Transcript Slide 1

Marketing Executives Council
February 28, 2008
Today’s Agenda
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Welcome and Introductions (Tarnacki)
Review of Anti-trust guidelines (Bruno)
Supplier Image Business Case (Cameron)
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Getting the Message Out (Owens)
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AASA Show Committee expectations
AAPEX – Joint Association Marketing Sub-Committee (Harris)
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New Special Report follow-up to Risks of Direct Import
Lunch 11:30
AAPEX – AASA Involvement (Gardner)
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AASA Proposal and Media campaign
Break 10:30
Distributor Liabilities (Bruno)
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Overview and Feedback
Sub-Committee Mission
Open Discussion
Wrap-up & Adjourn (Tarnacki)
Marketing Executives Council
February 28, 2008
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
February 28, 2008
Supplier Image Initiative
 Since its inception, the MEC has continued to advance the
idea of a Standard of Excellence to distinguish value-added
suppliers from all others.
 Supplier Image Initiative Business Case
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Some members including board members expressed concern over
AASA’s role in certification
Business case was developed in last MEC breakout to educate and gain
buy-in before moving further
 Presentation to the BOG tomorrow
 Move toward a formal recommendation by next BOG
meeting
Marketing Executives Council
February 28, 2008
Business Case – Talking Points
 The Marketing Executives Council has requested time on
AASA Board of Governors agenda to discuss its Supplier
Image Initiative - why it is important, what it is, what it is
not and our hope to gain buy-in for moving forward.
 When the MEC was formed, its primary objective was to
develop a strategy for improving supplier image and
awareness of the value added services provided. This has
been on each meeting agenda since its inception in 2006.
Marketing Executives Council
February 28, 2008
Business Case – Talking Points
 Among issues identified by the council facing suppliers
today, include:
• Inferior products entering the country that pose safety, quality
and reliability concerns.
• Effects of the imported products on other components within
the vehicle (which could lead to premature failures,
unnecessary warranty claims, etc.).
• Continued loss and appreciation by customers of value-added
services and programs.
• Increased momentum of virtually all aftermarket components
becoming commodities (which will lead to a market driven
only by price).
• Degradation of brand equity.
• Further erosion of North American manufacturing.
• Negative impact on the image of the independent aftermarket
(pushing sales to OE service outlets).
Marketing Executives Council
February 28, 2008
Business Case – Talking Points
 The Supplier Image Initiative, as it has become known,
focuses on these elements to address the identified issues:
• What does it mean to be an AASA member?
• When it comes to country-of-origin, it is not about where a
product is made but rather who develops and stands behind it.
• Retailers, distributors, program groups, jobbers and
technicians can have confidence in companies that hold
membership in AASA knowing that member companies will
provide quality products supported by important value-added
services and programs.
 Over the past year or more, the MEC has developed a road
map answering the questions of – where we are; where we
should be; and, how we should get there, which is in your
copy of the business case.
Marketing Executives Council
February 28, 2008
Business Case – Talking Points
 Our proposal to you is that we want to develop and present
to you at a future meeting, our recommendations on a
Supplier Excellence enhancement to AASA membership.
• This enhancement would be an additional tiered status of
membership, a Premier status if you will, only attainable by
meeting minimum guidelines, which you can see an example of
in the Business Case.
• It is not a certification but rather standards of excellence.
• Legally, these would be administered by submitting to a “code
of ethics” at the time of membership and subsequent annual
renewal.
Marketing Executives Council
February 28, 2008
Business Case – Talking Points
 The minimum standards of these guidelines should be both
attainable for the vast majority of current membership yet
meaningful as to provide value downstream. It is proposed
that the following be adopted as minimum standards:
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Sales representation / manpower
Credit terms
Marketing programs
Industry standard cataloging
Product specifications
Quality control
Product liability
IP protection
Technical support and training
Category management
Marketing Executives Council
February 28, 2008
Business Case – Talking Points
 It may be necessary to amend these guidelines in the future;
however it is believed that this is a reasonable start. While
these minimum standards may appear inherent to all
suppliers to the aftermarket, it is believed that for many
short-line and/or off-shore suppliers they will be difficult to
obtain.
 Our desired result is to extend the value of membership in
AASA down to the customer level and back that up with a
tangible list of standards that not all AASA members may
qualify for but should be attainable. Additionally, we want
to heighten the awareness of the value added services by our
members as well as the intangible benefits of dealing with
well known and respected suppliers.
Marketing Executives Council
February 28, 2008
Business Case – Talking Points
 This is only one part of the Supplier Image Initiative but it is
the foundation. Without it we will have to choose an
entirely different direction. However, it is the combined
thought of the Marketing Executives Council, your
marketing experts, that this is the best course of action.
