character of desire to establish more
appealing image of the product and implement worldwide marketing. Having good image is much
stronger than flowery expressions for having psychological impact on people. So, we should use
the feeling of joy to make ‘Orion World’ arouse people’s desire. Creating abundant atmosphere by
colorfully packed products helps for that. Chromatism indicates the state of hallucinatory
perception of abnormal coloration. This state can be made only by releasing a large amount of
dopamine without using hallucinogen. All exhibition areas should be stage-managed under a
certain theme and contain stories in coherent flow like a drama. As a good example, Whole Foods
Market is a foods supermarket where food is displayed based on the ensemble principle. Fruit and
vegetables play a role as actors and there is a rule of actors’ appearing. Foods should be heaped
up high and arranged by contrasted color for giving the impression of abundance and diversity.
This ensemble technique is very useful for displaying various kinds of products at stores without
making them look cheap and poor.
Choco Pie is the representative long surviving product of Orion. Everyone would have fell in love
with Choco Pie once in their life. So, a place specially created for Choco Pie would arouse feeling
of nostalgia. This place would not only remind people of their childhood or times of the military
service, but also give off Choco Pie’s new charm. Choco Pie will catch people’s eyes visually by
its round shape and psychologically by all things accompanied. In order for Choco Pie to be newly
recognized, it needs to be related to more interesting stories. It is important to give an impression
that Choco Pie not only stays in your past memories but also will be with you as one story of your
future.
When you in the state of being absorbed, a large amount of neurotrophin is released and it is
almost similar to the state of falling in love with someone. People visiting Orion World also could
fall in love with Orion’s tempting snacks and feel happy with being there. This will then be
naturally remembered and reflected to the image of the brand and the company Orion.
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[2]-2 Korean Wave
1. Pie that has been developed along with the growth of Korean Wave
Koran Wave has been spreading in Asia, Europe and America. The world is fascinated by K-pop,
TV series and movies, the cultural contents. Girls’ Generation and Kara, popular Korean idols,
earned 30 billion won. Korean Wave became a content of culture and business in large scale.
Succeeding singers and actors, Korean food is now ready to take over the next player.
As already mentioned earlier, Choco Pie is now holding its firm position in overseas markets –
China, Russia, Vietnam and India.
<Pic.12 – Global Issue of Choco-Pie>
Korean Wave can be found also in Europe through the one of chat between Rio Ferdinand and Ji
Sung Park, the soccer players of Manchester United. Rio Ferdinand wrote Ji Sung Park on twitter
on May 11, 2011 that he would also like to ask Mr. Kim to send Choco Pie to England for him.
Choco Pie’s image as the warm-heartedness of Koreans was recognized in Europe.
Officially sponsoring Korean singers’ tour overseas will be another way of promotion. Unique and
sensational promotion is needed sometimes for successful result just as trash marketing in China.
Fans of Korean stars are customers with high potential provide that they are people who adore
Korean stars and accordingly more readily affected by the stars. If the Korean stars join making
CM songs, it will bring a chance to create culture shared with people as well as a great promoting
effect.
Orion also should continue pursuing Glocalization strategies and devise suitable plans.
Studying every nation’s own culture and designing different ways of promotion for each culture
are the first to be done. Many Korean restaurants are known to be quite popular in other
countries. Promotion through those restaurants would be also helpful – like putting vending
machine or holding free tasting events.
In movie theaters in Germany, showing movie is stopped for a little while so that a sales clerk can
come and sell food to the audiences. This type of promotion and sales could work out in Europe
23
and many other nations. Making an event in other countries like this will be a good way when
Korean movies with PPL are released abroad.
Orion should ensure to secure the distribution both in the Korean and Asian markets. Vending
machines in youth hostels in each nation are also useful and Orion should turn to other countries
having many touristic places. People living in touristic regions are more likely to open their mind
about other culture and food compared to others.
If some Koreans are staying there, they could happen to give Choco Pie as a gift to foreign
friends.
