Hyundai Card Marketing Strategy Case Study

I often pass by the giant square arch that stands in Itaewon, Seoul’s most diverse neighborhood. Below it is a glass-walled structure containing a café and music library. Sometimes, I drop by just to take in the night view outside: a low skyline of brown brick villas and flickering lights. But my plan to take friends from Singapore to the building recently was confounded when I found out that only certain people — specifically, Hyundai Card holders — can access the music library on the second floor.

The library is part of a mini cultural empire developed by one of South Korea’s leading credit card providers as part of an intense strategy of “cultural marketing.”

South Koreans are avid credit card users. In fact, they own an average of 3.6 credit cards each, compared to figures of 2.6 and 1.5 cards per capita in the United States and the United Kingdom, respectively, according to Korea Financial Telecommunications and Clearings Institute in August 2017.

With such a level of market saturation, competition between credit card providers is bound to be fierce.

In apparent acknowledgment of its Hyundai Card’s cultural marketing strategy, other South Korean credit card providers have followed its lead, building images for themselves as culture providers in a bid to gain an edge in the country’s hypercompetitive industry.


Culture Guru

The story of Hyundai Card’s renaissance is widely known in South Korea; The company, a subsidiary of leading chaebol Hyundai Motor, has been featured in a variety of case studies and local media reports. Diners Club Korea, the company that became Hyundai Card, had just a 1.8 percent share of the market when parent company Hyundai Motor bought and renamed it in 2001. Now, Hyundai Card is South Korea’s fourth biggest credit card provider, with a 12.8 percent share of the market as of late 2017.

Many credit Hyundai Card CEO Chung Tae-young, who took the helm in 2001, for the company’s surge. In 2003, South Korea experienced a massive crash in the credit card market as a large number of consumers defaulted on their loans. Many credit card companies were on the brink of collapse, but Hyundai Card persevered, creating a series of popular products such as a series of “Alphabet cards,” and eventually venturing into organizing mass cultural events.

Since the mid-2000s, the company has been bringing world-class athletes, and musicians to South Korea in a series of high-profile matches and concerts. Big names flown in to perform include Stevie Wonder, Beyoncé, Lady Gaga, Coldplay, Billy Joel and Maria Sharapova. 

Independent experts declined to speculate on the effects of the strategy, saying it was impossible to prove a direct correlation between such cultural marketing and profit. But Hyundai Card itself describes cultural marketing as the “driving force” behind its growth.

The company also runs multiple cultural venues that are, it says, helping it “increase channels of contact with the public.” Such locations include Vinyl & Plastic, where visitors can listen to and buy from a selection of 9,000 vinyl records and 16,000 CDs; the music library in Itaewon, with a collection of 10,000 rare records and more than 4,000 music-related books; and a design library in northern Seoul’s Bukchon neighborhood. Elsewhere in Seoul are a travel library and a cooking library.

Hyundai Card’s competitors have been taking note. In 2017, Shinhan Card, the number one player in the industry, re-branded its Facebook page as “Shinhan Card Culture Factory.” The page contains no mention of credit cards at all, despite ultimately being a platform to promote them. Instead, it attempts to convey uniquely Korean stories featuring local small and medium enterprises. One such example is an introduction to Seoul Collector, a small business that collects vintage objects that illustrate Seoul’s history; another is a list of book cafés operated by boutique publishers.

According to its own book, “Deep,” Shinhan Card has two goals for its SNS channel: becoming a “feeling partner” by relaying trendy information in the language of young adults; and being a “consumption partner” by providing customers with “rational consumer information.”

The future looks bright for South Korean credit card companies. Despite the intense competition in the industry, business is still lucrative — the total value of credit card transactions rose from 578 trillion won in 2012 to 694 trillion in 2016.

According to research firm Euromonitor Korea, the Bank of Korea is trying to bring about a cashless society by 2020 and “encouraging more consumers to spend through financial cards at convenience stores or drugstores.”.

“In addition, as more consumers use credit cards in South Korea, even though this is only for small amounts, the number of transactions and their total value will increase during the forecast period,” the firm claimed.  


