While acknowledging that 2013 likely will be a challenging year for tire dealers and for the industry in general – similar to what was seen in 2012 – Kumho Tire USA executives gave attendees of its annual dealer meeting plenty to look forward to.
From new products and a return to the medium truck tire market to a revamped Premium Fuel program and all-new Kumho Dealer Portal, the meeting’s announcements lived up to its theme, “Fuel for the Future.” In addition, the tiremaker pledged to work more closely with dealers on events, promotions and support for their businesses moving forward.
At the event, held Dec. 7-10 in Cancun, Mexico, Armand Allaire, national vice president of sales, welcomed 40 dealers and their guests, along with tire trade media. According to Allaire, the economic uncertainty of 2012 has resulted in a “wait and see attitude,” but “Kumho Tire USA is now.”
Fuel Additions
Allaire detailed changes to Premium Fuel, mainly that the tires included in the program have expanded beyond the original six Ecsta UHP units to include 14 tread patterns that cover passenger, CUV, SUV and light truck tires. “We are convinced we have the best affiliate dealer program in the industry,” Allaire said, adding that rewards are now easier to achieve, as well.
Rick Brennan, vice president of marketing, laid out the details after the dealer sessions, explaining that when the program first launched, a minimum of 200 units per quarter were required for a dealer payout.
“When we rolled out Premium Fuel, we looked at what product we had available with large enough capacity to support the program, so that’s why it was focused on UHP,” he said. “The program worked, but it left out 85% of the market; if the dealer wasn’t a large UHP seller, he didn’t earn any money. Our production and fill rates came back (Brennan estimates they now sit at 95% to 100%), so this year we’re focusing on relaunching the program.”
Under the relaunch, the lowest purchase requirement has been dropped to 75 units per quarter, with a second bracket of 150 units per quarter.
Kumho will pay anywhere from $3 to $10 per unit depending on the type of tire and the dealer’s level. And there are benefits for full-line Kumho distributors, as well, with an available 2% rebate on everything that is a paid upon unit of Premium Fuel dealers, Brennan noted.
Allaire told dealers the revamped program also offers enhanced marketing support direct to the retailer, including: an all-new Premium Fuel dealer kit; new POS displays and brochures; a redesigned EDGE online training program; new brand merchandise in the online store; and a new ad builder for customizable print and digital ads.
Kumho Dealer Portal
Launching in three phases in the first quarter of 2013, the Kumho Dealer Portal is designed to be an all-encompassing resource for tire dealers, according to David Koh, marketing communications manager.
With a communication focus, the portal will offer: training, promotions, POS materials, wearables, an image library, an ad builder, marketing support, product videos, announcements, a Q&A section and a chat forum. Added functionality, possibly including rewards status and inventory tracking, will come as dealers offer their feedback on the portal, Brennan noted.
“The portal will provide access to a lot of different elements that will help the dealer sell more,” he said. “It gives us the element to communicate with dealers not just through them logging in, but possibly through direct emails, alerts, etc. It allows dealers to get more information about Kumho that may enhance their business.”
“One great element is the flexibility to make adjustments based on dealer feedback,” added Megan Wentz, marketing communications coordinator. “This allows us to better service dealer needs and figure out what other information we could be providing or utilizing more efficiently.”
New Products
On the new product front, John Mosby, product planning coordinator, introduced two new passenger products – the Kumho Sense KR26 all-season touring tire and a still-to-be-named Ecsta all-season UHP tire.
Mosby said the new Ecsta AST, slated for release in the third quarter of 2013, will come in 27 V speed rated sizes ranging from 15- to 18-inch wheel diameters. With a UTQG rating of 560 AA, the tire will carry a 55,000-mile limited treadwear warranty.
The yet-to-be-named tire, which will be marketed to sports cars and sporty sedans, is a “well-rounded tire that excels in all-season traction, wet and dry handling and long mileage,” Mosby said, adding it also offers impressive snow braking, handling and acceleration.
The Kumho Sense KR26, an H-rated all-season touring tire, will launch in the first quarter of 2013 in 28 sizes ranging from 13- to 17-inch wheel diameters. According to Mosby, the tire offers circumferential grooves for water evacuation and improved lateral grip; a full-depth sipe system for enhanced wet, dry and light snow traction; multiple lateral grooves for improved traction; and a variable pitch tread block for a quiet ride.
He explained that OE tire sales of 14-, 15-, and 16-inch H-rated tires have more than doubled in the past two years. “These sizes are primarily used on small sedans and hatchbacks, such as the Honda Civic and the Mazda 3. The KR26 was specifically designed for this segment by providing exceptional ride and handling, as well as a lightweight design for lower rolling resistance.”
Allaire highlighted Kumho’s renewed focus on the medium truck and bus radial tire market, with the newly-hired Ron Gilbert serving as director of commercial tire sales. He added the tiremaker plans to add two TBR sales specialists, as well.
The tiremaker has a SmartWay-verified tire for steer, drive and trailer positions with its KLS02e, KRS02e, KLD01e and KLT02e, Allaire noted, adding that Kumho also is launching its new KMD41. The tire, which replaces the KFD04, is a mixed service drive tire with an updated compound for better cut/chip resistance and an increased maximum speed of 65 mph. It is available in sizes 11R22.5 and 11R24.5.
“Five years ago, we were a full-line TBR supplier and had up to a 2% marketshare within that market,” Brennan added after the meeting. “We ran into some issues with price competition in the U.S. and we couldn’t meet that price pressure at the time, so our marketshare dwindled pretty rapidly.”
He said since that time, prices have risen in the U.S., putting Kumho back in a competitive zone in the second tier and spurring the tiremaker’s reentrance into the TBR market. “To get to our maximum velocity overall, we have to offer all products,” Brennan said. “That’s why we’re reentering and hiring more people to specifically handle TBR. We’d like to get back up to our former marketshare.”
Marketing Changes Detailed
On the marketing side, Koh said Kumho’s goals for 2013 are to continue boosting brand awareness and perception, target print and digital enthusiast media for the AST launch, and continue to provide outstanding value. He also noted Kumho will increase digital advertising on enthusiast and trade websites, e-blasts, e-newsletters, mobile and social media, as well as grow its radio ad presence on top regional and local stations to complement sports sponsorships and promotions.
While the tiremaker will continue its successful sports marketing strategy – as an example, more than 720,000 Lakers fans saw Kumho’s lower ring display at the Staples Center in the 2011-12 season – the extent will be reduced somewhat to allow more resources for partnering with tire dealers on regional events, Koh added.
“Sports marketing did a great job for us in increasing our brand awareness, but more importantly, through our activation efforts at sports events, we were able to interact with people so that brand awareness will stick longer in their minds,” Brennan told Tire Review. “We’re still brand building, but for us it’s really important to help our partners and support them. It could be anything – sports, Internet, consumer promotions – to support them in selling more Kumho tires to earn them more profits. We want to tailor the approach with each dealer, instead of creating a standard program that we take out to everyone.”
Kumho is so serious about working with its dealers to improve their businesses, the tiremaker created a dedicated email address to answer comments, questions and concerns: [email protected].
This improved focus on dealer profits was echoed by J.B. Kim, Kumho Tire USA president and CEO, in his address to meeting attendees.
“When tough economic times face us, we must join forces to overcome obstacles,” he said. “There are no easy promises, but this is what we can tell you…that you can and should count on Kumho tire in 2013.”
