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Harvard Case - CJ E&M: KCON Goes Global

"CJ E&M: KCON Goes Global" Harvard business case study is written by Elie Ofek, Michael Norris. It deals with the challenges in the field of Marketing. The case study is 21 page(s) long and it was first published on : Jun 19, 2017

At Fern Fort University, we recommend that CJ E&M adopt a multi-pronged approach to solidify KCON's global expansion. This strategy involves: 1) Refining KCON's brand positioning to appeal to a broader international audience, 2) Leveraging digital marketing and social media to foster community and engagement, 3) Developing a strategic partnership model with local organizers and sponsors, and 4) Expanding KCON's content offerings beyond concerts to encompass a wider range of Korean cultural experiences.

2. Background

CJ E&M, a leading South Korean entertainment company, launched KCON in 2012 as a global platform to promote Korean pop culture (K-Pop) and entertainment. Initially focused on the US market, KCON has expanded to other countries, including Japan, France, Australia, and Thailand. The case study highlights the challenges CJ E&M faces in maintaining KCON's growth and profitability amidst increasing competition and evolving consumer preferences.

The main protagonists of the case study are:

  • CJ E&M: The company responsible for creating and managing KCON.
  • KCON: The global platform for promoting K-Pop and Korean culture.
  • K-Pop fans: The target audience for KCON, who are increasingly diverse and demanding.
  • Competitors: Other entertainment companies and events vying for the same audience.

3. Analysis of the Case Study

To analyze CJ E&M's situation, we can utilize the following frameworks:

1. SWOT Analysis:

  • Strengths: Strong brand recognition, established network of artists and performers, proven track record of successful events, access to Korean entertainment industry resources.
  • Weaknesses: Limited global reach, reliance on a single event format, potential for cultural misunderstandings, difficulty in adapting to diverse market preferences.
  • Opportunities: Growing global interest in K-Pop and Korean culture, expanding digital marketing channels, potential for partnerships with local businesses, diversification of content offerings.
  • Threats: Increasing competition from other entertainment companies, changing consumer preferences, economic fluctuations, potential for negative publicity.

2. Porter's Five Forces:

  • Threat of new entrants: High - the entertainment industry is relatively easy to enter, with many independent promoters and event organizers.
  • Bargaining power of buyers: High - fans have many choices of entertainment events and can easily switch preferences.
  • Bargaining power of suppliers: Moderate - artists and performers have some bargaining power, but CJ E&M has established relationships with many.
  • Threat of substitute products: High - fans can choose other forms of entertainment, such as online streaming, gaming, or other music festivals.
  • Competitive rivalry: High - the entertainment industry is highly competitive, with many companies vying for the same audience.

3. Consumer Behavior Analysis:

  • Target market: KCON's target market is primarily young adults, aged 18-35, who are passionate about K-Pop and Korean culture. This demographic is increasingly diverse, with fans from various countries and backgrounds.
  • Motivations: Key motivations for attending KCON include:
    • Experiencing live performances: Witnessing favorite artists perform live is a major draw.
    • Connecting with fellow fans: KCON provides a platform for fans to meet and interact with each other.
    • Learning about Korean culture: KCON offers opportunities to explore Korean food, fashion, and other aspects of the culture.
  • Decision-making process: Fans often make decisions based on:
    • Artist lineup: The presence of popular artists is a key factor in attracting attendees.
    • Event location and accessibility: Convenience and affordability are important considerations.
    • Social media influence: Recommendations and reviews from other fans play a significant role.

4. Recommendations

1. Refine KCON's Brand Positioning:

  • Target market segmentation: Identify specific sub-segments within the global K-Pop fanbase and tailor KCON's messaging and offerings to appeal to each group.
  • Brand positioning: Reposition KCON as a celebration of Korean culture, not just a music festival. Emphasize the diverse range of experiences offered, including food, fashion, beauty, and traditional arts.
  • Value proposition development: Clearly articulate the unique value proposition of KCON, highlighting its immersive experiences, cultural immersion, and community building aspects.

2. Leverage Digital Marketing and Social Media:

  • Digital marketing strategies: Utilize a multi-channel approach, including search engine optimization (SEO), social media marketing, content marketing, and influencer marketing.
  • Social media engagement: Build a strong online community by actively engaging with fans on social media platforms, creating interactive content, and fostering fan-to-fan interactions.
  • Customer relationship management (CRM): Implement a CRM system to track fan data, personalize communication, and offer targeted promotions.

