Semiotic-based Strategy Model to Decode Service as Brand Communication Focused on Automotive Industry

Kwak, Mingoo *Lee, JoonseoService Design Institute, Sungkyunkwan University Design Department, Sungkyunkwan Universityflaneur@skku.edu mildjoon@skku.edu

*Corresponding author

Abstract Background This research focuses on the transition from the product to service as a brand communication strategy, adopting a semiotic perspective with structural analysis. While sharing the same point of view from the existing service design research, that is focused on service as a business opportunity for manufacturers, this study analyzes the structure of brand communication to find the strategic orientation and to design the new form of strategy. Methods The theoretical base of this study is from Greimas’ Semiotic Square; the tool to analyze the structure and to understand the depth of journalism. The research carries out a case review to build an appropriate model by reconstructing the Semiotic Square. About ten communication practices from the global brands were analyzed: copy, situation, concept, and context to study the elements of brand communication. Results The analysis of the case review shapes the structure of brand communication. Strategy Square is a model reconstructed from the semiotic square, containing the elements found in each case review. The model has three stages; emotional, experience, and interpret. As a decoding feature, the model analysis finds three strategy types in automotive industry cases. As a result, this study leads to a new strategy developed specifically for Hyundai Motor Company. Conclusion Three strategy types are suggested through the case review. This strategy type provides a way to interpret manufacturers’ strategic orientation, but is also suggested as a tool to design service. Specifically, this study identifies the factors that the manufacturers capture in their intention to engage with customers. Furthermore, service design becomes an opportunity for both leading and following automotive corporate because of the changing paradigm of service strategy. The strategic orientation on service may determine the solidity and the clarity of brand communication.

Keywords: Semiotics, Service Strategy, Service Decode, Service Design, Brand Communication

1 Introduction In the rapid emergence of automotive industry, the marketing promotion tactics tends to focus on products’ frontline function to promote sales. However, in this era, the level of engineering technology is similar amongst manufacturers; after the M&A, R&D, and with the application of digital technology. Afterall, the leading manufacture and the followers still exist with small gap of technology between them. To keep up to this circumstance, some manufacturers started to focus on other aspects rather than the functionality of the product. Brand Communications started to focus on customer relationship instead of the centered features of products. Such shifting norm of brand communication strategy is definite in the automotive industry. This study involves the process of making an actual operating brand communication strategy of Hyundai Motor Company.

We have reached this method by starting a case review to compare the on-going strategies of global automotive brands. We observed the shift of their marketing features and its materials; from product-focused strategy to service focused strategy, and the benefit focused strategy. The marketing methods began to change as the communication strategy shifted [19]. In this trend, traditional ads focused on product’s function are still used. Also, the brand communication offering the benefit of the product and providing the service is in a rising demand. The communication is created by the manufacturers, it is hard to define the brand communication’s strategy oriented on a specific method in this trend. That is because of the common methods used to position the product as a material or in the background in a brand communication. This research aims to discover the strategy under the specific brand communication cases through the semiotic approach.

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Received June 8th, 2020; Accepted July 3rd, 2020

We developed a new method to decode and to design service as brand communication.

2 Literature Review 2.1 Changing Paradigm from Product to Service From the new paradigm occurred by technological advancements, globalization, an improved user demand led to emerge the importance of service amongst manufacturers [3]. Many studies focused on how the transition occurs from product to service [22] and business expansion by the service for manufacturers [24, 28]. Research in the marketing field also noticed the importance of service. These studies focus on the evaluation of service, which is also known as servqual and servperf [1]. On the other hand, the research focused to study experiential consumptions [28] and marketing approach with cultural and art experiences [6, 23, 25]. Marketing approaches with experiential materials share the similarity with service-based communication. Overall, service is essential more than ever to manufacturers today as a business opportunity and marketing tool.

2.2 Semiotic Approach on Marketing Sidny J. Levy shared a semiotic view on marketing in the research about symbols in marketing [17]. The following research on marketing with semiotics tend to focus on consumer behavior [26]. A recent study about the semiotic approach on communication with its target audience [4] shares the same perspective with this research. Other researchers focused on studying brand positioning in two dimensions with the semiotic square [9, 20]. A semiotic square is a tool for analysis of the relationship between semiotic signs suggested by Algirdas Julien Greimas [10]. This tool uses a structural analysis by considering the relationships between the different modes of each concept [5]. And the research conducted using this model is to figure out the intention of the news article [8]. Thus, the semiotic square was used as a method to find the in-depth meaning and to reveal the ideology in journalism [2]. (Figure 1)

Figure 1 Application of Greimas’ Semiotic Square to analyze news

2.3 Service Analysis with Semiotic Method In contrast to existing studies, this study attempts to understand and decode the communication in three dimensional ways. Journalism report and brand communication share the similarity in covering the real intentions of the content and the marketing strategy. This research aims to discover the brand communication strategy

with the approach of semiotic method. We named this analysis procedure the “service decode”; to analyze the strategy when service is used as a brand communication. To fully adopt the semiotic method, we chose Greimas’ Semiotic Square. We assume that the in-depth meaning stage and the symmetry figure of the model can reflect the characteristics of brand communication. The case review was conducted to find the common elements constructing the brand communication to reshape the semiotic square as a new form.

