Why fleets buy
Mar 1, 2008 12:00 PM, BY RICK WEBER
What role does price play in the buying decisions of fleets in the commercial-vehicle market?
Bruce Plaxton, president of BGP Marketing Solutions and moderator of a Business & Technical Theater Session, “Fleet Panel: Why Fleets Buy,” put it like this:
“Everyone is price conscious. Everyone buys some products in some situations on price. Some people buy most or all products on price regardless of the situation. For most people, purchase rationale varies by product and situation.”
He said that while there may be 1001 reasons why fleet managers buy replacement parts, the four primary ones are the product, vehicle age, fleet size, and operational situation.
He said the replacement-parts market is divided into two segments:
- Predictive
Examples are filters, coolant, motor oil, and brake shoes. “The more predictive the part is - “You have to do this every 5000 miles” — the more price sensitive it is.
- Non-predictive
Examples are clutches, seats, evaporators, hoods, and fenders. “Even the largest fleet cannot predict, ‘I'm going to need a replacement hood or fender.’ They don't know when that accident is going to occur.”
Plaxton said that based upon research conducted by BGP Marketing Solutions in the past six months, most fleets that purchase new temp-controlled trailers will trade, sell, or otherwise dispose of the trailers in seven to nine years. He said that is important to distributors because the same manager for the same part will make a different decision on a part for a 4-year-old trailer than he would for an 8-year-old trailer.
“The larger the fleet, the higher percentage of non-warranty predictive parts usage, and hence the sharper the pencil,” he said. “Most owner/operators will replace a headlight himself and often pre-buys a headlight at Wal-Mart or Farm Fleet to protect himself from being ‘ripped-off’ at a truck stop.
“Generally speaking, the larger the fleet, the greater the likelihood that management understands to the penny the cost of downtime. It's a case of, ‘If it is broke, fix it now, ’ because this shipment has to get from point A to point B.
“Let's say we have this operational situation: It's August in the Mohave Desert. You're carrying frozen pizzas, and the condenser fails. Is price the issue? No. ‘I really need to get it fixed and fixed now, because somebody is waiting to have a piece of pizza.’
An inside look
“In non-predictive situations, availability is the key. Is the part on the shelf? If it is not, the firm with the part on the shelf will capture the business most of the time, if the fleet manager knows who to call. If you've never called on a fleet, and his truck breaks down and he doesn't know who you are, he's probably not going to pick up the phone and call you. He may call your competitor.
