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Cultural technology Cultural

technology
A framework for marketing cultural
exports – analysis of Hallyu
(the Korean wave) 25
Steven Chen
Received 10 July 2014
Department of Marketing, California State University, Revised 18 December 2014
Fullerton, California, USA 30 March 2015
Accepted 21 May 2015

Abstract
Purpose – The purpose of this paper is to outline a framework for marketing cultural goods
(e.g. music) to global markets by examining modes of entry and positioning strategies used by media
producers of the South Korean music industry.
Design/methodology/approach – An historic analysis was implemented to investigate the
modalities and structures through which cultural products are produced and disseminated. Data
for this study came from 314 articles collected from www.allkpop.com, a leading English-language,
South Korean popular culture news site.
Findings – The cultural technology framework consists of the institutionalization of cultural
technology, exportation of cultural content, collaborations with local talent, and joint ventures with
local markets.
Research limitations/implications – The findings emerge from an analysis of South Korean popular
music industries, and further research is needed to generalize the results across cultural industries.
Practical implications – The cultural technology framework can be applied to cultural industries
such as music, film, comics, and art, where culture and language could be barriers to adoption.
Originality/value – This study outlines a framework for the modes of entry and positioning
strategies of cultural goods (e.g. music) in international markets. Extant literature has examined global
marketing from the purview of durable consumer goods and brands, with limited insights into cultural
products. More broadly, this paper addresses the call for more qualitative inquiry into international
marketing topics.
Keywords International marketing, Global marketing, Cultural technology, K-pop,
Hallyu Korean wave, Transnational cultural products
Paper type Research paper

Introduction
This study explicates a framework for marketing and positioning cultural products
through an analysis of the South Korean popular music industry. While recent
scholarship has called out the need for qualitative inquiries into international
marketing topics (Andriopoulos and Slater, 2013), the crux of existing scholarship
focusses on the global market entry of durable goods and brands (Cayla and Eckhardt,
2007; Cova et al., 2007). Yet, within the literature, there is limited insight into global
modes of entry for cultural products such as music, film, and television dramas. Unlike
durable goods and brands, it is difficult for marketers to alter the language and
packaging of cultural goods, such as music, to adapt to local markets. Additionally,
music is often produced in the language of the country of origin, and it is challenging
for music to be consumed by international customers due to language barriers International Marketing Review
(Huat, 2012). Thus, the main research question addressed in this manuscript is: how do Vol. 33 No. 1, 2016
pp. 25-50
marketers position cultural products (e.g. Korean popular (K-pop) music) to overseas © Emerald Group Publishing Limited
0265-1335
markets whose consumers may not understand the language? DOI 10.1108/IMR-07-2014-0219
IMR The context of this study is hallyu (or “the Korean wave”), which refers to the
33,1 “popularity of South Korean popular culture in other Asian countries” (Ryoo, 2009,
p. 139). Hallyu began in the early 1990s with the export of South Korean television
dramas to China, and the subsequent spread of these media to other East Asian
regions such as Japan, Taiwan, Hong Kong, Vietnam, and Thailand (Huat, 2012).
In the early-2000s, the first wave of hallyu was followed by shin-hallyu (“new Korean
26 wave”), characterized by the widespread popularity of South Korean popular music
among East Asian consumers ( Jang and Paik, 2012). The overwhelming demand for
Korean cultural products has fueled the production and distribution of South Korean
television music, dramas, film, and fashion for consumption throughout East Asia
( Jung, 2011; Park, 2011).
A key ingredient to the success of South Korean culture is “cultural technology,” a
strategic marketing framework used by South Korean media corporations to promote
cultural products to local and overseas consumers (Seabrook, 2012). Essentially,
cultural technology refers to the culture of production, knowledge, and practices used
to create and market South Korean TV dramas, music, and film (Shin, 2009a).
The development of cultural technology is usually credited to Lee Soo Man, the founder
of SM Entertainment, Korea’s largest talent agency. Yet, other media institutions such
as YG Entertainment and JYP Entertainment, South Korea’s second and third largest
talent agencies, use global entry strategies that mirror SM Entertainment’s approach.
However, the specific marketing strategies that South Korean institutions use to
implement cultural technology remain unclear. Thus, a systematic framework for
cultural technology implementation is an empirical issue that needs more examination
(Huat, 2012).
The results of the study have implications for two bodies of literature. The first
literature is the corpus of research on global positioning and modes of market entry.
Some scholars suggest that the removal of “cultural odor” facilitates the consumption
of cultural brands and products (Cayla and Eckhardt, 2008; Iwabuchi, 2002).
Specifically, researchers have found that adopting a global (vs foreign or local)
positioning is more effective for entry into foreign markets (Alden et al., 1999; Gammoh
et al., 2011). However, others argue that consumers purchase cultural products for the
cultural associations, and thus, local elements should be retained (Goldstein-Gidoni,
2005). Within the context of K-pop, the issue of whether or not to remove or retain
cultural markers is important because Korean music agencies heavily promote their
talent in global markets.
The second literature is discourses of globalization, cultural hybridity, and soft
power (Iwabuchi, 2002). Korean cultural products are consumed widely in East Asia
and the West. Korean media producers blend Western and Korean media forms to
produce a culturally hybridized aesthetic that becomes identified as “Korean” and
facilitates adoption by foreign consumers ( Jang and Paik, 2012; Jung, 2011).
The consumption of culturally hybrid products results in the creation of a “Pan-Asian”
imagined community that provides a sense of cultural proximity and shared
temporality, an experience that is highly desired by East Asian consumers (Cayla and
Eckhardt, 2008). At the same time, other consumers see the penetration of K-pop as
cultural imperialism or soft power (Huang, 2009).
The rest of the manuscript has the following organization. First, a brief history of
the Korean Wave and factors that contributed to its global success will be explicated.
Then, a literature review identifies extant modes of entry and positioning strategies for
cultural products. After that, a framework for cultural technology will be articulated
based on an analysis of the K-pop industry. Subsequently, implications of the cultural Cultural
technology framework will be explained. The manuscript will conclude with technology
managerial implications and directions for future research.

Hallyu, the “Korean wave”

