AKRON (Feb. 6, 2002)—Kumho Tire U.S.A. Inc., shooting for 30-plus-percent sales growth for the second straight year, is launching tire dealer and consumer incentive programs de-signed to increase sales of its Ecsta high-performance tire lines and enhance customer awareness of the brand.
At the dealer level, Kumho is introducing a $2 per tire spiff program for the counter sales personnel at its direct dealers. Sales personnel will accumulate the bonus cash on a new American Express debit card created especially for Kumho, according to David C. Hudrlik, vice president, sales.
For consumers, Kumho will offer a “MOMO/Kumho Way To Go” premium, offering a set of Momo design sunglasses (an $80 value) with the purchase of four Ecsta tires.
To support the program, Kumho is launching two additions to the Ecsta product range—the MX ultra premium and STX sport-utility vehicle tires. And last year the company also added six regional sales representatives and opened a warehouse in Atlanta, its fifth in the U.S. The tire maker said it is evaluating the need for a sixth warehouse this year, most likely in the Chicago area. Kumho claims a 98-percent fill rate.
Promotion-wise, Kumho Tire also is stepping up its involvement in grassroots sports car and off-road racing programs, and will continue to promote the brand through its association with the BASS (Bass Anglers Sportsman Society) Pro Fishing circuit. Associating with these types of racing series gives the Kumho brand an aura of credibility in the performance car owner's mind, said Mike Leverington, director of marketing.
In addition, all these activities offer dealers opportunities to participate on their local level, Mr. Leverington said. The BASS fishing organization stages 26 regional tournaments, for example. The group has more than 600,000 members, 92 percent of whom own light trucks and are considered extremely brand loyal, according to Mr. Leverington. Kumho is the group's exclusive tire sponsor.
The Fontana, Calif.-based tire company told Tire Business it will expand its involvement in the Championship Off-Road Racing (CORR) series this year, sponsoring the rookie of the year award and taking on several winning drivers. CORR will stage 16 races in 2002, most of which are televised on cable channels, Kumho said.
In 2001, Kumho's sales in the U.S. shot up 32 percent, to $217.6 million, and the company is forecasting 32-percent growth again this year. The company's sales are equal to about a 2-percent share of the U.S. replacement market.
In the past few years, Kumho Tire U.S.A. steadily has gained more direct control of its distribution—to the point where it now moves about half of its tires through its direct dealers and half through independent wholesalers.
The company, a subsidiary of South Korea-based Kumho Group, claims 2,500 direct dealer points of sale and “several thousand” more associate dealer locations, Mr. Hudrlik said. In 2002, the company will roll out an expanded associate dealer program that eventually will include hot links from Kumho's national dealer locator on its Web site. It also has developed a dealer training program it plans to offer via the Internet.
For 2002, the U.S. company plans several high-performance tire launches, new dealer incentive packages and a revival of its medium truck tire business, which plateaued, in part, because of capacity constraints, he added. Kumho targets its truck tire business to regional fleets of up to 50 units and steers away from national account business, Mr. Hudrlik said.
In order to achieve 32-percent overall growth, Kumho has targeted a 30-percent increase in passenger tire sales, a 13-percent rise in light truck tire sales and a 40-percent jump in sales of radial truck tires.
To support its growth targets, Kumho plans to boost its print and TV advertising schedule, Mr. Leverington said. It has produced four TV spots that dealers can tag onto.
Among product introductions on tap for this year are:
*Ecsta V700, a V- and Z-rated, DOT-approved race tire line targeted at Sports Car Club of America (SCCA) racing venues. It has a directional tread and will be available in 19 sizes, ranging from 175/60R13 to 285/30R18.
*Ecsta MX ultra-high performance tire, designed to deliver extreme dry traction handling; it will be available in 26 V- and Z-rated sizes ranging from 205/40R17 to 245/40R20.
*Ecsta STX P-metric light truck tire—ST for Sport Truck and X for Extreme Performance—available in 20 V-rated fitments in a range of 15- to 23-inch sizes for sport-utility vehicles, pickups and 4x4s.
*KRS02 and KRD01 “regional” truck tires aimed at local fleets. The KRS02 steer axle tire offers a 20/32-inch tread depth and “tread centering groove” technology. The KRD 01 drive-axle tire has a 28/32-inch tread depth.