CANTON, Ohio—Mad scientists and bubbling cauldrons aside, Goodyear is stepping into the "laboratory" to experiment a little with a new look and feel for its fledgling Gemini Automotive Care concept. As the replacement for the tire maker's tired Certified Auto Service (CAS) format rolls toward its first-year anniversary in June, the company has unveiled its stand-alone prototype Gemini outlet—with a caution that it would be a constantly evolving "work in progress," a place where experiments in customer service and marketing would be the norm, rather than the exception.
Brand new, with floors in the 10-service-bay area clean enough to, well, host a party on, Goodyear did just that. Members of the media and trade press were invited to a house-warming tour of the company-owned store March 28, three days before it officially opened for business in Jackson Township, a half-hour ride south of the company's Akron headquarters.
Several Goodyear officials used the opportunity to conjure an image of a customer- and family-friendly place featuring service desk modules with cherry-colored inlaid wood, the latest in shop equipment and an easy-to-maneuver showroom. There's even a "Wall of Pride" where personnel certifications and photos highlight the store's employees.
What they outlined is a program that far overshadows its 15-year-old CAS predecessor in components—but also in price.
How expensive is Gemini?
The program's new tagline says "We're Making Drivers Smile," but Gemini may not be having the same effect on some independent dealers, who face monthly fees that, on the low end, are five times those of CAS.
For Gemini's first year, dealer monthly costs vary from $835 per outlet to $1,430—compared with a flat $166 fee per CAS store.
However, Steven M. Schroeder, Goodyear's manager of trade marketing for North American Tire, was quick to tell journalists the second-year fixed-cost structure has been lowered to a range of $474 to $1,074 per store. The variance in monthly program fees takes into account the disparity in advertising and marketing costs determined by specific markets, based on population density, a Goodyear spokesman explained. Consequently, a dealer in a rural area might pay the low-end fee, while one in Los Angeles or New York City would face top-tier pricing.
The Gemini program is overseen by a dealer advisory board, with assistance from Goodyear, and Mr. Schroeder noted that, after a key meeting, the dealer group "challenged" the company to maintain the program's integrity but also reduce its cost, "so more retailers could come onboard."
One outcome has been that as Goodyear continues to expand the program's elements, it also will give retailers greater freedom to pick and choose the ones they wnat to use—and pay for.
One key component of the program that has become optional to retailers is database marketing, which includes monthly direct-mail pieces. A Goodyear spokesman said that element worked for some dealers but not for others. Some decided they'd prefer to do it on their own.
Gemini currently includes 750 company-owned and about 1,000 dealer outlets.
Mr. Schroeder told Tire Business that about 65 percent of the former CAS dealers have opted to switch to Gemini. Given the program's high standards, though, Goodyear did not expect all dealers in the CAS program to qualify for or desire to join Gemini, he added.
"We're confident that with the new program for year two, we should be able to get to our goal of 2,000 retailers by signing 200 to 300 more," Mr. Schroeder said.
At the store opening, Marco Molinari, vice president, sales and marketing, for Goodyear North America, said Gemini is "all about maintaining the credibility and competitiveness of the independent dealer channel."
Gemini, he stressed, is a "retailer-driven proposition" that allows dealers to set their own monthly fee by selecting from the program's menu of offerings, those elements they need to meet their own requirements.
Goodyear is 100-percent committed to Gemini in the dealer distribution channel, Mr. Molinari said.
That commitment is underscored by the tire maker's own retail stores, which he said are fully aligning their investment and marketing efforts with Gemini, including identification, vehicle services, training and product offerings.
The program's goal, he added, is to "provide a good shopping experience so that consumers leave the store with smiles on their faces.
"We're doing something that's important by investing in the small independent dealer channe.... We believe that still can be the place of choice for people looking for value, for a positive buying experience—not just for speed and price, as is the case in some other buying channels."
The Jackson County store will be treated as a "learning lab" to improve the customer experience, with the goal of being the best in the industry, said John Peer, Goodyear's director of retail operations.
The company, he said, will monitor and track customer—as well as employee—acceptance of the showroom, service counters, displays, waiting areas, service department—even the bathrooms.
Store Manager Kerry G. Bartman said the store will try out various approaches, such as modular, upscale furniture, "to make sure it works right."
This year, Goodyear plans to open 26 new company-owned Gemini stores remodel about 100 of its old CAS locations, Mr. Peer said. While not all Gemini locations nationally will look like the "lab" store—due to building and property configurations—plans call for all sites to be remodeled within two to three years to make them more appealing to customers.
The cost to re-identify and refurbish company and dealer stores varies from $2,000 to $8,000 per outlet, depending on the area it's in, Mr. Schroeder said.
All signage has been shipped to stores nationwide, but problems with zoning and variances have slowed its adoption in some areas. Goodyear said it has spent $5 million to convert its own stores' signage.
Heading into Gemini's second year, Mr. Schroeder said the program will include:
An enhanced Blue Ribbon (new-store development) program for Gemini retailers.
Goodyear lease-controlled facilities for Gemini retailers.
Development of a Goodyear "Gemini" performance tire brand.
Enhanced co-operative advertising and additional co-op funds based on total sales growth.
Availability of three dedicated Dunlop tire lines.
A Gemini-label tire was an advisory board recommendation, a company spokesman said. "It's being studied. They want a brand," he said. Taking into account difficulties in launching a new line, he said a Gemini tire "could happen in 2001."
Different from CAS, Gemini's objective is to "drive tire sales," Mr. Molinari said, as opposed to the old auto service center operation, which had service at its heart.
"Gemini is a tire and service proposition. That's why we refer to it as `automotive care' and not just auto service.
"As a tire company, we, of course, get our greatest returns by selling more tires. We believe Gemini is a format that mixes tires and service."
With CAS going away, and some dealers declining membership in the new program, Mr. Molinari said Goodyear's dealer channel has migrated in two directions: those who had, for instance, a 65:35 or 70:30 mix of service to tires and are predisposed to Gemini; and others who "have migrated to tires and are focusing on tire retailing.
"The way we approach them is with our own brand under the G3 umbrella, focusing on tire sellout."
The company's so-called G3 strategy symbolizes its multibrand, good-better-best tire offerings, with the top-line Goodyear brand followed by Dunlop, then Kelly.
Aside from new signage and reworked showrooms, Gemini's big gun remains its advertising budget. Of the amount pooled from monthly program fees, Mr. Molinari said about 63 percent—roughly $13 million—is being used nationally for advertising. An equal amount is being spent on local levels, Mr. Schroeder said, through co-op accruals.
"That $13 million—Goodyear's investment in the Gemini brand—is probably considerably more than most tire manufacturers spend on their tire brands," Mr. Molinari pointed out.
Still, some dealers have decided Gemini is not in their stars, based purely on financial considerations.
One former CAS operator, who asked that his name not be used, told Tire Business he sent a detailed letter to Goodyear explaining why he won't sign up for Gemini, although he still wants to handle the company's brands.
His basic objection: the program's cost, which he felt was too high simply for point-of-purchase displays and new uniforms. He said his multi-store dealership would have to spend tens of thousands of dollars annually for Gemini, and he feared his sales wouldn't make up for that.
Mr. Molinari acknowledged he has heard complaints about Gemini's cost structure being prohibitive. However, the program contains 17 elements, he said, and "to cost all that out was a certain dollar amount. Everything that is paid by the retailers goes into the stores 100 percent, and then back out to fund those 17 activities."
The cost is higher, he conceded, but as with anything else in life, "we had to deliver value for the investment."
Dealers have to "decide what that investment is, and also whether it delivers the value."