3 Case Review This case review is the first approach to decode service. The major purpose is to find the elements which constructs the structure of brand communication. Global brands using service as a material of communication have been selected for this case review to reflect the changing paradigm. The case review was made with the selected brands and their form of marketing medium released from January 2018 to December 2019. (Table 1)

Table 1 Brands and their choice of marketing medium

Brand Marketing Medium

BMW / BMW M* “M Town” (Commercial)

“BMW Driving Center” (Driving Experience)

Mercedes-Benz / AMG* “Design to Seduce” (Commercial)

“AMG Driving Experience” (Driving Experience)

Porsche “#sportscar_together” (Event)

“Porsche Passport” (Subscription Service)

Hyundai / Genesis* “Hyundai Motor Studio” (Space)

“Hyundai Driving Academy” (Driving Experience)

Toyota “Smart Eco” (Tour Guide)

Lexus* “Intersect by Lexus” (Space)

*Automotive brands are reaching higher value market withsub or second brand sharing the parent company [16]

3.1 The Background of Brands These selected brands are using service as a material for brand communication. These brands are in highest demand in the industry of their field [12]. § BMW and Mercedes-Benz are the two leading brands in

the premium car segment. These two brands approach theirtarget customers by providing a driving experience. Theyalso have each sub-brand (M & AMG), appealing highperformance to compete in sportscar segment brands.

§ Porsche provides a leading performance with circuit laptime in sports car segment. Most sports car brands focus ontheir limited number of consumers. However, Porsche usestheir communication method to expand and share the brandstory with the public. Porsche is one of the two sportscarbrands amongst the Interbrand’s top 100 brands [13, 14].

§ Hyundai is one of the leading brands in global sales. TheGenesis brand was launched in 2015 to compete in the

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premium car segment with BMW, Mercedes-Benz, Lexus, etc. Hyundai is trying to communicate the brand with driving experience and brand experience space as a result of the following premium brands.

§ Toyota is the top manufacturer in global sales as along-time successful foreign brand in the North Americanmarket, with eco-friendly concept products. Toyota haslaunched the Lexus brand in 1989, which is a segment totarget the premium market.

3.2 Reconstructed Model through the Case Review The case review is conducted to find the units of surface meanings and the in-depth meanings through the analysis of each communication’s content; copy, situation, concept, and context [15], etc. We have found the common symmetry elements in these cases. The “expression stage” and the “deep stage” from the semiotic square is transformed to customers’ side and manufacturers’ side. The relationship between the elements is not relevant in the reconstructed case review. The reconstructed model observes the case in three stages; customers’, manufactures’, and their engagement stage. (Figure 2)

Figure 2 The Model Reconstructed from Semiotic Square for the case review

4 Strategy Square Model 4.1 Case review Result 1: Elements and Stages (Figure 3) Through the case review, we discovered the elements and the structure of brand communication. The meaningful units of the semiotic square are transferred to product, function[7], service, and brand, which are the elements that customers recognize in the first place. We named this the “emotional stage”, where customers recognize the obvious elements in the marketing medium instantly. In the new form of the square, the deep stages are seen as two stages, the experience and interpret. The Experience Stage is where customers and manufacturers engage[18, 19]. The four elements; effectiveness, performance, relationship[11], and efficiency are customers’ experience as a result of brand communication through the first emotional

stage. In this case, the manufacturers’ intention is to offer experience through the Engagement Stage. The four elements; reliance, convenience, empathy[29], and optimize[18] are the strategy of communication to make customers appreciate their consuming brand. At the same time, these four elements could lead to the customer’s involvement as a result in this form of brand communication. This means that the four elements in the Emotional Stage are the manufacturers’ instrument to make customers involve in another level of engagement.

Figure 3 Elements and Stages found from the case review

4.2 Case review Result 2: Strategic Orientation We have disclosed the types of brand communication through several case reviews. The strategic orientation categorizes the following new types of brand communication. § In-depth product (Table 2)

While advertising the product in a commercial film orcampaign, manufacturers do not tend to focus on theproduct’s specifications anymore. This is because thetechnology used does not differentiate their product withcompetitors. Yet, automotive brands rely on productfeatures in advertising by emphasizing the aspects of styleand design to be considered exceptional from competingbrands.

Table 2 Visualized model of In-depth product strategy Visualized Decode Result: In-depth product strategy

Mercedes- Benz

“Design to Seduce”

(Commercial)

§ In-depth usage (Table 3)This strategy is focusing on the use of products or service.The content of communication highlights the usage and thecharacteristics of a product by providing the service. With the highlight of the usage-value, the communications alsosuggest the lifestyle through the product’s relationship withtheir customers [20].

