Background about Hyundai Motor Company

Marketing communications is an essential part of any company to attract and hold its customers. It is basically a part of the marketing mix. According to Kotler & Armstrong (2012), the marketing mix is defined as the 4Ps of marketing: product, price, place and promotion and promotion is what marketing communications is all about. Promotion or marketing communications are the tools that the company uses to persuasively and effectively communicate customer value and build relationship with customers. It is the message that a company uses to carry its products to the market. Today, consumers are surrounded by many different choices and commercial messages for different sources and to be able to compete and to get customers’ attention, a company needs effective marketing communication channels and strategies.

This research paper aims to investigate the marketing communication channels that Hyundai use as a well-known motor company to reach a massive audience around the world. It aims to discuss Hyundai marketing channel trends and strategies and find out how successful and effective they are in today’s world. In other words, this paper will help to clarify whether Hyundai’s message is clearly communicated to all customers and potential customers around the globe especially here is Saudi Arabia or net.

Background about Hyundai Motor Company

The Hyundai Motor Company is one of the most dynamic automobile producing companies. It is the largest producing company of cars in South Korea and the fourth largest automobile manufacturers in the world. It was established in 1967 by one of the most famous businessmen in the history of Korea called Chung Yong. It has seven manufacturing area outside of South Korea including India ,China, the Czech Republic, Brazil, Turkey, Russia and the U.S. It has annual about 4.06 million vehicles sold globally and has a sales network of 6,000 dealerships and showrooms across 189 cities such as Al Majdouie here in Dammam, Saudi Arabia.

According to Hyundai official website (n.d.), their main vision is to provide value for people future and their Mission is “To create exceptional automotive value for our customers by harmoniously blending safety, quality and efficiency. With our diverse team, we will provide responsible stewardship to our community and environment while achieving stability and security now and for future generations”.

Hyundai focuses its marketing dollars and brand message on two main target markets. Its essential consumer target is middle to upper class professionals who seek excellent value for their money and comfortable driving in city conditions. Its secondary consumer target is college students who looking for stylish design and speed. On the other hand, Hyundai primary business target is medium to large sized enterprises who want to provide their managers and employees a car for ease of transport. Its secondary business target is business leaders and small business owners who want to provide special offers to managers buying a new car (Das, n.d.).

Hyundai Consolidated Financial Statements and Auditors Report for Year 2012 show that Hyundai spent about 498,262, Korean Won millions equivalent to SR 1,722.02 million on marketing expenses only to promote its sales and show the world their valuable products (Hyundai Official Website, 2012).

Literature Review

Marketing communications are essential component that a company must needs to reach its potential customers. It builds customer’s awareness and encouraging trial. In this research, our purpose is to understand the marketing communication channels and how we can measure their effectiveness. Then, we take Hyundai Motor Company as an example and investigate whether its marketing communication channels and strategies are effective or not by using a number of literature review statements and hypotheses.

Author of the book Simply Marketing Communications, Chris Fill (2006) described marketing communications as a “management process through which an organization seeks to engage with its various audiences”. It is a method used by companies to encourage engagement between the audience of customers and their product or service. In a basic manner, we can say that marketing managers try to establish marketing communication channels by developing a series of messages. Then, the marketing managers present those messages to their different audiences, all in the purpose of positioning or repositioning the company’s products or services in the minds of their targeted customers. And in turn, build a relationship with the customers that hold mutual value for both parties (Fill, 2006). So, marketing communications is a process and this process needs planning of the pricing, promotion and distribution of goods and service to create value for potential customers. Then exchange this value to fulfill individual and organizational objectives (De Pelsmacker, Geuens, & Van Den Bergh, 2005).

Now that we understand what marketing communication is, and what marketing manager’s roles are, we will move on to understanding how marketing communications work. Authors of the book Foundations of Marketing Communications have stated that predicting how a consumer will respond to an advertisement or how they process a communication message is something often hard to achieve (De Pelsmacker, Geuens, & Van Den Bergh, 2005). The reason behind this is that there are many factors affecting the consumer’s way of thinking. Factors like the product type, the consumer’s psychology, culture and social status as well as many other factors impact a consumer’s way of processing advertisements (Kotler & Armstrong, 2012).

Therefore, to understand how consumers think and react to different advertisements, experts developed models to help them do so. The hierarchy-of-effects model is one of the oldest models published on this topic and has dominated the marketing communications literature for decades. In this model, the consumer is assumed to go through “a hierarchical process of cognitive, affective and behavioral responses to communications stimuli”. Later on other models with modification evolved among the most important ones is the cognitively based high elaboration model developed by Fishbein-Azjen and the affectively oriented feelings-as-information models. All these models were developed in the sake of understanding consumer’s behaviors and based upon that communicating with them as effectively as possible (De Pelsmacker, Geuens, & Van Den Bergh, 2005).

