Wednesday, January 13, 1999
Buy your car!
FEATURE: Korean conglomerate Daewoo is spending big bucks to
pitch
its cars to American college students,
even going so far as
to send ‘College Advisors’ across
the Pacific
to test-drive cars
By J. Sharon Yee
Daily Bruin Senior Staff
When the opportunity to travel to Korea for free came up, Houman
Hemmati took it, despite knowing very little about the company who
was offering it.
Little did Hemmati know that the company, Daewoo, was recently
ranked the 18th-largest conglomerate in the world by Fortune
magazine, and that in Korea, the name has come to be associated
with everything from cars to electronics to heavy industry
machines.
"Daewoo has the idea that the cars speak for themselves and
will, in time, build their own name recognition," Hemmati said.
Living in America, where Fords and Toyotas crowd the streets, it
seems unusual to see a car made in Korea.
Yet Daewoo, is determined to change all of that, with a little
help from college students, that is.
After launching three car models in 15 dealerships all across
the United States last September, the company also decided to
implement a rather unique marketing program, using word-of-mouth
strategies over traditional marketing tactics, such as television
commercials and print ads in national magazines.
Instead, Daewoo has opted to advertise through more
"grass-roots" efforts, as demonstrated by the introduction of the
Daewoo Campus Advisor (DCA) program.
After spending an all-expense paid one-week trip to Korea
learning all about the history of the company and taking tours of
their factories, the students go back to their universities and
essentially spread the word.
They don’t do it alone, however. Each DCA is given a car to
drive around for three months, with everything, except the gas,
paid for. The philosophy behind this is that having the actual
product to show family members, friends, and complete strangers
could help increase their chances of buying one, Hemmati said.
"People don’t know what brand it is when I show them mine. In
fact, many think it’s a Lexus or Infiniti," said Hemmati, a
second-year medical student and DCA.
When Lisset Pacheco, a fifth-year microbiology student, heard
about the free trip and car, she also decided to join.
"I was shocked at first. I thought they were insane and taking a
huge risk," she said, of these brazen marketing tactics.
After the three-month trial period, DCAs have the option of
keeping their cars for several more months, if they are still
actively participating in the program, Hemmati said.
Though the DCAs do not act as official salespeople, they do
receive a commission for each person they refer to a nearby dealer
who ultimately buys a car.
Just ask Pacheco, who proudly holds the honor of being the first
DCA in southern California to sell a car, for which she received a
$400 commission.
Seoyeun Stephanie Won, a third-year business economics student,
sold her first car on New Year’s Eve and received an extended three
months to drive her car, in addition to a $500 commission.
"College students who are looking at buying used cars can spend
virtually the same amount on a brand-new Daewoo car," she said,
explaining how she was able to sell a Leganza SX to a fellow
student.
With over 80 UCLA students in the program, the university is the
model campus for the DCA program and will be evaluated this summer,
Pacheco said.
The three models – Lanos, Nubira, and Leganza – all range in
price from $8,749 to $18,660 and come with 24-hour emergency
roadside assistance and scheduled maintenance program for the first
three years or 36,000 miles.
Won explained the importance of having her own car to not only
show people she knows, but also to help keep the Daewoo name
recognizable on the streets of L.A.
"When we (the DCAs) drive the cars, it gives people the chance
to actually see them being driven on the open roads so when it
comes to buying a car, they will be less hesitant or reluctant to
look at our cars," Won said.
Unlike other car manufacturing companies, Daewoo has established
college students as a niche market, hoping to target young people
as a main concern in getting the word out about their company.
"College students and young adults are just beginning to develop
brand loyalties and they exert a tremendous amount of influence on
the purchasing decisions of their family and friends,"said Kim
Woo-Choong, the company’s chairman.
"We expect to generate lifetime customers by paying close
attention to their purchasing preferences," he added.
Additionally, the company helps fund activities run by student
organizations on campus.
Hemmati, co-chair of the annual medical school banquet
committee, turned to Daewoo for funding and received $2,000.
Still, regardless of all their efforts to generate publicity and
sales within the past four months, Automotive News magazine
reported in December that only 1,750 Daewoo cars had been sold
since their introduction.
Of those, only 700 were bought by the general public, and even
less, a mere 20, had been sold to their niche market, American
college students.
"It’s normal for any company, particularly an auto manufacturer,
with a new product launch in the U.S. to experience sluggish sales
initially," Hemmati said.
"Sales will inevitably grow as the public builds recognition of
the Daewoo name," he added.
Statistics given by Daewoo indicate that the company is "on
target" with its unique marketing plan.
Since the end of September, a total of 2,463 cars have been
sold, of which 1,264 were sold through the DCA program, according
to a statement released earlier this month.
All in all, Hemmati said he believes that the non-traditional,
hands-on approach of marketing is the best approach for a company
just starting out in a country where cars are so highly valued.
"Until a company like Daewoo builds a name for itself, it’s
better to get people to understand the cars on a more personal
level and build the confidence that way," he said.
Hemmati, who used to drive a sport utility vehicle, also said he
believes the Korean cars in many ways, "surpass the quality of
American-built cars" and are "competitive in terms of quality and
price factor because you just get so much more with Daewoo
cars."
Ryan Lee, assistant manager of the product planning team at
Daewoo in Korea,described this unique marketing campaign very
succinctly.
"We call it ‘disruption,’ the idea of doing something
differently from the way it’s been done in the past," he said.J.
Sharon Yee
An assembly worker from eastern Europe assists on the production
line for one of Daewoo’s car models in South Korea. Daewoo is
currently training workers to operate a future plant in
Kazakhstan.
The Leganza, which means "powerful elegance" in Italian, is
Daewoo’s highest-priced car currently selling in the United States
at $18,660 fully equipped.
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