Download MEC_031709_mtg_slides - Automotive Aftermarket Suppliers

Marketing Executives Council
March 17, 2009
Today’s Agenda
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Welcome and Introductions (Altenberger)
Mission and Purpose (Altenberger)
Review of Anti-trust guidelines (Cameron)
Review Supplier Image Market Research (Zipser)
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Review of Quantitative and Qualitative
Conclusions / Recommended Next Steps
Supplier Image Direction / Discussion (Cameron)
Lunch / Networking / Telephone Break
AAPEX Update (Gardner)
AASA Marketing Communications (Beck)
Afternoon Break
Optimizing Marketing Spend – E&Y (David Baron)
Council Business (Altenberger)
Wrap-up & Adjourn (Cameron)
Marketing Executives Council
March 17, 2009
Mission Statement
To advance the automotive aftermarket supplier
industry through collaborative marketing and
communication solutions.
Purpose
Forum for aftermarket supplier marketing
executives to collaborate in helping improve the
state and image of the North American
manufacturer base.
The Council will serve a major role in helping AASA
communicate to key audiences and develop
communication strategies and action items.
Marketing Executives Council
March 17, 2009
Anti-Trust Guidelines
It is the unqualified policy of the Motor & Equipment Manufacturers
Association to conduct its operations in strict compliance with the
antitrust laws of the United States.
MEMA's antitrust policy prohibits any discussions which constitute or
imply an agreement or understanding concerning: 1) prices,
discounts, or terms or conditions of sale; 2) profits or profit
margins or cost data; 3) market shares, sales territories or markets;
4) allocation of customers or territories; 5) selection, rejection or
termination of customers or suppliers; 6) restricting the territory
or markets in which a company may resell products; 7) restricting
the customers to whom a company may sell; or 8) any matter
which is inconsistent with the proposition that each manufacturer,
wholesaler and distributor must exercise its independent business
judgment in pricing its services or products, dealing with its
customers and suppliers and choosing markets in which it will
compete.
Marketing Executives Council
March 17, 2009
Supplier Image Market
Research
Catevo – Joseph Gaitens
Randi Garrett
Neal Zipser
Marketing Executives Council
March 17, 2009
Methodology
AASA Image Campaign:
Phase 1 | Research of Independent
Service Professionals
Marketing Executives Council Meeting | March 17, 2009
© 2009 AASA and The Catevo Group | Confidential
Setting the Tone
Methodology
Methodology
 Review existing quantitative data
• Validate focus group data
• Challenge findings of focus groups
• Provide basis for focus group questions
– dive deeper into some of the issues
Marketing Executives Council
March 17, 2009
Methodology
 Our hopes:
• Obtain a better understanding of the service
community regarding value-added programs,
generic/name brands, country of origin,
decision-making processes, etc.
• Obtain a better understanding of the service
community for the development of an image
campaign
• Capture feedback on marketing messages and
spec creative created by Catevo
• Develop image campaign recommendations
Marketing Executives Council
March 17, 2009
Quantitative Data:
A Review of Existing Data
What We Knew
 Research was collected by the
Automotive Service Association and
Babcox Publications
 This data was used to validate some
of the findings of the MEC focus
groups and to enhance some of the
overall findings
Marketing Executives Council
March 17, 2009
ASA Surveys
 ASA surveys its members in 2007 and
2008
 The study examined the use of OEpurchased parts vs. aftermarket-purchased
parts and country-of-origin issues
 This study revealed that service providers
want more information about the parts
they purchase (i.e., country of origin,
specifications, certifications, labeling, etc.)
Marketing Executives Council
March 17, 2009
ASA Surveys
They still buy the majority of their products from
aftermarket sources
Marketing Executives Council
March 17, 2009
ASA Surveys
 The survey also showed that ASA
members really don’t have a good
understanding of the globalization
issue:
• How parts are sourced
• Overseas manufacture standard
validation
• They want to know more about “what
goes into the box”
Marketing Executives Council
March 17, 2009
ASA Surveys
60 percent of respondents said that aftermarket parts had a
positive impact on their business; 74 percent said OE parts had
a positive impact
Marketing Executives Council
March 17, 2009
ASA Surveys
About 29 percent said that quality problems with aftermarket
parts had a negative impact on their business, compared to
only 6 percent for OE parts
Marketing Executives Council
March 17, 2009
Babcox Tech Group Survey
 Results from Babcox’s every-other-year survey
of techs were very consistent with results from
the MEC focus groups
• Specifying particular brands
• Consumers’ preference in brands
• Where they receive information on
products
• Importance of factors in deciding on a
particular brand
• Type of parts purchased from OE dealer
Marketing Executives Council
March 17, 2009
ASA Surveys
 Contrary to the focus group findings
• The ASA study revealed that service providers
are concerned about the quality of products
outsourced from other countries
 Consistent with the focus group findings
• The ASA study found that service providers do
trust the parts they purchase from the OE
dealers more; they see them as more reliable
than parts purchased from aftermarket sources
Marketing Executives Council
March 17, 2009
Qualitative Data:
Focus Group Findings
Background
 Focus groups held in:
• Raleigh
• Chicago
• Los Angeles
 Included a mix of:
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Shop owners (50 percent)
Techs (26 percent)
Shop owners/techs (15 percent)
Service writers (9 percent)
Marketing Executives Council
March 17, 2009
Background
 Decision makers on the brand of
parts purchased
 Had at least five years of experience
 Shop had at least three service bays
 Worked on all makes of vehicles
 More than 50 percent of work was
not tires and oil changes
 More than 50 percent of purchases
were from aftermarket sources
Marketing Executives Council
March 17, 2009
Background