The rise of South Korean popular culture in Asia is called hallyu, “the Korean wave”
(Ryoo, 2009). Consumers in China, Japan, Taiwan, Singapore, Thailand, and Vietnam 27
vigorously consume K-pop cultural products including, TV dramas, music, film, and
fashion (Huat, 2012). Not relegated to Asia, the popularity of South Korean pop culture
also extends to audiences in North America and Europe (Shim, 2006). Hallyu is an
economic and cultural force; the South Korean government recognizes its cultural
exports as key resources in its economy and agents of cultural diplomacy in the East
Asian region ( Jang and Paik, 2012).
Scholars conceptualize hallyu as two overlapping waves: the “original” hallyu of the
1990s and the shin-hallyu (“New Korean wave”) of the early-2000s ( Jang and Paik, 2012;
Park, 2011). The original hallyu is characterized by the widespread Asian popularity of
South Korean TV dramas among middle-aged Asian women. South Korean dramas are
serialized soap operas that feature young characters intertwined in romantic scenarios
and intergenerational conflict. Two dramas, What Is Love About (1997) and Stars in My
Heart (1999), are usually credited with kickstarting the Korean wave (Huat, 2012).
The two dramas were immensely popular in China, and subsequently, in other parts of
East Asia. In the early to mid-2000s, two more dramas, Winter Sonata (2002) and Dae
Jum Geum (2003), catalyzed the Korean wave by shattering ratings records, not only in
South Korea, but also in China, Hong Kong, Japan, Taiwan, and Vietnam. The demand
for South Korean TV dramas by Asian consumers continues to the current day.
The second wave of the early-2000s, shin-hallyu, is the widespread diffusion of K-pop
music throughout East Asia ( Jang and Paik, 2012). Compared to the first wave, the New
Korean wave is more of a youth movement characterized by the popularity of K-pop
idol groups such as Girls’ Generation, Big Bang, and TVXQ ( Jung and Hirata, 2012).
The progenitor of the K-pop wave is High Five of Teenagers (H.O.T.), a five-member
boyband created in 1996 by SM Entertainment specifically for the teenage market.
As the first manufactured boyband in South Korea, SM conducted market research on
teenagers to discover what type of singers and music they valued (Shim, 2006). H.O.T.’s
1999 concert in Beijing cemented their status as pan-Asian superstars, and opened up
the Chinese market for subsequent South Korean acts. Before their disbandment in
2001, H.O.T. saw unparalleled success, and the five-member template – the prototypical
band configuration used around the world (e.g. Backstreet Boys, N’Sync, Arashi,
SMAP) – became the model from which today’s K-pop groups are built. Today, K-pop
music remains popular in China, Japan, and other parts of East Asia, and South Korean
media corporations are keen on fueling the demand. K-pop groups such TVXQ and Big
Bang perform in the Japanese language for the Japan market. Meanwhile other groups
such as EXO and Super Junior have spawned “brand extensions,” EXO-M and Super
Junior-M, which feature Korean and Chinese members who perform in Mandarin for the
China market.
Concurrent with the New Korean wave, was the rise of South Korean cinema,
particularly in the West (Huat, 2012). Realizing that international revenues from cinema
could exceed or equal to those from other industries, private South Korean investment
firms in the late 1990s and early-2000s financed the adaptation of Western film
technology and aesthetics for South Korean movies (Shim, 2006). Several groundbreaking
IMR Korean blockbusters resulted from this initiative, including Shiri (1999), Joint Security
33,1 Area (2000), Old Boy (2003), and Taegukgi (2004). Each film shattered domestic box office
and attendance records, providing evidence that South Korean films can compete with
American imports (Ryoo, 2009). More importantly, the new wave of South Korean cinema
was lauded for their production values, critical success, and popularity in Western
markets. For example, Old Boy won the Grand Prix at the 2004 Cannes Film Festival and
28 launched the career of director Park Chan-Wook. In 2013, director Spike Lee remade
Old Boy into an American film.
Scholars identify several factors that contributed to the popularity of Korean cultural
exports among global audiences. The first factor is the South Korean government, which
actively promotes its cultural products (Sung, 2010). The South Korean government’s
recognition of the economic power of cultural products can be traced to the film Jurassic
Park (1993). In 1994, the Presidential Advisory Board of Science and Technology of
Korea showed that the total South Korean box office revenue of Jurassic Park
was equivalent to the export revenue of 1.5 million Hyundai cars. This statistic stunned
politicians; just one film, and no less a foreign film, outdrew the annual revenue of
one of South Korea’s largest companies. Jurassic Park underscored the untapped
economic power of cultural industries (e.g. movies, music), and it motivated the South
Korean government to focus on cultural industries as one of its economic initiatives.
Some scholars argue that it was this shift in the South Korean government’s focus
toward cultural industries, which laid the groundwork for the subsequent hallyu wave
(Shim, 2008).
The second factor that facilitated the widespread proliferation of hallyu products is
the liberalization of media technologies in East Asia. In the early-1990s, withdrawal of
Korean state subsidies forced state-owned media corporations to compete in the market
(Shim, 2006). Consequently, cable and satellite television networks rapidly expanded,
creating airtime to be filled. The South Korean drama was the most popular genre
of television for Korean consumers, particularly middle-aged Korean women.
At around the same time, the expansion of media in other Asian countries catalyzed
the spread of South Korean dramas (Huat, 2012). Again, South Korean dramas were
used as low cost solutions to fill airtime. According to Huat, K-pop culture “would not
have engendered a regional phenomenon were it not for the presence of the ethnic
Chinese population as consumers” (Huat, 2012, p. 15).
A third perspective attributes the adoption of hallyu cultural products to the
diaspora of Asian, and specifically, South Korean people throughout the globe.
The distribution of South Koreans throughout the world laid the groundwork for the
proliferation of South Korean pop culture, as immigrants consumed popular culture
from their home country to stay connected with their culture (Siegel and Chu, 2010).
Meanwhile, other East Asian consumers, both locals and immigrants, consume South
Korean cultural products because of their fusion of Western and Eastern elements
(Shin, 2009b). In particular, East Asian immigrants consume South Korean cultural
products as symbols of modernity and global cosmopolitanism ( Jung, 2011). At the
same time, East Asian immigrants enjoy the cultural proximity of Korean music,
movies, and dramas, which may remind them of home (Iwabuchi, 2010a). Consequently,
aided by Asian immigrants and expatriates, Korean musicians such as Big Bang and
Girls Generation have been able to sell out large concert venues around the world.
Finally, a fourth perspective holds that East Asian audiences consumed South
Korean cultural products because Korean music, film, and dramas addressed cultural
sensitivities that resonated with East Asian consumers. For example, scholars have
argued that South Korean dramas touched on traditional, Confucian values such as Cultural
respect for elders and filial piety, which are valued by East Asian consumers technology
( Jung, 2011; Ryoo, 2009; Shim, 2008). A second variation of this argument posits that
Korean cultural products encourage other East Asians to think reflexively about their
own lives, cultures, and gender relations through the lens of a culturally proximate
Asian modernity, an experience that is highly desirable (Iwabuchi, 2010a).
In closing, hallyu is an example of transnational cultural products (Iwabuchi, 2002). 29
Cultural products such as TV dramas, music, and film are developed in Korea, but flow
into foreign markets such as China and Japan. The magnitude and success of the
Korean wave is impressive when one considers that foreign consumers must overcome
significant language barriers to consume Korean dramas and music. Despite the
scholarly attention to hallyu, there is limited research that examines the role of
marketing in promoting Korean cultural products in global markets.

Theoretical background
From the purview of the global marketing literature, the mode of market entry or the
positioning of South Korean cultural products may explain the success of
hallyu products. In the following passages, research on modes of market entry and
global brand positioning will be reviewed.

Modes of global market entry

Marketing scholarship has outlined four main modes of entering international markets:
exporting; licensing; strategic alliances/joint ventures; and foreign direct investment
(FDI) (Pan and Tse, 2000). Each of these modes of entry has their advantages and
disadvantages, and the appropriate mode of entry depends on a number of internal and
external factors.
Exporting is the marketing and direct sale of domestically produced goods in
another country. Through exporting, firms can grow their domestic sales to overseas
markets while minimizing risks (Lee and Makhija, 2009). Exporting does not require
goods to be produced in the target country, and consequently, is the most popular form
for firms to enter international markets (Leonidou and Katsikeas, 1996). However, with
exporting, firms have less control over the marketing of their products and they have
to expend significant human resource costs (Freeman and Styles, 2014). Export
performance has been linked to the firm’s marketing strategy capabilities and its ability
to implement that marketing strategy (Morgan et al., 2012), and its ability to customize
an adapted export promotion (vs standardized policy) that considers the culture of the
target market (Hultman et al., 2011). In the exportation model, South Korean media
producers ship their music products to local markets (e.g. China) with little to
no adaptation, and let a local entity distribute and sell their products.
Licensing permits a firm in the target country to use the property of the licensor.
Firms incentivize licensing as a means of global entry when they exhibit relatively
inefficient means of production (Gallini and Winter, 1984). In other words, the licensor
minimizes investment expenses as the licensee absorbs the costs of production and
marketing. Additionally, licensing allows the firm to exploit the brand name
and quality associations of the licensee in the target market ( Jiang and Menguc, 2012;
Saqib and Manchanda, 2008). However, potential revenues may be lost through
licensing as the licensor surrenders control of their product. There is limited application
of the licensing model in the K-pop context.
IMR Strategic alliances (a.k.a. joint ventures) occur when two or more firms share risks
33,1 and resources to enter international markets (Griffith et al., 1998). Firms often form
global joint ventures when their domestic markets become saturated (Bartley and
Minor, 1994). Additionally, strategic alliances can signal quality to consumers,
especially when a new brand allies with a stronger, local brand (Fang et al., 2013; Saqib
and Manchanda, 2008). Through joint product development, firms can mitigate risk
30 and uncertainty, and share potential rewards. However, firms may encounter conflicts
over asymmetric investments and splitting profits. Overall, joint venture performance
may depend on the size of the joint venture (Griffith et al., 1998). In the K-pop industries,
some media agencies have developed strategic alliances with firms in local markets
(e.g. China) to disseminate Korean music and to develop local talent.
FDIs are wholly owned subsidiaries, acquisitions, or greenfield startups (Damoiseau
et al., 2011). FDIs are a form of vertical integration with a high degree of control, and
first hand knowledge of local consumers. Determinants of successful FDI include
having a large local market, good infrastructure, and preferential policy (Cheng and
Kwan, 2000). However, FDI’s require high levels of resources and commitment. In the
context of K-pop, a FDI strategy would involve a South Korean media agency opening
an office in the local market to oversee the production and distribution of their music.

