Marketing Blitz Boosts Brand

CooperTires’ China General Manager Alex Koi is driving its branding, marketing and human resources development strategy.   With a master’s degree and academic honours  in marketing research from AC Nielsen Research Center at the University of Wisconsin, he is credited with introducing a wide-range of creative marketing  innovation that has helped in strengthening the Cooper  brand across the nation. By evolving a unique corporate culture, he has ensured healthy company bottom lines, improved employees’ quality of life and contributed to society’s well-being as good corporate citizen. Excerpts from the interview:

You have come a long way since Cooper Tire & Rubber Company unveiled in 2006  its brands in the China market. What has been your experience since then?

Alex Koi ：Yes, we have certainly come a long way since 2006. Our experience in developing the Chinese market involved manufacturing, marketing and management concepts.  From the manufacturing point of view, we have two joint venture partners. They have helped us tremendously in getting our footprint across China. Having a local base allowed us to have a quick start. It has also been a good catalyst in coming out with high-quality products within a relatively shorter period of time. On the marketing front we have done a lot of local customisation to suit the market, especially with the customers and  channels. As far as the management concept is concerned, it is one of the most critical points because  we have to really localise our management style to suit the China market. We have put in an expansive programme in terms of training, local skill cultivation, and global exposure in order to really bring it up to our requirements. So instead of hiring up a lot of special talent, we looked inwards for whatever available resources first, and then train these people, which is one critical management difference. And training has become one of the key factors that has helped us in our success in China. We spend a lot of time doing training. With regard to myself I end up doing 600 hours of training every year, of which 200-250 hours of training is directed inwards towards our staff and another 300-400 hours to train dealers and retailers.

What are your brand building, marketing and local production strategies?

Alex Koi ：We have done a lot of local market studies and we realise that the Chinese consumers   are actually a lot younger compared to the US and European markets.  Product-specific marketing campaign may not work well here in China. So we have to develop a differential marketing approach, which means lifestyle marketing, targeting different segments, which include auto enthusiasts who do a lot of tuning, and also involve in a lot of 4x4 auto clubs that engage in expeditions. Our marketing strategy aims at tailor-made programmes that involve a lot of our consumers and retailers. Such programmes have helped us gain strong foothold to reach out to our customers and consumers. At a product level, we have a team which has done a lot of product testing in China to figure out customer demand and expectations. We have put   our product engineers with a lot 4X4 auto clubs, and they drove through various Chinese terrains. We have a programme ‘Going Places with Cooper’ under which we work closely with auto clubs and undertake 40-day expeditions all over China. The terrain varies: Deserts, highways, off roads, snow-capped mountainous regions. It is a very extensive test, and we get first-hand feedback on what the China customers are expecting and the different operational conditions in the country.

What have been the challenges in setting up   distribution and dealership networks in China?

Alex Koi ：I would not say we faced challenges. For us such tasks threw up   opportunities. The distribution and dealership network here in China is a bit different from rest of the world. It is closer to Europe than the US. Here we have small to mid-size businesses that are deeply entrenched in their respective markets.So while we were setting up retail channels we had a tough job in discovering good dealers. It takes time to convince them about our brand strategy, product quality, and our market positioning. I would not say that it was a challenge, but it was an opportunity to find dealers, who would remain loyal once you convince them about your credentials. The business is based on trust developed over years.  

What is your product segmentation focus as you have a wide-range  of tyres?

Alex Koi ：Our focus is to build up leadership in several segments that we are in. They include the 4x4 segment, SUVs, vans and trucks to ultra-high performance sports cars to family sedans. This would continue to be our strategy in Asia in the short and long run.

What is the expertise that you have brought to the Chinese operations in terms of design know-how and R&D?

Alex Koi ：We have designed and implemented our own Stage-Gate process innovation in product development. It quantifies investment in new product design. It is a management process to move a new-product project from idea to launch. Most Chinese companies bring product to the market based on hunch. We in Cooper listen to the voice of the consumer, gather market data, we look at consumer usage and preferences before setting out to design and launch a product. We have also adopted company-wide quality management methods under Six Sigma in our two manufacturing plants.

What is your analysis of  a post-economic stimulus scenario in China?

Alex Koi ：The Chinese economic stimulus package has benefited CooperTires, particularly its truck and bus tyre business. We see a lot of infrastructure development and construction that would boost transportation. Even in the post-stimulus era, the government expects China to grow at 8% GDP, which will give a significant support to growth of the tyre industry. We have 1.3 billion population, and it offers enormous potential for domestic consumption. 

Can you explain what is ‘drive-channel’ and how it has benefited CooperTires?

Alex Koi ：By drive channel we mean hands-on experience that we gain from our expedition programmes. We have covered 17 to 18,000 kms driving through off-roads across China’s various terrains. The Cooper Experience of Adventure allows us to involve the media,  our dealers, our channel partners and product managers. This involvement has helped us press forward with our efforts to test and analyse our tyre’s performance quality. We never compromise on quality. Another of our programme is ‘Happiness on Wheels’. It organises charity work, collect donations across counties and provinces.  

Can you explain your retailing concepts?

Alex Koi ：For TBR we have a programme that target the bus and truck segments. In retail we have a model in China that has worked well. Retail being one of the growth segments, we are aiming to change the concept of tyre not as a mere commodity by developing   a holistic marketing solution.   Right now we are experimenting with several models. We have a retail solution model, a retread solution model, fleet management solution, a roadside assistance model. All these enable us to convince our customers of the long-term relationship that we aim to build.  Right now we have 400 Cooper branded retail outlets   and this has helped us increase our footprint across the country.  

Can you comment on your human resources planning initiatives?

Alex Koi ：Cooper in China has been working on employee accountability system where we actually quantify and develop multiple facets that would help us evaluate productivity and performance.   We train our employees and develop a career succession plan. We have mapped out   employee retention and succession programme. It allows us to systematically predict our human resources usage and allocations

Can you elaborate on your corporate culture driven by innovation under Chinese managers trained in the US and abroad?

Alex Koi ：When we talk about innovation in China, we are not merely talking about product innovation. Our innovation is aimed at consumer needs. We have management innovation, we have training innovation, and we have employee retention innovation. For example, we conduct employee orientation programme as they set to come in to join Cooper. We hold boot camps. We put them through 40 to 55 hours of training during which we train them in our corporate culture. Such training helps our staff to figure out our core values  and match with that.  We also have programmes, written by me and my training team, to reach out not only to our staff but also our dealers as well retailers. The programme also includes personality mapping to help our dealers understand themselves better. We have a communication course where we help them develop positive body language. That way we help elevate them to a different level.  

What are the specific measures  you have taken on cost reduction, improved margins, and social commitment?

Alex Koi ：Cost reduction is a process that we pursue relentlessly. This you can see with our adoption of the Six Sigma process initiative. Of course cost-cutting will never be at the cost of quality. As far as improving the margins is concerned, we believe it is a two-way traffic, it is part of an equation of increasing margin and maintaining our selling price. This is achieved through our training programme.