Treadways Corp. has developed a product screen management program designed to streamline its Laramie, Jetzon, Telstar and Eldorado brand offerings and simplify stock-keeping for dealers.
With the concept, dubbed ``Powerline,'' Treadways will replace its former layers of ``entry,'' ``good,'' ``better'' and ``best'' tires with only ``good'' and ``premium'' applications. Some sizes will be phased out and others added, company officials said.
The idea of Powerline, they said, is to increase market share by offering more complete product lines while at the same time making inventories easier to manage for both dealers and Treadways.
``The result for the customer and us is that we have a significant reduction in SKUs and at the same time we're able to accomplish a dramatic increase in market coverage,'' according to Lyle Symonds, vice president of sales and marketing for the firm's Eldorado brand.
He said, for example, that a size in his brand can have as many as seven different SKUs with the various white stripes, speed ratings and other features. The Powerline concept can take that line down to three SKUs.
The overall result is a reduction of about 300 SKUs-some 30 percent-among the four brands, CEO Dan Wire said. Within the ``good'' tier, each brand will have about 55 SKUs, and within the ``premium'' tier, each brand will have about 67 SKUs, he said.
Mr. Wire added that the move should improve dealer loyalty, Treadways' already strong fill rates and response times as well as help dealers reduce inventory, some by as much as 30 percent.
``We believe this will make us a much better supplier,'' he said.
The changes will be rolled out at the beginning of November and should be complete by mid to late second quarter, 2004.
As the East Norriton-based private brand marketer brings sizes in and out of its product screen, it will create a new family brand, Triton, to act as a supplemental brand available to all Treadways dealers.
The brand, which will be produced by Treadways' current manufacturers, will comprise some less popular tire sizes as well as new sizes that have yet to reach the appropriate level of demand to include them in one of the company's primary brands.
``At some time we can justify bringing (a new tire size) in, but maybe we can't bring it in all four brands,'' said Bill Hirst, vice president of sales and marketing for the Jetzon and Telstar brands.
``So we bring it in in Triton, and as it develops and as the popularity increases we move it out of Triton into the branded merchandise.''
In the same way, products can move out of the brands as their popularity wanes.
``The key here is that we have something for our dealers to sell in each step of the lifecycle,'' Mr. Hirst said.
Mr. Wire said the Triton brand is likely to carry about 15 percent of Treadways' products.
While Treadways looks to gain dealer loyalty as well as some relief from SKU proliferation for itself, the marketer isn't the only one to introduce this type of system. Earlier this year, TBC Corp. of Memphis, Tenn., introduced its own Power Line concept to streamline its lines and reduce SKUs.
Each TBC private brand has its own line, and they include about 45 different sizes in 14- to 17-inches, 50 to 80 series and S-, T-, H- and V-rated. Each brand also has a good-better-best program.
But Mr. Wire said Treadways' program is more in-depth than the TBC program because the Treadways version is essentially a total reconfiguration of its brands while TBC created power lines within its existing lines.
``We're in a sense almost wiping the slate clean and starting over with our products,'' Mr. Wire told Tire Business.
He said Treadways also made a ``multi-million'' dollar investment in new molds to produce unique tread designs to further distinguish each brand.
``The brands will be even stronger,'' Mr. Wire said. ``We're doing this to strengthen the brands.''
He said each brand division will develop marketing materials to help roll out the program, though the focus won't necessarily be on signing new dealers just yet.
``We're certainly looking for new business, but to a great extent our initial thrust is going to be getting in front of our current dealers and distributors.''