Lizeo Group
Data Blog by Lizeo
The tyre market is extremely competitive: as a tyre manufacturer or distributor, you need to understand the market behaviour and your performance in it. In other words, you must be able to keep track of market changes, distribution channels and your competitors. But how can you collect data representative of the market? What Key Performance Indicators (KPIs) should you monitor to drive your strategic objectives? How can a panel help you pass from Data to action?

Definition: what is a panel?

A distributor panel is a sample of market players representative of the distribution world, both on and off-line. It provides an overview and precise look at the sell-out market, which reflects emerging trends. It's an essential tool for both tyre manufacturers and retailers.

Key Performance Indicators for the tyre market

Top Key Performance Indicators
To measure market performances and the development of competitors in the market, the indicators used most frequently are as follows:
Panels provide a direct view of the global market situation, by channel or by market segment.
Sell-out data
As a tyre manufacturer, panel sell-out data can be used to manage your sell-in offers. The analysis of distribution sales allows you to trigger various actions such as reviewing production volume, removing products that no longer sell, or adding new ones while reconsidering sizes, prices, etc.
Of course, the benefits of this data will be different if the panel is used from a distribution point of view. 
Numerical distribution (ND) and the distribution value (DV)
Numerical distribution and the distribution value provide a good view of a tyre manufacturer’s catalogue and distribution strategy. They are the most direct indicators to view the market.
Numerical distribution
Numerical distribution is an indicator of presence. It gives the percentage of sales outlets in which a product is found, and indicates the level of establishment. Tracking how the DD changes over time will provide information about:
  • launch of a new reference or a new tyre brand on the market,
  • speed to market.
Distribution value
The distribution value is an indicator of the value. It represents the weight of sales outlets across the entire network, and results in a percentage of the market covered by those in which a product is referenced.
The indicator given by the sales value divided by the distribution value (Sales value / DV) is often used to smooth discrepancies between the distribution networks and compare the real efficiency of references.

For example...

A tyre reference has a DD of 30: it is therefore present in 30% of sales outlets.

The DV for this same reference is 50: we can deduct that it is present in distribution channels with a high sales volume.

How to study panel performance indicators

You can study these different indicators at a time T, and also monitor their changes from one year or a month to another (Y-1, M-1, etc.). The year-to-date concept can also be taken into account. Over time, the variation of these indicators represents concrete events that have happened in the market.
In the case of decline, your panel and the indicators can be used to search for explanatory factors: strong promotional activity from competitors, high distributor prices, insufficient consumer demand with respect to forecasts, arrival of new players in the market, etc.
The objective? Monitor market performance and its development while assessing your position within it. You can also establish a forecast based on this study.
Why good "tyre" data is important
Key indicators will provide you with better vision of the market. However, rigour is required, and you must pay close attention to specific issues. