In the movie Risky Business, Tom Cruise plays a high school senior struggling to decide whether to stay on the straight-and-narrow or to put a little craziness in his life. He opts for the latter, uttering the film’s trademark line. “Sometimes,” he drawls, peering out from behind a pair of Ray-Bans, “you just gotta say, ‘What the f –.”That sentiment is pretty much the one that motivated 49-year-old Bill Tucker to leave his job of 15 years with Subaru of America and his beloved home in a comfortable suburb of Philadelphia to help engineer Daewoo’s assault on the U.S. passenger car market. Now vp marketing of Daewoo Motor America, Tucker readies plans for the Aug. 31 intro from headquarters in Compton, CA. What’s a little crazy about this is not just that the auto business, though strong, is already saturated with competitors (including two others, Hyundai and Kia, from Daewoo’s home base of Korea). What’s unusual is Daewoo’s marketing approach: a grassroots, promotion-laden effort aimed at college towns.
No glitzy national advertising will herald this fall’s arrival of Daewoo’s Lanos, Leganza, and Nubira models. Instead, the $68 billion conglomerate, which already markets consumer electronics and heavy equipment in the states, is recruiting up to 2,000 students at some 400 colleges and universities to create a buzz over the new line of value-priced cars.
Through ads placed in college newspapers and on GenX radio stations, the company has received more than 3,000 applications from students looking to become Daewoo Campus Advisors. Those chosen (about a thousand have already been signed up) get free trips to Korea this summer, where they will tour Daewoo auto plants and dealerships to soak up product knowledge. Once school is back in session, and the first Daewoo cars appear in company-owned dealerships, the DCAs will be expected to put in eight to 10 hours a week passing out informational handbills, giving presentations to groups and clubs, and promoting on-campus Ride-and-Drive events. They will receive commissions of up to $400 on referrals and will be able to purchase Daewoo cars at what the company says will be “significant” discounts.
Daewoo’s unusual launch strategy is a bit of target marketing and a tad of test marketing rolled into one. The Korean automaker is trying to establish its affordable cars with a young, influential segment, yes, but it is also going one-on-one with that segment in an attempt to disassociate itself from the poor quality reputation that plagues both Hyundai and Kia. The financially ailing Kia currently idles in neutral, waiting for an acquisition offer from a rival auto company.
“We needed to find an approach that wouldn’t require the money other auto manufacturers spend on mass media, and we wanted to get noticed quickly,” says Bill Tucker. “So we decided to target college and university towns and have 1,500 to 2,000 student actively promoting us to fellow students, recent grads, faculty, and their own parents.”
Educated word-of-mouth Why college folk? Tucker ticks off a number of reasons. It’s a manageable population – that is, it’s easy to find them and be among them. Students are at an age when they’re still flexible about their preferences, and Daewoo would like to make them early adopters of their vehicles. Establishing a brand identification with a group of educated, soon-to-be professionals who will leave their campuses and spread out across the country is a good way to proliferate the brand. What’s more, the tactic fits nicely with Daewoo’s global commitment to support education through cause-related programs.
Daewoo will also employ the unusual strategy of kicking things off in America with company-owned dealerships. Most new car companies sell franchises to existing dealers, allowing them to gain an immediate national retail presence, as well as benefit from the advertising and promotion activities of established businesses. It is also illegal for automakers to have company-owned dealerships in some states.
Daewoo will start with 14 dealerships in college-heavy towns such as Atlanta, Boston, Philadelphia, Orlando, Chicago, and San Diego. Having control of the dealerships allows Daewoo to use them as hubs for training and equipping DCAs. The company will also make a Saturn-style attempt at customer service. “It’s an opportunity for us to change the retail process,” says Tucker. “We intend to offer customers convenience and hospitality, to be sensitive to their needs.”
Fall ’98 will not be Daewoo’s first experience selling cars to Americans, having produced models for Pontiac in the past. The Korean company, founded with $10,000 in the late ’60s by current chairman Kim Woo-Choong, sold 1.4 million cars worldwide last year. It has strong presences in South America, Eastern Europe, and Asia. But if Kim’s aggressive goal to hit annual sales of 2.5 million cars by 2000 is to be met, Daewoo has to make it in the U.S.
“Anybody that wants to be a global player must succeed in this market,” says Automotive News executive editor Ed Lapham. “The easiest way to do it is to come in at the entry level.”
What better way to do that than appeal to a populace in training for entry-level jobs? Daewoo’s plan is to blind college kids with offers enticing enough to make them forget all about the Korean quality question. Daewoo purchases come with 15-day, 1,000-mile money-back guarantees. The company is promising new car buyers free maintenance for three years and a free, 24-hour roadside assistance program including towing services, battery charges, and lockout services. It’s a great offer, and one that Daewoo’s sparsely located dealerships would find impossible to deliver on, so the company recently signed a long-term deal with Cross Country Automotive Services to handle the load.
“This [deal] demonstrates Daewoo’s commitment to the U.S. market, as well as their innovative approach to launching vehicles in the U.S.,” comments Cross Country president Jeffrey Wolk.
Over-equipped Daewoo also wants to make their young targets eyes pop at the product and the price. “We’re going to have over-equipped vehicles for their price points,” says Tucker.
Daewoo’s maiden line consists of three models: the Leganza sedan, the compact Nubira, and the subcompact Lanos. Most likely to make a quick impact on campus is the Lanos, whose standard features include McPherson strut suspension, anti-lock brakes, and safety features such as impact beams in doors – all for between $9,000 and $12,000.
The Nubira ($12,000 to $15,000) comes with a German-built engine and more interior room, Daewoo claims, than many other models in its class. The Leganza is Daewoo’s Italian-designed, high-end model, aiming to steal sales from Toyota’s Camry and Nissan’s Maxima with a $20,000 sticker.
It will be up to the Daewoo campus advisors to preach the company’s quality-at-a-value message. They will help plan, stage, and promote the on-campus Ride-and-Drive events, an important tactic for getting potential buyers beyond the Korean quality issue. Some DCAs will be given free use of Daewoo vehicles for 90 days to demonstrate them to friends – and to drive prospects to local Daewoo showrooms.
“We plan to put lots of local promotions into play, even some coupons,” says Tucker. “And we have to find out how to be hip and cool real fast.”
Daewoo will make liberal use of the Internet in promoting its cars. It already has a site up for DCAs (www.daewoous.com), and banner ads on heavy-traffic young adult sites will join local newspaper and radio ads as the only media accompanying the launch. The company is even toying with the idea of virtual dealerships on the Net.
“We may push Daewoo into the forefront of e-commerce,” says Tucker.
College-kid marketing reps, dealerships in cyberspace. Has Daewoo gone stark raving marketing mad? Perhaps not.
“In Britain, where they have a decent business,” says Lapham of Automotive News, “Daewoo sells their cars in department stores and door-to-door.”
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