AKRON-Market penetration, aggressive marketing, staff training and, yes, even competitive pricing, are some of the popular methods many tire dealers employ to maintain or bolster their sales in a business marked by increased competitive pressures. These pressures vary with the regional market, so when North America's largest independent tire retailers were asked to name their primary competitors, the answers ranged from warehouse clubs to tire-manufacturer-owned stores to ``anyone who sells tires.''
Warehouse clubs top the list of whom tire dealers consider to be their major competitors in a business plagued by low-ball pricing and shrinking margins.
Mass merchandisers, in particular such stores as Sears, Roebuck and Co.'s Tire America and Wal-Mart, and other independent tire dealership chains are considered close seconds.
And yet another competitor, tire manufacturers' tires-only stores, are infiltrating some markets. These tires-only operations present a particular challenge, according to AKH Co. Inc. President Andy Andonian, mainly because they have access to more advertising dollars from the tire manufacturers. The warehouse clubs, on the otherhand, don't advertise.
While all these competitors differ in the types of services and methods of operation, they usually use a common strategy-discount pricing.
However many of the tire dealers surveyed said they answer the challenge by beefing up services and concentrating on customer satisfaction.
``Improving customer service'' is almost cliche when talking about ways to compete, but some dealerships have done just that and use it as their primary weapon against price competition.
Fountain Tire of Edmonton, Alberta, won the Canada Awards for Business Excellence in 1992 for its customer service program, and since then the 70-outlet commercial/retail dealership has been touting its award and creating an awareness of its customer service.
Providing exceptional customer service is something a business has to continually work at improving, according to Fountain Tire President Brian Hesje.
Not stopping with earning the national recognition, the dealership has become involved with ``Alberta Best,'' a government-sponsored certification program in which the staff at each store takes a course in customer service. Upon completing the course, the store can display an ``Alberta Best'' certificate.
Likewise, O.K. Tire Stores Inc. of Langley, British Columbia, has been emphasizing professionalism among its staff. ``We must be, and show that we are, professional in the way we do business,'' said Don Blythe, president and general manager of the franchise group.
While improving professionalism and customer service can be an effective strategy, promotion is almost as important. Many of the largest tire dealerships have earmarked from 1 to 8 percent of their revenues for advertising this year, often representing an increase over last year's budgets.
Big O Tires Inc., which spends about 4 percent of its revenues on advertising, underwent a marked shift away from its previous advertising strategy. The franchiser has launched a series of TV and radio advertisements geared at building consumer trust by positioning Big O dealers as ``tire experts.''
Previously, the Englewood, Colo.-based franchiser emphasized Big O products, warranties and services through a series of animated spots. The new ads-employing both visual images and actors-allow dealers to tailor them to their own markets.
Tirecraft Auto Centers Ltd. of Edmonton, Alberta, said it also has become more aggressive in its tire marketing. President David Cosco said the dealership is beefing up its advertising budget and airing more television and radio commercials in its western Canadian markets. The extra advertising seems to make a difference, according to Mr. Cosco, who has been overseeing an expansion of the dealership during the past year.
Tirecraft also has hired a new marketing manager to help the 65-outlet dealership assess its marketing needs and develop an effective program. One of the projects the dealership already has undertaken is a joint program with the Alberta Motor Association in which AMA members can receive a discount on tire purchases at Tirecraft.
Marketing and image-building have become especially crucial for Automotive Industries Inc., which is facing a new competitor, Tire Kingdom, in its home market of Jacksonville, Fla.
Automotive Industries, which operates stores under several names, has been building up its image as a mainstay in the local market and trying to keep its name in the forefront of consumers' minds.
Automotive Industries' ``More tread for less bread'' campaign, complete with bumper stickers and pins, promotes the dealership's name, as well as touting the services included with a tire sale, and emphasizes the full range of automotive services the stores offer.
According to Automotive Industries Executive Vice President Bill King, the dealership is ``keeping watch'' on how Tire Kingdom will compete in the market. Tire Kingdom, the largest independent dealership in Florida, has a reputation as a tire discounter.
For now, Mr. King said, Automotive Industries will stand back and let Tire Kingdom compete on price with the warehouse clubs and other major competitors.
With consumers drawn to warehouse clubs and discounters because of their low prices, many dealerships have chosen to play their game and compete on price.
AKH Co. Inc., which operates Discount Tire Centers, Evans Tire & Service Centers and David Early Tires in the West, goes head-to-head on price with its competitors, promoting the Discount Tire Centers ``200-percent price guarantee.'' Under the guarantee, the dealership offers a double-the-difference refund on any advertised tire price-so if a tire is offered $2 cheaper in a competitor's ad, AKH will pay the customer $4. AKH's Andy Andonian said the company hasn't had many people seeking claims on the guarantee.
Mr. Andonian said the company is banking on making up with volume what it may lose in profit margins by participating in the pricing fray. But so far, the company hasn't seen a drastic jump in sales since the promotion started earlier this year, he said.
Aspen Enterprises of Simi Valley, Calif., said its main competitors are Goodyear's Just Tires outlets and Bridgestone/Firestone Inc.'s Tire Station stores which, it said, have both become more aggressive.
Aspen's Tire Pros stores have tried to stay competitive by joining American Car Care Centers. The ACCC product line's exclusivity is ``very important to (our) retailers,'' said Dennis Mangola, Aspen president and CEO, ``because today, it seems for every brand we carry, somebody else has a better price on it.''