Marketing Executives Council

1. Marketing Executives Council August 13, 2009

2. Today’s Agenda • Welcome and Introductions - Altenberger • Mission and Purpose - Altenberger • Review of Anti-trust guidelines - Lupo • Supplier Image Task Force - Tarnacki • OptiCat – Brad Duncan & Stas Mintowt-Czyz • Lunch • Social Networking and Media – Jonathan Ressler • Legal Review: Social Networks – Tony Lupo • Market Pulse - Cameron • Council Business – Altenberger • MEC Self-assessment Discussion

3. Mission Statement Toadvance 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.

4. Anti-Trust Guidelines It is the unqualified policy of the Automotive Aftermarket Suppliers Association to conduct its operations in strict compliance with the antitrust laws of the United States. AASA'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.

5. Supplier Image Initiative • Task Force (Tarnacki – leader, Altenberger, Burton, Cameron, Harris) • Met four times since last MEC in May • Initiatives: • Creative Brief – finalized with new tag line • NASCAR – public service announcement • Special Reports & Executive Summary • Buying Influences of Repair Professionals • Industry Image: Quality Does Matter

6. Supplier Image Initiative • Creative Brief (handout) • ID: “AASA Full Service Suppliers” • Voted on by you • Conveys several messages • Inclusive of all AASA members • Implies premium and value-added • Value-added as “Essential Services” • Replaces an out dated phrase • Conveys several messages • Implies that they are critical and necessary • Irreplaceable

7. Supplier Image Initiative • NASCAR Public Service Announcement • University of the Aftmkt Foundation Grant • Air-time donated by NASCAR • In-race on ESPN (9 @ :30 spots) • NASCAR content Speed TV (140 @ :10 spots) • Timeline: • Develop script/concept – August • Produce PSA – early September • Run schedule – October/November

8. Supplier Image Initiative • Draft PSA Copy " The vehicle you drive is one of your most important investments. Protect that investment by properly maintaining your vehicle. By following the recommended maintenance schedule and using quality parts, you can ensure that your vehicle operates safely and efficiently well into the future. In NASCAR, we know that not all parts are created equal. Be sure to ask your automotive service provider about the parts being used on your car. Your best value today is premium branded parts from quality aftermarket parts suppliers. NASCAR urges you to KNOW YOUR PARTS!"

9. Supplier Image Initiative • Special Reports • Buying Influences of Repair Professionals • Includes an Executive Summary • Results from focus groups • Industry call to action in the conclusion • Independent Aftermarket Image • Follow-up to above and cornerstone • Frames the impact low-cost products have throughout the supply chain

10. Supplier Image Initiative • Communications Plan • Advance copies to service trade for article development • Press Release on first Special Report • Posted to public AASA Web site • Followed in two weeks by Press Release on second Special Report • Update/re-release Direct Importing and Distributor Liabilities as part of series

11. Supplier Image Initiative • In the News… SHOPS REPORTEDLY ILL AT EASE WITH PRIVATE-LABEL PARTS, PREFER OE “In a press release offering a glimpse inside a new report titled “Frost & Sullivan Speaks Candidly with U.S. Automotive Shop Owners,” the Mountain View, CA-based research firm states that repair shop owners consider OE parts far superior than their private label counterparts in fit and functional quality and continue to promote their value to customers, despite the current focus on low-cost repairs. Frost & Sullivan points out that this comes as manufacturers, retailers and WDs patronize private labels, as they are economical, with better margins and revenues.”

12. Supplier Image Initiative • In the News… “Quality products from quality suppliers have been the foundations of this industry, and that is the simple solution to this potential problem.” – Gary Molinaro Greensheet Perspective in response to light weight brake rotor issue

13. Supplier Image Initiative • Next Steps • Task force to continue development • Other PR opportunities • Ways for AASA to include messaging in their own efforts • Additional Special Reports • Other ideas?