Cover image: Hyundai Music Library in Itaewon. (Photo by Kyungsub Shin)



Case on:


HyundaiCard was established in 2001. In Aug 2005 HyundaiCard established a strategic alliance with GE Consumer Finance. So, HyundaiCard’s largest shareholders became Hyundai Motor (31,6%) and GE Consumer Finance (43%).

HyundaiCard focused on its customer needs, developed new credit card products, and provided different online marketing campaigns. Its customer segmentation strategy focused on its customer needs:Lifestyle Influences à Activities. That why HyundaiCard formulated “Alphabet Marketing” named M, S, W, U, K and A, based on consumer lifestyle. The customized marketing approaches included “Alphabet Credit Cards” having unique and creative designs. HyundaiCard also diversified its product line and expanded into the premium market via the introduction of “the Black” and “the Purple” cards.

HyundaiCard scoured the world for top artists and designers to help create strong brand identity, incorporating unique, contemporary elements that resonate with today’s consumers. HyundaiCard’s also diverse marketing strategy was integration of online and offline channels. Thus, to carry out an effective marketing strategy and increase profits, HyundaiCard focused on customer value and online interaction through e-CRM. The company also strengthened its internal administration regarding customer service and guaranteed safe online business.

Long-term strategy in order to transform itself from an automobile manufacturer into the world’s leading provider of additional services related to automobile business. The company’s goal was to strengthen its financial services, retail businesses and Internet fields, etc.


In the competitive South Korean credit card market, a review of the past decade of HyundaiCard’s marketing strategies and evaluation of anticipated possible difficulties of being a market follower revealed several challenges for senior management. Despite a tremendously successful creative business model based on customer needs, innovative products and integration of online and offline customers, the company’s performance had not progressed in the past seven years. HyundaiCard had difficulty relating its creative business model to the strong personas of the leading players in the credit card industry. How could HyundaiCard, a market follower, successfully position itself as a market leader? Could HyundaiCard’s marketing strategy keep enhancing its competitive edge in the market? What future strategy would be best for HyundaiCard?



Sales: HyundaiCard’s sales growth in 2004 to 2008 was growing. The 2008 sales was 42,7 trillion won.

Margins: Operating revenue was increasing from 2003 to 2007 while the 2007 operating revenue was 1121,3 millions of Korean won or 1109,5 thousands of U.S. dollars.

Profits: Net income was increasing from 2003 until 2006, but in 2006 to 2007 the net income was decreasing from 281 millions of Korean won to 234,4 millions of Korean won or 299,5 thousands of U.S. dollars to 249,8 thousands of U.S. dollars.


Market size which describes the number of customers in the market and the amount they purchase is 89.565.000 in 2007 (Exhibit 10).

Growth rate: It was not until year 2000 that the market saw an annual growth rate of 80% and more than 100 Million cards issued. Between the 1990s and 2002, the number of credit cards issued in South Korea increased tenfold (10x), from 10 million to 100 million. The Korean credit card market was characterized by rapid growth and was the first preference of payments (Exhibit 8). But since 2003 to 2007 the growth rate number of Credit Cards per person was stagnant between 3,5 to 4,1 (Exhibit 10). In 2004 to 2008, the growth rate from number of card issue was approximately 0.08%.

Potential: Potential market for credit cards can be seen from economically productive population which in 2007 was approximately 24.216.000 (Exhibit 10).


Competitors: The Korean credit card market was characterized by intensified competition. The major monoline credit card issuers were Samsung Card, LG (Shinhan) Card and HyundaiCard. The major competitor of HyundaiCard were LG (Shinhan) Card and Samsung Card.


  • Credit card penetration in South Korea was quite high. So, Rivalry Among Existing Firms was high.
  • Credit card companies had taken a customer-focused view and retreated from the mass marketing approach.
  • In order to increase profits, credit card companies focused on the fact that customers had to be willing to use their cards often. The key to profits was frequent card usage.
  • The average South Korean cardholder held 3,78 credit cards in 2008 which means the Determinants of Buyer Power was High.
  • Even though the use credit cards was the most common mode utilized by South Koreans to pay for products and services, but the substitute products was many and have total preferences about 61,30 (Exhibit 8).