Global positioning strategies

The rapid globalization of the marketplace presents new opportunities for growth
for marketers while at the same time posing challenges in terms of properly positioning
their products and brands for global consumers (Poulis and Poulis, 2013). Thus,
the issue of whether to remove or retain cultural elements in cultural products has been
an area of intense theoretical debate (Gammoh et al., 2011; Guo, 2013; Nijssen and
Douglas, 2011).
One perspective posits that the removal of “cultural odor” is necessary to facilitate
adoption of cultural products worldwide (Cayla and Eckhardt, 2008; Iwabuchi, 2002).
In the marketing literature, this approach is known as a global consumer culture
positioning (GCCP), a strategy that seeks to unmoor products and brands from a
specific culture or territory (Alden et al., 1999). The removal of cultural odor results in
mukokuseki (“culturally odorless”) products and brands that consumers can inscribe
with personalized meanings (Iwabuchi, 2002). Furthermore, the consumption
of odorless cultural products could contribute to a sense of shared experience and
the formation of an imaginary pan-Asian nation, which is desired by many East Asian
consumers (Cayla and Eckhardt, 2008).
A rival perspective holds that the retention of “cultural odor” is necessary to attract
consumers to cultural products and brands. In marketing, this approach is known
either as foreign consumer culture positioning (FCCP), a strategy that seeks to
differentiate a product or brand by associating it with its country or culture of origin, or
as local consumer culture positioning (LCCP), a strategy that associates a product
or brand with local cultural meanings (Alden et al., 1999). Certain products and
brands may benefit from anchoring themselves to a place or its culture of origin
(Goldstein-Gidoni, 2005).
Broadly, the literature suggests that practitioners implement GCCP strategies to
succeed in the global marketplace (Alden et al., 1999; Gammoh et al., 2011).
The rationale is that consumers, even those from emergent economies, are increasingly
global-minded, and respond better to products and brands that are globally oriented
(Guo, 2013; Nijssen and Douglas, 2011). However, in recent years, scholars have relaxed
this suggestion, and found that different segments of consumers respond differently to Cultural
GCCP, FCCP, or LCCP strategies (Steenkamp and de Jong, 2010; Westjohn et al., 2012). technology
Summary of literature
In summary, firms can enter international markets through exporting, licensing,
forming joint ventures, or investing directly in the target market with a wholly owned
subsidiary (Pan and Tse, 2000). However, marketers need to understand how 31
consumers tradeoff global or local positioning strategies (Van Ittersum and
Wong, 2010). While the literature offers insights for the global marketing of durable,
consumer goods such as electronics, apparel, and food and beverage (Cayla and
Eckhardt, 2007; Cova et al., 2007), there is limited guidance on how to market cultural
products such as dramas, film, and music.
The success of the Korean wave is interesting because there are significant cultural
and language barriers that must be overcome for successful adoption of Korean
cultural products. For example, Korean dramas and film must be subtitled or dubbed in
order for foreign consumers to fully appreciate them. K-pop music, however, presents
an immense marketing challenge as it cannot be dubbed over (Huat, 2012). Through the
lens of K-pop, this research investigates the modes of entry used by Korean media
firms to penetrate overseas markets. Additionally, this study examines how South
Korean media producers negotiate global vs local positioning strategies for their
cultural products.

Methodology
To analyze the modalities and structures through which South Korean cultural
products are produced and globally disseminated, the researcher employed an
historical approach similar to other studies in marketing (Golder, 2000; Humphreys,
2010). Broadly, an historical analysis uses archival documents such as news articles as
data sources. News articles are rated high in authenticity because the occurrence of
events and their reporting is short (Golder, 2000). Consequently, news articles present
data without the recall error that may accompany primary data collection methods.
The historical method prescribed by Golder has five stages: selecting a topic and data
collection; evaluating the sources of the evidence; critically evaluating the evidence;
analyzing and interpreting the evidence; and presenting findings and conclusions.

Data and data collection

Data for this study was collected from allkpop.com, a leading South Korean pop culture
news site that reports the marketing activities of South Korean talent agencies.
Launched in 2007, allkpop.com boasts 100 million page views a month and over seven
million unique visitors a month. allkpop.com is the most trafficked English-language
K-pop website, and American media reporting on K-pop culture frequently reference
allkpop.com. allkpop.com has developed direct relationships with South Korean talent
agencies and has exclusive coverage on breaking news and access to celebrities in
comparison to other similar websites. For these reasons, allkpop.com is the most
reliable English-language source for K-pop cultural news.
Data collection started with keyword searches to identify relevant articles.
Keywords included “marketing,” “global marketing,” “licensing,” “export,” “joint
venture,” “FDI,” “Lee Soo Man,” “Yang Hyun Suk,” and “Jin Young Park.” The first
six search terms are relevant to global entry modes as defined by the literature, while
IMR the last three search words correspond to the chairmen of South Korea’s top three
33,1 talent agencies: SM Entertainment, YG Entertainment, and JYP Entertainment.
The chairmen are celebrities in their own right, and often arrange press releases that
disclose the marketing activities of their talent. This search resulted in an initial pool of
527 news articles.
After reading all the articles, the researcher reduced the final data set to 314 articles
32 that were focussed specifically on the modes of entry into global markets. Examples of
articles include “SM Entertainment, Avex and Universal Music Japan establish joint
company ‘Everysing Japan’,” “Popularity of Hallyu wave increases sales and exports of
Korea’s creative content,” and “Epik High collaborates with China’s Bibi Zhou for ‘With
You’.” Articles ranged from 145 to 10,572 characters in length and were published
between the years 2010 and 2014. Finally, the researcher watched Lee’s (2011) lecture
at the Stanford University, which provided detailed information on the global strategy
of SM Entertainment.

Data analysis
To prepare for data analysis, the researcher imported the 314 newspaper articles into
Dedoose, a qualitative analysis program. Taking methodological cues from past
marketing research (Humphreys, 2010), the researcher carefully re-read each article and
coded them at the article level. The process is akin to the open and axial coding processes
of grounded theory (Corbin and Strauss, 2008), whereby the researcher categorizes units
of data. The researcher coded each article based on the following dimensions: record
label, band name, band gender, band lifecycle, target market, promotion activity, and
mode of entry (Table I). With the use of Dedoose, the researcher was able to facilitate data
organization and conduct cross-code analyses to arrive at insights that may have been
difficult to accomplish with traditional hand coding procedures.
Through qualitative, historic approach to data collection and analysis, the researcher
examined how marketers positioned cultural products to consumers in overseas markets.
The following section will outline the set of strategies that South Korean marketers used
to market South Korean cultural products (e.g. popular music) to non-Korean consumers.

