A
Primer On Marketing
Part 1 - Introduction, 4 "P's", and Product
by A. Michael Baker - Printed in Specialty Automotive Magazine
Yes, Grasshopper, marketing is so simple! Just follow the path of the four "P's"; Product, Price, Place, and Promotion. Well, as my fellow Masters of Marketing Zen are very quick to point out, it sounds simple but actually is sooo complicated. Marketing encompasses all the obvious things along with subtle nuances in every aspect of your business. And, yes, this column is not titled "Zen and the Art of Performance Marketing." If you will indulge me for a moment, I will explain why the "Performance Marketing, Technology, and Trends" column is in fact the most important marketing column you will read.
The four basic components of marketing are (in order of importance) defined as: Product -- you can't do marketing if you don't have a product that someone wants to buy; Price -- ultimately price is the second most important decision in consumer buying behavior; Place -- your store, mail order ads, web retailing, the consumer has to have a place to get the product; Promotion -- yup, advertising, personal selling, PR, all this stuff is in last place though you must not think it unimportant. As each issue of SAM comes, each column will focus on one of the four aspects of marketing along with information on all of them. Want to sell more parts? Have the parts they want to buy at the price they're willing to pay in a place where they can (and will) buy it and then promote it so they know what you're doing. Well, Grasshopper, are you ready to begin your journey?
This
Isn't Your Father's Performance Market
It's no secret; the "hot" new trend today is small, front-wheel drive
cars. The fact is that many companies like Kaminari (aerodynamics), TRD
(Toyota performance parts), Mikuni (carburetors), and many others were
making oodles of money in this new market two decades ago! It's a hot
new market because the "traditional" performance companies have just woken
up to the fact that it exists. The big change sees this new/old trend
now growing faster than ever as a new generation of teenage "rebels" has
chosen it for their adrenaline pumping thrill of choice; and because the
formerly West Coast/East Coast trend is finding its way to the big volume
potential of Middle America. I'm not sure whether street racing these
little cars is more or less dangerous than knoshing, head-banging, and
other punk thrills of a previous generation; but at least our industry
can identify much closer with it.
These
Consumers Buy The Same Products - And More
What do these consumers buy? Basically the same things we've always sold
to "traditional" performance enthusiasts; cams, induction components,
headers, exhaust, pistons, cranks, rods, bearings, clutches, balancers,
valve (cam?) covers, ignition, bolts, gauges, books, tires, wheels, and
racer tape. But you are also going to sell a lot of new things that practically
didn't exist in the "traditional" performance market before now; like
lowering springs and other suspension components, aerodynamics, and nose
rings. No, you don't need to go into body piercing. You do have to realize
that, although they will still come into your shop and plunk down their
whole paycheck for the latest trick parts, this new generation is not
like the old. That kid with a gold stud in his tongue and a ring in his
eyebrow may well give you a totally blank stare when you mention the new
Integra part from a well-known 50-year old "traditional" manufacturer.
And his eyes may well take on that familiar gleam of "parts lust" when
you mention Eibach, Nakayama, Neuspeed, OBX, GReddy, or Iceman. Get ready
to find new suppliers (or new brands from old suppliers like Chikara from
Hedman) to satisfy the product demands of this new customer.
What
You Should Be Selling Now
While future columns will keep you updated on product trends in this marketplace,
there are two that you need to pay attention to right now. First, this
new generation of consumers is addicted to nitrous; for their cars not
their noses! Make sure you stock nitrous kits for imports and that you
offer bottle refills to get consumers back to your store on a regular
basis. They will buy a lot more parts from you if they are coming back
to your store every week for a bottle refill. Give them a chance to shop
while you fill the bottle and they might not mind paying a little extra
to get it right now instead of waiting for the "cheap" mail order company!
You might also consider selling Puritan-Bennett's Nytrous-Plus brand nitrous
oxide as it cannot be abused by the druggies. This will keep an unwelcome
class of customers out of your store and solidify your friendship with
the local D.A.R.E. officer. The second thing you need to get your hands
on is the new line of front-wheel drive drag slicks from Mickey Thompson.
