The day was misty and foggy, the waves of Lake Erie were churning, but the weather wouldn't stop Goodyear from making its point to Kelly dealers: the Kelly brand is about to surge ahead.
On Kelleys Island, a summer vacation destination in Lake Erie's west basin, Goodyear toasted a renewed relationship with its Kelly dealers and a resurgence of the brand. The Akron tire maker plans to step up investment in the brand and expand the line into the original equipment market with a few fitments by 2006/2007 as part of a strategy to increase market share and improve brand value, Goodyear executives said.
And perhaps most importantly, the Kelly brand will remain a product for Kelly dealers and be off limits to mass merchandisers, dealers were told.
``We're excited to put Kelly into overdrive,'' Jon Rich, North American Tire president, told dealers at a June 12 press conference. He emphasized that more marketing dollars would be spent on the brand as Goodyear pushes to broaden its distribution.
Mark McDonald, director of Kelly Brands marketing, announced that Goodyear will reinstate a Kelly dealer advisory board numbering 10-15 dealers that will meet a couple times a year with Goodyear executives to discuss issues relevant to the brand. The last time a Kelly dealer advisory board met was during the early 1990s.
Goodyear also will integrate its supply chain, from ordering down to payment, so that one department dedicated to the Kelly brand will handle all these steps instead of the current system of 13 departments, Mr. McDonald said. Pat Hurley, vice president of the North American supply chain, will be responsible for the new department.
``In total, the actions that we are taking for independent tire dealers will provide the framework for a resurgence of the Kelly brand, which is a key element of our company's road to recovery,'' he said. ``We want our loyal Kelly dealers to know that the road to recovery leads directly through the independent tire dealer.''
Armed with statistics indicating a near 40-percent loyalty factor among new-car purchasers in replacing their original tires with the same brand, Mr. McDonald said that provides a tremendous opportunity for Kelly dealers. It will allow them to capitalize on the replacement loyalty that will couple select American automobiles with ``America's original tire brand.''
He and other Goodyear executives declined to comment on which OEMs will carry Kelly fitments as those contracts are not finalized yet. However, during a question-and-answer session with reporters, Goodyear executives acknowledged the fitments would be S- and T-rated tires for the broadline market.
Additionally, Mr. McDonald told Tire Business those fitments would be on 2006 and 2007 vehicles, both cars and trucks, and that the Big 3 auto makers have expressed positive attitudes about Kelly.
The OE sizes will fit 185-, 195- and 205-aspect ratios on 15- and 16-inch rims, he said, adding that Goodyear's profile of a Kelly consumer shows that such a buyer has a lower income than a typical Goodyear consumer and shops for deals. Hence, it makes sense to take Kelly to the OE level in order ``to drive consumers to Kelly dealers.''
Mr. McDonald promised that Goodyear would make smart decisions that are mutually beneficial to both dealers and the Kelly brand. Part of that plan includes hiring a national sales manager exclusively dedicated to the Kelly brand and aligning Goodyear's marketing and ordering personnel to handle one brand only, be it Goodyear, Dunlop or Kelly. The tire maker hopes these initiatives will bring back the ``old culture'' Kelly dealers enjoyed when the brand had its own subsidiary in Cumberland, Md., Mr. McDonald told Tire Business.
Goodyear also told dealers it plans to introduce 50 new sizes for the Kelly brand in the next 18-24 months, with the focus being on line simplification and SKU reduction. Beginning in 2003 and continuing in 2004, Goodyear will increase spending on Kelly brand advertising, which will be targeted to local markets and will include dealer tag lines, thus emphasizing territory integrity. Ad spots will be slated for ESPN this fall as well as for morning sports and talk radio shows.
Professional bass fisherman and host of TNN's ``Outdoor Magazine'' Hank Parker attended the event on Kelleys Island to emphasize his role as Kelly Tires' official spokesman and pledge his support in the brand's marketing effort.
``The Kelly family is dedicated to that brand and has built a business around the brand, and you guys deserve support,'' Mr. Parker told a cheering crowd of dealers.
After the island event, Chuck Sinclair, Goodyear's newly named senior vice president of global communications, acknowledged to Tire Business that the reason for all the new Kelly initiatives is that the brand ``hasn't gone anywhere'' in recent years and ``can't afford to stand still.'' He said the brand is too good not to build upon and promote to consumers.
The Kelly brand is estimated to hold a 3- to 4-percent share of the North American replacement market for passenger and light truck tires. Earlier this year, Mr. Rich told a conference of financial analysts there was room for Kelly to grow since the brand is sold in less than half the zip codes in the U.S.
Mr. Sinclair said Goodyear believes Kelly's success will be key to the tire maker's own recovery from its recent financial doldrums.
``I think dealers would agree that this is a great thing for Kelly Tires if we execute it properly,'' he said, admitting, ``I'm sure there will be skepticism.''
If there was skepticism that day, then Kelly dealers kept it to themselves. Most told Tire Business they were pleased with Goodyear's plans for the Kelly brand and the organizational changes that mirror the former Kelly-Springfield Tire Co.'s operations. Joe Karnes, president and CEO of Burggraf Tire in Quapaw, Okla., said Goodyear's announcement was a step in the right direction of reinstituting the old Kelly culture.
He said he liked the idea of Kelly going OE because the brand will gain recognition and credibility with consumers as well as open markets dealers haven't seen before. Mr. Karnes also said he was glad Goodyear is bringing back the dealer advisory board.
``Our voice will be heard,'' he said. ``Sometimes we talk to our field representatives, and it doesn't always get back to management.''
Joe Flynn, president of Flynn's Tire Group in Mercer, Pa., said that if Kelly stays in the dealer network, the OE fitments definitely could be very good for dealers. He said he's excited that Goodyear is placing an emphasis on Kelly again, noting that since Kelly was integrated into Goodyear the brand has gotten lost in the ``Akron shuffle.''
``I think they have the right intentions,'' Mr. Flynn said.
Dennis Leipold, owner of Leipold Tire in Cuyahoga Falls, Ohio, did not attend the Kelleys Island event but told Tire Business he thinks Goodyear has recognized it should have adopted the Kelly culture when it integrated the brand and closed Kelly-Springfield in Cumberland. He said Kelly's move to Akron forced him to plan his inventory orders more carefully because of lower fill rates, and Goodyear's attitude the past few years has been that Kelly was not a brand that brought in the ``meat and potatoes.''
Mr. Leipold said he is now encouraged by what he called ``genuine care'' for the Kelly brand that he's seen from Jack Winterton, Goodyear's director of dealer sales/consumer tires, and Mr. Rich.
``I hope the cold, corporate culture is gone,'' he said.
Goodyear especially needs to stick to its pledge to keep Kelly within the independent dealer channel, Mr. Leipold said, adding that he hopes the OE positioning and advertising campaign will bring ``top-of-mind'' brand awareness to consumers who would otherwise buy competitors' tires.
``It's like moving from the farm league up to the majors,'' Mr. Leipold said of Kelly's OE position. ``It'll give a name to the tire. We're being threatened by Toyo, Kumho and Yokohama...It'll be a good thing for Kelly to stave off some of these foreign manufacturers that are making their mark in the market.''