Code Description Sub-code

Record label The talent agency associated with the SM Entertainment, JYP Entertainment,
marketing of music recordings and YG Entertainment, Other
music videos
Band name Name of music talent Variable
Band gender The gender of the music talent Male, Female, Mixed
Band The development stage of the music Introduction (year 1), Growth (years 2-3),
lifecycle talent Maturity (years 4+)
Target The target market of the music talent’sS. Korea (domestic), China, Japan, Southeast
market promotional activity Asia, USA, Europe, South America
Promotional Type of promotional marketing activity Concert tours, fan meetings, album releases,
activity appearance at live event (sports, tourism),
appearance at marketing event (fashion show,
trade show, store launch)
Mode of Strategy used to enter overseas market Exportation, licensing, joint ventures, foreign
Table I. entry direct investment, collaborations with local
Coding description talent
A framework for cultural technology implementation Cultural
K-pop music agencies use cultural technology to globally market their cultural technology
products. The term “culture technology” was first coined by Professor Won
Kwang-yun, the Dean of the Graduate School of Culture Technology at the Korea
Advanced Institute of Science and Technology to explain the “culture of production” in
South Korean cultural industries (Shin, 2009b). Culture technology is recognized by
the South Korean government as one of the five next generation technologies for 33
economic growth along with information technology, bio-technology, nano-technology,
and environment technology.
In today’s marketplace, cultural technology refers to the factory system used by
South Korean music agencies to manufacture, disseminate, and promote Korean
cultural products (e.g. K-pop music) to local and overseas consumers (Seabrook, 2012).
The implementation of cultural technology is usually credited to Lee Soo Man, the
founder of SM Entertainment, South Korea’s largest talent agency (allkpop.com, 2011a).
However, other music agencies such as YG Entertainment and JYP Entertainment,
used similar marketing systems to create, distribute, and promote their talent overseas.
In the passages below, a framework of cultural technology is presented, which includes
the: institutionalization of cultural technology; exportation of cultural content;
collaborations with local talent; and joint ventures in local markets to create perfect
localization. Overall, the framework offers a multidimensional approach for cultural
industries to successfully market cultural products in foreign markets.

Institutionalization of cultural technology

In the 1990s, South Korean policymakers and media producers realized that cultural
products, such as television dramas and K-pop music, were economically viable export
items, and a means to control South Korea’s overseas image (Ryoo, 2009).
Consequently, two types of institutions took the initiative to disseminate and
produce South Korean cultural products (e.g. cultural technology): government
institutions and talent agencies.
Government institutions. In the 1990s and 2000s, the South Korean government
created or re-purposed several government institutions to promote K-pop culture on an
international level. In 1994, South Korea established the Cultural Industry Bureau
within the Ministry of Culture, Sports, and Tourism, whose mission was to prioritize
media production as part of the Korean national strategy. The bureau regularly
solicited South Korean pop musicians to promote cultural events on the world stage.
For example, hallyu stars, JYJ (C-JeS Entertainment), Psy (YG Entertainment), and EXO
(SM Entertainment) performed at the 2014 Incheon Asian Games to “help in the unity of
Asia” and to “unify races, culture, and language” (allkpop.com, 2014a). The songstress
Baek Ah Yeon ( JYP Entertainment) attended the 2013 Thailand-Korean Cultural
Center Opening Congratulatory Event, a symposium that brought together over 300
government officials, ambassadors, and ministers from the two countries (allkpop.com,
2013a). Similarly, members of boyband SS501 (DSP Entertainment) partook in the 2012
Thailand-Korea Friendship Festival, another cultural event designed to improve
relations between South Korea and Thailand (allkpop.com, 2012a).
In conjunction with the South Korean government, South Korean talent agencies
regularly engaged in corporate philanthropy. Philanthropy created goodwill for the
talent agencies, raised the profile for their artists in the local market, and essentially
was a form of state-sanctioned entry into new markets. In 2011, Lee Soo Man, the CEO
IMR of SM Entertainment, donated $100,000 USD to the Center Culturel Coréen, a French
33,1 institution established in the 1980s to raise awareness of Korean culture to the French
public (allkpop.com, 2011b). The donation was accompanied by a two-day concert in
Paris featuring SM Entertainment’s major talents. Also in 2011, JYJ (C-JeS
Entertainment) donated 200 million won (roughly $170,000 USD) to Thailand’s flood
recovery. JYJ’s publicist reveals that philanthropy is a regular activity in the band’s
34 promotional mix:
This isn’t the first time JYJ members have helped out those in need […] the members have
consistently participated in various causes by making donations and taking part in projects
such as sponsoring children in Africa […] (allkpop.com, 2011c).
One of the major windfalls of promoting South Korean popular culture worldwide is
tourism. South Korean organizations regularly invite song celebrities to promote
tourism to their country. In 2011, the Visit Korea Committee organized the “Super
Concert Wonderful Jeju” to promote tourism to Korea, and specifically, to the Jeju island
resort. The marketing director for the promotion purposively leveraged the regional
popularity of South Korean pop stars: “by using the international power and influence
of K-pop, we have decided to open this event to encourage and promote tourism in Jeju
island” (allkpop.com, 2011d). In 2014, SM Entertainment and Korail (Korea Railroad
Corporation) signed a business agreement to revitalize hallyu tourism by developing
“vacation and travel programs linked to SM’s hallyu content and Korail’s train service
in the hopes of attracting tourists to Korea and spreading the hallyu wave” (allkpop.
com, 2014b). Finally, Lotte Duty-Free, South Korea’s largest duty-free retailer, sponsors
K-pop artists to promote Korean tourism. Kim Ju Nam, Lotte’s marketing director,
explained why they sponsored 16 artists while most brands employ two to three pop
artists in their marketing:
Our aim is to expand Korea’s tourism industry through enter’tour’ment marketing, a
combination of the tourism industry and the entertainment industry (allkpop.com, 2011e).
By deploying South Korean artists in cultural events, philanthropy, and tourism, the
South Korean government was able to push its national agenda and influence in the
East Asian region through its cultural technology. The institutionalization of cultural
technology followed the model created by Japan, who pioneered “cultural
internationalism” as its national strategy (Iwabuchi, 2008). Japan’s Ministry of
Foreign Affairs and the Ministry of Economic, Trade and Industry advocated Japan’s
investment in cultural products in economy and diplomacy while the Japan Media
Communication Center was established to subsidize the export of cultural products
(e.g. Japanese dramas) to other Asian countries (Otmazgin, 2008). While government
institutions promoted and disseminated cultural technology, they rarely created any
cultural content themselves.
Talent agencies. In the world of K-pop, the actual production of cultural content
(e.g. celebrities and music) occurs via yeonye gihoeksa, or talent agencies. The “Big
Three” agencies are SM Entertainment, YG Entertainment, and YG Entertainment,
founded in 1995, 1996, and 1997, respectively. Each talent agency has its own
proprietary training curriculum to manufacture song celebrities. These agencies are
essentially academies, where trainees are recruited, trained in dancing, singing,
acting, and speaking of foreign languages such as Japanese, Chinese, and English.
The foreign language component is significant, because it facilitated penetration into
major global markets. Park Ji Yoon, a popular female singer in the late 1990s and Cultural
early-2000s, compared the training systems of the three big talent agencies to schools: technology
SM is an academy of thorough training (like a military school). YG is an alternative school
that emphasizes each students’ individual colors, and JYP is home schooling that is taught by
the way of J.Y. Park (allkpop.com, 2013b).
Thus, the celebrity-making system exemplifies a new marketing-management 35
paradigm through which South Korean talent agencies exert systematic control over
the careers of trainees.
The cultivation of celebrities is an expensive and lengthy endeavor. For instance,
Kim Young Min, an executive of SM Entertainment, recently revealed that each of the
nine members of the popular band Girls’ Generation required between $2.5 and
$3.5 million USD to train (allkpop.com, 2011f). To construct the nine-member girlband,
SM Entertainment screened over 100 trainees culled from a larger pool of 300,000
auditions. The nine finalists underwent five to seven years of training prior to debut.
Similarly, SM invested $2.6 million USD to debut BoA, a popular teen celebrity, who
auditioned for SM when she was in the fifth grade. BoA’s development paints a
militaristic picture of SM’s training regiment:
[BoA] practiced five hours a day after school on the weekdays and ten hours a day on the
weekends in order to prepare her debut. She also dropped out of junior high in order to focus
on her career (allkpop.com, 2012b).
Talent agencies also provided image management training and constructed long-term
image strategies to maximize the success of their talent. For example, GOT7 revealed
that they received sex and ethics education at JYP Entertainment so that they could
better manage temptations that come along with their celebrity status (allkpop.com,
2014c). Similarly, SM Entertainment carefully managed the sexuality of their talent as
they progressed in age. In Girls’ Generation 2007 debut single “Into the New World,”
the lyrics emphasized teenage dreams and the members of Girls’ Generation wore
schoolgirl uniforms; in their 2009 single “Gee,” the girl group sang about first love and
wore colorful youth fashion; the 2010 single “Run Devil Run” depicted mature members
that wore tighter, more suggestive clothing (Park, 2011). In this way, SM tightly
managed Girls’ Generation’s image as the band grew up with its target audience.
Talent agencies wield asymmetric power over their artists, who rarely exercise creative
freedom. For example, Jin Young Park, the CEO and super-producer of JYP Entertainment,
produced, recorded, and composed many of his talents’ hit singles, often inserting his own
name in the opening segments of their songs. In social life, recruits were contractually
bound to strict morality clauses that prohibited drinking, association with the opposite sex,
and spending time in places of ill repute. These contracts were sometimes called “slave
contracts” because of the long period of service and low wages relative to the popularity of
the singers (Leung, 2012). Periodic feuds between the agencies and their talent often
resulted from these contracts. For example, Taecyeon, a member of popular boyband 2PM,
expressed his discontent on Twitter that upper management took too much credit for the
overall success of JYP Entertainment at detriment of band members (allkpop.com, 2014d).
In 2010, three members of boyband TVXQ sued SM Entertainment for unfair wages and
labor practices, resulting in the dissolution of the band at the apex of their popularity
(allkpop.com, 2010). More recently, in 2014, three members of SM Entertainment’s new
band EXO quit the music label, citing similar reasons (allkpop.com, 2014e).
IMR The talent agency system is unique to the Korea pop eco-sphere, and it is not easily
33,1 replicable in music industries in other countries. According to Lee Soo Man, the
chairman of SM Entertainment:
The U.S. couldn’t establish a management system like ours. Picking trainees, signing a long
term contract, and teaching trainees for a long period of time, this just can’t happen in the U.S.
U.S. agencies are hired as sub-contractors after an artist has grown and gained popularity on
36 their own. As a result, the agencies only play roles of sub-contractors, and can’t make
long-term investments in singer-hopefuls. However, in Korea and Japan, whose cultural
industries developed later, agencies were free to make such contracts (allkpop.com, 2011g).
As Lee’s comment alludes, the K-pop celebrity-system is influenced by Japan’s aidoru
(e.g. “idol”) system, which emerged in the 1970s (Jung and Hirata, 2012; Otmazgin,
2008). Specifically, Johnny’s Jimusho (a.k.a. “Johnny’s Boys”) is considered to be the
origin of the celebrity training system in the East Asian music industry (Marx, 2012).
Many of Japan’s premiere male groups such as Arashi, KAT-TUN, and SMAP were
promoted through Johnny’s Jimusho. Essentially, Korean agencies such as SM
Entertainment adapted Johnny’s model to produce their own music groups. SM’s first
boyband H.O.T. was modeled after the popular Japanese boyband, SMAP (Jung, 2011).
In other words, the academy system itself is a strategic technology that can be exported
to media producers in foreign markets so that they can develop their own stars using
South Korean knowledge capital.
After music celebrities are produced, talent agencies initiate a multidimensional
marketing strategy to market their product to domestic and international audiences.

