Over the last few years, Cooper Tire & Rubber has been strengthening its presence overseas, and in particular China. Matthew Beecham talked with Phil Caris, vice president, marketing & sales and Dewey Beach, director of product management, and Pat Brown, vice president, global branding and communications, Cooper Tire & Rubber Company.
Just-auto: How has Cooper Tire & Rubber Company developed over the past year as a global tyre business without Cooper-Standard Automotive?
Pat Brown: “Since we last spoke [summer 2005], we have had quite a bit of activity in our Asian strategy going forward. We purchased the third-largest tyre manufacturer in China -- Chengshan -- and formed a joint venture with them last year. That is going along very well. We have renamed it Cooper Chengshan. That purchase was primarily for making tyres for sale in China although there is a part of their sales which is exported.
So we have been involved heavily in looking at the technology there and bringing any improvements that we can from our US and European operations. And we are very close to introducing our first tyre from our Cooper Kenda joint venture facility. We could ultimately produce 10 to 12 million tyres annually at that facility. The third thing that is that is going on in China is that we have recently introduced our Cooper brand. We launched that brand a few weeks ago. We are going to sell a very limited line initially until we get our production started up but the results of that launch were very successful. There is a high demand for Cooper products.”
Just-auto: What have you learnt from operating in China?
Pat Brown: “Well, the opportunities are enormous. What we have learned is that you certainly have to study the market very carefully because everything is changing so rapidly. It is such a fast-growing economy over there. So you really have to keep your eye on the ball in order to keep up with it. For example, we didn't even do consumer research until very recently because the consumer attitudes were changing so dramatically.”
Just-auto: What did your consumer research tell you about the Chinese?
Pat Brown: “That is really a topic on its own and there is a tremendous amount of research. One of the most notable findings is that the Chinese consumer really likes western [tyre] brands. They like the look and feel of western brands. So we were very careful to keep that look and feel of the Cooper brand when we introduced it as a western brand. It has the same image that we have instilled in the United States, i.e. very modern, very contemporary. That seems to have resonated with the Chinese consumers so I think we did the right research and I think we adapted accordingly.”
Just-auto: Although brands have always played a part in tyre marketing, they have assumed more importance in the last decade or so with the emergence of global players and the acquisition of a portfolio of existing brands as a result of the takeover of other firms. At basic level, tyre makers are promoting three main brands on the ‘good, better, best’ principle. What is your tyre branding strategy?
Pat Brown: “We have positioned the Cooper brand as a value brand. And what I mean by that in each of those good, better, best categories is that we have a Cooper brand that provides value in whatever the consumer is looking for. So we feel very comfortable that the Cooper brand can be sold out as a value brand. We don't use the word premium because that is very difficult to define. At the end of the day, when you are talking about branding, especially in tyres, the dealer really holds the key to the brand in terms of recommending a particular brand that they are comfortable recommending.”
Just-auto: In what ways has the increasing segmentation of the car market affected your marketing strategy?
Dewey Beach: “The UHP tyre market is certainly growing over here, i.e. the W and Y rated tyre products. Some manufacturers not only have a summer UHP range of products but also a complete and competitive range of all-season UHP products.”
Phil Caris: “From an overall marketing perspective, traditionally Cooper has been a broad line company as well as being strong in the light truck arena. As the market continues to shift towards these new products, we want to be a very fast follower to the original equipment market. So our goal is that we are going to play in the majority of these major segments, and we want to be a leader as they emerge.
In other words, we want to be the first replacement tyre company out with a product to follow original equipment as well as having alternative offerings for the consumer. The other thing from a marketing perspective is that as we reach into these new arenas, we need to bring awareness to that portion of the consuming public about who Cooper is and why they should consider us as they are looking for a replacement product. So it has really focused us to go in and do more targeted segmentation of the consuming public as opposed to just [sending] a common message to everybody.”
Just-auto: Reducing tyre weight has always been important to the OEMs. Have there been any major breakthroughs in the tyres arena?
Dewey Beach: “Well, the tyre has to be designed with a certain amount of carcass strength and a certain number of components to make sure it performs in a way that satisfies all the consumer needs. Until there are some breakthroughs on alternative materials -- like very lightweight steel or titanium -- that is affordable that you can put into the tyre construction, then I don't really see any big breakthroughs coming.”
Just-auto: How is demand for run-flat tyres shaping up in North America?
Dewey Beach: “Europe is pretty much leading the charge for runflat tyres. We are wrapping up a development programme on runflat tyres that we should be introducing some time in 2007. It is a highway comfort type tyre as well as a winter tyre for next season. So we shall be covering that for the European market. In North America, however, it is really lacking in the O.E. market and it has certainly not caught on in the aftermarket.”