 All details are not yet finalized and a formal
recommendation is forthcoming. However, without your
buy-in we are reluctant to move forward.
 Questions?
Marketing Executives Council
February 28, 2008
Getting the Message Out
on Supplier Image
Jon Owens, Babcox
Marketing Executives Council
February 28, 2008
Original AASA Proposal:
» Research
» Ad Campaign
» Franchise Piece
» White Paper
» Monthly Editorial Section
» Industry Award
New Elements:
» Enhance Top 100 List
» AASA “You Tube” Page on AMN
» AASA Press Center Page on AMN
» AASA Stock Ticker Page on AMN
Research Project:
» Comprehensive (i.e., all levels of market)
» Consultative question development
» Results for each level
» Cross-hatch of results across all levels
» Full analysis of all results
» Guaranteed return rates
» Full disclosure of methodology
» Presented as a comprehensive report to
guide your efforts
Monthly Editorial Section:
» AMN, CM & TG (reach over 165,000)
» Educate readers at every level
» Build AASA and member brands
» Build “awareness” of member services
and benefits
Industry Award:
» Create a new “Image” award
» Validate and recognize member
performance
» Babcox to execute balloting and gather
results from our audience(s)
» Present award at annual AASA breakfast
or at GAAS…….
Enhance Top 100 List:
» Feature additional or different information
than is currently captured
» Make it AASA only
» Use the piece to better position AASA
members and build “awareness” of
member services and benefits
» Currently sponsored and has it’s own
page on AMN
AASA “YouTube” Page on AMN:
» Upload member video’s to a web page
within AMN
» Do a weekly story that features a video
“snippet” and links back to the page
» Video Categories = solving customer
problems, product or service
testimonials, product “glamour” shots,
product tests, service enhancements,
training, etc…
AASA Press Center on AMN:
» Upload all press releases, product
announcements, catalog enhancements,
racing stories, etc….
» Do a weekly story on AMN to cover
highlights and link readers back to the
page
» Brand each individual story that makes it
to AMN Daily news with small AASA logo
AASA Stock Ticker Page on AMN:
» Create a “stock ticker” profile of all
publicly traded AASA members tracking
real time stock performance 24/7
» All quarterly and annual financial releases
on AMN direct readers to this page
» Do a weekly overview story on AMN to
cover performance of the ticker for the
week
Break
15 minutes
Marketing Executives Council
February 28, 2008
Distributor Liability What You Need to Know
Presented by
Sarah Bruno, Esq.
Arent Fox PLLC
Washington, DC
February 28, 2008
Distributor Liability
You can be liable!
–Counterfeiting
–Product Liability
–Recall Issues
There are several theories for holding the
distributor accountable…
Distributor Liability – What You Need to Know.
Active Participation
 Active Participation in a Counterfeiting Scheme
• Obviously, distributors can be liable for active
participation.
• Microsoft case – distributor found liable for failing to act
to remove counterfeit goods after receiving notice.
But it is not limited to active participation…Distributors
can be liable for simply "ignoring" what appears to be
illegal.
Distributor Liability – What You Need to Know.
“Willful Blindness”
 Distributors are liable for being “willfully blind”
• They should have known about the counterfeit goods or they failed
to inquire.
• Factors the courts have considered:
– Where the goods were purchased
– Whether the goods were sold with the authenticating documentation
– Whether the quality differs from the quality expected by consumers
– The pricing of the goods
– Evidence on billing slips
Distributor Liability – What You Need to Know.
What does this mean for you?
Pay attention to the details....
• Packaging slips – do they look tampered, altered or raise red flags
for other reasons?
• Quality – is the product of the quality that you expected?
• Safety standards – does the product include the safety
specifications?
• Country of origin – was the product manufactured in the country
that you expected?
• Trademarks and logos – do they look authentic?
Distributor Liability – What You Need to Know.
Pay Attention to the Logos and
Packaging Elements
 Trademarks - It can be a product name, logo, trade name,
part number, the name of a service, the color and design of
a product’s packaging.
Distributor Liability – What You Need to Know.
Contractual Protection
- Protect yourself contractually
- Have an agreement with the manufacturer that asks them to
indemnify you for any claim of infringement.
- Warranty provision from the manufacturer attesting to the
legitimacy of the product.
- Be vigilant! Look for the red flags and then take action
when you come across them.
- Notify the manufacturer when you believe there is a
counterfeit goods problem.
Distributor Liability – What You Need to Know.
