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Brand Source Turns Up The Heat In Cool Market

Dallas — Brand Source/AVB, the $11 billion home products buying organization, is stepping up its advertising and marketing efforts to build brand awareness, drive traffic and increase market share amid a sluggish sales environment.

At the group’s fourth annual spring Summit, held this week at the Hilton Anatole hotel here, CEO Bob Lawrence told attendees that “Our primary goal is to get footprints in the store, because without a customer nothing else matters.”

To that end, the 3,000-member group will build upon a multimedia marketing strategy that includes tabloids, TV, sponsorships, Internet efforts and its private-label credit card in order to get the Brand Source name before female consumers. These “growth drivers” will include dropping 500 to 600 CE and majap tabs a year; TV spots on the HGTV cable network, and syndicated “Bob Villa” and “Designing Spaces” shows; and continued sponsorship of Ronald McDonald House and NASCAR’s John Force Racing team, with supporting spots on the “Driving Force” reality show on A&E.

Brand Source, along with Fisher & Paykel, will also be primary sponsors of “Re-New Orleans,” a seven-part, half-hour series documenting their efforts and those of others to rebuild a new community center in the hurricane-ravaged city. The show is slated to begin airing on the anniversary of Katrina on The Discovery Channel, although it may also be picked up by one of the broadcast networks now that actor Louis Gossett, Jr. is attached to the project and other celebrities, including Shaquille O’Neal, have asked to participate, Lawrence said.

Online, Brand Source is retooling its Web site to enhance navigation, provide product specification pages and side-by-side product comparisons, improve the appearance of online circulars, and upgrade backroom functions. Dealer logos will also appear alongside the Brand Source logo, and the group is urging members to participate in a $495 shopping cart program that brings up their businesses during online product searches at Google,, Oodle and CitySearch.

Marketing efforts to date have made Brand Source the fourth most recognized major appliance brand and the fifth most recognized name in consumer electronics, Lawrence said, with 22 percent of consumers correctly associating Brand Source with white goods in unaided awareness studies. That brand awareness has paid off in sales, with the group’s volume growing from $1.5 billion at retail in 2000 to $11 billion last year. Brand Source also gained significant market share in 2006, with majap sales increasing 10 percent compared to industrywide growth of 0.7 percent, and CE sales rising 30 percent compared to that industry’s 4 percent hike, Lawrence said. Much of those share gains came at the expense of Sears, he noted.

Still, members — and the greater industry — face “challenging” market conditions this quarter. “It’s not bad, it’s not good, it’s tough, and it will continue to be tough,” Lawrence said, citing the soft housing market and what he described as the sub-prime mortgage debacle. “It will keep a lot of people out of stores,” he told TWICE. “Consumers are tightening their belts and holding back, whether they have to or not.” Lawrence said there is no regional or demographic pattern to the pullback, although “those dealers who are promoting are doing well.”

He added that the recent wave of store closures by major national and regional chains creates an opportunity for Brand Source dealers, “but we have to get that customer into our stores.”

On the product front, Brand Source dealers will be able to add the Siemens premium appliance brand to their assortments through an arrangement with Bosch that’s exclusive to the buying group channel. Toshiba also made its Brand Source debut, in a standalone showroom, through the vendor’s longstanding relationship with MARTA Cooperative of America, Brand Source’s affiliate group.

Elsewhere at the show, the group’s largest yet, Brand Source formally launched its Service program, announced last November to help dealers improve their service departments’ productivity and profitability. The group also introduced a new “second look” program designed to raise approval rates for Brand Source credit applications from 74 percent to 85 percent, representing 11 percent in additional sales.

On a somber note, Lawrence requested a moment of silence during the meeting’s proceedings to remember Eric Medlen, a popular John Force Racing team member who earlier this month succumbed to injuries sustained in a crash of his Funny Car during a routine test run.