 Participants included representatives
from shops implementing “best
practices”
 Every effort was made to recruit the
“questionable” service shop
 Findings may be skewed
Marketing Executives Council
March 17, 2009
Key Findings
Key Findings
 Quality of aftermarket parts has
significantly improved
• Not a concern the way it once was
 Brand comes before country of origin
• Service community trusts the manufacturers
 House brands sell on price alone
• Sentiment was that house brands were reboxed generics that couldn’t compete on
quality
Marketing Executives Council
March 17, 2009
Key Findings
 Few people (if any) claim they buy generic
brands
• Only if nothing else was available (and not
safety-related)
 OE quality is still important
• Instills confidence in service community and to
consumer
 Quality first – everything else is secondary
• “Form, fit, function” is primary concern
Marketing Executives Council
March 17, 2009
Key Findings
 Online catalogs are a must
• Must include illustrations and be updated
 Full-line offerings are not that important
• Confusion among full-line vs. short-line
 Two-year/24,000-mile warranty coming
• This is an expectation among some in the
service community
 Training
• Lack of consensus on value of manufactures'
training programs
Marketing Executives Council
March 17, 2009
Key Findings
 Marketing programs not valued
• The service community wouldn’t mind seeing
marketing programs eliminated
 Value-added programs do NOT increase
loyalty
• Participants noted these programs do not
influence their purchasing decisions
 Trade magazines are effective
• Magazines were noted as the number one
source of product information
Marketing Executives Council
March 17, 2009
Specific Areas of Interest
Country of Origin
 Most note where the products
originate
 Some say they would prefer to buy
American but realize that is not
realistic
 They will ask country of origin if they
haven’t heard of brand
 Globalization is understood to be a
reality
Marketing Executives Council
March 17, 2009
Country of Origin
 Almost no one could tell a difference
in quality between U.S.-made parts
and non-U.S.-made parts
 Many said they could tell a difference
in the appearance of the product
 There is some lack of trust in parts
made in smaller, emerging countries
(e.g. Pakistan, Indonesia, etc.)
Marketing Executives Council
March 17, 2009
Country of Origin
 Summary: Brand comes before
country of origin; they trust that the
manufacturers have their best
interest in mind
Marketing Executives Council
March 17, 2009
Aftermarket Parts Quality
 Parts quality has improved greatly
over the past five years
 Most believe that Japan has
improved its quality the most
 Several noted it comes down to who
will stand behind their parts
Marketing Executives Council
March 17, 2009
OE vs. Aftermarket
 Many said OE has been overused
 However, OE is very important to
them and their customers
 OE instills confidence
 OE allows them to charge higher
prices
 Many only buy from dealers when
they have to
Marketing Executives Council
March 17, 2009
OE vs. Aftermarket
 Many only buy specific parts from
dealers (mostly electronics and
emissions)
 Dealer pricing has been reduced to
gain business (at times it’s lower than
aftermarket)
 Some view OE parts as “cheaper over
the lifecycle of the part”
Marketing Executives Council
March 17, 2009
OE vs. Aftermarket
 It is understood that dealer brands
are re-boxed branded parts (e.g.,
Motorcraft)
 Many see OE parts as the benchmark
for quality
 ASA data supports these findings
Marketing Executives Council
March 17, 2009
Off-Brand/Generic Brands
 Nearly all participants claim they do
not use generic parts
 They will use generic parts if only
generic available and a vehicle has to
be repaired
 Many said that they would test a
generic part on their vehicles first
 They would never install a safetyrelated generic part
Marketing Executives Council
March 17, 2009
Off-Brand/Generic Brands
 Comments included:
• “It would be suicide to use those parts”
• “Why put your reputation on the line?”
 A couple mentioned that they gave
the consumer a choice
• More than half replied they wouldn’t
give the choice
Marketing Executives Council
March 17, 2009
Off-Brand/Generic Brands
 A few participants who worked in
economically depressed areas said
they did what was needed to fix
vehicles at a low price
 Many said they don’t play the pricing
game
 In Los Angeles, the brand “Centric” is
gaining in popularity (once a generic
– now a recognized brand)
Marketing Executives Council
March 17, 2009
House Brands
 Many believe house brands are
generic parts in house-branded boxes
 Many have had problems with these
parts
 Many said they have been billed as
“OE” but are not near OE quality
 Salespeople only sell on price and do
not believe in the products
Marketing Executives Council
March 17, 2009
House Brands
 Quality issues have arisen, mainly
with brake products
 While house brands may save money
in parts, they could cost in labor
 It is understood that premium
products are name-brand products
 Several have not had issues and find
them a good value
Marketing Executives Council
March 17, 2009
Consumer Brand Preferences
 Consumers rarely ask for a brand
• “They don’t care; they trust us with their
vehicles”
 Some consumers say they are not
keeping their cars long and are
looking for the cheapest fix
• Need to be educated as to why a quality
repair is needed
Marketing Executives Council
March 17, 2009
Consumer Brand Preferences
 A few noted they will offer a labor
warranty but not parts warranty if the
name brand/OE brand is not
selected; as a result, consumers will
often choose name brand/OE brand
 Some say it is better to lose the job
than to install a cheap or inferior part
Marketing Executives Council
March 17, 2009
Definition of Quality
Form, fit, function
A part that never comes back
A part that outlasts the original part
A part that outlasts the warranty
A part that lasts a reasonable amount
of time
 A part that needs no modification by
the technicians
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Marketing Executives Council
March 17, 2009
Definition of Quality
 As good or better than the OE part
 A part that performs the way it says it
is supposed to perform and beyond
 Fit and finish the same as the part
that comes with the vehicle
Marketing Executives Council
