LAS VEGAS-Despite the upheaval in leadership at the top of Big O Tires Inc., and other events which seemed to overshadow the company's recent annual dealer meeting, there was a certain calm in the eye of the storm. In fact, dealers learned of a number of ``positives'' aimed at making them more successful-read that ``profitable''-in 1995.
Among other things, some 320 dealers who traveled to Las Vegas for the Feb. 12-15 gathering got to visit Big O's $7.8-million mega-distribution center, located on the outskirts of the gambling mecca.
The sprawling complex can house almost a half-million tires-enough to service 71-percent of existing Big O stores.
Dealers were told that new pricing and warranty programs introduced last year have put the company in a ``favorable competitive position,'' according to Big O President Steven Cloward, who reassured participants, ``Our boss is. . . you, the dealer.''
Kelley O'Reilly, vice president of marketing, said the firm's Cost-U-Less price roll-back program on all Big O-brand tires has ``leveled the playing field'' with tire chains like Tire America, Pep Boys and Discount Tire of Arizona, and with discounters like Sam's Club.
The program allows Big O outlets to offer value pricing everyday, she told dealers, because ``you can't create customer loyalty unless you get them into the store.''
Last year, franchisees voted to modify Big O's all-inclusive mileage warranty program, which critics say has cut into dealer and company profitability. Instead of all Big O brand tires being equally protected against failure due to defects in workmanship, materials and road hazards for the original tread life, now only select lines carry that coverage; others offer pro-rated protection.
The program's step-up structure, Ms. O'Reilly explained, ``was designed to highlight the distinction between tires in your good-better-best sales approach.''
She also updated dealers on the company's relatively new in-house ``Impact Advertising'' agency, which is focusing on consolidating Big O's advertising activities to reduce duplication while offering a more consistent, standardized ad message from region to region. As of Feb. 1, 120 Big O stores out of some 375 outlets had signed on.
The company also announced it will re-introduce its popular ``Made in the USA'' promotion of two summers ago-touting the Big O brand's current manufacturer, ``home grown'' Kelly-Springfield Tire Co. In 1994, Big O severed its manufacturing relationship with General Tire Inc. and began a gradual conversion to Kelly, although General still makes some high performance tires for Big O.
Dealers will receive accompanying promotional and point-of-sale materials for the ``USA'' campaign launch, scheduled to coincide with the Fourth of July weekend.
The lifeline to the company's new 300,000-sq.-ft. warehouse, according to Tom Staker, senior vice president of operations, is a fleet of Big O trucks expected to log a million miles and 25,000 deliveries annually to more than 280 Big O stores in California, Nevada, Arizona, New Mexico and Colorado.
The Henderson, Nev., warehouse uses a new computerized bar coding system, with each tire pallet bearing a ``license plate'' for tracking purposes. Next-day deliveries are anticipated.
The facility also stocks custom wheels from Progressive Wheel, as well as shock absorbers and struts by Monroe. Mr. Staker reported that Big O's total retail wheel sales were up 15 percent last year.
Big O will continue to operate distribution centers in Boise, Idaho, and New Albany, Ind.
To further streamline dealers' operations, Big O and Kelly-Springfield are testing a new ``field destroy adjustment program'' in Northern California which, if successful, will be rolled out to all Big O stores by late 1995, Mr. Staker said.
Currently, dealers must ship a product back to a regional warehouse to receive an adjustment credit. The new procedure would allow them to handle their own adjustments and dispose of tires in the field, thereby reducing shipping, handling and overhead charges and keeping prices more competitive, he explained.
Big O national training director, Tony Stubbs, said the ``Big O University'' Mesa, Ariz., training center will offer basic and advanced sales techniques for the new pricing and warranty programs.
And once the field destroy program is operational, Mr. Stubbs said a core group of trainers and dealers will fine-tune it, then regional meetings will be held to certify all Big O dealers.