Cooper Tire & Rubber Co. is nearing the end of its first full year offering its Medallion and Century associate dealer programs for Cooper and Mastercraft tire dealers, respectively, and with 3,000 dealers already on board the tire maker is shifting its focus to refinement.
Adam Zickert, director of channel development for Cooper, said the company is “reviewing all aspects of the program,” which covers 50 Medallion distributors serving 2,000 dealers and 30 Century distributors serving 1,000 participants. “We talk with our associate dealers, we talk with our distributors, we have advisory councils—we're trying to work in different ways to figure out what we do well and what we can do to improve the programs.”
The Medallion and Century programs derive from a series of channel interviews Cooper conducted in late 2007 to find out how the company could improve its offerings for dealers, Mr. Zickert said.
“Through the interviewing, one of the things we ascertained was that we've historically done a lot of great things with Cooper with both brands in the wholesale channel, but we didn't have an associate dealer program,” he said. “We knew that, but it came up during the interviewing process.”
In 2008, the company launched the Medallion program as a pilot with a few U.S. distributors, as well as some in Canada. The program continued throughout the year, and in the second quarter of 2009 Cooper officially launched both programs on a national level.
Cooper developed its associate dealer programs for simplicity and flexibility, according to Mr. Zickert, and to offer dealers quality programs rather than fillers designed to make it look better than it is.
“We want to be careful that we don't add too many things to it,” Mr. Zickert said. “I think a big part of it is just getting everyone trained on what is part of the program. If you have 20 things on the back end of a program it's hard to focus on all of those.”
Cooper's offerings under the programs include advertising and promotion support, such as Internet placement support and competitive rates on direct-mail campaigns. The company also provides associates with store signage, volume discounts, point-of-sale materials, store design, a credit-card program and access to Cooper's various training programs.
“Both programs serve the need of our dealer base by providing competitive incentives at three different levels, point of purchase materials, advertising and marketing programs and promotional activities,” said Hal Gardner, vice president of marketing for Cooper. He added that where the programs differ is in the qualifying products—Cooper brands for Medallion and Mastercraft for Century—and in the qualifying unit sales.
“We have a good foundation with the distributor program and will strive to keep it competitive in the market, not just with incentives for the dealer, but with programs and promotions to help the dealer sell more Cooper and Mastercraft tires to the end consumer.”
With Cooper's program, Mr. Zickert said there's no work involved for the dealer, “other than to buy our tires and support the program.”
Ron Brady, vice president of wholesale for Johnson City, Tenn.-based Free Service Tire Co. Inc., said he believes Cooper's Medallion program, which his company has participated in since it launched in 2009, is one of the better programs in the industry.
“I like the dollars they pay in comparison to some of the other programs,” he told Tire Business. “Compared with the brands we carry—as far as pay out to ease of attainment to the things that it offers—I like it as a total package.”
Mr. Brady said Free Service Tire has upwards of 40 retail dealers enrolled in the program. So far feedback from them has been positive, with most liking the fact that “pretty early in the month after the quarter ends their credit card is updated.”
Mr. Brady added that one thing he would like to see in the program is the inclusion of Cooper's Starfire brand tires in the qualifying product mix. “This is a selfish thing on our part, but we buy tons of Starfires.”
Gene Bova Sr., owner of Motostar Tire and Auto Products Inc., a wholesale tire distributor based in Merrimack, N.H., said he and his 60-plus active dealers like that Cooper is providing point-of-purchase materials directly to the retail dealer network, rather than using distributors as a middle man.
“We like that (the dealers) are getting contact direct from the manufacturer,” Mr. Bova said. “The dealers feel a little more loyalty because of that.”
While Cooper's isn't as intense and extensive as some other major programs, according to Mr. Bova, it “certainly is a step in the right direction.”
“It's a good program and it's a great start for them. This is certainly a real good move for them down the road to improve things,” he said.
Chris Roberg, owner of Pacific Tire Distributors, a wholesale tire distributor based in Portland, Ore., signed up in early October as a distributor for Cooper's Century program.
“We've grown quite significantly with the Cooper and Mastercraft brands, and (participating) just ties us in with our dealers better,” he said. “…The jury's still out on the long-term effect.”
Mr. Roberg added that one thing he likes about the program so far is that it doesn't cost the distributor anything to participate. For participating dealers, according to Cooper, no initial investment is required for either program and dealers also do not pay any fees; rather, they must meet a minimum purchase volume of 100 units per quarter, which makes it very easy to sign up.
The ease of signing on with a program, however, has created another issue for Cooper.
“The dealers that we signed on during the initial sign up, who were engaged in the program and earning money in the very beginning, we've done a nice job keeping those guys,” he said. “…When you launch a program for the first time you end up with some guys who maybe shouldn't have been signed up. They don't sell that many tires. We've been working to filter our way through the ones who aren't engaged.”
Dealers who hit the minimum purchase amount receive rebates on their tire purchases. Cooper also offers two additional tiers of unit sales volume for each program, which provides participants with the opportunity to earn back a higher percentage.
One change the company made in 2010 was to prorate the sales volume for the quarter that a dealer signs up. According to Mr. Brady, the company also has made it possible for retail dealers to switch to a different distributor administrating their program if they are dissatisfied.