March 17, 2009
Importance of Value-Added
Programs and Services
Warranty
 Seen as a “given”
 Manufacturers should stand behind
their products
 Lifetime warranties are seen as junk
 Manufacturers should do a better job
resolving warranty claims – seen as
taking too long and too tedious
Marketing Executives Council
March 17, 2009
Warranty
 Many shops are offering two-year,
24,000 mile warranties
• They expect/hope their manufacturer
partners will support them if product
failure was manufacturer’s fault
Marketing Executives Council
March 17, 2009
Catalogs
 Industry format and standards mean
nothing to this segment
 Print catalogs are not used anymore
and can be eliminated
• Note: Many still use print catalogs for
filters and batteries
• They also considered themselves “old
school” and were generally older in age
Marketing Executives Council
March 17, 2009
Catalogs
 Online catalogs were used by virtually
everyone
• Illustrations are a must
• Must be updated regularly
• Several mentioned it helped when the
sales rep showed them how to use it
during one of the rep’s visits
Marketing Executives Council
March 17, 2009
Toll-Free Tech Lines
 Only a few mentioned that they use
these services
 Los Angeles participants noted some
weren’t open on West Coast time
 Many use iATN instead
• Others use Mitchell or other repair
guides
 It was noted that a quick resolution
line would be of assistance to some
Marketing Executives Council
March 17, 2009
Local Availability/
Widespread Coverage
 Product availability is the name of the
game
• If the preferred brand is not available,
they will choose a different brand
• A few mentioned they will find out how
soon the customer needs the repair
before making a decision about brand
Marketing Executives Council
March 17, 2009
Local Availability/
Widespread Coverage
 Widespread coverage, on the other
hand, didn’t seem as important
• They didn’t want the manufacturer to be
spotty in coverage and wanted the
popular applications covered
• Being an all-makes supplier was not
important
Marketing Executives Council
March 17, 2009
Marketing Programs/Rebates
Not valued at all
Take too much time
Too tedious/too much paperwork
Too many programs going on at once
Online games and programs not
valued either
 Many believe the programs can go
away
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Marketing Executives Council
March 17, 2009
Marketing Programs/Rebates
 Some mentioned lower prices would
be nice but realized the
manufacturers couldn’t control the
price directly
 Do value better point-of-purchase
displays to help sell (cutaways, good
vs. bad, new vs. old, etc.)
Marketing Executives Council
March 17, 2009
Field Sales Reps
 Some said they appreciated the visits
by sales reps
• These tended to be the smaller and midsized shops
 The best reps are those who know
something about the product
 Others said the best are those who
can truly go back to corporate and
make a difference
Marketing Executives Council
March 17, 2009
Field Sales Reps
 Many said the reps just get in the way
 They were seen as valuable if they
could visit and teach something
unknown or resolve an issue
 Most said they were too busy for reps
unless reps provide significant value
 Most said reps should not come late
in the day
Marketing Executives Council
March 17, 2009
Training Programs
 Responses ranged from “don’t need
manufacturers to provide training” to
“can’t get enough of it”
 Some get enough from third-party
sources
 Only a few using online training
programs
Marketing Executives Council
March 17, 2009
Training Programs
 The negative:
• Too commercial
• Too advanced for the beginning techs
• Not advanced enough for the
experienced techs
• Old information (focus on a new
technology)
• Instructors reading out of a book
• Manufacturers need to fill gaps in the
training offerings
Marketing Executives Council
March 17, 2009
Training Programs
 The positive:
• Manufacturers seen as the engineers
and researchers (more credible)
• Would send their techs to training if
seen as valuable
• Want to focus on reducing comebacks
rather than selling more products
Marketing Executives Council
March 17, 2009
Overall Importance
Marketing Executives Council
March 17, 2009
Loyalty to Manufacturers Who
Provide Value-Added Programs
 There is very little
 Some noted the exception is the period
once they return from training
 Many noted they wouldn’t change brand
unless brand quality slipped
 Loyalty comes from providing a quality
product
 Majority felt industry would not be hurt if
these programs were eliminated
Marketing Executives Council
March 17, 2009
Decision-Making
Process
Decision-Making Process
Top considerations when deciding on a part:
Marketing Executives Council
March 17, 2009
Decision-Making Process
When you are placing an order for a particular part,
how often do you ask for a specific brand?
Marketing Executives Council
March 17, 2009
Decision-Making Process
When you are placing an order for a particular part,
how often do you purchase a brand recommended by
your aftermarket supplier?
Marketing Executives Council
March 17, 2009
Decision-Making Process
When you are placing an order for a particular part,
how often do you choose the least expensive part?
Marketing Executives Council
March 17, 2009
Decision-Making Process
When you are placing an order for a particular part,
how often do you only select the same brand than
that of the one you are replacing?
Marketing Executives Council
March 17, 2009
Obtaining Information
Obtaining Information
 Trade magazines were number one
Note: They do not read them – just “skim”
through them
• Motor Age, Underhood Service and
ACDelco’s Intune were the most
mentioned publications
• Chilton and Mitchell repair guides were
also mentioned
Marketing Executives Council
March 17, 2009
Obtaining Information
 Several noted they went to trade
shows (AAPEX, SEMA, CARS, local
ASA events), or browsed the Internet
(iATN)
 Some relied on local organizations
(IGOA in Raleigh and ASC in Los
Angeles)
 Half relied on getting info from their
suppliers (e.g., CARQUEST rep)
Marketing Executives Council
March 17, 2009
Reaction to Marketing
Messages
Marketing Messages
Why Take the Risk?
This theme focuses on the question of “why
take the risk on gambling with your
livelihood by choosing a product from an
unproven source?”
