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Deep Dive

Kia's top marketer on fixing 'brand snobbery', record marketshare and accelerating out of COVID with brand investment

By Paul McIntyre - Executive Editor

24 May 2020 6min read

By Paul McIntyre - Executive Editor

24 May 2020 6min read

Kia has been eating up the road on competitors for five years running. Top marketer Dean Norbiato says it's because the leadership backs brand. While Covid-19 has crashed the car market, dealers are reporting renewed interest as people take less public transport and retreat to the safety of their cars. Norbiato believes the autos that cut through the 'sea of sameness' can turn a negative into a positive result.

 

You need to know this:

  • Kia has doubled Australian sales from 2014-19 and is on track to overtake Ford in 2020
  • Despite Coronavirus halving car sales in April, Kia sees potential shoots of recovery as people avoid public transport
  • Marketing GM Dean Norbiato backing brand investment to power growth, board buys into vision
  • Preparing to launch new models
  • Mitsubishi and stablemate Hyundai in crosshairs.

 

Kia no longer surprise package

Kia has been on a winning streak in Australia since 2015, when it posted record sales. It’s been climbing ever since and was the only top ten auto to sell more cars across 2019 than 2018. Until Covid-19 hit, 2020 looked set to follow the trend, with growth outstripping the market January to March.

In April, the car market crashed to a 30-year low. All major brands saw sales nosedive, but Kia was less affected than the marques around it - Mitsubishi, Ford and stablemate Hyundai.  As a result, Kia ended up as the number three brand for the month for the first time ever.  Year to date it is beating Ford, and closing in on Mitsubishi. Even sister company Hyundai is looking over its shoulder.

Despite worldwide economic stress, general manager of marketing, Dean Norbiato, says there are signs of growth in the Australian auto market as people opt for the safety of their cars over public transport.

Just how much growth materialises and how long Covid-19 stalks the economy is uncertain. But Norbiato says Kia isn’t about to go dark. Channeling the brand’s slogan, he says Kia, planning an onslaught of new models, has a few surprises up its sleeve for the next 12 months. While the market zigs to performance and retail, he says, Kia will zag to brand in a bid to finish “above where we are now” in the market share stakes.

 

“Looking at the market orientation of our product, it was obvious to see looking at the traditional funnel that we were doing really well up top. Down the bottom, we're also doing well. But in the middle is where we really let ourselves down.”

- Dean Norbiato, GM marketing, Kia

Back brand, win

Norbiato joined Kia in January 2019, new to a category where many people wear their multi-decade experience “as a badge of honour".  But he says the leadership wanted a fresh, unbiased pair of eyes, and that their deep collective experience and belief in brand is driving Kia’s sustained market share growth.

“I would have to say [the growth] comes down to our executive team, who have spent most of their professional life in the auto industry,” says Norbiato.

He singles out chief operating officer Damien Meredith, who joined Kia in 2014, the year prior to Kia’s five-year bull run, as a driving force.

“He brought in a couple of big things. Originally, we stood for being ‘cheap’, that’s what we were. So Damien got rid of pricing on all of our cars for 18 months above the line, and then also ushered in a seven year warranty.

In Meredith's own words: “Don’t rely on the price, rely on the product. You’ve got to be consistent in your delivery of what you do. That’s communication, marketing, customer service, and the best dealers. And you have to get the value equation right.”

Norbiato says that approach has been “the backbone of the rise of our business over the last six years and something that we've kind of fed off. But it's got us to a point that we need to now start investing into the brand to get people buying at an emotional level as well”.

 

Fresh eyes

Norbiato’s marketing background is in sports and wellness (Australian Swimming and Swisse) and he spent three years at independent agency group Bastion Collective before joining Kia.

Coming fresh to the category, Norbiato said it was clear where Kia needed to focus resource:

“Looking at the market orientation of our product, it was obvious to see looking at the traditional funnel that we were doing really well up top. Down the bottom, we're also doing well. But in the middle is where we really let ourselves down.”

In terms of brand consideration, he says, people were buying Kia “because it was a really rational purchase”. As such, there was “a huge opportunity for us to get further up the funnel influence through brand, emotion, and have a greater trickle down effect on the effectiveness of our short term performance marketing.”

Having “shaken the tree a little bit from the start,” Norbiato says the carmaker now has “a really solid trajectory and plan, with a real clear direction for our brand in the next 12-18 months.”

 

Funnel vision

Twenty years ago, the only debate in Australia was “Ford or Holden, mate?” It’s a sign of the times that Kia is on track to sell more cars than Ford this year, having come close in 2019. Holden may well slip out of the top 10 altogether.

But old habits die hard, and Kia still finds itself having to overcome ‘badge rejectors’, or old fashioned brand snobbery.

That challenge aligns to the middle funnel Norbiato is focusing on.

“We have really good unaided awareness at the top of the funnel, but when you get down to intent, that's when our numbers really do struggle. There's only 4% of the market that's ever in the market to actually buy a car. So the people who are ‘intenders’ are a much bigger group, and who had preconceived opinions of models that stretch back four to seven, 10 years, depending on their buying circumstance or cycle,” says Norbiato.