Exportation of cultural content

The exportation of cultural content is the marketing of music celebrities and songs in
foreign markets with no to little adaptation to the local market. Exportation was the
most common mode of entry used by the South Korean music industry. The primary
export markets for South Korean music were Japan and China, with increasing activity
in Southeast Asia. Western countries were also sites for music exportation, but South
Korean talent agencies viewed them as secondary markets. During his Stanford lecture,
Lee Soo Man stated that a market presence in the USA was unnecessary for Korean
music to become the world’s largest music industry; South Korean cultural industries
only needed to capture the Chinese market in order for that to happen (Lee, 2011).
The three primary forms of music exportation include concert tours, fan meetings, and
music albums.
The most common exportation activity was concert tours. H.O.T.’s 1999 concert in
Shanghai was a seminal event that heralded the cross-over of K-pop music in East Asia
(Lee, 2011). H.O.T. performed their hit songs in Korean with little adaptation to the
Chinese market. Language barriers proved not to be a barrier to adoption, as Chinese
consumers’ demand for more Korean music fueled the shin-hallyu wave. Today, it is
common for South Korean artists to tour in East Asian markets and sell out large
concert venues. For example, Big Bang (YG Entertainment) visited Japan, China, and
various parts of Southeast Asia for their 2012-2013 Alive concert tour. Notably,
Big Bang was able to sell out Japan’s 50,000-seat Tokyo Dome, an impressive feat that
few Japanese stars have been able to accomplish themselves (allkpop.com, 2013c).
With the exception of Japan, Bing Bang performed their songs in the Korean language.
Another type of concert was record label concerts such as “SMTOWN Live,” “YG
Family,” and “JYP Nation,” which feature joint performances by each agency’s artists.
Less common were unit tours that include performances by a sub-division of a band Cultural
(i.e. Big Bang’s G-Dragon and T.O.P. performing as a duo). These jam-concerts technology
attracted audiences in the tens of thousands in the East Asian markets, and were,
for the most part, performed in Korean.
Another exportation activity was fan meetings. Talent agencies often arranged fan
meetings in local markets as a way to soft launch their talent that in turn opened the
market for more lucrative future activities such as concert tours. Relative to concerts, 37
attendance at fan meetings was kept deliberately small, between several hundred to
several thousand in numbers. In fan meetings, the music talent greeted local fans
in speaking sessions, signed autographs, and performed a limited set list. Typically,
a language translator facilitated the meetings, so that the talent could communicate
with fans. However, when promoting in Japan, Korean talent often communicated in the
Japanese language. For instance, Winner, YG Entertainment’s new boyband, held a
2014 fan meeting in Japan that drew 8,000 fans:
Winner showed off their Japanese skills by singing the Japanese versions of their songs
during their opening stage for Big Bang’s dome tour. They also naturally answered the MC’s
questions in Japanese during the event […] Although their first event was held in Osaka, the
voices of fans who hope for events in Tokyo and other cities in Japan are growing (allkpop.
com, 2013d).
The final export activity was album releases in local markets. Typically, record labels
released “best hits” albums in export markets. For instance, GOT7 ( JYP Entertainment)
released “GOT7 Thailand Special Package” in the fall of 2014 and it immediately
reached the number one slot in Thailand’s B2S charts (allkpop.com, 2014f). Also in
2014, girlband AoA (FNC Entertainment) released a “best of” album in Taiwan, which
contained a DVD that had music videos with Chinese subtitles (allkpop.com, 2014g).
Although these export albums featured new song configurations selected for the local
market, the songs remained by and large in the native Korean language.
Sometimes the exportation of K-pop required local adaptation such as creating
localized variations of songs or performing in the local language. Local adaptation was
especially important to succeed in the Japanese market because of Japan’s market
potential and positioning on top of the East Asian cultural-economic ladder (Iwabuchi,
2002). For example, Big Bang (YG Entertainment) and TVXQ (SM Entertainment)
created Japanese-language versions of their hit singles and performed them in Japanese
when touring in Japan. More recently, K-pop media producers started a similar
adaptation approach for the emergent Chinese market. Miss A ( JYP Entertainment), a
four-member girlband, produced a variation of their debut album A Class (2011) for
China, which contained Chinese-language renditions of four hit singles.
Other times K-pop talent agencies completely exported their talent and harvested
them in a foreign market. The prime example is BoA, a female teen singer contracted to
SM Entertainment. BoA debuted in Korea in 2000 with her first album Peace B, which
received lukewarm sales. It was in the Japanese market where BoA developed into a
superstar. In 2001, SM Entertainment arranged a deal with the Japanese record label
Avex Trax to develop BoA as a Japanese celebrity. Over the course of the next decade,
BoA developed into a prominent celebrity in the Japanese pop music scene (performing
in Japanese) and her popularity in Japan and South Korea continues to the current day.
Although BoA intermittently released Korean language albums during the course of
her career, it was not until 2013 that she performed her first concert tour in South
Korea. SM Entertainment applied a similar strategy to boyband TVXQ, who was
IMR renamed Tohoshinki for the Japanese market. Although TVXQ/Tohoshinki found
33,1 initial success in Korea, their development followed a separate career track in Japan,
involving the production of exclusively Japanese-language albums and singles.
Consequently, scholars sometimes conceptualize BoA and TVXQ/Tohoshinki as
Japanese pop stars, who happen to be Korean ( Jung and Hirata, 2012).
However, the exportation of cultural content will only propel South Korean talent so
38 far in terms of market penetration. First, they will always be cultural “outsiders” who
compete with local talent. Second, there are language barriers specific to music
consumption that can occlude adoption by international consumers.