Replacing the old road-racing tires we made do with until now, these new
M/T slicks offer enormous profit potential if you stock them. Remember,
the right product mix is your most important key to profits.
Profits!
We don't need no stinking profits.
The trend being set by internet based companies gives any experienced
businessman a sinking feeling in the pit of his stomach. Amazon.com, Buy.com,
and many more like them have been based on a penetration pricing strategy
that creates lots of sales, lots of operating losses, and "other worldly"
stock valuations on Wall Street. Sure those companies talk about their
great customer orientation and other such malarkey; but the fact is that
real service is picking a book off the shelf at our local Barnes and Noble
or seeing that spoiler live, up close, and personal right in your shop.
It has nothing to do with waiting for the UPS truck to arrive and then
hoping the delinquents next door don't steal the package off your porch.
Consumers buy from "mail order" (generic term for direct marketers without
storefronts) companies because - read my lips - it's cheaper! Unless you've
found a way to make the performance aftermarket another "darling" of Wall
Street, you and I are going to need operating profits instead of surviving
off of investor's money. The problem we face, though, is consumer expectations
for deep discount pricing, even falling prices. So how do you price your
offerings and still prosper? The next PMT&T column will focus more on
pricing strategies and tactics. For now, in a nutshell, you keep tip-toeing
through the mine field. Make profit where you can, lose it where you have
to, and make product (yup, there's that first, most important "P" again)
mix decisions that lessen competition.
It's
Not The Same Old Smoky Speed Shop
I'm dating myself here, but, I miss the old speed shops -- greasy floors,
wrecked pistons turned up on the counter for ashtrays, and more bench
racing than you can wag a tongue at. I remember Harry Eberlin's first
store, crowded with people hanging out. In the end, his Super Shop stores
were the last place you wanted to hang out. The ambiance and employee
attitudes just didn't encourage it. You want to sell parts? Make your
"Place" the place to buy 'em. Forget the grease and the turned up pistons,
but encourage consumers to be in your store! Give them a place to sit
and bench race, put more than just products on display, create regular
traffic with consumable products like nitrous refills, and make sure your
employees turn off the high pressure while encouraging people to relax,
take their time, and enjoy themselves. Make your shop a place where a
consumer feels welcome to spend the afternoon even though the only thing
they bought was a soda out of your machine or a virtual "ride" in your
arcade machine. Do I hear the words "new profit centers" here. When you
put up your web site (you are going to sell over the web, aren't you?)
point a web cam at the arcade game and let people have a hoot watching
me feed in quarters and continuously crash. They'll just have to come
in and be on the web cam themselves. Heck put a terminal in your store
so your customers can race against each other through your web site. There
are billions of ways you might increase traffic in your store; and you
need to try them all. Traffic is the lifeblood of retail commerce.
Promotion
- Catch The Attitude
X, Y, whatever you want to call it, this new generation of performance
enthusiasts has a different frame of mind and responds to different visual
stimuli than consumers of the past. It's a new attitude and you should
mirror this attitude in your promotional efforts. Ads, store signage,
t-shirts, hats, decals, and all other promotional efforts need this attitude
in their design. It is not an easy target to hit! Just look at the music
they listen to; an eclectic collection of rap, heavy metal, grunge, ska,
and a revival of swing from the 1930's and 40's. For a really good example
of practical application, check out the new "Street Racer" magazine from
Drive Media. Their subtitle says it all; "adrenalin • attitude • addiction."
What Is The Sound Of One Hand E-Mailing? Thank you for reading my first PMT&T column here at SAM. I hope you found it informative, useful, and a little bit fun. I invite your comments and suggestions; especially if you have particular topics that you would like to see covered in depth. Please send mail c/o Specialty Automotive Magazine or e-mail me at mbaker@idm-marketing.com.
BIO
A veteran of the replacement, performance, and accessory parts aftermarkets
for over 3 decades, Michael Baker has been a salesman, manufacturer's
rep, sales manager, product manager, advertising manager, marketing manager,
international marketing manager, division manager, and company president
for major manufacturers and retailers. Mr. Baker holds degrees in Marketing,
International Marketing, and Humanities. He currently heads his own firm
specializing in marketing communications, marketing consulting, and e-commerce.