Then come the ‘considerers’, those who are looking to buy a car in the next 12 months.

“Our numbers over the last two to three years have really increased with regards to the consideration set,” he says. “But it was evident that it was much further upstream that we had a challenge and a blockage, because when it got down to purchase, we were jumping into consideration, due to the value of our brand and key code, the seven year warranty and what that meant for them.”

 

“Off the back of the Australian Open last year, where we really put our foot down on brand and integrated a big campaign with the guys at Channel Nine, we had our biggest pool of considers and the lowest level of rejection - down to about 26% - that we've ever had.”

- Dean Norbiato, GM marketing, Kia

Australian Open a smash, but Covid hits returns

Given Kia’s sales, the shift in perception is undeniable. Norbiato says its long-running Australian Open sponsorship continues to pay dividend.

“Off the back of the Australian Open last year, where we really put our foot down on brand and integrated a big campaign with the guys at Channel Nine, we had our biggest pool of considers and the lowest level of rejection - down to about 26% - that we've ever had.”

Kia planned to map that again following this year’s tournament, but then Covid-19 hit “and skewed the numbers considerably,” says Norbiato.

It means Kia cannot benchmark against previous years, “especially from a conversion standpoint - all of our bottom funnel metrics were not available because you physically weren't able to go out and test drive.”

As such, the brand is “pausing” its metrics and, to a degree, its strategy. “We’re still going in the same direction,” says Norbiato, “but taking a bit of time to treat it in the context it deserves.”

 

“Yes, we've had a budget cut. But we haven't, fortunately, been cutting all of our brand dollars, it's been an even split to get us around fifty-fifty on brand versus performance.”

- Dean Norbiato, GM marketing, Kia

Defending budgets

Most marketing budgets will be under serious pressure given the Covid crash. Norbiato says Kia is trying to ensure it has sufficient torque to pull away from its peers as the economy begins a slow recovery. He thinks demonstrable results from brand investment in recent years helped protect that portion of the budget.

“We have had cuts. But we have to think strategically, not just say ‘okay, get rid of all brand, put your performance metrics up’, and then over-index in the short term in just performance,” says Norbiato.

“We have really good buy-in from the executive … [because] we've had some really successful results over the last two years by starting to invest more heavily in brand, and educate the wider business about the importance and the results of that.

“So, the biggest thing for me is yes, we've had a budget cut. But we haven't, fortunately, been cutting all of our brand dollars, it's been an even split to get us around fifty-fifty on brand versus performance.”

Kia may go more heavily on brand in the future, but Norbiato believes marketers need to build slowly and consistently to reach that destination.

“If you start in any new business and say ‘I want to go at a million miles an hour, I want to be 90% brand, 10% performance, off we go’, and you have no short-term results, then you often get offside,” says Norbiato. “So it's almost a weaning off that short term-ism, and then starting to chunk your big building brand blocks underneath as you go.”

 

“We have quite a number of different pipelines that come in from the dealer network, and we get fed information from the coalface on a daily basis. A big one that we're seeing is the lack of confidence around public transport, therefore, people looking to take their own transport and looking to step into a vehicle.”

- Dean Norbiato, GM marketing, Kia

Light ahead?

A big believer in TV, especially live sport, Norbiato believes brand will help drive Kia out of the Covid-19 crisis.

“If everyone is retailing and we go to brand, that gives us an opportunity to stand out. Because we don’t have the media dollars and clout of some of our competitors.”

Norbiato says there are signs of potential growth.

“We have quite a number of different pipelines that come in from the dealer network, and we get fed information from the coalface on a daily basis. A big one that we're seeing is the lack of confidence around public transport, therefore, people looking to take their own transport and looking to step into a vehicle,” he says.

“Obviously the numbers are down compared to same time last year and other metrics, however, we are seeing an emerging trend. What that flow and effect is, how long that lasts, is uncertain. But the information we're getting from the dealer network at the moment is that there are still opportunities, there are conversations. And that one in particular around public transport is something that we're monitoring.”

 

Avoiding the sea of sameness

Tapping that demand means Kia must achieve greater cut through than the “thousand pound gorillas” in the category with bigger budgets, says Norbiato. Kia has to shun the ‘sea of sameness’ that seems to have afflicted advertising in the time of coronavirus.

The brand’s research suggests that, “when someone sees a car ad, they just see another car ad and then a facade comes down,” he says.

“So we need to ensure that when we're marketing, we're actually cutting through with the dollars that we've got. But also, that we're taking advantage of those big blue chip moments like Friday night footie, partnerships with the Broncos, with the Australian Open, to actually stand out in a very cluttered market.

“And I'm still a big believer in TV and those magic moments that seem to be still very omnipresent within the Australian public. You look at the numbers of the Aussie Open last year, and they are significant; look at the numbers in the early NRL rounds before it stopped,” says Norbiato.

“So there is a significant opportunity to use big platforms like that to actually make noise. We just need to ensure that we're standing for something and we're being distinct, and we're actually getting cut through.”

 

Check out last week's episode with Koala’s new global marketer Peter Sloterdyk below:

 

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By Paul McIntyre - Executive Editor

24 May 2020 6min read