Transcript Slide 1

Marketing Executives Council
August 19, 2008
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
August 19, 2008
Today’s Agenda
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Welcome and Introductions (Tarnacki)
Review of Anti-trust guidelines (Bruno)
Review Supplier Image Initiative (Cameron)
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Lunch / Networking / Telephone Break
Wrap-up Supplier Image Discussion (Cameron)
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Final Discussion and Decision
Next Steps
Market Research (Cameron)
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Background / Progress to Date
Review of Options
Currently Available
Needed – Survey Results
What Are Your Products Doing Online? (Bruno)
Free-Cat (Brent Berman)
Council Updates (Cameron)
Wrap-up & Adjourn (Tarnacki)
Marketing Executives Council
August 19, 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
August 19, 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.
 Progress has been impeded by…
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Some members including board members concern over AASA’s role in
a certification program.
Business case development and presentation to gain buy-in from the
AASA board. (Nov ‘07, Feb ‘08, May ’08)
 Brings us to today…
• Draft of AASA Seal of Supplier Excellence Proposal
• The NEED to review other options
Marketing Executives Council
August 19, 2008
AASA Seal of Supplier Excellence
 The Current State of the North American Automotive
Aftermarket Supplier Image (Option A)
• Heightens the awareness of the value-added services and
provides AASA membership value down stream through the
development and licensing of a “Seal”
• Similar to “Good Housekeeping Seal of Approval”
• Incorporates many elements:
– Standards of Excellence
– Code of Ethics
– License Agreement
– 3rd Party Administrator
– Governance and Oversight
• Review Committee
• Arbitration Process
Marketing Executives Council
August 19, 2008
AASA Seal of Supplier Excellence
Option A
 Standards of Excellence
• Ten clearly defined standards – page 9
• Request Form – page 14
– Signed “Code of Ethics”
– Required answers / description by requestor
– Required proof of performance / documentation
– Non-refundable application fee inclusive of first year
license fee
• Establishment of 3rd Party Administrator
– Collects and stores all documentation
– Verifies completeness not accuracy
• Establishment of Review Committee (2 staff, 5 members)
– Approves / disapproves all requests
– Reviews and Rules in all arbitration
Marketing Executives Council
August 19, 2008
AASA Seal of Supplier Excellence
Option A
 License Agreement
• Signed Agreement – page 17
• Fees structure
– Application fee $1500 inclusive of first year license
– Annual renewal fee of $1000
• Use of fees obtained
– A portion, not to exceed 25%, may be needed for
administration
– Balance of annual fees funds association marketing of
program
• Potential Issues
– Amount of fees
– Non-refundable feature
– Annual collections
Marketing Executives Council
August 19, 2008
AASA Supplier Image Campaign
 The Current State of the North American Automotive
Aftermarket Supplier Image (Option B)
• Heightens the awareness of the value-added services and
provides AASA membership value down stream through an
industry message marketing campaign
• Similar to “Got Milk?”
• Incorporates elements of:
– Standards of Excellence as a Best Practice
– Creation of an Annual Supplier Excellence Award
– Employment of a professional marketing firm
Marketing Executives Council
August 19, 2008
AASA Supplier Image Campaign
Option B
 Standards of Excellence
• Ten clearly defined Best Practices – page 9
• Annual Supplier Excellence Award
– Nomination form – page 13
– Nominated by and voted on by customers (all channels)
• Establishment of an Award Committee
– Solicits nominations
– Reviews and tallies votes
Marketing Executives Council
August 19, 2008
AASA Supplier Image Campaign
Option B
 Professional Marketing Firm
• Bid process – page 10
– Minimum of 3 firms invited to bid
– Firm given 60 days to develop and submit proposal
– Firms present programs at November MEC meeting
• Scope – page 10
– Overall theme and tagline creation
– Marketing of annual award
– Communications/advertising/media plan with costs
– Creative ways to involve sponsors to defray costs
• Selection – page 10
– Must be or become an affiliate member of AASA if selected
– Judged on overall merit, creativity and perceived
effectiveness not lowest cost
Marketing Executives Council
August 19, 2008
Supplier Image Initiative
Option Next Steps
Option A: the “Seal”
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Legal scrubbing
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Decision / consensus on:
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Assurance of legal precedent
Creation of official documents
Fees
Role of Administrator
Role of Review Committee
Arbitration Process
Sell, Sell, Sell
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AASA Board of Governors
Members
Channel Partners / Customers / Industry
Marketing Executives Council
August 19, 2008
Supplier Image Initiative
Option Next Steps
Option B: the “Campaign”
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Scope and Bid Criteria
Potential Marketing Firms / Bidders
Funding
Sell, Sell, Sell
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AASA Board of Governors
Members
Channel Partners / Customers / Industry
Marketing Executives Council
August 19, 2008
Supplier Image Initiative
Recommendation
Option B: the “Campaign”
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Less controversial
Easier buy-in / approval
Potentially less start-up cost
Quicker ramp-up
More marketing focused
Far less complicated
Non-confrontational
Maintains control within MEC
Eliminates maintenance costs – admin, collections, etc
Marketing Executives Council
August 19, 2008
Lunch
Marketing Executives Council
August 19, 2008
Supplier Image Initiative
Decision
Option A or B?
