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July 08, 1996 02:00 AM

SIZE PROLIFERATION MAY WEED OUT SOME MARKETERS: LARGER PRIVATE BRANDERS HAVE CLOUT WITH TIRE MAKERS

Gregory James Kennedy
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    AKRON-The proliferation of stock-keeping units (SKUs) within the tire industry points to the continued viability of large private brand marketers and the possible demise of their smaller competitors, according to some industry experts. As original equipment fitments continue to expand the range of available tire sizes and types, private branders are increasingly finding the need to expand their replacement tire lines.

    Where a ``complete'' private brand tire line once consisted of 15 to 20 SKUs, today's offering must hold between 25 and 30 different tire types and sizes, according to Michael Bierstock, marketing and purchasing manager for Electra Group International. It markets the Electra Ironman passenger, light truck and specialty private brand tire lines in Canada.

    According to Mr. Bierstock, larger private brand marketers can use their size to more effectively deal with size proliferation than their smaller counterparts by:

    Being able to devote additional inventory space to new tire sizes;

    Selling the volumes of tires required by manufacturers to warrant production runs on new sizes. ``When you start talking new molds . . . there has to be a payoff for the manufacturer,'' explained Tom Radl, a private brand account executive with Dayton Tire Corp., a division of Bridgestone/Firestone Inc.; and

    Being able to ask major manufacturers-those with high levels of technology-to produce quality performance tires currently demanded by consumers.

    Smaller marketers who can't expand their lines, on the other hand, will find themselves unable to remain profitable, said David Hoffman, national sales manager for Jetzon Tire and Rubber Co. Inc., Montgomeryville, Pa., which markets Jetzon and Doral private brand tires.

    ``The smaller private branders are having a tougher time,'' Mr. Hoffman explained. ``I think the small are going to get smaller and the big are going to get bigger.''

    That prediction comes as retail unit sales of private brand tires are on the rise, according to marketers contacted by TIRE BUSINESS.

    Private brands typically are presented as lower-cost alternatives, an attractive prospect for consumers who are increasingly price sensitive-especially those with older cars whose original equipment fitments were expensive speed-rated tires.

    ``As cars get older-and they come with a performance tire-(owners) want to put on a tire with the same size (but) with a smaller speed rating,'' Dayton Tire's Mr. Radl said.

    Jetzon Tire revamped its entire lineup over the past two years, prompted, in part, by a greater number of cars coming from the factory with T-, H-, and V-rated tires, Mr. Hoffman said.

    ``People get sticker shock when they find out their $16,000 car has $150 tires,'' he explained.

    But consumers are looking at private brands for more than simply a way to drain the final miles from their aging vehicles, according to Electra's Mr. Bierstock.

    ``There's much greater confidence of the private brand name,'' he said. ``But I think that's a function of a maturing market.''

    Companies like Canadian Tire-and Big O Tires Inc. in the U.S.-have been raising consumers' level of awareness of the quality of private brands throughout the industry, Mr. Bierstock said.

    But the key to a successful private label is a constantly evolving lineup that gives consumers tires that fit their vehicles in styles that conform to current buying trends.

    ``Every quarter you have to look at your line and do small course corrections,'' Mr. Bierstock said.

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