Independent service providers strive for
customer loyalty and cannot take the chance
of losing core customers
Marketing Executives Council
March 17, 2009
Marketing Messages
"Good Enough" Never Really Is
Relying on short-line manufacturers for parts
doesn't always yield the best results for techs,
shop owners or their loyal customers
This theme also appeals to the inherent pride
that independent garages bring to their craft;
after all, if the standards of quality that go
into the overall repair job are so much higher
than the competition, shouldn't the quality of
the replacement part be, too?
Marketing Executives Council
March 17, 2009
Marketing Messages
Fool Me Once. Only.
This theme shows what would happen if the
wrong decision was made and the damage
that might occur to a customer relationship
because of a poor decision about a
replacement part
This theme plays up the pain that awaits
independent garage owners who take the
cheap way out with inferior parts lines: lost
loyalty, re-dos, unfavorable word-of-mouth,
etc.
Marketing Executives Council
March 17, 2009
Marketing Messages
 All three of the messages resonated with the focus
groups. “Why Take the Risk?” scored the highest.
Marketing Executives Council
March 17, 2009
Reaction to
Spec Creative
Spec Creative Review
Approximately half of respondents preferred
the ad on the left. The other half preferred the
ad on the right.
“Pride” Ad
Marketing Executives Council
“Fear” Ad
March 17, 2009
Spec Creative Review
 Those who liked the “pride” ad:
• Felt the “fear” ad was too negative
• Felt the “fear” ad spoke to the positive aspects
of the independent aftermarket (loyalty, doing
the job right, customer satisfaction)
 Those who liked the “fear” ad:
• Liked the “in-your-face” approach and the
shock value of it
• Felt it addressed what professionals want to
avoid
Marketing Executives Council
March 17, 2009
Spec Creative Review
 Additional findings:
• Shop owners and older focus group
participants preferred the “pride” ad
– Shop owners noted that the “pride” ad spoke to one
of the scariest aspects for the independent
aftermarket service provider: losing a loyal customer;
much like real estate, it is more expensive to obtain a
new customer than to retain a loyal customer
• More of the younger focus group participants
and technicians preferred the “fear” ad
Marketing Executives Council
March 17, 2009
Would Advertising Work?
 Many thought the ads were “preaching to
the choir”
 They thought that the shops who most
often at fault for buying/installing subpar
parts would be the shops who are not
generally committed to the industry and
who do not belong to associations, attend
trade shows or read trade magazines
 So, how as an industry do you reach out to
them?
Marketing Executives Council
March 17, 2009
However…
 Many of the focus group participants
believed that an image campaign would be
useful because:
• It would reinforce always doing the right thing
(“don’t cut corners”)
• The magazine could be passed around (from
tech to tech, from shop to shop)
• Many of the technicians at the “good” shops
today will own a shop in the future so this is a
way to invest in the future
• It’s better than doing nothing
Marketing Executives Council
March 17, 2009
But…
 The groups did agree that advertising
alone is not the answer
 Reaching out to the shops that offer the
$12.95 oil changes and $69.95 brake jobs
will be a major challenge
 Ultimately they are the ones who are
jeopardizing the image of the independent
aftermarket due to their unprofessional
business standards and by installing parts
of questionable quality
Marketing Executives Council
March 17, 2009
Summary of Key Points
Validating Existing Beliefs
 Brand comes before country of origin
 “House brands” sell on price and price
alone
 No one claims they buy generic parts
 OE quality is important
 Form-Fit-Function is primary . . .
everything else is secondary
 Trade magazines can be effective
Marketing Executives Council
March 17, 2009
Possible Surprises
 Quality of aftermarket parts has improved
 Print catalogs have become obsolete
(online catalogs a must)
 Full-line offerings not that important
 2-year, 24k mile warranties making a mark
 Marketing programs not valued
 Value-added programs don’t increase
loyalty
 “Low-end” shops impacting whole industry
reputation
Marketing Executives Council
March 17, 2009
Why the Research Worked
 Validated industry consensus
 Revealed some unknowns
 Countered conventional thinking
Continued . . .
Marketing Executives Council
March 17, 2009
Why the Research Worked
 Contradicted original strategy and
messaging:
• “Preaching to the choir” on quality
• Lack of loyalty toward value-added programs
• “Short-line” vs. “full-line” argument lacked
resonance
• Campaign target should be changed, expanded
• Audience of image campaign should be on
“low-end” service shops
Marketing Executives Council
March 17, 2009
Research Q&A
(and then a quick break)
The Road Ahead
The Road Ahead
Marketing Executives Council
March 17, 2009
The Road Ahead
 Realizing budget is an issue for 2009,
it is important to start the “buzz”
going at least on the trade side.
 If budget becomes available,
expanding the “buzz” in 2010 is
recommended.
Marketing Executives Council
March 17, 2009
The Road Ahead
 Remainder of 2009
• Trade PR
• Advetorial Campaign
• Industry Award Program
Marketing Executives Council
March 17, 2009
Potential Next Steps
(a springboard for discussion)
Supplier Image Initiative
Next Steps
To target repair professionals  Technical Article Series on Product
Quality
 Collaborate with trade associations to get
message out – ASA, CCPN
 Address business practices
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Next Steps
To target channel partners  Advertorial Campaign:
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–
–
–

Members devote one full page ad to campaign from
existing Marketing budget (divert funds)
Negotiate an advertorial page for our message
Member’s ad remains in tact
No additional cost to member
Industry Award:
–
–
–
Supplier Excellence based on our criteria
Voted on by channel partners
Promoted throughout the industry
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
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Supplier Image 6-Part Series (x3)
•
One for Repair Professional
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•
One for Jobber / Distributor
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•
AutoInc. – ASA
Parts & People – Independents
Counterman – Babcox
Aftermarket Business – Advanstar
One for Supplier / Manufacturer
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News@AASA – AASA
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Repair Professional – “Product Quality”
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•
Negotiate with trade partner(s)
6 Feature Articles
1.
