HyundaiCards Marketing Strategy

Hyundai Motor Group prepared a long term strategy to enter into Credit Card industry . They entered into the competitive Korean credit card industry in the year 1999 as Hyundai M Card . HyundaiCard was the top among its competitors in Credit Card industry. HyundaiCard plans to enter into various international markets.

1960-1970 The first card was appeared in July, 1969 issued by Shinsaegae Department Store to Samsung Corporation employees. The purpose of issuing the credit card was simply to expand the sales volume (transaction volume) in department store. 1970-1980 A specialized mono-line credit card company was Korean Express Credit Card Company, in 1978. 1980-1990 An aggressive growth of credit card industry was started in 1987 when the Law of Credit Card (currently the Financial Law of Credit Business) had amended. At this stage, there were four mono-line credit companies established. For example, LG in 1987, Kookmin in 1987, Korean Exchange Bank Credit Service (KEBCS) in 1988, and Samsung in 1988. Since then, the type of credit card was divided into Mono-line and Bank credit cards.

Hyundaicard is facing tough competition from Kookmin Card, Samsung Card and Shinhan Card, all of whom are leading players in the South Korean credit card industry. Hyundaicard will have to realize sustainable growth by further developing its differentiated marketing strategies. It will be important for Hyundaicard to continuously develop advanced marketing strategies, to maintain current customer relations and attract potential customers. Hyundaicard will have to increase efforts to create new, additional value in the constantly changing domestic market.

 PRODUCT

Hyundaicard was the first company in Korea to introduce card brand marketing, using alphabet marketing, premium VIP card program and card design marketing. In May 2003, Hyundaicard launched its flagship credit card Hyundai Card M and in February 2005, the Black card, the first super-premium brand, targeting the top 0.05% of cardholders. In February 2006, Hyundaicard launched the Purple Card, an exclusive premium brand, targeting the top five percent of cardholders, and then in 2008, The Red Card.

 PRICE

Different fee for each kind of card depends on its card holder type and its card benefit or services.

Such as, for VIP card holder the annual card fee can double than university students (HyundaiCard U holder). But this different price must be supported by worth benefit and services from HyundaiCard.

PLACE

Retailers. Websites. Online and offline channels.

The finance shop was the place that enabled Hyundaicard customers to enjoy all-in-one service, getting financial consultation services and enjoying an ambience created by world-famous designers. Hyundaicards first finance shop opened for business in 2006 in Seoul, South Korea. By 2009, the company had the network to 12 shops nationwide. Finance Shop

Strengths

Weakness Minimal customer count.

Countrys 4th largest credit card co. Won 1st prize in service quality. Most admired co during 07 and 08. Ranked no. 1 in the credit card category. Ranked no. 1 in NSCI for the 3rd consecutive year (05,06,07). Hyundai card M had the largest subscriber.

Low in comparison. Low brand awareness. Weak marketing communication. Fewer customer and sustain moderate losses.

Opportunities

SWOT

Threats

Encourage consumers to use credit card to stimulate private spending. Secure more taxes. Growth in the market.

Strict control of the Korean Government.

Redistributing cards to expired members Rapid expansion in the number of cards. Reduced standards for issuing cards. Late payments.

Political
Active support from the government and

Economical
Strategic alliance with GECF, a unit of GE.
Improvement in risk profile. Largest subscriber in 2005. Increased market share from 1.8% -9.96%.

encouraging policies. Government panelized stores not accepting credit card. Tax Incentives for credit card users.

PEST
Social
Focuses on customer lifestyle. Based on gender, age, status and card type. S card for women in 30s as largest consumer segment.

Technological
Use of strategic websites. Easily accessible from the internet. Popularization of E-payment in a Tech savvy country.

Customer Segmentation

The Innovative marketing Strategy focused on customers lifestyles. Divided into four categories (General, Low, Middle and High) Customer segmentation filtered each groups usage, status and purchasing methods Helped in collecting data according to their age, gender and the main location of purchase (shops, gas station, restaurants, etc.). Hyundaicard formulated Alphabet Marketing, having unique and creative design. Hyundaicard executed the companys alphabet marketing strategy by launching Hyundaicard M, S, W, U, K and A, based on consumer lifestyle. Thus, the company issued the new Hyundai Card S for women in their thirties.

eCRM was introduced in the most widely used credit card websites in Korea. eCRM collected Hyundai card customer information. The database provided useful, accurate information about Internet customers and their transactions. Establishing an effective eCRM system could potentially strengthen Internet services and allow the company to execute Internet marketing strategies.

Hyundaicard integrated online and offline customer data, maximized the potential of marketing campaigns. It maximized the two channels (online and offline channels) to increase customer profits and strengthen customer relationships. Hyundaicard enjoyed the synergy effect of online and offline channels for customer information. The integrated of online and offline information provided accurate customer data to CRM Business departments and related administrators. The integrated information could then be shared by the whole company.

Korean credit card market experienced a period of overheating, due to a rapid expansion in the number of cards, reduced standards for issuing card, etc. In the loan services, credit card companies began witnessing an alarming growth in the number of late payments and users with bad credit history. The Korean credit card industry was a bubble on the verge of bursting. Hyundaicard had fewer customers and sustained moderate losses.

Hyundaicard, as a market follower, will have to generate an aggressive marketing strategy, to catch up with the market leaders. Hyundaicard will have to adopt differentiated market strategy. Hyundaicard will have to create additional value, by promoting cross-selling and expand customized services. Such strategy will perfectly address each customers lifestyle and needs. Hyundaicard will also have to extend its network of alliance with major players, in various industries. Internationally, Hyundaicard will have to break into the foreign financial markets, so as to become a global player. As a brand in the international market, raising the status of the company, by solidifying with GE, will be vital.