A complete analyses of Fed Ex Rewards and Incentive Structure of Korea

1. Korea Market
FRC Benchmarking and Recommendations:
07 February, 2007

2. Confidential and Proprietary
page 2
Korea
Agenda
1. Re-Cap of Benchmarking Conclusion
2. Deep Dive: Tier Wise Points, Effective Rebate Rate, Popular Items
3. Program Specific Summary
4. Innovative Ideas / Trends of Loyalty Program for Korea
5. Structuring Redemption Categories : Popular, Preferred, Not Common
6. Proposed Re-staging of Redemption Strategy
7. Snapshot of benchmarked Redemption Rewards
8. Big Picture: Market wise Summary
Appendix 1: Web Links of the Programs : Korea Market
Appendix 2 : Methodology
Appendix 3 : DHL Reward listing : EU Campaign

3. Confidential and Proprietary
page 3
Korea
FRC One Size Fits All Approach
 FRC One Size Fits All Approach as seen across SG, HK, CN, TW, JP and KR
 Low impetus on Discounting ; Reward Classification is Implicit with no distinct segmentation
Discount based
Hard benefit Soft benefit
FRC redemption items and strategy
developed around the use of hard
benefits; this includes shipping
discounts as a business savings
FRC does not make use of soft
benefit items within the program
Experiential/ Aspirational
No experiential rewards has been
utilised in the program to-date
A dual effective rebate rate of – 3%
for small enterprises and1.5% for
medium enterprises is used
respectively
Rational items Emotive Item
Retail discount vouchers – shopping,
health and beauty and
food/beverages vouchers are the
mainstay of the program
Shipping discounts is the sole
business savings applied to the
program
Explicit tiered Implicit tiered
No segmented value tiers Implicit pricing strategy followed by
FRC program; reward items can be
achieved by all members within the
expiry period of the points collected
Segmented pricing Inclusive pricing
No segmented pricing
No exclusive or segmented pricing
for elite or other high-value FRC
members
FRC
FRC
FRC
FRC
FRC

4. Confidential and Proprietary
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Korea
Recap of Benchmarking Conclusion
Hard
Benefits
Soft
Benefits
Discount
based
Experiential Rational
Items
Emotive
Items
Explicit
Value
Tiered
Implicit
Value
Tiered
Segmented
pricing
Inclusive
pricing
Partner
redemption
FRC KR
(B2B)           
LG Card KR
(B2B and
B2C)
          
LG Caltex
KR (B2B
and B2C)
          
DHL KR
(B2B)           
OK
CASHBAG
(B2C)
          
Best-in
Class
Example
TBC
          
•
 Key Drivers for Loyalty Programs in Korea :
In program
• Not in program

5. Confidential and Proprietary
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Korea
FRC Earn Rate and Points Comparison
Company Earn rate Avg. basic tier
pts/spend
Avg. silver tier
pts/spend
Avg. gold tier
pts/spend
Effective
Rebate Rate
FRC KR
(B2B)
KRW 1000- 1 Point (small)
KRW 2000- 1 Point ( med)
482 points
964 points
1757 points
3514 points
4471 points
8942 points 3%
LG Card KR
(B2B and B2C)
1000 KRW- 2 Point 12,583 points 27,013 points 77,064 points 0.2%
LG Caltex KR
(B2B and B2C) 1000 KRW=1 Point 11,650 points 31,624 points 115,521 points
OK Cash bag
(B2C) 1000 KRW =30 Points 13,293 points 28,800 points 166,071 points
DHL KR
(B2B) 1 Internet Booking =100 Points
7500 points
75 Internet
Booking
25000 points
250 Internet
Booking
130,000 Points
1300 Internet
Booking
0.7-1%
 Earn Rate for FRC Korea is same as LG Caltex Program, and close to LG Credit Card ;
 Effective Rebate Rate Range : FRC much higher than others (DHL-0.7% compared to FRC –3%)
 AVERAGE POINTS FOR EACH TIER is lowest for FRC ( Low barrier of entry) ( Opportunity of Segmentation)
LG has lowest Earn Rate; Samsung Card has 0.5% and
Hyundai Card has 2% of the paid amount as earn rate
Highest Earn Rate

