Cooper Tire's unusual marketing strategy in China proves effective

Gasgoo.com: We know that Cooper Tire & Rubber Co. is the second largest tire company in the U.S., and specializes in the replacement tire market. But in China, Cooper is a late-comer (who entered China in late 2005). So first of all, would you please give us a brief introduction to Cooper Tire's business in China?

Alex Koi, in his Shanghai-based office, believes Cooper Tire is suitable for the local market

Alex Koi: We have two manufacturing facilities in China-the Chengshan plant and Kunshan plant. We started our business via acquisition of the Shandong Chengshan Tire Company, while the Kunshan plant is a joint venture company. We have a pyramid-type of sales channels, and by the year-end, we'll have a total of 500 retailers countrywide from the current 300.

We offer both the "small tire" and the "big tire" in the Chinese market, i.e. tires for passenger vehicles and commercial vehicles. We have double brands for the passenger vehicle tires-Cooper and Starfire; also double brands for the industrial tires, i.e. Chengshan and Dean.

The Dean brand, produced in our Chengshan plant, was introduced to the Chinese market this May. Surprisingly, the feedback was more than encouraging. We are almost short of capacity to cater for the increasing demand. The brand of Dean, though originally from America, is well received here in China, which is even out of our expectation.

Amazing but successful promotion campaign

Gasgoo.com: How did you successfully introduce Dean tires into the Chinese market? How could the local industrial vehicle user accept such a new overseas brand?

Alex Koi: First of all, we make sure the Dean tires are of high quality. We started the research and development of Dean tires for the local Chinese market two years ago. We carefully carried out the tests and made modification on the basis of the existing American design. The first three series of tires have the similar quality as those imported ones.

Then we sell Dean tires in the way of imported tires. You know, prices depend on quality and branding power. We sell Dean tires at the a proper price---if the imported tires sell for $100 and local-made tires for $70, then our Dean tires would be priced at $80 or $85.

Next we need to promote our products. It's admitted that industrial products are usually sold in a traditional way, or say a conservative way. But we take a different way. We sponsored the 6th National Truck Rally Race: all the trucks equipped with  Dean tires can run for hours without any problems. And with our tires, the racers drive the trucks to drift and make difficult stunts. We even invite our customer-dozens of dealerships to take a personal experience.

In the background of rocketing oil price and harshening regulation of overloading by the Chinese authorities, Dean, durable and reliable, to the most important, is very fuel-efficient. The driver would spend more on qualified tires, thus saving more on the fuel.

Also we sponsor our "heros". One is Ms Sun Weiwei, who's one of the very rare top woman racers in China. Our "heros" also include a popular internet cartoonist and a rock singer, who're not that popular but have earned the cult following. Those foreign-branded and local tire-makers ware amazed at our sales strategy. They have never known that tries could be sold in such a way!

Cooper Tire's "Heros"

Gasgoo.com: So your promotion adds value to the brand?

Alex Koi: You can put it like this--innovative marketing can add value to the product with good quality already. Dean is a good and new product in the first step and we believe innovation in branding and promotion can help gain more market appeal. So branding innovation should keep up with product innovation; otherwise, you have to double your efforts. So Cooper pays much attention to product promoting and brand shaping.

Starfire brand to be re-defined, no plan to recap tires

Gasgoo.com: It's rumored that you'll re-introduce Starfire later this year, is it true?

Alex koi: Yes, we'll announce our reshaping plan this October.

After Starfire's one year of market presence in China, we've developed our ideas as for how to sell it better. We'll re-define the Starfire branding below Cooper-the latter will be placed at the top of the pyramid of all of our products here, while the Starfire will be shaped clearer and more accurate than before. We now need to highlight the character of Starfire users to attract them. They may be first-time buyer; they're young, and they may choose car models like Mazda6 and Buick Excelle.

Starfire to be re-introduced in China this fall.

Gasgoo.com: Have you had any plan to develop retread tires?

Alex koi: We have retread technology and Dean could be recapped, but at present, we have no plan to do so. It is full of danger and risk as the retreading industry is not well developed. We are only planning to produce more safe, efficient and durable tires to enhance our market position. And we'll provide more products which is suitable to the Chinese market.

Chinese consumer gets mature around 2010

Gasgoo.com: What is your outlook on the Chinese market?

Alex koi: According to a famous market-research firm, the European tire-buyers consider the four values when making decision: fuel-efficiency, price, exhaust emission and driving sensibility. The EU has made strict rules to limit the mileage and exhaust emission, so the European automakers have to lighten the automobile, while the consumers deem the driving sensibility as the third most important factor after fuel-efficiency and exhaust emission.

However, in China, people are always price-oriented and the other three factors were not given enough attention to. As long as the tire can run for some time, the customers are satisfied. But a car can only be driven to the full function with the tire and other components being in good form; also as the regulations in China get stricter and fuel price continues to soar, we predict this phenomenon will change around 2010. We see Chinese will value the other three factors soon. In fact, tires contribute about 30 percent to the total driving control and safety. With customers getting more mature, the auto market is also becoming mature.