Patrick Farrell used a radical sales and marketing strategy to drive Korean car
giant Daewoo into the U.K. car market's top 20 a year after launching. The trip was all uphill: Entering an overcrowded car market, Mr. Farrell faced research that told him customers resented salespeople's haggling and hard-sell tactics, and believed dealers slip in hidden costs. Data also indicated that U.K. consumers might reject the unfamiliar Daewoo name.
"In 1994, our chairman said he wanted us to hit the 1 percent share in the first year," explained Mr. Farrell, 47. But the April 1, 1995, launch lacked the crucial marketing peg.
"Volkswagen cars have a reputation for being reliable, Volvo cars are known as safe and BMWs are admired for the engineering. We wanted to develop the `customer focus' positioning," Mr. Farrell said. "We kept banging the drum on customer focus, and that will always be our position."
Daewoo Cars' key tactic was to ignore dealers, setting up its own retail network and dealing directly with customers to sell its Nexia and Espero models. Hassle-free service meant no pressure to buy nor any nasty surprises like hidden costs (the models are priced from around $12,000 to $20,000). Daewoo also offers a three-year warranty in the U.K.; one year is standard.
As Daewoo enters car markets around the world, the company lets its local marketing directors choose their own strategies-and then learns from them. When it enters the U.S. in 1998, the company may use the no-dealers approach started in the U.K.
To raise Daewoo's product and corporate brand awareness, a marketing program actually began six months before the 1995 launch in the U.K. Also a reason for the early start: Daewoo had to sell 18,000 cars in year one to reach the targeted 1% market share. The $240 million total investment budget included an estimated $18 million for marketing, 50% of which was TV.
Duckworth, Finn, Grubb, Waters in London, kicked off the multimedia campaign with "Transporter." Unveiled in October 1994, "Transporter" aimed to establish Daewoo's credibility. In the TV spot, Daewoo products, including a satellite, a supertanker, a plane and a computer, are lined up on a car transporter, with the last item a Daewoo car. The commercial ended with the self-deprecating line, both spoken and seen: "The Biggest Car Company You've Never Heard Of."
The "Dialogue" campaign invited customers to telephone a toll-free number to voice their dislikes about buying a car. By the time that campaign ended in February 1995, Daewoo Cars had a database of 180,000 people who had called.
Riding the momentum of meeting its year one goal, Daewoo aims to sell 23,000 cars in the U.K. in 1997.