14. OptiCat(see separate slide deck entitled OptiCat 081309)Brad Duncan, CEOStas Mintowt-Czyz, VP Sales & Marketing

15. LunchStart again at 1:00

16. Social Networking and Media(see separate slide deck entitled Social Media JR 081309)Jonathan Ressler

17. Legal Perspective: Social Media(see separate slide deck Arent Fox Social Media 081309)Tony Lupo, Arent Fox

18. BreakStart again at 3:15

19. Market Pulse • Survey Results: • Inaugural survey went out 7/20/09 • Original deadline extended to 8/7/09 • Sent to executives list, approx. 700 • 30 participants • Only half requested results • Aggregate results furnished to MEC • Detailed results by company size and product category available to participants only

20. AASA Market Pulse

21. AASA Market Pulse

22. AASA Market Pulse

23. AASA Market Pulse Returns Average warranty returns % of net sales. 3.28% Average obsolescence returns % of net sales. 2.01% Average discrepancy returns % of net sales. 1.15% Average of all other returns % of net sales. 1.86% Sum of return categories 8.3%

24. AASA Market Pulse Operations Order fill rate % of unit volume of sales. 93.87% Order fill rate % of dollar value of sales. 95.13% Order turnaround time in days. 7.3 Overnight shipping directly to stores, % of business. 2.92% General selling and sales administration expenses % of net sales. 15.31% Average defect rate in defects per million units. 841 Weighted % change on last published price sheet. (Jobber net ) 3.25% Current days sales outstanding. (AR divided by average daily sales) 56.4 Percent change in net sales from prior quarter. 8.73%

25. Market Pulse • Additional Questions Suggested • Supply Chain Efficiency • Order Turnaround time • Drop shipments/Cross Docking • Customer ordering cycles • Overnight Special Ordering  • Credit • Terms • Cash to cash cycles • Participation in  draft programs • Customer Information • Collaboration levels • Category Management participation • Use of Point of sale information • Utilization of suppliers tech services

26. Market Pulse • Additional Questions, continued • Inventory • Turns • SKU's inventoried • New Part Numbers Introduced • Time to market of current models • Latest Age of  SKUs • Cataloging • Frequency of updates • Time to get information into 3 rd party catalogs • Time to get information into customer catalogs • On line catalogs • Proportion of orders/invoices where shortage is claimed • Percentage of worst case customer

27. Market Pulse • Additional Questions, continued • Sales force • Reps or Factory • Level of service in supply chain ( WD, jobber, retail store, installer) • Customer Training • Fuel Surcharges • Trade Show Participation • Customer Trade Show Participation • International Trade Show Participation • Off shore content • finished product • raw materials • engineering • programming

28. MEC Self-assessment • Re-evaluate MEC mission and goals • MEC Mission Statement - “Toadvance the automotive aftermarket supplier industry through collaborative marketing and communication solutions.” • MEC 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.”

29. MEC Self-assessment • Membership and dues • Current $2000 (meetings / projects) • Proposed $1000 (meetings only) • Drive new membership • Promote member retention • Meeting frequency and venue • Maintain four meetings a year • Consolidate with events (Vision, AAPEX) • Utilize Webinar for one meeting

30. MEC Self-assessment • MEC leadership • Board of Governors to include: • Chairman • Vice Chairman • Immediate Past Chairman (non-voting) • Two Board members at-large (two-year, staggered terms) • AASA staff executive • Recommended that positions be voted by incumbent BOG rather than popular vote

31. MEC Self-assessment • Future Meeting Agendas • On-going (every meeting) • Supplier / Industry Image • AASA Marketing Communications Update • Market Pulse Results / Update • Roundtable / Open discussion • Topics / Guest Speakers • Outside Research – Polk, IMR, Experian • Advertising Effectiveness • Outsourcing – catalog, fulfillment, shows • Legal Issues – 3rd party, green, data protection

32. Wrap-up and AdjournNext Meeting:November 5AASA Member CenterAAPEX9:00 – 12:00

33. Thank You!

34. Back-up Slides

35. Market Pulse • Initial survey categories: • Warranty returns percent of net sales • Obsolescence returns percent of net sales • Discrepancy returns percent of net sales • All other returns percent of net sales • Weighted average change on latest published price sheet • General selling expenses percent of net sales • Defects per million units • Order fill rate percent of units • Order fill rate percent of dollars • Order turnaround time in days • Days sales outstanding • Percent change in net sales • Overnight shipping