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Published on April 12, 1999

COOPER-PIRELLI PACT GOOD FOR DEALERS

If it works, the recently announced strategic alliance between Pirelli S.p.A. and Cooper Tire & Rubber Co. can be beneficial for North America's independent tire dealers. Combining the product lines of these firms into one multi-brand tire package will provide dealers with an attractive, new alternative to other multi-brand offerings now available in the market.

This should prove particularly true if Cooper and Pirelli stick to their plan of not demanding a majority of a dealer's business or forcing retailers to take on new tire lines.

By themselves, neither Cooper nor Pirelli could field a complete ``good-better-best'' selection of tires.

Cooper has solid broadline coverage, as well as a slew of associate and private label lines.

But the Findlay, Ohio-based company has lacked a major brand with national recognition and a sufficient assortment of tires in the high-performance segment.

Pirelli, on the other hand, has cachet in performance circles but is weak in broadline coverage.

For the first time, the combined product lines of these two tire makers could serve as the No. 1 source of supply for small- and large-volume tire retailers alike.

Cooper and Pirelli have much work to do to make their alliance successful.

While both employ talented, dedicated people, their approach to market is very different.

Pirelli is flashy, motorsports-oriented and has a flare for the exotic in marketing and advertising. It produces some of the industry's most highly technical tires and takes pride in its original equipment fitments on some of the world's finest cars.

Cooper, on the other hand, is Midwest conservative. It is a highly profitable company, with a solid line of broadline products and a reputation for customer service and loyalty to independent dealers.

Together, the firms are as different as night and day, which could be their strength or their downfall.

Executives of both companies seem committed to making the alliance work, and from the start they're making the right moves. Pirelli, for instance, has stopped selling tires through warehouse clubs in keeping with Cooper's approach to market.

The company also has vowed not to expand distribution of the Pirelli lines to the detriment of current dealers.

Cooper, which takes over North American sales and distribution for Pirelli under the agreement, plans to meet with all Pirelli dealers to minimize possible marketing conflicts.

The challenges are many, but the potential is great for both tire makers.

If all goes well, independent tire dealers soon will have a new full-line supplier to help them compete in the marketplace.

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