Darn good cars ... and darn more of them. That's Kia Motors America's promise as it expands its product line and broadens its image. Kia's agency, David and Goliath of Los Angeles, created the 'Darn good cars' tag line as the centerpiece of a $125 million-plus integrated national image campaign that broke this month.
But selling 'darn good cars' and taking a brand to another level are two different things. In its first seven years in the United States, Kia sold only the Sephia compact sedan and the Sportage sport-utility. In the past nine months, Kia has introduced three more cars: the Optima, Rio and Spectra. A station wagon and a minivan arrive later this year.
But Dick Macedo, executive vice president of marketing and sales, isn't ready to change Kia's value-oriented image. The new products, coupled with a 10-year powertrain warranty and low prices, will define the company as long as he's running the show.
And, yes, Kia will continue to poke fun at itself in its ads. But it will also take aim at some big-shot competitors - such as Honda - too.
Goal: 200,000-plus sales
Macedo predicts that the wider selection will help the company surpass the 200,000-unit sales mark in 2001. That would come on top of a 16 percent increase last year, when Kia sold a record 160,606 vehicles.
Although its product is going more mainstream, Kia's attitude will remain irreverent.
The company estimates 60 percent to 75 percent of its buyers are considered subprime credit risks. So its marketing caters to a less image-conscious and more cost-oriented buyer. Heavy incentives spending, ranging between $500 and $2,300 per vehicle as of Jan. 31, also have appealed to bargain shoppers. Kia won't abandon them.
'By the nature of our cars, we're kind of an anti-establishment brand,' Macedo, says. While 'it can't be Mercedes ... it can't be as crass as Kmart or Wal Mart.'
Kia's lighthearted approach is designed to take the sting out of shopping the blue light special.
Such irreverence has earmarked the company's marketing ever since Goldberg Moser O'Neill of San Francisco, started pitching the brand in 1994. The agency blended quirky vignettes with the tag 'It's about time everyone had a well-made car.'
By the end of 1999, Macedo fired the agency. In his words, 'There wasn't much talent left.' Agency talent, he insists, is the key to maintaining Kia's edge.
Macedo, a former adman, hired upstart David and Goliath. The agency was composed of a small cadre of seasoned agency execs who had decided to strike out on their own. Kia was their first client.
At first the agency continued Goldberg Moser O'Neill's approach. Images of Kias were paired with copy such as, 'Finally, an $11,000 car that's better-looking than your dates.' The agency has also created award-winning ads that poke fun at Kia's rebates while glorifying the warranty.
Skip Sullivan, COO and partner at David and Goliath, says Kia's marketing is ready to evolve. While the ads will retain a humorous focus on value, they will also make daring claims.
For example, the 'Darn Good Cars' campaign casts the Sportage in a new, more sophisticated light. It's cast as 'a real SUV' and is compared with a 'pretty little Honda CR-V.' The spot unashamedly guarantees quality and rugged performance.
The initial ads for Optima are likewise centered on product. While not directly picking any fights with its competitors, the older and wiser addition to the Kia family is tied into the no-apology claim of affordable luxury. 'The new Optima: Who wouldn't be proud?'
Shifting the mix
If the image is evolving, the media mix is evolving right along with it.
In the first eight months of 2000, more than 69 percent of Kia's $77.8 million in measured media went into spot TV, and another 28 percent went to network and cable TV, according to Competitive Media Reporting. The split was nearly identical in 1999.
Just 1.3 percent was spent advertising in magazines and newspapers in 1999. That figure rose to just 2 percent during the first eight months of 2000, according to Competitive Media Reporting.
Sullivan says those patterns will change. This year Kia will be buying ads in trade publications and newsweeklies and will send out direct mail for the first time. The print is being added to support Kia's two major product launches this year.
Macedo says Kia also will be looking at event marketing next year, including a possible mall tour.
A new arena
Launching the Optima and its affordable luxury mantra will cost Kia about $30 million. That compares with nearly $25 million for the Rio launch and $12 million for the Spectra.
Wes Brown, an analyst with Nextrend in Thousand Oaks, Calif., wonders if demand will be there as the market cools.
'The people who are going to panic the most are people who don't have money,' he says. Brown sees the Optima as a strong product - but clearly not in the same class as a Toyota Camry or Honda Accord.
Harold Drezner, general manager of two Las Vegas Kia dealerships, takes a more positive stance. His stores sold 1,200 Kias last year, and he is looking for an increase of 15 percent to 20 percent this year. He says that more product, a better warranty and Kia management's willingness to listen to criticism and suggestions will sustain momentum.
Dealers ad spending will see a 'significant' increase this year, says David and Goliath's Sullivan, whose agency also pitches ads for Kia dealers associations, During the first eight months of 2000, associations spent $6.8 million on measured media. That's less than nine percent of the importer's $77.8 million, according to Competitive Media Reporting.
Focused on cost
After the new products are launched, Kia will remain a budget-friendly brand, says Macedo.
'What we have is a vehicle that sells for less because of labor rates and the arrangements we have in Korea,' he says. He adds that Kia's success among consumers has been built on successfully marketing this advantage. That's also reflected in Kia's rank among the Top 10 in the National Automobile Dealers Association's Dealer Attitude Survey.
For example, Optima, billed as a near-luxury model, is priced at about $17,700, depending upon the equipment. Kia's new flagship costs $4,000 to $8,000 more than the base price of its current smaller cars, the Sephia, Spectra and Rio. The price divide could blur its longstanding and fruitful low-price image.
Yet the Optima is priced $2,000 to $4,000 less than most of its competitors, including Honda, Nissan and Toyota models - and that's the point Macedo wants to get across.
In other words, you may buy a more expensive Kia, but you'll still pay less for what you get.