Affliates. Buying groups. Cooperatives. Franchises. With so many different marketing groups available in the tire industry, it's enough to make dealers scratch their heads and wonder which one is right for them.
Marketing groups undoubtedly offer dealers many benefits, particularly the advantage of greater buying power through the group than an individual dealer with a few stores could ever attain on his or her own. Many small to mid-sized independent dealerships want to buy like a major chain yet retain their autonomy, said Chris Wyborny, vice president of Hemet, Calif.-based Ramona Tire Inc. and a founding member of the Independent Tire Dealers Group (ITDG).
Mr. Wyborny said he thinks buying power and flexibility are the most important criteria tire dealers should look for in a marketing group, and those are the main reasons why Ramona Tire, a Bridgestone/Firestone affiliate, helped create ITDG. Other criteria dealers should consider, Mr. Wyborny said, are if a marketing group's membership requirements would be prohibitive to or enhance the way they conduct their businesses.
ITDG is a buying group that offers volume discounts, service bay equipment, a credit card program, protected territories and a captive insurance program, among other services. Its members also can belong to other marketing groups concurrently.
``Ours is very flexible and can work with a lot of different programs that are out there, whether it's a manufacturing program or a distributor program,'' Ed Long, ITDG's vice president of sales and marketing, said of the buying group's features.
For Skip Lightfoot, owner of San Jose, Calif.-based Skip's Tire & Auto Centers Inc., joining a group where the members are committed to the group and not themselves was the major reason he joined ITDG, as well as for its protected territories.
``We kind of have this nickname that we're a band of brothers,'' Mr. Lightfoot said of ITDG.
Identification, advertising support and technical assistance are other benefits of a marketing group that can be the deal closers for retailers looking to join a group. Those factors weighed heavily on Pete Muirhead's mind when he joined the Gemini automotive service program. Owner of a Gemini store in Juno Beach, Fla., Mr. Muirhead said it ``made all the sense in the world'' to sign on to Gemini because he already was a Goodyear dealer and wanted his store to be identified as an auto repair center.
In Canada, Superior Tire & Auto Inc. of Scarborough, Ontario, has been concentrating on expanding its franchise program in the Toronto area. Frank Bongiovanni, director of business development, told Tire Business dealers need to consider how a particular group will help them grow their businesses.
``They should be asking, `What's in it for me? What are the benefits? How much is it going to cost me and what am I going to get in return for my investment?''' Mr. Bongiovanni said.
The marketing group's company also should be reputable and trustworthy and sport a name that attracts customers, he added. Dealers join Superior Tire as franchisees to increase either their tire or automotive service revenues or both and to take advantage of Superior Tire's advertising support. They can belong to other marketing groups as long as those groups don't compete with Superior Tire.
In addition to a franchise fee that varies by tire dealership size and situation, Superior Tire expects its franchisees to live up to a 100-percent customer satisfaction guarantee, Mr. Bongiovanni said. ``I'm not saying the location has to be a first-class location, but a respectable-looking location,'' he explained. ``The cosmetics have to be acceptable. The people have to give professional service that we expect through our program.''
Product exclusivity and territory protection are other benefits some marketing groups offer, and dealers may want to find out which ones do the best in protecting exclusivity, according to Ken Coltrane, vice president of marketing at Del-Nat Tire Corp.
Dan Beach, president of Tire Alliance Groupe (TAG) Ltd., agreed that tire exclusivity is the key criterion for any dealer shopping various marketing groups.
``The retailer likes to control the brand and pricing in each market,'' Mr. Beach said. ``He's able to do that if he has an exclusive line or to be able to leverage the size of the group into a better buying price.''
The old adage ``birds of a feather flock together'' also could be applied to what dealers should look for when they're evaluating marketing groups. It makes sense for non-competing dealers with similar business models to associate, according to Mr. Beach.
``We do a lot of forums so that people can learn from the best and pass on their ideas,'' he said.
A marketing group also should make the process of ordering tires factory direct easy for dealers, Mr. Coltrane said. Del-Nat and TAG both offer product lines from overseas, and both agreed that dealers who join are expected to commit time as well as money to a group.
``(Dealers) can call us and they can call the other groups and find out what our strategic plan is, what do we stand for,'' Mr. Beach said. ``If it fits for them, they have to embrace it and participate in it. They can't just join in name only.''
Mr. Coltrane said Del-Nat wants its members to take full advantage of its programs and think of Del-Nat first for tire supply even when the cooperative isn't offering the lowest prices. A dealer who joins Del-Nat should think of himself or herself as a part owner of the company, he added.
``Meeting buying quota is the minimum you have to do to be a stockholder, but what we look for really is tire dealers who are willing to embrace the co-op ideals and are willing to get involved in the company as a participating stockholder,'' Mr. Coltrane said. ``We want him to come to stockholder meetings and vote for boards of directors and be involved in the running of the company, perhaps serve on a committee at some point.''
Tire Business staff writer Jennifer Mussig contributed to this report.
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Size up the prospects
When considering participation in a marketing group, buying group, cooperative, franchise or affliated dealer program, an independent tire dealer should compare the benefits, which often include:
* Buying power
* Protected territories
* Volume discounts
* Service bay equipment
* Credit card program
* Captive insurance program
* Recognizable name
* Advertising, marketing support
* Parts, equipment and related services
* Exclusive brand(s)