3. Develop a Strategic Partnership Model:

  • Local organizers: Partner with local event organizers and promoters in each target market to leverage their expertise and network.
  • Sponsorships: Secure sponsorships from local businesses and brands that align with KCON's values and target audience.
  • Co-branding and partnership strategies: Collaborate with other entertainment companies and brands to create synergistic events and promotions.

4. Expand KCON's Content Offerings:

  • Product development: Introduce new content formats beyond concerts, such as workshops, panel discussions, cultural exhibitions, and interactive experiences.
  • Product diversification: Explore opportunities to expand KCON's offerings into other areas, such as K-Drama screenings, gaming tournaments, and fashion shows.
  • Product positioning: Position KCON as a comprehensive platform for experiencing all aspects of Korean culture.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core competencies and consistency with mission: CJ E&M's core competency lies in its expertise in entertainment and its understanding of the Korean entertainment industry. Expanding KCON's content offerings and partnerships align with its mission to promote Korean culture globally.
  • External customers and internal clients: The recommendations address the needs of both KCON attendees and CJ E&M's internal stakeholders, including artists, sponsors, and partners.
  • Competitors: The recommendations aim to differentiate KCON from its competitors by offering a more comprehensive and immersive cultural experience.
  • Attractiveness ' quantitative measures if applicable: The recommendations are expected to increase KCON's revenue and profitability by attracting a larger audience and diversifying its revenue streams.
  • Assumptions: The recommendations assume that the global demand for Korean culture will continue to grow and that CJ E&M can successfully adapt its strategy to meet evolving consumer preferences.

6. Conclusion

By embracing a multi-pronged approach that combines brand positioning, digital marketing, strategic partnerships, and content diversification, CJ E&M can solidify KCON's global expansion and position it as a leading platform for promoting Korean culture.

7. Discussion

Alternatives not selected:

  • Focusing solely on existing markets: This approach would limit KCON's growth potential and expose it to increased competition within established markets.
  • Adopting a solely digital strategy: While digital marketing is crucial, it cannot fully replace the in-person experience and community building aspects of KCON.

Risks and key assumptions:

  • Cultural sensitivity: CJ E&M must be mindful of cultural differences and avoid any potential misunderstandings or controversies.
  • Economic fluctuations: Global economic conditions can impact event attendance and sponsorship revenue.
  • Competition: The entertainment industry is highly competitive, and CJ E&M must continuously innovate and adapt to stay ahead of the curve.

8. Next Steps

Timeline with key milestones:

  • Year 1: Implement brand positioning strategy, launch digital marketing campaigns, establish strategic partnerships in key markets.
  • Year 2: Expand KCON's content offerings, introduce new event formats, and launch KCON events in new markets.
  • Year 3: Continuously monitor market trends, adapt strategies based on data analysis, and explore new opportunities for growth and innovation.

By taking these steps, CJ E&M can ensure KCON's continued success and establish it as the premier platform for promoting Korean culture worldwide.

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Case Description

In January of 2017, CJ Entertainment & Media (E&M) proudly announced that it will be holding its first ever KCON in Mexico City just two months later. CJ Group Chairman Jay Lee and Vice Chairwoman Miky Lee are pleased at the progress that KCON, a Korean-oriented music and cultural convention, has made since its debut in LA in 2012. In the years since 2012, the event has been held every year in LA, and has recently also taken place in New York, Tokyo, Paris, and Abu Dhabi, with varying levels of financial success. In addition to growing in number, KCON has grown in size. By 2016, KCON LA had become a three-day, two-concert affair, that attracted 70,000 attendees with a wide range of experiences for fans to enjoy, including Korean foods, dance classes, beauty products, and eSports offerings. Chairman Lee and VC Lee believe that KCON is a good vehicle for accelerating the Hallyu wave of Korean culture that was still sweeping the globe, and riding this wave in promoting CJ Group offerings. Indeed, the Group's food brand Bibigo, which ran nine restaurants in the LA area and sold frozen dumplings and other Korean foods in Costco across the U.S., and KCON.tv, a digital media channel, were experiencing commercial success in the U.S. market. But at the same time, there was some uncertainty about the best way to ensure continued growth of the KCON concept. Should they expand the current KCONs to include more days, shows, and events; launch KCONs in new geographies such as Southeast Asia or Australia; or some combination of these growth strategies? How concerned should they be with KCON's uneven financial performance and difficulty in generating sponsorship revenue? KCON LA and KCON Tokyo have made a profit for multiple years in a row, and KCON NY was in the black for the first time in 2016, but other KCONs lost money. What can they do to further grow the Bibigo brand in the US?

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