6. Confidential and Proprietary
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Korea
Overview on the Loyalty Programs in Korea
• Most of the Loyalty Programs offer a ‘card’ : Either a payment device in terms of a credit card
or a membership card
• Statistics shows around 47.8 million people in South Korea are receptive to new technologies and
South Korea is a leading smart card market in Asia Pacific
• Banking and Telecommunication industry practice a large scale loyalty program
• Average Earn Rate for a Loyalty Program in the Korean Market is 0.5% ; 1000 KRW – 5 Points
• LG has a strong variety of programs across credit card, fuel retail categories
• Some Korean Programs have a unique rewards redemption process : The Rewards are available on an
Online Shopping Mall and the redeemer community can go and redeem rewards from the mall
• Reward Points can be converted into currency of the same value and used as currency for purchase of
rewards

7. Confidential and Proprietary
page 7
Korea
Program Specific Summary
LG Card ( B2B and B2C Program )
Key Highlights
• LG Credit Card competes with other cards like Samsung and Hyundai
• LG Card has lower earn rate compared to other Programs , but is preferred for their convenience
Program Mechanics
1. Points can be earned by using credit card in My LG 80,000 franchisees and participating in website
event
2. Valid for rewards when accumulate 5000 points
3. Rewards can be used on LG Mall ( Online shopping by LG) ( Value of 1 KRW= 1 Point )
4. The points can be converted into cash for same value ( 200 points can be converted into 200 KRW
and used for shopping) : could be used for cash back, annual membership fee, for airline mileage,
for cash donations
5. The Program has Home and Kids Rewards and the Rebate Rate is 0.2%
Finding :
The Program is quite innovative due to the Reward Redemption Process , The LG Mall offers
Convenience / Choice ; URL : http://lgmyshop.lgcard.com/pointshop.jsp

8. Confidential and Proprietary
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Korea
Program Specific Summary
LG Caltex ( B2B and B2C Program )
Key Highlights
• Caltex Bonus Card is for Members to accumulate points while they get service from GS Caltex fuel stations
Program Mechanics:
How to earn point?
• By purchasing Volatile oil /LPG/ kerosene/light oil: 1,000 KRW = 5 points
• New card issuing = 500 points
• Member birthday = 250 points
• Wedding anniversary = 250 points
• Spouse birthday =150 points
Points Eligibilty to earn Rewards is 4000 Points
Major Reward Categories are Home and Kids, IT / Electronics

9. Confidential and Proprietary
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Korea
Program Specific Summary
OK Cash back ( B2C Program )
Key Highlights
Okay Cashback is a generic term that indicates a card that affiliate with this program , Okay Cash back card applies to
the credit card by the same name and to the membership card that is issued by few companies in the telecom and retail
side. Membership Card has no payment function only point accumulation
Program Mechanics :
How to earn Point ?
BY purchasing a product with OK cash back credit card
By purchasing a product and accumulate a point with OK cash back card
By purchasing a product and send OK cash back coupons which printed on the product
By participating in event or survey of OK cash back
(almost every category of product adopts this system, especially in product category that housewives
buys in discount mall in general)
1. Earn rate : Highest compared to other programs , range from 3-5% of the payment ( for some special
programs its 10-12%)
2. Places to use : could be used in Online and Offline affiliated shops ( more points needed to avail of
the program in an Offline shop )
3. Over 50,000 Points cash back scheme is applicable
4. The program has high number of Home & Kids Rewards and Shopping Items
5. Redemption Gifts : Around 100 gifts in 10 categories are available

10. Confidential and Proprietary
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Korea
Program Specific Summary
DHL Loyalty Program (B2B Program)
Key Highlights
• DHL Korea rewards on shipping frequency through E Mileage Club Program
• Key Rewards Redemption Categories are :
Key Categories HK – IT/E CN – B.SAVINGS TW – H & KIDS
Rebate Rate Comparison: HK : 2% , CN : 0.3% , TW : 0.4% , JP : 1.2-1.4% , KR : 0.6%
JP – B.SAVINGS
KR: Home and Kids, IT and Electronics, Discount Vouchers
Program is called DHL E Mileage Club , Points are
earned through booking the shipping order on
Internet, Point accumulation can be used
to redeem premium items

