What, precisely, is the need for tire dealer marketing groups? What do they do for independent tire dealers, and can dealers survive without them?
First of all, they can survive without marketing groups, top personnel at five of the largest groups in the U.S. agree. But not easily, and not in all circumstances.
``They can survive much more successfully with marketing groups,'' said Bill Pace, manager of Bridgestone/Firestone's TireStarz program. It boasted 660 members in the last Tire Business franchise/marketing group survey, though Mr. Pace noted that the group enrolled 22 more dealers in May 2003 alone.
``Tire dealers in small towns who've been in business 40 years can continue to be successful, but they need a marketing group if they're going to grow,'' he said.
It's possible for independent dealers to survive without marketing groups, ``but the odds are stacked against them,'' said Rick Lang, consumer division manager for St. Cloud, Minn.-based Royal Tire Inc. The company's TireOne program now has 243 member stores.
``The discounts marketing groups can offer on things like advertising, training, credit cards and uniforms totally reduces their costs,'' Mr. Lang said. ``I don't know of anyone these days who doesn't need to reduce costs.''
The whole question of survival is tied up with public profile and identity with consumers, according to the heads of marketing groups. That-along with the sort of buying and marketing power that only larger dealership chains can provide-is what they feel they can provide for the independent dealer.
Officials at American Car Care Centers Inc., for example, quote Dan Mingione, president of Dodgeville Tire & Service Center in Dodgeville, Wis., and one of ACCC's more than 850 dealer members nationwide: ``I went into business for myself, but not to be by myself.'' At a time when larger chains and company-owned stores are extending their reach exponentially, marketing groups can provide things to small, mom-and-pop dealerships that level the playing field for them.
ACCC's members operate 1,083 outlets.
``I think different groups provide different things, but two things they all provide are a common identity and economies of scale,'' said Jerry Bauer, president of Bauer Built Inc., whose Tire Shop program currently has 243 associate dealers. ``They provide strength through numbers.''
``There's a lot of professional expertise we can offer tire dealers that's hard to get,'' noted Dave Snyder, vice president-small tires marketing and sales for Tire Centers Inc. and head of TCI's T3 dealer program. TCI, a Michelin North America Inc. subsidiary, has 394 T3 affiliates as of May 31, Mr. Snyder said. ``If we can take the small, individual tire dealer, make him part of our organization and bring him up to speed with the large chains, we've done our job.''
The services marketing groups offer tire dealers can vary widely, but they always include name identification and price discounts for the bulk purchases the groups negotiate for tires, oil, parts and other merchandise. Road hazard warranties and credit cards usually are part of the package, as are uniforms. ``The more elaborate programs might offer capitalization and cooperative ads,'' Mr. Bauer said.
One major part of the T3 program is the makeover of each participating dealer's showroom, according to Mr. Snyder. ``We take pride in making it a much more attractive, much more pleasant place to do business,'' he said.
Officials of ACCC, meanwhile, cite their exclusive programs as stellar attractions for prospective dealers. These include the group's Tire Protection Freedom plan and Coast-to-Coast National Undercar Service Warranty; its Preferred Customer Credit Card; and its exclusive ACCC product line that includes the company's own private label tires.
An extremely important part of the TireStarz program-and one that prospective dealers ask about constantly-is its comprehensive educational program to keep independent technicians up to date with the latest automotive, business management and tire technologies, Mr. Pace said.
TireStarz offers financial records services at the Nashville, Tenn., headquarters of Bridgestone/Firestone, and ``lots of educational programs'' through its Educational Group based in Bloomington, Ill., he said. ``The group holds educational meetings on various and sundry subjects.''
At TireOne, excellence in training is the organization's pride and an overriding plus for prospective members, Mr. Lang said. ``We supply a venue for employees to get tire, auto repair and customer relations training,'' he said.
``The average independent dealer is so busy with everyday matters that he doesn't have time to think about training. Our success is in focusing on training-helping the dealer to become better at his job.''
The features that attract individual dealers to a specific group vary as much as the dealers themselves, the groups said. ``In Texas, one dealer was very excited about our health insurance plan, while others didn't even ask about it,'' Mr. Snyder said. ``Some dealers go bonkers over our bulk oil plan because we can save them a lot of money, but others don't even carry oil.''
Marketing groups obviously offer a great deal to the one- or two-store dealership, but can they help the growing chain with 10 or 15 stores? According to the group executives, that depends very much on the group.
``My program is not designed for multi-location clients,'' Mr. Bauer said. ``Mine is focused on the small independent retailers.''
On the other hand, ACCC points with pride to its strong relationship with Valley Forge Truck & Auto Centers, a Philadelphia-area chain with about a dozen outlets.
T3 is designed for the small individual dealer, yet it has signed about a half-dozen small chains with 10 or more locations, according to Mr. Snyder. ``To have that many stores, they probably do a lot of things that we otherwise would do for them,'' he said. ``I guess those larger affiliates who signed on with us did so because we can do those things better than they can.''