A Study on the Importance of the Network Trade Marketing in the Banking Banking Business.

Lee,jong Hem(Graduate School of Business Administration Yonsei University)

Since the early economic development stage of 60 and 70s, Korean banks were driven by the policy loans and export supporting programs requested by the government mainly focused to the growth of national economic growth This trend had been continued until the mid 1980s, focusing to the policy loan and government driven projects. Banks role during the time was almost a part of government organization and performed as similar role as the government in terms of financial support. Accordingly, the Korean bank business strategy and marketing plans were also mainly focused to the areas that the government tries to achieve. As a result Korean banks were not so successful in the area of stand-alone survival strong financial structure, competition in the international banking industry and profitability of the banking business. This historical background has prevented the Korean bank from being a strong global bank a competitive bank in the international market a healthy and better financial structure. In line with the recent Urguy Round implementation, after which rapid financial markets opening is expected, the need of newly developed bank business strategy and the understanding of the importance of the network trade marketing such as enhancement of competitiveness, development of the variety in product servicing and the development of overall bank profitability are gradually increased

In this context, trade business in the banking area is very important. Korea's trade business had been the bread and butter of the Korean industry from the beginning of the early 1960s by greatly affecting to the national growth, employment, economic expansion etc. etc. and the trade volumes have also been sharply increased during the last 20 years. Although the government's trade driven policy had created some negative impact to the Korean economy, there were more positive factors in the economy and more importantly, policy maker believed that the increase/ expansion of trade business is the only way that Korean economy could continue to grow and survive in the international society. In this year, total trade volume is estimated to be approximately $140bn in import and $130Bbn in export and keeps increasing year by year. As per the growth of the trade volumes, Korean trade flows are also getting more and more diversified and complicated. Therefore, banks who ate doing main support of the trade business of the companies should focus in the development of more sophicated knowledge of the products together with the marketing skills that fulfills the demand of the clients. Trade products are better than the other banking products in the financial structure in terms of the risk concept of the bank assets according to the BIS risk rating formula. This is the Treason why trade business is important in banking business especially for Korean Banks.

Korean banks business behavior in terms of the trade business was not so well sophicated and not much profitability oriented for long time. Moreover, there was no specially dedicated team who serves trade marketing and development of product as an expert. In addition, Korean banks did not have well structured for net-work trade marketing concept in the bank business area.

Therefore, this study is for the propose of suggesting the banks to understand and implement the effective and profitable marketing strategy on the net-work trade business.

Net-work trade business is a trade business that is performed in-betweens among the branch network each other through coordination. communication teamwork which is different from the old classical trade concept. For example, classical trade business is a trade business directly doing the trade business with the branch/bank clients and recognizes only the branch and client revenues however. network-trade business is a trade business doing directly and/or indirectly with the network clients through the net-work officers abroad against the net-work clients. This concept gives rise to the extra, add-value opportunity on the existing trade business to the banks. So, the network trade business menus much more expanded concept of the trade marketing.

The problem and issues that the bank are currently facing are summarized

As follows:

1. Understanding of marketing concept in trade. Especially in the area of network trade marketing.

2. Operation of marketing in product, function oriented. Lack of flexibility and communication among other product and function

3. Lack of utilization of the marketing knowledge through the intensive research, segmentation of the markets. Lack of common resource allocation/utilization, and mass customization.

4. Product development and price strategy. Lack of differentiation and flexibility in the price strategy.

To be more effective and efficient in the trade business, especially in the net-work trade marketing area, followings are required:

(1) Profitability and less risk oriented product marketing strategy. Set-up network oriented marketing strategy and look for the add-value opportunity.

(2) Internal support on the development of trade marketing and network trade business.

(3) Develop specialized marketing officers in the network trade area through internal training, external hiring etc.

(4) More close coordination, communication and team work among marketing officers are necessary so that the utilization of the limited resources could be maximized.

(5) Marketing oriented professionalism is necessary to be more effective in the business prioritization and profit generation.