NEW ORLEANS-As independent dealers look ahead to the 21st century, they can expect to be marketing an ever-increasing variety of sizes and types of tires that continue to improve in quality and technical sophistication. And they will be marketing them to a consuming public that is increasingly pressed for time and demanding greater value and better service.
That was the general consensus of a panel of top marketing executives from five leading tire makers who discussed ``Marketing tires into the next century'' during the National Tire Dealers & Retreaders Association convention's general session Oct. 13.
Moderated by Pamela Fitzgerald of Mike Gatto Inc. in Melbourne, Fla., the panel comprised:
Chris Dickson, vice president of replacement sales, Continental General Tire;
John Fahl, president-tire operations, Cooper Tire & Rubber Co.;
Edward F. Gallagher, vice president of sales, Goodyear;
Hubert Hannezo, executive vice president, marketing and sales, Michelin North America; and
John T. Lampe, president, Bridgestone/Firestone Tire Sales Co.
Asked to identify developing consumer trends and their impact on dealers' marketing strategies, Mr. Lampe said the percentage of consumers that base tire purchasing decisions primarily on price is declining, while those who are seeking value-a combination of high quality and service with a reasonable price-is increasing.
Tire buyers also remain very dependent on the advice they receive at the point of purchase, he said, as 54 percent make the decision on their tire purchase in the store.
Consumers have reduced the time they invest in tire-buying from an average of 10 days 10 years ago to a single day now, Mr. Gallagher pointed out.
``Consumers are time poor,'' he said. ``They want fast service, convenient hours and reasonable prices''-preferrably from a full-service outlet.
As an example of the time crunch people perceive, Mr. Gallagher cited a study in which adults' top responses to the question, ``If you had a free Saturday and Sunday, what would you do?'' were: 1) Watch TV; 2) Take a nap.
Trends Mr. Dickson noted included the tendency for people to take long trips by plane rather than by car, and the growing presence of personal home computers.
``The information highway may be a dramatic new way for people to go to market,'' he said.
Mr. Hannezo agreed. For dealers who are prepared to exploit this evolving new medium, ``computer shopping provides an opportunity to promote their business uniquely,'' he said.
There also is a trend toward people taking more and shorter vacations, Mr. Hannezo said, which is contributing to the growing popularity of sport utility vehicles. And the trend toward leasing, rather than purchasing new vehicles, ``provides dealers an opportunity to forge links with car dealers,'' he said.
The panelists all agreed that among the trends in the area of supply and distribution, one that was not going to change was the proliferation in the number of tire stock-keeping units (SKUs).
Whereas a dealer could cover the passenger and light truck tire markets with 55 SKUs a decade ago, that number has grown to 175 SKUs today and will continue to rise, Mr. Dickson said.
``For dealers,'' he said, ``the future is about association''-with each other, with wholesale-distributors and with tire suppliers.''
Dealers need to forge strategic alliances with a co-op, distributor or the like to have ready access to exotic/low-demand tire sizes, Mr. Fahl said. ``But that doesn't mean a buying group or franchise system,'' he added.
The growth in electronic data interface (EDI) services-computer links between dealers and suppliers that exchange point-of-sale information, order entry etc.-will have a major impact on dealer-supplier relations, the panelists agreed. And it may be something of a two-edged sword.
EDI links between tire retailers and suppliers will enable manufacturers to improve their forecasting models and better gear their production to actual consumer demand, Mr. Gallagher said. They also should result in replenishment cycles for individual dealerships based on the demands of their own customers, he said.
``Independent dealers have a right to expect fast delivery, fast service and prompt attention,'' Mr. Fahl said. They should demand a fast turn on orders and push more inventory back on their suppliers.
``But just-in-time delivery has its costs,'' he added. ``This has to be factored into the selling price.''
``Electronic commerce will determine how dealers choose suppliers,'' Mr. Hannezo predicted. Because of the nature of these electronic ties, ``it won't be possible to have a multitude of suppliers,'' he said. Dealers won't be able to secure a wide variety of brands and price points by dealing with a wide variety of suppliers.
From a technological standpoint, tires will continue to improve, the panelists agreed. But to be truly successful, new technology has to be perceived by customers as responding to a need or desire and as adding real benefit or value to the product.
Translating technological advances into consumer benefits is a critical challenge for independent tire dealers and their staffs, and an area for ongoing training, the panelists said.
``Never take for granted (that consumers appreciate) the quality of the products,'' Mr. Hannezo said. ``People need to be informed.''
``Our industry has suffered from the promotion of tires as a commodity,'' Mr. Gallagher said. ``Technology can change that and boost profitability. The key word is `value.' ''
``Employees must be well-trained,'' Mr. Fahl stressed. ``Customers must understand the reason for the cost.''
Dealers must also address auto service technology, Mr. Lampe said. The need for a commitment to technology and training in that area is equally great, he said.