The Hyundai Touch the Market Strategy

Subject: Case Studies
Pages: 5
Words: 1378
Reading time:
5 min
Study level: PhD

Introduction

Hyundai Touch the Market is a customer-centric product development and improvement concept that this company used to come up with a product that had key features desired by a specific target market within the United States and the world market. Hyundai was concerned that the changing tastes and preferences was making some of its products in the market irrelevant to the specific market needs. Instead of allowing its engineers to come up with new concepts based on issues such as the comfort, speed, and functionality of the car, the management introduced this new concept that actually sent the engineers to the field to meet the market segment targeted by this company. The engineers interacted directly with the customers and asked them questions about the features they desire in their cars. This was a deliberate attempt to allow the consumers to decide on the kind of products they wanted from this company based on specific features.

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The management hoped to eliminate cases where customers would single out a number of issues that should be improved in the product. By participating in the product concept development, customers would identify these areas so that the company could adjust them at the concept stage. This was expected to increase the level of customer satisfaction and expand the market share for this company in an industry that is getting very competitive. The concept developed from the Hyundai Touch the Market strategy received massive acceptance in the market. This ethnographic approach became one of their popular strategies used in product concept development process (Hülsmann & Pfeffermann, 2011).

Analysis of the Case beyond Hyundai

The market is increasingly becoming competitive as various firms struggle for the same market. With these changes, firms have realized that the only way of surviving is to offer high quality value to the customers in order to expand their market share. The case of Hyundai is happening in various other companies in the global market as they struggle to offer customer-centric products. According to O’Connell (2011), many firms are now taking the traditional ‘Voice of the Customer’ a notch higher. As shown in this case, it is clear that firms are not only interested in getting the views of the customers when they are developing new products, but are now trying to involve them directly in product development. Touch the market strategy is a direct attempt by the firm to involve consumers in product concept development. Some of the largest firms in the world have realized that maintaining customer-centric innovation is the only way of maintaining their leads in the industry. Others only have this tool as the only means of survival. A clear case in point is on the electronic industry.

Some of the leading electronic firms in the world are struggling to maintain their position in the market. New entrants into this field have relegated Nokia, once a market leader in the mobile telephone market to the third position. Others such as Motorola were completely faced out of the market because of stiff competition that requires constant innovation among the key players. Samsung and Apple have taken the lead in this industry because of their ability to understand the market needs in various market segments. According to O’Connell (2011), it is not just enough to listen to the market needs as proposed in the traditional ‘Voice of the Consumer’ strategy. Currently, it is important for firms to first understand their target market, and seek their voices in developing products which are specific to their needs within that particular segment. Hyundai took in its ‘Touch the Market’ approach this approach. It is the same approach that other leading car manufactures such as Mercedes Benz are using when targeting the high-end consumers in the world market. A new approach is meant to make consumers own a company’s products in the market.

As Hülsmann and Pfeffermann (2011) say, when the product is finally released to the market, it will not only meet the expectations of the customers, but also create a sense of ownership amongst them. This approach makes them feel that they directly participated in the development of such a product. It creates a sense of responsibility among them as they will feel responsible to the firm and to the product. They requested for the product, and once the company meets their request and presents it to them, they will feel obliged to buy it. This is the new strategy that Hyundai has just developed as a way maximizing customer satisfaction and expanding their market share within specific market. The following are some of the areas where this strategy is very relevant.

Organizational issues

This strategy is very important in addressing various organizational issues. According to O’Connell (2011), firms struggle to find the best way of defining their organizational structure. In the past, many companies believed that market research was a preserve of the marketing department. However, this is no longer the case in the current business world. As shown in this case, the production unit should rely on market research largely that even the marketing unit. Their product concept needs to be defined by the needs of the customer. This organizational issue is redefining the organizational structure of companies were departments are getting highly integrated in order to achieve the expected success. As Osborne (2012) puts it, in this new approach, departments must work very closely and information must be freely shared in order to ensure that all the strategic decisions made by any department is well informed, and reflects the conditions and needs of other departments. This not only improves the efficiency, but also eliminates confrontational cases between various departments within the firm.

Strategic issues

In order to understand the relevance of this new approach to strategic issues within firms in the current society, it is necessary to understand how it works. According to Kluter (2007, p. 4), “It is a process that includes senior management, generational product and platform management, and technical, team-based concept evaluation.” This strategy brings top management unit of an organization, the mid-managers, and junior employees into a forum of knowledge seeking in order to understand how to develop products that are desired by the customers. There has been a general feeling in many organizations that when making strategic decisions, the junior employees are always ignored. This is despite the fact that they play an important role within the organizations and are always in touch with the customers. This new strategy breaks the hierarchical boundary within these organizations and allows all the stakeholders, including the customers, to participate directly in the strategic planning of the organizations. Although such strategies may be a little more complex for the management because some may be unrealistic, the outcome is always positive because it shall suite all the stakeholders.

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Innovation oriented and methodological issues

According to Osborne (2012), companies are slowly moving away from the comfort of conventional methodologies in production and marketing, to a more sophisticated approach to a more sophisticated and more challenging method of creativity and innovativeness. Companies are constantly struggling to come up with new products that outmatch those of competing firms. With the high rates of copyright infringement cases as has been witnessed in various industries such as the electronic industry- the constant copyright infringement claims by Apple and Samsung is a case in point- the best solution may not only be the court battles. The court battles may continue, but a success-oriented firm will find a way of coming with more sophisticated products that are not easy to copy. By the time the competitor succeeds in copying such a product, a new product should be available that is superior to other existing products. ‘Touch the Market’ strategy makes this seamlessly possible. The more they use the products, the more they realize some unique features that they need. When they are actively engaged, a firm will always be on an innovative path, producing products unmatched by those from rival firms.

Conclusion

The ‘Hyundai Touch the Market’ strategy is a concept that seeks to integrate all the stakeholders, and most specifically the customers, in product concept development process. It takes the innovative responsibilities from the employees to the customers so that they can specify the nature of products they desire from the company.

References

Hülsmann, M., & Pfeffermann, N. (2011). Strategies and communications for innovations: An integrative management view for companies and networks. Berlin: Springer.

Kluter, H. (2007). Hyundai uses “Touch the Market” To Create Clarity in Product Concepts. Visions Magazine, 7(6), 1-8.

O’Connell, D. (2011). Harvesting external innovation: Managing external relationships and intellectual property. Farnham, Surrey: Gower.

Osborne, S. P. (2012). Handbook of innovation in public services. Cheltenham: Edward Elgar.