2.
3.
4.
5.
6.
What’s in a Brand?
Keeping Customers for Life
Value of Value Lines
Beyond Price: Value Added Services
Who Supplies the Tail?
We are All in this Together
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Jobber / Distributor – “Recommended
Best Practices of Value Added Suppliers”
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•
•
Negotiate with trade partner
Supplement with full-page trade ad
6 Feature Articles
1.
2.
3.
4.
5.
6.
What’s in a Brand?
Definition of Full-Line
Value of Value-added
Direct Importing: Risk v. Reward
Who Supplies the Tail?
We are All in this Together
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Supplier / Manufacturer – “Supplier
Image”
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•
Special Reports
1.
What’s in a Brand?
Selling Against Short Lines
2. The Value of Value-Added Services
Quantify do not Just Give Away for Free
3. Protecting the Aftermarket
Maintaining consumer confidence
Marketing Executives Council
March 17, 2009
Methodology
Thank You
Marketing Executives Council Meeting | March 17, 2009
© 2009 AASA and The Catevo Group | Confidential
Supplier Image Market
Research
Next Steps - MEC
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Next Steps
Funding: $40,000 (if all dues collected)
Spent:
$22,000 (market research)
Balance: $18,000 (if all dues collected)
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Next Steps
Some conclusions:
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•
Service professionals already get it – they put
quality over price
–
–
–
–
Many still have unresolved issues on “what’s in the
box”
Many recognize that there are poor businessmen
among their peers who only know how to compete
on price – they hurt the entire industry
They do not see value in supplier value-added
services because they do not use directly
Not a good target for our supplier ‘Best Practices’
or ‘Standards of Excellence’ message
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Next Steps
Some conclusions:

•
Channel partners – jobbers / distributors /
groups / retailers
–
–
–
Good target for our supplier ‘Best Practices’ or
‘Standards of Excellence’ message
Stand to be impacted the most by loss of valueadded services
Push low-cost products on their customers to win
business on price and/or improve margin
•
•
•
Yet repair professionals do not want them
Drives commoditization
Stand to damage image of the aftermarket
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Next Steps
Recommendations to target repair
professionals  Technical Article Series on Product
Quality
 Collaborate with trade associations to get
message out – ASA, CCPN
 Address business practices
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Next Steps
Recommendations to target channel partners
 Advertorial Campaign:
–
–
–
–

Members devote one full page ad to campaign from
existing Marketing budget (divert funds)
Negotiate an advertorial page for our message
Member’s ad remains in tact
No additional cost to member
Industry Award:
–
–
–
Supplier Excellence based on our criteria
Voted on by channel partners
Promoted throughout the industry
Marketing Executives Council
March 17, 2009
Supplier Image Initiative

Supplier Image 6-Part Series (x3)
•
One for Repair Professional
–
–
•
One for Jobber / Distributor
–
–
•
AutoInc. – ASA
Parts & People – Independents
Counterman – Babcox
Aftermarket Business – Advanstar
One for Supplier / Manufacturer
–
News@AASA – AASA
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Repair Professional – “Product Quality”

•
•
Negotiate with trade partner(s)
6 Feature Articles
1.
2.
3.
4.
5.
6.
What’s in a Brand?
Keeping Customers for Life
Value of Value Lines
Beyond Price: Value Added Services
Who Supplies the Tail?
We are All in this Together
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Jobber / Distributor – “Recommended
Best Practices of Value Added Suppliers”

•
•
•
Negotiate with trade partner
Supplement with full-page trade ad
6 Feature Articles
1.
2.
3.
4.
5.
6.
What’s in a Brand?
Definition of Full-Line
Value of Value-added
Direct Importing: Risk v. Reward
Who Supplies the Tail?
We are All in this Together
Marketing Executives Council
March 17, 2009
Supplier Image Initiative
Supplier / Manufacturer – “Supplier
Image”

•
Special Reports
1.
What’s in a Brand?
Selling Against Short Lines
2. The Value of Value-Added Services
Quantify do not Just Give Away for Free
3. Protecting the Aftermarket
Maintaining consumer confidence
Marketing Executives Council
March 17, 2009
Lunch
Marketing Executives Council
March 17, 2009
AAPEX
Chris Gardner - AASA
Marketing Executives Council
March 17, 2009
AAPEX Update
MEC Meeting
March 17, 2009
Agenda
•
•
•
•
•
•
2008 Results
AAPEX Joint Marketing Sub-committee
AAPEX JOC
2009 Event Enhancements
Onsite Marketing Program
AASA AAPEX Show Committee
AAPEX
AAPEX 2008 Results
•
•
•
•
Exhibitors – 1,931 (-4.2%)
Booths – 4,618 (-3.7%)
Buyers* – 52,392 (-12.5%)
International Buyers* - 11,454 (+1.9%)
* AAIW figures
AAPEX
Joint Marketing Sub-committee
• Purpose – provide short and long-term
strategic direction to association staff to
increase buyer attendance and improve
exhibitor ROI
• Members
– Members of AAIA Show Committee
– Members of AASA’s MEC
AAPEX
Joint Marketing Sub-committee
• Results
– 18-page document with several
recommendations
– Convert AAPEX from show to event
– The AAPEX Experience
– Training/education
– Theater on show floor
– Hire dedicated show manager
AAPEX
AAPEX JOC
• AAPEX Joint Operating Committee
• Newly formed in 2009
– AAIA members and Kathleen
– AASA members and Steve
• Met in January in Dallas
• Reviewed comprehensive AAPEX survey
results
AAPEX
AAPEX JOC
• Short Term
– Seminars to be completed by 10:00 a.m.
