The South Korean importer is in the midst of its most aggressive new-product assault since it started selling small cars in the U.S. seven years ago in the West. It took until 1998 for Kia to complete its national rollout, but the brand has enjoyed a growing acceptance of its vehicles since then.
Kia bucked the industry's 11% overall sales slump in December vs. the prior December by reporting a sales jump of 53%, said Dick Macedo, exec VP-sales and marketing at Kia. The brand's sales in calendar 2000 rose by nearly 20% from the prior year to 160,600, he said.
The marketer, acquired by rival Hyundai Motor Co. in Dec. 1998, launches its newest product, the Optima midsize sedan, with an estimated $30 million ad campaign breaking Feb. 1 on national broadcast and cable TV. The two-month media flight includes spot TV in 37 markets and national magazine ads.
Kia hopes to sell at least 20,000 Optima sedans this year, said Rick Weisehan, marketing director at the carmaker. The vehicle will target annual household incomes of $50,000 or more-the brand's most upscale audience to date. "That's one reason we're so excited about this car," he said. "It's going to bring in a little more affluent buyer," whom he projected would be move-up owners of small cars and current midsize owners looking for something new. The base price is $15,299.
Mr. Weisehan also is formulating launches for the Rio wagon, a sibling of the entry-level Rio small car, which debuted last summer, and the all-new Sedona minivan due this summer.
The marketer added the Spectra, a small sporty sedan, to its lineup last year. Before that, Kia only sold the Sephia small car and Sportage sport utility. Kia's ad spending rose as new products arrived. It spent $92 million in measured media in calendar 1999 and $96 million in the first nine months of 2000.
Bob Schnorbus, a director at consultancy J.D. Power & Associates, said Kia is still a niche player in the low-priced market. Kia's biggest hurdle is "overcoming consumers' hesitancy because they don't know what to expect in [the cars'] durability." The automaker's U.S. success has probably encouraged Kia to "solidify their footing" by adding more products, he added.
Mr. Weisehen said ad spending will be up again in 2001 to handle the three launches. He declined to be specific, but it's expected to be at least 25% higher.
The Optima campaign, from David and Goliath, Los Angeles, introduces the brand's new umbrella tag, "Darn good cars." It replaces "It's about time everyone had a well-made car," Kia's original tag from Goldberg Moser O'Neill, San Francisco.
"It's a completely different brand than it was a few years ago," said Skip Sullivan, chief operating officer and co-managing partner of David and Goliath, Kia's agency since fall 1999. "It was time to elevate and evolve the brand," which he said is now competing with "established and well-entrenched brands."
The agency created two 30-second spots with Optima owner "Frank." In one, he asks his wife whose car is in the driveway. To her reply of "It's yours Frank," he retorts "It is. Isn't it?" He repeats that line in each spot; both tout the car's six-cylinder engine, leather seats and long-term warranty.
Mr. Sullivan described Optima's ad campaign as Kia's first fully integrated campaign.
It includes a direct-mail piece totaling 1.4 million prospects. DDB Direct, Los Angeles, is handling. The first phase drops in late February, the second a month later. Kia has a promotion with the syndicated "Hollywood Squares" TV game show, which will run spots in May offering a music CD in exchange for an Optima test drive. The promo will be displayed at Sam Goody stores nationwide.
Mr. Macedo said most of the brand's growth this year will come from small cars, with sales rising from 97,000 units in 2000 to 150,000 in 2001. The Rio car and wagon will account for about 50,000 units. Twenty percent of the Rio sales will come from the wagon, which he said would be "the lowest-priced wagon in the world." He didn't predict Sportage SUV sales, which tallied 62,350 units last year.
"We're the people's car," he said. "Our marketing campaign is clear and acceptable in a friendly way."