CHARLESTON, S.C.—By law, any building in Charleston at least 75 years old cannot be torn down. It must be renovated instead. It was an appropriate environment for Dayton Tire Co. dealers, who heard at the company's annual dealer sales meeting in Charleston, Jan. 30-Feb. 1, that their supplier would spend 1997 renovating itself.
At the heart of the overhaul is a combined marketing effort with parent Bridgestone/Firestone Inc. to provide dealers a comprehensive, multibrand strategy.
Any successful renovation starts with a solid foundation, and Dayton's five-year performance represents just that, according to President Tom Crofutt.
Like its parent, Dayton has been in a growth mode since 1991. Unit sales climbed almost 70 percent during that period, Mr. Crofutt said. The company's share of the radial passenger tire replacement market increased from 4.2 to 6.6 percent, while radial light truck market share crept up from 3.3 to 3.7 percent.
Sales climbed more than $400 million last year alone, he added.
And Mr. Crofutt said he expects the growth to continue. Company projections call for radial passenger and light truck market shares of 7.9 and 5.2 percent by 1998, aided by 15 percent growth in unit sales.
That's not to say Dayton hasn't had its share of problems. Ask dealers their number one complaint and you'll most likely hear ``fill rates.''
``Last year in San Francisco (at the 1996 dealer meeting), I said that we were doing what was necessary to fix the supply situation: adding manpower, getting better equipment and improving efficiency. . . ,'' said John Dougherty, Dayton plant manager. ``Well, I am here to report that we did everything we said we would do to fix the supply situation, except one thing—fix the supply situation.''
Dayton continued to experience supply problems despite producing 2.6 million more units at its Oklahoma City plant than it did in 1995, he said.
Dayton hopes to increase production again this year, aided, in part, by the $430 million Bridgestone/Firestone plans to dump into its North American operations during the next two years.
Dayton's Oklahoma City plant will increase production by 1.6 million units this year. Decatur, Ill., will add an additional 1 million units, while other plants will contribute a combined 2 million more units this year, said Kenji Shibata, BFS chairman and CEO.
The company also will improve production forecasting and scheduling, Mr. Dougherty said.
Dayton recently also amended its carrier policy, allowing dealers to file carrier claims with the tire maker instead of the transportation line itself.
``Dayton Tire will, in turn, put pressure on the carriers for better service,'' he said. ``If the carrier's performance doesn't improve, they risk losing Dayton's business and perhaps that of Bridgestone/Firestone,'' Mr. Dougherty said.
A new approach
Reacting to market research that suggests consumers are interested in multibrand offerings, Bridgestone/Firestone has decided to combine its marketing efforts with those of Dayton, according to Shu Ishibashi, BFS executive marketing director.
``We are creating a combined marketing program to give consumers what they want,'' Mr. Ishibashi said.
Combining the two programs allows dealers to attract consumers who are brand-conscious, value-driven, price-conscious or store-reliant, Mr. Ishibashi said.
In BFS' current lineup, the Bridgestone brand fills the brand-conscious segment, while Firestone tires tend to attract value-driven customers, he said. Dayton's Daytona and Road King brand tires can provide dealers a way to reach customers who rely on their retailer for advice.
``At the retail level, Bridgestone will be positioned to compete with Michelin. Firestone will be targeted against Goodyear. Dayton Tire will compete with Cooper and Kelly. Other Bridgestone/Firestone associate brands will be aligned against similar private brand competitors,'' Mr. Ishibashi said, giving the new strategy a more competitive spin.
Despite the combined marketing strategy, Dayton will retain a separate sales force, according to Brandon Stotsenburg, Dayton sales manager.
In fact, the transition is meant to be as transparent to Dayton dealers as possible, he said.
``We will also maintain the territory, and therefore, profitability of our associate brands,'' he explained. ``This (change) does not mean that Dayton will be available to any BFS dealer who wants it.''
Dayton district sales managers will help determine where the brand is sold, he said.
Bells and whistles
In order to help position Dayton within BFS' new marketing strategy, the company has developed a new logo that ``projects a progressive image,'' and a theme—``Per-formance for Every Road''—that ``encompasses traditional product categories, but will attract consumers who want more,'' he said.
Dayton's traditional thoroughbred logo still will be used for ceremonies, plaques and wearables.
To help support Dayton's new image, dealers will receive quarterly display packs and a Dayton-specific educational video program. The modular system allows dealers to customize the program to their merchandising plan and time constraints, Mr. Ishibashi said.
In addition, changes to the Dayton co-op advertising program will allow dealers, ``in many cases,'' to double the amount of co-op earned, Mr. Ishibashi said.
Three new tire lines will be available to Dayton dealers later this year: The Daytona Stag LT will replace the Trans Trac Radial AT; the Daytona Stag A/S will replace the Daytona Radial Stag (Rib); and the Dayton Widetrack Wintertrax will debut in August.
The company also is adding sizes to the Daytona Premium GT Touring and Radial S/R lines.