VANCOUVER, B.C.-Dave Schaub had some sage advice for dealers attending the Tire Dealers Association of Canada convention and trade show Feb. 14-17: Focus on the consumer first. ``Every move that we make must be judged by starting at the consumer and looking back inside the house,'' he said in his keynote address. The reason: ``the consumer is the one who ultimately pays the bills. Until then, it's all cost.''
Mr. Schaub, who recently retired as president and chief operating officer of Michelin Americas Small Tires, believes dealers, even in urban areas, can compete with larger and more powerful mass merchandisers and national and regional tire dealerships by satisfying the consumers' needs.
But to do that, they must understand what the consumers in their local marketing area want and work to address those needs.
Smaller dealers face increased competition, but do have some advantages, Mr. Schaub said. If the dealership is located in a town far away from a major market, ``that distance protects you,'' he said.
Being in a long-time family business also provides a benefit, in that ``everyone in town knows you.''
``The pressure, in some cases, that comes on you is whether there is a next generation to take over,'' he added.
Mr. Schaub cited an Exxon study that showed light truck tires offered the greatest growth opportunities-particularly for sport utility vehicles, and high performance radials.
Knowing this, he suggested dealers designate a high performance and/or light truck specialist in their dealerships to service these customers. ``That's where the profit opportunities are,'' he said.
Mr. Schaub also suggested dealers rethink their newspaper advertising.
``The tire ads, for me, are terrible,'' he said. By putting the price of every tire a dealership sells in the newspaper, ``you're telling the competition everything,'' he said.
Dealers also risk having consumers, who know little about tires and tire construction, making purchase decisions based on lowest price between tires that may not be of equal quality. ``Then you've just spent all that money and told the consumer where not to go to buy tires,'' he said.
As a result, he sees the opportunity for more direct marketing in lieu of newspaper advertising.
Mr. Schaub added that dealers also must watch their costs because the consumer will not pay for a lack of efficiency.