However, the way marketing communications work doesn’t only depend on how marketing experts understand the consumers. Consumers also take charge of the direction of marketing communications. This happens with the changing mentality of the consumers over time and the evolving culture that is affected by the new world’s globalization, media and technology (Blythe, 2006). Based on that, advertisement channels are chosen by marketing specialists. Those specialists choose the kind of advertisement based on what people attract to the most. There are many kinds of advertisement channels such as print advertising, celebrity advertising, outdoor billboards, radio broadcasts, television commercials, the internet, cellphones and electronic magazine advertising are available today to market a product. However, in each era, there is a certain kind of marketing channel that dominates the advertising field (O'Dell, 2011).

In regards to the old trends of marketing channels, it was stated by Anne Janzer that “old marketing channels never die”. She included in the article that the top three marketing channels worldwide is the use of advertising through newspapers, TV advertising and finally the radio. She also emphasized the importance of updating the use of traditional channels in order to broaden the consumer ranges. New marketing strategies that come under the social media such as Facebook, Twitter, and online blogging are the most popular methods of advertising products online. Janzer (2011) stated that using new channels can magnify the impact of vacant marketing offers. In the late 20th century radio and TV commercials were most prevalent. Jobber and Fahy (2010) has stated that 67% of the advertising were on TV and radio which means the majority of companies advertised their products and services using those two methods. While other types of commercials and advertisements didn’t occur as much such as internet and cellphone advertisements because they were still not popular, and not as fully developed as now.

However, today with the technological revolution the world has witnessed, the advertisement world has changed. It became more developed, enhanced, and gained more power and influence over people. Advertisements are all around us and they are affecting and manipulating us one way or another. Companies have changed their strategies and found new ways to sell their products and services to consumers around the world. Companies have come to realize that the interests of people have changed. In the past, people were interested in TVs and newspapers for example, but not anymore. People today are more attracted to technology and social media instead of old media. These days almost every one of us has either a smart phone, large desktop like iPad, iPod…etc., so companies started to reach people through these new technologies. Therefore, as technology develops, people will accordingly adapt to it and make it a part of their lives and based on that companies strategies will change (Fill, 2006).

New technological forces are emerging in rapidly, and all marketing aspects are affected by IT expansion and progression. Thousands of marketing research studies are currently being conducted by the use of email. This marketing channel is extremely effective due to the facts that it reduces costs and saves time. International marketing has, without a doubt, been enhanced by the boom of technology. The new industry which uses database technologies is called customer relation management (CRM). This huge database enables companies to receive information about all of the customers; therefore, it improves the relationship with the customer as well as the supplier. With today’s new and improved technology marketing channels can be used through two types of communication. The first is mass communication and the second is direct communication. Social media involves both mass communication as well as direct communication (Jobber & Fahy, 2010).

In the shade of what we just discussed, we can sense that marketing communications do not follow any rules and have no rigid format. This uncertainty creates challenges to marketing managers and specialists because miss-communicating a product’s or service’s message to an audience has a high possibility of occurring. Author Jim Blythe (2006) categorized these communication failures into 7 categories. One of those categories is distortion of information in which changes in the product’s message occur because of outside influences. Another category is confusion, where the customer cannot interpret the company’s message because of the ambiguity of it. Other categories are disruption, implication, personal, transformation and disagreement, and those all contribute to failure of marketing communications.

Now that we understand the basics of effective marketing communication, we need to investigate more and find out about marketing strategies that Hyundai Motor Company use to sell their product and reach their audience. To start off, Hyundai was mentored by Ford Automobile Company only 40 years ago and soon enough, it is one of the fastest growing automobiles company worldwide. In fact, it was stated that Hyundai’s technological growth and market growth has reached to the point that now this automobile company is a huge supplier of technology to the world’s top automobile company. The main factors of Hyundai’s fast growth are due to its developed technologies, its high quality products, and most importantly its market sensitive strategies. This means that Hyundai finds and pierces through the right market at the correct time. This is not something that can be done easily or efficiently, however Hyundai successfully does this by receiving the needed and important market information, which not many automobile companies can receive at that speed (Newscast, 2012).

