Marketing Mix of Kia Motors

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  • Post last modified:February 19, 2021

Kia Motors is a leading brand of automobiles based in Seoul, South Korea. The company is owned one-third by Hyundai Motors, another South Korean automobile giant. In 2019 and 2020, the company experienced swift growth in the Indian market driven by the growth in sales of its SUVs and a higher focus on product quality and innovation. The company is eyeing faster growth and is encouraged by the growing popularity of its car models like Forte, Soul, Sorrento, and Telluride. Its Seltos and Sonet SUV models are among the best-selling models in India.

Kia Marketing mix.
Kia Motors. Image credit: Kia news center.

However the growth momentum Kia managed despite the pandemic was not an easy feat. 

During the pandemic, its growth rate remained much better compared to other leading car brands in the global market. The reason was that Kia had maintained a strong focus on research and development. It has generated strong publicity as a maker of safe and stylish cars. J D Power rates it as the highest-ranked car brand for the mass market. Its strong brand image and diversified product portfolio continue to drive higher sales in several leading markets. 

The automobile industry has undergone a major transition during the pandemic. The pandemic has accelerated the movement towards electric mobility. People are now more environmentally conscious than before the pandemic, and due to that, automobile brands are aggressively investing in the development of electric cars and hybrids. Kia is also expanding its electric car portfolio and plans to develop market-leading autonomous driving technologies that can attract customers and drive higher sales in this decade. However, compared to several of its leading rivals globally, the company has remained mostly lagging in terms of marketing. Its brand image and publicity have mostly worked to drive sales throughout the globe.

Kia is among the oldest automobile brands in South Korea. Founded in 1944, it started as a maker of cycles and motorcycles. The company has come a long way since its humble beginnings. Ir has grown into the fifth-largest automaker globally as a part of the Hyundai Kia Motors group. 

In this marketing mix, we will study the seven P’s of Kia Motors’ marketing mix and how each element plays a significant role in the marketing of the automobile brand.

Product:

Kia has created an attractive product portfolio that includes several car models from sedans to hatchbacks, SUVs and Minivans. Apart from that, it also makes vehicles for military use. Kia’s product range in the US market includes the following models:

SUVs –

Kia Seltos, Kia Soul, Kia Sportage, Kia Niro, Kia Sorento, Kia Telluride.

Sedans:

Rio, Forte, K5, Stinger, Cadenza, K900.

Hybrids and Electric cars:

Niro, Niro Plugin Hybrid, Niro EV, Sorento Hybrid.

Hatchbacks and Minivans:

Rio 5 door, Sedona.

Kia’s focus is on design, product quality, and making safer cars that are fuel-efficient and environmentally safe. However, its SUV portfolio is particularly attractive. The company mainly makes cars that match the taste and lifestyle of the modern generations. This has helped it establish itself as a leading mass-market brand and achieve quicker growth in the leading markets. It has also released a nice range of eco-friendly cars since the market for these cars has grown fast in recent years.

Place:

Kia is a global automobile brand headquartered in Seoul, South Korea. It is a global company with sales across the globe in various markets around the world including the Asia Pacific, Europe, and North America.

According to its website, Kia has 14 manufacturing facilities in eight countries. In its home country, Kia operates three vehicle assembly plants – the Hwasung, Sohari, and Kwangju facilities – plus a world-class research and development center employing 8,000 technicians at Namyang and a dedicated environmental R&D center, known as the Eco-Technology research institute. Currently, its R&D staff is working on developing hydrogen fuel-cell vehicles for the future as well as state-of-the-art end-of-life vehicle recycling technologies and processes at the Eco-Technology Research Institute. Apart from that, it has research and development centers in the US, South Korea, Japan, and Germany. The company has its European headquarters at Frankfurt, Germany. The company has its leading European design center located at its European headquarters. Its Frankfurt design center has played a key role in making a highly sought-after brand in the European market.

The company has a large distribution network of 3,000 distributors that sell Kia products in 172 countries worldwide.  The company utilizes both physical and online channels for marketing, sales, and customer service. Like the retail industry, the automobile industry has also moved towards offering its customers an omnichannel experience. This has become particularly crucial since the pandemic when the digital channels have helped automobile brands maintain their market presence and sales in all the leading markets. The use of digital channels in the automobile industry in the next few years for generating leads is expected to grow faster.

Price:

The pricing strategy employed by an automobile company is an important factor that affects its sales in the global market and the overall revenue. Apart from that, automobile brands also use pricing as a method of differentiation and to differentiate their products from rivals. While Kia has basically adopted a competitive pricing strategy, it does not sell cheap car models. It mainly sells products in the mid-tier that are not priced too high or too low. 

