30/34 (A) Business Management Extended Essay (N21) – Amorepacific

1.0 Introduction

The buying experience is not always about what product is purchased. It covers the entire process through which a customer is engaged with a business. These experiences encourage users to develop a sense of emotion about products and build relationships with a brand. Experiential marketing is a marketing strategy which involves “offline effort to raise brand awareness, create and nurture business opportunities and develop long-term customer loyalty” (Limelight, 2019). Amorepacific, South Korea’s leading health and beauty conglomerate has introduced experiential marketing as a branding strategy to attract Chinese customers. “China’s lucrative cosmetics industry hit US $53 billion in sales in 2020 and is set to become the world’s largest market in the coming years” (Koty, 2021). Chinese customers have already shown their interest towards Korean-styled beauty products in both China and Korea with the influence of the Korean Wave. The Chinese target market is responsible for more than 50% of Amorepacific’s gross revenue (Apgroup, 2021).

Since 2017, salaries in China have annually increased by an average of 9.3%, and therefore, consumer demands in the beauty industry have shifted from economy to luxury products (Koty, 2021). Amorepacific has largely focused on economy brands for Chinese customers to rapidly increase sales volume however, due to this in consumer demand, the company has seen a decrease in sales of 21.5% (Sternberg, 2021), and has implemented an experiential marketing strategy to alter perception of their existing economy brands…