Sometimes a product is actually better than its brand. It’s physical product performance is greater than its reputation in the marketplace.  In those instances, a brand can literally hold sales back.

 

One of the most powerful consumer marketing laws is that once brand identity is firmly established, it can be extremely difficult to change - particularly for the better. As with people, first impressions can be lasting! Take Reebok, for example. They have had major presence in professional sports for decades, yet still struggle to overcome their original positioning as a more fashion oriented lifestyle brand. It’s why Lexus, Infiniti, and Acura were created; to allow Toyota, Nissan, and Honda to sell upscale luxury cars that their base brands could not support.

 

Case in point, recently I noticed a new silver sedan on the side of the road. It had sophisticated, “Euro” lines and from a distance appeared to be a high-end, luxury vehicle. From afar, if someone had told me it was a new Jaguar or even an Aston Martin, I would have had no reason not to believe them.

 

I love cars, have owned more than my fair share in my adult life, so my curiosity was peaked. As I walked closer to see what it was, I had an interesting reaction. The closer I got, and the more of the lines and details I noticed, the more impressed I was. This, until I noticed the Hyundai nameplate in the rear. At that point, for better or worse, it was like letting the air out of a  balloon of excitement and expectations! I felt a tangible and significant disappointment.

 

Despite what my eyes were telling me, my feelings about the brand dragged down my overall perception of the car.  As is now, the car looks better, more luxurious and higher performing than its brand. Although it's only a matter of time before consumer perception (brand equity) catches up to its manufacturing, at this point, the brand’s early positioning - as a low end, affordable import - are in conflict with the current direction and performance of the company.

 

The whole point of branding is to enhance perception of the overall product experience. It is to make the overall experience of the product interaction (and any other inputs) even more valuable. And, of course, a logo is meant to capture, and remind consumers of, the essence of that experience.  But in this instance, the name is a negative.  

 

So what is a company to do about this kind of brand imbalance? More specifically, what should Hyundai do? Here are five things to consider:

 

  1. Product: Continue investing aggressively in product innovation, R&D, etc. Make the product better than the competition you aspire to compete with. Although this is clearly ‘easier said than done’, it’s a commitment required to pull consumers from your competitors. Take smart phones as an example. Although Apple has a dominant brand position, Samsung has added key features like a higher resolution screen and camera, water resistance, and with memory cards - the ability to infinitely expand the capacity of the phone. Now, while Samsung has yet to attack the brand strength of Apple, at least they are remaining credible because of what many believe are real features/benefits advantages.

 

  1. Price:  Be careful with pricing. As an underdog brand trying to increase its stature in the marketplace, you must offer a meaningful value to incent trial and purchase. The Hyundai Genesis sells from the high 30’s to the high 50’s, seemingly competing with cars like the BMW 3 and 5 series. While its cars might be able to transport consumers comparably, today Hyundai can’t come close to credibly competing with BMW (or others in that competitive set). So, practically, until your brand can compete, you’ve got to offer more for less. Don’t fall for the hype that you’ve got to be at a premium price to become a premium brand. First, you’ve got to create an overall brand experience that consumers want to engage with, then you can price more aggressively.

 

  1. Advertising:  to change hearts and minds, you’ve got to paint a clear picture of the new brand - what you want consumers to believe about your brand - and communicate it over and over and over again. You’ve got to articulate a clear aspirational vision that flows from key consumer insights, that will resonate with consumers emotionally, and that will drive awareness and purchase. For Hyundai to evolve into a credible luxury brand, it's going to have to use generous amounts of advertising and marketing to paint a compelling picture of the new Hyundai - what it means, who its for, and how it's different and unique from its competitors. The advertising has got to make new consumers want to be a part of the brand. With respect, creating a message for someone in the space shuttle by driving in the desert doesn’t cut it. That imagery doesn’t make people want to spend $50,000 for a Hyundai!

 



  1. Logo: Hyundai should reduce its on-vehicle branding and let its design and engineering carry the awareness weight for the line.  To be clear, a logo is simply a brand tool to be used strategically. If it doesn't confer meaningful value, or worse - if it detracts from your brand experience, then reduce or eliminate its presence until it does. It’s extremely difficult to take a "price" brand upscale. Again, it’s why Toyota, Nissan, and Honda created completely new brands for its premium offerings. It can happen, but be prepared for it to take a generation of aggressive product development, advertising and marketing to do so! I can envision some extraordinary word of mouth about a hot looking car with little to no branding on it. In this age of viral social media, not having a logo on a car could create a measure of buzz that could far more than offset a more traditional approach.
  1. The Experience: Invest in making the service experience and other complementary aspects of car ownership as valuable as possible to enhance overall brand value. For example, BMW’s free service is a great way to both keep their cars running well and to build strong, strategic relationships with their consumers. What about offering free car washes?

There's a reason that most companies fail at taking an established brand upscale. It can be a ridiculously difficult task requiring enormous amounts of money and patience. Most companies, particularly in the auto industry, simply opt to create new, upscale brands rather than chance the investment of time and money to take the approach that Hyundai is. Over the course of a generation, Hyundai will have to invest hundreds of millions (if not billions) of dollars in marketing along with spectacular product development to do so. It'll be interesting to see if they can pull this off. They seem to have gotten the cars right!


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Tags: auto, brand, brandstrategy, strategy

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