Share Position

HyundaiCard was the country’s fourth largest credit card company. Since LG Card and Shinhan Card were integrated, LG Card was South Korea’s largest credit card company and at the end of 2008, market share reached 24%. Shinhan Card was the largest card issuer in Asia and No.10 in the world. In 2008, Kookmin Card was the market leader in the industry. Samsung Card was Korea’s third largest card issuer.


Market Share: HyundaiMarket Share was 9,96% in 2006 (Exhibit 14)

Share Potential: The average South Korean cardholder held 3,78 credit cards in 2008. So, HyundaiCard share Potential was 100% divided by 3,78 was 26,45%.


Customer Needs: Lifestyle Influences à Activities

Purchase Behavior: Korean paid for many purchases with credit cards, even small purchases of a few dollars at convenience stores. Private consumption with credit cards amounted to approximately $210 billion in 2006 (40% or higher of private final consumption). Card purchases of goods and services were on an upward trend, accounting for as much as 45.7 per cent of private consumption expenditure in 2002 (Graph 1).

Graph1. Credit card purchases1 as a percentage of private consumption

1 All credit card purchases of goods and services; flows.

Sources: Bank of Korea; Financial Supervisory Service of Korea (

Customer Profile: Customers like to easily use its credit cards almost anywhere they went. Customers of Credit Card were Male and Female who use credit card for all purpose such as driving, dining out, flying, or even shopping. The customers were varying from university student, premium-level, and VIP customers.


Product & Service: HyundaiCard launched Alphabet Card: M, S, W, U, K and A. HyundaiCard also diversified its product line and expanded into the premium market via the introduction of “The Black” and “The Purple” cards. HyundaiCard intended provide effective tailor-made services through its website for HyundaiCard consumers. The finance shop (Exhibit 13) was the place that enabled HyundaiCard customers to enjoy all-in-one service, getting financial consultation services, and enjoying an ambience created by world-famous designers.

Cost of Purchase: interest payments on purchases made at alliances stores.

Customer Value: HyundaiCard make creative business model which provide pre-discounted and provide more diverse data for financial services and added value.



  • HyundaiCard was the country’s fourth largest credit card company.
  • Sept 2004, HyundaiCard won first place in Service Quality Index for the Credit Card
  • HyundaiCard M had the largest subscriber base of any credit card in Korea.
  • HyundaiCard was named Korea’s Most Admired Company for the second consecutive year out of all Korean credit card companies (2007 and 2008).
  • HyundaiCard ranked number one in the National Customer Satisfaction Index (NCSI) for the third consecutive year (2005, 2006, and 2007).
  • HyundaiCard was also selected number one in the Credit Card category of Net Promoter Score (NPS)
  • HyundaiCard website traffic almost caught up with the top three credit card companies in 2005 and 2006


  • HyundaiCard suffered from minimal customer count (i.e. number of cards distributed)
  • The web traffic of the HyundaiCard website was low in comparison with several competitors in spite of an aggressive marketing campaign in 2003 and 2004.
  • HyundaiCard was slowly becoming a brand name in the international markets.
  • Compared to other major credit card companies, Hyundai entered the Korean credit card market late (latecomer)
  • Low brand awareness
  • Weak marketing communication
  • Weak card services
  • HyundaiCard had fewer customer and sustained moderate losses


  • The Korean government encouraged consumers to use credit cards to stimulate private spending and secure more taxes.
  • The Korean government made the acceptance of the credit card mandatory and penalized stores not accepting the credit card.


  • Under the strict control of the Korean government, adding new members swiftly and redistributing cards to expired members proved very difficult.
  • The Korean credit card market experienced a rapid expansion in the number of cards, reduced standards for issuing cards, etc.
  • There is growth in the number of late payments and users with bad credit history.
  • The industry underwent an adjustment period, with many credit card companies forced to change the way they did business.


