The Magic of Market Share

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IN 1982, I WAS DIRECTOR of marketing at Kawasaki Motor Corp. My boss, Chuck Larsen, and my advertising manager Peter Locassio were sitting in Locassio's office kicking some ideas around. Locassio was unhappy with the advertising agency we had back then and said aloud, "If we'd had better advertising, we'd have sold more units."

Larsen, who was then the VP of sales and marketing (and one of the savviest motorcycle execs I've ever known), retorted, "No we wouldn't have, we've sold everything we've got."

A year later, things had turned 180 degrees. We had plenty of inventory. Dealers had plenty of inventory and sales had slowed down, as if someone had abruptly pulled the brake lever. All of a sudden my advertising budget was cut by two-thirds, and that money was shifted into dealer support programs. PR budgets were cut as well, and our winning superbike team was unceremoniously shown the door, much to everyone's surprise.

Obviously, it wasn't just Kawasaki in a sales freefall, but the entire industry. Our problems, compared to Yamaha or Honda — who were back then engaged in a battle for market-share supremacy — weren't as bad. The two were faring far worse, and it was said that Honda would be better off if the ship bringing motorcycles in from Japan sank rather than land its cargo.

Even in light of this, our marketing groups' marching order hadn't changed. They were instructed to "make people aware of the brand and models and drive them into dealerships, so that the dealers can sell them on our products."

We'd been spoiled for years by being able to buy network TV advertising, and even commercial air time during the Superbowl. We were used to running four pages of advertising in all of the major motorcycle magazines. We ran ads in smaller, though substantial schedules, in a myriad of small motorcycle publications as well. Previously, we'd also been able to advertise in general print media: Popular Mechanics, Popular Science, even Women's Day. And then, bam, these were no longer affordable.

After some period of bitching, griping and whining, we realized nothing was going to change. Our previously generous budgets weren't coming back. We bowed out of TV as well as national general-interest magazines. We began to focus on grassroots programs. After all, the rubber meets the road at the dealership. Team Green, our grassroots amateur support program, started a year or two earlier and was strengthened and expanded. Team Tour, our consumer events program, was beefed-up as well, and we started showing up at events where no OEMs had been before.

We started our own magazine, Good Times, with a 2.2 million circulation. It was a roaring success, and we actually had reports of people coming into dealerships with the magazine in their hands, asking for this or that motorcycle.

We'd started a Key Market program back in the '70s when times were fat. Basically what we did was have KHI build a special model in the fall, when things normally started to slow, offer them for sale to our dealers along with some group advertising money, advertise on TV locally, and voila, we would reel in additional sales. That program terminated when the market declined. We resurrected it by focusing on carryovers, kicking in some co-op dollars, developing retail ads, organizing dealer groups according to DMAs, and again buying local TV ads. While the sales weren't exactly voila, it did move the iron a bit.

By the late '80s, we'd managed to create an advertising campaign called Hangouts, which focused on places to go and things to do. Much to our surprise, we had people calling and asking us about events. We started putting on events and engaging dealers to participate or at least organize rides. Hangouts got all elements of our marketing department (advertising, PR, and consumer events) working together.

At the same time KHI kept pumping out the hits: the Ninja 900, 600, 250, KLR650 the Eliminator (OK, so some weren't exactly hits), the Concours and so on. Our competitors were banging out hits of their own, but through it all, we started to gain market share even though we didn't see any overall number increase. In some months, Kawasaki actually was a solid No. 2, behind Honda.

The point of all of this is that in a declining market, sometimes the only thing you can do is work at gaining market share, managing your business better and learn to live with smaller gross sales. One of the best ways to do that is to focus your efforts on your existing market. These are people who've already made the commitment to motorcycling. Some have made the commitment to you by patronizing your store. You need to turn these folks into disciples for your dealership, to make sure that they're not just happy, but enthusiastic about the way you treat them and look after them.

How to do that? You've probably got someone on staff now that has great ideas about how to attract and keep customers. If you don't know who that is, throw the problem out there. Dedicated staff, when pressed, can come up with solutions that are effective and require little money to implement.

This current sales slump won't last forever, although it may seem that way. If you can't gain overall sales, it's been said that market share gained in a down market usually stays when the market recovers.

Mike Vaughan is the former publisher of Dealernews. You can reach him at mvaughan@mikevaughan.com or via editors@dealernews.com.