[2]-3 PPL
PPL, natural enticement
PPL stands for Product Placement and means advertising products unconsciously exposed to
viewers by placing them as props in entertainment contents such as movies, TV programs, music
video, gram, software and so on.
Products are advertised naturally and effectively to people who have been in high concentration.
It
brings no repulsion and distrust that have been caused in the overflowing advertisement.
<Pic.12 – Korean Movie,‘JSA’>
PPL has the high effect of being exposed to customers compared to what it costs. Normally it
costs roughly 2 billion won to make TV advertisement for about 5 to 6 months, but it costs 100200 million won at the most to place products in TV programs.
A typical example of Choco Pie’s PPL is seen from scenes of movie ‘JSA’ directed by Chan Wook
Park. The scene of a North Korean soldier’s eating Choco Pie and a line ‘My wish is that North
Korea makes tastier snack that the one of South Korea.’ These short but impressive scenes made
a fortune for Orion and it cost only 1 million won. Furthermore, PPL through movies is bound to
lead to PPL through video, cable TV, public TV, having enormous effect of exposing the products
to a number of people repeatedly.
24
Choco Pie favored by a military officer of North Korea in the movie has become now popular
among North Koreans for real. Choco Pie is a favorite snack offered to workers at the Kaesong
Industrial Complex. It is bought through China into North Korea and costs 700 won (about 240
won in South Korea). Considering 1 kg of rice costs 2,000 won, it’s high priced favorite food.
For successful PPL, it is important to set different strategic plans for every stage, ranging from
developing contents, video, Cable TV and to the second stage of spreading. BMW, as an example,
displayed a car Z3 – appearing in 007 series - in department stores and cinema and hold a road
show reenacting the movie scene in order to maximize the effect of promoting the car Z3.
Current situation of Choco Pie’s PPL
: JSA, Marathon, A Dirty Carnival, The Way Home, My Lovely Sam Soon, a soap opera Thank You
(Choco Pie was constantly exposed even without official sponsor), etc
Orion has benefited much from PPL as stated above and PPL is one of the most effective ways of
promotion considering the strong impact of media. Seeing the potential for promotion through
Korean Wave, PPL in TV series, movies and cartoon that are to be exported will be more
profitable. Thus, Orion should develop proper strategies for business through movie and TV
series industry.
In case of entering new overseas markets where Korean Wave is spreading, it will be a good
strategy to make advertisement casting the Korean stars of Koran wave in the region. All possible
kinds of PPL should be considered. We suggest expanding the choices of media for PPL – not
only TV series and movies, but also cartoons
Possible ways are letting Choco Pie appear naturally on cartoons for children or collaborating
with character industry. In addition to them, making ‘limited edition’ as promotion is another way
- Choco Pie accompanied with toys like stickers and small mobiles. Or it would be also a good
idea to develop a Choco Pie character.
∨ Proposal to collaborate with Pororo
Character industry is a new growth industry and ‘a strategic industry for the next generation’
creating high-added value. By developing familiar characters that can last long, the promotion
activities could be done through movies, TV, video, game and products.
Pororo, the Korean cartoon character, is very popular among French children. It displayed
average viewer ratings of about 47% (the highest ratings of that time) on TFI, the biggest
terrestrial channel of France. Pororo was exported to about 110 nations in the world. According
to the survey of Seoul Business Agency, the brand value of Pororo is 383.9 billion won and the
market of allied products amounts to 500 billion won. Pororo has more than 1,000 patented
products and get more than 10 billion won as royalty of patent rights.
7. Summary and Conclusion
25
Capturing tastes of people in the world, Orion Choco Pie has been a success model in the
confectionery markets all over the world. The success in both domestic and overseas markets
results from he continuous research and development.
The case of Orion’s entry to the Chinese market has been a great success model for a number of
companies and industries that plan to go into overseas market. The marketing point for overseas
markets is to overcome the cultural differences. Orion has tried to appeal to the foreign
customers by adapting the strategies to them based on understanding their own culture and the
needs in the market.
