February 19, 2014

MARKETING LESSONS FROM THE HYUNDAI GENESIS

Hyundai Sonata vs BMW 525i (click to see)In 2007, Hyundai commercials suggested the Sonata was better than a BMW 5-Series at half the price (see the rationale for irrational behavior). Who would really believe that? There's a difference between specifications and real world performance.

I sat in a Hyundai for the first time ever, the 2013 Genesis sedan. The interior quality is comparable to a BMW 5-Series or Mercedes E-Class but you get more space. That's especially welcome in the rear row. Legroom! The Genesis costs much less than a comparably equipped German sedan. Value! What about the ride? It's good — well-suited to day-to-day driving in the city or on the highway. The coming-soon all-new 2015 is even better. I saw one at the Canadian Auto Show.

The Surprise

I didn’t expect Hyundai to create something as good as the Genesis (and more recently the Equus). Then again, who expected Toyota to succeed with Lexus? The first model, the LS 400 outsold the competition from BMW, Jaguar and Mercedes-Benz. The Genesis launch had impact too, winning 20+ awards including North American Car of the Year.

The Genesis isn't as good as a German vehicle but so what? Vehicles keep improving. Think of the Genesis as an older German car. There's much we can learn for our own marketing.

Lesson: Get Started

The first launch needn’t be perfect. You learn lessons which make the next version better. Momentum makes progress faster. The key is getting started. Keep waiting and the competition gets further ahead and harder to catch. Look at the too-little-too-late attempt to rejuvenate Blackberry.

Did the world need another premium car? No, but the success of the Genesis shows there’s room for new competitors and that catching up is possible. Hyundai already is a top manufacturer which gives them money to experiment and succeed.

What’s holding you back? You don’t need to be perfect in the beginning.

Lesson: Create A Halo

Developing a new vehicle takes years and in the case of the Genesis, $500 million (according to Wikipedia). Is the investment in a niche car worthwhile?  Yes. By creating a standout,  Hyundai raised the credibility and appeal of their entire line up. They got lots of free publicity.

What brings positive attention to you? Maybe you're associated with a cause (e.g., a charity). Maybe you're doing something relatively rare (e.g., blogging). 

Lesson: Just Listen

2015 Hyundai Genesis at N├╝rburgringWhen launched, the Genesis was very credible. Certainly an A for effort. Hyundai identified an underserved market niche: premium cars for people who care more about value than the emblem on their quickly depreciating car. Current Hyundai buyers and brand switchers.

The all-new 2015 Genesis addresses criticisms of the first generation. There is now All Wheel Drive and a better ride. In addition, there is more value than ever at their price points. Horsepower is down but torque is up. There’s innovation such as the first-ever CO detector as a tool for driver alertness (adds more fresh air as levels rise).

What does your market want?

Lesson: Keep Moving

The next battleground is the user experience. Premium vehicles like BMWs and Mercedes have their own dealerships. This helps meet the expectations of more affluent buyers. Hyundai looks committed to getting better. Using a separate brand would help but cost $2.5 billion and take 13 years.

The competition keeps moving. You eventually compete with yourself. Take the iPhone. Other phones are arguably better (e.g., larger screens, better Google integration) but there are dedicated iPhone buyers. Apple is really competing with Apple.

Right now, Genesis is competing with other brands but that will change, perhaps with the third generation launch in a few years. You can’t get there without getting started.

Links

PS Hyundai and affiliate Kia aren’t perfect. They’re settling class action lawsuits for overstating fuel economy: $395 million in the US and $70 million in Canada.

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