11. Confidential and Proprietary
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Korea
Structuring Redemption Categories - 1
IT / Electronics
Lifestyle & Entertainment
Shopping
Business Savings
Health and Beauty
Home and Kids
• Popular Categories : Home and Kids
• Health and Beauty
LG Credit Card Korea (B2B and B2C )
• LG Caltex card offers more categories at the basic tier
Tier 1
• Dining, Home and Kids , IT/Electronics are key
categories
LG Caltex Card (B2B and B2C)
Travel
Dining
IT / Electronics
Lifestyle and Entertainment
Shopping
Business Savings
Home and Kids
Travel
Dining
7
4
1
1
2
13
0
0
0
1
4
1
8
26
0
0
0
1
0
1
15
29
0
0
*** Items are tiered into standard (1), silver (2) and gold tier (3)
Highlighted Boxes are categories with high number of
rewards
13
2
0
0
9
0
0
9
1
2
0
22
0
9
1
5
3
1
23
0
8
Tier 3 Tier 2 Tier 1 Tier 3 Tier 2 Tier 1CategoryCategory
Health and Beauty 0 6 3
Others 0 00Others 0 0 0 Major
Rewards
Category for
LG CARD Korea
And CALTEX Korea
(widely
Preferred Programs)

12. Confidential and Proprietary
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Korea
Structuring Redemption Categories - 2
• More of a B2B Program; Few Rewards in the
program
• The program is spread more towards IT/Electronics,
Home and Kids
DHL (B2B) FRC Korea (B2B)
IT / Electronics
Home & Kids
Lifestyle & Entertainment
Business Savings
Others
Shopping
Travel
Dining
IT / Electronics
Home & Kids
Lifestyle & Entertainment
Shopping
Travel
Dining
2
0
1
0
0
0
0
4
2
0
0
0
0
0
0
4
0
2
0
2
0
0
Tier 3 Tier 2 Tier 1Tier 3 Tier 2 Tier 1Category Category
1
3 1
2
0
0
0
2
2
1
0 1
2 1
5
1
Business Savings 0 0 2
1
2
Health & Beauty 1 1 0
Number of
Reward Items
For FRC and
DHL are
comparable
4
0

13. Confidential and Proprietary
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Korea
Structuring Redemption Categories - 3
IT / Electronics
Lifestyle & Entertainment
Shopping
Business Savings
Health and Beauty
Home and Kids
• Assumed Points are being earned by
participating in a Cash Bag Event ;
• Rewards calculated for that event is as follows
OK Cash Bag (B2C )
Travel
Dining
3
0
0
0
0
4
0
0
5
0
2
0
0
7
0
0
3
1
1
0
1
8
0
0
*** Items are tiered into standard (1), silver (2) and gold tier (3)
Highlighted Boxes are categories with high number of
rewards
Tier 3 Tier 2 Tier 1Category
Others 0 0 0

14. Confidential and Proprietary
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Korea
Widely Used Redemption Items by Category
Health and Beauty
Home & Kids Lifestyle & Entertainment Shopping Business Savings
IT / ElectronicsTravelDining
• Portable TV
• Laptop
• Foot Massager
• Digital Door Lock
System
• Electric Oven
• Dove Body Wash
• LG set
• Nivea Men Care
• Cardio Machines
• Fila Body Care Set
• Kitchen Utilities
• Furniture Set
• Blankets
• Tool Box
• Baby Items
• Korean Wine
• Badminton Set
• Football
• Folding Bicycle
• Climbing Bag and Stick
• Shopping Voucher
• Perfume
• Valentino Wallet Set
• Shaving Set
• Incense Gift Box
• Fix Line with Cordless
Phone
• Telephone set
• Shipping Voucher
(discounts)
 SNAPSHOT of items used by other programs
• Pack of Brown Rice
• Cooking Oil
• Noodles
Home and Kids is one of the most developed Rewards Category with wide choice of gifts offered
OK Cashbag offers health
Products, other
Program offer beauty products
Mid Range Items

