Kim Garners More than $40,000 in Marketing Channel Research FundingAssociate Professor of Marketing Stephen Kim is on a roll. His recent research has received endorsement by the Korea Research Foundation (equivalent to the National Science Foundation in the U.S.) to the tune of $37,000. Prior to that, in collaboration with Colorado State University professor David Gilliland, Kim received $6,700 from the Marketing Science Institute with sponsorship from the National Beer Wholesalers Association and the Global Technology Distribution Council (GTDC) for a project titled "Rejection of Channel Incentive Programs."
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| Associate Professor of Marketing Steve Kim garners research funding. |
Kim, whose specialty is marketing channel research, is working with two Korean visiting scholars, Dr. Soongi Kwon and Sanggi Shon, on the Korea Research Foundation project.
Kim came up with the idea of researching marketing channels within the fashion industry. He was fortunate to meet Kwon, a fashion-marketing expert in Korea who had a strong connection with the industry leaders, and Shon, who was experienced with data collection in the Korean market.
The team examined the Korean hybrid-marketing channel whereby fashion manufacturers use "shop masters" to distribute their product to department stores and use department stores to distribute the products to the consumers. The fashion manufacturer employs the shop master to work closely with department stores across Korea. The business model, allowing for shop masters to move from one company to another, was deemed a huge liability to manufacturers whose clients could be lost when a shop master moved to a different manufacturer. With non-competition agreements being ineffective, the research sought to analyze alternatives to keeping manufacturer/department store relationships.
According to Kim, the classic approach would be rotating the shop masters among the company's clients to prevent them from developing a close relationship with individual department stores and therefore making it more difficult for shop masters to take clients when they leave a manufacturer.
"Performance incentives and/or penalties don't cut it," said Kim. "Companies trying to work directly with retailers via just a sales force are less and less effective."
However, after conducting the research, Kim found that by using brand equity and creating market pull, manufacturers could have more voice and power. Rather than heavily relying on shop masters, he found fashion manufacturers could use their brand to maintain relationships with department stores. Building up the brand enabled department stores to feel honored selling the manufacturers' products and less likely to switch suppliers. Manufacturers could also get input from both the retailer and the shop master sales force to manage each other.
"Shoppers should be the focus," said Kim. "They love to buy brand and have more say."
Kim will be presenting his findings to the three main department stores in Korea. Over the years small and medium department stores have consolidated into the three which now control 80 percent of the Korean market.
In his research for the Marketing Science Institute, Kim analyzed resellers and why they sometimes refuse "selling incentives." In his research, he determined that money often can impact reseller effort. However, to change a reseller's attitude/dedication or competence, companies must think about more than just money. According to Kim, resellers think about the equity in the relationship and fit. For example, resellers might consider the incentive versus what they feels they deserve. Resellers also assess fit by considering if a product they are being encouraged to sell actually helps meet customer needs. Ultimately, for channel incentive programs to be effective, they have to provide monetary incentive, as well as equity and fit to improve attitude and competence.
Kim will be presenting his findings at the GTDC industry conference in September. | 