Product Liability
Distributors may also be found liable for damage or harm
caused by a defective product
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A distributor may be “strictly liable” if it is in the chain of
distribution. This means that it can be found liable without any
evidence that they were negligent or acted willfully.
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A distributor can also be liable if the advertising or product label
indicates the product is manufactured by the distributor.
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A distributor can also be liable if the foreign manufacturer is
located outside of the U.S.
Distributor Liability – What You Need to Know.
What Can you Do?
 Trust your gut - if something doesn’t seem right, pull it,
or contact the manufacturer and put them on notice of
the problem.
 Protect yourself contractually
• Require the manufacturer to indemnify you.
• Require the manufacturer to meet all the required safety
specifications.
• Require the manufacturer to warranty the quality of the product
and the fact that it meets the appropriate safety standards
Distributor Liability – What You Need to Know.
Recall of Private Label or Will-Fit Product
 What is a private label or Will-Fit product?
• Generic equivalent to a branded product
• In some instances, they are more affordable
 In order to make the products more affordable,
producers may have to cut costs.
• May lead to safety issues
• The products may not meet government or industry standards
• Lack of quality control
• However, it arguably keeps the cost down for customers
Distributor Liability – What You Need to Know.
Private Label Products
 Insurance Companies are also supporting the industry
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State Farm case (2006) – State Farm was allowed to continue to require repairs to
include non-OEM parts. Policyholders had sued for breach of contract.
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American Family Mutual Insurance Company case (2007) – insurer had to pay $17
million to 315,000 residents of Missouri who claimed that repairs included inferior
auto parts.
 In response to this issues, the public has demanded that NHTSA and
Consumer Product Safety Commission take a more active role
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NHTSA has began to put blame on the importing reseller when attributing liability
for a product that does not meet U.S. standards
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NHTSA took action against a tail-light distributor and assessed fines in the range of
$650,000
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Spitzer asked the CPSC to draft legislation that imposes penalties against
distributors, as well as manufacturers, that are selling unsafe products. The
product must ID the distributor and the manufacturer.
Distributor Liability – What You Need to Know.
Questions?
Distributor Liability – What You Need to Know.
Lunch
30 minutes
Marketing Executives Council
February 28, 2008
AASA AAPEX Show
Committee Expectations
Chris Gardner
Marketing Executives Council
February 28, 2008
AAIW
 Jointly owned by SEMA, AAIA and
MEMA
 Coordinated activities
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AAIW promotion
Hotel contracts
Housing
Registration
Network Now
Shuttle buses
Marketing Executives Council
February 28, 2008
AAPEX
 Jointly owned by AAIA and MEMA
 Coordinated activities
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Housing
Registration
Promotion
Special events (media reception,
chairmen’s reception, etc.)
• Liaison with show management
• IP/BP enforcement
Marketing Executives Council
February 28, 2008
AAPEX
 2007 Results
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2,016 exhibitors
4,845 booths
9,361 total buyers
3,528 international buyers
23,570 total attendees
Marketing Executives Council
February 28, 2008
AAPEX
 2008 Changes
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Small increase in promotion budget
GreenZone renamed GreenWay
New AASA Show Committee
New AAIA-AASA joint Marketing SubCommittee
• Focus on non-core sponsors
Marketing Executives Council
February 28, 2008
AAPEX
 AASA Show Committee
Barry Harris, Committee Chairman
Brian Tarnacki, MEC Chairman
Brian Altenberger, MEC Vice Chairman
Brian Couch, UCI
Tony Battaglia, Permatex
Kevin Burton, Four Seasons
Dil Kulathum, Cardone
Chris Gardner, AASA staff
Jack Cameron, AASA staff
Marketing Executives Council
February 28, 2008
AAPEX
 Show Committee
• Subset of MEC
• Formed in November 2007
• Ad hoc meetings & conference calls
 Expectations
• Issues/concerns
• Advisory group for questions and
possible initiatives
• Feedback on show changes
Marketing Executives Council
February 28, 2008
AAPEX Joint Association
Marketing & Promotions
Sub-Committee
Barry Harris
Marketing Executives Council
February 28, 2008
AAPEX Sub-Committee
 Joint AAIA and AASA collaboration
 AAPEX Marketing & Promotion Focus
 First Meeting –
• Dec 18, 2007
• Robert Bosch facility in Chicago
• AASA Marketing Executives Council &
AAIA Marketing Committee
• Sam Lippman, facilitator
Marketing Executives Council
February 28, 2008
AAPEX Sub-Committee
 Joint AAIA and AASA collaboration
• Six Groups of Five
• Idea Generation Topics…
– Two Most Important Benefits of AAPEX for
Buyers, Exhibitors and the Industry
– Two Most Promising Attendee Growth Areas by
Region, Distribution Channel and Job Title
– Top Obstacles to Convincing These Targets to
Attend and/or Stay Longer at AAPEX
– Best Strategy to Overcome These Obstacles
Marketing Executives Council
February 28, 2008
AAPEX Sub-Committee
 AAIA / AASA Joint AAPEX
Marketing Sub-Committee formed
Feb 14, 2008
 Sub-Committee Members –
Jack Cameron, AASA Staff
Arlene Davis, AAIA Staff
Chris Gardner, AASA Staff
Bill Hanvey, Schaeffler Group USA
Barry Harris, Timken
Mike Kamal, Wetherall Associates
Tom Marx, The Marx Group
Tony Molla, ASE
Laura Sullivan, Akebono Brake Corp.
