NEW ORLEANS—For the first time, Dayton Tire Co., the associate-brand unit of Bridgestone/Firestone Inc., will offer independent dealers exclusive rights to sell Dayton and the company's other associate brands within a specific area. Shu Ishibashi, BFS vice president of consumer marketing, told attendees at the unit's annual sales meeting, Jan. 22 in New Orleans, that Dayton Tire will sign written agreements with dealers for the first time in 1999 to give them exclusive territories.
In exchange, dealers will be asked to commit to attaining a minimum 1-percent market share for any of the brands—Dayton, Gillette, Peerless and Road King—they choose to sell in their trade area.
Dealers selling more than one of these brands will have a separate agreement for each brand they choose to sell. Mr. Ishibashi said that these agreements will be reviewed on an annual basis.
These agreements will ``strengthen relationships with our current base of dealers,'' said John Gamauf, BFS vice president of consumer sales.
In town about two weeks prior to the kick-off of New Orleans' famous Mardi Gras festivities, the Dayton dealers still found plenty of reasons to celebrate.
``Thank you for making 1998 the most successful year in the 94-year history of Dayton Tire,'' said company President Tom Crofutt. He told the record 650 dealers in attendance that Dayton Tire rang up $430 million in sales last year on a 23-percent increase in unit sales.
Mr. Crofutt said sales of the Gillette and Peerless brands, which BFS acquired in 1997, were ``just taking off like crazy.''
He attributed Dayton's overall growth to the revitalized image provided by the company's sponsorship of the Indy Lights Racing Series; the continued introduction of new products; the company-wide emphasis on the BFS Family Channel; the emphasis on area marketing to avoid conflict; and competitively priced products perceived to have value in the marketplace.
Kenji Shibata, president of BFS, said Dayton Tire's increase was the largest of any Bridgestone Corp. unit worldwide. Top management has designated 1999 the ``Dayton Tire Associate Brands Year,'' he added. ``It is our intent to make 1999 the year we focus on creating excitement and enthusiasm as we direct our resources to our associate brands.''
If there is a down side to these booming sales numbers, it's the issue of fill rates. John Lampe, president of BFS Tire Sales Co., told dealers it was another disappointing year in that regard.
``We're probably not much better than 70 percent, and our goal is a minimum of 92 percent,'' Mr. Lampe said.
Though BFS produced 2.9 million more passenger and light truck tires in North America in 1998 than in 1997 and increased imports by 1 million units, fill rate problems remained ``a fact of life,'' Mr. Lampe said—one that may persist even after the company's new plant in Aiken, S.C., goes on-line.
Mr. Crofutt announced that national sales for the associate brands will be reorganized under two sales managers. Terry Carlon will be based in Richmond, Va., and manage sales for the eastern part of the country and Oklahoma City-based Roger Grefsrud will manage sales in the West.
Mr. Crofutt said reorganization of the sales force had been under discussion since October, when former Dayton Tire national sales executive Brandon Stotsenburg left BFS to head up the sales efforts of Goodyear's Kelly brand.
Mr. Crofutt said the new arrangement ``will reduce the middle layers, enabling you to deal directly with a decision-maker.''
Mr. Crofutt reiterated the importance of the concept of area marketing. Area marketing committees look at dealers by location, market and customers, Mr. Ishibashi said.
Mr. Crofutt added that ``difficult decisions'' must be made sometimes and all the associate brands will be used to ``minimize conflict.''
Mr. Ishibashi said 1999 will see the introduction of Bridgestone UNI-T technology into the performance products of the associate brands. UNI-T technology will appear in 11 new lines of associate-brand passenger and light truck tires with 152 sizes.
The UNI-T technology will be incorporated into performance lines only because other lines are ``more price-sensitive'' Mr. Ishibashi said.
The new UNI-T lines will be featured at five two-day regional ride-and-drive events for dealers.
The company premiered a TV commercial promoting Dayton Daytona tires' high-performance image.
Joe Barbieri, manager of Dayton Motorsports, told dealers the second year of Dayton's sponsorship of the Indy Lights racing series will feature 12 races starting March 21 and ending October 30. The entire series will be shown nationwide on the ESPN2 cable TV network.
Mr. Barbieri said the race series created 1.2 billion TV and print impressions in the first eight months of 1998. Mr. Gamauf added that racing's ``value to the morale of dealers and associates is the most important thing.''