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January 4, 2011
KAPALUA, HAWAII
DOUG MILNE: Dave thanks for joining us, executive vice president, sales, for the Hyundai Motor Company. We appreciate you taking a few minutes of your time. Obviously the first year, title sponsor of the event here. If you would start us off by telling us how things have gone so far, and then we'll just open it up for a few questions.
DAVE ZUCHOWSKI: Thanks. Obviously we are thrilled to be here. Automotive in golf is such a natural, natural combination. It's something we have been looking to get into for quite a while now. We didn't want to jump into it. We have had a lot of opportunities and this one presented itself and we just think it's a great venue, it's a beautiful venue.
The whole concept of champions and a great competition is really sort of where we are as a brand right now. It's a good fit and it's come together quickly. I think the negotiations were September; the contract was signed in October. So this has really come together quickly. It's a three-year gig for us and we hope to grow it from there. We are learning as we go, along with the transition of the name sponsor, has been very smooth. We are really happy with the way things are going. We are really excited about the prospects of where we can go with this.
DOUG MILNE: I understand you got a round in today. How did you play?
DAVE ZUCHOWSKI: Played the Bay Course. Had a lot of fun. Got used to the wind. Did not get used to the greens yet. I don't know how these guys do it. A lot of fun.
Q. When you look golf against other sports, why golf?
DAVE ZUCHOWSKI: The demographics are amazingly good for us. Particularly with Hyundai, we have changed quite a bit in the last ten years, but certainly in the last two or three years in terms of where our brand is and how we position our products. We used to be known as the company that sold vehicles under $10,000 and that's really not a good fit with the golf demographic.
Now as you look at our vehicles that are parked out front with our new Equus, which is in the $60,000 range, and the Genesis, and all of these great products, we have a much better product fit than we have had in the past.
And the demographics are just outstanding in terms of the viewership and the appeal to those customers with our types of products. It's a very natural fit for us now.
For right now it's a starting point. Like I said, we didn't jump into this. We have been thinking two or three years in terms of sponsoring players on the TOUR or sponsoring tournaments. We wanted to get in in the right way, and we think this is a great way to get our feet wet and grow from here.
Q. Curious about the changes, going back to what the tournament was called before.
DAVE ZUCHOWSKI: It's heritage more than anything else. The most important thing for us is the affiliation with champions. The whole idea of bringing the best golfers in the world to compete and Hyundai being involved, and we think nothing says that better than Tournament of Champions. I think the heritage goes back to 1953 or something like that with the name. They had moved away from it and we thought a very important part of this was getting the Tournament of Champions back in.
Q. For all of this to come together --
DAVE ZUCHOWSKI: Normally on an event of this scale, we would allow more than 60 days to try to just coordinate everything. We are new into golf. Grace Morgan is with me, she is in the back, and she has coordinated the logistics. And we are new and learning as we go along. Next year will be bigger and broader than this year, because we will have a full year to plan for it. This year is a shorter wheel base. It just happened quickly.
Mark Rolfing and his team have been phenomenal in helping us make this transition. I think we can leverage this better as we move forward and use the fuller part of the year and incorporate some of our other marketing planks that we use to incorporate this.
This is really a bigger piece of what we call being in big places. We want to be in the Super Bowl. We are going to have a couple of ads in the Super Bowl. We are the automotive sponsor of the Academy Awards. We sponsor FIFA globally. So we like to do things in big places, get a lot of eyeballs looking at our products and hearing our name, and we think we can work this in better as we move forward than we were in the short period of time that we put this together.
To be honest with you, it came together a lot quicker -- we were very concerned in mid-October last year -- we were thrilled to get the opportunity; and then said, oh, my God, what have we done and how do we get ready for January, and here we are and it's worked out great.
Q. Why does this tournament work better for you than a World Golf Championships?
DAVE ZUCHOWSKI: We looked at a lot of different things. One of them logistically surprisingly enough is it's almost a midway point between our parent company in Seoul and our U.S. distributors in the market here. The venue is wonderful. The location is very good.
Again, the whole concept of champions and this high level of competition that we wanted to be associated with I think is a good starting point.
Q. Where is your headquarters?
DAVE ZUCHOWSKI: Fountain Valley, California. Orange County, California.
