After Hyundai acquired Kia in 1998, the two brands had overlapping portfolios and weak consumer perceptions almost everywhere outside South Korea, even as their quality reached the top of the industry. Vivaldi Group researched drivers in five European markets, the US, China and South Korea, then built separate brand strategies, a simplified portfolio architecture and a proactive brand management system. Following the project, Hyundai's sales grew from about 2.5 million to over 4.6 million vehicles in 2013.
Hyundai acquired Kia in 1998, leaving two brands with largely overlapping product portfolios. Despite major gains in quality, manufacturing and design, both suffered from poor consumer perceptions in almost every major global market outside South Korea.
Using its demand-first innovation and growth methodology, Vivaldi ran a large quantitative global study, preceded by novel qualitative research, across five major European markets, the US, China and South Korea. The findings fed separate brand strategies for Hyundai and Kia, a simplified brand portfolio and architecture, and global brand management practices.
Since the project, Hyundai and Kia have moved in clearly separate directions, from marginal low-end players to strong and distinctive brands. Hyundai's sales grew from approximately 2.5 million to over 4.6 million vehicles in 2013, much of the growth coming in Europe and the US.
| Client | Hyundai Motor Company and Kia Motors |
|---|---|
| Industry | Automotive |
| Research markets | Five major European markets, the United States, China and South Korea |
| Vivaldi scope | Global demand research, brand strategy for each brand at country, regional and global level, brand portfolio and architecture strategy, global brand management practices |
| Brand essences | Hyundai: refined and confident. Kia: exciting and enabling. |
| Outcome | Two distinct, stronger brands; Hyundai sales from about 2.5 million to over 4.6 million vehicles in 2013 |
Moving a brand upmarket is one of the hardest things in marketing, and Hyundai and Kia started from a difficult position. When Hyundai acquired Kia in 1998, the two had largely overlapping product portfolios, and both suffered from poor consumer perceptions in every major global market except their South Korean home base.
Most consumers knew Hyundai for inexpensive, stripped-down compacts typical of fleet purchases. Some turned the slogan Cars that make sense into Cars that make trouble. Resale values were low and sales fell. Yet Hyundai Motor Corporation had invested heavily in quality, manufacturing and design, and by the mid-2000s its cars compared well with the best on the road and were winning major quality awards, including from J.D. Power. The brands had fallen behind the product.
Around 2006, Hyundai and Kia moved from managing product launches and the campaigns around them toward a proactive brand management system, and Vivaldi worked with both companies to build it. The foundation was research in five major European markets, the US, China and South Korea to define the market opportunity, identify new needs and wants and set brand performance benchmarks.
A large quantitative global study followed a set of novel qualitative approaches. Applying its demand-first innovation and growth methodology, Vivaldi identified distinctive driving routines and shopping patterns, then combined them with global needs, automotive trends and lifestyle trends to map the demand landscape around cars and the role each brand could play in it.
On that basis Vivaldi developed a brand identity system for each brand at country, regional and global level, defining where each could win against consumers’ alternatives in terms of consideration, purchase and repeat purchase. Globally, Hyundai’s essence became refined and confident, and Kia’s exciting and enabling. Vivaldi also organized both product portfolios into a simpler brand portfolio and architecture, focused marketing and sales effort on the right models, and codified global brand management practices across the organization. Vivaldi’s guide to managing a brand portfolio strategically covers the same principles.
For the architecture choices behind two brands under one group, see house of brands vs branded house. Vivaldi has also worked with Hyundai on internal brand engagement across its global organization.
Hyundai and Kia engaged Vivaldi to close the gap between their improving cars and weak brand perceptions after Hyundai acquired Kia in 1998. Vivaldi ran demand-first research in five European markets, the US, China and South Korea, then built separate brand strategies, a simplified portfolio architecture and a proactive brand management system. Following the project, Hyundai’s sales grew from about 2.5 million to over 4.6 million vehicles in 2013, with much of the growth in Europe and the US.
Hyundai Motor Company is a South Korean automaker that acquired Kia Motors in 1998. The two operate as separate brands within the Hyundai Motor Group, and over the following years both moved from low-end positions to strong, distinctive brands in Europe, the United States and other major markets.
Vivaldi ran global demand research and used it to build separate brand strategies for Hyundai and Kia, a simplified brand portfolio and architecture, and a proactive brand management system. Following the project, Hyundai’s sales grew from about 2.5 million to over 4.6 million vehicles in 2013.
At the global level, Hyundai’s brand essence was defined as refined and confident, and Kia’s as exciting and enabling. The separation let each brand win different consumers instead of competing with its sibling.
It starts from how people drive and shop for cars, not from existing vehicle segments. At Hyundai and Kia it combined driving routines and shopping patterns with lifestyle trends to show where each brand could win.
Perceptions lag behind product quality, often by years, so better cars alone do not change what consumers believe. Brand strategy, portfolio choices and consistent management are what close that gap.