If at first you don't succeed, have someone else do it.
That's Winnebago's new strategy in the conversion van market.
Eight years ago, Winnebago Industries Inc. abandoned its conversion van business to focus on its trademark RVs. On April 1, the company got back into the business, but this time by licensing its name to converter Choo Choo Customs Group Inc. in Chattanooga, Tenn.
The Winnebago-badged vans could grab 5 percent of the North American conversion van market during the next 12 to 18 months, said Jim Jaskoviak, Winnebago vice president of sales and marketing.
Kurt Faires, president and owner of Choo Choo Customs, estimates Winnebago conversion vehicles could represent 50 percent of his business soon. He would not reveal his company's current annual sales.
'The Winnebago name is probably better recognized than any other (conversion) van name,' Faires said.
KLEENEX OF THE ROAD
People typically refer to any RV they see on the highway as a Winnebago, Jaskoviak said. 'We have become without a doubt the Kleenex of recreational vehicles,' he said.
And that kind of name recognition, Winnebago has discovered, can go a long way.
Beginning in 1992 the Winnebago name began appearing on tents and sleeping bags marketed by Avid Outdoor. Last year, Winnebago licensed its name to Chariot Eagle Inc. for use on a line of nonmotorized park homes (homes built on a single chassis and mounted on wheels).
Conversion vans were the next logical step, but are certainly not the only possibility, according to Allan Feldman, president of Leveraged Marketing Corp. of America, a New York consulting firm. Leveraged Marketing orchestrated the Chariot Eagle and Choo Choo deals for Winnebago.
Feldman said it makes sense to put the Winnebago name on a variety of travel and leisure products - everything from pop-up campers to roof racks to hammocks. 'Brand-extension licensing' allows Winnebago to enter these markets without making an investment or taking its eye off its core business, he said.
A couple of years ago Winnebago lost market share in RVs when its eye strayed onto unrelated businesses, said Guy Nielsen, an equity analyst who follows the RV industry for Nutmeg Securities Ltd. in Westport, Conn. Winnebago, with 16 percent of the motor home market, currently is the No. 2 player behind Fleetwood Enterprises Inc., Nielsen said.
The licensing agreement with Choo Choo Customs is less risky than Winnebago converting the vehicles itself. But as far as money goes, 'I don't think it's going to amount to much,' Nielsen said.
No one will say how much Winnebago will earn on each conversion vehicle sold. Feldman insists brand-extension licensing 'can be big business.' The consultant estimates about $25 billion (wholesale value) in licensed products are sold in North America each year.
REPUTATION IS KEY
The key to brand-extension licensing is having a great reputation, said Larry Light, president of Arcature LLC in Stamford, Conn., and a brand management consultant to the auto industry. 'As a general principle, you don't brand products; you brand promises,' he said. 'The customer isn't asking who's making this product, but who is making this promise.'
To pull this off, Winnebago reviews potential partners such as Choo Choo Customs to make sure they can keep Winnebago's promise of quality. In addition, Winnebago has retained the right to reject any potential dealers for the Winnebago-brand conversion vehicles to ensure quality at the dealer level. The company also wants to make sure its own RV dealers do not end up with rivals who also carry Winnebago-brand products, Jaskoviak said.
'When you go out and license your name to somebody, you don't want to be embarrassed,' said Faires.
So far Winnebago has not rejected any of Choo Choo Customs' dealer choices. And Jaskoviak is not worried about its choice of a partner. Choo Choo Customs is the 'most Winnebagolike' conversion van maker out there, he said.
Choo Choo Customs' line of Winnebago-brand conversion vehicles will include Ford, Chevrolet, Dodge and GMC full-sized vans, as well as the Chevrolet Tahoe and Suburban sport-utilities and the Chevrolet Astro and GMC Safari minivans.
A typical Winnebago full-sized van will retail for about $31,000, according to Faires.
The Winnebago vans will not differ much in price from the Choo Choo-brand conversion vans. 'They certainly won't be any more expensive,' Faires said. What will set them apart will be the styling - for example, different paint styles and different use of interior wood trim - and accessories both inside and out, he said.
Faires expects the Winnebago-brand vehicles to open doors for Choo Choo Customs. For example, Choo Choo Customs has granted some of its Choo Choo-brand dealers the exclusive rights to specific regions. Now the company can go to other dealers in those regions with the Winnebago products, he said.
Newton Chevrolet, just down the street from Choo Choo's headquarters in Chattanooga, soon will have Winnebago-badged conversion vehicles sitting next to its Choo Choo products. Walt Melton, a Newton sales manager, said he is excited about having the additional line of vehicles.
Said Melton: 'Anyone over the age of 18 has heard of Winnebago.'