Rich White, AAIA Staff
Marketing Executives Council
February 28, 2008
AAPEX Sub-Committee
 Mission Statement –
“To provide short- and long-term strategic
direction to association professional staff for
the marketing and promotion of AAPEX with
special emphasis on increasing buyer and
service provider group and individual
attendance. The ultimate goal is to improve
the experience, justify the investment and
enhance the overall value proposition for
exhibitors and buyers thus ensuring the future
viability of the event.”
Marketing Executives Council
February 28, 2008
Marketing Executives Council
February 28, 2008
AAPEX Sub-Committee
 Group Discussion – 2008 and Long Term:
• KPIs (Key Performance Indicators) –
– How Will We Gauge Success?
• Ideas on Improving the AAPEX experience…
– Suggestions on Driving Attendance
– Promotional Brainstorming
– How to Attract More Service Professionals
– Draw More East Coast Attendees
– Leverage / Compete for SEMA Crowd
• Other???
Marketing Executives Council
February 28, 2008
General Discussion / Wrap-up
 Meeting Format & Frequency
• Original charter called for a two-day meeting once per
year
• Addition of Networking Opportunities – one of the most
valuable assets
• 2008 Remaining Schedule:
– May 22 in conjunction with GAAS - Chicago
– August 19 in conjunction with BPC - Detroit
– November 18 - Chicago
 MEC membership recruitment / prospects
 APRC Excellence Award (see next slide)
 What’s on Your Mind? Comment or pass
 Adjourn
Marketing Executives Council
February 28, 2008
APRC Excellence Award
The Excellence awards recognize outstanding achievement
in these categories:
• Advertising (open to auto/truck suppliers only)
• Communications Campaign (PR program that was an
on- going campaign)
• Crisis Communications
• Internal Communications
• Media Relations (Consumer)
• Media Relations (Trade)
• New Product Launch
• Press Events
• Special Events/Observances
All entries must be received at APRC headquarters by Friday, March 28.
If you have questions, contact Emily McConnell at [email protected]
or 919-406-8811.
Marketing Executives Council
February 28, 2008
Next Meeting
May 22 in Chicago
following GAAS
Marketing Executives Council
February 28, 2008
Back-Up Slides
2007 In Review:
Slides of AASA Supplier Standard of
Excellence and Improving the Image
of the NA Supplier
Marketing Executives Council
February 28, 2008
Communications Campaign
(session 1)
Universal advertising campaign that can be repurposed for all
target audiences
 Primary goal of campaign will be designed to elevate the North
American Aftermarket Supplier
 Secondary goal of campaign will be to promote AASA to industry,
members and media
 Get approval from AASA board of governors to create an RFP to
put for bid of a complete ad campaign that would include the
following:
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Print ads
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Franchise pieces
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Web site
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Public relations strategy and campaign
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Advertising strategy for trade publications, financial publications and
consumer media
Marketing Executives Council
February 28, 2008
AASA Supplier Standard of
Excellence
(session 1)
 “Standard of Excellence” will encompass
the value-added supplier elements
 Create a logo / seal for North American
suppliers to utilize on packaging, ads,
collateral materials that will reinforce the
“Standard of Excellence” that they adhere
to in their products, businesses and
operations
 Criteria can be designed and analyzed by
a third party firm and administered and
managed by AASA
Marketing Executives Council
February 28, 2008
AASA Supplier Standard of
Excellence Criteria
(session 1)
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Quality
Supply
Safety standards
Training
Product lifecycle management
Cataloging / pricing
Innovation / latest technology
Designed for the aftermarket
Warranty
We are the “parts” experts
We’re more efficient/profitable to do business
Intellectual property
Marketing Executives Council
February 28, 2008
Brand Planning Process
Where are we?
Are we getting there?
