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<#305 View of Foreign Press>
 
Tongkeun Fried Chicken Divided South Korea
 
By Ahn Seon-woo, Tribune Cub-reporter
 
Fried chicken is a very popular food in Korea; many people like to eat it through a delivery service. Nowadays, fried chicken has been a very hot issue since Lotte Mart, which is a Korean large discount chain, launched its own fried chicken brand ‘Tongkeun’ last December 9th. The controversy was started by the price. Tongkeun chicken was priced at 5,000 won, which was about 30~40 percent less than that of existing common fried chicken brands. Tongkeun chicken was not only cheaper in price but also bigger in size compared to other fried chicken brands. However, as Lotte Mart sold began to sell Tongkeun chicken, local chicken chains near Lotte Mart strongly blamed Lotte for threatening their means of living. They claimed that Tongkeun chicken has abnormally low priced, and that Lotte was aiming to attract customers rather than create profit. Chonnam Tribune selected some articles from the foreign press about Tongkeun chicken.
 
The Times, an influential daily newspaper in the U.K., reported Tongkeun chicken on December 14th. It analyzed this situation, “Korea showed they don’t want big merchants bound up at least in food” and reported that Lotte group announced that it would stop selling Tongkeun chicken after a conference with smaller enterprises. It also mentioned existing fried chicken sellers’ response, “Production cost cannot be lower than 5,000 won, it is Lotte’s tyranny.”
The Australian, a broadsheet newspaper published in Australia, showed interest in changes of public sentiment. It said that many Koreans supported existing chicken sellers and condemned Lotte at first, as they thought it was like “a rapacious giant” against “the little guys” However, The Australian added the Tongkeun chicken opponents gradually changed their mind and now realize existing chicken restaurants’ prices had been too expensive compared with Lotte Mart’s Tongkeun chicken.
The Wall Street Journal, an English international daily newspaper, said that Lotte’s introduction of Tongkeun chicken was a successful marketing strategy. It expressed Tongkeun chicken is “a loss leader” of Lotte and also said that the loss leader was planned to attract public attention through the extremely low-profited products and this method is a well-known and time-tested strategy in retailing. The journal pointed out that although the loss leader strategy was a business moral issue, there was no law against it in South Korea. The article suggested the possibility that Tongkeun chicken was just “a giant publicity stunt” and claimedthat Lotte’s strategic marketing worked, as the issue got bigger.
Although ‘Tongkeun’ chicken was sold only for seven days, the effects have been huge. It raised controversy about adequate chicken prices, which became a social concern in Korea. Countless parodies of Tongkeun chicken have been posted on the Internet and many people paid attention to Tongkeun chicken’s aftereffects. Even after the sale of Tongkeun chicken was stopped, the controversy continued and grew stronger. Customers are demanding the reduction of chicken prices from existing chicken franchises. From an economic point of view, Lotte Mart was successful in promoting its Tongkeun brand because the whole of South Korea paid attention to its Tongkeun chicken. Lotte Mart even said it would launch additional products using the ‘Tongkeun’ brand. Even if it was a successful marketing campaign, the effects were too big to control. Lotte Mart’s controversial Tongkeun chicken made the public hastily reevaluate chicken prices, a sensitive subject for existing chicken sellers.
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