Aftermarket Segment Remains Buoyant During Downturn

Although the aftermarket accessories segment is faring better than other parts of the marine industry, competition is keener than ever.

The influx of imported products and the ability for anyone with a computer to research them online means that manufacturers, distributors and dealers have to stay on their toes, fighting for their share of the market.

Longtime OEM supplier GEM Products Inc. sees many opportunities in the marketplace, but the company still is building its reputation among consumers, says Monica Krout, aftermarket account manager for the Orange Park, Fla., manufacturer.

“We have brand recognition with the builders, and we are making strides to have that same recognition with the end user,” says Krout. “GEM Products offers a lifetime guarantee on our entire product line. This helps to ensure customers they are getting the highest quality product we can offer.”

Quality products and quality service go hand in hand to satisfy increasingly selective customers, adds Ken Taranto, vice president of galley products and aftermarket sales at Dometic Environmental Corp., Pompano Beach, Fla.

“The challenge today, as it is every day, is to provide products of value to consumers coupled with responsive service,” Taranto says. “There are pressures on suppliers to operate with low staffing, which can have a negative impact on customer support.”

Taranto stresses the importance of using technology wisely to provide cost effective sales support to distribution partners while maintaining low-operating costs. That’s the key to increasing market share, he believes.

When new and used boat sales are sluggish, aftermarket sales pick up as consumers choose to spend a little money making their current boats more comfortable and fun rather than a lot of money on a bigger, newer boat, says Scott Rowles, president of Dive N Dog, Naples, Fla.

“This year especially, we have seen an increase in custom fabrication jobs in our business,” Rowles says. “People who want to accessorize their boat are spending money to add stainless accessories, customize existing items, or add new customized items to their existing boats.”

Zack McLanahan, aftermarket sales manager at T-H Marine Supplies Inc., notes that skyrocketing fuel prices and a tight credit environment have negatively impacted the aftermarket segment, too. Current boaters aren’t getting out on the water as often, so the need to upgrade and replace components isn’t as great. The Huntsville, Ala.-based supplier believes this downturn is hitting the market harder than previous ones.

Put Quality First
To carve out market share, it’s not enough simply to offer products and hope for the best. Manufacturers increasingly are focusing their efforts on quality processes, distribution and customer service to make sure the right products hit the market at the right time.

“In manufacturing Isotherm products, a focus on introducing new products that incorporate advanced design and adherence to the quality process is key,” says Dave Lerbs, manager of sales and marketing at Indel Webasto Marine USA, which distributes Isotherm Marine Refrigeration products from its base in Pompano Beach, Fla. “We are constantly monitoring performance, and anything that deviates from zero defects triggers a report back to manufacturing with immediate corrective action. The same goes with distribution. We take feedback from the market and use it to improve the
delivery of product.”

Cleveland-based Mallory Marine Products has been incorporating lean manufacturing principles to stay competitive in a global marketplace, says Jim Self, brand manager. On the distribution side, the company has been working to manage inventory to provide good order turn-around and line-fill rates while maintaining respectable inventory turns. “We also have designed our distribution network so our product is not over distributed to give our product line more value to our distribution partners,” says Self. “In our marketing, we emphasize the value of our brand.”

Invest in marketing
Promotion is an essential key to success in the aftermarket industry, notes Mike Cross, technical sales/RF specialist at Delta Systems Inc., based in Streetsboro, Ohio. “Promotion helps dealers and consumers understand the value proposition of the product,” Cross says. “In addition, strong distribution channels, product placement and an eye-catching package design are paramount to success.”

In a down economy, advertising often is one of the first areas where cuts are made. However, Dr. Shrink Inc. President Michael Stenberg believes that advertising becomes even more important, as do such fundamentals as customer service, value-added products and competitive pricing.
“We have increased advertising, exhibiting at shows, mailers, new Web site, etc., to keep our name in front of the public, and we are pushing the above points,” Stenberg says. “We have also increased the materials we stock for immediate shipping. If you don’t have it — you can’t sell it.”

In addition to strong marketing, the keys to success in this category are the right promotion, right product, right placement (in the retail arena) and the right price, says Dennis Zirkelbach, vice president of aftermarket sales at Teleflex Marine, based in Litchfield, Ill. “Our strong OEM market share coupled with our preferred brands, great product coverage, centralized distribution and the stability of belonging to a large corporation are competitive advantages for Teleflex Marine,” Zirkelbach says.

Use the internet to your advantage
Rowles says that Dive N Dog utilizes an almost completely computer-controlled fabrication process, which allows the company to keep delivering quality products time and time again. The company employs a Web-enabled application that allows customers to collaborate on projects, view estimates, save orders, place orders, view order history, view shipments and search the Dive N Dog catalog.

“This site helps us drastically increase the level of customer service that most OEMs and retailers are used to from a company in this segment,” Rowles says.

The ability to search for information online and converse with other boat owners in cyberspace and in person helps consumers make informed buying decisions, says Lerbs from Indel Webasto Marine USA. Because information about Isotherm refrigeration products is available online, consumers often are pre-sold on the units.

Besides the increased importance of the Internet for research, Self from Mallory Marine Products notes that the consolidation of distribution has made it more difficult for manufacturers to get complete market penetration in some regions of the country.

The Internet gives consumers the ability to shop for price globally, which can impact the profitability of dealers and distributors alike. “Many savvy dealers are turning it to their advantage by not only offering products for sale on the Internet but also selling their services, which can set them apart and give them a competitive advantage,” Self says.

TighTen up
Dr. Shrink is endeavoring to tighten the organization and focus on creating more business by hiring outside counselors to take an objective look at the organization and suggest changes to achieve these ambitious goals, says Stenberg.
McLanahan from T-H Marine Supplies says that consolidation of businesses and the influx of imported products remain challenges to continued success. The importance of the Internet has not gone unnoticed.

“You can now search, compare, research and buy parts right from your laptop, often with free freight and no sales tax,” McLanahan says. “All this is forcing businesses to re-examine the way they go to market and how they position themselves. It is a challenging time but also an exciting one as we learn new ways to market and reach the end users.”