Bridgestone Europe Complete Integration of Bandag Operations

Most market observers would agree that Bandag have been fairly quiet in terms of their profile in the European market since the company was acquired by Bridgestone, but that's not surprising considering that the priority during 2009 has been to complete the integration of Bandag's European operations into the Bridgestone organisation, with sales of all Bandag products being channelled through Bridgestone sales companies.

Meanwhile, a new department within Bridgestone Europe - "Bandag Retread Franchise Operations" has been formed centralising the core franchise operations functions. Other core Bandag functions such as Marketing, Manufacturing, Logistics and Legal Services have been integrated within their respective Bridgestone Europe Departments.. Now that the integration has been completed Retreading Business was able to travel to Bridgestone Europe's head office in Brussels to talk to Gerry Duffy, Bridgestone Europe's VP Sales and Marketing and Steven Janssens, who heads up the new Bandag Operations Department.

The first point made by Duffy and Janssens is that it is Bridgestone's intention to keep the Bandag model as it has been in the past. Bandag's "Six Gears concept" encompassing products, equipment, value-added services, sales support, fleet programmes, and business consultancy solutions, will remain intact. "The aim", says Janssens, "is to make it more complete and stronger". One of the key issues that will interest the European market is how Bridgestone intends to structure its collection of brands - the Bridgestone Qualitread brand, Bandag, the Bandag Value Line range of lower priced treads and Bridgestone mould cure interests (principally Bulldog in the UK and SLBR in France).

According to Gerry Duffy the Qualitread range will be fairly restricted in terms of target market, being aimed principally at the long mileage, pan-European transport sector. It will also be restricted to the newest Bridgestone tread designs and tread compounds . In addition the Qualitread brand name will gradually be dropped in favour of the Bridgestone Retread brand. This is in line with Bridgestone's global branding strategy.

Says Duffy; " Bridgestone Retread will be a restricted range at the premium end of the market. It will also be positioned at the top end of the price spectrum, which means we will be looking to sell it where cost per kilometre (cpk) is high priority, for example on mileage contracts. That said, the Bandag brand is also strong on mileage contracts, especially in bus.

"The Bandag range will, in some areas, be better and more complete than Qualitread - for example in on/off and city bus segments and there will continue to be an emphasis on fleet customers".

In terms of price positioning, assuming Bandag's Premium Application Specific range has a value of 90-100, Duffy places the Bridgestone Retread range at 100- 110 and the Bandag Standard range at 95-85. The Bandag Standard range will be also strengthened with multiple Bridgestone patterns.

"The Bandag range is absolutely a premium product", says Duffy, "and Application Specific is vital because not all Bandag customers are Bridgestone customers." In addition to the Bandag range some development work will also be carried out on the Value Line range, to satisfy the more price oriented sector.

To support the Bandag brand Bridgestone says it will continue to support plans to replace the existing range with Application Specific treads as well as to introduce Bridgestone tread designs into the range. According to Janssens, 2010 will see seven new products being introduced including 2 new unique designs and 5 Bridgestone designs.

In terms of distribution, substantial work is being carried out on developing the Bandag franchise network. "There are still some white spots in our network so we are serious about developing it", says Steven Janssens. "We are very active in franchising and the results of this work should become evident come very soon", he adds. In 2009, growth has taken place in the Bandag network mainly with Qualitread dealers. The core of this network, which was coowned, has now been converted to Bandag franchises. As far as the remainder is concerned, if it makes sense for both parties strategically to convert to Bandag then it's done. However, Gerry Duffy emphasises that Bridgestone's strategy is to respect existing business commitments. This also holds true with Bandag dealers where the dealer already has a relationship with one of Bridgestone's competitors. "We totally respect relationships with others", says Duffy. "Bandag is a business - not just a brand".

In the meantime Bridgestone's hot cure retreading interests are not expected to be expanded significantly, although these operations play an important role in the UK and France. Outside of Europe the situation in the area previously covered by Bandag's European offices (ie the Middle East and Africa), arrangements are described as something of a "hybrid situation" - support continues from Bandag in Europe although commercial business responsibilities are gradually being handed over to regional Bridgestone companies.

Issue 2010/2