How Hyundai Uses Behavioral Segmentation to Take the Bull by the Horns and Send the Bear Packing
Hyundai took the bull by the horns in this bear market and scored big. It used behavioral segmentation to identify what was keeping prospects from buying and then developed a strategy that made it easier for customers to part with their hard-earned dollars.
What can you learn from its example? In every market change, even a downturn, there is an opportunity to use the power of behavioral segmentation to make your product or service stand out.
Talk to Your Target Prospects
Each news cycle brings a tsunami of information that influences your customers' purchasing decisions. The smart marketer understands that every change in the marketplace is an opportunity to capture new customers.
How do you seize that opportunity and grow your business? Relying on secondary data or past segmentations isn't a realistic option. Even in these tough times, resist the urge to repeat a smaller version of last year's marketing strategy and tactics.
Instead, use voice-of-the customer research to talk to prospects you are currently winning over as well as those whose business you would like to win. You can't overestimate the value of talking to your customers. Ask new, open-ended questions. Focus on learning:
- What their reason is for buying—how is it changing?
- What their needs are—how have they been affected by recent events?
- What's keeping them from buying?
- What do they think of your product versus the competition's product?
- What would change their perception of your product versus the competition's?
- How do they rate your product against alternative solutions?
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Michael Barr is a principal at marketing consulting firm QDI Strategies, Inc. (qdistrategies.com). Contact him via mbarr@qdistrategies.com.
Comments
THE POINT HERE IS A CALCULATED RISK MANAGEMENT, THE QUESTION IS HOW DOES HUNDAI GAIN IF THERE ARE DEFAULTS, SECONDLY BUYING A CAR IS MAYBE NOT A PRIORITY WHEN ONE IS WORRIED ABOUNT LOSS OF JOB, AND FOR HUNDAI THE FIRST PRIORITY THAT COMES IN ONES MIND IN THE PRESENT SITUETION IS HOW MUCH LIQUIDITY (MONEY) ONE CAN GENERATE & TO BE SAFE.
The gaurantee is a calculated risk, but so is any other incentive. The car makes that are increasing rebates are taking the short term risk it will increase purchases and the long term risk that they will be able to raise their prices in the future. So far it looks like Hyundai has made a much better decission.
Mike
This is an interesting concept. How would it be applicable in the B to B space?
In a B2B market there are there are behavioral segemnts since commerical and industrial firms with different business needs/drivers act differently. Firms seling into B2B markets can and should be segmented the same way Hyundai did. If the B2B marketer can find an emerging segment whose purchasing behavior is driven by an issue they can address -- they can win new customers.
I recently saw a manufacturer of sensors used in energy efficiency solutions that accomplished the same thing in the industrial sensor market. By offering to take out the sensors if the total solution failed -- the manufacturer is able to participate in deals they didn't see before. While it is possible the products can be return, the manufacturer's experience in these solutions suggest the sales gains outway the small risk a buyer would ever want the solution removed.
Hyundai certainly had a well timed strategy and very pertinent - I remember telling others that they would get a boost from that strategy - as long as the economy did not tank too far.
Thinking about it, a company would need to have resources and processes in place to react quickly to trends in order to take advantage of them. While making short term gains on trend reactions, are you risking an overall long term strategy? Would this type of marketing be primarily for the transient customer?
We were also wondering how this fits in a long term strategy. If it wins you car buyers who develop a brand peference it could be a great strategy. If the buyers tend to switch based on the promotion, it could be short lived. I wonder if Hyundai has done the research to know which is likely?
It is interesting to see that both Ford and GM have responded to Hyundai’s new approach.
Hyundai’s goal was to get more car shoppers to consider Hyundai a via alternative. Press coverage showing the Ford and GM are now offering a program similar to Hyundai is helping their cause.
The responses seem to present the state of Detroit.
Ford’s response is clear and specific. “Ford will cover payments for up to 12 months on any new Ford, Lincoln or Mercury vehicle if customers lose their jobs.“ Understanding that Hyundai is promoting the offer to met buyers with job concerns, Ford responded with a clear message, that the buyers can come to Ford – they don’t need to go look at Hyundai.
But General Motor’s response is an attempt to be all things to all people, “A special package of services designed to keep your hard-earned vehicle investment secure, and your family safe. Best of all, there’s nothing to add or order. It comes with almost every new 2008, 2009 and 2010 GM vehicle (excludes Saab and medium duty trucks). So starting now, you’re free to shop, own, and drive GM with Total Confidence.” This appears to be designed to offer regular GM buyers some reason to stay with GM, but will it stop customers from taking a look at Hyundai’s cars?
What do you think – will the responses stop Hyundai’s rising share?
What do you think the factors that influence car purchase behavior especially during the economic downturns?
and do you think people will turn to national car since it is cheaper and more affordable as compared with imported cars?
While total spending is down, we see significant numbers of people in restaurants and taking vacations. When people have a job and feel they need or deserve a car -- they are still buying cars. However, the buyers have a greater concern, that they could lose their job, which would make it difficult to continue making payments.
We have seen average prices paid for PC's, Air travel, and cars decline, both because buyers are choosing less expense options and because the sellers are discounting more.
Unclear it there is a significant increase in preference for cars build in the US.