HyundaiCard was established in 2001. In Aug 2005 HyundaiCard established a strategic alliance with GE Consumer Finance. So, HyundaiCard’s largest shareholders became Hyundai Motor (31,6%) and GE Consumer Finance (43%). HyundaiCard focused on its customer needs, developed new credit card products, and provided different online marketing campaigns. Its customer segmentation strategy focused on its customer needs: Lifestyle Influences à Activities. That why HyundaiCard formulated “Alphabet Marketing” named M, S, W, U, K and A, based on consumer lifestyle. The customized marketing approaches included “Alphabet Credit Cards” having unique and creative designs. HyundaiCard also diversified its product line and expanded into the premium market via the introduction of “the Black” and “the Purple” cards. HyundaiCard scoured the world for top artists and designers to help create strong brand identity, incorporating unique, contemporary elements that resonate with today’s consumers. HyundaiCard’s also diverse marketing strategy was integration of online and offline channels. Thus, to carry out an effective marketing strategy and increase profits, HyundaiCard focused on customer value and online interaction through e-CRM. The company also strengthened its internal administration regarding customer service and guaranteed safe online business. Long-term strategy in order to transform itself from an automobile manufacturer into the world’s leading provider of additional services related to automobile business. The company’sgoal was to strengthen its financial services, retail businesses and Internet fields, etc. PROBLEM
In the competitive South Korean credit card market, a review of the past decade of HyundaiCard’s marketing strategies and evaluation of anticipated possible difficulties of being a market follower revealed several challenges for senior management. Despite a tremendously successful creative business model based on customer needs, innovative products and integration of online and offline customers, the company’s performance had not progressed in the past seven years. HyundaiCard had difficulty relating its creative business model to the strong personas of the leading players in the credit card industry. How could HyundaiCard, a market follower, successfully position itself as a market leader? Could HyundaiCard’s marketing strategy keep enhancing its competitive edge in the market? What future strategy would be best for HyundaiCard? CURRENT SITUATION
Sales: HyundaiCard’s sales growth in 2004 to 2008 was growing. The 2008 sales was 42,7 trillion won. Margins: Operating revenue was increasing from 2003 to 2007 while the 2007 operating revenue was 1121,3 millions of Korean won or 1109,5 thousands of U.S. dollars. Profits: Net income was increasing from 2003 until 2006, but in 2006 to 2007 the net income was decreasing from 281 millions of Korean won to 234,4 millions of Korean won or 299,5 thousands of U.S. dollars to 249,8 thousands of U.S. dollars. MARKET DEMAND
Market size which describes the number of customers in the market and the amount they purchase is 89.565.000 in 2007 (Exhibit 10). Growth rate: It was not until year 2000 that the market saw an annual growth rate of 80% and more than 100 Million cards issued. Between the 1990s and 2002, the number of credit cards issued in South Korea increased tenfold (10x), from 10 million to 100 million. The Korean credit card market was characterized by rapid growth and was the first preference of payments (Exhibit 8). But since 2003 to 2007 the growth rate number of Credit Cards per person was stagnant between 3,5 to 4,1 (Exhibit 10). In 2004 to 2008, the growth rate from number of card issue was approximately 0.08%. Potential: Potential market for credit cards can be seen from economically productive population which in 2007 was approximately 24.216.000 (Exhibit 10). COMPETITION & INDUSTRY
Competitors: The Korean credit card market was...
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