Collaborations with local talent

South Korean agencies implemented a second mode of entry into foreign
markets: collaborations between Korean talent and local artists and producers.
Inter-cultural collaborations between celebrities of different East Asian countries have
existed for decades. For example, in 2003, Mai Kuraki of Japan and Stephanie Sun
Yanzi of Taiwan sang a duet, “Tonight, I Feel Close to You,” in English. More recently,
Big Hit Entertainment’s seven-member boyband, BTS, collaborated with the
Vietnamese singer Thanh Bui on their 2014 single “Danger” (allkpop.com, 2014h).
Additionally, the Korean diva HyunA (Cube Entertainment) was featured in the
Indonesian boyband S4’s single “She is My Girl” (allkpop.com, 2012c).
The South Korean talent agencies have increased creative collaborations
particularly with Chinese-language talent as a means to enter the lucrative Chinese
market. In 2006, SM Entertainment formed pop duo Kang Ta and Vanness, comprised
of the lead singer from Korean boyband H.O.T. and Taiwanese actor/singer Vanness
Wu. Strategically, the formation of the creative duo extended SM’s reach into China and
Taiwan through the collaboration with a Taiwanese talent (Lee, 2011). Kang Ta
and Vanness released one album, Scandal, which included both Korean and
Chinese-language tracks. The duo was a manufactured marketing promotion because
Kang Ta and Vanness had no prior relationship with one another. Another recent
collaboration is Epik High’s (Woolim Entertainment) collaboration with the Chinese
signer Bibi Zhou on the 2014 song “With You,” which is poised as the former’s “first
step into the Chinese market” (allkpop.com, 2014i).
Recently, South Korean talent agencies have turned their attention to recruiting local
talent into their boy- and girl-bands. The result was more organic solutions in
comparison to forced collaborations characterized by Kang Ta and Vanness. For
example, five-member girlband f(x) (SM Entertainment) included Victoria Song,
a Chinese national, and Amber Liu, a Taiwanese-American. SM brought Victoria and
Amber to Korea to train under the academy system and learn Korean. The group
debuted in 2009 and was branded “Asia’s Pop Dance Group.” The emphasis on “Asia” as
opposed to “Korea” is evident of SM Entertainment’s intention to position f(x) as a
globally oriented pop group. In line with this positioning, f(x) released a Chinese-language
cover to the American classic, “Lollipop” in 2010. At around the same time, rival agency
of JYP Entertainment debuted its popular seven-member boyband 2PM (later reduced to
six members after the departure of Jay Park). 2PM was positioned as a mature boyband
in contrast to the “pretty boy” bands that dominated the industry. More significantly,
JYP’s recruitment of member Nichkun Horvejkul, an American-born Thai-Chinese, as one
of its members significantly increased 2PM’s popularity in Thailand. Overall, the
recruitment of local members in both f(x) and 2PM enabled overseas consumers to
overcome cultural and language barriers posed by Korean music.
 South Korean artists also collaborated with Western musicians, but these Cultural
collaborations took on a different texture than collaborations with Eastern musicians. technology
Whereas collaborations with Eastern talent were about facilitating market entry,
Western collaborations were more about gaining cultural credibility and indicating
cultural-economic progress of South Korean media industries. Global consumers often
viewed Western music, especially American popular music, as the gold standard by
which music is evaluated. Thus, collaborations with Western talent and producers 39
provided South Korean celebrities a high level of cultural cache. South Korean artists
who collaborated with Western artists are seen as having “conquered the West” (Dong
and Tian, 2009). For example, Psy (YG Entertainment) collaborated with American
rapper Snoop Dogg on “Hangover” as a follow-up to his worldwide hit “Gangnam
Style.” The commissioning of a well-known American celebrity on a Korean song is
symbolic of South Korea’s emergence on the world musical stage. In similar fashion,
G-Dragon’s (YG Entertainment) 2013 album Coup d’Etat featured collaborations with
American rapper Missy Elliott, electronic artists Diplo and Baauer, and Sky Ferreira.
The collaborations with Western musicians were not by happenstance, and served to
position G-Dragon as an international celebrity by association. In another example, JYJ
(C-JeS Entertainment), a three-member boyband popular in both South Korean and
Japan, produced “Ayyy Girl” with American rapper Kanye West as the lead song for
their 2010 debut album. The collaboration with Kanye helped JYJ signal to consumers
that they were major players in the K-pop market even though “Ayyy Girl” never aired
in the USA.

