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Kumho pledges more support for its dealers, distributors

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RIVIERA CANCUN, Mexico—In recent years, Kumho Tire U.S.A. Inc. has tailored its marketing programs toward building recognition for the Kumho brand.

It won't be doing that quite as much in 2013.

While brand building will continue, Rancho Cucamonga, Calif.-based Kumho Tire U.S.A., a unit of South Korea's Kumho Tire Co. Inc., will refocus some of its marketing dollars toward helping its dealers and distributors maintain and grow in what company executives anticipate will be a slow-growth economy and difficult tire market this year—one not much different from 2012.

That includes dropping its $3 million television budget and redirecting those funds, plus additional monies, to programs to help dealers' sell through and to provide incentives for them to buy more tires from Kumho.

“We are switching resources to provide dealers more support to assist them in selling more,” said Rick Brennan, Kumho vice president of marketing, in an interview during the company's recent dealer meeting in Riviera Cancun. “By giving more support to the associate dealer, it makes it more beneficial for him to buy more of our product than it was in the past.”

One way Kumho will do that is by offering dealers enrolled in the company's “Premium Fuel” dealer marketing program more incentive “and making it more advantageous for him to buy more of our product over someone else's,” he said. “We're also providing more support to our direct dealers for pass-through promotion and sales activities,” meaning more of a co-op-type fund.

Kumho also will launch two new tires in 2013, including an as-yet-unnamed high-performance, all-season passenger tire that will replace the Ecsta AST, and the all-season Kumho Sense, a value-priced touring tire targeted at new small-car fitments with higher speed ratings. (See story on page 21.)

The company also is beefing up its sales force “to be able to do more for you, to spend more time with your people,” said Armand Allaire, national sales vice president.

In the last three months, Kumho hired four regional sales managers and will be looking for four more, as well as two additional truck/bus tire specialists, as Kumho rebuilds its truck tire business. The company also has tapped Ron Gilbert, formerly with Toyo Tire U.S.A. Corp., as director of commercial tire sales.

“We need a strong team and that strong team will sell and service you much more effectively than we currently are,” Mr. Allaire said.

In his remarks to the 40 North American tire dealers and distributors attending the meeting, J.B. Kim, Kumho Tire U.S.A. president and CEO, encouraged them to join forces with the company in these tough economic times and to buy more tires from it.

“As you know, there are no easy answers, but this is what we promise you: You can and should count on Kumho Tires for the rest of this year, for 2013 and for your future,” he said. “We've listened closely to your valuable input. We are excited about the opportunity to expand our sales with you.”

The end of the elevated U.S. tariffs on Chinese passenger and light truck in late September also will make it possible for the company to tap its available capacity in China “to keep supplying all your needs and to maintain the highest fill rate,” he said.

While Kumho is shifting its marketing focus to be even closer to its dealers and distributors, the company is not taking its eye off brand building, sports marketing or working with dealers at the local level.

The tire maker will continue as the official tire of the Los Angeles Lakers and a sponsor of the Miami Heat of the National Basketball Association and of the University of Southern California football team, said David Koh, marketing communications manager.

Plans also call for continued sponsorship of U.S. men's and women's national soccer teams.

The company also will maintain a heavy print advertising schedule in car enthusiast magazines and will continue a focused effort on digital.

In addition, Kumho is looking to do more drive-time radio advertising.

Meeting attendees also learned about an all-inclusive dealer portal, which will allow Premium Fuel dealers and distributors one-stop shopping, online training, promotions, an image library, marketing support, point-of-sale materials, product videos and “to know everything about Kumho Tires,” Mr. Koh said.

“I know right now you have to have a couple of different web sites, different logins, different passwords,” he added. “I know we are five years, 10 years behind the game there. We are going to get better for you, we promise.”

The dealer portal is a welcome addition, said Chuck Haring, director of marketing and advertising for Dunn Tire Corp. in Buffalo, N.Y., who attended the meeting. “The dealer portal is the thing I am most excited about,” he said.

Kumho will launch the new dealer portal in three phases during the first quarter, Mr. Koh said.

Phase one, in January, will include training information and a basic dealer-image library. Phase 2 will be communications to the dealers/distributors, and phase 3 will offer tire unit tracking.

Kumho also has made improvements to the Premium Fuel program for 2013, which the company said is essentially the same aggressive program it offered in the fourth quarter of 2012.

The program features more tires, more profit, lower requirements to earn and no cap on how much a dealer can make.

Dealers can earn between $5 and $7 per tire on purchases of 75 or more tires and between $6.50 and $10 per tire on purchases of 150 or more tires in the program. The eligible products include 14 lines of Ecsta, Solus, Eco Solus and Road Venture models, including eight new lines added to the program in the fourth quarter.

Distributors will receive a rebate of 2 percent of the wholesale dollar amount of all eligible product purchases.

Kumho is looking at a new marketing philosophy, explained Mr. Brennan, something he calls CCR—communication, collaboration and relevance.

“We have to communicate better. Not just with the consumer, but with all of you to tell you what direction we're going and what we expect.”

Kumho also needs to do a better job of collaboration with its dealers and distributors, Mr. Brennan noted. “We need to work better with you.

“What do you need? What can we do to help you? And we need to finish it. We need to do the detail. We can't just come out half way.... We can't just pass it over and expect you guys to be able to sell tires. We have to close the loop.

“And all the money we spend for Kumho has to be relevant to make things move. If we want them to move for us, the key is to make them move for you.”

This initiative includes two consumer-rebate programs in 2013. In April, May and June, Kumho will offer a $50 rebate on the purchase of four Solus KH16 high-performance tires or Solus KH25 original equipment tires. The company will conduct a second rebate program in September and October that will include the replacement for the Ecsta AST.

Kumho also will offer an expanded signage program for associate dealers in 2013 and will re-enter grassroots racing, where more and more sanctioning bodies are introducing street-tire-only classes with a high UTQG requirement, Mr. Brennan said.

In concert with this, the tire maker will launch a tire called the V720, which Mr. Brennan said “is absolutely killer in that extreme category.” This will be followed by a redesigned Ecsta V710.

“We are refocusing on development because one of the things that put Kumho on the map from 1991 to 1999 was the grassroots motorsports program,” Mr. Brennan said.
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