|
Domestic businesses, which promised to give away free products and discounts on purchases if the national football team made it the last 16 of the World Cup, are beginning to worry they will face serious financial pressure. Following a win against Scotland 4:1 and a draw with England 1:1, pundits are noting that Team Korea's chances of securing a berth in the second round have immeasurably improved, meaning these companies will have to delve deeply into their pockets.
Companies had, rather unpatriotically, jumped at the marketing prospect of a "small investment for a big return," but the team strength as exhibited against European heavyweights is giving them food for thought. The nerves of insurance companies, which sold insurance to companies with regard to the offers, are also becoming a little frayed.
LG Electronics, expecting a 30% to 40% surge in sales during the World Cup, promised a bonus 21" TV to customers buying an HDTV, and W10,000 in cash per goal scored by Korea, to LG Cyon mobile phone purchasers. However, LG only set aside a W5 billion budget, as it predicted it would be paying out a maximum W10 billion according to the team's record.
Most second round marketers, including SK, KTF and Nong Shim Co., which have promised to give away a new Grandeur XG car and cash, to 16 customers drawn from a lottery, have already taken out insurance.
A Hyundai Marine and Fire Insurance manager said some 20 companies had subscribed for insurance with his company, adding that with those not insured could pay out a lot more than expected. Insurance companies who may face the biggest damage do not afford to speak out loud.
Hyundai has decentralized it risk of a payout by taking out reinsurance, with manager Kim Jae-gab saying over 95% of the company's exposure has been covered in this manner with overseas' companies.
(Shin Deok-hong, dhshin@chosun.com )
|
