AKRON—J.D. Power and Associates has good news—and bad news—for tire dealers.
Based on its latest evaluation of the tire retailing arena, dealers must offer a reasonable selection of low-priced tires in order to survive long-term.
However, consumers do not perceive price differences among various brands to be too great, and price plays a relatively low factor in a customer's final buying decision.
"Tire retailers won't win over many customers on price alone, because virtually all tire buyers expect a competitive price," said Jeff Zupancic, senior manager of tire practice at J.D. Power. "The battle for consumers' business will be fought and won on the people and services front."
Bearing this in mind, J.D. Power revamped the evaluation criteria for its tire retailer satisfaction survey for 2000, putting greater emphasis on personnel and service.
Based on the new selection process, locally owned and operated independent tire dealerships were rated above all other channels of distribution, according to preliminary data presented at the International Tire Exhibition and Conference, held last fall in Akron.
Independent dealers ranked above average in all the selection criteria—people, service, facility, reputation and product selection—and were rated slightly ahead of car dealerships and service stations in the overall satisfaction index; national/ regional independent tire chains ranked next, also above the average.
Tire-manufacturer-controlled retail stores rated slightly below average on J.D. Power's satisfaction index, ahead of warehouse clubs, mass merchandisers and auto parts stores.
The people factor—comprising courtesy, knowledge, trust and empathy—makes up 32 percent of J.D. Power's satisfaction index rating. Service—quality, aftersales warranty etc.—makes up 29 percent; facility—cleanliness, location, hours of operation etc.—contributes 18 percent; followed by reputation, 13 percent; and product selection, 8 percent.
The Power study also suggests that the Internet does not yet play a significant role in tire retailing.
Without citing exact figures, J.D. Power said "very few" consumers use the Internet as part of their tire shopping and buying process, although its research showed that most tire buyers have Internet access and spend an average of 7.8 hours a week online.