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Eyes on the Prize


12/1/2002
By Jon S. Owens

Pricing is an important factor in running an auto parts business. But it's not the only one.
 

Next month, Counterman starts its 20th year in publication. Over the years, this magazine has touched on many topics, but probably none are as sensitive as pricing.

In this space last month, I addressed the thorny subject of pricing. A hot topic for sure - given the Coalition for a Level Playing Field's effort to address the situation from a legal standpoint. There isn't enough room on this page to thoroughly dissect all of the nuances involved with "level" pricing. The inspiration for my comments last month was not to discourage this effort. It was simply to remind everyone that, while "inappropriate" pricing may in fact exist within our market, I hope the effort to correct it doesn't detract from the effort to serve your customers better, explore new technologies and maximize the things you do best to enhance your competitive advantages. Challenging the Robinson-Patman Act requires reams of documentation and supportive data. I urge you not to take your collective "eyes" off the ball while pursuing the coalition's goals.

In Counterman Editor Brian Cruickshank's Top 10 Distribution Influences, which starts on page 36, Influence #6 delves into the issue of Brand Erosion. At Counterman, we feel strongly that, in certain instances, premium brands have definitely been "compromised" by virtue of their price points out in the market.

However, if we think that we are the only market to have experienced this phenomenon, we are sadly mistaken. Value lines became prominent as retailers grew their market presence. Now those same retailers carry prominent, high-quality national brands. It's no different in the hardware, drug store or big-box retail markets. Where K-Mart failed in the "price point" race, so too will some prominent store chains in our market.

However, don't be fooled by thinking that K-Mart failed because they didn't buy as effectively as Wal-Mart (they didn't.) What ultimately killed K-Mart was their inability to run an efficient operation and properly serve their customers. Target stores have nowhere near the volume that Wal-Mart has, and subsequently, Target does not enjoy many, if any, pricing advantages. However, they manage to succeed and thrive through an efficient replenishment system, effective marketing and customer service. They are also great merchandisers.

As you read the Top 10 Distribution Influences article, you'll see that many challenges exist in our market. Brand erosion via "inappropriate" price points is just one challenge, and an important one to be sure, depending on which side of "inappropriate" you sit. But there are many more.

And, with that comes a pledge: We at Counterman will do our very best to provide the necessary and pertinent technical and operational information and general market analysis to allow readers to sell more parts and product and become more profitable in doing so. We are dedicated to helping you succeed in this hyper-competitive automotive aftermarket parts business.

It's not an easy task by any stretch of the imagination, but it's one that we are honored to pursue for you throughout the coming year and beyond! Thank you for your loyal readership.















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