Magazine Subscription by Telemarketing Case of Korea (By Kim - - PDF document

Magazine Subscription by Telemarketing – Case of Korea

(By Kim Yong-Kook for Session IV: Breakout B, April 18, FIPP Seoul 2002)

• I. An Overview of Korean Magazine Market

(1) Number of magazines: 2,463 (Source: Korea Magazine Association). (2) Annual Sales Volume: KW1 trillion ($770 million). (3) Magazine Sales by type: Subscriptions 35.2% (Asia-Pacific subscription/retail ratio 55%/45%, Source: Distripress Gazette, March 2002); national wholesalers 30.2%, Bookstores 15.4%, Telemarketing 8.3%, Door to Door 3.6%, Street Kiosks 3.3%. (Source: Korea Magazine Association) (4) Current Trend: Increase in women’s magazines (specialized); Low sales of men’s and specialized magazines; Growth of online sales; More culture-

• riented (general interest) magazines; International licensing – high quality

magazines; computer magazines and CD-Rom magazines.

• II. Korean Telemarketing Industry at a Glance

(1) Telemarketing business volume is on the rise. (2) At least 1,500 firms are currently selling “anything.” (3) Market size is estimated KW5 trillion ($3,850 million). (4) Some 200,000 salespeople work in the industry. (5) Korea Telemarketing Association: Established in 1998, member companies are 69 (December 2001). (www.telemarketing.or.kr) (6) IPS, a member of Distripress since 1987, is also a KTA member.

• III. Magazine Sales --- Subscriptions via Telemarketing

Magazine Telemarketing Research : Conducted (telephone interview) survey of 61 magazine publishers to find out the market size and general situation of sales by

• telemarketing. (Period: One month -- 26/01/02 through 27/02/02).

Magazine Subscription by Telemarketing – Case of Korea Page 2 Summary of Research Findings

• A. Major Findings:
• A. Of the 61 companies, 13 (21%) answered they engage telemarketing

sales system for subscriptions.

• B. Computer/science magazines, newsmagazines, culture & art magazines

and education magazines use telemarketing as the main marketing tool. No telemarketing activities by economy magazines.

• B. Profitable companies use telemarketing:
• C. In general, telemarketing activities are carried out by relatively large

business or for magazines with high brand awareness/high sales volume.

• D. Small businesses cannot afford telemarketing.
• E. Newspaper companies (those publishing magazines) utilize outbound

branch offices for telemarketing, while magazine publishers operate in- house call centers.

• F. Women’s magazines, with strong distribution channels, do not operate

call centers because of high telemarketing and mailing costs.

• G. Major businesses (with the telemarketing as their primary sales

method) report telemarketing subscriptions account for more than 80%

• f annual sales.
• H. The number of telemarketing salespeople at a company ranges from 10

to as many as 500 to 350 (YBM/Sisa MBU and IPS).

• C. Outlook:

I. In selling subscriptions via telemarketing, innovative techniques are

• employed. (Discount coupons, various gratis services, merchandise

mix). J. Newsmagazine distributors (telemarketing) plan to increase R&D budget and develop further database marketing at modern call centers.

• K. Small or medium sized business, which are more vulnerable to

market/economic fluctuations, expect to maintain current level of telemarketing.

Magazine Subscription by Telemarketing – Case of Korea (3)

• L. Fierce competition among call centers foments a headhunting war to

engage professionals – individual or group – to increase effectiveness.

• M. In building and/or expanding database, telemarketing operators face

various legal and social problems.

• N. Ever-increasing online sales.
• IV. Major Magazine Telemarketing (Subscription) Operators

IPS and YBM/Si

• sa MBU are two major magazine telemarketing companies: Combined

subscribers total 251,000 (IPS 105,000; MBU 146,000).

• O. IPS, established in 1983, is exclusive distributor for NEWSWEEK,

National Geographic, Reader’s Digest and some 60 U.S. magazines. Annually IPS distributes some 4.5 million subscription copies.

• P. IPS operates 11 call centers (9 in provincial cities) with a total of 325

salespeople.

• Q. MBU is the major sales arms for YBM/Si
• sa, publisher of the Korean

edition of the National Geographic and many other bilingual monthly magazines.

• R. MBU operates the largest magazine subscription sales center with

450/500 telemarketers.

• V. Future Challenges and Tasks
• S. Large market and hot competition
• T. Trained professionals and high commissions
• U. Effective Database Marketing System and introduction of working

CRM.

• V. Diminution of social and legal barriers.

To receive a copy of the magazine telemarketing survey results, send an e-mail requesting it to: ykkim@ips-korea.com