methodology aasa image campaign: phase 1 | research of independent service professionals © 2009...

MethodologyAASA Image Campaign:Phase 1 | Research of Independent Service Professionals

© 2009 AASA and The Catevo Group | Confidential

Marketing Executives Council Meeting | March 17, 2009

Methodology

Marketing Executives Council March 17, 2009

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


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

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


ASA Surveys

ASA surveys its members in 2007 and 2008

The study examined the use of OE-purchased 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.)


ASA Surveys

They still buy the majority of their products from aftermarket sources


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”


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


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


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


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

Qualitative Data:Focus Group Findings


Background

Focus groups held in:• Raleigh• Chicago• Los Angeles

Included a mix of:• Shop owners (50 percent)• Techs (26 percent)• Shop owners/techs (15 percent)• Service writers (9 percent)


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


Background

Participants included representatives from shops implementing “best practices”

Every effort was made to recruit the “questionable” service shop

Findings may be skewed

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

re-boxed generics that couldn’t compete on quality


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


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


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

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


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.)


Country of Origin

Summary: Brand comes before country of origin; they trust that the manufacturers have their best interest in mind


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


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


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”


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


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 safety-related generic part



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



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)


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


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


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


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


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


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

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


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


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


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


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


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


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 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


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.)


Field Sales Reps

Some said they appreciated the visits by sales reps• These tended to be the smaller and

mid-sized 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


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


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


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


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


Overall Importance


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

Decision-MakingProcess


Decision-Making Process

Top considerations when deciding on a part:



When you are placing an order for a particular part, how often do you ask for a specific brand?



When you are placing an order for a particular part, how often do you purchase a brand recommended by your aftermarket supplier?



When you are placing an order for a particular part, how often do you choose the least expensive part?



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?

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



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)

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 Messages

"Good Enough" Never Really IsRelying 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 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 Messages

All three of the messages resonated with the focus groups. “Why Take the Risk?” scored the highest.

Reaction to Spec Creative


Spec Creative ReviewApproximately half of respondents preferred the ad on the left. The other half preferred the ad on the right.

“Pride” Ad “Fear” Ad


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


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


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?


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


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

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


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


Why the Research Worked

Validated industry consensus Revealed some unknowns Countered conventional thinking

Continued . . .


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

The Road Ahead


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.


The Road Ahead

Remainder of 2009• Trade PR• Advetorial Campaign• Industry Award Program

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 Address business practices


Supplier Image Initiative

Repair Professional – “Product Quality”

• 6-Part Series: Feature Articles1. What’s in a Brand?2. Keeping Customers for Life3. Value of Value Lines4. Beyond Price: Value Added Services5. Who Supplies the Tail?6. We are All in this Together


Supplier Image Initiative Next Steps

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



Jobber / Distributor – “Recommended Best Practices of Value Added Suppliers”

• Supplement with full-page trade ad• 6 Feature Articles

1. What’s in a Brand?2. Definition of Full-Line3. Value of Value-added4. Direct Importing: Risk v. Reward5. Who Supplies the Tail?6. We are All in this Together



Supplier / Manufacturer – “Supplier Image”

• Special Reports1. What’s in a Brand?

Selling Against Short Lines

2. The Value of Value-Added ServicesQuantify do not Just Give Away for Free

3. Protecting the AftermarketMaintaining consumer confidence

MethodologyThank You

© 2009 AASA and The Catevo Group | Confidential

Marketing Executives Council Meeting | March 17, 2009

methodology aasa image campaign: phase 1 | research of independent service professionals © 2009...

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