Market research firm Reuters has compiled a special report on how multinational companies can develop successful brand strategies in South Korea and how they can avoid potential pitfalls that minimise profitability, dilute brand value and erode competitive advantages.
Asia's fourth largest economy has undergone rapid consumer growth and a revolution in intellectual property enforcement that has created numerous opportunities and challenges for multinational brands in the area of trademark filing.
According to the report; ‘Trademarks in South Korea: Branding the New Cultural Wave,' this strong culture of intellectual property protection, combined with broad-based economic growth, resulted in a 171 per cent increase in trademark filing over the last 15 years, with analysts projecting continued growth for this market.
Reuters noted that this level of trademarking activity represents approximately 4.13 per cent of all trademarks filed globally in 2011.
According to the report, the Republic of Korea’s economy grew at 6.2 per cent in 2010 and continues to be one of the fastest growing economies among members of the Organization for Economic Cooperation and Development (OECD).
It further highlights that South Korean companies are prolific filers of patent and trademark applications for inventions, products and brands while western brands have also started brand-building with several major names showing up everywhere from Seoul to Guangju.
Michael Alge, a partner with Marks & Clerk, a leading global patent and trademark law firm says; “South Korea presents a wealth of opportunity for brand-owners looking to expand their presence and establish themselves not only in South Korea but their peripheral markets as well.”
Similar to preparing for brand expansion strategy in China, the report warns that multinational companies looking to file for trademark protection in South Korea must be prepared to encounter numerous challenges.
Alge outlines some of the biggest concerns for Western brands as translating the message into a foreign language, targetting the right consumer, if there is an existing market for the good and lastly if the pricing structure is competitive enough for the Korean marketplace.
In terms of solutions, he offers that there is no perfect strategy for protecting multinational trademarks but that with the right cultural know-how, investment of time and resources, and working directly with South Korean IP specialists to navigate the regulatory framework, will put brand owners in the best position to build a strong consumer base in the country.
Three key steps to successful trademarking
The South Korean government is vigilant in its enforcement of trademark law, creating an environment that better protects brand owners’ assets. Based on an analysis of the industry’s current thinking, Reuters says there are three steps to note to success.
File early, file often: South Korea’s first-to-file system for trademark registration makes it essential for brand owners to file a mark well in advance of a Korean brand introduction.
Actively track your trademark portfolio: It is not essential to show use of a mark at the time of registration, but registered marks not in use more than three years are vulnerable to cancellation.
Plan with all senses: Since South Korea allows brands to file applications for marks in both sound and smell, it is important for brands to focus on not just what the brand means but also how it looks and sometimes even smells.
Top Filing Companies
Amongst companies registering the most trademarks in 2011, cosmetic company Amorepacific ranked second on the list. In the last year it has continued its focus on the Asia market with its Sulwhasoo skin care serum.