AKRON-While tire companies annually invest millions of dollars ``packaging'' their more high-profile passenger tire products, they primarily depend on tire dealers and wholesalers to market their specialty lines, according to industry officials and analysts. The marketing life of low-volume products such as aircraft, industrial and off-the-road tires is far removed from the glitz of their passenger counterparts.
``Small-volume tires are not a real bonus to the companies themselves,'' said Scott L. Soffen, a securities analyst with Lehman Brothers Inc. ``(Specialty tires) are not a huge factor that affects their earnings quarter to quarter.''
The analyst pointed to Goodyear's recent announcement that it was exiting several specialty tire lines.
``If (Goodyear) backed out of (manufacturing certain specialty tires) they obviously thought there was more money on the passenger side of the business,'' he said. ``There's generally fewer competitors in (specialty lines); there's also significantly less demand. A lot of the tire business is making money off volume.''
Not everyone agrees, however.
``The market may be small, but it's still definitely profitable,'' said Joe Rayna, national marketing manager for Bridgestone/Firestone Off Road Tire Co., which claims it holds one-third of the $500 million off-road market.
Because low-volume tires are targeted at customers with very specific needs, marketing methods-television and radio commercials, print advertising, point-of-purchase displays-employed in selling passenger tires don't have the same impact in the specialty sector.
``Marketing low-volume tires is less cost effective than marketing passenger tires,'' Mr. Soffen said. ``If you pay money to produce and put on a television ad for passenger tires, you may get millions of people to buy the product. But you won't get the same response from, say, a tractor tire.''
This lack in market size also affects intensity.
``It's difficult to be more aggressive,'' Mr. Soffen said. ``There's not much competition so you aren't actually trying to beat the other tire makers-you're trying to get people to buy more tires, which is tough to do. You can't influence demand.''
Big companies hope low-volume tire customers will associate their specialty products with their passenger lines.
``Tire makers rely heavily on name recognition (in the specialty markets),'' Mr. Soffen said.
The things a company does to market its passenger tires-owning a blimp, sponsoring sporting events, auto racing, commercials-often help its name recognition in specialty applications, he said. ``That's one of the things (tire companies) are praying for.''
Small-volume tires are so specialized that it's difficult for a tire maker to reach every potential customer with a single campaign. That's why tire makers leave most of the marketing to people who have direct contact with the end-users-the dealers.
``Manufacturers try to educate dealers so they know what the advantages of their brand is,'' Mr. Soffen said. ``You have to do something to let (the dealer) know what your brand is about. Unless you do that, it's tough to compete against the value-oriented house brands.''
Dealers also must know what tires will best serve a specific function.
``Because OTR tires are customized, you have to make sure you get the right tire with the right piece of equipment,'' said Tom Dow, general manager of Goodyear's off-the-road tire division.
Yokohama Tire Corp. educates its dealers by supplying product brochures, literature and data support ``so when the dealer gets the tire, he knows the applications,'' a company spokeswoman said. Many customers will buy the cheapest tire they see unless the seller points them in a different direction, she said.
Like most tire manufacturers, Bridgestone/Firestone Off Road keeps dealers informed through direct mailing.
In addition, BFS employs more than 60 field salespeople for a ``hands-on approach'' to marketing the small-volume tires.
``There's not a large (tire-buying) population out there, so it's relatively easy (for the sales staff) to stay in contact with (the dealers)...and update them about new products,'' the company's Mr. Rayna said.
BFS Off Road does little advertising to promote its specialty lines because it doesn't have to. ``We have a great amount of name recognition in the off-road industry,'' Mr. Rayna explained.
This comes from manufacturing quality products, he said. Customers associate the tire maker's name with whether or not they had a good experience with that firm's product. ``So quality has a lot to do with it.''
Small-volume tires often sell themselves on the merit of a tire maker's reputation, and one way a company's reputation can be affected-negatively or positively-is through word-of-mouth advertising.
Master mechanic meetings-in which mechanics convene and swap stories about problems they've encountered-and gatherings of representatives from the mining and construction industries sometimes serve as spawning grounds for negative publicity.
If a mechanic witnesses a problem or malfunction involving a specialty or small-volume tire brand, Mr. Rayna said, the mechanic probably will not recommend that tire maker to potential customers.
``If a product has a problem, then everyone will know,'' he said. ``Rumors spread rapidly in this industry.''
Original equipment contracts with industrial vehicle makers also are important in a specialty tire's marketing, Goodyear's Mr. Dow said. ``A product's reputation, beginning with (a customer's initial exposure to it), has a great deal to do with its sales.''