15. Confidential and Proprietary
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Korea
FRC Item per Category
IT / Electronics
Home & Kids Lifestyle & Entertainment Health & Beauty
ShoppingBusiness Savings
• Fed Ex Tube Pillow
• Note Cube
( 2 Items )
• FedEX Handphone Holder
• JCB
• Quo
(3 Items )
• FedEx Radio
• Aqua Mouse
(2 Items )
• ( 2 Items )
• FedEx Gym Bag
• Music Gift Card
• The traveller
( 3 Items )
• None
 FRC Items classified as per the categories listed and the reward items of FRC are mapped with the other
programs.
Dining
• Hagen Diaz
• Starbucks
• Mc Donald's
(3 Items )

16. Confidential and Proprietary
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Korea
FRC Analysis: Need For Value Tiers
Methodology : Value Tier Classification is done based on the ABC Analysis ( 20-40-40-% Break –up for A- B-C
Categories ) ( Breakdown of bonus points per redeemer )
Time period taken for the Redemption Behaviour Analysis is 5th June 2005 to 30th November 2006
 High value redeemers redeem average 8 items in KR (compared to 94 items -JP; 80 - SG and 64 - HK )
 Number of Redemption for each tier for the developed markets of HK, SG and JP are similar
 Distinct existence to segment FRC Program and create value tiers
Low-Value
Redemptions
Mid-Value
Redemptions
High-Value
Redemptions
22%
39%
39%
%age
Break-up
Segment
Average
Points spent
per item per
redeemer
Average
points spent
per redeemer
Average
number of
redemptions
per annum
Average
number of
items
redeemed
per annum
Low value
redeemers 445 491 1 1
Mid-value
redeemers 1028 2873 2 3
High value
redeemers 1672 12862 3 8
Level of Engagement for redeemer at every level is low compared to other 5 markets
Potential : To Reward redeemers also on their shipping frequency like the program of DHL to encourage active
redemption for each member
1
2
3
* Earn rate data not supplied

17. Confidential and Proprietary
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Korea
FRC Survey Participant Preference vs. Actual Redemption Behavior
Program Participants Reward Category
Preference Source: Online Survey, 2006
Preference
(%)
Actual Program Participants
Redemption (2004-2006)
Redemptions
(%)
Shopping Vouchers 68% Shopping Vouchers 39%
Food/Beverage Vouchers 51% Food/Beverage Vouchers 42%
Travel Vouchers 34% Travel Vouchers 8%
Entertainment / Movie Vouchers 51% Entertainment / Movie Vouchers 1%
Shipping Discounts 16% Shipping Discounts N/A
Health / Beauty Vouchers 12% Health / Beauty Vouchers 1%
FedEx Premium 8% FedEx Premium 10%
.
 Travel Vouchers, Entertainment / Movie Vouchers, Health /Beauty Vouchers continue to be an opportunity
 Shopping , Food/Beverage & FedEx Premium are the strong points of current rewards portfolio for FRC KR
Source of Data: Annual Survey Analysis (Aug 2006), Pg 11

18. Confidential and Proprietary
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Korea
Structuring Redemption Categories - Summary
• Korea Market : ‘Elite tier’ rewards are few (programs are more focused
on basic and silver tier to drive acquisition)
• Point Eligibility for most programs is 4000 points which is higher
compared to FRC
• Home and Kids is preferred category by far LG Card (68 Rewards out of
114) ; Cash bag (19 out of 35) ; Caltex(45 out of 93 Rewards)
• No clear trend for second preferred category - IT/Electronics ; Health &
Beauty ; Dining ; Entertainment
• Business Savings, Point Conversions Rewards are quite few
FRC: Potential to add Home and Kids Category , in the program, and in the survey; Also to add variety within Health and Beauty items

19. Confidential and Proprietary
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Korea
Identified Redemption Strategy Development Areas
FRC
Look at tier
segmentation with
focus on basic and
silver tier
Innovation in the
Program by working
Point Conversion with
a Fuel Card
Focus on
Popular
Redemption
Categories
Create a smart card
technology to localize
FRC Program like other
players
Focus on Rebate rate of 1% in Korea Market
Entertainment,
Health and
Beauty
Medium end IT/
Electronics
Home and Kids
Look at same
approach of
communication for all
tiers

