Write a full case analysis: HyundaiCard's Marketing Strategy
Hyundaicard's marketing strategy
General overview of Hyundaicard
Current marketing strategy assessment
Assessment of the strategic alternatives
Qualitative ranking of alternatives
Market share of credit card companies
Preference of payment
Hyundaicard financial statements
This essay is a case study for Hyundaicard marketing strategy. Hyundaicard is a company situated in Korea's credit card industry. It forms the basis of the case study because of its' unique experience with marketing, since it was a late comer in the very competitive market it had to employ various marketing strategies in order to shift from being a market follower to being a market leader.
This study will first of all identify some key issues or aspects of the company after which it will conduct an evaluation and assessment of the company's internal and external situations. Thirdly the paper will look at some of the possible alternative strategies of which the company can employ and at the end one alternative will be chosen. Lastly the paper will give some few recommendations before it ends with an action plan that includes a projected financial performance after the recommendations have been implemented by the company.
Hyundaicard Company was established in 1999 after the Hyundai KIA Automotive group acquired Diners card, which was the first company to release into the market a general purpose credit card. Thou initially it didn't trade in the name of 'Hyundaicard', the current card name was only implemented in 2001 when the company resorted to re-energies itself and take a leading position in the market place.
The Korean credit card industry first developed in 1969 when Shinsaegae; a Korean department store which introduced the first credit card into the market that was to be used by its' customers, this development was later to be followed in 1978 when another credit card was launched by the Korean exchange bank for its' customers who travelled frequently. By the 1980's many players had already entered into the Korean credit card industry and it is reported that by the year 2000 the industry had recorded a tremendous growth with over a hundred million credit card issued countrywide.
The Hyundaicard which is the case study of this paper is perceived by marketing consultants to focus more on customer needs, this was after it shifted to a new online marketing campaign strategy and also new credit card products. In a bid to address customers' needs the Hyundaicard launched a strategy that involved dividing it clients' base into segments with regards to their respective lifestyle activities, in addition it has also diversified its' product line by introducing new products such as the purple and black credit card.
Goals and objective
Hyundaicard company's goal was to make its' retail businesses, financial services and internet fields, leaders in the market in terms of innovation and quality of their products and services. And by forming a strategic alliance with another company called the GE consumer finance (GECF), Hyundaicard Company aimed at increasing its revenue, market share, sales level, reputation and image and product development, since the new strategic partner was expected to provide extra funds, risk management system and financial product planning for Hyundaicard to initiate marketing campaigns for alphabet cards that were designed for their new unique and customized services.
The company had a long-term objective of transforming itself from what many used to know as an automobile manufacture into a global leader in the provision of additional services that are related to the automobile industry.
At its inception in 1999, the creative business model of Hyundaicard which was based on innovative products, integration of offline and online customers and the general consumer needs, forecasted that their clients would be given a discount of up to two million won as a promotion for using the Hyundaicard when purchasing Hyundai automobiles. This discount awarded could be paid back using points accrued from the use of the credit card in a five-year period. Thou there was commendable success of the creative business model in the Korean market, the performance of the company had not shown the much anticipated improvement, seven years down the line.
This prompted the company to evaluate its' marketing strategies, after which it was evident that the company experienced difficulties in relating its' creative business model to the loyal clients of other leading companies in the Korean credit card industry. This resulted to a minimal client base i.e. The number of Hyundaicard holders was very minimal representing a very small share of the market, as a result the company was regarded as a market follower not a market leader.
At this point the company's management was faced with the problem of how to successfully re-strategies the company to become a market leader in the Korean credit card industry up from being a market follower. The other challenge was whether the current Hyundaicard's marketing strategy could give it a competitive advantage in the market place and what future marketing strategy could best suit Hyundaicard.
Evaluation and assessment
Customer value proposition
Through the creative business model the Hyundaicard offered customers who used the card when purchasing automobiles manufactured by the Hyundai automobile company, a pre-discount of up to two million won, of which they would repay it back in span of five years using the points accrued while using the card. The other value addition to Hyundaicard customers was the diversification of financial services it offered to them.
Sustainable competitive advantage
Through the diversification and expansion of the company's product into the premium market by launching the purple card and the black card, it gained a competitive edge over other companies in the Korean credit card industry for its' distinguished services. These new products targeted only 0.05% of credit card holders in the market of whom the company considered to be extremely important customers or rather VIP customers. Important to note is that the company had to form strategic alliances with other financial partners in order to penetrate deeper into this new market niche.
Another sustainable competitive advantage of the company was through the electronic customer relationship management (eCRM) which was meant to address customer expectation and also satisfy the increasing consumer needs. The intentions of the eCRM was to further increase the quality of e-mail solutions and offer to Hyundaicard customers who use its' websites, a more customized service. The electronic customer relationship management was consistent with the integration of customer information that was to be used to create new credit card products that are suitable for customer needs.
The finance shop also accorded the Hyundaicard Company a distinction from the rest of other credit card companies as it offered the company's esteemed customers a place where they can get financial consultation services, enjoy all-in-one services and also enjoy the refreshing atmosphere designed by leading world designers. The new culture marketing strategy that also used concert series to promote the company products also enabled Hyundaicard it to have a sustainable competitive advantage.
According to Johansson (2002, 98-108) strengths are the most important aspect in which variables or aspects of Hyundaicard in this case, that are considered of very great importance and usage to make the company achieve the competitive advantage over the others in the Korean credit card industry.
Using the tools and techniques presented by Yip (2004, 17-24) in his studies; the strengths of Hyundaicard include Hyundaicard M, which is the leading credit card with most subscribers in Korea, Hyundaicard also took the top spot in terms of national customer satisfaction index in years 2005, 2006 and 2007 and again it came top on the credit card category of net promoter score further more it was recognized as the most admired company in Korea for two consecutive years (2007 and 2008). The other strength of Hyundaicard is based on its website whose traffic nearly caught up with the other top three credit card company's websites.
According to Ehrbar, (1998, 5-7) weaknesses are aspects of the Hyundaicard that may hinder in its realization of the set goals and objectives. In the line of the research, they can be the factors that may hinder the Hyundaicard in trying to achieve the competitive advantage over other industry players.
Hyundaicard recorded a major weakness when reports noted that it had a very small customer base and that its' website traffic was low despite of the aggressive marketing campaign that was conducted in 2003 and 2004. Neuner (2000, 153-174) pointed out that Hyundaicard showed signs of weakness in terms of weak marketing communication, low brand awareness, weak card services and delays in venturing into the international market.
Market trends and market potential
Compared to other industry players, Hyundaicard is considered to be a latecomer in the industry and hence the reason for its low client base. Due to this fact the Hyundaicard had to adopt the differentiated market strategy in order to increase its customer…