Choco Pie is concentrating its energy on providing well-being and environmentally friendly
products for stepping with the current market trend in the world. It already took the first place in
the pie market, but still the growth of Orion is being continued through constant effort and market
research. In this regard, Orion shows its success as a pioneer company that exerted is capability
in all phases of entry to the overseas market, growth and decline.
Orion Choco Pie that succeeded in gaining popularity in overseas markets has the meaning of
going beyond the nation as well as being one of the representative brands of Korea. It took high
market share in the markets and was absorbed into the everyday life with the brand value ‘Jeong’.
Now it’s time to develop a method for making Choco Pie perceived as a product with delight.
Orion Choco Pie needs to make its brand image encompass larger ideas and be created in new
places as diversifying away from the already established network of distribution. We suggested
the idea of Orion World, Korean Wave and PPL marketing strategy as the plans for this. The
common purpose of the plans is to raise Orion Choco Pie to the world’s top brand. Choco Pie has
a spiritual value ‘Joeng’ just as Coca Cola’s spirit of ‘enjoy’. A product with its own spiritual
value and distinguished character has high potential for creating enormous added value. It is
certain that Choco Pie will be able to become a product that contributes to spreading Korean
unique sentiment and spirit through realizing its privilege of having distinct character.
The confectionery markets in the world are getting larger along with the globalization and Orion
Choco Pie is being favored by the markets. While many global confectioneries from other
countries are competing to put all energy for outrunning, we look forward to seeing Orion Choco
Pie marking a new ear in the world’s confectionery industry with innovative ideas.
8. References and Sources
Thesis
Chonnam University (2007) Study on the Entry Strategies of the Korean Companies into Chinese
Market
Books
Kim Jun Shin, Orion Marketing Group, Inc. (2007) Successful Case of Choco Pie’s Global
Marketing
Christian Mikunda <The Third Place> Miraebook Publishin
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Christian Mikunda < The forbidden place or the enacted enticement > Book 21
Lee Jang Ro ㆍ Shin Man Su, 「International Management」, 弘文社, 2006.
Lee Jang Ro ㆍ Moon Hee Choel,“Introduction to Trade”, 2000.
Lee Jun Won, Choi Moon Young and others < 대학생이 요리한 맛있는 상하이 경제 (Shanghai
Economy that college students experienced) > 새로운 사람들(Saeroun Saramdeul)
Gang Jun Man, Joen Sang Min <광고, 욕망의 연금술 (Advertisement, Alchemy of Desire)> 인물과
사상사(Inmulgwa Sasang)
Won Young Chan <상상 + 경제학 블로그 (Imagination + Economics Blog)> 당대(Dang Dae)
Ju Young Ha <China, Chinese, Chinese Food> 책세상(Chaeksesang)
Sidney Mintz <Sweetness and Power> 지호(Jiho)
Internet
Export-Import Bank of Korea, Statistics of overseas investment 2008.
Newsis <인도 초코파이에는 마시멜로가 없다(Choco Pie in India has no marshmallow)>
국민일보(Kukmin Ilbo) < 화해의 메신저 ‘초코파이’(Choco Pie, Messenger for Reconciliation) >
아주경제(Aju Ecnomomy) < Nestle, attempting takeover of Hsu Fu Chi International Ltd. >
KOTRA < Brand-naming in Chinese Style, the shortcut for the Chinese Market>
KOTRA < Trends of the Indian Market for Consumer Goods and Strategy for Expansion >
한국경제(Hankuk Kyungjae) <Global Brand ‘`Made for China’` Competition>
Delovoy Kvartal 2007
Others
KBS 신화창조의 비밀(Secret of Creating Myths) – 100 원 과자의 도전(Mythic success of 100 won pie)
(Episode of Orion Choco Pie – 03.12.26)
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