PALM DESERT, Calif. (Jan. 18, 2002)—Larry Day doesn't really like the phrase “Flight to Quality.”
It's not the phrase's proposition that the TBC Corp. president and CEO is unhappy with, but rather its preposition.
“(Major manufacturers') desire to be all things to all people, it may be argued, has represented a 'flight from quality,'” Mr. Day told whole-salers and dealers at TBC's Private Brands Di-vision Marketing meeting, Jan. 6-10 in Palm Desert. “(It) represents in turn a major opportunity for the independent dealer who can provide a quality purchase experience.”
The original phrase, coined last year by Goodyear Chairman Sam Gibara, alleges that tire buyers, in the wake of massive recalls of Firestone tires, would flock to brand names. Mr. Day told the audience, which included several Goodyear executives, that the opposite is true.
He prefaced his remarks by saying, “this might make our suppliers a little uncomfortable. So, don't forget—I love you guys. It's tough love, but it's love.”
He went on to say that there has been and will indeed continue to be a flight to quality among replacement tire consumers, but that the flight is not to major brands, perhaps not to brands at all. He said the actual flight is one to service, in particular the service of the independent tire dealer.
Consumers, Mr. Day said, covet the attention and personalized service that dealers can give them, calling service a “quality option” in the tire business.
In an earlier session with reporters, Mr. Day elaborated on the topic. He called the notion that consumers prefer branded tires “absolutely ridiculous,” pointing out that Ford's recall last May of 13 million Firestone tires mandated replacing major brand tires with other major brand tires.
The numbers seem to support Mr. Day's theory that if there is indeed a flight to major brands at all, there is an equal or greater one to private brands. He pointed toward the 2001 sales of TBC's Big O Tires Inc. subsidiary as evidence. Big O, he said, “had a modest increase while the industry was down.”
“Then you look at Tire Kingdom, which actually has a healthy unit increase, and their mix has gone from 75 percent major brand to somewhere around only about 60 percent major brand today, with our TBC product having a major impact on that,” Mr. Day said. (TBC also owns Florida-based Tire Kingdom Inc.)
Mr. Day does not dispute the flight to quality aspect regarding consumers' quest for safety and quality. But he called the notion that people are avoiding private brands with that in mind “ludicrous.”
“We just don't see it in our numbers,” he said.
While talking with reporters—and without prompting—Mr. Day took one final jab at the manufacturers and at the phrase in general.
“When CEOs of major rubber companies stand up and speak, they get quoted, and people often take that as the gospel,” he said. “We're not just going to let it stick like that and let stuff like that slip into the marketplace unchallenged. We don't agree with it.”