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Marketing Executives Council

Marketing Executives Council. February 28, 2008. Today’s Agenda. Welcome and Introductions (Tarnacki) Review of Anti-trust guidelines (Bruno) Supplier Image Business Case (Cameron) Overview and Feedback Getting the Message Out (Owens) AASA Proposal and Media campaign Break 10:30

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Marketing Executives Council

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  1. Marketing Executives Council February 28, 2008

  2. Today’s Agenda • Welcome and Introductions (Tarnacki) • Review of Anti-trust guidelines (Bruno) • Supplier Image Business Case (Cameron) • Overview and Feedback • Getting the Message Out (Owens) • AASA Proposal and Media campaign • Break 10:30 • Distributor Liabilities (Bruno) • New Special Report follow-up to Risks of Direct Import • Lunch 11:30 • AAPEX – AASA Involvement (Gardner) • AASA Show Committee expectations • AAPEX – Joint Association Marketing Sub-Committee (Harris) • Sub-Committee Mission • Open Discussion • Wrap-up & Adjourn (Tarnacki)

  3. 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.

  4. 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 • 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

  5. 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.

  6. 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).

  7. 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.

  8. 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.

  9. 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: • Sales representation / manpower • Credit terms • Marketing programs • Industry standard cataloging • Product specifications • Quality control • Product liability • IP protection • Technical support and training • Category management

  10. 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.

  11. 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?

  12. Getting the Message Outon Supplier ImageJon Owens, Babcox

  13. Original AASA Proposal: • Research • Ad Campaign • Franchise Piece • White Paper • Monthly Editorial Section • Industry Award

  14. New Elements: • Enhance Top 100 List • AASA “You Tube” Page on AMN • AASA Press Center Page on AMN • AASA Stock Ticker Page on AMN

  15. 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

  16. 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

  17. 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…….

  18. 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

  19. 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…

  20. 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

  21. 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

  22. Break15 minutes

  23. Distributor Liability - What You Need to Know Presented by Sarah Bruno, Esq.Arent Fox PLLC Washington, DC February 28, 2008

  24. Distributor Liability You can be liable! • Counterfeiting • Product Liability • Recall Issues There are several theories for holding the distributor accountable…

  25. 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.

  26. “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

  27. 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?

  28. 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.

  29. 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.

  30. Product Liability Distributors may also be found liable for damage or harm caused by a defective product • 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. • A distributor can also be liable if the advertising or product label indicates the product is manufactured by the distributor. • A distributor can also be liable if the foreign manufacturer is located outside of the U.S.

  31. 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

  32. 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

  33. Private Label Products • Insurance Companies are also supporting the industry • 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. • 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 • NHTSA has began to put blame on the importing reseller when attributing liability for a product that does not meet U.S. standards • NHTSA took action against a tail-light distributor and assessed fines in the range of $650,000 • 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.

  34. Questions?

  35. Lunch30 minutes

  36. AASA AAPEX Show Committee Expectations Chris Gardner

  37. AAIW • Jointly owned by SEMA, AAIA and MEMA • Coordinated activities • AAIW promotion • Hotel contracts • Housing • Registration • Network Now • Shuttle buses

  38. AAPEX • Jointly owned by AAIA and MEMA • Coordinated activities • Housing • Registration • Promotion • Special events (media reception, chairmen’s reception, etc.) • Liaison with show management • IP/BP enforcement

  39. AAPEX • 2007 Results • 2,016 exhibitors • 4,845 booths • 9,361 total buyers • 3,528 international buyers • 23,570 total attendees

  40. AAPEX • 2008 Changes • Small increase in promotion budget • GreenZone renamed GreenWay • New AASA Show Committee • New AAIA-AASA joint Marketing Sub-Committee • Focus on non-core sponsors

  41. 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

  42. 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

  43. AAPEX Joint Association Marketing & PromotionsSub-CommitteeBarry Harris

  44. 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

  45. 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

  46. 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

  47. 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.”

  48. 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???

  49. 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

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