Cconma‟s Strategy

one that cares about quality, cares about the work or craftsmanship that goes into producing such a product and is willing to pay a higher premium for such products.

4.2.2 Cconma’s Strategy

CSR as a Competitive Advantage

Cconma has a comprehensive CSR strategy which allowed them to differentiate themselves from other online retailers which allowed them to appeal to this savvy segmentation. Here are some of the following strategies it has adopted are:

 Offering only customer focused high quality products, which is the core for its brand reputation.

 Regulating their own products and suppliers‘ products to meet Cconma‘s rigorous quality standards before being able to sell products on the website

High quality customer focused products

As stated before Cconma‘s business model and reputation revolve around the concept of quality. Consumers buy products and join the website because they trust and respect the company‘s products. Therefore, Cconma spares no effort to make sure that all of its products, both its own, and sellers‘ products adhere to their strict standard. They also make sure that the customer always comes first. Customers‘ demands and needs are top priority, and it should never come at the expense of losing product quality. Customer satisfaction and brand

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reputation are top priority. The company is building deep connections with the customer which improves customer satisfaction, which in turn increases sales (figure 16.)

Figure 16- customer/company relations: through responsible leadership Cconma connects with local

farmers to increase Customers and profit

Regulation of Sellers

Cconma is unlike other ecommerce website. While other e-malls are anxious to host a variety of sellers, without extensive background checks, Cconma is different. Cconma has a very strict and detailed process of managing sellers. Cconma does this in five different ways:

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 Cconma does not allow itself or other sellers take advantage of the anonymity of the internet. All second party sellers are responsible for the products and the quality of the products they are selling. Brand photos and introductions are offered for each product.

Sellers are encouraged to strictly monitor their own product quality so that the customers associate their product with quality, which in turn helps establish brand reputation.

 Second party sellers go through a trial period, called an intern period, before officially launching their product line on the website. This is so that that Cconma can check customers‘ response to their products and service

 Price competition is not allowed. In the end, this lowers product quality with only a small price benefit for the consumer

 All promotions are organized by its member through online survey. This allows sellers to save money on promotion and advertisements.

 Sellers are required to donate 1% of sales to a charity of choice in the community.

Cconma does the same for all of its own brand sales.

Cconma has high expectations for its sellers, but it does not wish to exploit their sellers.

The sellers‘ fee is 10%. For Amazon.com, the number one ecommerce company in the world, sellers are expected to pay 12-15%. In return for this fee, the category managers, which are divided into food and non-food, are in charge of launching new stores, helping each store‘s operation and promotion, and ensuring that they adhere to Cconma‘s mission. (See figure 17)

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Figure 17- Cconma‘s CSR in working with business partners: Leadership choosing to work directly with

local farmers to create a Sustainable competitive advantage while improving conditions for local farmers

(sellers)

Another example of how dedicated Cconma is to quality control is in its ―food‖

division. In 2010, Cconma moved its headquarters closer to its farmers. Cconma‘s dedication to monitoring quality, and understanding their farmers and their work condition was shown in this decision. While most Ecommerce companies would prefer being in the capital city: Seoul, Cconma decided to move its base to the agricultural city, Chung-Ju. This helped show the community where their priorities lied, and also expressed where their core competence lies.

As this happened work productivity increased which in turn directly affected profitability.

(Figure 18)

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Figure 18- How moving Company HQ close to core competence can affect business relations

Brand reputation through strong CSR

There have already been quite a few examples of how Cconma has created a strong brand reputation; however, the most lasting impression exists due to some of the stories that they create for their products.

Once such example of How Cconma‘s has developed brand reputation is with the

―We-can Cookies‖ product. These cookies are hand-made, organic cookies. The cookies are baked by physically or intellectually handicapped individuals. This gives them the ability to have a job and live a normal life. It also lets them be a beneficial member of community. The story of Cconma‘s commitment to helping the community is then posted on the website.

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Customers feel happy knowing that when they purchase these cookies, someone the community is benefitting.

Another example is one of Cconma‘s bestselling products: the ―Chaga-mushroom extract fermented Soybeans,‖ which are made from organic soybeans. This product was developed in 2004 as a way to support the settlement of Koreans who returned to Primorsky after Stalin‘s ethnic cleansing of 1937 to 1949. Despite its excellent quality, sales stagnated until it was introduced on Cconma‘s website in 2007. The story of the Koreans living in Primorsky touched many customers, which lead them to make a purchase. After tasting the product, the quality spoke for itself, which lead to repeated purchases and loyal customers.

The last example is the Rhajin organic bean paste. The bean paste is made in North Korea. Purchases of the bean paste help improve the livelihood the farmers in North Korea which produce it.

These, and other stories like these, impress consumers, which will then generate feedback on the website. This feedback then influences others to make similar purchases, which then perpetuates the Cconma strategy. Customers are number one to Cconma. But it is evident that Cconma‘s goal is not only pleasing the customers, but also making a difference in the community by caring for all its stakeholders, both internal and external. This dedication has a direct effect on brand reputation (figure 19)

48 Figure 19- Brand reputation through CSR