Brand marketing key in automotive aftermarket
By Industrial Distribution Staff -- Industrial Distribution, 5/1/1999
Mountain view, Calif. -- A recent study of the U.S. belts, hoses, gaskets and seals aftermarket shows that manufacturers are relying on brand marketing as a primary means of competition.The study, conducted by research firm Frost & Sullivan, was directed at manufacturers selling replacement parts to the automotive aftermarket. According to Frost & Sullivan, the U.S. belts, hoses, gaskets and seals aftermarket is experiencing slow growth -- total revenues in 1998 were just three percent higher than in 1997, reaching $1.1 billion. In turn, it is becoming more difficult for manufacturers to find new markets or niche segments, according to the research.
The study also shows that end users are becoming more demanding as their product knowledge grows, another factor contributing to the competitive marketplace.
Growth strategies for market participants depend on company size and resources, says Frost & Sullivan analyst David Yu. Large companies can take advantage of economies of scale and maintain brand loyalty, while smaller players must implement niche marketing strategies. Yu adds that while availability, timely delivery and technical support are still major competitive factors, effective brand management is the key to success for all players in the market.
"Basically, the brand is more important now than it was two or three years ago," says Yu, adding that the market forces are leading to shifts in the distribution channel.
In a related report, the Valve Manufacturers Assn. of America reported a rise in industrial valve orders for the first nine months of 1998, as compared to the first nine months of 1997. While orders booked were up, shipments during the first nine months of 1998 decreased by 1.3 percent compared to the same period a year earlier. In addition, automated valves had the only gain in shipments over 1997, up 2.6 percent. Plug valves had the largest decline in shipments, down 7.3 percent, followed by industrial butterfly valves, down 3.3 percent.
VMA also reported that exports increased six percent during the first nine months of 1998, and imports rose by 11 percent. The valve industry price index was up .2 percent during the third quarter of 1998, and up 1.8 percent for the 12 months ending Sept. 30, 1998.
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