Jul. 13, 2009 – ‘More effective marketing tools’

By Neil Pascale
Editor
CYPRESS, Calif. — Yamaha Motor Corp., U.S.A. has revved up its marketing efforts in an increasingly challenging retail market.
Henio Arcangeli, Yamaha Motor Corp. USA’s motorsports group president, said, “If you have look at the money we’re spending on incentives and the advertising we’re doing in key markets, we’ve re-focused our efforts and are now more targeted than ever.”
While noting that practice is in contrast to some of its competitors, Arcangeli also discussed the company’s inventory status and business changes during a recent discussion with Powersports Business at Yamaha’s U.S. headquarters.
Like the industry as a whole, Yamaha reported reduced U.S. retail sales in its first quarter. Yamaha’s sales of its motorcycles totaled 21,000, a 30 percent dip from the year-ago period. U.S. retail sales of its ATVs fell to 17,000, a 26 percent decline, and its side-by-side retail sales dropped to 4,000 from 9,000 a year ago.
In the ATV category, Yamaha fared better than the industry as a whole, which was down by more than 33 percent in the first quarter. Conceding the U.S. market is smaller than in years past, Arcangeli notes Yamaha has been able to generate market share gains in this environment.
“The change in business has been dramatic — no doubt about it,” Arcangeli said. “As a result, it has caused us, as well as all our dealer partners, to re-think about how we do business, everything from sales, marketing, service and general operations.
“Through our business review, we are keeping the activities that have a good business return and make us more competitive. The ‘nice-to-do’ items, however, are being reduced or eliminated all together,” he said. “I believe everybody is looking at their business and restructuring to be more competitive and with that I believe they are going to have a stronger business going forward. I know that has happened to us.”
While Arcangeli would not cite specific areas where Yamaha has made cuts, he did say all aspects of the corporation have been examined during this economic downturn. Arcangeli said Yamaha has gone to all of its business leaders and asked them to go back to their business plan and identify “what is going to have the biggest impact and make sure we emphasize those items.”
Marketing, certainly, is one of those items.
“Because business is more challenging, we need to give our dealer partners more effective marketing tools to be more successful,” Arcangeli said.
Also in reaction to the challenging retail market, Yamaha has cut its manufacturing in an aim to improve its and its dealers’ inventories. The company suspended manufacturing for 10 days in February and March and is expecting another
24-30 days of production suspension from April-July. In its recent quarterly report, Yamaha notes its inventories for two-wheel and four-wheel products were reduced from a year ago. Yamaha’s U.S. inventory for motorcycles fell 3.5 percent to 136,000 units while its four-wheel inventory totaling 68,000 units declined 16 percent. Arcangeli expects further inventory improvements by the third and fourth quarters of this year.
While manufacturing has been reduced, Arcangeli says he is confident about the company’s R&D plan.
“Like every business, we’ve had to re-evaluate our business plan going forward,” he said. “But the one thing that we’re very cognizant of is that having leadership products is important for us and our dealer partners’ success. So I feel very confident that our product plan is strong and as such, we should be in good shape going forward.”
The same can be said of Yamaha’s dealer network. Arcangeli says Yamaha has lost less than 5 percent of its dealer network this year despite the challenging marketplace.
“Everybody is re-engineering their business to be a better operator in this tough market and I think that’s what you need to be successful,” he said. “The people who do this are going to be fine.”