Pickard’s view, no doubt, carries a grain of truth. Yet there are reasons to suggest that - after spending years concentrating on research, development and product innovation - Korea’s venerable chaebol are finally ready to upgrade their PR activities. Samsung’s pitch, says one participant, was a clear attempt to bring PR to the heart of the company’s strategy, in favour of the traditional reliance on product-led marketing.
LG’s RFP - despite a 33-firm conflict list - is fashioned with similar goals in mind. The company is aiming to consolidate all its messaging with one agency. Western markets have become critical for the two chaebol as Korea’s economy nosedives - and there is an acceptance that, compared to competitors such as Apple and Nokia, branding remains an Achilles’ heel. “It’s a business imperative for them,” says Bill Rylance, who spent 13 years running the country’s largest PR firm, Burson-Marsteller. Another source adds: “Trust in Korean business is eroding badly, so there is a lot of pressure on them to perform overseas and the big problem for them there is transparency and governance. They need to reform.”
Driving these changes, say observers, is rapid internationalisation in a country that can favour insularity. Almost half of Samsung is now foreign-owned, and LG’s brand is the responsibility of an Irishman - CMO Dermot Boden. More importantly, says LG communications director Ken Hong, the return of overseas-educated Koreans in their droves is transforming the chaebol.
“Ten years ago I don’t think they were looking for people like me,” says Hong. “They realised that in order to play in the same field, they need to bring in Western-educated knowhow - not that it’s better, it’s just something they didn’t have in-house.”
A number of challenges persist. Only last year, Samsung chairman Lee Kun Hee was convicted of tax evasion, the kind of scandal that is lapped up by chaebol critics. “It’s far from perfect but it’s also unfortunate that these stereotypes continue to exist,” says Rylance, noting that growing domestic scrutiny can only help. Hong paints a picture of chaebol media rooms that encourage “relationship-building” with journalists - but another source says that these efforts can encourage a perception of a co-opted media.
Then there is the matter of their image in other Asian markets, where, historically, the chaebol have felt little need to engage on the same terms as they do in the West. “If they want Asian consumers they need to take it up a notch,” agrees Hong.
“In Asia the chaebol get a more sympathetic ear,” adds a source close to Samsung. Whether that will be enough to ensure growth in still-expanding markets remains open to debate. For the agencies they employ, meanwhile, it adds up to a set of challenges that many may be unfamiliar with.
“I don’t think the chaebol like to be told by Westerners how to communicate with Asians,” says Rylance. “Western agencies are going to be tested and will really have to demonstrate their loyalty and commitment. With Korean organisations and Koreans within them, if you win their hearts, you win their wallets.”
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