The selection of the right target market is one of the very first steps any firm needs to take into consideration. During the 1980’s, Hyundai targeted the Korean market only. This was not really a smart strategy because a handful of other top automobile companies concentrated on other countries around the globe. Hyundai realized this and was quick to realize, that if they did not successfully target other markets around the world, they would not expand any further. Halpert (2011) stated that Hyundai first entered the Canadian market and shortly the US market. The first car Hyundai introduced to the world outside of Korea was the car Excel. Shortly after Hyundai knew it was time to expand even more due to the well accepted reaction for their products. Hyundai hit the European markets, and while doing so, the company realized that they were in need of a low-cost production location in order for them to export their cars worldwide.

Hyundai’s close competitors had their production locations in Europe. However, as stated previously, Hyundai was smart enough to think fast, and find a location that would be cheaper for them to produce mass amounts at lower costs. Hyundai’s strategy for production was solely focused on delivering products that had a combination of reliable products, with quality, that were at an inexpensive price range. This strategic method was a competitive advantage for the company; in fact, Hyundai’s sales were top charted. On the other hand, Hyundai’s marketing strategy was perceived as “cheap”. Again, Hyundai was quick to their feet, and provided numerous and various products such as Getz and Accent which focused on the upper class and produced high quality and high technological advanced car systems (Halpert, 2011).

Hyundai’s passion for creating new innovative products and product quality is their strongest advantage. In return, their production and sales increase dramatically. Mong Koo Chung stated that their secret to future growth is to continue developing innovative products in order to appeal the rising global markets. Another important factor that Hyundai is contributing to the society is their corporate obligation to secure the environment by also providing environmentally friendly vehicles. Another marketing strategy that Hyundai has as an advantage is their number one priority for customer satisfaction. They incorporate their customer needs and wants, whether if it’s inexpensive high quality products or high-class vehicles that have top technologies (Chung, n.d.).

To keep its customers informed, Hyundai is using social media websites. Hyundai has a Facebook page where its employees post their new product’s advertisements. It uses it to announce events and be more involved with the community as well as inform the website’s visitors about the company in the “about” page where there is a full company description (Hyundai Fan Page, n.d.). Hyundai also has a YouTube channel where it uploads videos of its cars for interested consumers who want to know more about their products, prices and quality. It also upload videos of events it usualy holds (Hyundai World Wide, n.d.). Hyundai has also recently established several Twitter accounts to help customers with any inquires and technical support. They also announce events and offers and on their cars through this website (Hyundai Live, n.d.).

So now, after understanding marketing communications, and understanding Hyundai’s marketing strategies, we can make an initial outcome or conclusion of the efficiency of their marketing channels. Based on the primary study we have made we can see that Hyundai has no marketing gap in their marketing communications strategies, meaning it is delivering its message as acutely and as clearly to its targeted segment of consumer. However, this is just an initial conclusion and upon the completion of our research we will re-assess this conclusion and see whether Hyundai marketing communications function effectively here in Saudi Arabia or not.

In order to achieve our aim of this research, which is examining the effectiveness of Hyundai marketing communication channels that it uses in reaching out its target market, we have to collect primary and secondary data.

Secondary data is the data that have already been collect and analyze. It’s provides a good starting point for the research. We used several books and articles that discuss marketing communication, what marketing managers do and how marketing communications work. They also helped us to understand the challenges of marketing communication and the manners of obstacles marketing face nowadays. Moreover, we used Hyundai’s website and other websites to gather some information about the company marketing strategy and what communication channels Hyundai uses to advertise its products and to build relationships with customers.

As we already have secondary date, primary data is also critical for filling in the gaps left after secondary research is completed. For our research paper, we have used the most common method, which is the survey (questionnaire) approach so we’ve conducted qualitative and quantitative data gathering methods. Questionnaires are suitable for gathering descriptive information because they are flexible, rapid, and less costly comparing to observational or experimental research (Kothari, 1985).

For the quantitative questionnaire, we chose to do it online using surveymonkey.com and distributed throw Facebook, Twitter, and WhatsApp. The reason of choosing this type of contact methods is because of its flexibility, low cost, and the speed of collecting date and getting responses. We’ve distributed the survey among almost hundred people (consumers) selected randomly and we are expecting to get around %60 average responses. This sample gives us reliable information with giving individuals known and equal chance from the population. We used close-ended questions that include all possible answers and participants have to choose among them. We started with three demographic questions to know more about Hyundai’s customers and whether our participants are from Hyundai’s target our not. We used multiple-choice, yes or no, and scaling questions to know more about customer values and the effectiveness of Hyundai’s communication channels in reaching their target. These types of questions are easier to collect, interpret, and tabulate (Kotler & Armstrong, 2012). Refer to Appendices, Section A for the survey questions.

