Hyundai is speeding toward a new brand image with a $150 million advertising campaign and a new upscale sedan intended to compete with the top German and Japanese luxury brands. In the late 1980s, when the South Korean car company first entered the U.S. market, it used its vehicles and communications to create  brand image of affordability. That budget image helped Hyundai increase its sales in the United States throughout the 1990s and beyond. By 2008, the firm was selling nearly 500,000 cars in U.S. markets each year and enjoying especially strong demand for its low-priced Elantra and Accent models.

Now Hyundai's long-term goal is to broaden its appeal beyond the budget segment and to target U.S. buyers who want a better car and are willing to pay for it. The company invested $540 million in designing, developing, and manufacturing its new rear-wheel-drive Genesis sedan. Its engineers and designers studied luxury sedans from Cadillac, Lexus, Mercedes, and BMW and then set out to "build a car to wow consumers," says a Hyundai executive. The firm contracted with suppliers such as Bosch and Haman Becker, which sell parts to many European luxury car brands, to produce critical elements such as the engine controls and the sound system. As a result, the Genesis boasts a stylish design, a powerful V 8 engine, a well-appointed dashboard, a music-lover's audio system, and a price tag well below comparable competing models.

However, moving upscale will be challenging because U.S. consumers still think of Hyundai as a budget brand. "Hyundai doesn't have product issues; Hyundai has brand issues," observes a Hyundai Motor America's vice president for marketing. "Unless we give people a compelling reason to shuffle the brand deck, they'll stand with the brands they know rather than make that switch."

To reshape its brand image, Hyundai hired Good by, Silver stein & Partners to come up with a multimedia campaign focusing on product attributes that suggest quality and reliability. The campaign asks questions like "Shouldn't a car have more air bags than upholders?" (which Hyundai's cars do) and makes statements like "A five-year warranty says a lot about the car. A 10-year warranty says a lot about the car company" (because Hyundai's cars are covered by a 10-year warranty). All the ads end with an invitation for consumers to "Think about it" and get more information 

As part of the campaign, Hyundai bought two Super Bowl commercial spots to introduce its Genesis sedan to the widest possible audience. In one ad, actor Jeff Bridges tells viewers, "We're pretty sure that Mercedes, BMW, and Lexus aren't going to like it very much" as the Genesis drives over mountain roads and zooms along on a test track.

Jeff Good by, who heads the ad agency that created the campaign, explains that the messages "emphasize the quality and integrity of the cars" rather than highlighting their price advantages. "Largely because the cars have been improved so much in the last three, four years, if you dismissed them then, you haven't seen the best of them," he says. "So all we want to do is get people to look at the facts, think about it, and ask them to make up their own minds."

Can Hyundai change its brand's image by replacing negative associations with positive associations? Will encouraging consumers to elaborate on the brand and categorize it with more upscale competitors change consumers' inferences, and make consumers consider the Genesis? Solid U.S. sales for the Genesis and sales increases for all other Hyundai models will be the final measure of whether the campaign has been effective.

Question 1: Why would Hyundai have a voice-over stating, "We're pretty sure that Mercedes, BMW, and Lexus aren't going to like it very much" in a Genesis ad?

Question 2:  How is Hyundai using the country of origin to influence consumers' inferences about the Genesis?

Question 3:  In terms of knowledge and understanding, how is the introduction of the upscale Genesis sedan likely to affect how consumers think about lower-priced Hyundai models?