Public relations was briefly discussed in the last post. Though it does not drive revenue directly, it is used to help TVXQ construct a charismatic image that will attract fans.

For example, TVXQ wear designer apparel at media events and benefit from the chic, sophisticated image of the brand.

SM Entertainment also partners its artists with charity and everyday causes: e.g. sending out a video for students doing the SAT; performing at Nongshim Love Charity Concert. And of course, TVXQ attends many award show/concerts put on by other companies, such as KPOP festival and Gayo Daejun, and gain exposure there.

Sales promotion is also used creatively to stimulate sales, especially premiums. The company would put together ‘special editions’ or different versions of the album and charge it above normal price with added ‘bonus footage, photos, or songs.’ This rewards fans to buy all the versions or go for the most expensive version for the most content possible.

In fact, TVXQ has released a repacked album of Catch Me, which includes new songs, “Humanoid”, the title track, and “Here I Stand.” This is different from the special versions of the previous normal ‘Catch Me’, however, so fans end up buying even more.

This technique is a common practice for South Korean artists, but is still quite courageous because an artist needs to have attracted enough devoted fans in order for this to succeed, as TVXQ has.

Moreover, when going on TV or radio shows, TVXQ often gives out free autographed albums as a contest and increase audience attention.

On top of all these pull promotion in which they address customers directly, SM Entertainment is also clever to use push promotion in which they focus on channel partners. They give out free albums to people in the industry such as critics, TV hosts, radio hosts, and so on to incentivize them to listen and promote the album for SM Entertainment.

That’s about it for SM Entertainment. Or is it…? Thank you for your attention ’til now! Hopefully, with its marketing masterminds, SM Entertainment will continue pushing TVXQ to the top!

And we’re back to discussing SM Entertainment’s ingeniousness! To recap, SM Entertainment uses integrated marketing communications to drive selective demand and communicate the value of TVXQ.

Like we discussed in the last post, TVXQ already has an appeal that breaks through the clutter and grabs the attention from the customers. Therefore, the normal AIDA model does not really apply. Fans are already equipped with the awareness, the interest, and the desire. In fact, most of them make preorders and take action early.

SM Entertainment promotes through three main promotional mix elements: advertising, sales promotion, and PR. We’ll discuss advertising in this post.

TVXQ’s albums are advertised on both mass and niche media outlets and represent a persuasive form of product-based communication, designed to get the consumer to take action. SM Entertainment media plan very carefully to avoid lashing out excessive cost on mediums that are not effective to boost sales or image.

Using mass media — radio shows, general TV programs, magazines, and on buses and billboards – they are able to reach large numbers of anonymous audience members.

 

 

 

 

 

 

As for niche media, there is a very interesting medium that is unique to South Korean entertainment industry. Three broadcast stations dominate the entertainment industry: SBS, MBC, and KBS, each with its own live music program where comeback artists perform live each week. This niche media focuses on reaching young individuals who are the primary purchaser of albums.

This unique promotion, as well as other advertisements, are used on a flighting schedule, with TVXQ performing and promoting only when they comeback with a new album and not otherwise. This ‘promotion period’ of approximately 12 weeks is used by all entertainment companies in South Korea and allows firms to focus advertising in a concentrated period to allow for maximum intensity when it really matters – that is, when the album is out.

 

Continuation of last post.

People immediately think advertising when hearing the word ‘marketing’; when in actuality, it is only one of the many elements of the promotion mix. Promotion, which is communication between companies and consumers, further includes sales promotion, personal selling, public relations, and direct marketing.

SM Entertainment’s success in building renowned, celebrated artists such as TVXQ, Girl’s Generation, and Super Junior can be attributed to their ability to create flesh and blood to what was previously only a product.

To start, SM Entertainment focuses on creating an emotional appeal and makes customers want to buy. It changes TVXQ from simply an artist to real people who have thoughts and feelings and want to be successful and loved.

When a customer starts seeing TVXQ as people, he/she becomes a fanboy/girl (much like myself) and starts being (willingly) manipulated by TVXQ’s perceived mood/thought – and a bond appears between the consumer and the brand TVXQ.

Crazy fangirling antics might include buying all versions of the same album with reasons not limited to helping TVXQ win year-end awards and for the pride of TVXQ’s fandom, Cassiopeia, becoming more powerful than other fandoms. These behaviours clearly demonstrate emotional desires rather than utilitarian needs.

In a way, when the customer buys, votes, or helps refer, she feels like she belongs to the Cassiopeia family and is thus satisfying both her belonging needs and her desire to fit in an aspirational reference group.

In order to create this appeal, SM Entertainment combines public relations and advertising together. For example, TVXQ maintains a highly prestigious image by only going on the most high-end magazines (such as W, Marie Claire, and Ceci), the most popular TV shows (such as Running Man and Strong Heart), and the most celebrated radios (such as Sukira and Kiss the Radio); even on variety shows, they maintain a calm and collected exterior to maintain or elevate their ‘cool’ status.

However, since SM Entertainment want TVXQ to feel like real people, interactive social medias (Youtube, Twitter, Facebook, Kakao) are used to communicate with fans galore, both internationally or nationally.

More about promotion in the next post.

“The power of music as a promotional tool is enormous. “

– Bill Stensrud

In the last post, I talked about how SM Entertainment creates value for TVXQ and captures this value with its price. I applaud SM further for their efficient supply chain management to effectively deliver CD, DVD, and photo albums to consumers, especially after reading the blog post “Thoughts on the Supply Chain for Recorded Music” by Bill Stensrud, technology entrepreneur.

First, let me briefly summarize the channel structure of the recording industry: composer/performer –> label (finance, manufacture, promote, market) –> distributor (buy in bulk, warehouse, ship) –> Retailer –> Customer.

This supply chain seems streamlined and minimizes the number of marketplace contacts. However, with the appearance of Internet retailers, direct digital distribution (such as iTunes), and illegal downloading, this supply chain has been seriously severed. The following graph shows how each short-lived music trend has been replaced time and time again in the music industry.

As much as I already know the destruction internet can cause to the industry, when I compared this graph to TVXQ and other South Korean album sales all over the world, this analysis seems that much more shocking.

Nowadays, it is becoming prevalent for artists and labels to use the recordings to “promote performance-based income opportunities” rather than deriving revenue from the recording itself (Stensrud).

Indeed, albums seem to simply take on promotional roles for raising awareness for the artist and for selling concerts and performances, which people still value highly. TVXQ tours every year and seems to be doing the same thing — with one exception– their albums sales are still going strong: selling 114,956 copies in October with a total of 246,838 since the release on Sep 24.

I attribute this number to SM Entertainment’s unimaginable methods of promotion and idolization of TVXQ.