For the qualitative data, we planned to do structured face-to-face personal interview with Mr. Yaser Abo Malek, the marketing manager for Almajdouie Company which is the official agent for Hyundai here in Saudi Arabia. We prepared and set several structured open-ended questions that allow him to answer easily and fast. These several questions ask about the different marketing communication channels that Hyundai uses, the purpose of depending on them, the effectiveness of those marketing communication channels, their strategies and techniques in marketing, and their future marketing plans. Refer to Appendices, Section B for the interview questions.

We aim to understand the marketing communication channels Hyundai uses as a company, and in order to reach or accomplish this goal, several steps need to be taken under consideration. What kind of relationship Hyundai is trying to build with their consumers? And is it effective? Have Hyundai developed new strategies that would keep its marketing communication effective? Of course in order to accomplish all those goals Hyundai needs several departments to have an effective marketing communication. For example; marketing managers are those who establish the marketing communication messages to the customers or consumers. Also, there is another reason why Hyundai needs several departments taking care of the marketing communication types and what affect the most on people these days, it is because the customers’ way of thinking is changing from time to time, so companies who want to have an effective marketing, they have to adapt with the modern way. Companies need to consider these days, the product type, the consumer’s psychology, culture and social. All these are factors could affect the buyer buying behavior. And that is what Hyundai studied and focused on to target its customers.

Hyundai is a very old company, experience must be one of their advantages. In the past companies had different trends, because people had different way of thinking. Hyundai used to focus on TV advertisement, because most of the people were attracted to it at that time. However, today most of the people are attracted to social media such as Facebook and YouTube. Therefore, Hyundai changed their direction to what can really attract potential customers these days. Hyundai realized that most of the people have some kind of technology available in their hands and have access to it, so Hyundai for example; started to establish radio stations you can easily download on your devise and listen to. As mentioned before, there are 2 types of communications: mass communication and direct communication. Hyundai is focusing on both of them, that’s why Hyundai marketing communication has a strong foundation or what some people call “fearless marketing”, because Hyundai reaches people almost through every channel they can get into. Having an effective marketing department that considers all the factors that are affecting the customers buying behavior and way of thinking, it has to lead it to the top. Hyundai is one of the fastest growing automobile. And Hyundai is known for high quality, technology development, and what we care about the most is their marketing communications and strategies. Marketing the right target is what made Hyundai where it is right now.

Hyundai has to create some methods to get into their customers attention. Several ways Hyundai could achieve that, but only the most effective and efficient methods will attract the consumers or customers. To know what and how Hyundai get into their consumers’ mind, understand their buying behavior, and get their attention. Some researches were done to examine or test how efficient the Hyundai marketing. Hyundai covered almost every popular social media network such as: YouTube, Facebook, Twitter...etc. also, there are another ways that Hyundai exposed itself for example; SMS, radio stations...etc. Hyundai exposed itself where almost everyone knew about the new product or services that they provide.

Hunyadi provided an official YouTube channel worldwide. What Hunyadi tying to approach here is downloading or providing videos on YouTube to attract people from all over the world. Providing videos gives customers a better and clear idea about what Hunyadi is attempting to do, beside that young people are more attracted to videos that reading articles, so establishing that channel will give Hunyadi the attention that it targeted from the beginning. Hunyadi established a channel on YouTube, so it can have the opportunity to demonstrate to people what are their new products and services, also to show people where Hunyadi can take it further. Also, Hunyadi provided links that will lead you to your Facebook page or Google to share information with other people Hunyadi created this idea, so its customers won’t take long time to login into those sites. Hunyadi keeps some of their old videos to show people how its products have developed.

More than 175 million people are using Facebook every day. The purpose of it is to keep people connected with their friends and families and to to be always updated with new information. Hunyadi here used it as an opportunity to achieve its marketing goals. Hunyadi established a channel on Facebook to keep people updated to what is new in Hyundai. Because Facebook has a lot of popularity, you can find that most of the companies do their advertisement through Facebook pages and it is a way to compete and be innovative.

As we mentioned in the methodology, we made a face-to-face interview with the marketing manager of Hyundai. We noticed that Hunyadi keeps their employees updated on all the changes that occur in the organization, also they keep their customers engaging with their employees by SMS, sending them e-mail to inform them about the new products or services the company is providing. This will create a strong work environment with informed employees which will help in spreading news more rapidly. Moreover, Hunyadi has different marketing methods and strategies in each country depending on its population, culture, lifestyle…etc. For example, Hunyadi found that the word of mouth is very effective in Saudi Arabia, so Hunyadi is focusing more in that channel, because that what attract people the most. It also noticed how Saudis are really attracted to Apple products, so they developed a Hyundai Application that customers can download for free in the App Store. This application can help customers to can view Hyundai vehicles, book a driving test…etc.