Yoon Kwan Choi, MD, and Vivek Srivastava, ED & COO, Innocean Worldwide Communication India

"Hyundai Motors decided to set up an in-house agency that can take good care of the brand. In India, Hyundai wants to take its image to the next level so that it can sell its high-end products with a lot more ease than at present. The idea is also to consolidate the gains made by Hyundai so that we can strengthen, leverage, and add value to the brand’s presence in a very definitive manner."

Korean automobile major, Hyundai Motors, set up its in-house agency, Innocean, in India last year after testing the Korean market. The agency is headed by Y K Choi and Vivek Srivastava in India.

Choi brings with him a cumulative experience of 17 years with the largest advertising agencies in Korea that include Cheil Communications (on Samsung Electronics); Diamond Advertising of the WPP Group (on Hyundai Motors) as Account Director; Marketing Director at SMC Ad where he used to handle LG, Samsung and Dongwon Securities. Choi was also MD of Principle, an agency specialising in e-marketing for clients like Samsung Mobile, LG Life & Health and Hyundai Motors.

Srivastava, a Management graduate from Allahabad University, brings with him 18 years of experience in advertising. He started his career as Sales Executive with Onida in 1987. From there he moved to Mudra Communications for five years working on accounts like Nestle, Fuji Films, NIS, among others. Srivastava has also worked with Triton Communications for over 12 years. He held the position of Executive Director and worked on key brands like Samsung, Honda Scooters, Panasonic Mobiles, Business Today, Outlook, Kajaria Tiles, Hamdard, and The Home Store, among others.

In conversation with Sumita Patra of exchange4media, Choi and Srivastava talk about the way forward for Innocean and strengthening of the Hyundai brand. Excerpts:

Q. How will you ensure your top line and bottom line growth when you are working with only one client?

YKC: We will get the margin money from Hyundai to sustain our operation. But we will develop new clients when we are ready.

VS: Hyundai as a brand is a very daring brand. I don’t think any agency, which has worked with Hyundai, can ever do safe thinking. I think most of the agencies have delivered on the brief. When Getz was launched, the communication was very interesting. Agencies have come out with strategically sound ideas while working for Hyundai. So, I don’t think one can point out any flaw. It’s purely a question of enhancing the value on the long-term basis, and that’s the difference that we bring to the table.

VS: That is evaluated on a very objective level, but ultimately the strength of a brand lies in its being able to emotionally connect with the consumer. We are already there in the top 15. We are not here to take away the strengths of a brand, we are here to add to its strengths.

YKC: Yes, globally, but we wouldn’t take all regional business until we are fully ready. We will move gradually.

VS: For Innocean, India was the first overseas operation, the reason being that Hyundai Motors’ headquarters believes that in India the brand power of Hyundai needs to be expanded and strengthened faster. Hence, the decision to start Innocean in India first, and then in other overseas locations.

YKC: Hyundai Motor Company had been working with several agencies. The agencies were chosen whenever some new launches happened. Through pitching, HMC got good creatives, but in terms of brand management, a one-time good creative can’t improve brand power – that is a weakness that Hyundai has been suffering from globally. So, HMC decided to set up an in-house agency that can take good care of the brand.

VS: Hyundai is now looking at leveraging its brand power in various markets across the world. It is competing very effectively in most evolved markets as far as automobile is concerned, like Europe, USA, Middle East. It is really becoming a brand with a lot of buzz around it. In India, the brand has done very well consistently. Santro is pretty much like a case study; Accent has done exceedingly well; Sonata is seen as a symbol of luxury in its segment. In India, Hyundai wants to take its image to the next level so that it can sell its high-end products with a lot more ease than at present. The idea is also to consolidate the gains made by Hyundai so that we can strengthen, leverage, and add value to the brand’s presence in a very definitive manner.

YK Choi (YKC): Innocean was founded in May last year with 54 people. Now it has become the number 2 or 3 agency in Korea with about 300 staff. It's an in-house agency of Hyundai and Kia Motor Group, but it also has non-group businesses such as pharmacy, department store and tyre company clients, which we won through pitching. Innocean was designed to take over all Hyundai and Kia clients through the world, but we will take over when we are fully ready.

Vivek Srivastava (VS): Innocean is headquartered in Seoul. Effectively you can say India is the first overseas operation of Innocean. The agency has also set up operations in China, London and Frankfurt. Currently we are operational in these countries and our objective is to be a prominent global agency network with a position in the top 20 by 2010. We are going to be present in at least 24 countries by 2010. You have set quite high targets. How to do you intend to achieve them? VS: Within a year’s time we have already set our foot in four countries. If we maintain the same average, we will achieve that figure by 2010.

VS: We are still in the process of making a decision on this. It should be South India or Mumbai.

VS: It will take another three to four months before this tool starts working in India.

YKC: Absolutely not! VS: Our boss says the essential part of globalisation policy at Innocean is localisation – that all brands will be strengthened by using communication done locally. If the communication is not locally relevant, it will not build the brand on a long-term basis. So, there is no constraint on us to use creatives developed by our headquarters. So, all the work that we develop is developed locally. Yes, it is reviewed by a strong panel of international experts to make sure that it consistently delivers on building the long-term value of the brand, but there is freedom to create locally. The only thing we have to make sure is that the quality is good. The only targets that we have set are quality targets, there are no quantity targets.

YKC: As we have weekly status meeting in our headquarters, we issue weekly status reports to Seoul. Only when we have an urgent and important issue, we report to the top management.

