Hyundai’s Challenge To Mercedes: Should Either Brand Be Nervous?
Image by AFP via @daylife
If it walks like a duck, quacks like a duck, swims like a duck, but isn’t a duck, can you still convince people it’s as good as a duck? That, for all intents and purposes, is what the folks at Hyundai are hoping will happen with the introduction of Equus, the Korean automaker’s new luxury car that comes equipped with everything that a Mercedes Benz S550 has, with one, no make that two, exceptions. The Mercedes brand price tag, and the Mercedes brand name.
A number of folks asked me whether I thought this was a smart move for Hyundai, a brand known more for its affordability than anything else, and whether Mercedes, or any other luxury car brand for that matter, should start to worry. It’s an interesting, not to mention long-winded question, but from my branding point of view, the answer– or answers– are pretty straightforward.First question first. I do think this is a smart move for Hyundai.http://www.myhappyhyundai.com/ Even if the company sells ten of these well-equipped models it will have gotten consumers to think of its brand within a whole new framework. “Wow, did you hear about that Equus? It’s got everything a Mercedes has and it’s $20,000 less!” When you’re a challenger brand, which Hyundai is (against companies like Honda, Toyota, and Ford that is), it takes a bold move to move up in the mind of consumers. People will now have another metric against which to compare auto brands. Hyundai can put the same stuff into its cars that Mercedes does, but for less, which says something about the company’s engineering acumen. The Equus, if nothing else, will help differentiate Hyundai from others in its league. And in a world where competition in every brand category is only increasing, identifying a relevant way to set your brand apart can only help.
As for the second part of the question, well, a car has never been about the “stuff.” A car, like clothing, jewelry, boats or kitchen appliances, is more than the sum of its parts. It’s about what the stuff says about the person driving it. It’s the intangibles that differentiate one brand of car from another. Cars fall into what those in the industry call badge brands. Those who drive a Mercedes Benz make a conscious decision to pay top dollar for their badge-brand of prestige.
This is not to say that the Mercedes Benz isn’t a fantastically engineered machine, full of luxurious details, and an absolute pleasure to drive. However, the branding lesson for this top-notch company, or any other luxury car company, for that matter is that it cannot rest on its laurels. As features like sophisticated sound systems, heated seats, multiple airbags, and GPS become standard features Mercedes is going to have to keep a couple of steps ahead in its innovation. Complacency is not an option for any leader brand. Look what happened to Sony. It thought Samsung could never catch up, and Samsung is now one of the hottest brand names in Sony’s category.
On a similar note, in this era of non-conspicuous consumption, when Target and Wal-Mart have become brand badges for those who can afford Saks and Neiman-Marcus, companies that represent prestige brands are going to have to work extra hard to make sure that the entire experience of the brand is worth its weighty title and price tag. Consumers’ expectations for special treatment will only rise as prices on similarly-featured goods and services fall. They’ll want the reassurance that, however intangible, the price to value ratio of their purchase is significant.
Bottom line, kudos to Hyundai for doing what challenger brands should do. It takes a bold move to help consumers see a brand from a different perspective. I’d say introducing its Equus as equal to the Mercedes Benz in features is pretty bold. Only time will tell if the number of consumers who flaunt Equus badges can change the meaning of prestige in the eyes of car-buyers. Until then, if I were Mercedes Benz, I’m not sure I’d lose any sleep. I would be careful, however, not to fall asleep at the wheel of innovation or superior service. In other words, keep your ducks in a row and make sure people know they’re for real.
For more information about the new Hyundai you can visit your local Hyundai dealer Happy Hyundai of Oak Lawn.
