Aiming for Number 1
Currently Michelin doesn’t offer anything resembling an eco-styled “green tyre” in its Motorbike range. However the manufacturer is confident that its new Sport Touring tyres last longer and are, on average, the longest lasting motorbike tyres available. These suggestions, according to Gros, are verified by research conducted by CERM. The research institute’s independent studies found that Michelin’s tyres last 10 per cent longer than any of the competition. The new Sport Touring tyre will be followed in 2008 by the release of a track-day hyper sport tyre. Again this is likely to use dual compound technology. Michelin representatives told T&A the manufacturer has planned an extensive publicity campaign for the official launch of the new tyre in February, which will be followed up with a comprehensive marketing strategy. This includes: a new website, revised retailer opportunities, show participations and media, advertising and PR activities – all in addition and forming the basis of the company’s new motorcycle tyre dealer programme. From Michelin’s perspective brand recognition is already there. Time and again unprompted recognition research shows that everyone knows Michelin and pretty much everyone recognises Bibendum as the company’s global corporate identity. For Michelin it is just a question of emphasising the sportiness of the brand and the performance of its motorcycle products.
There are signs that, with the advent of dual compound technology, customers have begun to become more aware of the performance of Michelin products. Oliver Gros pointed to the sales performance of the company’s existing performance as evidence of this. At the end of November 2006, 2CT tyres had already reached over 100 per cent of their sales target. As a result Michelin representatives say they expect a lot from the new tyre when it is released. When you consider that the 800,000 unit UK motorcycle tyre replacement market has remained relatively flat for the last five years this means the only way for Michelin to successfully achieve the number one spot in the next three years is to aggressively take market share from its premium level competitors. So how does the manufacturer expect to do that? Distribution is key Speaking to T&A, Oliver Gros highlighted Michelin’s relations with wholesalers and distributors as the weakest part of the chain.
And this exactly the area the company hopes to develop with its dealer programme. Currently Michelin has 700 customers in the UK. These include: wholesalers, two-wheel specialists, internet businesses, national retailers and two, four, and two and four wheel specialists. There are about 3000 two-wheel retail points of sale in the UK. Thanking Michelin customers for all their business, Gros explained how the new dealer programme aims to support Michelin dealers with an increasing number of marketing initiatives designed to help communicate why the quality associated with Michelin products is worth the 5-10 per cent more they cost up front. At the moment 65 per cent of UK two-wheel sell-in sales are to wholesalers and these are dominated by two or three leading national businesses and five to 10 regional wholesale businesses. The new programme will involve Michelin selecting between 50 and 80 retail partners – businesses that share Michelin’s two-wheel retail policy. The company will continue professional working relationships with every company it deals with, but will offer extra benefits to this 10 – 15 per cent of its customers. Support in this market comes in three distinct forms. According to Olivier Gros, Michelin is set to: improve its incentive scheme so the “commercial conditions are correct”; increase the range of product training it offers; increase promotional sales and marketing support.
One particular example of how Michelin wants to get closer to its customers comes in the form of the joint customer visits the manufacturer is recently introduced. The thinking is that Michelin’s representatives have more of the specific product knowledge customers demand than the wholesalers alone. “We have just started to do this with one customer and now other customers are interested too,” Gros commented. Motorcyclists are some of the most interesting tyre consumers on the market. Unlike with passenger cars, motorcycle tyre purchases are less likely to be distress sales and are commonly pre-meditated buys. According to Gros 70 per cent of motorcyclists are active in searching for information about their tyres online. And in this sector more than 50 per cent of consumers already know the brand and product they want when they arrive at the dealer. Consequently Michelin will also update its website in order to make sure customers are best informed about their products. Michelin has also invested in personnel with plans to add a key account manager to the team. A new sales manager joined the two-wheel staff late in 2006. In addition Michelin will offer financing and physical support in the form of: club talks, café evenings, freebies, and POS to supplement sales, all of which is to be introduced formally in 2007.