ABSTRACT

A Study on the Distribution Channel of Automobile in Korea

-Concentrated on the Introduction of Dealer System-

Kye, Do Won(Dept. of Business Administration The Graduate School of Dongguk University)

I. Introduction

Automobile industry, as the comprehensive machine industry with intensity of capital-technology, plays on important role in advancing highly industry structure. Automobile industry has a great influence on not only the forward-backward linkage effect of the manufacturing industry and service industry related industry but also the economic growth.

Although automobile industry in Korea was rised to the world-leading automobile manufacturing country as a result of technical R&D, since a passenger car produced in 1955, automobile manufacturers take premodern direct distribution method. Therefore automobile distribution is in disorder.

The purpose of this study is to analyze the actual conditions of automobile distribution channel in Korea, to grasp on the points at issue and to insist on necessity to introduce dealer system, as a plan of rationalization of automobile distribution channel to solve it.

For this, I have posed questions to the owner drivers and automobile salesmen and finally 23 drivers and 74 salesmen were selected to analyze this study.

For analyzing the necessity to introduce dealer system, x2-test and ANOVA(analysis of variance) were used.

II. Theoretical Background

We define a channel of distribution as a set of interdependent organization involved in the process of making a product or service available for use or consumption, of all organizations, dealer as a firm that buys and resells merchandise at either retail or wholesale.

The theoretical grounds on the dealers' necessity are as followings;

1. To strengthen salesforce to cope with the increasing demand

2. To connect the new car market with the used car market

3. To perform efficiently a car import and export business

4. as other grounds, improvement of transaction efficiency, efficient management distribution flows, financing, profit of specialization, principle of mass reserve, mininization distribution cost resulting from transactions-routinization, improvement of customer' cervice level, marketing imformation link, etc.

Also, dealers create possession, time, place and form utilities.

III. Empirical findings

The characteristic of automobile distribution channel in Korea is that automobile manufacturers without dealer's participation take direct marketing channel.

The problems to be raised by this are as follows.

1. The production funds is diverted to selling divisions, and the companys are weighted financial burden.

2. The dealer's function are not active.

3. Under the present selling system, are agents cannot transact with new cars of the other manufacturers and the used cars that multi-dealers can be take.

4. The option system, test-driving, after service don't manage customer oriented method.

5. Because dealer's storage function cannot act efficiently, in case of rapid increased demand, supply-shortage phennomena occur.

6. It is difficult to rationalize management on account of enormous organization size involving personnel and physical resource of selling division.

7. There are raising dumping problems resulted from rapid increased export and shortage problem of environmental adaptability resulted from heterogeneous foreign distribution channels.

For solving this problems, it is necessary to introduce dealer system in the automobile market.

The results of analysis are as follews.

1. The consumers emphasize the need of dealer system.

2. The consumers recognize that service improvement is more important than price, in the attitude on the service improvement and the markup resulting from the introduction of dealer system.

3. The consumers recognize the need of test-driving.

4. The consumers insist on the need to possess dealer's own maintenance-facilities.

5. The advantage comparative analysis between direct marketing versus dealer system results in that both consumers and salsemen rated dealer system above direct marketing high at 979:517 and 557:395.

6. The sales managers of automobile company take up the attitude of dealer system's introduction, in time of economic circomstances being well.

IV. Conclusion.

Automobiles makers, under the thoughts of the social marketing not to aim at short-term profits, have to introduce Dealer System in the automobiles manket as soon as possible.

Government also do that system for under the purpose of the consumer protection and the enhancement of efficiency in the automobile manket.

In concluding this study, due to a restriction in time and finance, random sampling was difficult and the deep study of company administration was subject to restrication.

In advance, therefore, the deep studies about the above problems are required.