MUSCATINE, Iowa—Most tire dealers associate ``Bandag Inc.'' with the precure retreading process the company introduced to North America's replacement tire market 40 years ago. But market research indicates many of its trucking industry customers regard Bandag as a ``premium brand'' replacement tire, according to Sam Ferrise, vice president of sales and marketing for the Muscatine-based supplier of retreading equipment and tread rubber.
``By the time our product gets to (the end-user) it is a replacement tire,'' Mr. Ferrise pointed out. ``We think of our product as equipment and tread rubber. But (the fleet buyer) thinks of it as a tire—an alternative to fill a wheel position.''
Does this suggest the possibility of a Bandag-brand new tire sometime in the future? After all, the new-tire makers—Goodyear and Bridgestone/Firestone Inc. in particular—talk of increasing their involvement in retreading in order to offer cradle-to-grave tire service. So isn't it just as logical to imagine Bandag responding to such competition by adding new tires to its present retread product offerings?
No, he replied. ``We're not in the new-tire business. Nor are we going to be anytime soon.'' There are plenty of competitors in tire manufacturing already, Mr. Ferrise said, adding that Bandag's management finds challenge enough in the business arena it's in.
``The issue is not about us being in the new-tire business,'' Mr. Ferrise said. It's about ``knowing and understanding what our business is and being the very best at it we can be.
``Our organization is geared around placing (the Bandag dealer) in position to take a worn tire and put it back into service,'' he said. ``That's radically different from being in the new-tire business.''
Everything Bandag does, he said, is aimed at determining the needs of the end-user and providing its dealers with products that are unique, in demand and profitable to sell.
``We're not after the cheap market here,'' Mr. Ferrise said. ``We're a company that always has differentiated itself both to the end-user and the dealer. That means we're not going to sell an intermodal tire for $47. We're going to customers who are willing to pay a fair price for a good product.''
And despite dealer complaints about competition from too many other Bandag franchisees, the company does not want to see a Bandag dealership on every street corner, he assured.
Ironically, there are fewer—albeit larger—Bandag franchises today in North America than in the past, he pointed out. ``Fifteen years ago, we had close to 700 shop locations and almost a one-to-one relationship in terms of shops to owners. Today, we have about 350 principals and about 550 shops.''
In fact, there are markets within the U.S. ``and certainly elsewhere around the world'' where Bandag still has openings for distributors, he said.
Complaints about overlapping franchises are fewer than in years past, and Mr. Ferrise sees this as evidence the company is making progress in communicating with its dealers.
Still, he said, ``There are areas of (dealer) concern that we're working on daily, and we'll continue to do so. But what I hear from a majority of these guys is that things are better—that we're tracking in a good direction and tracking with them.
``Every once in a while you need validation that what you're doing is good. And I think they've given us that.''