Michael Proud is director of marketing, North America, for Federal-Mogul Corp., with responsibility for the company’s extensive portfolio of North American brands and go-to-market programs. A 20-year industry veteran, Proud joined Federal-Mogul in 1999 and has held a variety of marketing positions within the company’s global aftermarket operations. In today’s exclusive AMN Executive Interview, Proud talks about the supplier’s new "Smart Choice” campaign to promote the use of premium brand products at the consumer level.

Given the softness of the North American economy, how is Federal-Mogul approaching the challenge of convincing consumers to invest in premium brands and products as part of vehicle repairs and maintenance?

We are very sensitive to the challenges facing consumers, and understand that keeping their vehicles in safe, reliable condition is of the utmost importance to them. Research from several sources shows that a growing number of consumers are planning to hold on to their vehicles for much longer periods of time. It’s clear, therefore, that when their vehicles do require maintenance or repairs, consumers are smart to choose better performing, longer lasting parts that will help extend the vehicles’ service life as well as assure its safety and reliability.

In light of these facts, we have introduced one of the most innovative and comprehensive programs in our history, the Federal-Mogul “Smart Choice” campaign. We’re reaching out to millions of consumers and professional automotive service providers with the message that top-quality parts are always the smart choice, but especially when the customer is trying to maximize vehicle reliability, safety and service life.

Are consumers receptive to premium messages today, or should distributors and service providers focus more attention on “economy” alternatives?

Our research indicates that consumers are very receptive to premium products and leading brands, particularly when they can improve the performance, reliability and safety of a vehicle over the long run. And this is what millions of consumers worldwide are looking for today.

Recently conducted consumer focus groups and other research have provided insight into the effects of the economy on purchasing habits. What comes through loud and clear is that consumers strongly prefer replacement parts that meet four key criteria: 1.) Specifically engineered for the vehicle by a leading original equipment manufacturer; 2.) Help improve vehicle performance; 3.) Extend the vehicle’s service life; and 4.) Provide a safer, more reliable vehicle. In their mind, parts that deliver on these criteria are a better “value” than lower quality parts that simply cost less.

Consumers also told us that when the cost of a repair is an issue, they would much rather use a premium-quality product, if it were available with a special offer, than settle for the lower-quality part.

What do these criteria tell you about the opportunity for the aftermarket in 2010 and beyond?

It tells us that the aftermarket stands at a crossroads – we can choose to leverage our historic strengths to grow our share of the overall parts and service market, or we can jump into a never-ending spiral of price competition featuring lower quality parts.

It’s clear that more consumers are looking for real value in the form of parts and services that will extend their vehicles’ service life and improve performance. If we respond by recommending inferior parts with a shorter service life, we’re not serving the customers’ needs. And, as a result, we probably won’t be their first choice for future service needs.

So our question needs to be not only what effect will our strategies have today, but how will they impact consumer behavior in the long run. If the aftermarket’s value proposition today becomes “lower price” and “lesser quality,” we’ll never be able to reverse that negative momentum down the road.

How can you and other industry manufacturers help service providers communicate the value of premium products to the consumer? And how can the industry alleviate the service providers’ concerns that they might lose customers due to price?

First of all, our industry needs to focus on the benefits of premium parts in all economic environments. Consumers throughout the past 80 years have turned to the aftermarket for a differentiated experience based on quality, service, convenience and value. As vehicles become increasingly sophisticated – a phenomenon that’s certainly obvious to vehicle owners themselves – offering quality replacement parts designed and manufactured by OE suppliers becomes increasingly important. As a result, we need to redouble our efforts to sell customers the best products in virtually every repair situation. And, as our research has shown, consumer preference for premium parts is actually rising due to their plans to extend their vehicle replacement cycle.

Your second question really goes to the heart of the matter: The key to increased sales of premium products is to give the technician and service writer the knowledge, materials and third-party validation needed to help the consumer make a smart repair decision. All shop professionals are understandably reluctant to put themselves in a position where they might appear to be overselling the customer. But with the help of our campaign and the consumer-focused fmsmartchoice.com Web site, shop professionals can encourage consumers to read up on the real value of better quality parts for a full range of repairs. In this scenario, the shop owner isn’t doing the selling; rather, he’s helping the consumer make a better decision.

Will premium brands and products play a role in helping aftermarket businesses capture customers and sales from the OES channel?

Absolutely. Independent repair shops don’t typically like purchasing parts from the OE dealer, whom they view as a competitor. They would much rather buy trusted aftermarket brands from the sources they’ve known for years. Sometimes, customers specify that they must have an OE replacement part because they are concerned about the quality of the repair and believe only OE will do the job. What the customer and independent repair technician may not realize is that they can have the best of both worlds with Federal-Mogul products. Federal-Mogul is a leading supplier to original equipment manufacturers around the world, with products that are featured on more than 250 global vehicle platforms and more than 700 powertrains. That OE design and quality manufacturing expertise goes into the premium branded products offered by Federal-Mogul.

Is Federal-Mogul’s program a short-term initiative to address existing economic worries or will this type of program live over the long term?

We are a manufacturer of highly differentiated, premium products backed by many of the industry’s best brands, so our emphasis on premium is absolutely long-term. We also anticipate that the fundamental strategies behind our Smart Choice initiative will continue to resonate for many years to come.

In short, our trade customers can look to Federal-Mogul to continue to provide the programs and other support needed to help grow their sales and margins through better performing, longer lasting premium products.