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South Koreans tech-savvy, electronic payment easy & popular. 30.7 million used Internet (March 2007). 75.5% above age six used Internet (2007). Credit Card usage was high.

Credit card companies were in demand but customers unhappy with cold treatment. A change started to happen. Korean credit card companies, used highend technologies & automated the entire process. Reimbursement in 3 days. In the US many merchants not equipped for electronic authorization & settlement one or two weeks to get reimbursed.

Korean credit card companies, used VAN service, high-end technologies & automated the entire process. Reimbursement in 3 days. In the US many merchants not equipped for electronic authorization & settlement one or two weeks to get reimbursed.

Korean government policies favorable since 2000. Acceptance of card mandatory - stores not accepting card penalized.

Credit card lottery events & tax incentives for credit card usage.

Non-bank companies like Samsung, LG (Shinhan) & Hyundai increased market shares through: Proactive marketing - sales promotions (i.e. street promotions, sales),
Better CRM & interest-free installment payments on purchase.

Concept introduced in 1969, by Korean department store, Shinsaegae. 1978: Korean Exchange Bank launched first credit card for frequent travelers under a JV with VISA International. 1980s: Bank & non-bank credit cards began arriving. Growth in 2000: 80%; 100 million cards issued.

Koreans used credit cards even for small purchases. Spend $210 billion in 2006; Country ranked 34th in per capita income in the world, card issuance per capita, second highest; Average 3.78 cardholders (2008). Behind US 5.3 cards, beat Singapore 2.98 cards; Cards in Korea multi-functional.

HyundaiCard customers bought goods at Hyundai Internet shopping mall ( & at Hyundai department stores. Samsung customers bought at Samsung Internet shopping mall ( & Samsung department stores.

Incentives such as 5% discount or interest-free installments or airline mileage points offered to increase consumer loyalty.

Big companies issued customized cards. Card types: The Lady Card, the Cellular Phone Card, the Teen Group Card, the Revolving Card & the Transportation Card.

Bank credit (BC) cards: Kookmin Card & Hana Card; Gwangju cooperating with Korean Exchange Bank Credit Service.

One out of 4 1/2 people used LG Card.

Shinhan Group bought LG Card for over $7.25 billion merged business.
Product development major competency of credit card companies: LG Lady Card, Kookmin Pass Card & Hyundai M Card benchmarked by global issuers. Variety of membership programs benefits associated with retail stores, popular services.

Kookmin Card: industry leader, 9.3 million cardholders - innovative, aggressive marketing. Product range: KB Star Card, SK LPG Save KB Card, S-Oil KB Card, KB Fn Save Card, Social service voucher cards: Senior Citizen Support Voucher Card, Housekeeping/Nursing Voucher Card, & Beautiful Mommy Card for expectant mothers. Kookmin credit cards designed by renowned Fashion designer Andre Kim.

Samsung Card - third largest card issuer, innovative products & services. Won several awards in customer satisfaction surveys. 2004: Samsung Card merged with financial affiliate Samsung Capital - expanded into commercial financing. Listed on Korea Exchange (2007). Core competence: size, range of offerings, advanced CRM system, extensive business network - partnerships with Group affiliates.

Samsung developed Samsung Blue American Express Card & ShinsaegaeSamsung Card. Social contribution activities set it apart from peers. Active in community service, offering volunteer services; Charitable work with local communities. All employees part of at least one volunteer activity under 365 Volunteering program.

2007: Shinhan & LG integrated as new Shinhan Card. End 2008, active cardholders 13.6 million, market share 24%. Usable almost anywhere. Strong customer base of Shinhan Financial Group, second largest financial holding company. Largest card issuer in Asia, #10 in the world. Two distribution channels: 1,052 branches of Shinhan Bank & 30 credit card branches.

January 2009: Strategy Meeting with VP HyundaiCards Marketing Jae-Woo Park. Marketing Managers put forward ideas & anticipated possible difficulties for HyundaiCard as a market follower. Jae-Woo reported the marketing strategies to Ted Chung, President of HyundaiCard.

HyundaiCard 4th largest credit card company, sponsored by Hyundai Kia Automotive Group (bought over Diners Card & changed name);
Group long-term strategy: Transform itself from auto-manufacturer to leading provider of auto-related services: financial, retail, Internet based.

