DURAND, Wis.—Bauer Built Inc., which generates about 20 percent of its revenue from tire wholesaling—mostly to small-volume purchasers—soon will offer a new marketing program targeted at such retailers. President Jerry Bauer said the new program, called ``Tire Shop,'' is intended to provide a marketing umbrella and support services for those Bauer Built associate dealers unable to satisfy the minimum purchasing requirements of existing programs, such as Bridgestone/Firestone Inc.'s Tire Starz.
Besides sharing the Tire Shop name and taking advantage of economies of scale to develop common signage, point-of-sale and other materials, Tire Shop members also may choose to cooperate in group advertising efforts, Mr. Bauer said.
While all the details are not yet finalized, he said, Tire Shop will be similar in concept to BFS's Tire Starz program, which also is targeted at small-volume purchasers. However, unlike that BFS program, Tire Shop will not be tied to any specific brands nor will it require as large a minimum purchase on the part of participants.
Bauer Built, which operates 23 combination retail/commercial outlets in its own right, also participates in the Tire Starz program—acting as both a wholesaler and retailer of that tire maker's Bridgestone, Firestone and Gillette brands.
In 1998, the Durand-based dealership, North America's 15th-largest retreader of medium and heavy truck tires, generated the lion's share (approximately 70 percent) of its $112 million in tire-related revenues from the sale of new and retreaded commercial tires.
The company is in the process of converting its former Bandag-franchised retreading shops to Michelin Retread Technologies Inc. (MRTI) franchisees.
Bauer Built, with an annual production capacity of 200,000 units and more than $10 million in retread sales in 1998, was one of seven former Bandag franchisees listed by Bandag Inc. in a pending lawsuit against MRTI, in which Bandag accused the Michelin subsidiary of pirating its commercial tire customers.
Mr. Bauer said Bauer Built has converted five of its original seven former Bandag shops to MRTI retreading processes to date. One former Bandag shop was closed and its operations consolidated with those of the company's Durand facility. Conversion of the remaining former Bandag shop should be completed by January.
He said all but one of the six converted Bauer Built shops are equipped to use MRTI's Pre-Mold (precure) retreading process. The lone exception is the company's Durand shop, which is considered a ``hybrid'' in that it uses both MRTI's Pre-mold and Custom-Mold (mold-cure) processes.
Meanwhile, the company is scouting locations in the Chicago area for a new MRTI retread shop, which, like the company's Durand facility, may also turn out to be a ``hybrid.'' However, no final decision has been made as yet, Mr. Bauer said.
Ultimately, he said, Bauer Built expects to open another MRTI-franchised shop somewhere in the Northwest.