– Third exhibitor category/rate for non-NAFTA
members: $24.95/sq. ft.
– Critical to work with DOC to simplify process
of getting visas for international buyers
AAPEX
AAPEX JOC
• Long Term
– Position AAPEX as an industry event and not
a trade show
– Focus on attracting repair professionals
– Target/integrate OEMs
– Benchmark AutoMechanika Frankfurt
– Continue annual frequency
– Continue SEMA relationship for now
AAPEX
Onsite Marketing Program
•
•
•
•
ResultsNow!
Traditional targets – exhibitors
New opportunities
New targets – service providers to exhibitors
– Business services, couriers, printers
– Airlines, car rental agencies
– Larger software companies
• MEC participation
AAPEX
AAPEX – New in ‘09
• Seminar times: 7-10:00 a.m.
• AAPEX Demo area – theater for exhibitors
to demonstrate products/services
• iSHOP Shop of the Future
• New onsite marketing opportunities
• New registration vendor – CompuSystems
AAPEX
AAPEX – New in ‘09
• Reduced hotel rates, i.e. Mirage - $145
• Increased WD participation
– Pronto, Federated
• AWDA meetings on Sunday and Monday
AAPEX
AASA AAPEX Show Committee
• 2008 – MEC subcommittee
• Stand alone committee going forward
• Composed of marketing and booth
managers
• Launch April 2009
AAPEX
AASA Marketing
Communications
Margaret Beck - AASA
Marketing Executives Council
March 17, 2009
AASA Communications
1.
2.
3.
4.
Association Web sites
e-Communications
New communications tools
Suggestions for improving existing
communications tools
Marketing Executives Council
February 28, 2008
Association Web Sites
MEMA: www.mema.org
HDMA: www.hdma.org
OESA: www.oesa.org
Washington/government affairs:
www.automotivesupplier.org
 AASA: www.aftermarketsuppliers.org




Marketing Executives Council
February 28, 2008
MEMA Web Site
TOTAL 2008
Unique Visitors: 130604
Number of Visits: 623061
Marketing Executives Council
February 28, 2008
HDMA Web Site
TOTAL 2008
Unique Visitors: 32433
Number of Visits: 101299
Marketing Executives Council
February 28, 2008
OESA Web Site
TOTAL 2008
Unique Visitors: 104902
Number of Visits: 301490
Marketing Executives Council
February 28, 2008
AASA Public Web Site
TOTAL 2008
Unique Visitors: 43714
Number of Visits: 138588
Marketing Executives Council
February 28, 2008
AASA Members Only Site
May 15-Jan. 31, 2008
Unique Visitors: 1237
Number of Visits: 1993
Marketing Executives Council
February 28, 2008
e-Publications
 All MEMA e-newsletters
 All AASA e-newsletters
 All MSA e-newsletters
Marketing Executives Council
February 28, 2008
MEMA e-Publications
 MEMA Industry News
• Frequency: Daily, A.M.
• Content: Industry-related headlines; republished from
other sources
• Circulation: All members, councils & subscribers
• Readership:4062*
• Open:25.6%*
• Click: 37.1% *
*Average Feb 2008-2009
Marketing Executives Council
February 28, 2008
MEMA e-Publications
 MEMA ToplineNews
• Frequency: Alternate Wednesdays, P.M.
• Content: Association news from internal sources
• Circulation: All members & subscribers
• Readership:3926*
• Open:20.6%*
• Click: 8.1%*
Marketing Executives Council
February 28, 2008
MEMA e-Publications
 MEMA Washington News
• Frequency: Biweekly (Tuesdays & Fridays)
• Content: GA news from external & internal sources
• Circulation: All Members, GAC & RAC & & subscribers
• Readership:3686*
• Open:16%*
• Click: 10%*
Marketing Executives Council
February 28, 2008
MEMA e-Publications
 MEMA Personnel Insight
• Frequency: Fridays, P.M.
• Content: Jobs & professionals available listings,
contributed
• Circulation: HR Members, all contributors & subscribers
• Readership: 401*
• Open: 28%*
• Click: 29%*
Marketing Executives Council
February 28, 2008
MEMA e-Publications
 MEMA Market Analysis
• Frequency: Monthly, Thursdays, P.M.
• Content: Trends, data & analysis from internal sources
• Circulation: Research & analysis members, subscribers
• Readership: 990*
• Open: 31%*
• Click: 34%*
Marketing Executives Council
February 28, 2008
HDMA e-Publications
 HDMA Diesel Download
• Frequency: Mondays, P.M.
• Content: news from external & internal sources
• Circulation: HDMA members, subscribers
• Readership: 521*
• Open: 34%*
• Click: 38%*
Marketing Executives Council
February 28, 2008
HDMA e-Publications
 HDMA International Diesel Download
• Frequency: Thursdays, P.M.
• Content: news from external sources
• Circulation: HDMA members, subscribers
• Readership: 582*
• Open: 33%*
• Click: 30%*
*Started Publishing Jan. 29, 2009
Marketing Executives Council
February 28, 2008
OESA e-Publications
 OESA Weekly
• Frequency: Mondays, A.M.
