Cooper Asia Pacific Marketing Push Aims to Increase Domestic Sales

Whether the attention Cooper Tire & Rubber Co., Asia Pacific gained at Reifen China was a result of the tyres on display or the bus loads of dancers performing on the exhibition stand each hour, you cannot ignore that the company has embarked on a slick and high profile marketing campaign and is increasingly making an impact on the domestic Chinese market in both the passenger car and truck tyre sectors. With this in mind, Tyres & Accessories interviewed vice president and general manager Asia operations, Allen Tsaur, and senior PR manager Jojo Tang.

Cooper’s ongoing region-specific marketing push aims to invest in the future of China’s fast growing automotive business by reaching more consumers and particularly the young driver audience. Car ownership in general has shot up in recent years, but Tang reports that ownership in the 23 – 35 age group has “boomed.” And this explains the “Charlie’s Angels” meets “Kill Bill” styling of the Cooper Angels customer-facing marketing concept.

From a business to business perspective, Cooper is playing the long game, trying to introduce young motorists to its products through its network of around 500 retail partners as early as possible. Considering the fact that the retail network has grown 20 per cent compared with 2008 levels, there are signs that this approach is working.

The Chinese tyre retail market is generally classified as having three to four levels of dealer. Cooper partners are said to be found at the top end of that spectrum, with so-called tier one outlets branded virtually head to foot with Cooper materials. Tier two dealers are described as multi-brand operations, selling two to three brands. And tier three dealers carry proportionally fewer Cooper tyres and therefore less branded point of sale material.

According to general manager Allen Tsaur, the latest marketing blitz is the brainchild of Cooper Asia’s in-house marketing “guru” Cooper China general manager, Alex Koi. Along with the “Going Places With Cooper” strap line and Koi is said to have introduced a Cooper Knight marketing character, signed an exclusive deal with one of China’s favourite cartoonists and launched a new advertising campaign featuring an English driver rescued by the tyre changing skills of the Cooper Angels (more about this later).

So what’s the return on investment? Specific reasons for increased sales are notoriously difficult to pin down, however when T&A spoke with Allen Tsaur in Shanghai in November third quarter PCR sales were reportedly up 60 per cent in terms of both volume and value. During the same period, the company’s sales in the Chinese domestic PCR tyre replacement market experienced between 30 and 40 per cent growth, double the rate of the market in general which was apparently insulated from the effects of the global recession, which caused dismal sales volumes in the US.

OE on the horizon

Following the company’s strong PCR replacement performance this year, there is also the suggestion that the company will – at some point – embark on an OE sales programme. Negotiations appear to be at a relatively early stage at the moment, however Cooper representatives are talking about possible supply deals with an Asian or “other western” car marker. Any final decision is expected to come in less than six months time, with company representatives describing a move as a “long term commitment.” No indication of how many tyres or exactly who the company might supply have been given.

The fact that Cooper opened its third global research and development centre in Shanghai in May 2008 (the others can be found in Akron, Ohio and Melksham, UK; plus a Tire & Vehicle Test Centre just outside San Antonio, Texas) is likely to provide support for any future OE bid. According to the company, around 30 engineers and technicians work in the “Asia Technical Center”. The company’s Chengsham joint venture factory has reportedly been ISO and “Lean Six Sigma” certified since its second year of operation.

The joint venture now produces a total of 10 million truck and bus (TBR) and passenger car (PCR) tyres. The product split is said to be approximately 70:30 in favour of passenger car tyre production, with 20 per cent of total output sold inside the People’s Republic of China and the remainder exported to over 100 countries worldwide. Key export markets include the UK, Germany, the Middle East and South Africa.

Tsaur stopped short of revealing how many tyres the company exported to the US before and after the implementation of 35 per cent ITC import tariff, however it is clear that a significant number are now being sold into Europe. However, Tsaur pointed out that (in November 2009 at least) the company was still exporting some tyres to the US.

While the company’s marketing approach is clearly specific to the domestic Chinese and Asia Pacific markets, it is clear that there is plenty of cross-fertilisation between the company’s global production and R&D bases. For example the Cooper CS6 tyre on the show stand was imported from the UK and the currently US-only GRE low rolling resistance product is scheduled to be produced in China for sale in the domestic market from 2011 onwards.

Allen Tsaur was also pleased to point out that Cooper’s Chengshan-produced truck tyres (both Cooper and Dean branded products) have some of the highest uniformity in the Chinese marketplace, literally in the top 2 per cent of TBR tyre production in the country. This is said to have come as a result of tighter quality control processes implemented at the factory, following the well-documented 2005 joint venture. Together with the fact that its truck tyres are purportedly the largest western brand in the domestic Chinese mark, this goes some way to explaining how the company experienced fourth quarter 2009 TBR sales that were virtually double 2008 levels. True this was from a low base – the prior year period was when global truck tyre demand virtually collapsed as a result of the credit crunch – but this is an achievement nonetheless. Currently the company is selling out its production, with TBR exports accounting for 40 per cent of output. Cooper’s domestic TBR sales are mainly conducted under the Dean brand name, established in May 2008. Top markets include the US, Middle East, Africa and Europe.

33 products on show

Cooper Asia Pacific showcased 33 products under four brands at the third Reifen China show (11 – 13 November). The company officially launched its Chengshan CSC-5 and Austone SP-7 products at the show. The two are said to fit “all kinds of mid- to high-end sedans and roadsters.” In addition to two product launches, Cooper Tires also showed its “green way” philosophy for saving. However, it was the Cooper Angels (figureheads of the company’s Far Eastern TV advertising campaign) and the troop of dancers literally bussed in for the event that drew in the crowds.

According Reifen China’s organising company, Cooper Tires’ stand was one of the largest in terms of size at the show. The stand was structured into four function areas which showcase four product categories: the domestically-made Zeon series passenger car tyres, Starfire saloon treads, Chengshan and Austone-branded passenger car tyres as well as the Dean TBR tyres. All the treads on display are manufactured by Cooper Chengshan, which fully reflects the technology and production strengths of Cooper’s joint venture in China.

Allen Tsaur, vice president and general manager of Asian Operations for Cooper Tires, president of Cooper Chengshan (Shandong) Tire Company, delivered a speech highlighting Cooper’s latest achievements in environmental care and energy saving as he unveiled the Cooper booth. Cooper’s green approaches include reducing product rejection rate, using curing process during production, launching “green” designs for low rolling resistance tires, and using eco-friendly oil (Clean Oil) in the whole product manufacturing process. All these illustrate that Cooper Tires has been strictly carrying out the International Environment Protection Standard for long-term development and challenge.

Commenting on this “green way”, Tsaur added: “With the popularity of hybrid technology and clean oil, a series of campaigns about energy saving and environmental care were kicked off in all fields of automotive industry. Environmental care, definitely, has been a hot topic among all tyre manufacturers. As a responsible company, Cooper Tires is dedicated to carrying forward green environment and improving formula, design, processing techniques and products for the future challenges. What we are doing is for today as well as tomorrow.”

However, as was alluded to earlier, the arrival of the Cooper Angels (three beauties selected from Cooper Tires employees) proved a big draw when they performed tyre replacing and, apparently, drifting demonstration at the show. Moving forward, the Cooper Angels are set to become one key icon as part of the company’s communication campaigns in 2010. Their image will appear on a series of souvenirs including poster, desk calendar and VCR. The angels will also be promotional ambassadors of Cooper Tires to deliver its brand values among dealers and customers among various marketing activities.

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