Assessment of the Economic Benefits From U.S. Meat Export Federation (USMEF)’s Marketing Investment in South Korea

ABSTRACT

In 2007, the United States and South Korea agreed for partial access of U.S. beef to South Korea under the Korea–U.S. (KORUS) FTA concession, and started to import sizable U.S. beef to South Korea in 2008 despite some negative sentiments of Korean consumers for U.S. beef due to the safety concerns. From 2011 to 2015, the USMEF is scheduled to invest approximately US$10 million on promotion of U.S. beef in South Korea. Thus, it is important to access effectiveness of USMEF promotional strategies and to justify accountability of its marketing investment in the Korean beef market. The objective of this study is to estimate the economic impact of USMEF marketing investment for beef on U.S. beef performance in South Korea. The study determines the effectiveness of USMEF’s generic beef market development and promotion program in South Korea, by developing an econometric import demand model for U.S. beef and eliciting benefit–cost ratio (BCR) of USMEF’s promotion investment. From this analysis, (1) the relationships between selected uncontrollable and controllable economic variables and the U.S. beef demand in South Korea are assessed; and (2) with BCR simulation analysis, the return on promotion investment (ROI) of USMEF is derived.

KEYWORDS:

• import beef demand model
• Free Trade Agreement (FTA)
• promotion effects

Funding

The research reported is funded by the Social Science Korea (SSK) Research Grant of the National Research Foundation of Korea (NRF), and the author would like to thank the NRFK for supporting our research project (NRF-2013S1A3A2052995).

Notes

¹ Retrieved from attached file at http://hanwooboard.or.kr/home/www.hanwooboard.or.kr/publicity/board1_view.php?bidx=1159&rownum=24&fild=&search_title=&PAGE=3

² BSI: Business Survey Index, by Bank of Korea.

³ There are no empirical estimates of , and a conservative three levels of were hypothesized in this study.

Additional information

Funding

The research reported is funded by the Social Science Korea (SSK) Research Grant of the National Research Foundation of Korea (NRF), and the author would like to thank the NRFK for supporting our research project (NRF-2013S1A3A2052995).