The company targets middle-class and affluent buyers through its product models that are priced mainly in the $16,000 and $30,000 range. The company did not price its products too high to avoid losing sales to competitors. However, the prices are not too competitive either since several competitors including Nissan and others have released competing product models at lower prices. The prices are high enough so that its products are not considered of lower quality. In the automobile industry, the pricing strategy of a brand is also associated with its image. For example, there are companies like BMW, Audi, Porsche, and others that sell only premium models. Kia has positioned its products in a segment where they are not out of reach for the middle-class customers and do not leave an impression of lower quality products. These products are excellent in terms of design, quality, and functionality which helps drive higher sales. If the company priced products higher, it could be difficult for the company to compete against rival brands like Ford, Toyota, and others. Kia’s pricing strategy is also similar to its parent company Hyundai. 

Promotion:

Kia is a fast-growing brand. However, when compared to several other leading car brands across the globe, it has not been marketing its products as aggressively as its rivals. While the company promotes its products in the markets where it sells, its marketing strategy is not as aggressive as some leading players have employed. The company has instead mainly depended on word of mouth and publicity to drive sales and revenue. Its consistent focus on product quality, innovation and passenger safety has helped it earn faster recognition and set itself on a firm footing in several leading markets including India and the US, apart from Europe.

 JD Power has ranked Kia as the leading mass market brand for the sixth consecutive time in 2020 in its Initial Quality Study. In terms of product quality too, Kia’s performance compared to most other brands has remained relatively better. Kia owners have been found to be more satisfied with their cars. They have reported fewer issues compared to the customers of other car brands. Higher quality in the automobile industry leads to higher trust among customers and results in higher brand equity. The stronger the brand equity of a company, the higher are its sales and revenue. Customer trust is a critical factor driving sales and growth in the automobile industry. On the one hand, it drives sales, on the other it helps keep the costs related to marketing and CRM under control. Companies that build higher trust find it easy to attract new customers and retain existing ones. 

Overall, Kia has mainly used publicity and innovation to drive growth. The company is also making use of digital marketing channels for promotions and driving sales but compared to most auto manufacturers, it has used less aggressive marketing tactics relying purely on its brand image and word of mouth or media publicity. However, the competition in the automobile industry is growing and the company might need to focus on creating higher brand awareness using digital marketing channels and social media to maintain its growth momentum and sales level.

People:

Human resources are an important asset for any company including the automobile brands which are among the reading employers in the entire industry. The human capital of an organization drives most of its core competencies and is the foundation of its competitive edge. Companies that focus on grooming their employees, find it easier to achieve growth even amid a hypercompetitive industry environment.

In 2019, Kia Motors employed 52,448 people, of which more than two-third were employed in Korea and the remaining was employed overseas. The company has maintained a strong focus on employee satisfaction and happiness. To provide them opportunities of faster growth, the company invests a large sum each year in employee training and education. While this has helped the company maximize  employee satisfaction, it has also helped the brand drive employee retention rates higher. In 2019, the company spent 10.8 billion Korean Won on employee training and education.

It took some major steps that helped the company improve employee performance and create a better work culture inside the organization. Apart from diversity and inclusion, the focus of the company has remained on offering employees a safe and smartwork environment, promoting active communication,fair and equal opportunities as well as higher transparency and accountability. Trust is an important factor for Kia Motors when it comes to employer employee relationships. The company therefore emphasises upon a trust based management approach and higher decision making authority for individual employees.

Processes:

For Kia Motors, the efficiency of organizational processes from manufacturing to marketing, research and development, human resources, and finance is an important focus area. It is because higher process efficiency leads to higher production efficiency and higher sales. Automobile brands like Toyota have already proved that lean management can lead to better productivity and improved organizational performance. Kia is also dedicated to higher production efficiency and improved supply chain management through a focus on lean and agile. Most of its manufacturing facilities are located inside its home market and remaining in Europe, Asia and the US. Apart from focu on technological innovation, the company also stresses on sustainability in key areas including supply chain, production, marketing, and other operational areas. The result has been that the company has come to quickly dominate specific market segments like the SUV market in India. Due to higher process efficiency, its performance in other markets including its home market, Europe and the US has also been impressive during 2019 and 2020.

Physical Evidence:

Kia’s home market is South Korea and the company has achieved rapid and impressive growth in several leading markets of the world. It has also established a strong physical presence throughout the globe to support its fast market expansion strategy. Its manufacturing facilities and research and development centers both in its home market and overseas are key physical evidence of the company’s market presence and expanding footprint around the globe. Apart from that, the company has around 3000 distributors in its distribution chain through whom it sells to customers around the world in 172 countries.

Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.