After selling cars for more than a year in the U.S. with virtually no advertising, the South Korean auto importer is finalizing its first national ad campaign, which Bill Tucker, VP-marketing and customer relations, said will break by the end of February.
Daewoo's plan in 1998 was to market almost exclusively to college students. It enlisted 5,000 students to identify prospects from campuses and direct them to 15 company-owned stores. But only about 20% of sales that year derived from the campus program.
Now, Daewoo has about 50 company-owned stores and last year decided to expand via franchised dealerships. The current 290 dealers will grow to 450 by the end of 2000, Mr. Tucker predicted.
The integrated ad push will start with outdoor, followed by TV and print. Mr. Tucker said creative focuses on the "affordable luxury" of the Leganza, the brand's flagship sedan.
Rather than choose a major national agency, Daewoo selected Kenneth C. Smith Advertising, La Jolla, Calif to buy the media and develop the TV spot.
The agency is not handling outdoor and print. Mr. Tucker wouldn't cite the agency responsible for those media, noting only that Daewoo works with several southern California agencies on a project basis, including Smith, Abert/Poindexter and URI.
$30 MIL RANGE
Mr. Tucker declined to discuss the campaign's cost, but media budgets for national car campaigns traditionally fall within the $25 million to $30 million range.
"A national ad campaign will help create some integrity for the brand, more so than a college campaign," said Susan Jacobs, president of auto consultancy Jacobs & Associates. "To create a niche for themselves, Daewoo needs a coherent strategy and consistent marketing message. You can't change strategy every year."
Both General Motors Corp. and Ford Motor Co. are interested in acquiring control of Daewoo Motor Co., Daewoo's parent. The parent is mired in debt.
Mr. Tucker said the question of ownership hasn't affected Daewoo's operations in this country. He welcomes a new owner with financial resources to help.
Daewoo is targeting U.S. sales of 100,000 units this year, "ambitious but doable," Mr. Tucker said.
The marketer sold 30,787 cars in the U.S. last year and 2,400 in 1998, according to Automotive News.
Daewoo currently sells three models in the U.S. In addition to the Leganza, it markets the Nubria sedan and Lanos hatchback coupe. In May or June, its first sport-utility, the Korando, will go on sale with a sticker price of about $20,000.
Ms. Jacobs believes Daewoo will have an uphill battle because of its lack of visibility and name recognition. She also questioned the marketer's pricing strategy, since more-established brands have lower prices on similar vehicles.
Daewoo has made other strategy changes. It had four regional offices in 1997, each autonomously reporting to Korea. Each held agency reviews and picked a shop, but the chosen agencies waited for months for business that never materialized. Daewoo eventually consolidated the regional offices in Los Angeles.
The brand last summer received permission from California to sell directly on the Web in the state. Mr. Tucker said Daewoo put those plans on hold.