Two longtime competing manufacturers' associate labels, Kelly and Uniroyal, have fared differently in the marketplace over the last several years, with each a study in marketing strategies, or lack thereof.
Goodyear and Michelin North America Inc. have been focusing on the value-conscious tire customer by boosting their lower-tiered Kelly and Uniroyal brands, respectively, in 2006.
The results aren't in for one company yet as to how successful it has been, while the other is raving over a ``record year'' for its brand. A look at both of their approaches shows one camp of dealers guardedly hopeful and another extremely enthusiastic.
At Goodyear, things have been quiet on the Kelly front for a long time as the Akron tire maker has concentrated on promoting the Goodyear brand in its turnaround strategy. Kelly Brand Manager Chris Magana said Kelly still is a strategic piece in supporting Goodyear's North American business, and the company has switched to local promotions for Kelly tied with its dealers from a national advertising campaign.
``We ended up marketing a lot more closely with our independent dealers vs. doing a national ad campaign,'' Mr. Magana explained. ``That's where our money and our focus has been. That's why it seemed like it fell off the radar.''
He said the company had formed an advisory board of about a dozen Kelly dealers as it had promised to do three years ago when it announced new investments in the Kelly brand, including original equipment fitments, at Kelleys Island, Ohio. At that event, Jon Rich, president of North American Tire, promised that Goodyear would put the Kelly brand into ``overdrive'' by increasing marketing dollars spent on the brand.
However, since then, some Kelly dealers have remained discontented with the brand. Ron Thrasher, vice president of Burggraf Tire Co. in Quapaw, Okla., said that until 2006, Goodyear hadn't done anything with Kelly. He contends Goodyear didn't commit to the promises made in 2003, and the result has been that Kelly has lost market share in the Midwest, including Burggraf's share.
``They just wouldn't invest in new sizes,'' Mr. Thrasher said. ``Their focus was on internal problems and the Goodyear brand. They didn't want to lose share in the Goodyear brand.''
Tania Warminski, vice president of Mercer, Pa.-based Flynn's Tire Co., agreed with Mr. Thrasher that Goodyear hasn't been putting out the Kelly brand in the more popular sizes, and yet tire prices continue to rise. Flynn's hasn't been competitive selling Kelly, which appears more to be a second-tier brand, she said.
``Everybody has to raise their prices, but when we're not getting the sizes, it's outdated, and you have to offer something else,'' Ms. Warminski said, adding that Flynn's still has back orders on many Kelly sizes this year.
The dealer advisory board had told Goodyear that dealers weren't interested in Kelly OE fitments, but rather more sizes, flexibility and control over advertising, Mr. Magana said.
As a result, Goodyear switched the OE fitments over to the Goodyear brand and has added more than 50 sizes to the Kelly lineup, he said. This year, Goodyear launched new products for Kelly dealers: Navigator Touring Gold, a premium touring tire; Safari Trex, a light truck tire; and Fierce, an entry-level tuner tire. Although not a Kelly brand, Fierce is exclusive to Kelly dealers.
``This high-performance, tuner segment really requires you to bring out sizes more quickly, and so you've really got to be focused on doing that and not trying to divide it up into multiple brands,'' Mr. Magana said, adding that the Fierce launch has been a success so far.
Goodyear also is supplying Kelly dealers the ability to tie their logos with the Kelly logo in ads and in their showroom displays, Mr. Magana said. The tire maker also plans to launch Internet-based sales training for the brand through its Web site.
Mr. Thrasher said that after meeting with Mr. Magana recently, he does believe Goodyear now is trying to rejuvenate the Kelly line, and he said Burggraf Tire will incorporate more of the new Kelly lines into its program. ``I think once they get their new products up and running, people will take a look at (Kelly),'' Mr. Thrasher said.
Michelin hasn't been trumpeting it, but 2005 was a record year for the Uniroyal brand in terms of volume and market share, according to Tom Jupena, Uniroyal's brand communications manager.
``I've been working on this brand for five years, and the enthusiasm is what I would consider to be at an all-time high, both from the dealer perspective and our sales organization internally,'' Mr. Jupena said.
Like Goodyear and Kelly, Michelin's focus with the Uniroyal brand is localizing national programs to its independent retailers, not national advertising. One program that Michelin considers a great success that is being expanded to Michelin Canada Inc. this year is Uniroyal dealer participation in youth soccer leagues.
``We've invested a lot into making this (soccer) program a winner for our dealers because that's our role in the portfolios-to make sure our dealers have the tools they need to be successful,'' Mr. Jupena told Tire Business. He noted that more than 1,000 Uniroyal dealers participate in the soccer program and choose to continue in it year after year.
Michelin and Uniroyal dealers last year donated $1.4 million in equipment and funds to local soccer leagues, said Kaz Holley, Uniroyal brand director. Michelin puts soccer leagues in touch with local dealers and gives away soccer balls to families of that league who visit a dealership. Dealers have found that the giveaways and the community presence drive increased customer traffic to their stores, Mr. Holley said.
``One of the things that just amazed me...was that 85 percent of the families that come in to get the soccer ball have actually never been in the dealership before,'' Mr. Holley explained. ``It's a wonderful way to introduce our dealers to the value consumers that the Uniroyal brand targets.''
In 2005's fourth quarter, Michelin introduced what Mr. Holley called two ``power'' Uniroyal lines: The Laredo Cross Country sport-utility vehicle tire and the Tiger Paw touring in H and V speed ratings. He said Michelin's strategy is to achieve broad market coverage with a small number of lines in order to simplify its message to both dealers and consumers.
During the week of May 8, Michelin is launching a national radio advertising campaign that will play up the Laredo Cross Country and Tiger Paw lines through the summer. At the same time, Michelin will offer dealers updated point-of-sale merchandising, Mr. Jupena said.
``Radio and soccer programs are the two anchors for marketing the brand this year,'' he said.
However, on the original equipment front, Michelin said at the Detroit auto show in January it is phasing Uniroyal out of its OE portfolio and in the future plans to only use the Michelin and BFGoodrich brands at OE.