Ginseng in Korea has not only the biggest production value but also still a good reputation from overseas in the name of 'Korea Ginseng'. Having spread rapidly nationwide from 2000 year, its production keeps on increasing but its consumption becomes l...
Ginseng in Korea has not only the biggest production value but also still a good reputation from overseas in the name of 'Korea Ginseng'. Having spread rapidly nationwide from 2000 year, its production keeps on increasing but its consumption becomes lazy and its price is also falling down because of comsumer's concern about mainly overusing pesticide for ginseng.
In order to cope with this problem, the government introduced the GAP certification system to ginseng in 2006 to reflect consumer's needs for food safety. This system will be a good opportunity to promote ginseng consumption dramatically. In this aspect it is very important to know how well this system is established and how ginseng farmers build marketing strategies to draw new wind in the market.
This study was carried out to look over the GAP certified ginseng system and show its marketing strategies using STP(segmentation, targeting, and positioning) and 4P‘s(product, place, promotion and price).
The main results are as follows.
1. GAP ginseng system currently has some weaknesses such as lack of systematic certification management and after-service, nonrealistic certification fee and poor linkage from production to consumption. And GAP ginseng requires 3.2% higher production cost than general ginseng.
2. Consumers' willingness to pay(WTP) for GAP ginseng was 7,477 won per 750g, which consist of 34% of its selling price. And retailers' WTP was 4,349 won for self-sufficiency and 6,779 won for present.
3. As a result of market segmentation, 3 consumer groups(large size preferred, safety preferred, lower price preferred) were classified. Among those groups, the safety preferred group was selected as a target market for GAP ginseng and its market size was estimated approximately 6,038 tons which is 26.8% of total ginseng market. And it is better to choose multi benefit positioning which appeals to consumers as 'safe, credible but less expensive product'.
4. In the marketing mix strategies, product strategy suggests that the most desirable appearance be transplanted ginseng filled with branch roots and 4 to 5 year-ginseng, and it is necessary to choose multi-brand strategy divided for present into for self-sufficiency and family brand strategy by use if its brand enlarges to processed products in the future.
5. In the place strategy, 3 stages like 'producer group' - 'GAP certified facility' - 'sales shop' are based as the physical marketing channel according to traceability, and connected with giant retail market and environment friendly stand, and if its sales volume enlarges, it should be considered the GAP ginseng specialized marketplace which is a type of chain store.
6. In the promotion strategy, the promotion of government level is necessary at first and producer alliances require the promotion targeting at the group of women under 40 with differentiation from price, quality, and safety.
7. In the price strategy, the early stage-high price strategy which sets 20~25% higher for self-sufficiency and 30~35% for present is desirable.
In conclusion, it was proved that the GAP ginseng has a room enough to gain consumer's preference and much higher willingness to pay(WTP) than conventional ginseng. Therefore this study indicates that the GAP certified ginseng system should be promoted to not only consumers but also producers and middlemen for well-established starting point.