CUMBERLAND, Md.—Lee Fielder, former president of Kelly-Springfield Tire Co., knows a lot about private brands. According to the 1998 Tire Business Market Data Book, Kelly manufactured tires for about two dozen private brand marketers—including giants such as Sears, Roebuck and Co., Wal-Mart Stores Inc., Discount Tire Co. and Big O Tires Inc.
Mr. Fiedler, 57, retired in January after seven years as Kelly's chief executive when parent Goodyear decided to shutter the division's Cumberland headquarters and bring the unit's operation to Akron. He spoke with Tire Business by phone from his Cumberland home about private brands. Some of his comments were edited for brevity:
Tire Business—Large manufacturers are acquiring private brands and turning them into associate brands—for instance Bridgestone/Firestone Inc. acquired the Gillette and Peerless brands and Cooper Tire & Rubber Co. bought Dean. Why?
Lee Fiedler—Generally, they want to have control over a brand—where it's sold and what it's sold for. So they take control and determine their own future on that brand.
Although they're doing it to some, they're not doing it to others if they're good, strong private brands.
TB—How do they fit into the larger picture?
LF—If they have a brand out there—a private brand—that's been there for a long time and it's not doing well and is messing up what they're trying to do, sometimes the tire maker will buy the brand. Then they'll direct it and make it a house brand.
They get to direct and choose what it does, depending on whether or not they want to promote or want to kill it.
TB—Is this an ongoing process? Is it going to continue?
LF—I think it will always be an ongoing process, as far as looking at all the private brands out there and saying: `Should we have that one? Should we not have that one? Can we make it stronger by bringing it back in and using it as a house brand?'
The differences between a house brand, a lot of the minor house brands and private brands are pretty small. It depends on what the manufacturer is trying to do with its lines and brands of tires.
TB—Where did they fit in for Kelly when you were president?
LF—The private brand was a large portion of Kelly, an important portion and still is an important portion of the entire company. Kelly, like everyone, is making sure that they support their good, strong private brands.
And, if they have ones that are weak, that they can't deal with, they're looking at them the same as everybody else is.
It's a nice piece of business for Kelly and Goodyear.
TB—What about the future of private brands? Are we going to see more or less?
LF—My personal take on that is that you'll see less private brands, but you'll see the strong ones flourish as they're supported by the companies because they have full programs and are not just brokers of tires.
Even in Michelin's program of getting rid of some private brands last year, you'll notice they did not get rid of all of them—just certain ones they felt they did not want to promote.
But, there are other ones that they are very strongly promoting and are actually going out and trying to get more business. I think everybody will treat private brands the same way. They're a portion of the industry that is there, that is going to be strong and they'll support them.
But, as far as the actual number, there will be less of them.
I think one thing you may see is some private branders will pick up branded products because they fit somewhere in their program. Now, they won't be picking up and selling 80 percent of a branded product and a little bit of their own.
But some of them will find they need a brand to fill out their lineup, so they'll sell heavily on their private brand along with some branded products.
That would not surprise me at all and I think, to some degree, that is already happening.
TB—In addition to promoting strong private brands, are big companies trying to lessen the clutter in the marketplace?
LF—That's a good way to put it, but they're lessening the clutter of ineffective ones.
Competition is good, but if you have bad competition it really can hurt the marketplace. And that's why I think they're all looking at them with the idea that they're not trying to get rid of all private brands—just weak private brands and weak house brands.
TB—Is there anything else about trends or the future of private brands?
LF—If some large companies feel they should remove the entire private brand thing...—and in the past, I think some people have felt that way—I think they'll find out that private brands are very strong. And very strong with the dealers.
They're strong because the dealer makes profit on it. The dealer and the consumer are going to decide the need for the private brands of the future, not so much the manufacturers. Because...as long as the dealer can make more money on it and the consumer feels he's getting a good thing, there will be a demand for that tire.
TB—Do you ever have any inclination to get back into it? Some retired executives are like retired athletes who miss playing when the season comes back around.
LF—I'm retired, but over the next several months I'll be looking at options both inside and outside the tire industry. Whether I will do something or not, I'll make the decision at that time.
TB—What have you been doing since you retired?
LF—I'm working on several things for the Cumberland community as well as the state of Maryland. I'm on a governor's task force and I head up a steering committee on economic development in western Maryland. I'm spending a lot of time on that.