20. Confidential and Proprietary
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Korea
Proposed Redemption Strategy for Korea
• Redemption Value Proposition needs to reward retain new joinees
• Program needs to focus on mass with special focus on bonus points accumulation
• To achieve Image Enhancement for the program by adding multiple reward items and brands
• To focus on Home and Kids Category to widen rewards and improve their preference
• Rebate Rate to be made 1% for Korea
• FRC Korea should move to distinct segmentation – elite, silver, standard/(entry)
• Introduce experiential and soft benefits at elite member tier with innovative items at silver tier
• Innovative gifts need not be high value ; Minimize overlapping of rewards for each tier
• Increase share of wallet by encouraging up-trading among high value customers
• The program needs to be mass acquisitive and high on involvement ( by rewarding frequent
shipping or frequent redemptions ) ( overall involvement of redeemers for FRC is low)
• Work on creating a FedEx branded smart card ( Give local context to service / rewards in
Korea)
• Work on Home and Kids as a key reward item ( Focus on furniture and home items )
• Look at soft benefits like bonus points for Christmas, or incentive for being a regular redeemer
• To understand the behaviour of HR/ secretaries and CEOs through focus groups/survey
• Implement website promotion and work on aggressive communication to influence members
• Facilitate a change in redemption strategy by shifting from :
Less number of low value items redeemed More number of low value items redeemed
Re-staged Redemption
Strategy
Tier Wise
Segmentation
Strategic Revenue
Objective
Developing Loyalty
Member Redemption
Behaviour

21. Confidential and Proprietary
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Korea
Redemption Items Tier Wise Strategy
• Elite Tier
• Silver Tier
• Basic Tier
Objective is to motivate buyers to accumulate points to
redeem experiential / Aspirational Gifts
Objective of the rewards at this
Tier is to retain low end buyers by giving something extra
Objective is Mass acquisition; Keep low Points criteria
which reduces entry barrier. Focus on low value rewards
Which are innovative in nature
,
HOME AND KIDS
High end rewards
Is the perfect
category
Focus on FedEX
Premium
And Points Cash
Rewards
Shopping,
IT / Electronics
And Health and Beauty
FRC KOREA NEED TO CREATE SEGEMENTATION OCCASIONS FOR FRC MEMBER BY CREATING
UNIQUE REWARD ITEMS FOR EACH TIER, NO OVERLAPPING REQUIRED

22. Confidential and Proprietary
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Korea
Recommendations : IT/ Electronics
CASHBAG T43 STANDARD 30GB portable TV 400,000
CASHBAG Dicple D26 Laptop 399,000
CASHBAG S10 2GB + (ROSSIGNOL) 06/07 시즌 여성스키장갑 MP3 290,000
CASHBAG HI-2020G steam iron 265,000
CASHBAG Di Café 카푸치노머신 CR-CF3100 coffee maker 250,000
CASHBAG 웅진 블랙홀 무선진공청소기 DTV-1800 vacuum cleaner 160,000
CASHBAG 고운소리 FORUS DI-6128A audio specker 140,000
CASHBAG 질베르 스트레이트기 JBFI289K Jilbere de Paris hair straight 130,000
CASHBAG [2GB] Hanadata SD-2GB 110,000
CASHBAG mobile cable and charger 95,000
CASHBAG [착불]SONY MDR-E10LP SONY headphone 90,100
DHL Electric Dictionary 85,000
DHL DVD Player 80,000
DHL LG Air cleaner 70,000
DHL Microwave 69,000
DHL Drying Machine 62,000
DHL cosmetic refrigerator 55,000
Caltex 맥스텍MNT-3600/3.5인치/DMB일체형 GPS 50,000
Caltex 올림푸스 620만화소 디지털 카메라 Olympus digital camera FE-170 40,000
Caltex (신상품) 게이트맨 리오(RIO)-설치비제외 digital door lock system 40,000
Caltex 웅진케어스 인공지능 초미세 복합식가습기 40,000
Caltex 초슬림 터치 패드 MP3 (1G) M-OODY M-20 40,000
Caltex 엔유씨 마이젠 컨벡션 전기오븐 oven 36,000
Caltex 다이아몬드 필링 삭피기 / 피부관리 32,500
Caltex 김수자 발마사지기 foot massager 30,000
Caltex 2006년 동양매직 전자레인지 microwave 30,000

