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Presented by Shraddha Shah Ruchi Wadhwa

Hyundaicard, sponsored by Hyundai Kia Automotive Group, was established in 1999. Hyundai Motor Group acquired Diners Card as a subsidiary and changed the cards name in 2001 to Hyundai Card. The company provides credit card products and services to its customers in Korea. Companys strategy focus is to have a diversified and stable funding portfolio. Hyundaicard plans to enter into various international markets through the launch of its products in the US, Europe and China.

In 2005, Hyundaicard had a strategic alliance with GE Consumer Finance (GECF), a unit of General Electric (GE). GECF invested 678.3 billion won in the firm, thus becoming the largest shareholder. The partnership with GECF has enhanced Hyundaicards management structure, financial profile and competitiveness. Hyundaicard introduced GEs advanced financial product planning and risk management systems. As of December 31, 2011, the Hyundai Motor Group owned 53.98% and GE Capital 43.00% of the Companys shares capital.

As at the end of 2011, Hyundaicard had a market share of 14.30% in the domestic credit card market. Hyundaicard is Korean market leader in premium cards and is one of the largest card issuers in the country. Hyundaicard was the first company in Korea to introduce card brand marketing, using alphabet marketing, premium VIP card program and card design marketing. In May 2003, Hyundaicard launched its flagship credit card Hyundai Card M and in February 2005, the Black card, the first super-premium brand, targeting the top 0.05% of cardholders. In February 2006, Hyundaicard launched the Purple Card, an exclusive premium brand, targeting the top five percent of cardholders, and then in 2008, The Red Card.

1960-1970 The first card was appeared in July, 1969 issued by Shinsaegae Department Store to Samsung Corporation employees. The purpose of issuing the credit card was simply to expand the sales volume (transaction volume) in department store. 1970-1980 A specialized mono-line credit card company was Korean Express Credit Card Company, in 1978. 1980-1990 An aggressive growth of credit card industry was started in 1987 when the Law of Credit Card (currently the Financial Law of Credit Business) had amended. At this stage, there were four mono-line credit companies established. For example, LG in 1987, Kookmin in 1987, Korean Exchange Bank Credit Service (KEBCS) in 1988, and Samsung in 1988. Since then, the type of credit card was divided into Mono-line and Bank credit cards.

A unique characteristic of the Korean Credit Card was its multi-functionality. South Koreas credit card companies offered competitive incentives like Cash Discounts, Interest-free Installments, Air mileage Service, Point Cash and Pre auto financing service, in order to entice credit card customers to use their products frequently. A great deal of credit card use was tied to Retail Chains or Conglomerates / Business Corporation.

Information technology was an important growth engine for the South Korean economy and had expanded rapidly since the early 1990s. In particular, South Korea was a technology-savvy country in which electronic payment was easy and popular. The use of credit cards (38.70%) - was the most common mode, utilized by South Koreans to pay for products and services, followed by cash and online banking services.

Korean credit card web sites had gained nationwide popularity, resulting in various new services and goods, appearing on the Internet. Korean credit card companies, using the VAN service, developed high-end technologies. The affiliated member stores were equipped with electronic authorization and settlement technologies. The member stores were reimbursed within three days. This convenience helped the issuers attract more affiliated stores.

South Korea was one of the worlds most dynamic countries, encouraging credit card use, thanks to the support and an encouraging policy by the Korean government since 2000. Nos of credit card issued exceeded 100,000 thousands. The Korean government encouraged consumers to use credit cards to stimulate private spending and secure more taxes. The average South Korean had at least Four Credit Cards. The Korean government made the acceptance of the credit card mandatory and penalized stores not accepting the credit card. The membership stores exceeded 15,000,000. There were sensational credit card lottery events and tax incentives for credit card usage.

The Korean Credit Card market was characterized by rapid growth and intensified competition. The major mono-line credit card issuers were Samsung Card, LG (Shinhan) Card and Hyundaicard. The aforementioned companies issued credit cards, customized for Korean individuals Lady Card, Teen Group Card, Revolving Card, Transportation Card and Cellular Phone Card. Another variety was credit cards issued by banks. Kookmin bank, the countrys largest bank, launched its credit card business in 1980. With 9.3 million card holders, Kookmin Card established its leadership position in the industries.

I) Customer Segmentation The Innovative marketing Strategy focused on customers lifestyles. Hyundaicard divided its card members into four categories (General, Low, Middle and High) according to credit card payment. Customer segmentation filtered each groups usage, status and purchasing methods Customers segmentation helped in collecting data according to their age, gender and the main location of purchase (shops, gas station, restaurants, etc.). Hyundaicard formulated Alphabet Marketing, having unique and creative design. Hyundaicard executed the companys alphabet marketing strategy by launching Hyundaicard M, S, W, U, K and A, based on consumer lifestyle. Thus, the company issued the new Hyundai Card S for women in their thirties.

eCRM was introduced in the most widely used credit card websites in Korea. eCRM collected Hyundaicard customer information. The database provided useful, accurate information about Internet customers and their transactions. Establishing an effective eCRM system could potentially strengthen Internet services and allow the company to execute Internet marketing strategies.

The finance shop was the place that enabled Hyundaicard customers to enjoy all-in-one service, getting financial consultation services and enjoying an ambience created by world-famous designers. Hyundaicards first finance shop opened for business in 2006 in Seoul, South Korea. By 2009, the company had the network to 12 shops nationwide.

Hyundaicard integrated online and offline customer data, maximized the potential of marketing campaigns. It maximized the two channels (online and offline channels) to increase customer profits and strengthen customer relationships. Hyundaicard enjoyed the synergy effect of online and offline channels for customer information. The integrated of online and offline information provided accurate customer data to CRM Business departments and related administrators. The integrated information could then be shared by the whole company.

Hyundaicard market share stood at 9.96% and the number valid card holders were 6.33 million in 2007. In 2007, through an innovative marketing strategy, Hyundaicard was named Koreas Most Admired Company for the second consecutive year out of all Korean credit card companies.

The financial highlights for the year 2007 are as under:


Sr No
1 2 3 4 5

Particulars
Operating Revenue Net Income Total Assets Total Liabilities Total Shareholders Equity

US dollars in thousands
11,952 2,498 49,512 37,542 11,970

Backed by its stable financial results, Hyundaicard was slowly becoming a brand name in the international markets.

Hyundaicard is facing tough competition from Kookmin Card, Samsung Card and Shinhan Card, all of whom are leading players in the South Korean credit card industry. Hyundaicard will have to realize sustainable growth by further developing its differentiated marketing strategies. It will be important for Hyundaicard to continuously develop advanced marketing strategies, to maintain current customer relations and attract potential customers. Hyundaicard will have to increase efforts to create new, additional value in the constantly changing domestic market.

Korean credit card market experienced a period of overheating, due to a rapid expansion in the number of cards, reduced standards for issuing card, etc. In the loan services, credit card companies began witnessing an alarming growth in the number of late payments and users with bad credit history. The Korean credit card industry was a bubble on the verge of bursting. Hyundaicard had fewer customers and sustained moderate losses.

Hyundaicard, as a market follower, will have to generate an aggressive marketing strategy, to catch up with the market leaders. Hyundaicard will have to adopt differentiated market strategy. Hyundaicard will have to create additional value, by promoting cross-selling and expand customized services. Such strategy will perfectly address each customers lifestyle and needs. Hyundaicard will also have to extend its network of alliance with major players, in various industries. Internationally, Hyundaicard will have to break into the foreign financial markets, so as to become a global player. As a brand in the international market, raising the status of the company, by solidifying with GE, will be vital.