A proliferation of tire retail marketing groups in recent years has proved successful in that it's rare to find a tire dealer who doesn't belong to at least one.
In fact, even a few dealers not participating in a marketing group wouldn't advise it for a small independent, especially one just starting out.
Don Frisby, owner of Frisby Tire Co. Ltd. in Ottawa, Ontario, said his 84-year-old retail/commercial dealership doesn't need to join a marketing group because he competes in his market on the strength of his organization. With all five of his stores located in Ottawa, Mr. Frisby said his dealership is ``sort of tucked away in a corner in eastern Ontario far enough away from Montreal and Toronto.'' Thus, he believes the business is left alone from the heavy-duty competition that often causes dealers to join marketing groups.
``I don't think (marketing groups) have anything to offer me,'' Mr. Frisby said. ``Our name in this city is associated with tires, much more so than any of the big chains. I've seen market surveys that show it.''
Frisby Tire posts about $20 million (Can.) in annual sales. Mr. Frisby admitted retailers like Costco Wholesale Corp. do eat into his gross profits and force him to watch his bottom line. But he said the size of his market, his dealership's longevity and his ability to get discounted insurance rates through the Ontario Tire Dealers Association are reasons why he feels a marketing group wouldn't benefit him.
Yet, Mr. Frisby cautioned that his situation is not for every tire dealer.
``I think marketing groups are a great thing for somebody who wants to get into the tire business, someone who's starting out, starting small and wants to get into it,'' he said. ``I think it's almost a must. I wouldn't dream of trying to start a business on my own without being affiliated with someone, because I don't think the support is there from the tire manufacturers for someone starting out in business.''
A Michelin T3 dealer who asked not to be named said it's difficult to find a dealership that's totally independent because many have been bought by larger chains. He said staying out of a marketing group now is like ``leaving money on the table.''
``Small, independent retail chains of six stores or less aren't going to survive in today's market by themselves,'' he said. ``You really have to be part of a larger group.''
A year ago, Bob's Tire & Alignment Center in Victorville, Calif., was not a participant in any marketing group because owner Jim Murray decided to do business based on reputation and servicing a niche. Since then, Mr. Murray retired and son Steve bought the business. He signed on to Bridgestone/Firestone's TireStarz program six months ago.
Steve Murray, who had always handled the dealership's advertising, said the program's co-op dollars for advertising is ``a plus'' as well as the time he saves from no longer needing to sit down and create his own advertising campaign. He remarked that ``nobody likes dealing with the Yellow Pages people'' and that placing his own ads is an inconvenience.
``It's easier when they tell you this radio spot is going to cost you this much money, and I can look at it and say, `Well that's fine with me because I'm going to be able to co-op that' and get (BFS) to pick up half of it or...whatever the proportion is,'' Mr. Murray said. ``It's not all coming out of my pocket.''
Mr. Murray said he thinks independent dealers need every advantage they can get against the Costcos and Wal-Marts of the world, and the advertising support offered by marketing groups definitely helps a business do additional advertising that it otherwise might not have done.
Besides the advertising support, Mr. Murray said he likes the national recognition that TireStarz brings his two-outlet dealership and the credit card program that helps qualify customers for large purchases. He noted that Bob's Tire could have qualified as a TireStarz dealer years ago because of the volume of Bridgestone, Firestone and Gillette brands it was buying.
But he's now getting better pricing and that, he said, helps maximize profits since his business is strictly a tire and alignment operation.
Has Mr. Murray's father disapproved of his son's decision to participate in a marketing group?
``Actually my father, who last year said `Naw, I don't want to be part of any kind of group like that,' has told me, `You know what? You've done pretty good with that. That was a good idea,''' Mr. Murray said.