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07/05/2012
FROM LOGIC TO STRATEGY

GRUPPO GEMINI
The tyre market has been enriched with a dynamic new network. Centralized management for the coordination of the widest distribution from business-to-business to the end-customer

Duilio Damiani

A COMPANY that is in step with the evolution of the concept of distribution was something that Italy lacked. It was this fact that encouraged two well-known personalities in the tyre world to develop what began as the seed of an idea into the establishment last year of GruppoGemini, a network specifically and totally dedicated to tyre specialists. A new player in a market that is increasingly complex and has various shapes and forms, GruppoGemini immediately set its sights on ambitious projects for the strong commercial penetration of a segment that did not have a very positive start to the year.
At one time it was “wholesalers” who bought products from manufacturers to sell to tyre repairers. Over the years they became “distributors” and products were joined by integrated business services. Commercial development continued and now includes the figure of the “partner”, through which manufacturers develop their brands, implement customer loyalty programmes and interface with local markets. In short, what used to be simply the logic behind sales has become marketing strategy.
The fact of in some way entrusting business and marketing investments to distributors”, explained GruppoGemini chairman Antonio Andreucci, a figure of importance in the tyre commercial sector, “… will probably make manufacturers more selective and prudent in their choice of partner, favouring companies that can provide the market with excellent levels of service, sufficient stocks and an efficient B2B service and, above all,  want to add value to brands and implement strategic marketing and loyalty programmes that make them competitive”.
The figures quoted by GruppoGemini clearly explain this trend: in 2000, tyre repairers held over half of the market with about 11 million units a year, but only ten years later and a market that had grown to 29 million, their share was less than a quarter and distributers were handling 78%, a predominant position that would be consolidated even more.
In the 1990s, only five manufacturers – Bridgestone, Continental, Goodyear/Dunlop, Michelin and Pirelli – with 25 brands controlled almost the entire Italian market; in 2010, 95% of the market was served by 16 manufacturers – Apollo Vredestein, Cooper Avon, GT Radial, Hankook, Lassa, Kumho, Nangkang, Nexen, Nokian and Toyo in addition to the original five – with 45 different brands. The increasingly sophisticated development of products, very diversified ranges and references with a vast array of sizes to cover the maximum possible demand, make accurate management strategies in step  with the market and corporate vision a necessity. In other words, unity is strength also in this case.
In a territorial scenario that is totally fragmented, according to data from the network, and composed of about 16,000 outlets – divided among approximately 7,000 tyres specialists, 3,000 dealerships and authorized garages, 1,000 filling stations and 5,000 mechanics, general repair garages and service centres – logistics demand an accurate choice for widespread and frequent deliveries, even of just a few items, range and brand diversification as well as considerable stock in hand.
From this aspect, GruppoGemini puts itself forward as a qualified partner, a federation of independent companies unhindered by obligations with specific tyre manufacturers, but with centralized coordination that covers the whole of Italy. “In Italy, 130 distributors now represent 79% of the market and distribute over 23 million tyres a year” stated Giuseppe Cirillo, Group managing director. “Eight of these are multi-regional and have a share of  8.9 million units, 34 are regional (9.1 million), 47 are multi-province (3.45 million) and 38 are local (1.05 million), a total of 22.5 million units out of an overall market of 29 million. Four of these now control 25% of the domestic market, eight firms have 2 million items in stock, and 85 firms have stocks of 1 million items, an  average of 12,000 items per firm with an obviously limited number of brands and article codes”. Local distributors are relegated to the edges of the market because they are unable to offer sufficient choice for an increasingly diversified demand, availability is limited and sales conditions are quite unsuited to the commercial challenge. Their presence tends to be representative and is still strictly dependent on the distribution policies  of the official suppliers.
According to GruppoGemini, the future must be with multi-regional distributors that are bigger and better organized, not only in terms of volumes, stocks and more aggressive sales conditions, but also have a dimension that maintains and strengthens entrepreneurial identity by being present also in those zones where the so-called “official” distributors operate.
At the Group’s first conference held in November last year at the Villa San Carlo Borromeo near Milan, it officially presented the new company to sector operators and manufacturers. With the completion of the four stages of the internal development plan and the rapid development of its organizational structure, to all effects and purposes GruppoGemini is commercially operational in the passenger sector, but this will be expanded soon to trucks, agricultural and other product types. Thanks to the efficiency of its members, companies that have been established on the national territory for some time now, the various zones are divided as follows: Gexpo for Lombardy, Pneusmarket for Triveneto, CGA of Marghera for Friuli and the provinces of Padua and Venice, Union Pneus for Emilia Romagna, Royalpneus for the Le Marche and part of Abruzzo, Lara Tyres for Umbria, Lazio and southern Tuscany, PR Sud of Minicuzzi Nicola for Molise and centre-south Abruzzo, Ferrara Pneumatici for Puglia and Basilicata, Mannino for Calabria, and Tessilgomma for Sicily. The entire country will be covered within the first half of this year with the addition of Piedmont, Campania and Sardinia. The figures: 18 depots, 9,000 article codes, 80 vans making 300 deliveries a day, a total of 3 million units/year and expected revenues of € 190 million.
With the recent completion of the B2B development process through virtual depot management software that connects peripheral centres with digital platforms dedicated to large customers, all members will have an instantaneous projection of global availability in all depots, thereby enabling collection and delivery from the various distributors, faster coverage of specific requests and completion of availability in concert with the entire group.

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