MEMPHIS, Tenn.—It's one thing to simply offer any old tire brand. Depending on the market, they often can seem to be a dime a dozen. More often than not, it's how a brand—especially a private brand—is differentiated from its competition and merchandised that can make or break its success.
After years of indisputably prosperous sales of its core private label Sigma, Cordovan and Multi-Mile tires, TBC Corp. has decided to go against the philosophy that you just don't tinker with success.
In order to ``add more value'' to those popular brand lines, North America's largest private-label tire marketer recently introduced an ``authorized dealer'' program. It's aimed at boosting consumer awareness of the brands while increasing distributors' sales, profits and strengthening their ties with their retail dealer customers.
Rather than just a primer on how to sell a brand, call it a ``coordinated retailing philosophy.''
``These brands have a lot of advantages, including breadth of product, exclusive territories and quality service,'' James R. Pascover, Memphis-based TBC's director of communications, explained. But the company believes it can add value to them ``by creating a coordinated merchandising and retailing value-added package.''
The distributor-focused program, tested in the fall of 1998 with a couple of wholesale distributors, was officially launched earlier this year at TBC's annual marketing meeting.
The nationwide rollout, on a distributor-by-distributor basis to those who qualify, is under way. It is following TBC's ``geographic footprint''—areas where the company is strongest and has the majority of its customers, including the Midwest, South and Northeast.
Gary M. Paulson, an 18-year TBC veteran recently named national sales director, said more than 600 independent tire dealers have thus far signed on to the program through the company's contract Cordovan, Sigma and Multi-Mile wholesale distributors.
Various levels of dealer participation are offered by each distributor, he said, and, ``dependent upon the dealer's participation level, he or she may receive free merchandising support materials, access to TBC's nationwide `Today Credit Card Program,' and other miscellaneous value-added programs.''
Signaling its ``serious commitment'' to the authorized dealer program, Mr. Pascover said the company designated a member of its sales department, J.B. Bates III, to coordinate its rollout and oversee distributor training.
To explain the benefits of becoming an authorized dealer, Mr. Paulson said TBC supplies each participating distributor with a dealer flip chart presentation—customized to meet each distributor's local market requirements. TBC also provides promotional brochures and a sample ``Authorized Dealer Product & Warranty Guide.''
Typically, distributors handle only one of TBC's key Cordovan, Sigma or Multi-Mile brands, since they were ``designed to be sold next door to each other, not together, with consumers unaware that there's a resemblance,'' Mr. Pascover pointed out.
Authorized dealers are tied to the program with several ``hooks,'' he added, such as price discounts or exclusivity in return for substantial opening orders and annual commitments.
Mr. Paulson believes the new program has ``substantially increased our presence with participating dealers, both in terms of product and how our products are presented to the consumer.''
Distributor promotional packages for each of the three private labels are essentially identical, save for the names of the tires.
A Cordovan sales kit touts the brand as helping a seller ``stand out in a crowded market'' because it is ``dedicated solely and exclusively to the independent tire dealer network.
``You won't find Cordovan tires in warehouse clubs, or being sold directly to the consumer through some aftermarket magazine....''
Each kit outlines the brands' full line of passenger, light and heavy-duty truck, farm and specialty tires, nationwide limited workmanship and materials warranties and the availability of dealer-sponsored nationwide road hazard warranties.
``To me, the warranties are the heart of marketing a private brand tire,'' Mr. Pascover said, ``because a consumer may be interested in a private brand, but is more familiar with a comparable flag brand. That's where a warranty may clinch the sale. If it's not there, it can make it harder to sell the tire.''
The new package also includes materials such as ads, flyers, bargain sheets, camera-ready artwork, interior and exterior signage, point-of-purchase banners and posters and promotional kits for seasonal products.
Though some margin compression continues among flag, associate and private brands, private labels have usually offered dealers a higher profit.
While Mr. Pascover acknowledged ``in some cases, private brands exist as a dealer's opening price-point pitch, (their) real power is to compete at the level where the flag brand is bringing traffic into the store...and private labels have proportionally more margin vs. comparable flag brands.''
Mr. Paulson said TBC is already working on a ``Phase II'' version of its authorized dealer program for launch next year, and is analyzing what enhancements can be added ``in a cost-effective manner'' to the current program.
``We have also established a fairly significant database of authorized dealers,'' he said, ``and we, in conjunction with our distributors, are analyzing how this data may best be utilized.''