EUROPE CALLS AND HANKOOK RESPONDS
Tires and marketing strategies
A European at the head of continental marketing to reach premium market positioning, to expand the market with independent dealers and develop the Hankook Masters dealer network: the same goes for the Italian branch, ready to exploit new tools such as the new brand Laufenn
Mino De Rigo
The quest for the fifth position among the top ten premium manufacturers starts from Europe. And not only for the launch of a new brand, Laufenn, specifically created for the European market, or because of hefty investments on new OE approvals, not to mention the renewed sponsorship of UEFA’s European League, but also through a complete management change in the continental marketing department, which now sees a European occupying a position traditionally filled by a Korean manager.A huge leap forward, that looks at marketing strategies as well as pricing policies and distribution networks. And the Italian branch is ready to make an important contribution, all the more so as the Italian market represents 10% of the Korean giant’s sales volume for automobiles and light transport vehicles, and over 13% for the truck segment in Europe, making it the company’s second largest market after Britain.
Antal Takacs, new Hankook Tire Europe marketing director states: "On the one hand it is about strengthening Hankook’s price positioning in the premium segment: and that is where our new global brand Laufenn (just launched at the IAA fair in Frankfurt; editor's note) comes into play. On the other, we aim at revamping our distribution network, creating new partnerships with independent retailers and develop our Hankook Masters network", already well-branched internationally. Not so in Italy, though, as it was previously entrusted to distributors who, up to a few years ago, were the exclusive channel for the local branch of the Seoul giant.
Revamping the brand’s identity
"A little over three years ago - explains Carlo Citarella, commercial director of Hankook Tire Italia – we started addressing directly a number of retailers. And the greater visibility our brand receives, the greater number of partners we will be able to have and push on initiatives such as our Hankook Masters store network. Our aim is to consolidate our distribution channels; no revolutions, mind you, we would much rather confirm our partners and further develop our retail network, since our market penetration is still quite limited". Restating the typical aggressive approach of the Korean brand. Takacs says: "Thanks to a state-of-the-art range of offers and a “lean production system”, we are in the position to offer our business partners very attractive margins", a key prerequisite on which to base a mutually beneficial cooperation. "Which - adds Citarella - in addition to the excellent value for money, can also count on a number of new investments, from original equipment supply agreements to activities centered on the image of the brand".
And, last but not least, the three-year sponsorship agreement renewal with UEFA’s European League, which, according to Hankook’s estimates, has greatly contributed to increase, among European customers, the brand’s recognition and preference by 13% and 6% respectively. "For years now, - said Takacs – we have been conducting market researches in major European countries and we are proud of what we have achieved. In Germany, Great Britain and Hungary, for example, we have been among the three best-known tire brands for some time now".
Original equipment, a growing trend
Vehicle manufacturer’s approvals represent a further development for our company: “We are currently working with 32 manufacturers and we supply OE for 283 different vehicles and our goal is to do the same with every model of every premium manufacturer. We recently added to our collection of models the Porsche Macan, the Volkswagen Touran, the Mercedes Benz C Class and the new Audi A4”. The latter is equipped with Hankook’s Ventus S1 Evo2 model, derived from the experience in the DTM and produced at the Hungarian Rácalmás factory, which can now boast 3 thousand employees and an annual production of 19 million units. "Being able to count on direct requests of OE tires by motorists is an additional asset that we can use - states Takacs - thanks to our ability to meet demands and specific needs. Our R&D center in Hanover is entrusted with the development of tires for the Old Continent’s market". A market that accounts for 30% of Hankook’s total revenue and that, in the first half of 2015, according to the financial results of the group, was able to offset the weaker performance of the Asian continent in the context of an overall decline in sales compared to the same period last year. “Data from ERTMA (European Tire & Rubber Manufacturers Association) related to the car segment – points out Takacs – showed a growth in the market share of 1,8% over 2014, and an encouraging +11% for ultra high performance tires. We can safely say that the European market is currently in good health”. The comforting prospect for a positive year-end.
All-season or winter tires, a false dilemma
“Sure – continues Citarella – a strong demand on the domestic market would help. In the last five years we have managed to increase our shares, despite the market’s apathy, but we still feel the need, especially for premium products, for a strengthening of the domestic demand”. Winter tires have the responsibility to pave the way, with the new Winter i*cept Evo 2 in pole, though not neglecting the all-season option, such as the Kinergy 4S. “If all-season tires represented about 3% of the Italian car market last year, during the first half of 2015 the market share has already doubled. Demand is high, which is frightening tire dealers, who fear negative consequences on winter tire sales, although we believe that the negative impact will be limited to a few new clients who would not have chosen the winter option anyway”. The end of the recession, though, has been a blessing mainly for the truck segment, “from which – confirms the Marketing Director of Hankook Tire Italia – we received the greatest satisfactions: the first segment to feel the effects of the economic crisis is likewise the first to recover from it”. Durability and performance at a competitive price is the successful formula behind Hankook truck tires, not to mention quality casings making them suitable for retreading.
Concerning which, the company recently announced a partnership with a specialized Italian retreading firm, which will produce tires with the brand Alphatread, already used by Hankook for its own retreads and marketed in other European countries. A further step in developing a broad-ranging strategy aimed at exploiting the market resurgence.
HANKOOK MASTER, WORK IN PROGRESS!
"As those trailing behind, we will treasure the positive results as well as the errors made by those who have more experience." Thus, Carlo Citarella, marketing director of Hankook Tire Italia, explains Hankook’s approach to the development of the planned network of affiliated outlets. Which should be able to count on some thirty potential candidates boasting the Hankook Masters banner, after dealers were introduced to the new program last May during the Autopromotec fair in Bologna.
"A pilot project is well under way and layout, image and brand identity have been clearly defined. The formula is a soft franchise with a network of loyal dealers, who helped us by giving us suggestions on activities / services most useful to the development of their business. Light maintenance work and fleet services are fine, but we want to go further and stand out from the crowd, also because, being obliged to invest to remain competitive, we want to play it safe". The Hankook Master package, in addition to the promise of interesting margins and a portfolio of services, can boast also wide-ranging campaigns: "A greater brand awareness, thanks to initiatives such as the sponsorship of the UEFA’s European League tournament, makes it easier to communicate directly to the consumer and push on activities that will increase sales volumes and sell-out". At the same time, the organization too is being strengthened, and today the Italian branch, which opened in 1997, can count on about fifty employees, and new ones will soon be added, mainly as a support to sales and marketing.