23. Confidential and Proprietary
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Korea
Recommendations : Lifestyle/Entertainment
LG Card ALTON new foltech 2.0 bicycle 125,000
Caltex folding bicycle 112,500
LG Card 삼천리 접이식 자전거 folding bicycle 100,000
LG Card 영국BODY사 트위스트 스텝퍼BS1370 stepper 68,000
Caltex home gym 62,100
LG Card climbing bag and stick 40,000
Caltex 홈쇼핑히트상품] 엑스 칸(X-KHAN) 28,000
LG Card Football 25,000
Caltex 스윙파워 2.5 배드민턴 세트 badminton racket 15,000
Caltex 337 Diet DVD 13,500
Caltex 337 Diet vidso 11,000
Cashbag 3P Badminton set 9,900
LG Card Football 9,000
Caltex Wings 1000 football 8,000
Caltex mountain-climbing sticks 4 sticks 7,000

24. Confidential and Proprietary
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Korea
Recommendations : Home/Kids
Cash Bag HQ9070 PHILIPS razor 88,000
Cash Bag HQ7120 PHILIPS razor 80,500
Cash Bag HS-3220LC floor sweeper 75,000
Cash Bag Aladdin 232 장식장 [232 CDs/120 DVDs/60 VHSs] Holder 70,000
DHL Rice cooker 40,000
LG Card glass bottle holder 74,000
LG Card chair 60,000
LG Card Freshield Pro진공포장기 60,000
LG Card ELO cooking pot set 55,000
LG Card clothes hanger 49,000
LG Card PHILIPS iron 48,000
LG Card blanket set 40,000
LG Card ELO cooking pot set 40,000
LG Card wood dinner table 40,000
LG Card blanket set 40,000
LG Card mixer set 40,000
Cash Bag HD2566 PHILIPS toaster 24,000
Cash Bag AV-1205 car vaccum cleaner 23,000
DHL Digital scale 20,000
LG Card kitchen cooking set 39,000
LG Card Hot pot 39,000
LG Card giller 37,000
LG Card electric tooth brush 37,000
LG Card hanging clock 36,000
LG Card juice mixer 35,000
LG Card 420PCS magnetic glamous 30,000

25. Confidential and Proprietary
page 25
Korea
Recommendations : Home/Kids
Cash Bag AV-1205 car vaccum cleaner 13,500
Cash Bag [무료배송][발렌타인데이]큐티 빅사이즈 곰인형 바구니(초코릿포함) bear 13,500
Cash Bag 헬로키티(HELO KITTY) 어린이용책상 table 12,500
Cash Bag 엘프 (ELF)피자팬 REP-1354G pizza maker 12,500
Cash Bag [착불]귀차니스트를 위한 원목 독서대 겸용 탁자테이블 2 use table 12,000
Cash Bag [무료배송]최고급 알루미늄 카매트 5P 풀세트 aluminum car mat 5P 11,000
Cash Bag 스위티 튀김기 OQ-4000G rice cooker 10,000
Cash Bag [포특]생활 필수품 독일 ELO 칼가위 3종셋트 cutting set 10,000
Cash Bag [무료배송]차량용 선바이져 선글라스 CD holder 10,000
Caltex juice mixer 10,000
Caltex cooking pan 10,000
Caltex wood dinner table 10,000
Caltex 찜돌이 steam pot 10,000
Caltex 무선전기 주전자 electric kettle 10,000
Caltex frying machine 10,000
Caltex Blanket 10,000
Caltex Nova juice maker 노바 다용도 핸드블랜더 10,000
Caltex toy 옥스포드 블럭 - 특수구조대 15000 10,000
Caltex Or scull clause germ hygienic cutting board 9,900
Caltex Toaster UM-700 9,800
Caltex UNIX 2006 hair dryer 9,500
Caltex cushion combination blanket 9,500
Caltex House dust vibrating turbo 9,000
Caltex Europe elder brother high-class separate collection box 3P 9,000
Caltex home cleaning set 8,800
Caltex Skipping rope 8,750

