Puttin’ on the Ritz
What do a carmaker and a hotel chain have in common? An obsession with quality …
Korean cars used to be synonymous with value for money. That much is still true. But, as I confirmed on a recent trip to South Korea, the focus now is very much on quality – the Korean motor industry has become obsessed with this term.
Recently we wrote about Hyundai’s obsession with quality, which has paid huge dividends (its brand value has just surged by a whopping 20,5 percent to US$9 billion, or about R90 billion). Well I am pleased to say that Kia is equally besotted with the concept, and it is doing fantastic things in order to stay ahead of the pack.
Just one is enlisting the help of the Ritz-Carlton hotel chain, which has helped Kia develop customer service programmes, a training manual for sales and service staff, sales promotions and marketing campaigns.
But why the Ritz-Carlton? Well, the chain has long been associated with quality – ever since the Ritz-Carlton, Boston, opened on May 19, 1927, with a room rate of US$15 (around R150). It was, in fact, regarded as a private, formal club for the very wealthy. Guests were regularly checked to see if they were in the Social Register or Who’s Who and the hotel sometimes went so far as to examine the quality of writing paper on which the guests wrote to the hotel requesting reservations (if it wasn’t of a high enough quality, they were refused).
Fast forward a couple of decades and the Ritz-Carlton has twice won the prestigious Malcolm Bainbrige National Quality Award, an annual American barometer of quality excellence presented by the President of the United States – so it is safe to say that the company knows what it’s doing when it comes to quality.
Based on these quality credentials, Kia has fully utilised its expertise: last year almost 19 500 dealership employees, more than 100 staff members from service partners and 9 600 new recruits were given customer service training based on Ritz-Carlton guidelines.
Another quality initiative is the regular quality meeting, presided over by Kia vice-chairman and CEO Hyoung-Keun Lee. These product quality meetings have been taking place for 15 years.
Then there is the Pilot Centre at the group’s Technology Research Institute. Here, newly developed vehicles are put through the exact same manufacturing process as that of an actual Kia production facility. Vehicle blueprints are revised if problems are detected – avoiding nasty future recalls.
Within the Kia factories, the obsession with quality is also paramount. I toured the Hwasung factory in South Korea and there are quality-related signs everywhere. At Kia’s plant in Zilina, Slovakia, one in every 15 employees is responsible for quality control.
The Development Product Centre, which oversees all quality-control issues pertaining to vehicle components, also plays an important role. Incidentally, it doesn’t only examine Kia’s vehicles; it also studies competitors’ recalls.
Furthermore, there is what Kia rather ominously calls the “Global Quality Situation Room”. It is manned by technical teams who investigate any quality-related problems within 24 hours.
But has this all worked? It seems the answer is a resounding yes. The company has come up trumps in many quality surveys – for instance, the Soul and Rio recently came first in the United States and China in the JD Power and Associates Initial Quality Study. But what probably means considerably more is the fact that Kia Motors Corporation has increased its brand value by 15 percent over the past year to reach the 83rd position on the exclusive list of Top 100 Best Global Brands, according to a 2013 study released by Interbrand, the world’s largest brand consultancy agency.
Kia first entered the Top 100 Best Global Brands last year, coming in 87th place, but has since risen four spots to reach an estimated brand value of US$4,7 billion (around R47 billion). This represents a 15 percent increase from last year’s estimated brand value and far exceeds the overall top 100 brands’ average value growth rate of 8,4 percent.
Marketing gurus from Kia will tell you that it’s all thanks to the company’s brand-building activities, and its core brand characteristics (incidentally, they happen to be “vibrant, distinctive and reliable”).
I’m not so sure about that. I’m no marketing genius. But I think it’s more a case of sticking to the basics – and building a quality product that people trust.