Option C???
Next Steps:
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See previous slide
Committee selection
Update to Board on September 5
Marketing Executives Council
August 19, 2008
Market Research
AASA Automotive Aftermarket Status Report (published)
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US & Global Motor Vehicle Parts Market
Automotive Industry Data
Vehicle Sales Data
Vehicle Demographics
Maintenance & Repair by Sub-sectors
Global Overview including major emerging markets
AASA Other
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Supplier Barometer (participants only, e-format)
Replacement Rates (member only, downloadable PDF) HANDOUT
World Motor Vehicle Markets Report (OAC published)
Market Analysis (members only, e-format)
Industry & Economic Trends (Member-only web site)
Product Line Reporting (member/subscriber only)
Marketing Executives Council
August 19, 2008
Unique Market Research
“How’s Business” – Sales and Profits
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Net Sales
Net Income
Aggregate total and trend line
“State of the Aftermarket” – Key Performance Indicators
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Published price increase
Cost of goods sold – raw materials
Returns – Warranty, Obsolescence, total
Segmented – Co. Size, Market, Product
Benefits
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Allows benchmarking
Spots trends among top companies
Strategic planning tool
Used to describe industry dynamics
AASA membership value & differentiation
Marketing Executives Council
August 19, 2008
Market Research Survey
MEC Market Research Survey
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30 MEC members / 24 companies
5 responses
Market Research / Data Difficult to Obtain
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Import Specialist Market
Global especially by product category size and share
Engine Parts Data
Product Market Share
Service Shop Repairs Performed
Rank of Ideas – NOW!
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Please rank in importance as to how it might help
Please indicate your company’s willingness to share data
Please give your ideas on additional topics
Marketing Executives Council
August 19, 2008
State of the Aftermarket
Mock-up
Key Performance Indicators by Customer Segment
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
Retail
Traditional
Total Returns
Obsolescence
Returns
Warranty
Returns
Cost of Goods
Sold
Primary Raw
Materials
Published
price increase
Total
NOTE: Expressed in Percent of Net Sales
Marketing Executives Council
August 19, 2008
State of the Aftermarket
Mock-up
Key Performance Indicators by Supplier Size
12
10
8
0-$50M
6
$50-$150
4
$150&above
2
Total Returns
Obsolescence
Returns
Warranty
Returns
Cost of Goods
Sold
Primary Raw
Materials
Published
price increase
0
NOTE: Expressed in Percent of Net Sales
Marketing Executives Council
August 19, 2008
State of the Aftermarket
Mock-up
Key Performance Indicators by Product Category
12
10
8
Filters
6
Belts&Hoses
4
Water Pumps
2
Total Returns
Obsolescence
Returns
Warranty
Returns
Cost of Goods
Sold
Primary Raw
Materials
Published
price increase
0
NOTE: Expressed in Percent of Net Sales
Marketing Executives Council
August 19, 2008
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AASA and NAM
2008 Benchmarking
Scrap and rework rate (as % of sales)
Cost of goods sold (COGS)
Warranty cost (as % of sales)
Return on invested capital (ROIC)
Customer reject rate (parts per million)
Training hours and investment
Customer retention rate
Operating Equipment Efficiency (OEE)
Overseas sales (% of total dollar volume)
Machine availability
Cycle times
Market focus
Imported material and components from China (% of
dollar volume purchased from China)
• On-time delivery rates
• Imported material and components (% of dollar volume
purchased outside the U.S.)
• Improvement approaches (i.e., Lean, Six Sigma, etc.)
Source: Manufacturing Performance Institute
Marketing Executives Council
August 19, 2008
What Are Your Products Doing
Online?
Sarah Bruno
Arent Fox
Marketing Executives Council
August 19, 2008
Break – 15 minutes
Marketing Executives Council
August 19, 2008
Free-Cat
Brent Berman
Federal Mogul
Marketing Executives Council
August 19, 2008
Council Updates
AAPEX Joint-Association Marketing Sub-committee
Vision Conference Follow-up
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Global Selling & Sourcing
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Collaboration
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Survey & evaluation of freight consolidation program
Consulting & assisting on Free-Cat
Training
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Exploratory session planned on forming Training Council
AAPEX – NetworkNow! - Webinar?
Membership
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List of in-country 3rd party QC & inspection services in China
Benchmarking – Soon to launch link to NAM
AASA Member Global Database – Planned from Harris/D&B
30 Members / 24 Member Companies
Other areas of marketing participate as Alternate Member
Prospect suggestions?
Other
Marketing Executives Council
August 19, 2008
Wrap-up and Adjourn
Next Meeting:
November 18
Chicago, IL
Location???
Marketing Executives Council
August 19, 2008