• Content: Association news from internal sources
• Circulation: OESA members & non-members
• Readership: 7034*
• Open: 17%*
• Click: 11%*
Average Feb 2008-2009
Marketing Executives Council
February 28, 2008
OESA e-Publications
 OESA OE Supplier News
• Frequency: Monthly, Mondays, P.M.
• Content: Association news from internal
sources
• Circulation: OESA members & nonmembers
• Readership: 6673*
• Open: 21%*
• Click: 30%*
Marketing Executives Council
February 28, 2008
AASA e-Publications
 News @ AASA
• Frequency: Weekly, Mondays, A.M.
• Content: News from internal & external sources
• Circulation: AASA members & subscribers
• Readership: 1104*
• Open: 22%*
• Click: 17%*
Marketing Executives Council
February 28, 2008
New AASA e-Publications
 Social Media
•
•
•
•
Blogs
Existing vehicles: Facebook, LinkedIn
Bulletin Board/Online Forum
Other
*All quarters, 2008
Marketing Executives Council
February 28, 2008
New AASA e-Publications
Marketing Executives Council
February 28, 2008
Improving e-Publications
 Web site(s)
 e-Publications
• More industry news
• Different format
• Less or more frequency
*All quarters, 2008
Marketing Executives Council
February 28, 2008
Break – 15 minutes
Marketing Executives Council
March 17, 2009
“Optimize Marketing Spend”
David Baron – E&Y
Marketing Executives Council
March 17, 2009
Marketing spend optimization
Driving marketing value
Marketing Executives Council Meeting
March 17, 2009
Agenda
►
►
►
►
►
Introductions
Today’s marketing landscape
Marketing excellence capabilities model
The Marketing Lifecycle
Case study
Page 151
Today’s marketing landscape
►
►
►
►
►
►
Price pressure and margin erosion
Increased scrutiny and accountability on investments
Increasing regulatory barriers to traditional approaches
Expanding number of possible channels
Marketing effectiveness and productivity in decline
Intelligent competition
Price
Newspaper
Radio
Magazine
TV
Marketing
Channels
Out-of-Home
Sponsorship
Direct Mail
Page 152
Digital
Marketing excellence capabilities
take time to evolve
Short-term
activities
(Basic)
Mid-term
activities
(Enhanced)
Long-term
activities
(Leading)
• Increase brand awareness
• Measure surrogate markers
• Optimize the marketing mix
• Utilize inexpensive but
efficient marketing tactics
• Track sales to quantify the
impact of marketing initiatives
• Compare the ROI of marketing channels
• Study the market, customer
and competition
• Utilize market research to
understand customer
behavior
High
• Measure the incremental impact each
marketing initiative has on volume sales
• Copy-test a portion of the marketing budget
in non-traditional/innovative media
High
Organizations must utilize solutions that
increase marketing performance through
the enhancement of spend effectiveness
and channel optimization across all phases
of the process: from initial analyses to the
rigorous execution of tactical plans and
monitoring of results.
Long-term
Mid-term
Low
Page 153
Short-term
• Understand marketing effectiveness by
channel, geography and customer segment
Low
The Marketing Lifecycle is a process of
continuous improvement
• How does the changing marketing landscape affect
our marketing efforts and decisions?
• What marketing mix best drives incremental sales and
captures the core customer?
• How does new technology affect
the interpretation of our message?
• How do we best integrate
traditional and new media?
• What does our marketing mix look like? What could it
look like? What should it look like?
• Do we have a flexible planning model that allows us to
take advantage of changes in the performance of
campaigns or tactics?
• How can we integrate the most effective
tools to optimally value our customer?
• Are we looking at the right
metrics to evaluate marketing
performance? Are there different
metrics that could better capture
new tendencies?
Marketing
Lifecycle
• What is the contribution,
effectiveness, cost-efficiency,
and payback of each marketing tactic
and program?
• Which core and incremental initiatives
are driving volume and to what
degree?
• What is working, what is not, and why? How does current
performance compare to the norm (or the industry)?
• How can we use marketing mix analysis to optimize our
marketing strategy and dollars?
Page 154
• Are we getting the most bang for
our marketing buck?
• Do we have the ability to evaluate
marketing effectiveness rapidly and
make adjustments accordingly?
• Are we in a position to translate effective
marketing initiatives into opportunities?
• Do we have the data and tools to allocate our marketing
spending and evaluate the value of our marketing with
new metrics?
Case study
Business issue
►
Ernst & Young was engaged to assist an automotive manufacturer in reviewing
marketing strategies with respect to Brand A®.
►
The success and future growth of this brand may rely heavily on the level and
appropriate allocations of marketing spend to the available channels.
►
Ernst & Young was tasked with two primary objectives:
►
Calculate the impact marketing performance has on Brand A, for all geographic
markets (where statically significant), across all available marketing channels (TV,
radio, internet, among others).
►
Calculate an optimized marketing mix based on the information provided by the
Client and deliver the functional form of the model and its outputs to the Client.
Page 155
Case study
Business issue (cont.)
A Marketing Spend Effectiveness and Channel Optimization Analysis helps marketers
answer pressing questions concerning their business. Some of the most popular
questions are:
►
How important is base (volume generated in the absence of any marketing
activity) and incremental volume to my overall volume?
►
What has driven volume changes year to year?
►
What was the relative effectiveness of marketing activity year to year?
►
►
How did specific campaigns contribute?
►
Which advertising campaigns are most effective?
►
What trade tactics should be pursued for greatest effectiveness?
What marketing spending shifts, if any, should be considered?
