Ceragem President Kim, Sang-sik

“Our sales principal is that we sell to the customers who tried our product experienced the good effect. We don’t try to achieve quick sales increase with an exaggerated advertisement. We see improving customer satisfaction is most effective to increase the credibility of the company br that eventually leads to sales increase. Our “Free Trial Marketing” is the secret for Ceragem’s global success in only 15 years since its establishment.”

Since the first establishment of the overseas corporate office 15 years ago in Chicago, USA, Ceragem has grown as a global medical device corporate running over 3,000 stores in 75 countries. President Kim, Sang-sik (photo.56) emphasized Ceragem’s unique “Free Trial Marketing” as a reason for their success. Ceragem sells the product to the customer who experienced the health benefit from the free trial for at least one month. Ceragem’s main product, the thermal spine massager increases the body’s natural immunity relaxes the tight knots of muscle by applying heat acupressure while massaging the spine. The product targets mid-aged elderly groups for a main customer group. Its great stress relieving effect attracts a lot of customers all over the world. According to Ceragem, average of 600,000 people a day visit Ceragem Center (retail store) for product experience. They tried the thermal massager for 30 minutes a day for free.

◇ “Customer satisfaction is the first priority over product sales.”

“As the price is high, almost 3 million won, we don’t sell the product without customer’s family consent on purchase. It is to prevent a possible argument at home. We hope our product is to be a medium gluing customer’s health family happiness together. We put customer satisfaction happiness first than seeking immediate profit. That is Ceragem’s sales principle.”

Ceragem various principles in sales to pursue “Transparent Business Management”. The most unique principle is that they request the customers to get family consent on purchase to prevent impulse buying. It might sound like that this sales principle is an obstacle to sales growth but Ceragm does not think that way.

President Kim, Sang-sik has been endeavoring to secure the healthcare market in China for over 11 years. He emphasized Ceragem’s transparent sales principle firmly saying, “We cannot expect a long-run business if we only pursue an immediate profit. Especially in the personal medical device market, a transparent business strategy such as free trial marketing is essential to show our product’s high quality as well as to earn the credibility from customers.

◇ Medical device sales to over 75 countries ...“Secret for long-run business is to see business a long-term gain.”

Established in 1988, Ceragem developed the automatic thermal massager for the first time in the world brought innovation to the existing market where the manual type thermal massagers were a main stream. Ceragem has been exporting the automatic thermal massager since 1999 to USA, China, Europe as well as to Central South America. Currently Ceragem is running 3,000 Ceragem stores (Ceragem free trial center) in 75 countries. Headquartered in Korea with China as a base of overseas sales, Ceragem is selling the thermal massager all over the world making over 200 billion won worth of sales a year. Half of the overseas sales are made in China.

Ceragem’s main product, automatic thermal spine massager ”Master V3”:
currently being sold in over 75 countries.

Recently Ceragm’s effort on exping overseas market retail stores are bearing good fruit with 10 sales increase a year. Ceragem achieved 238 billion won of global sales in 2014 made 300 billion won of sales in 2015.

President Kim said, “In order to have a long-run business in the overseas market, we cannot just pursue an immediate profit in short-term. He added saying, “There was a period that Ceragem put an effort on increasing sales like everybody else in industry. However once experienced a crisis, we came back to our customer-oriented business principle. We made that crisis an opportunity to grow back.”

Actually, Ceragem has suffered from a big sales decrease in 2010. Back then Ceragem’s competitors were sanctioned by the China government for dishonest exaggerated advertisement. The medical device industry lost credibility from the customers. That incident affected Ceragem greatly as well. Ceragem had a successful business for 15 years in China until then. The sales decreased enormously. The sales were 200 billion won in 2008 but it came down to 60 billion won in 2012.”

President Kim recalled the experience of the difficult time saying, “As Ceragem’s products were so popular in China, dozens of Chinese companies got into the market that caused an excessive competition. Due to the false exaggerated advertisement, the Chinese government strictly cracked down on many companies. As a result, the whole medical device industry got to lie on the verge of collapse.

Despite the hardship he was very positive about that experience. He said that those hardships made a big leaping opportunity for growth. He said, “We decided to stop all the advertisement pursue the free trial marketing only. If the customers are satisfied with the product want to continue to use it, the sales increase naturally.”

◇ Earned the loyal customers with a transparent business management

President Kim was in charge of the Ceragem China Corporate Office for the last 10 years. He took the responsibility of the Ceragem global business last year. As a head of the global business he stricter sales principle to achieve Ceragem’s goal.

