AmorePacific Hong Kong: Marketing Korean Beauty Products

As the end of 2016 approached, the managing director of AmorePacific Hong Kong (APHK) was setting the media mix and budget for APHK’s four makeup and skin care brands: ETUDE HOUSE, LANEIGE, Sulwhasoo, and AMOREPACIFIC. Tourists shopping in Hong Kong from mainland China comprised over half of the company’s sales. However, in the face of a declining number of tourists and the shrinking of luxury goods spending, the managing director had to consider the marketing tools in the customer decision journey; competitive positioning; and the distribution of the marketing budget between traditional and digital channels in the upcoming bi-monthly campaigns. She needed to strike an appropriate balance between recruiting new customers and retaining existing customers within APHK’s overall strategy for Greater China.

This case can be used in graduate and senior undergraduate courses on advertisement management or integrated marketing communications. Students should be familiar with the 4Ps (product, price, promotion, and place) analysis; marketing management; brand management; and market segmentation. The case enables students to learn about and understand the following:<ul><li>The changing media habits affecting different target market segments.</li><li>The integration of traditional and digital media.</li><li>The allocation of a marketing budget in accordance with the company’s communication objective.</li><li>The four different approaches to establishing a communication budget—(1) top-down (percentage of sales and competitive parity); (2) bottom-up (product-based); (3) the objective and task method; and (4) payout planning.</li><li>The significance of geographic location (both country of origin and sales location) in brand building and positioning, including allocation on a campaign basis and allocation by channel.</li><li>The significance of customer service as a key differentiator and brand-building device.</li></ul>

• market segmentation, digital media, marketing budget, skincare and cosmetics