Joint ventures in local markets

The ultimate mode of entry was joint ventures with local markets to create “perfect
localization” (Lee, 2011). Joint ventures involved more than just creating foreign
language versions of songs or incorporating local talent. The goal of joint ventures was
to create locally developed talent, backed by the knowledge and production capital of
South Korean media producers. Due to its market potential, China was the target
of many joint venture projects. Joint ventures came in two varieties: the creation of
entirely new bands for foreign markets; and strategic alliances to disseminate cultural
content in local markets.
To create perfect localization, South Korean talent agencies created brand
extensions that were exclusively promoted in the local market. The prototype of the
joint venture model is a twelve-member boy band called Super Junior
(SM Entertainment), which debuted in 2005. In 2008, SM Entertainment created a
sub-unit of Super Junior, named Super Junior-M (where “M” is for “Mandarin”) for the
Chinese market. Super Junior-M was comprised of four members from the Korean
Super Junior, including group leader Han Geng who is of Chinese descent, and two new
Chinese members exclusive to the “M” brand extension, Henry and Zhou Mi. The
M-unit promotes within China and performs entirely in Mandarin.
In 2012, SM Entertainment debuted a novel boy band concept, EXO, which
epitomizes the joint venture model. EXO is actually two groups with the same name:
EXO-K (e.g. “Korean”) comprised of six Korean members and EXO-M (e.g. “Mandarin”),
a unit of six Chinese members. The two groups sing the same songs in two different
languages, “essentially promoting as two parts of a group of twelve” (Lee, 2011). Music
videos for EXO-M and EXO-K are parallel productions. For instance, the Chinese and
Korean music videos for EXO’s 2013 single “Miracles in December” are virtually
identical except for the different members featured in each version.
IMR SM’s joint venture model was subsequently adopted by other talent agencies.
33,1 For example, Woolim Entertainment debuted a sub-unit of its Infinite band, “Infinite F,”
who promotes in the Japanese market (allkpop.com, 2014j). In a move that heralds the
future, Pledis Entertainment formed a joint venture with the Chinese company
YUEHUA and created two bands for the China market (allkpop.com, 2013e). The first
band is NU’EST-M, an extension of Pledis’s existing boyband NU’EST, which adds one
40 Chinese singer to the five-member core. The second band UNIQ is an entirely new
creation comprised of two Korean and three Chinese members. In similar fashion, Cube
Entertainment and the Chinese company Xing Tian combined forces to create and
manage the boyband M4M (allkpop.com, 2013f). Essentially, M4M is a Chinese band
created using South Korean knowledge capital.
To cultivate joint venture projects, South Korean agencies conducted auditions in
global markets to discover next wave talent. Conducting regional talent searches was a
strategy that Japanese media producers have used in the past to manufacture “pan-Asian
pop idols” that can succeed in and outside of Japan (Iwabuchi, 2010a, p. 49). Korean media
producers emulated and expanded on the Japanese model. In 2014, SM Entertainment
held auditions in seven countries for their “SM Global Audition” (allkpop.com, 2014k).
Likewise, JYP Entertainment held its “U.S. Tour Audition” in Los Angeles and Toronto
(allkpop.com, 2014l). New talent are invariably incorporated into boy/girlband concepts
similar to EXO and Super Junior to facilitate market entry into different countries.
The next phase of the joint venture model is the formation of strategic alliances with
distribution channels in local markets to disseminate Korean cultural content. SM
Entertainment is the pioneer of forging strategic alliances with foreign corporate
entities. In 2014, SM Entertainment allied itself with several Chinese companies to
facilitate distribution of K-pop content on the Mainland:
[F]our companies, SM Entertainment, SM C&C, Baidu, and portal site QIY, are joined in a
strategic alliance for a joint business that covers the domains of SM’s music and music videos,
Chinese online services, joint operation of SM’s artists and K-Pop online communities (such as
the K-Pop channel on Tieba), the production of new broadcasting programs, and more
(allkpop.com, 2014m).
SM also formed a strategic alliance with Hong Kong’s largest entertainment company
Media Asia Group Holdings Limited to facilitate distribution of Korean content in the
special administrative region of China (allkpop.com, 2014n). In the same year,
SM entered into a joint venture with Avex Vanguard and Universal Music Japan to
establish “Everysing Japan,” which brings SM’s karaoke app system to Japan. The
distribution of K-pop through karaoke, a popular activity among East Asian
consumers, provides Japanese consumers ample exposure to SM’s stable of music. Lee
Soo Man articulated this “platform” strategy:
I anticipate Everysing’s advancement into the Japanese market not for simple content but an
original business model with the fusion of content and platform […] (allkpop.com, 2014o).
Me-too followers quickly mimicked SM’s strategy. For instance, Cube Entertainment
and iHQ formed a strategic alliance with the Chinese entertainment company Miracle
Group to disseminate their cultural products on the Mainland (allkpop.com, 2014p).

Discussion
The growth of Korea’s economy is intertwined with the growth of its cultural
industries. In South Korea, cultural technology was identified as one of five pillars to
economic development, and various institutions were constructed to promote South Cultural
Korean popular culture worldwide (Shim, 2006). Yet, South Korean media producers technology
faced enormous challenges in exporting their cultural products such as K-pop music to
global markets because of cultural and language barriers. To overcome these
challenges, South Korean institutions implemented a cultural technology framework
comprised of exportation of cultural content, collaborations with local talent to facilitate
foreign market entry, and arranged joint ventures with local markets to create “perfect 41
localization.” In this way, cultural technology intersects with theoretical discourses on
modes of entry and global positioning, and globalization.

Modes of entry and global positioning strategies

Marketers often use international expansion as a growth strategy. Cultural technology
is a strategic framework that facilitates the global market penetration of South Korean
cultural products such as K-pop. Broadly, this study contributes to the literature by
focussing on the global marketing of cultural products (e.g. music) as opposed
to durable consumer goods and brands. Specifically, the modes of entry that are
represented within the cultural technology model include exportation and joint
ventures; there was limited implementation of licensing or direct foreign investment in
the data.
The results from this study suggest that mode of entry may be a multi-stage game.
Pan and Tse (2000) conceptualize choice of entry as a hierarchical process that begins
with a decision between equity ( joint ventures, FDI) or non-equity (exportation,
licensing) modes. In choosing the appropriate mode of entry, managers first consider
macro-level factors (e.g. governmental, environmental, cultural), and then, micro-level
factors (e.g. contract terms, HR issues, distribution channels). The results of this study
show that Korean media producers initially took a stepwise approach to global market
entry by first exporting their musical talent with little adaptation to local markets, and
then over time, shifting to higher order modes of entry such as joint ventures to develop
localized talent. Nowadays, Korean media producers do not follow a hierarchical
pattern, but rather pick and choose from a portfolio of entry modes that best suit the
talent or album project.
With respect to global brand positioning, the literature is informed by two
perspectives. The first school of thought is GCCP, which calls for the
deterritorialization of products and brands and the removal of their “cultural odor”
to facilitate adoption (Alden et al., 1999; Cayla and Eckhardt, 2008; Iwabuchi, 2002).
The second perspective argues for the retention of cultural odor by anchoring the
product or brand to a culture of origin (Goldstein-Gidoni, 2005). In marketing, this
position is embodied by the FCCP and LCCP strategies (Alden et al., 1999). This study
shows that South Korean cultural producers simultaneously implement aspects of
GCCP, FCCP, and LCCP to market music talent. For example, SM Entertainment
strategically positioned boyband TVXQ (a.k.a. Tohoshinki) in the Japanese market as a
localized product by removing their “Korean-ness” – a GCCP strategy ( Jung and Hirata,
2012). At the same time, SM emphasized the “Korean-ness” of its stars to appeal to
Japanese consumers of the shin-hallyu (Lee, 2011). Thus, marketers can implement
global and local strategies simultaneously for the same product or brand (Alcade, 2009).
It is also evident that consumers are able to tradeoff global and local divergence (Van
Ittersum and Wong, 2010).
To facilitate global market entry, Korean media producers may also have to
understand the cultural meanings that consumers associate with cultural products and
IMR brands (Cayla and Arnould, 2008). The value of cultural products varies as they move
33,1 from the culture of origin to new markets (Poulis and Poulis, 2013). For example,
East Asian consumers may listen to K-pop to attain feelings of cultural proximity
(Cayla and Eckhardt, 2008) or identify with images of modernity and capitalism
(Huat, 2012). Alternatively, consuming K-pop may intersect with discourses of
imperialism or liberation (Dong and Tian, 2009), a theme explored in the next section.
42
Discourses of globalization: transnational cultural products, cultural hybridity, and
soft power
K-pop offers a lens to discuss issues in globalization, such as transnational cultural
products, cultural hybridity, and soft power. Transnational cultural products are
products, brands, and media that flow from one territory to another (Iwabuchi, 2002).
Cultural traffic between nations is facilitated by cultural hybridity, the fusion of
cultural elements in cultural products. Cultural hybridity creates a feeling of “almost
the same, but not quite” ( Jung, 2011, p. 11). It is a “third space” wherein new identities
and meanings can emerge (Bhabha, 1990). For some scholars, the Korean wave is not
a true “Korean” wave, but rather a hybrid of traditional Korean culture and American
culture that results in something that is quintessentially “Korean” ( Jang and Paik, 2012;
Jung, 2011; Ryoo, 2009).
Traditionally, globalization studies have examined how cultural products flow from
the West to the rest of the world. This perspective is known as the Americanization
thesis of globalization (Ritzer, 2009). However, other scholars note that globalization is
now dislocated from Western centers such as the USA, because other cultural sites
such as Japan and South Korea influence their East Asian neighbors as well as the rest
of the world (Iwabuchi, 2002). K-pop, for example, is widely consumed by East Asian
consumers and influences musical and fashion trends in China, Taiwan, Japan, and
various countries in Southeast Asia (Park, 2011).
In East Asia, cultural products tend to flow one-way and cultural trade is asymmetric
in its distribution. Japan and South Korea are the major exporters of cultural products,
and other regions such as China, Taiwan, and various countries in Southeast Asia are the
consumers (Huat, 2012; Iwabuchi, 2002). There is little reverse flow from the various East
Asian regions into cultural power centers such as South Korea and Japan. For example,
Chinese consumers listen to K-pop music, but there are comparatively less Korean
consumers who listen to Chinese music (Huat, 2012; Iwabuchi, 2010a). This asymmetry
also exists between the two cultural powers, Japan and South Korea. Korean celebrities
often sing in Japanese and release Japanese albums, but Japanese singers rarely sing in
Korean or release Korean albums (Shin, 2009b).
The asymmetric distribution of culturally hybridized products (e.g. K-pop) may
be symptomatic of a nation’s strategy to gain cultural relevance (Iwabuchi, 2008,
pp. 38-39). In essence, East Asian countries are competing with one another for cultural
relevancy on the global stage. The hybridized media of hallyu, the Korean wave, is a
means by which South Korea can gain “cultural diversity in the face of possible erosion
of their cultural particularity” (p. 38) and “[sustain] local identities in the global
context.” By emulating Western cultural production, K-pop producers have created
a genre of music that successfully traversed national boundaries and became uniquely
associated with South Korea (Huang, 2011; Jin and Ryoo, 2012). Some scholars
have dubbed this cultural strategy “strategic hybridism” (Iwabuchi, 2002). In essence,
the cultural technology framework outlined in this study represents the
implementation of strategic hybridism.
 The asymmetries in South Korean pop cultural products reveal much about the Cultural
discourses of soft power in the East Asian region. Joseph Nye (2004) developed technology
the notion of soft power to explain how “a country may obtain the outcomes it wants in
world politics because other countries – admiring its values, emulating its example,
aspiring to its level of prosperity and openness – want to follow it” (p. 15). As the use of
military power in international diplomacy receded in the latter half of the twentieth
century, global powers turned to popular culture as a “means of public relations and a 43
method of strengthening a country’s influence” (Otmazgin, 2008, p. 77).
Within the context of K-pop and cultural technology, there are several variations to
the soft power discourse. On the one hand, some scholars see K-pop as a form of
cultural and economic imperialism. For example, Huang (2009) argues that the
consumption of Korean wave products cannibalizes the consumption of locally
produced Chinese media. Huang’s critique is informed by the lack of reciprocation on
the part of South Korea and Japan in consuming Chinese cultural products.
Another set of scholars see hallyu not as cultural imperialism, but rather as a form of
cultural diplomacy (Ryoo, 2009). Essentially, South Korean pop culture is a tool to
broker peace between Asian countries with a history of conflicts (Huang, 2011). For
example, hallyu contributed to the rebuilding of positive South Korean image in
Taiwan, after South Korea broke off diplomatic relations with Taiwan to establish
relations with China (Sung, 2010). Min (2011, p. 15) discusses how Japanese celebrity
Kusanagi Tsuyoshi’s foray into the South Korean market “serves more than mere
entertainment when considered in the socio-political context of Japan in the early
21st century.” Given the history of Japanese colonialism in the twentieth century,
having a Japanese celebrity admiring and learning Korean, and meeting with the
South Korean President is a “rare and positive development” (p. 3).
Finally, other researchers see the expansion of cultural products not as cultural
influence, but as an opportunity for a nation to disseminate new cultural images of
itself (Otmazgin, 2008). Japanese pop cultural products are a mechanism by which
Japan can revise its cultural image with respect to their Asian neighbors, given its
history of war and conflict with them (Iwabuchi, 2008; Otmazgin, 2008). In 2005, Japan’s
Economic and Trade Ministry stated, “without the spread of Japanese pop culture,
anti-Japanese sentiments would be much stronger in Korea” (Iwabuchi, 2010b).
Recently, China has realized the power of popular culture in reshaping its national
image (Huat, 2012). The Chinese government was heavily involved in the design of the
opening ceremony in the Beijing 2008 Olympic Games, which mixed next generation
technology with historical Chinese narratives to communicate the message that China
is a modern, unique nation (Wu et al., 2013). Through its popular culture, South Korea
could similarly alter its cultural image, specifically as a modernized nation with high
expertise in cultural capital production (Lee, 2011).

