During Kumho Tire USA’s recent dealer meeting in Los Cabos, Mexico, Tire Review sat down for an interview with Rick Brennan, vice president of marketing, and Armand Allaire, national vice president of sales. The two discussed the tiremaker’s improvements in 2010, goals for 2011 and what dealers can do to ensure success.

In 2010, Kumho’s sales in North America were up 23%. How will Kumho continue that momentum going into 2011?

Brennan: We are focusing on new product in the segment we feel we need to grow in – UHP. We’re igniting some enthusiasm with that new product (the Ecsta 4X), and will have significant activity to launch it. And at the same time, we’re changing our marketing to something that generates more enthusiasm. For example, we did racing for 14 years and it was a little tough to get dealers involved, even if you gave them tickets to the races. With the sports marketing, we got so many requests for Ohio State or USC tickets that we just couldn’t keep up with it. The things we’re now involved in better match the interest level of the people who sell our tires. Consumers are spending more time on the Internet researching purchases, so we’re going to support the dealer more with our Internet activity. All this will expand Kumho’s top-of-mind recognition. We need to do all these things together, but given our size, we have limited resources. So we have to pick and choose. The bottom line is, if consumers are there at the games and we’re cheering their team on and they’re having a great time, they’re going to remember that. They may not know anything about Kumho tires, but they’re going to associate us with their enthusiasm.

Earlier, you mentioned Kumho approaches top-of-mind awareness differently than its competitors – how so?

Brennan: That sports marketing example really defines it. We’re not necessarily buying advertising in People magazine or other broad markets; we’re trying to do things that connect with the consumer more than just hoping they will look at a page in a magazine, or hoping they don’t fast forward past a TV commercial. The eyeballs that see a commercial may be there, but a real impact won’t be. We don’t have the resources for large TV campaigns, so we’ve chosen to make connections in an experience. Yes, the number of impressions we gain is lower than buying mass media advertising, but the impact is more meaningful.

How will Kumho continue with its sports marketing campaign?

Brennan: The problem is that it takes a lot of arms and legs. The college football program taxed us to the max, so we’re going to look at mixing that up a little. We’re in the midst of evaluating the college football sponsorships. It worked really well in some spots where we could connect with consumers, but we had some teams where we weren’t able to be there. There were events going on, but they weren’t attended by Kumho employees who knew the history and who had knowledge of the Kumho brand – it was temporary employees. We’re looking at doing fewer teams and are evaluating which teams those will be. A big question is how to cover all the territory. We have dealers in New Jersey, Atlanta, Southern California – we can’t pick teams all over the nation. We have to pick based on where emotions are the highest. Tennessee, Ohio State and USC all fit into that category. Some of the others we had high hopes for, but we just couldn’t be there.

In the general session, you addressed fill rate and supply chain issues in 2010 and the move from five distribution centers to three. Are there still any existing issues that need addressing going into 2011?

Allaire: We have reached a good, stable point now with our supply. We know what’s coming and it’s steady, more dependable. Making the distribution between the three locations was based on the issues and forecasts we studied to connect specifically with customers. The consolidation allows what comes in to be more effectively packaged up and shipped to dealers. Our fill rates have improved because of this.

Are there still issues from the Chinese tire tariff that you’re working to resolve?

Brennan: Yes, there are ongoing challenges. We have four plants in China that we can’t get any product out of, and that locks us up to a certain capacity. If we have a switch in demand, it can put us into a box. If we suddenly need a lot of a certain tire and we just don’t have the capacity in South Korea or Vietnam, then we’re stuck. It’s a constant management now – we have to help our supplier, our parent company in South Korea, as much as we can to know what we need. We have to do a much better job at forecasting what we need. It’s an ongoing challenge, but it has to be much more accurate now so we can keep our dealers full of tires. Right now a lot of our dealers are helping us with that – they’re making us aware of their needs so we can better forecast. We’re keeping pretty open communication to make sure we do the best that we can.

What’s the status of the Macon, Ga., plant?

Brennan: We are constantly reevaluating that. It’s been put off for another year. With all the things Kumho and the industry as a whole have gone through, the needs for that factory have to be evaluated closely because that plant wouldn’t be able to manufacture everything, so it’s a matter of determining when we actually need it and whether we can put the equipment in that we need right now. Those are the questions that we evaluate constantly.

Going into 2011, what are the top things dealers need to focus on to remain successful?

Brennan: The most important thing is to focus on what they really need. They have to be a little more aware of the market around them and of what’s happening in their immediate area so they can do as good of a job as possible to visualize what they need. With the expansion of SKUs, dealers can’t stock everything. And if they wait to call their local wholesaler until a customer is in their door, it may be too late. The immediate purchase is declining – consumers are spending more time doing research. Smartphone apps that are able to read barcodes and provide price comparisons for nearby businesses may not have reached the tire industry yet, but they are on the way. This makes it possible for a consumer to price check and do their shopping without ever seeing a human being. To keep people from walking, dealers need to have that tire in stock when the person shows up at their door. To work with suppliers to get those lines of supply lined up, dealers have to understand the market: How many 215/55R17s does he need? What type should they be? Dealers’ decisions are going to get increasingly complex as the number of things to evaluate increases.

How will Kumho help prepare its dealers for what to expect in their markets?

Allaire: We’ll definitely be able to communicate that better. Last year there were a lot of things we couldn’t understand or didn’t have a sufficient quantity of. This year, when we have a much steadier supply situation, we want to be able to say what we can do, where we can grow and then get dealers in line to grow with us in those same categories.

Brennan: The new client-centric focus lets us concentrate more on each individual customer. We have to help dealers meet that need of focusing on their markets that I mentioned earlier. There’s a lot more than tires to be sold by manufacturers in the future – you have to sell your capability to help dealers run their business. And we’re working diligently to be one of the best.