On the same day major league baseball players began reporting to spring training, Michelin Americas Small Tires (MAST) gathered its own team of tire dealers in south Florida to prep them on the Michelin Alliance dealer program's upcoming season.
Sitting on a stage resembling the studio of cable television's SportsCenter program, Michelin Alliance ``head coach'' Herb Johnson unveiled plans to integrate the Alliance marketing programs in Canada, Mexico and the U.S. into a single North American entity. It was all part of an effort begun last year to re-energize and grow the dealer program.
Combining the Alliance programs in North America will bring together about 550 dealerships representing nearly 2,000 locations, he said. And it will enable MAST to negotiate better deals with suppliers providing value-added programs for Alliance participants.
The integration already is under way, as are negotiations with vendors. It should be completed by next year's Alliance Customer Meeting, which will bring all three programs together, said Mr. Johnson, whose official title at Michelin is general business director for Alliance.
The Alliance program has 208 dealers in the U.S., 168 in Canada and 180 in Mexico.
In establishing its new Alliance team, Michelin has opted for longer-term commitments, Mr. Johnson said. To be part of the MAST Strategic Alliance, dealers as of last year must sign a three-year agreement-vs. single-year deals previously-and agree to buy at least 51 percent of their tires from Michelin. They also must purchase a minimum of 5,000 tires from MAST annually.
Mr. Johnson said that while the goal is to expand the Alliance program in the U.S., the first priority is to maintain the current number of participants and help them expand their businesses. The company is more interested in adding quality points of sale than quantity, he added.
At the Feb. 18-22 meeting, attended by about 200 U.S. Alliance dealers, Michelin executives repeatedly stressed the importance of Alliance to the firm's overall distribution efforts, noting the company has no retail stores of its own in the U.S.
Michelin is not as well positioned in the U.S. marketplace as its two major competitors that operate their own retail stores, said Jean-Michel Guillon, executive vice president of Michelin North America Inc. and COO of MAST, elaborating on comments he made during a speech at the meeting.
As a result, he said, ``Alliance has a major role to play for us in the future.'' Michelin, he said, does not always have a clear link between the brand equity it brings to the consumer and the retail store.
``You have other (distribution) channels that have their own brand, and they are not clearly identifying Michelin as a key brand that they support,'' he said. ``We need, if we want to continue to build brand equity with the consumer, to have strong identified retail supporters identified with our brand.''
During his speech, Mr. Guillon also referenced how the growth in high-performance and sport-utility-vehicle tires and the corresponding increase in tire sizes presents opportunities for dealers.
Five years ago, 54 percent of new cars were fitted with tires 15 inches in size or smaller, he said. For the 2005 vehicle model year, only 18 percent of new cars will come with 15-inch or smaller tires, and 45 percent of new cars will have 17-inch or larger rim diameters.
``What this all points to is more and more complexity in product trends in our market,'' he said. ``However, with this comes an opportunity for forward-thinking companies to capitalize on the increased profitability associated with this complexity.''
Mr. Guillon also promised Alliance dealers improved supply in 2004, noting, ``We can't be a premium partner with substandard fill rates.''
While he wouldn't provide specifics about the company's order-fill percentage, he said Michelin needs to achieve sustained fill rates above 90 percent. ``This will be my commitment to you, and we will deliver sooner than later,'' he said.
Dealers attending the meeting also learned about several new Alliance initiatives for 2004.
Among them, the company will introduce a training effort called the Alliance Certification Program that will provide dealers ``with everything they need to know to sell and service a tire,'' Mr. Johnson said.
The training will have three levels starting with bronze, which will provide basic tire information, and progressing to gold. Every Alliance dealer will need to have at least one certified employee, Mr. Johnson said.
Michelin is currently selecting the first six cities in which to launch the training program.
Also in 2004, Michelin will expand its test of an advertising concept for Alliance dealers. After initially piloting a campaign in the Pittsburgh area, the tire maker is taking the concept to four additional metro markets. ``We're looking to establish a consistent program that over time will go across the U.S.,'' he said.
What that campaign will look like is still up in the air.
In Canada and Mexico, the company is marketing the program to consumers as Alliance Tire Professionals but can't do so in the U.S. because another company owns the name. ``We are examining how we can take the Alliance program and market it to consumers'' in the U.S., Mr. Johnson said.
All of these initiatives seemed to play well with dealers in attendance.
``If they keep their word at what they say they will do, we could be a powerful force in the U.S.,'' said Jerry Rosenthal, owner of Tire Hut Inc. in Fort Lauderdale, Fla.
A longtime Alliance dealer, Mr. Rosenthal said he also likes the idea of developing the Alliance name and certification program so it means something to consumers.
Ron Burt, co-owner of Burt Brothers Tires in Bountiful, Utah, agreed. ``We need them to stay out there and advertise and get the Alliance dealer some recognition,'' he said. ``Alliance needs to mean something. They have to make the name synonymous with quality.''
To improve communication with participants, Michelin also announced the establishment of an Alliance Customer Council consisting of nine dealers, each elected to three-year terms.
Members include: Mr. Burt; Bob Beasley of Beasley Tire Service, Houston; Paul Bernstein of Delta World Tire Co., New Orleans; Jeff Buettner of Tire Distributors Inc., Winchester, Va.; Janine Calabro of Calabro Tire & Service, Pittsburgh; Ed Hogan of Hogan Tire Co. Inc., Woburn, Mass.; Jerry Nerheim of Waukegan Tire & Supply, Waukegan, Ill.; Ara Tchaghlassian of ATV Inc., Irwindale, Calif.; and Jim Whaley of Jim Whaley's Tires, Dothan, Ala.
``I like the fact that they (established) the dealer council so that they can get feedback from the dealer,'' Mr. Rosenthal said.