Assignment 5: Case 4-5 “Hyundai’s Turnaround”

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1.Determine the role of Hyundai’s 10-year, 100,000-mile warranty in its turnaround and how it relates to post purchase dissonance. In 1998, Hyundai was at a crossroads in the U.S. market. After a decade of dwindling sales and nagging quality concerns, Hyundai needed to do something to turn their brand around. And one of their bold moves included a 10-year, 100,000 mile warranty (Hawkins & Mothersbaugh, 2011). With these changes, Hyundai experienced profitable results. Their sales started to jump and they tied with Honda for second place in the J.D. power Initial Quality Survey. The car company; Hyundai has been did very well for itself in 2011, even in the down falling economy. Hyundai sold 50,765 vehicles in December of 2011, which were…show more content…
Even with all the changes and the profit increases Hyundai still struggles with their perception. Hyundai has great warranties, good values, they are affordable and a perception that Hyundai is probably better than its reputation. On the minus side, their brand still remains somewhat unfamiliar, cheap, low quality and boring (Hawkins & Mothersbaugh, 2011). The success that Hyundai has been having is especially remarkable considering Hyundai’s reputation for quality problems when it entered the U.S. market in 1986. But starting 10 years ago, following its acquisition of Kia, Hyundai not only addressed those problems but also backed them up with extraordinary 10-year, 100,000-mile warranties (Molitor, 2009). This wasn’t just a publicity stunt either, because Hyundai’s quality improved dramatically and now tops the J.D. Power rankings for non-luxury cars. In 2009, during the depths of the recession, Hyundai also introduced an “Assurance Program,” which allows its customers to return their cars if they lose their jobs within a year of purchase. “So far, only 50 cars have been returned, but the message is clear: We care” (Molitor, 2009). This all helps play a role in consumers’ ongoing mixed perceptions about Hyundai’s quality. 3. Assume that Hyundai successfully upgrades its quality image among all U.S. consumers so that they are universally recognized for high quality. Discuss whether this could result in greater

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