Hyundai Cards

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Case Study: Hyundai Cards Marketing Strategy
By: Innestasia Tjahyadi

I. Introduction
Hyundai Cards, sponsored by Hyundai Kia Automotive Group, was established in 1999. They joined in as the market follower, challenging the highly competitive credit card industry in Korea. In 2005, HyundaiCard formed a strategic alliance with GECF (part of GE), which invested 678.3 billion won in the firm and became the largest shareholder. Through its corporation with GECF, HyundaiCard made effort to become market leader in credit card industry by initiating a unique, customized service using alphabet card marketing activities. The partnership formed a solid foundation to become the market leader in South Korea.

Prior to the entrance of HyundaiCard, credit card industry in South Korea is dominated by 3 biggest players in the industry: Kookmin Card, Samsung Card and Shinhan (LG) card. Kookmin Card: issued by country’s largest bank, launched business in 1980. In 2008, with 9.3 mio cardholders and sales of W57.3 trillion, it became the leader in the industry. It started to launch innovative card (e.g. SK LPG Save KB card, S-Oil KB Card, KB Fn Save Card) and aggressively tried to capture larger share of check card and corporate card market. Samsung Card: established in 1988, and became 3rd largest card issuer in Korea. It launched several innovative products and services and won awards in customer satisfaction. Competence in: size and breadth of product offers, advanced CRM system and extensive business network. Shinhan (LG) Card: It has strong customer base of its parent company. In 2007, they integrated with LG and by the end of 2008, number of active cardholder reached 13.6 mio with market share of 24%. It becomes largest card issuer in Asia and no 10 in the world. They attracted new customer through their great infrastructure and boost cross-selling between subsidiaries to optimize product mixture.

II. Market Trends in South Korea
* From 1990 to 2002, there is significant increase of credit card usage in South Korea. According to BOK, Korea ranked 34th in per capita income in the world, with the world’s 2nd highest per capita card issuance. * Unique characteristics owned by Korean credit card: Multi-functionality. Credit card usage is tied to specific chain or conglomerates. They also offered some rewards to attract loyal customers (e.g. incentive, interest fee installment, airline mileage point). * There is a rapid IT development in South Korea. The usage of internet shopping has increased and created new trends of credit card web sites. This leads to the increase of CRM with customer-focused view marketing. * Support from government also plays important roles in the industry. Government made acceptance of credit card mandatory and penalized stores not accepting credit card.

III. Challenges Faced
HyundaiCard is the late entrant in the industry and sustained a very low customer counts. Aside from strong competition from the 3 main players in the industry, it also suffered problem with low brand awareness, weak marketing communication and weak card services.

Aside from that, Korean credit card market experienced a period of overheating which caused by a rapid expansion in the number of cards, reduced standards for issuing card, etc. In this period, the Korean credit card industry was a bubble on the verge of foaming and bursting. Several companies resort to downsizing their operations and undergo reconstructions to lower their burdens. However, compared to its competitor, HyundaiCard had fewer customers and therefore sustained moderate losses.

IV. Marketing Strategies and Analysis
As a follower in the credit card industry in South Korea, HyundaiCard entered the market by taking advantage of the latest technology and taking advantage of the pioneer’s limited resources.

Living up to its position as fast follower in the market, HyundaiCard has the following traits: * Larger entry scale than the...
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