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Anchors aweigh or away?

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Anchors aweigh or away?

Our name for them is “anchor brands.” Almost all tire dealers have them. They are the brands to which you tie your name, often by posting a sign on or outside your store. Or both.

Sometimes multiple brands are displayed on a pole near the street. I would guess that the anchor brands are close to the top, unless they are in alphabetical order.

The anchor brands I’m talking about are Goodyear, Michelin and Bridgestone. How popular are they?

An in-depth look at what brands are offered by the Modern Tire Dealer 100 hammers that point home.

The entrepreneurs on the 2012 MTD 100 list (there is a six-way tie for 99th place) average 11 tire brands each. They represent nearly 5,500 outlets.

Michelin was sold by 79%, or 82, of the 104 dealers. They represent 4,455 outlets. Both totals topped all brands. Goodyear was sold by 73% of the dealers, who represent 4,234 outlets.

Although Bridgestone, at 59%, was actually the fourth most popular brand based on number of dealers (BFGood-rich was sold by 68%), it was second in outlets represented, surpassing even Goodyear.

Brand              #/dealers     #/outlets

Michelin            82                4,455

Goodyear         76                4,234

Bridgestone      61               4,409

A deeper analysis of the brands sold by the MTD 100 dealers further demonstrates the impact the Big 3 brands have on market share. For example, seven of the top 10 sell all three.

Of the 104 dealers, 36 sell Michelin, Goodyear and Bridgestone. That means more than one-third of the largest independent dealers in the country, representing 3,272 stores, sell all three of the top brands. Only two dealers don’t sell any of the three brands.

When you include the number of dealers who sell two of the three, the impact of the anchor brands is staggering. Forty-nine dealers sell two of the three brands, so 85 of the MTD 100 — 82%! — sell either two or three anchor brands. Only 17 carry one of the three.

This is not an aberration among the various distribution channels. Sears Auto Centers and Walmart Tire & Lube Express outlets sell all three brands. So does Pep Boys Service and Tire Centers.

Sam’s Club (Michelin and Goodyear) and Costco (Michelin and Bridgestone) sell two of the three. Car dealerships focus on original equipment brands, so, well, you get the idea.

Money is greatly responsible for the brand overlap. Michelin North America Inc., Goodyear Tire & Rubber Co. and Bridgestone Americas Inc. spend millions of dollars targeting the consumer every year. Why not take advantage of it?

Anchor brands carry their company’s other brands along with them. Of the 82 MTD 100 dealers who sell Michelin, 69 of them also sell the BFGoodrich brand. So 84% of the time a dealer sells Michelin, he or she also sells BFGoodrich.

If you include the company’s Uniroyal associate brand, 46 dealers who sell Michelin sell all three brands.

Forty-eight of the dealers who sell Goodyear also sell Dunlop; 36 of them sell Goodyear, Dunlop and Kelly.

The Bridgestone and Firestone brands are sold by 52 dealers, or 85% of the number of dealers who sell Bridgestone (the company has de-emphasized the marketing and production of its Dayton associate brand the last few years).

Is having the Big 3 in stock a good thing? Should you be yelling “anchors aweigh,” which means bringing in the extra major brands, or “anchors away” and jettisoning them?

On the plus side, offering the Big 3 can entice more potential customers into your store. There is no question that brand equity is important, whether it be your brand or someone else’s.

On the minus side, promoting the Big 3 as your brands of choice doesn’t help differentiate you from your competitors. That is important, too.

I don’t think having a lot of dealers selling all three brands is in the best interests of their respective manufacturers, but maybe they don’t realize how extensive the overlap is.

In the vast majority of cases, it isn’t the brand that sells the tire, anyway. It’s you. The brand that makes you the most profit, either directly or indirectly, often influences which brand you sell.

Bottom line, there are a lot of brands out there. The MTD 100 listed 94 in all.

That gives you plenty of opportunity to sell what you want how you want.    ■

If you have any questions or comments, please email me at bob.ulrich@bobit.com.

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