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Table 3 Visualized models of In-depth usage strategy Visualized Decode Result: In-depth usage strategy

BMW “M Town”

(Commercial)

Porsche “Porsche Passport”

(Subscription Service)

BMW “BMW Driving Center” (Driving

Experience)

AMG “AMG Driving

Experience” (Driving

Experience)

Hyundai “Hyundai Driving

Academy” (Driving

Experience)

§ In-depth service (Table 4)

The changing paradigm eventually led service to become a communication that refers to the brand’s value and experience [11]. This strategy is tough to orchestrate that service is apart from the products. Today, the service-based method is essential indeed and leading manufacturers attempt to maximize the customer loyalty using this [28].

Table 4 Visualized models of In-depth service strategy Visualized Decode Result: In-depth service strategy

Lexus “Intersect by

Lexus” (Space)

Porsche “#sportscar_

together” (Event)

Toyota “Smart Eco” (Tour Guide)

4.3 Decode Result According to the case decode result, this study approached the goal for manufacturers to make customers reach the interpret stage. Manufacturers should reach customers by practicing brand communication with the elements of the interpret stage. The appropriate engagement will make customers appreciate their product’s reliance; convenient function, empathy on brand, and optimized service. These non-material aspects help to be exceptional from other brands and result in better responses from customers [21]. In the case of (Figure 5), the manufacturers can reach other strategy elements. (e.g., Using in-depth product strategy connected to other in-depth elements like service, not using the service as a material.) The case decode result shows service or brand element of the emotional stage, to reach “empathy” or “optimize” of the interpret stage. 5 Service Strategy Design With the decode result, we have developed a new strategy for the Hyundai Motor Company. At this time, Global Design Center of Hyundai Motor Company decided to work with us to develop the communication strategy starting with new product release. Past events made by Hyundai were focusing on the design concept and the identity of their product, which is a result of design process. Our analysis by the Strategy Square model showed far apart results from other competing manufacturers. Strategy shift to in-depth service is needed to

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make a competitive position among competitors. (Figure 4)

Figure 4 From former strategy to strategy suggested according to the analysis result by the model

Figure 5 Strategy design and result by the Square Strategy model

Although the former strategy focused on product, sharing the identity and design concept is to make a relationship with customers. Our approach is to focus on effectiveness in the experience stage to bridge relationship. In addition, we attempt to bridge efficiency through effectiveness. (Figure 5) The materials in emotional stage were shaped to bring customers in engagement stage by resetting the structure. The presence of (a)product as a material in emotional stage is a starting point to align consumer to engage. The short distance between the product and audience is made to attract the audience experience stage quickly. Staging the red painted model, rather than the popular colors in sales such as white, grey, and black, is to visually impact the sportiness design concept of the Sonata. This also appears in the screen presenting the design features with red painted model. Highlighting the design features of lightings and roofline on the screen is also another tactic to engage customers (b)effectively with the product identity. The above plans make the bridge to (c)relationship and (d)efficiency appear smoothly from the (b). To bridge from (b)effectiveness to (c)relationship, the designer must present the product in a close range with fellow audience. Presentation contents contain the efficiency of the results from the product design, including aerodynamics, fuel efficiency, and energy-saving feature. The strategy design applied to this project found how in-depth product strategy can reach the elements of service and brand in engagement stage. Without using the material of service or brand, this project showed compelling result as an in-depth strategy. After the release of this project, presales of Sonata thrived and made a new sales record. We forecast that this strategy will buy some developing time for an in-depth service brand communication for Hyundai Motor Company. The following communications from the Global Design Center of Hyundai Motor Company sustain this strategy to achieve better response from customers. We suggest long-term strategy timeline to design in-depth service strategy that customer can follow from the emotional stage. (Figure 6)

Figure 6 Long-term strategy timeline 6 Conclusion By looking at the changing paradigm of brand communication strategy, the shift; from product to service, is evident more than ever. This semiotic approach to design and to decode service as a brand communication can be an opportunity to win the competitor’s strategy. Indeed, a new method is found to establish a strategy for the brands that are not prepared for

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in-depth service strategy, and for the leading brands to set a solid strategy.

Figure 7 The Strategy Square Model The case review results show three types of strategy; in-depth product, in-depth usage, and in-depth service, which are decoded by the Strategy Square model. While some brands are already shaping their communication with services, some are still maintained with product. Product focused communication can reach usage or service elements in experience stage. However, it’s not a solution to compete with in-depth service strategy since this approach can hardly reach the interpret stage. The strategy square model can be used to decode the strategic orientation of brand communication. In contrast to existing linear service design methods, “service blueprint” and “journey map”, the Strategy Square Model brings three-dimensional method to understand and design service. In this way, the model provides simple visualization of service decode and strategic orientation. In design perspective, a flexible approach can result in a creative outcome fit for the corporate’s circumstance. Further research plans to discover the shift and the details of the strategy of a specific brand in their timeline. We predict that the emerging market of electric car brands will show different strategy of communication from this study. Applying the square strategy model in other industries such as service providers is planned for near future.

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