26. Confidential and Proprietary
page 26
Korea
Recommendations : Health and Beauty
LG Card MX-2 skin cares 80,000
LG Card Dove prodect set 44,000
LG Card skin care set 36,000
LG Card hair culer 33,000
LG Card washing set 25,000
Caltex NIVEA skin care set 25,000
LG Card 라끄베르 허브타임 바디세트 body set 23,000
LG Card local Q10 mask 20,000
LG Card shower set 20,000
LG Card Dove body washing set 20,000
LG Card FILA body washing set휠라 스포트 2종세트 20,000
Caltex BVLGARI skin care 20,000
LG Card NIVEA men face set 18,000
LG Card VONIN sunscreen 18,000
Caltex Johnnson's baby lotion 17,500
Caltex Neutrogena hand cream 16,250
Cash Bag [포특]Starmate IndustriaI Ltd Manicure set 15,000
LG Card NIVEA hand lotion 12,000
LG Card NIVEA Q10 body cream 11,500
LG Card NIVEA body wash 11,000
LG Card travel body set 10,000
LG Card LG body wash 9,900
LG Card LG facial cleasing 9,900
LG Card NIVEA lip balm 9,900
LG Card NIVEA body lotion set 9,500
LG Card Dove body wash 8,000
LG Card Dove body set 8,000
LG Card Dove Aqua set 8,000
Caltex LG shampoo baby sets 8,000
LG Card NIVEA Men mask 7,000
LG Card women skin care 7,000

27. Confidential and Proprietary
page 27
Korea
Recommendations : Shopping
Caltex 레드라벨 EVA20 25,000
Caltex 아날도 바시니 보스톤 가방 20인치 25,000
Caltex Shavingset 16,250
Caltex XTREME33중날 면도기(2개=1SET) shaver 15,000
Caltex Localsocks 2sets 4,500
LGCard 오마샤리프 천연 양가죽 숄더백(블랙/브라운 중 택일) ladyhangbag49,800
LGCard ValentinoMorris walletset 30,000
LGCard [카운테스마라]카트 보스톤백 CM-BOSTONbaggage30,000
LGCard BLVpurfume30ml불가리 블루맨 남성향수 30ml 27,000
DHL ShoppingVoucher KRW 50,000 10,000
DHL ShoppingVoucher KRW 25,000 5,000
Cashbag MICHIKO LONDONsuitcase 36,800
Cashbag 230mlGUCCIENVYME purfume 26,500
Cashbag HITAromaIncenseGiftBox 15,000

28. Confidential and Proprietary
page 28
Korea
Recommendations : Business Savings
Caltex BusinessSaving telephone 19,000
LGCard BusinessSaving Fixlinephonewithcordless phone 80,000
LGCard BusinessSaving 차량용청소기 AV1205carvaccume cleaner 25,000
LGCard BusinessSaving telephone 18,000
DHL BusinessSaving DHLShippingVoucherKRW 300,000 40,000
DHL BusinessSaving DHLShippingVoucherKRW 200,000 30,000
DHL BusinessSaving DHLShippingVoucherKRW 150,000 20,000
DHL BusinessSaving DHLShippingVoucherKRW 70,000 10,000
DHL BusinessSaving DHLShippingVoucherKRW 35,000 5,000