Page 156
Case study
Scope: This analysis utilized the following parameters:
Brand A
Geographic area
Country X (96 Markets)*
Dealership count
175 (2006-2007), 170 (January–August 2008)
Analysis period
January 2006 – August 2008
Marketing channels
National Open TV, National Paid TV, Local Open TV,
Radio, Newspaper, Magazine, Out of Home, Cinema,
Internet, Alternative Events
Page 157 * markets with dealerships
Case study
Findings — incremental volume decomposition
• Marketing activity generated roughly 26% of the incremental volume during the analysis
period.
• Open TV, Paid TV, and Newspaper accounted for the majority of incremental volume.
16.4%
Page 158
Base
incremental
volume
Marketing
incremental
volume
74%
26%
National Open TV
2.4%
Newspaper
2.3%
National Paid TV
2.2%
Local Open TV
0.9%
Magazine
0.9%
Radio
0.4%
Out of Home
0.2%
Cinema
Case study
Findings (cont.) — marketing efficiency
Open TV generated the highest ROI for Brand A during the analysis period, followed by
Paid TV and Newspaper.
Incremental $ revenue per $ spent
Average ROI*
$40
$35
$30
$25
$20
$15
$10
$5
$0
National
Open TV
Local
Open TV
National
Paid TV
Newspaper
Magazine
Radio
Cinema
Out of Home
* Revenue generated by each marketing channel is based on average dealer price multiplied by volume sales contributions.
Page 159
Case study
Findings (cont.) — optimized marketing mix*
• Based on ROI estimates, additional funds to the marketing budget should be allocated across
marketing channels in the following proportions.
• While marketing channels such as Alternate Events and Internet were insignificant in the
statistical model, Client should allocate budget to these activities to maintain brand awareness
and equity.
Radio
Out of Home
6%
Magazine
12%
Cinema
2%
2%
National Open TV
26%
Local Open TV
15%
Newspaper
18%
Page 160 * Based on the most recent 12 months of data
National Paid TV
19%
Case study
Findings (cont.) — annual volume topline
Units Sold
The total units sold peaked at the end of each calendar year, even though the average
price was not at its lowest during this period, and dropped during April/May of each year.
30,000
$30,000
25,000
$25,000
20,000
$20,000
15,000
$15,000
10,000
$10,000
5,000
$5,000
Total Units Sold
Average Selling Price
-
Page 161
$-
Average Dealer Price
Case study
Findings (cont.) — price elasticity
Brand A® is not price elastic. Changing price alone does not yield significant changes in
unit volume sales. However, price changes coupled with TV or Newspaper campaigns
could generate significant ROIs.
Price elasticity (sensitivity)
-0.964
Most Elastic Markets
Market A
Market B
-0.931
Market C
-0.78
Market D
-0.76
Market E
-0.719
Least Elastic Markets
Overall National Price Elasticity
= -0.395
Page 162
Market V
-0.123
-0.089
Market W
-0.043
Market X
-0.038
Market Y
-0.036
Market Z
Case study
Findings (cont.) — annual topline spending
Marketing investments in Paid and Open TV represented 59% of all marketing investments in
2006, 51% in 2007 and 54% until end of August 2008.
$40
Investment Level (MM)
$35
$30
Alternative
Internet
$25
Cinema
Out of Home
$20
Magazine
Newspaper
$15
Radio
National Paid TV
$10
Open TV
$5
$0
2006
Page 163
2007
2008
(January-August)
Case Study
Value Creation
►
►
►
►
►
Allocations across different channels can be adjusted to optimize
overall return on each Brand
Further internal analysis can be performed on each marketing channel
at the geographic or customer class level to optimize overall return
on each channel
Similar modeling for other Brands can be conducted in other key
countries
Learnings can be used as a planning tool (benchmark) for new
launches in similar categories
Learnings can be applied to decision making on marketing channel
activity for other Brands
Page 164
Thank you
David Baron
Senior Manager, Advisory Services
Chicago, Illinois
+1 312 879 2764
[email protected]
© 2009 Ernst & Young LLP.
All rights reserved.
Page 165
Council Business
Marketing Executives Council
March 17, 2009
Council Business

Member Satisfaction Survey – Top Rated Interests
–
–
–
–
Pricing Strategies
Supplier Margin Erosion
Supply Chain inefficiencies
(8)
Point
ofIssues
Sale Data- Relationships
& Strategies
Pri ci ng Stra tegi es
Suppl i er ma rgi n eros i on
Suppl y Cha i n i neffi ci enci es
Poi nt of s a l e da ta
Cus tomer terms & condi ti ons
Return pol i ci es
I nventory ma na gement
Mfgr.-Cus tomer col l a bora ti on
Suppl i er i ma ge
Suppl i er cons ol i da ti on
Cus tomer di rect i mporti ng
0

1
2
3
4
What can/should we do as an association?
What can/should we do as a council?
–
–
NPD, Activant Vista, others?
Retail Insights / Retail Retreiver
Marketing Executives Council
March 17, 2009
5
Council Business

Next Meeting May 13 – Webinar/Teleconference (4 hours)
–
–
–
–

Update on Supplier Image Initiative - Cameron
AASA Market Research Resources - Hampshire
Communications Update - Beck
Green Issues – Bruno
Future Meeting Topics
–
–
Member Spotlight / Best Practices
Working Sessions – Creating AASA Standards/Guidelines
•
•
•
•
–
–

Terms and Conditions
Popularity Codes
Copyright and Trademark protection – Customer License
Web site – Terms of Use
Benchmarking with other industries
Member roundtable / how’s business
Format / Content
–
Suggestions for improvement (67 / 33 )
Marketing Executives Council
March 17, 2009
Wrap-up and Adjourn
Next Meeting:
May 13
Teleconference/Webinar
AASA Board Reception:
5:00 – 6:00
Marketing Executives Council
March 17, 2009