Hyundai plans to become "modern premium" brand
12-06-10, 11:47 AM
#1
Hyundai plans to become "modern premium" brand
Hyundai plans new brand strategy
'Modern premium' will target an upmarket image
Hans Greimel
Automotive News -- December 6, 2010 - 12:01 am ET
Cho Won Hong: After a decade of building an image for quality, Hyundai plans to move its brand message upmarket.
SEOUL -- Hyundai Motor Co. plans to unveil a global branding strategy under the concept "modern premium" in a bid to nudge its image upmarket and command higher prices more in line with the carmaker's recent strides in quality and technology.
The concept, already used internally, is expected to be announced at the Detroit auto show in January and rolled out next year. A new slogan will also be revealed to replace Hyundai's current message of "Drive Your Way," spokeswoman Song Meeyoung said.
The overhaul will focus on improved customer service, more innovative marketing and a better look and feel for the vehicles themselves.
"In the past 10 years, we have been very successful in building an image for quality," Executive Vice President Cho Won Hong, Hyundai's new global marketing chief, said in an interview last month.. "From now on, our direction will be defined as new premium or modern premium."
Hyundai, whose name means "modern" in Korean, was long known as an economy brand that undercut rivals on sticker prices. Now the company wants to foster an image that matches its burgeoning reputation for top-notch quality. Cho targets an "attainable" premium niche above Japanese competitors that packs technology, style and service into reliable rides.
The South Korean automaker ranked seventh among mass-market brands in the this year's U.S. Initial Quality Study by J.D. Power and Associates, topping such brands as Toyota, Infiniti, Audi and Lincoln. Hyundai's Accent compact and Elantra small car were named among the top three cars in their segments.
Better cars mean better business. Through November, Hyundai's U.S. sales surged 23 percent to 493,426 units in a market up 11 percent.
"We have been doing quite well in building good functional quality," Cho said. "But we still have some room to improve our emotional quality, and that is related to our brand strategy. That's why we set modern premium as the brand direction for the next five to 10 years."
Starting next year, Hyundai will reinforce the new message through:
-- A "substantial increase" in marketing funding
-- A new dealer and salesperson education program
-- An improved global dealer showroom identity.
Modern premium may also mean higher sticker prices.
"Obviously, there will be some price increases," Cho said. "If we deliver premium value to the customers and they recognize the value, then that's the time we can increase our prices."
Cho returned to Hyundai in August after a decade at the management consultancy Monitor Group in Boston. His early years at Hyundai were spent in overseas and strategic planning. As an outside consultant, he helped develop Hyundai's current concept of "refined and confident."
Cutting-edge creativity
"The idea of modern premium is something we've been working with for some time," said John Krafcik, CEO of Hyundai Motor America. But the term itself won't be telegraphed externally, he said. It is the philosophical underpinning for the new image.
Cho said details of his modern premium strategy will be announced next year. Spokeswoman Song confirmed that the new slogan is expected to be announced in Detroit, but she declined to say what the catchphrase will be.
Cho said it will pursue more cutting-edge, experimental marketing in the vein of the recent "Hyundai Uncensored" advertising campaign and the earlier "Assurance" program," in which Hyundai offered to buy back vehicles from customers who lost their jobs.
Hyundai also wants more innovative showrooms. It is already upgrading its U.S. retail body by culling weaker dealers and luring stronger dealers from more upmarket brands.
A focus on creativity will be key to unifying the shopping experience across dealerships, Cho said. For example, Hyundai is developing a racing video game to be deployed in showrooms. The idea is to have something different, eye-catching and engaging for customers.
At the same time, Hyundai is launching two new global marketing teams.
The first, formed in April, focuses on youth marketing. It looks at youngsters, from first grade through college, who aren't even customers yet. The goal is to pinpoint future trends.
The other unit, to start work next year, will drum up innovative marketing ideas. It will rely on shop-alongs, customer shadowing and ethnographic research to find out what customers want.
Signs in the Sonata
To Cho, the redesigned Sonata epitomizes modern premium -- starting with a curvy sculpted design that infuses a sense of elan into a brand long belittled as bland. Yet the Sonata also offers top-shelf technology, such as a direct-injection engine and a six-speed automatic transmission.
A hybrid version was specifically introduced to polish the Sonata's high-tech credentials.
But there is no mistaking the impact of improved look and feel.
