Hyundai: the victory of a brand

By , agencyfaqs! | In | December 09, 2000
As the Korean company celebrates the rolling out of its 150,000th car, the brand name has finally arrived

Sabil Francis
NEW DELHI, December 9

In April 1998, Hyundai had one target: to convince people to correctly pronounce its name. Last week, as the 150,000th car rolled off the Hyundai's plant in south India, it marked the victory of a brand that was unknown until two years ago. And one that triumphed over major odds.

In building up the brand, both the marketing department of Hyundai, and the advertising agency Saatchi & Saatchi had to cross several hurdles. When Hyundai set foot in the small car market Maruti ruled the roost with a 70 per cent share and the Tatas were getting set to launch the Indica. Daewoo's Matiz was being raved over in Europe and was already on Indian roads. Korean products had a very poor image, the economy was in recession, and it was a very difficult market to make any headway in.

To top all this, the Hyundai Santro was an odd-looking 998-cc small car and a laggard in all respects - as a corporate brand, a car brand, and a service brand. Yet, two years down the road, it's Hyundai that has made it.

Hyundai went in for an aggressive marketing and advertising strategy that made the Korean company carve out a 20 per cent plus share of the small car market. The one-point agenda: win the heart of the Indian consumer.

Of course, some things worked in favour of the company. Though Daewoo had a well-established distribution network for the Matiz, Daewoo and its dealers' poor image had made consumers wary. On the flip side, this also made the Indian consumer even more doubtful about yet another Korean car company.

The company decided to take the challenge head on. First, it decided to take up the challenge of being unknown. "What Hyundai did was to involve the consumer from day one. They made Shah Rukh Khan the average Indian consumer, and Mr Kim, the company. It was a campaign that used humour to remove the ignorance about Hyundai. It worked, as it did not have any of the in-you-face style of much of corporate advertising. At first, they had only one goal: win the consumer over," says a Delhi-based media analyst.

The teaser campaign, which began in April 1998, aimed to build the corporate image for Hyundai. Three TV spots and three print ads ran till June to show the company chasing Khan to advertise for Hyundai's car, Santro, while introducing the brand. And in a first for car advertising in India, the series was the first to use TV in a major way to sell a car. The break-up between TV and print was 65:35. The second phase, from August to September 1998, had Khan posing questions that consumers could ask. And then the tag line, "I'm convinced." What all this did was sell the features of the car while building the brand in a subtle way.

Hyundai also followed up the ads with some savvy marketing. In the small car segment, price is an important criteria. One factor that led to the success of the brand was the launch price of Rs 2.99 lakh, which effectively undercut the market for the competition. The company was looking at those who had a small budget and were looking for the best value for money. The strategy made perfect marketing sense as even today, about 50 per cent of the total cars sold in the country are bought through consumer finance.

"We started with a very focussed vendor development, and we had full control over both the inventory and the pricing. And that played a major role in our success," says Sanjeev Shukla, deputy manager, marketing, Hyundai. One key advantage that the Santro had over the Matiz was in pricing. And this was because Santro had localisation of nearly 70 per cent. Daewoo, which had to bring most of the Matiz components from Korea made losses on the cars that it could sell. And since the cost of importing components was extremely high, the company could not lower the prices.

Santro also put across its superiority through a series of "car clinics" that were set up all over the country to make consumers aware about what to look forward to in a car. And quietly emphasised that a large number of its dealers are either MBAs or engineers, knowing full well that word-of mouth was an extremely important factor in car sales. The strategy succeeded. Today, almost 40 per cent of Santro's sales come through referrals.

For a company that started as an underdog, Mr Kim has done his work well.

© 2000 agencyfaqs!