Water Purifier Case Study

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2. Company Situation 2.1 Industry Situation

The water purifier industry aims to improve the environmental pollution and is a field of high-income elasticity which its demand increases more than the price decrease. As the water pollution caused by industrialization becomes serious, consumers in Asia are increasingly interested in 'safe water' and the water purifier market continues to grow. It is estimated that the water purifier market will be expanded as the awareness of water pollution has been raised on the wind of well-being, which views water purifier not a luxury item but a necessity. As foreign imported water purifiers are known for the problem of filter supply, which is the crucial part for health, the domestic water purifier industry
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In addition, Coway only uses materials approved by the U.S. Food and Drug Administration and U.S. Hygiene Association in its products and the ones received the quality mark Q and the U.S. Water Quality Association Gold Seal. By these Third-Party Endorsement marketing activities, Coway succeeded in establishing the foundation for building trust from consumers. In addition, it achieved the market foundation by establishing own manufacturing plant which has a maximum capacity of three million annual productions and of 10 million filter automatic production lines. It also saved costs by developing a pump-free membrane filter, which can be purified by a constant pressure of the water purifier without a motor, and by creating a management structure to manage the filter, focusing on improving the water quality …show more content…
In the past, Coway had been selling luxury water purifiers of more than one million won to homes and businesses through visiting sales. In 1997, a result of self-inspection of water purifiers showed that customer satisfaction was less than 50% because after-sales management was not done properly. To overcome this situation of customer recreation difficulty, Coway lent the product at a low cost starting from 26,000 won per month. As a result, Coway was able to escape from the IMF quickly by offering solutions to consumers who were worried about the distrust of water quality and the price of water purifiers. In addition, the post-management after the purchase was improved through free filter exchange and periodic inspection service through Cody, which consists of water purifier management experts. As Coway launched a rental water purifier when many companies followed a restructuring order through austerity policy, it was able to increase the number of employees and launch aggressive marketing

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