February 23, 2009

Will Hyundai win in trying times?

It is a sign of the times that the two most prominent advertisers on Oscar night, one of the most glamorous nights of the year, were JC Penney and Hyundai. Both brands sought to align with the panache of the event by emphasizing style to a heavily female audience. JC Penney aired six spots promoting new lines of apparel: Allen B., from Allen B. Schwartz; Fabulosity, from Kimora Lee Simmons; and Nicole, from Nicole Miller. Each featured a new tagline “We’re stepping up our style. Style, quality, and price do matter.” New popular designers + good media + value should create a compelling approach to drive consideration among young women. However as an audience of one, the clothes and spots were what I would expect to find at JC Penney since the 1980’s: prints, polyester, and unfortunate denim vests. Girls dancing together for no apparent reason and a young man handing a young woman a flower. Were these outfits truly the best each line had to offer? The one exception was the spot featuring the I heart Ronson line, which felt current, youthful, and did not remind me of every other department store ad. To truly create consideration among those who have not shopped the store in the past, I’d like to see more work like Ronson and less Fabulosity. See the spots here:

Hyundai ran eight spots including a sexy ad featuring the new 2010 Genesis coupe on a track accompanied by music by famed cellist Yo-Yo Ma.

“The medium is part of the message,” said Chris Perry, director of advertising for Hyundai Motor America. “Showing that we belong with the top-tier brands is one of the reasons why we have been advertising in the Super Bowl, and now we are in the Academy Awards.”

The timing and ubiquity of their marketing push is more compelling to me than the shots of the Genesis on the track. In a time when most automakers are scaling back, Hyundai has the resources to invest in advertising (surely getting more bang for their media buck) and are savvy enough to address the uncertainty preventing most consumers from buying a new car this year.

December marked a painful low for the auto industry: the lowest annualized sales in 27 years. Carmakers acknowledged that the job outlook was a key driver: people worried about their jobs simply don’t buy new cars. And in a bit of “chicken and egg,” consumers don’t want to buy from a manufacturer that may not be around next year. For those of you who believe genius emerges from adversity, South Korean automaker Hyundai launched a timely promotion that doesn’t just drive short term sales, but may reposition the brand in the US marketplace.

In the past Hyundai was known as a value brand that broke into the US market with quality and a generous 10-year warranty. A car purchased with head rather than heart. However sentiment may be warming between the automaker and consumers. In early January Hyundai launched its Assurance Program offering customers the ability to return a car without penalty in the event of losing a job. On February 19th, Hyundai launched Assurance Plus, in which the company will cover up to three months of car payments if the customer loses a job and chooses to keep the car while job searching. Check out the Hyundai Assurance Program here.

Will it work? Critics argue the offer will attract those who are most likely to need to return the car, creating an accounting headache worthy of a CFO’s worst nightmare. However Hyundai has just joined a very select group of brands that consumers perceive as truly having their backs, a particular distinction in the category. Hyundai sales rose 14% in January, and they are positioned to overtake Nissan and perhaps even give Honda something to think about.

In sum, kudos to Hyundai for balancing a little bit of glamour on Oscar night with an offer that truly creates consideration, and please promote the creative responsible for the Ronson spot for JC Penney. They’re going to need more non-traditional clothing + creative to get me in the door.

U.S. Market Share by Manufacturer
May 2007 May 2008
GM 23.8% 19.3%
Toyota 17.2 18.4
Ford 16.5 15.4
Chrysler 12.8 10.7
Honda 9.3 12.0
Nissan 6.0 7.2
Hyundai 4.6 5.6
BMW (includes Mini) 2.0 2.3
Volkswagen (includes Audi) 2.0 2.2
Mercedes (includes Smart) 1.4 1.8


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