Kumho extends ‘Platinum Club’
The UK, along with Italy, served as the pilot market for Kumho’s new dealer programme. Since its rollout here a number of years ago, the Ecsta Performance Centre network has grown to include around 400 tyre retailers, while its Italian counterpart, the Kumho Platinum Club, contains some 300 dealers. The Korean firm is now launching equivalent dealer networks in other European markets; our sister publication Neue Reifenzeitung reports on the Kumho Platinum Club’s rollout in Germany.
This current drive to establish the dealer programme in Germany is not Kumho’s first attempt. In 2011, Kumho Tire Europe GmbH introduced the Kumho Platinum Club within the German market, however for Kumho that year – as was the case for most within the market – turned out to be a very good year business-wise, a record year even. Market demand for Kumho tyres was strong, so strong in fact that it made implementing the new partner network a difficult task. The economic pressure to join such a network was also absent.
Now, two years later, the market is developing satisfactory, yet it is quite different from 2011. Market observers estimate Kumho sold well over a million tyres in Germany last year, although Kumho has not openly confirmed this figure. And the company’s annual turnover in Germany during 2012 was exactly 100 million euros. In an interview with Neue Reifenzeitung, Kumho Tire Europe managing director Kim Yong-Sung and executive sales director Thomas Schlich said they believe now is the right time to have a second go at establishing the dealer programme in the German market and creating an extra tool for securing customer loyalty.
Schlich explained that, as was the case in the UK and Italy, the concept will centre on ‘shop-in-shop’ solutions. Dealers joining the programme set up a ‘Kumho corner’ within their sales area, complete with tyre stands, seating, brochure displays and cabinets, along with Kumho advertising for the building’s exterior and other promotional items. In return for this product placement, the dealer receives training and educational programmes from Kumho’s own technical department, assistance with advertising costs and invitations to trade fairs and events. Upon certification as an official dealer the tyre dealer is also listed on Kumho’s website as a partner and gains access to the Kumho dealer portal, through which good purchasing conditions can be obtained.
As already mentioned, the UK dealer programme (which, incidentally, may also adopt the ‘Kumho Platinum Club’ name in future) now boasts some 400 members and the Italian programme around 300. According to Thomas Schlicht, who will be responsible for establishing the Kumho Platinum Club in Germany, the first 30 dealer sign-ups will most likely occur this year. The plan calls for a further 50 or so to join next year, and by 2017 an anticipated 300 dealers should be on board in Germany. In addition to shop-in-shop solutions, Kumho Tire Europe offers the option of fully Kumho-branded outlets.
The executive sales director (who began in this position at the start of 2013) and managing director Kim state that the programme’s rollout is an important component of Kumho’s efforts to position itself more broadly within the German market. A broader positioning decreases the company’s vulnerability to the market fluctuations that hit wholesalers, as the middle link in the value chain, particularly hard. Schlicht stresses that in future the company wants to better serve its retail channels while also further deepening its traditional, established relationships with wholesalers and increase the Kumho brand’s in-house share with these businesses.
Schlicht has received backup for tackling this project; on 1 July Peter Fottner began in the role of key account manager in Germany. Fottner will mainly take care of larger wholesale customers and the company’s cooperative relationship with trade associations. In addition, the German sales area has been divided into five regions and each is looked after by a sales manager. In addition to this, a sales manager has also been appointed to focus on car dealers and another for the truck tyre business. According to Thomas Schlicht, Kumho Tire Europe’s sales team will enjoy additional growth in future.
Kumho Tire Europe is located in Offenbach, near Frankfurt, and employs 40 staff; 15 work in the European head office and the remaining 25 are involved in the German market. A further 20 employees work at the nearby Kumho European Technical Centre (KETC) in Mörfelden-Walldorf under the leadership of executive managing director Peter Becker. The Korean tyre maker currently employs around 120 people throughout Europe.