Started in 2005 with a strategic alliance with GE Consumer Finance (GECF); GECF invested in HyundaiCard & became largest shareholder bigger than Hyundai Motor;

HyundaiCard increased capita adequacy ratio to 43% from 11% - upgraded creditability, reinforced financial stability. Benefited from GEs advanced financial product planning & risk management systems.

HyundaiCard having gained experience, launched a unique, customized service: the Alphabet Card.

1999: Hyundai M Card launched; Card pre-discounted up to US$1,800 to pay for purchase of Hyundai cars;

Payoff in five years against credit card mileage points;

Limited success initially: Later HyundaiCard positioned as market leader.

Hyundai M Card enjoyed high performance - secured more than 1,000,000 subscribers within first year of launch.

As a single credit card brand, it had largest subscriber base in Korea. Hyundai M Lady Card followed designed with services for female customers, also received good response.

HyundaiCard utilized diverse segmentation strategy.

Company strengthened customer service & guaranteed safe online business. Highest level of services & diverse marketing strategies to convert customers to high usage frequency.

HyundaiCard divided members into four categories (general, low, middle, high) based on credit card payments. Customer segmentation filtered each groups usage status & purchasing methods based on age, gender & points of purchase (shops, gas station, restaurants).

Homepage & e-mail used extensively to convey info & benefits (discount rates & bonus points) on special cards, according to customer traits (gender, age, level, card type).

Differentiated marketing using alphabets M, S, W, U, K and A, based on consumer lifestyle. HyundaiCard discovered women in their thirties represented largest consumer group using credit cards via Internet & offline. HyundaiCard S for women in their thirties featured more enjoyable shopping & more purchases leading to more bonus points & benefits. Result: Many new memberships.

Premium market: Color-coded cards the Black, the Purple & the Red cards became popular as well.

Electronic Customer Relationship Management (eCRM) adopted widely by websites in Korea. HyundaiCard ALSO upgraded its Internet system environment to eCRM to:
1) Provide effective tailor-made services; 2) Promote marketing campaigns with online business strategies & online services; & 3) Upgrade e-mail solutions.

Strengthened customer relationships: companies analyzed customer preferences, transactions & online usage; Allowed companies to create themed malls on website to promote: shopping, insurance & travel;

Design and GUI (Graphic User Interface) upgrade: connecting HyundaiCard website with family site services

Finance shop: First shop opened for business in 2006 offering all-in-one financial services, in a nice ambience created by world-famous designers.

2009: network size increased to 12 shops.

Culture Marketing: Hosting Super Concert series with musical stars Billy Joel & Placido Domingo.

Integrated online & offline customer data used to maximize potential of marketing campaigns, increase profits & strengthen relationships.

Data Gathered: Recent website usage duration, frequency of visits & history with HyundaiCard provided metrics to assess online familiarity, frequency of use etc.
Data shared: with entire company.

2007: Koreas Most Admired Company for second consecutive year; #1 in National Customer Satisfaction Index (NCSI) for the third consecutive year. #1 in the Credit Card category of Net Promoter Score (NPS) survey by Bain & Company in 2006. HyundaiCard joined Samsung Card, Kookmin Card and LG Card (merged with Shinhan in 2007) as one of four leading credit cards.

HyundaiCard entered market late. Sustained very low customer count at first. Had to generate aggressive marketing strategy to catch up with market leaders. Adopted differentiated marketing strategy to cover strategic weaknesses & increase membership & card usage rate. Faced strict control of Korean government a hurdle.

Going forward, HyundaiCard expecting to face tough competition from leading players. Company must realize sustainable growth. More advanced strategies needed to maintain current customer relations & attract potential customers. Must create new, additional value in the constantly changing domestic market.

In auto financing, there is a need to create additional value (through crossselling & more customized services) to maintain lead;

Alliances must be signed to extend network & strengthen M point-based marketing activities. Internationally, HyundaiCard must break into major financial markets, to solidify base & become a global player.

In North America, Europe & Asia, alignment with global brands e.g. VISA, Coca-Cola, Wal-Mart & Google would be crucial.
As a new brand in international, HyundaiCard must raise company status (by solidifying links with GE? or

1. How could HyundaiCard, a market

follower, manage to successfully position itself as a market leader in Korea?

2. Could HyundaiCard's marketing

strategy keep enhancing its competitive edge in the market? Will any major change be needed in future?
3. What future strategy would be best

for HyundaiCard going forward?