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Silent running

By Li Fangfang (China Daily)
Updated: 2008-09-15 07:21

In March 2006, the company unveiled a service program, the Auto Nurserymaid Plan, free of charge and open to all tire owners. The plan includes free puncture repair, a tire care package and exclusive VIP services.

"Along with the development of the industry, competition in the tire market has shifted from price to service. Consumers need comprehensive, customized services, and service is the key to winning in the replacement segment," say Cohade.

Goodyear's other initiative to help branding in China's retail market was its iconic symbol, the Goodyear Blimp. One of the most familiar advertising vehicles in the US (it rivals Coca-Cola and McDonald's), the first blimp was launched in the US in 1925.

The airship has since flown in many countries overseas, but its maiden flight in China was on September 1, 2006 when the 45.7-meter blimp lifted silently off in Guangdong province. It was christened Navigator in a mainland Internet contest that drew 900 entries.

The Navigator was leased from a Florida company called Lightship, which also has a branch in Singapore where the airship, its pilot, co-pilot and 20-person ground crew are also based.

The initial six-week flights throughout Guangdong province were a debut promotional effort to expand the brand to Chinese drivers who were in the market for new tires.

"Brand and brand image are very important," says Goodyear spokesman and senior vice-president of global communications Chuck Sinclair at the time. "That's one of the reasons we've turned to this global icon."

But explaining the iconography and history of the Goodyear - or gu te yi in Mandarin - blimp to the curious Chinese media required "quite a bit of background", Sinclair says.

But since 2007 the Goodyear Blimp sailed well in various marketing campaigns to promote safe driving around the country, reaching millions of people in Wenzhou, Ningbo, Hangzhou, Shanghai, Suzhou, Shenyang, Dalian, Tianjin, Qingdao, Jinan, Changsha, Shenzhen, Wuhan, and Zhengzhou, among others.

"China has 3 percent of the world's population of cars," says Cohade. "When we inspected 1 million cars in Shanghai for free, we surprisingly discovered 30 percent of the tires with problems which possibly cause accidents.

"I hope we can make a difference by raising customers' safety awareness: when they buy tires, safety will be their first consideration. Moreover, the blimp helps raise Goodyear brand's recognition," he adds.

The promotion has already paid off. Huang Yuling, a staff member of Car Space Service Union, one of Goodyear's leading outlets in Guangzhou, says that after the blimp's appearance, "sales quintupled and shoppers increased by 50 percent. In the next three months, the sales should keep growing at 10 to 15 percent. They know the blimp. Now they know our store."

Cohade declines to disclose the current proportion of Goodyear's OE and replacement businesses. "China's whole tire industry has shifted from that OE sector double sized replacement to the present equal size. Goodyear is higher than the average."

New markets

After Goodyear reinforces its leadership in both the OE and replacement markets, it is looking for growth driven by new markets.

For the past three years, transportation, mostly by trucks, has become busier while many industries have expanded their distribution networks in China.

"In the next five years, transportation (logistics) will see significant growth here," Cohade says.

Currently, its commercial business in China is supplied by imports, as its old Dalian plant - which is closing down - only produces passenger and light truck tires.

Goodyear found it could not expand the old plant in Dalian's Shahekou and will begin moving its production to a new plant in Pulandian by late 2010, when construction is set to be finished.

The production transfer will be completed by 2012, when the Shahekou plant will be completely closed.

"The factory will be Goodyear's most advanced, a totally green factory. We have reduced the consumption of energy in our factory in Dalian by 20 percent," says Cohade.

The facility will focus on tires for cars, and also, for the first time in China, tires for buses and trucks. "That is an example of investing to build the future," says Cohade.

"In the meantime, for the next two years, we are going to focus on the strategies that so far have led to positive results," says Cohade. "Continuous improvements in costs, innovative products, building up the brand with the Goodyear Blimp, building up our distribution structure, and most importantly building the best team we can at Goodyear, because we have the best people, in the factory, in service, in marketing and in general administration."

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