Video: Kumho is in a new era of change

CASTRIES, Saint Lucia (Jan. 4, 2016) — Kumho Tire North America went through a lot of growing pains in 2015 when it moved its headquarters from Rancho Cucamonga, Calif., to Atlanta, needing to replace 80 percent of its staff in the process.

Harry Choi, Kumho Tire North America president and CEO, said the reward for dealers' patience now comes—with new products, market enquiries, factories, marketing programs and more.

Kumho has been working on this “new era” for quite a while, Mr. Choi said at the company's annual dealer meeting in December, and through all the planning he kept repeating: “Cha-Cha-Cha. Cha-Cha-Cha stands for challenge, change and chance.”

Kumho challenged itself to reinvent its brand in North America and then made the changes necessary to begin this new era. It gave itself a chance for a fresh start to be a better company and a better partner to its customers.

“It means today our goal is to be better than we were yesterday,” said Jim Mayfield, executive vice president of marketing and sales for Kumho Tire U.S.A. Inc.

“It means tomorrow our goal is to be better than we were today. And every day, as we start the day, our goal is to be better. To get better, it means you're not where you want to be yet, and we're not where we want to be yet.”

This shift has set the ground work for Kumho's future in North America.

“2015 has been a year to kind of set the foundation of the new era for Kumho Tire,” he said. “In 2016, we've got to grow our market share.”

One of the firm's goals for 2016 is to improve its efficiency, including working toward a better positioning strategy for its products.

“We've got an aggressive plan to launch new products in 2016, just like we did in 2015,” Mr. Mayfield told Tire Business. “We're going to continue work on solidifying our pricing position and identifying where we really should be positioned in the market place.”

Stephen Ewing, pricing manager, and his marketing intelligence and pricing team have done a lot of work to ensure as Kumho launches new products that they are priced properly from the beginning, he said. That way a product does not go into the market at the wrong price and then have to be moved later on.

Another efficiency measure in 2016 will be to get credits processed more quickly. Because of Kumho's employment shift, there was a time in 2015 where there were only a few people in the Kumho marketing department to run the credits, the Fuel dealer program and everything else.

Mr. Mayfield credits SB Kim, general marketing manager, for keeping all of those things running through the transition. However, now with a full marketing team in place, these functions can be served more quickly.

Along with this streamlined process, Kumho Tire will alter its decision-making process and allow division sales directors to work with their customers and make decisions, Mr. Mayfield said, which will speed up the process.

“The decision-making process at Kumho in the past has sometimes been a little bit slow because we've tried to make decisions at the headquarters level,” Mr. Mayfield acknowledged.

“But, one of the things that we will do differently in 2016—a lot of the decision making will be pushed into the field. The field will be empowered to make decisions when it comes to marketing programs and support programs.

“Headquarters will be there to support that, to make sure claims get turned around quickly, but the field, the people closest to you, will have the ability to make those decisions and then we will support those decisions.”

Georgia is home to more than just Kumho's new headquarters, as the tire company will be opening its first U.S. factory in January in Macon, Ga., which is about an hour and a half southeast of Atlanta.

“We'll be able to utilize both facilities when we have our customers come in to be able to host them at the headquarters,” Mr. Mayfield said.

Plans for the Macon factory began in 2008, but when the financial crisis hit the nation, Kumho had to back off this investment. It restarted construction in 2014.

The plant will begin producing tires in January and then ramp up through the first half of the year, with an aim to be in full production in July.

“We anticipate 2 million tires being built in 2016,” Mr. Mayfield said. Full capacity expectation would be 4 million tires on an annual basis, in the passenger and SUV/CUV tires market.

“The majority of the production will go to OE, and what that will do will free up capacity in our Korean and Vietnam factories to be able to increase the capacity for shipment to the United States for the replacement market,” he told Tire Business.

Kumho plans to continue its sponsorship of the National Basketball Association (NBA), but looks to do things a little differently moving forward.

In an effort to target some key markets, the tire maker will not just be working with the NBA on a national level, but will work with some local NBA teams as well.

“It'll be markets where we have strong dealer support and we can activate that sponsorship by running promotions, by driving business to the stores for our dealers to help grow the Kumho business that they have,” Mr. Mayfield said.

Kumho plans to work with two to four pilot locations in 2016 and then determine how to proceed from there, he added. While he didn't name all the teams Kumho plans to work with, he did say with the Atlanta Hawks playing two blocks away from the company's headquarters, it's a good option.

“(Atlanta) is our new home. We want a presence in Atlanta. We want our brand known by the residents there,” Mr. Mayfield said. “We want a place where our employees know where they could go to get Kumho tires.

“So we will be partnering with local dealer organizations to do that in the Atlanta market and then for two or three other places around the country.”

Kumho also detailed plans for updating its dealer portal in 2016, releasing its Dealer Portal 2.0. While Kumho was not ready to release all the updated information at its dealer meeting because the changes were still in discussion, the company did note a new streamlined interface for the portal.

Additionally, Kumho is answering requests for more support materials, including assets dealers can co-brand with the tire maker, including tag ads, banners, etc. Additionally, there will be video assets that can be used on dealer websites and social media.

The Dealer Portal 2.0 also will have an ad builder tool that will allow dealers or distributors to go in and customize any size print or Web ad, Kumho said, with drop-down options for coupons or to upload a logo or type in text messaging.

In all, Kumho is committed to its dealers and will continue to get better, Mr. Mayfield said, by working together as a team.

“We want more of your business. I won't be bashful and I won't be shy about it,” he told dealers at the meeting. “We need to grow so we're going to do everything we can in 2016 to accomplish that goal.”

To reach this reporter: [email protected]; 330-865-6143; Twitter: @jenniferkarpus