Q. When you look at leveraging sponsorship, what kind of things are you looking at; ratings?
DAVE ZUCHOWSKI: It's really, the ratings are a simple thing to look at but not everything. There's getting our products to the right people. We really don't do a bunch of specific golf-targeted marketing right now. So this is getting us into a whole new area that we have not been in very big before. Football we are big in. Golf, we have not been big in. And golf is something we want to get big in and we think we are hitting it at the right time. So it was pretty important for us.
Q. When you look at sponsoring an event, players in the past who have played, are there things you have looked at there?
DAVE ZUCHOWSKI: We have looked at it closely in those areas. One thing you get with sponsoring a player, a little bit like a race car; you get a lot of different logos on his shirt and his hat. We think we have more exclusivity as a sponsor of a tournament, and we think that makes more sense.
As we go along more and as we get more involved in golf, as we get more geared up for it, maybe there are more players involved; maybe there are other tournaments. We just think this is a great way to get our feet wet and see how it works for us. But it gets us really into a whole different marketing area than we have been at most recently.
Q. Every year down here, there is always talk about the field. There are I think 32 players this year. As you go forward will that be a point of discussion, possible changes in the criteria of the field and increasing it?
DAVE ZUCHOWSKI: The most important thing for us -- and Mark and I have talked about this, and we are going to talk to the PGA TOUR about this, and making sure you have a great field. You really don't have a Tournament of Champions if you don't get all of your champions showing up.
What's really important to us and as we can build momentum behind this event is that we get a great field just because of the champions coming. We think the exclusivity is somewhat unique in that regard. That exclusivity is very special for us. It also provides us, because of the Pro-Am element, we have 800 dealers in the United States and we can run incentive trips with our dealers who are generally golf enthusiasts and allow them an opportunity to get out here and play with the pros. And we have about 25 of our dealers here on this trip. So we can do a lot of things with this that we can't do with the sponsorship of a player.
Q. Does it sell cars?
DAVE ZUCHOWSKI: It does sell cars. You talk about TV ratings and things like that. But we also look at what our business looks like after a big campaign and when we go into the Super Bowl and run a couple of ads there and go into the Academy Awards, it definitely makes a difference. It drives showroom traffic. We look at consideration of our brand, which we are a growing brand, and the consideration has more than doubled in the last couple of years, but it's still about half of what it is for Toyota or Honda.
So we are growing and we have a long ways to go and we think going into a new area allows for great exposure and new consideration, and we think more people will talk about Hyundai in conversations, conversations with people that previously didn't talk about it.
Q. What other sporting events are you involved with; you mentioned football?
DAVE ZUCHOWSKI: Yes, also, FIFA, worldwide soccer. It's not so big here -- it's globally huge. We are a global sponsor. That's handled completely out of Seoul. It's not a U.S.-based program. It's handled out of Seoul.
Q. And the sponsorship?
DAVE ZUCHOWSKI: Yes.
Q. What I'm kind of curious about is given at arena of the golf course umbrella, when you go about displaying your various cars, in the time you start getting interested in golf look at other auto sponsored tournaments and see what they do on-site?
DAVE ZUCHOWSKI: We did. We looked at a lot of them. Some folks, as you know, have been doing, automotive and golf has been together for a long, long time and it's a very natural combination. There are some manufacturers that have done a specific job with the events, and others that have not done as golf a job with it. And we have learned and taken the best practices of the guys that do it well and tried to work on those.
And we also understand having worked with other sponsors, it takes a lot work to make this thing right. It doesn't just happen. You really have to work at it, and we understand that.
Like I said, we think this year is going to be great. We think next year is going to be better because we have a year behind our belts, and the third year after that even better and after that we'll step back and look and where do we grow from this where do we go from here.
We are really enthused about it. We have been a little bit impatient about trying to it get but at the same time trying to avoid jumping in at something that didn't create a good opportunity. This is not an interim type of deal.
Q. Just as a matter of record, does the winner get a car?
DAVE ZUCHOWSKI: No, not this year. That's one of the things that we will grow into that probably didn't happen because we didn't have the time to plan it accordingly. We put all of the players into our new Equus this year to get them the feel for it. We have cars available, but we are not giving a car away this year. Hole-in-one cars we are; two.
Q. But the winner, no?
DAVE ZUCHOWSKI: No the winner, no. It's something that's open to discussion. We have two hole-in-one cars.
DOUG MILNE: Thank you for taking the time to stop by.
End of FastScripts
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