Differentiation advantage factor importance: 50%relative importanceAttractiveness ratingAttractiveness score
product quality30%6018
service quality40%208
brand image30%4012
Cost advantage factor importance: 20%relative importanceAttractiveness ratingAttractiveness score
Marketing expense50%3015
overhead expense20%408
Marketing advantage factor importance: 30%relative importanceAttractiveness ratingAttractiveness score
market share40%6024
brand awareness40%4016
Competitive Position Index19,00
Market Forces: 40%relative importanceAttractiveness ratingAttractiveness score
Market Size30%4012
Growth Rate30%6018
Buyer Power40%5020
Comp.Envi: 30 %relative importanceAttractiveness ratingAttractiveness score
Price Rivalry30%5015
Ease of comp entry30%4012
No of comp40%6024
Marketing acces: 30 %relative importanceAttractiveness ratingAttractiveness score
Cust familarity30%4012,00
Channel Acces35%5017,50
Sales/Services Requirement35%4014,00
Marketing Attractive Index20,00

The existing position of HyundaiCard was in Medium Competitive Position and Somewhat Market Attractiveness, so the strategy that should be implemented is Defensive strategy with strategic focus in managing profits and investing to protect position (Optimize Position).

Strategic Market Plans and Defensive Strategies

The suitable strategy for HyundaiCard was defensive strategic market plan to optimize position. A maximize profits strategy was sacrificing volume, share, and sales revenues, as well as reductions in marketing expenses to a level focused primarily on customer retention. A reduced-focus market strategy to more narrowly allocate its resources in an effort to better defend a desired share position and improve the profits derived from this market. A reduced-focus market strategy goes one step further drastically reduce market volume by focusing on certain customers in order to optimize profits.

With the average South Korean cardholder held 3,78 credit cards in 2008 means that increasing the number of card subscribers doesn’t mean much. Credit card industry more competitive in this sense so HyundaiCard to focus to make customers loyal and give appreciation for customers who are loyal.

From product life cycle, 2009 is the time to optimize position (Defensive Strategy) and Offensive strategies to expand market to become a global player to achieve greater profits (Improve Position strategy). The goal is to find a more profitable combination of margin and market share, one that yields greater marketing profits. When managed correctly, optimizing position at the later stages of the product life cycle should allow the product to produce it maximum profits.



Hyundai is suggested to strengthen customer relations through innovation. This includes diversifying business and products through more accurate analysis, on top of continuing creative marketing efforts. In simply analysis through segmenting had already done by Hyundai through its alphabet card, the premium card is the most prospectus one to be improved its customer relationship. Moreover, in this business the key to profits was frequent card usage. By improving customer experience, the premium card holder will use their card more frequent.

For example, for improve customer satisfaction (CS), HyundaiCard need to provide audio response system for customer. But also provide directly talk to operators to solve problems related with customer satisfaction in advance. HyundaiCard also can make differences in serve the customers which the VIP cardholder directly talks to operators instead of an audio response system. This customer service improvement in IT infrastructure and operator and product development can strengthen its brand.


HyundaiCard needs to give different fee for each kind of card depends on its card holder type and its card benefit or services. Such as, for VIP card holder the annual card fee can double than university students (HyundaiCard U holder). But this different price must be supported by worth benefit and services from HyundaiCard.


HyundaiCard need to be credit card brand that customers would recommend to their friends most. Besides doing penetration via television and radio media, Hyundai Card need to develop marketing strategy by word-of-mouth and improve its online marketing strategy. But word-of-mouth strategy must supported by service excellence and maximal customer experience so HyundaiCard can enhance the brand power of premium cards.


Hyundai is suggested to partner with retailers in all provinces and have partner with many merchandise. By partnering with many merchandise or other parties, HyundaiCard can provide more service and widen its channel. It makes HyundaiCard have competitive advantages.

For registration, customer must be provided by easier step and shorter place, such as registering online through HyundaiCard website and when finish, the card will be sent by post. HyundaiCard also can provide registration form and train its entire partner to can serve their customer to be new member of HyundaiCard. The benefit for their partners are having added value by giving discount and other promotions which provided by HyundaiCard and increase their customer loyalty by giving ease of payment.



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Categories: Marketing StrategyTags: case, HyundaiCard, kasus, marketing, Marketing Plan, Marketing Strategy, Profit Plan, SWOT

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