VS: When Shah Rukh Khan was chosen, it was for Santro. Hyundai is the umbrella brand. Shah Rukh was chosen at a time when Hyundai was a new name in India. The reason for choosing Shah Rukh was to be able to bring an element of familiarity and relatibility with the consumer. I think he has worked wonderfully for the company and the brand and Santro as well. Today they are both synonymous in a manner of speaking. We feel that brand ambassadors are chosen on the basis of their strategic fit – a certain amount of relevance as well as the nature of the target audience are important in choosing a celebrity.

VS: As of now we have only two brands which have celebrities attached to them as brand ambassadors. It is not always a written rule that any brand that Hyundai launches will have to have a celebrity. It’s a decision that we take depending on what the competitive situation is and the marketing strategy we adopt. So, nothing is fixed right now. I think it will evolve on a strategic level.

VS: We don’t think so. In fact, we think it will enhance it. There are an amazing number of challenges so far as the brand is concerned, there are six-seven models of Hyundai. Each model has its own strategic issues, consumer categories, and is driven by specific consumer insights when it comes to creating auto communication development. So, there are a hell of a lot of challenges, it’s not a boring process or a boring organisation! We are forever challenging ourselves to think of new things, come up with new ways to solve our problems. A lot of it has to do with the kind of confidence the client has placed in you. Today we feel probably 200 per cent responsible for every problem that is assigned to us by our client.

VS: We want to be in the top 20 networks in the world by 2010, and the way we are going, we will definitely have a better ranking than No. 20! We want to have a larger footprint in India and, as we enter our second year of operation, we would definitely look at having one more office in India.

YKC: By 2010, Hyundai will be a top-tier player. We are aiming at that and we will be there. VS: It is work in process right now. Our objective is to bring home to India the global reality of Hyundai. Hyundai is a very strong, technology driven automobile company. It is a very strong competitor; a lot of big automobile companies fear it actually. All these things are not so well known in India because here people still see it as a company that makes nice, stylish, fuel efficient, small and mid-sized cars. We want to move beyond that. We want to extend the brand beyond that.

YKC: Yes. First of all, the client benefits in terms of brand management. Secondly, the client can share lot of information with an in-house agency to make for better preparations for new car launches, which is extremely important for a brand like Hyundai that offers innovative and aggressive technology and features.

VS: Let me add here that we are not trying to say that the conventional agency system doesn’t deliver what clients look for, but definitely Innocean is better structured to handle Hyundai’s needs. The idea is to have a full service agency, which looks at understanding and living the client’s culture, and be able to reflect the same in the brand value that it proposes in the market place. So, the idea is that at the end of the day we are able to look at synergising the strengths in a much more effective manner.

We are very clear that we are going to be driven by unique insights for which we have our own proprietary tools that we have developed and are in the process of imbibing from our headquarters in Korea. We are a very quality driven organisation. The focus is on ensuring that the quality of communication that goes out of Innocean has to be the best in the category of automobiles, it should set trends in terms of the way people have looked at automobile advertisements in the country.

VS: If you look at it from the Indian context, automobiles are now evolving as a form of conspicuous brand acquisition activity. I think, for an ad agency, the understanding of the entire process of need arousal of the consumer to identification of the brands, and thereafter shortlisting and purchasing is going to be a very important challenge. That’s why at Innocean there is a stress on the strategic planning process.

We have developed a model of our own, which looks at distilling consumer insights relating to each of these stages. We are in the process of acquiring it from our headquarter people. Once that is fully available and operational, it will help us understand the particular peculiarities of each market in the Indian context

VS: It is difficult to name brands, let’s not say brands, let’s say organisations which believe in building brands in a manner that is compatible with our philosophy and work approach. We would like to emphasise more on long and medium-term strategy. We are not going to offer short-term solutions because we believe brands can make a difference only in the long and medium term.

As communication partners it’s very easy to give one good creative idea which works for two months. What makes the difference is whether it can put a brand on a long term growth path. We feel increasingly that’s going to become a very important component of business – how sustainable is your brand idea, how sustainable is your brand power. People who will value that approach are the kind of clients we would like to work with – and they can be from any segment. We will be open to people in the durables segment, fashion segment, FMCGs, so long as it matches our overall approach of looking at brands and communication.

VS:That is something, which will be driven by the market prioritisation of our key anchor client Hyundai Motors. We would definitely look at the US, a fairly hot market. It could cover South East Asia, countries like Malaysia and Singapore, the Middle East, and Australia.

VS: See, advertising is a mix of rational and emotional issues. The weightage that we give is always going to be dynamic. Beyond that I don’t think we can say anything else at this stage. Sometime you find heavy rational approaches, sometimes you find heavy emotional approaches, but at the end of the year, the two would balance out and give the brand what it is looking for in the Indian market.

VS: See, that is a global template which is being developed by our headquarter resources. It is a planning, too, which is available to Innocean staff worldwide to analyse consumer and market trends and come up with strategic directions. The tool is called Insight Stimulator.

VS: Nothing was missing; it’s a normal process of progression. Hyundai as a company believes that there’s a lot of effort that goes into developing a new model. If you are in the process of looking at agency pitching and re-pitching the new businesses every year or second year, then somewhere the focus on brand building gets lost. So, by setting up an in-house agency, the effort at Hyundai was to arrive at a structure, which is first of all conversant with the needs of the group, understands its philosophy, and is able to provide the confidentiality that a product category like automobile demands from the agency.