President Kim’s strong will to pursue a transparent business management is extended to “5 sales principles”. Those are “We don’t sell without customer’s trial.”, “We don’t sell if customer feels no effect.”, “We don’t sell if the customer does not trust.”, “We don’t sell without family consent.”, “We don’t sell if the customer does not use continuously.”

Ceragem ranked 1st on the customer satisfaction with Chines tourists in the field of
household products medical device at the 2015 Korea-China Management Award.

President Kim puts a lot of effort on educating the agencies to enhance those principles in sales. Recently, all the representatives of the overseas corporate office were convened in China received a 5-day intensive training reviewing the 5 sales principles conducted by President Kim. He emphasized the transparent business management at every training session. He emphasized again not to focus on sales but to focus on customers’ need for continuous use of the product.

The Basis of ting these strict sales rules is originated from the confidence of product competitiveness. Especially Ceragem obtained a patent for the core technology that other companies cannot catch up. This is also a source of their confidence on their product. As a leader of the healthcare industry, Ceragem is introducing an automatic thermal spine massager incorporating state of the art technology. Recently the new model is receiving good reviews. The model is loaded with spine scanning function that enables personalized massage adjusted to the spine length. It also has a music healing function.

President Kim said, “We are preparing an upgraded version of thermal massager. IT technology will be added to the current model”. Ceragem expects the new model will make one step closer to achieve a 1 trillion won sales goal by 2018.

-Thermal massager market status future

△ Currently a precise status of the thermal market is not quantified. However, looking at a sales total of 2014 of the major corporates in industry, Ceragem’s thermal massager has 60 market share. There are many companies in the thermal massager field including 2 Korean companies numerous Chinese companies. However few companies have global competitiveness. It is not much to say that Ceragem is developing the global thermal massager market.

Recently Chinese companies copied Ceragem’s product are distributing through the channel. Despite the illegal reproduction, they are not able to catch up with Ceragem’s patented high technology so far.

Considering the result of the 3 year-long effort of the Ceragem Chinese Corporate Office, I am confident about the possibility of growth. It is natural to see the companies who did not earn trust from the customers disappear in the market. Companies have to earn loyalty from the customers to survive in the market. As life expectancy increases in the aging society the customer base will be extended also. Since the spine is essential for good health, I see the thermal spine massager making an essential home healthcare device accordingly.

- It is said that medical device business in China is especially difficult. Is that right?

△ Yes, it is. In some ways, China is advanced in the medical device field. Ceragem’s products are being sold in over 70 countries. However, China is the only country who requires a compliance with the user’s manual through the clinical test as well as conducting the faulty product test locally. As China’s thermal massager industry is quite developed, the government requires difficult conditions to put out the products in the market.

In order to survive the difficult business regulation as well as very competitive market, a transparent management with product power based on the excellent quality is the only way to survive. There might be a misundersting about the way we do business in China. But it is wrong speculation. Twenty of our executives never do business with Chinese companies customers by offering any type of entertainment such as a round of golf or after-hours entertainment. Ceragem executives are endeavoring to solve the problems complaints by communicating with the customers staff directly on the selling points.

-It sounds unique that customers can purchase the product only with family consent.

△ As the product price is high sometimes a customer regrets a purchase. Especially the main customers are over age 50s, there are some cases of family disputes between the customers their children on the purchase. Often this is because the customer does not use after purchase. It is important to convince the customers to keep using the massager for their health benefit. We suggest the customers to consider having enough time before purchase to prevent possible complaints. The 5 sales principles apply to all of Ceragem retail stores with no exception. Family consent on the purchase is a matory requirement.

- Reason for performing dynamic CSR actives in China ?

△Year 2016 is the 15th year of Ceragem business launch in China. We make a contribution to society based on our transparent business management the practice of corporate social responsibility as Ceragem’s core business value. I see that the corporates growing co-existing with the local communities can sustain business for a period of a century.

Ceragem’s sincere transparent business practice in China was recognized nominated as an outsting corporate fulfilling CSR by achieving numerous awards high corporate evaluation on CSR activities. Ceragem obtained 100 outsting corporates fulfilling CSR awards last year. In addition, last October, Ceragem was evaluated as a number one satisfactory br in the medical device from the survey among Chinese tourists.

◇ President Kim Sang-sik

Born in Uireong-gun, Gyeongsangnam-do in 1960, had been a president of Ceragem China Corporate Office for 10 years since 2005. He is currently taking charge as the Ceragem general president since last December. He is recognized as an excellent senior manager with practical business expertise in both the domestic overseas healthcare market.