Since the revamped Sonata was launched this year, its monthly sales have soared -- more than doubling the older generation's, notes Executive Vice President Oh Suk-Geun, the brand's global design chief and the force behind the Sonata's "fluidic sculpture" design language.
"Our product is much better than our reputation," Oh said. "People are beginning to realize the real value."
'Modern premium' will target an upmarket image
Hans Greimel
Automotive News -- December 6, 2010 - 12:01 am ET
Cho Won Hong: After a decade of building an image for quality, Hyundai plans to move its brand message upmarket.
SEOUL -- Hyundai Motor Co. plans to unveil a global branding strategy under the concept "modern premium" in a bid to nudge its image upmarket and command higher prices more in line with the carmaker's recent strides in quality and technology.
The concept, already used internally, is expected to be announced at the Detroit auto show in January and rolled out next year. A new slogan will also be revealed to replace Hyundai's current message of "Drive Your Way," spokeswoman Song Meeyoung said.
The overhaul will focus on improved customer service, more innovative marketing and a better look and feel for the vehicles themselves.
"In the past 10 years, we have been very successful in building an image for quality," Executive Vice President Cho Won Hong, Hyundai's new global marketing chief, said in an interview last month.. "From now on, our direction will be defined as new premium or modern premium."
Hyundai, whose name means "modern" in Korean, was long known as an economy brand that undercut rivals on sticker prices. Now the company wants to foster an image that matches its burgeoning reputation for top-notch quality. Cho targets an "attainable" premium niche above Japanese competitors that packs technology, style and service into reliable rides.
The South Korean automaker ranked seventh among mass-market brands in the this year's U.S. Initial Quality Study by J.D. Power and Associates, topping such brands as Toyota, Infiniti, Audi and Lincoln. Hyundai's Accent compact and Elantra small car were named among the top three cars in their segments.
Better cars mean better business. Through November, Hyundai's U.S. sales surged 23 percent to 493,426 units in a market up 11 percent.
"We have been doing quite well in building good functional quality," Cho said. "But we still have some room to improve our emotional quality, and that is related to our brand strategy. That's why we set modern premium as the brand direction for the next five to 10 years."
Starting next year, Hyundai will reinforce the new message through:
-- A "substantial increase" in marketing funding
-- A new dealer and salesperson education program
-- An improved global dealer showroom identity.
Modern premium may also mean higher sticker prices.
"Obviously, there will be some price increases," Cho said. "If we deliver premium value to the customers and they recognize the value, then that's the time we can increase our prices."
Cho returned to Hyundai in August after a decade at the management consultancy Monitor Group in Boston. His early years at Hyundai were spent in overseas and strategic planning. As an outside consultant, he helped develop Hyundai's current concept of "refined and confident."
Cutting-edge creativity
"The idea of modern premium is something we've been working with for some time," said John Krafcik, CEO of Hyundai Motor America. But the term itself won't be telegraphed externally, he said. It is the philosophical underpinning for the new image.
Cho said details of his modern premium strategy will be announced next year. Spokeswoman Song confirmed that the new slogan is expected to be announced in Detroit, but she declined to say what the catchphrase will be.
Cho said it will pursue more cutting-edge, experimental marketing in the vein of the recent "Hyundai Uncensored" advertising campaign and the earlier "Assurance" program," in which Hyundai offered to buy back vehicles from customers who lost their jobs.
Hyundai also wants more innovative showrooms. It is already upgrading its U.S. retail body by culling weaker dealers and luring stronger dealers from more upmarket brands.
A focus on creativity will be key to unifying the shopping experience across dealerships, Cho said. For example, Hyundai is developing a racing video game to be deployed in showrooms. The idea is to have something different, eye-catching and engaging for customers.
At the same time, Hyundai is launching two new global marketing teams.
The first, formed in April, focuses on youth marketing. It looks at youngsters, from first grade through college, who aren't even customers yet. The goal is to pinpoint future trends.
The other unit, to start work next year, will drum up innovative marketing ideas. It will rely on shop-alongs, customer shadowing and ethnographic research to find out what customers want.
Signs in the Sonata
To Cho, the redesigned Sonata epitomizes modern premium -- starting with a curvy sculpted design that infuses a sense of elan into a brand long belittled as bland. Yet the Sonata also offers top-shelf technology, such as a direct-injection engine and a six-speed automatic transmission.
A hybrid version was specifically introduced to polish the Sonata's high-tech credentials.
But there is no mistaking the impact of improved look and feel.
