SAN ANTONIO—Continental Tire North America (CTNA) Inc. unveiled several major strategic initiatives to more than 200 of its distributors and Gold dealers during a meeting March 15-16 in San Antonio, including enhancements to the Gold incentive program and General brand product portfolio.
The company said its strategic initiatives include:
- Ensuring cost competitiveness through leaner processes and lower production costs;
- Penetrating replacement markets further in North and South America, while maintaining a strong original equipment (OE) position;
- Establishing Continental as the top premium brand image in the market; and
- Revitalizing General as the “All-American” brand, maximizing value to customers and offering a young and fresh product line.
According to Andreas Gerstenberger, vice president of sales and marketing for Conti's passenger and light truck replacement tire business unit, CTNA hopes to achieve unit volume growth in 2007 of 1.5 percent to about 30 million units.
This can be achieved, he said, by focusing on retail distribution; offering an enhanced product portfolio; leveraging the company's OE position; increasing the company's winter tire business in the U.S.; increasing marketing and selling support; and enhancing its dealer Gold Program incentives.
Carl Casalbore, director of dealer sales, told dealers there would be a price “realignment” effective April 1, to bring the company's products in line with those of its major competitors. Some prices will increase and others will be lowered, he said.
Acknowledging that CTNA over the last few years has been “a bit unstable with pricing,” Mr. Casalbore said the goal now is to focus on stabilization. “We will let the brands do the discounting—we do not want to discount the brands,” he stressed. “We will not take the Continental brand and bring it down to the General (price) level.”
He also promised more of an effort would be made toward “pull” rather than “push” marketing strategies. By leveraging CTNA's 20 percent original equipment position in North America, he said, the company would work to pull retail customers into its dealers, rather than pushing products on price.
That approach would convert OE customers to replacement customers, according to Travis Roffler, director of marketing,
Jeremy Lewin, product planning and brand development manager, said 2007 is the first of three crucial years in the revitalization of CTNA's product portfolio, starting with the General brand, but also including extensions in the Continental brand lineup.
The ContiProContact will become the “flagship” of the Continental brand and will be supported by a 51-SKU line expansion, Mr. Lewin said. CTNA's Continental brand now also includes the ContiSportContact 3 launched last October for American market high performance vehicles. Efforts also are under way to expand sales of the ContiWinterContact tire in North America.
General
Mr. Roffler explained to dealers the General brand revitalization strategy, including development of a new logo to replace the decades-old General Tire “G” with a more contemporary “GT.”
“General will become the new, fun, exciting lifestyle brand for the U.S. market,” he said. Some 50 million General Tire advertising impressions are scheduled for 2007, with import car and light truck owners a primary target of the ads. Sponsorships—including partnering with Lucas Oil on motorsports events telecast on ESPN2—also will play a role in recognition of the General brand among motorsports enthusiasts.
Mr. Lewin presented information about new General products such as the Altimax line, which will grow to 68 offerings from 37, while the Exclaim UHP will nearly triple to 91 from 32.
The Altimax line includes the RT, Arctic and HP—the latter tire being dubbed “A smarter tire for smarter drivers.”
At three positions on the Altimax HP center tread rib, the words “Replacement Tire Monitor” appear. When the tire is worn to its minimum safe depth, those words change to “Replace Tire.” The Altimax HP also has special siping at three shoulder locations to indicate abnormal wear caused by wheel alignment problems.
In addition to print advertising, the Altimax launch is being supported by a Web site, www.takeittothemaxtour.com that coincides with a “Take It To The Max” music tour that will visit six U.S. cities. An associated sweepstakes will give entrants a chance to win a 2007 Mustang GT or a custom Gibson guitar.
According to Paul Tecci, programs, promotions and events manager for CTNA, consumers also will see 10 million advertising impressions about the Altimax launch from March through June.
Gold Program
During the meeting Scott Batty, Gold Program manager, reviewed some of the challenges facing CTNA's distributor/dealer incentive program in 2006 and steps being taken in 2007 to address them.
He described additional enhancements to the Gold and Gold Select rewards, which are based on units purchased by dealers. (See the March 12 issue of Tire Business for details.)
The Gold Program also is being promoted to tire dealers by ads in various trade publications, including Tire Business.
Specifically related to the “Take It To The Max” Altimax launch, the enhancements enable Gold and Gold Select dealers, like consumers, to win a Mustang GT or Gibson guitar during a sweepstakes running between April 1 and June 30.
Dealer entries into the sweepstakes are based on the number of tires purchased, with double entries credited for purchases made by Gold Select dealers before March 31.
To increase the number of Gold Select dealers, Mr. Tecci said two other programs also have been launched. The first—RPM (Real Performance Motivation)—assigns reward points based on sales. The points can then be redeemed for a wide range of merchandise prizes.
As a part of the two-day Gold dealer meeting, participants—as well as automotive and trade press journalists—visited Conti's tire test track facilities in Uvalde, Texas, near San Antonio, where they had the opportunity to test drive and evaluate CTNA's new tire offerings under a variety of road surface conditions.