29. Confidential and Proprietary
page 29
Korea
Market Summary : HK SG PRC KR JP TW
Loyalty
Programs
SG HK TW KR JP CN
Status Tiers -
FRC
Mid and
Low Tier
More Low Tier Defined
Mid Tier
Low involvement
of Elite Tier
Defined Elite
Tier
Nascent Elite
Tier
Opportunity -
FRC
To
develop
3 Tiers
To develop 3
Tiers
Differentiate
Elite and grow
basic tier
Segment the
Program across
tiers
To engage
Elite tier and
Grow midtier
Differentiate
ELITE
Profile of Market Matured Matured Developed Developed Matured Infant
Industries
Benchmarked for
Loyalty
programs
Banking,
Airlines
Banking,
Airlines,Teleco
m
Banking,
Retail,Competitio
n
Credit Card,Fuel
Card,
Competition,
Retail Card
Airlines, Fuel,
Competition
Banking,
Hospitality,
Travel
Earn Rate Same as
others
1 HKD= 1 Point 20NTW=1 Point
(FRC: higher)
1000 KRW=1-2pt 100 Yen=1pt 1 RMB=1
Point
Rebate Rate Same as
others
Higher than
others
Higher than
others
1 % ( FRC is
higher)
1% * FRC
is higher
Higher than
others
Categories used Home
and Kids
Shopping
IT/ Electronics
Shopping
IT/ Electronics
Home and Kids
Business Savings
Home and Kids
Health and
Beauty
IT/ Electronics
Home and Kids
Shopping
IT/ Electronics
Home and
Kids
Partnerships Yes Yes Yes No Yes Yes
Potential Partner HP Airlines,Retail No Hotel,Retail C Trip

30. Confidential and Proprietary
page 30
Korea
Appendix 1 : DHL Korea Rewards Listing
Category Item Reward Points Count TIER
IT / Electronics Electric Dictionary 400,000 1 Top
Business Saving DHL Shipping Voucher KRW 300,000 40,000 2 Top
IT / Electronics DVD Player 40,000 3 Top
Home & Kids Rice cooker 40,000 4 Top
Business Saving DHL Shipping Voucher KRW 200,000 30,000 5 Medium
IT / Electronics LG Air cleaner 30,000 6 Medium
IT / Electronics Microwave 30,000 7 Medium
IT / Electronics Drying Machine 30,000 8 Medium
Business Saving DHL Shipping Voucher KRW 150,000 20,000 9 Medium
Home & Kids Digital scale 20,000 10 Medium
IT / Electronics cosmetic refrigerator 20,000 11 Medium
Home & Kids lock & lock product 20,000 12 Medium
Shopping Shopping Voucher KRW 50,000 10,000 13 Low
Business Saving DHL Shipping Voucher KRW 70,000 10,000 14 Low
Home & Kids Heater 10,000 15 Low
Home & Kids wireless kettle 10,000 16 Low
Shopping Shopping Voucher KRW 25,000 5,000 17 Low
Business Saving DHL Shipping Voucher KRW 35,000 5,000 18 Low
Home & Kids Hair Dryer 5,000 19 Low
Home & Kids Toaster 5,000 20 Low

31. Confidential and Proprietary
page 31
Korea
Appendix 2 : Rebate Rate Calculation -DHL
1 South Korean won = 0.00106682598 USD
10000 points = 100 shipments
1 Shipment = 84 USD 100 shipments worth 7873800
Rebate Rate - 50000/7873800 @ 0.64%
Reward = 50000 KRW

32. Confidential and Proprietary
page 32
Korea
Appendix 3 : Methodology
STEP 1 : SME SURVEY
STEP 2 : MARKET RESEARCH
STEP 3 : SHORLIST PROGRAMS TO TARGET
STEP 4 : GOT RECONFIRMATION FROM SME CONTACTS
STEP 5 : DEEP DIVE INTO THE REWARDS CATEGORIES, ITEMS
STEP 6 : USED ABC ANALYSIS TO DO TIER WISE CLASSIFICATION
STEP 7 : RECOMMENDATIONS BASED ON BEST IN CLASS PROGRAMS

33. Confidential and Proprietary
page 33
Korea
Appendix 4 : Weblinks of the Programs
URL:
LG Card http://lgmyshop.lgcard.com/pointshop.jsp
OKCashBag http://cashbagmall.okcashbag.com/mall/cEventHTML.jsp?dispNo=001030005
GS Caltex http://www.gscaltex.co.kr/Product/Card/gs_Bonus.asp
DHL http://www.dhl.co.kr/publish/kr/ko.high.html

34. THANK YOU