How do we get there?
Marketing Executives Council
Why are we there?
Where could we be?
February 28, 2008
Where Are We? (session 1)
 “Brands” are highly valued in the
aftermarket...
 However, we have lost:
• share to OE dealers
• share to LCC’s (Low Cost Countries)
• control of Brands to retailers/distributors
Marketing Executives Council
February 28, 2008
Where Should We Be? (session 1)
 Primary target: end user (professional
installers / DIYers)
 Other audiences: distributors/retailers,
government, Wall Street, vehicle owners
 Have them trust the aftermarket supplier
• Build our credibility
• Get credit for what we do
 Regain share from the LCC’s and OEMs
Marketing Executives Council
February 28, 2008
How Do We Get There?
(session 1)
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Aftermarket supplier standard of excellence - value-added supplier
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Value-added standards:
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Quality
Supply
Safety standards
Training
Product lifecycle management
Cataloging / pricing
Innovation / latest technology
Designed for the aftermarket
Warranty
We are the “parts” experts
We’re more efficient/profitable to do business with
Manpower
Intellectual property
Need to flesh out
Support with communications campaign
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Code of conduct
Focus on the positive
All sing from the same hymn book
Better IP protection
Better industry standards (data, quality…)
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Enforce adoption
Marketing Executives Council
February 28, 2008
Communications Campaign to
enhance the Image of NA
Supplier
(session 2)
Communications Campaign
 How do we know we are getting there:
Measure market share in North America
pre and post by product line or by dealer
share
 Measurements: Interest/response level
of other AASA members
 Pre and post evaluations: Survey key
buyers pre & post
 Frequency: Every six months
Marketing Executives Council
February 28, 2008
Communications Campaign to
enhance the Image of NA
Supplier
(session 2)
Communication Phase 1:
 Target audience: Suppliers.
 Message: Include meaning,
measurements and some
information from surveys regarding
differentiation. How to get certified,
where to get more information
 Assumption: Standard is
determined.
Marketing Executives Council
February 28, 2008
Communications Campaign to
enhance the Image of NA
Supplier
(session 2)
Communication Phase 2:
 Target audience: Buyers and
technicians
 Message: Informational regarding
the standard
 Assumption: Standard is
determined and some suppliers
already have it.
Marketing Executives Council
February 28, 2008
Communications Campaign to
enhance the Image of NA
Supplier
(session 2)
**Prior to communication, benchmark
the current market to have a pre
and post opinion regarding
certification. Benchmark other
industries (UL or JD Powers) to
understand their communication
process and their methods.
Marketing Executives Council
February 28, 2008
Criteria for Standard of
Excellence
(session 2)
1. Basic Criteria for Standard of Excellence
 Product Quality
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Must adhere to industry standards (ISO,
TS) or proprietary standards
Supply proof for sourced product
Adhere to current safety standards
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Carry product liability insurance
NHTSA standards, OSHA standards, etc.
No banned substances
Marketing Executives Council
February 28, 2008
Criteria for Standard of
Excellence
(session 2)
1. Basic Criteria for Standard of Excellence
 Cannot engage in illegal activities or
business practices
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Training
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Tech line
Provide Catalog
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No IP violations
ACES compliant
Conduct e-commerce with customers
Marketing Executives Council
February 28, 2008
Criteria for Standard of
Excellence
(session 2)
2. Cost of qualification or application
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AASA Member - Minimum fee or reduced fee
Non-members to pay a higher fee or equivalent
of membership dues for their category
3. Who Can apply for Standard?
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Any North American Aftermarket supplier
Have three different application/cost levels
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Company (highest)
Product (middle)
Brand (lowest)
Marketing Executives Council
February 28, 2008
Results of Breakout Groups“Top Five things that can be
done NOW to Reinforce doing
Business with a North
American Supplier”
Marketing Executives Council
February 28, 2008
China Quality
 Recent events involving toothpaste,
dog food, toys and now tires highlight
the need for special care when
sourcing products from here or abroad.
 Is all product coming from China poor?
No
 How can you ensure that the product
you source meets rigorous standards
for quality, reliability and safety?
Marketing Executives Council
February 28, 2008
Solution
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Source from experienced, global
aftermarket suppliers
Quality/supplier certifications
Rigorous product testing
Engineering/manufacturing expertise
We stand behind our products
Training and technical support
Cataloging
Marketing Executives Council
February 28, 2008
Communication Vehicles
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Ad
Press conference
AAPEX booths
Press release
Editorial campaign
PowerPoint
Collateral
Website
Value-add template (Proliance)
White paper
Marketing Executives Council
February 28, 2008