Hankook? Who and what is Hankook Tire America Corp.?
The question may seem absurd, but Hankook is changing its whole approach to marketing so consumers don't ask tire dealers that question. The Wayne, N.J.-based company may have achieved success by being a ``quiet company with quality products,'' but the firm now is ready to create some excitement in the marketplace with its tires-and let consumers know about it, according to President J.W. Choi.
``Today, we are a changing company, a different company, with a clear vision of who we are and where we are going,'' Mr. Choi told 52 journalists from 50 publications during a company-sponsored ride-and-drive event Oct. 2 in Las Vegas. The gathering, with a theme of ``Discover Hankook,'' marked the first time the tire maker had ever hosted the media, which included the tire trade press, automotive enthusiast publications and consumer magazines including Popular Mechanics and Business Week.
The driving event included slalom courses, ``hot laps'' with professional drivers, and an off-road course at the Las Vegas Motorspeedway on various Hankook tires that included the Ventus Sport K104, the Ventus ST RH06, the DynaPro AT RF08 and the Ventus Z211.
Hankook executives each took turns trumpeting the company's recent successes, especially its first original equipment supply deal in North America with Ford Motor Co. The Hankook DynaPro RH03 and DynaPro AT RF08 are being used on the 2004 Ford F-150 pickup truck, and company officials acknowledged another potential OE fitment of a General Motors Corp. vehicle is still in development. Prior to gaining the F-150 fitment, Hankook supplied mini spares for the Ford Focus and Escape.
Since 1998, Hankook Tire America's sales have surged 183 percent to a projected $250 million for 2003, according to Bill Finn, Hankook's senior vice president. Sales of its parent, South Korea's Hankook Tire Co. Ltd., have soared 169 percent from 1998 to a projected $1.62 billion for 2003. At the same time, production capacity at Hankook's Daejon, South Korea, and Jiangsu, China, plants totals 44 million tires per year and continues to expand.
``While other companies are upfront in their success, at Hankook we are busy breaking new ground in tire technology, R&D, product development, defining markets and meeting the needs of customers around the world,'' Mr. Choi said. ``We succeed in a quiet way to reach our goals.''
But Hankook is no longer remaining quiet, as Mr. Choi said the tire maker is targeting the luxury SUV and sport-compact car markets. The company is reinvesting more profits into R&D than most other tire makers and, he claimed, is well on its way to becoming one of the top five global tire manufacturers.
``I think this company is at a turning point in its history,'' Bill Bainbridge, Hankook's marketing director, told attendees.
Mr. Bainbridge said Hankook wants to be known as a technology-focused, market-driven company and has developed a creative marketing campaign for the brand. That campaign-which began this year with Hankook billboards positioned at home plate of several Major League Baseball stadiums-also will include rotating banners of the Hankook and Ventus names in some NBA arenas, particularly Boston, Chicago and Los Angeles, this coming season. The same rotating banners also will be displayed in select NCAA basketball arenas.
In an interview with Tire Business, Mr. Bainbridge said Hankook probably will roll out marketing programs for dealers between the Specialty Equipment Market Association/International Tire Expo trade show, Nov. 4-7 in Las Vegas, and Jan. 1. He noted that Hankook has relied on large distributors who service rural markets but now needs to add medium-sized retailers in metropolitan markets.
An example of this strategy, Mr. Bainbridge explained, is Hankook's desire to expand its distribution in Texas to the Dallas/Ft. Worth area. It is an effort he said will require ``dedication and a different focus on our part,'' particularly with passenger, light truck and ultra-high-performance tires.
``Make no mistake about it, we as a company will be more aggressive than ever before in looking for additional direct distribution,'' Mr. Bainbridge said. ``Our focus has been and remains on the independent dealer.''
Intent on increasing its points of sale, Hankook will be signing dealers either directly or as associates through its wholesalers, he said. The tire maker has no specific target number of dealers, but hopes to grow ``exponentially'' and fill in gaps in distribution. ``We've done our own internal study and plotted out where our distribution and points of sale are, and you'll see our efforts trying to fill in those dots,'' Mr. Bainbridge said.
Mr. Choi told Tire Business Hankook is looking for independent dealerships with 10-20 stores in more than one state. The firm doesn't plan to sell its products through mass merchandisers, but it is in the early stages of recruiting car dealers participating in Ford's Around-the-Wheel tire program, Mr. Choi said. He added that Hankook wants to be careful about guaranteeing territory protection to regional tire dealerships.
``We will destroy ourselves if we have dealers competing in the same market,'' Mr. Choi said. ``If our dealers are successful, then we will be successful.''
Details of Hankook's dealer marketing program will be finalized in November or December, Mr. Bainbridge said, but it will include point-of-sale materials and local TV/radio ad spots. He also said a ride-and-drive event for dealers in 2004 is ``definitely on the horizon'' though no date has been set.
Hankook's major marketing emphasis by far will be through sports teams. In 2003, the company's strategic plan was to build brand awareness through sports marketing. It now plans to take the next step in 2004 of directing consumers to local dealers, Mr. Bainbridge explained. Its efforts will include local market promotions such as ticket giveaways that tie the brand name to area retailers.
The tire maker also will place billboards in the arena of the National Hockey League's New Jersey Devils and perhaps one or two more NHL teams.
``If all we're doing is driving brand awareness and then consumers who might be considering the product don't know where to go to get it, we fail in the long run,'' he said.
Mr. Bainbridge wouldn't divulge details on what Hankook's TV and radio ads will say, but he promised a more ``brash'' Hankook with creative impressions to differentiate its products from other brands.