Since the revamped Sonata was launched this year, its monthly sales have soared -- more than doubling the older generation's, notes Executive Vice President Oh Suk-Geun, the brand's global design chief and the force behind the Sonata's "fluidic sculpture" design language.
"Our product is much better than our reputation," Oh said. "People are beginning to realize the real value."
12-06-10, 02:14 PM
#6
Lexus Fanatic
Modern premium may also mean higher sticker prices.
"Obviously, there will be some price increases," Cho said. "If we deliver premium value to the customers and they recognize the value, then that's the time we can increase our prices."
"Obviously, there will be some price increases," Cho said. "If we deliver premium value to the customers and they recognize the value, then that's the time we can increase our prices."
We have seen, in recent years, what happens when manufacturers move away from doing what they do best.....Saturn is arguably the best example. They moved away from the excellent, plastic-bodied S-series cars that satisfied customers right and left...and paid the price.
12-06-10, 03:05 PM
#7
^However didn't Lexus originate as a competitor to BMW and MB by providing "Luxury" automobiles at a much cheaper price and better quality? I would dare say their current prices aren't that much different from their competitors as was in the past. It doesn't seem all out impossible for Hyundai to move into that segment as well. If they do get to Tier-1, their cheapest car, may become an ES competitor.
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12-06-10, 03:22 PM
#8
Lexus Fanatic
I acknowledge what they've accomplished in the low-mid range, but they better have the product(s) to attempt reaching for premium. Not there yet. Although I didn't read any delusions of tier 1 status.
"The overhaul will focus on improved customer service, more innovative marketing and a better look and feel for the vehicles themselves.", sure sounds like a bunch of Acura or ex-Saturn execs talking to themselves.
"The overhaul will focus on improved customer service, more innovative marketing and a better look and feel for the vehicles themselves.", sure sounds like a bunch of Acura or ex-Saturn execs talking to themselves.
12-06-10, 03:42 PM
#10
Lexus Fanatic
iTrader: (20)
i've said this would happen for years, but heard a loud 'no chance, would never buy one, they suck, dealers are horriblem, kthxbye' over and over. 
hyundai will move their brand up and still have kia for the lower end. right now they're a bit confused with some kia models better than some hyundai models but they'll sort it all out.
and toyota, honda, gm, ford, etc., will all compete vigorously, and provided our economy doesn't completely collapse in the next 2 years (it could, especially if europe collapses as is 50/50 i'd say), we should have a very vibrant car industry.
hyundai will move their brand up and still have kia for the lower end. right now they're a bit confused with some kia models better than some hyundai models but they'll sort it all out.
and toyota, honda, gm, ford, etc., will all compete vigorously, and provided our economy doesn't completely collapse in the next 2 years (it could, especially if europe collapses as is 50/50 i'd say), we should have a very vibrant car industry.
12-06-10, 05:33 PM
#11
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If I was going to be spending $40-50,000+ on an upper-tier vehicle, you can bet it is going to continue to be MB, BMW, Audi or Lexus.
12-06-10, 06:08 PM
#12
Trends have a funny way of repeating. I'm not saying Hyundai will hit the top Tier, but I'm not going to rule it out either.
12-06-10, 08:05 PM
#14
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That's pretty much the same mentality many had during the early 90's when Lexus was introduced. Many folks were most likely like "Oh it's just a re-badged Toyota, if I want luxury, I'll stick to Mercedes, BMW, or Jaguar.
Trends have a funny way of repeating. I'm not saying Hyundai will hit the top Tier, but I'm not going to rule it out either.
Trends have a funny way of repeating. I'm not saying Hyundai will hit the top Tier, but I'm not going to rule it out either.
I personally think Hyundai is being to ambitious and trying to change their image too quickly. We'll see where this goes
12-06-10, 08:10 PM
#15
Lexus Champion
I, for one, think Hyundai is very capable of building a luxury car and can compete with the likes of Lexus, Infiniti, BMW, MB, Audi. They will HAVE TO come up with a new brand if they want to reach luxury customers.
There are way too many people who have bad experiences with Hyundai and still would never drive one. On top of that, some people will drive a badge. That's what they are paying for.
Kudos to Hyundai for setting it's sights higher. I hope they can show Acura how it's done.
There are way too many people who have bad experiences with Hyundai and still would never drive one. On top of that, some people will drive a badge. That's what they are paying for.
Kudos to Hyundai for setting it's sights higher. I hope they can show Acura how it's done.