Conclusion and managerial implications

Within the annals of globalization, cultural hybridity, and transnational cultural products,
much has been written about hallyu, the Korean wave (Huat, 2012; Ryoo, 2009; Shim, 2006).
However, there is comparatively less research that examines how South Korean media
agencies market cultural products such as K-pop to global audiences. Through an analysis
of the K-pop industry, this research outlines a cultural technology framework that offers
scholars and practitioners a guideline to facilitate the marketing of cultural products.
The managerial implications of the cultural technology framework can be applied to
cultural industries such as television and comics. For example, the success of the Idol and
IMR Got Talent television franchises illustrates the power of Cultural Technology. The Idol
33,1 franchise is now adapted in over 46 nations and the Got Talent franchise in over 50
countries. Essentially, the British pioneers exported the shows’ templates to global markets
via the joint venture model. In both franchises, producers removed the cultural origins to
adapt to the local markets, although savvy consumers may be aware of the shows’ British
roots (Tay, 2011). If producers had chosen the export model, the British Idol would have
44 simply been offered via syndication to local markets (e.g. showing British Idol to consumers
in Israel); in the collaboration model of cultural technology, British producers might invite a
foreign national (e.g. Chinese) to compete in Idol, and then syndicate the show in China.
Comic companies, such as a Marvel and DC, can also implement the cultural
technology to extend their business into the global marketplace. With the recent success
of comic book films such as The Avengers, it may behoove comic producers to export
print graphic novels, which often serve as the source materials for films. Using the export
model of the cultural technology framework, comic companies may simply translate
existing American comics into local languages. Additionally, American comic companies
may hire regional artists and writers to compose comic books for the local market.
Furthermore, American comic producers can develop joint ventures by exporting the
production and knowledge capital to produce a new line of comics for the local market.
Future research could investigate the bi-directional cultural flows between
periphery (e.g. East Asia) and center (e.g. USA). For example, musicians of the
visual-kei genre, a sub-genre of Japanese rock, have recently increased tour activity in
the West (e.g. Europe and USA). The tour represents a huge opportunity cost for the
rock bands; oftentimes, bands can sell out much larger venues in Japan, but play for
much smaller audiences in Western countries. One might question whether tours were
really meant to penetrate Western markets, or whether another agenda existed
for these international concerts. Thus, it may be interesting to examine the
re-appropriation of cultural products in their country of origin after a “process of
sanctioning” in the West (Askegaard and Eckhardt, 2012).
Additionally, future research could extend the findings by investigating the
relationships between constructs from this study. For instance, the findings suggested
that South Korean talent agencies increasingly used joint ventures for the China, while
they used exportation of cultural content for Japan. Quantitative, regression-based
analyses can empirically verify if there is a relationship between mode of entry and specific
export markets. Follow-up studies could address why certain modes of entry strategy may
work better in a particular market. Using similar methods, researchers could also test the
relationship between other constructs, such as band lifecycle and promotional activity
(Table I). There may be a difference in the way that talent agencies promote first-year
music talents vs more mature bands. Overall, the topic of East Asian cultural products is
rich and dynamic, and hopefully, this study inspires future marketing research in the area.

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About the author

Steven Chen is an Associate Professor of Marketing at the California State University, Fullerton’s
Mihaylo College of Business and Economics. Before joining the Cal State Fullerton, Steven
received his BA in studio arts and a PhD in management: marketing from the University of
California-Irvine. Steven’s research interests include East Asian transnational cultural flows,
design management, and new product development. His research has been published in scholarly
journals such as the Journal of Product Innovation Management and the Journal of Business
Research. Associate Professor Steven Chen can be contacted at: stchen@fullerton.edu

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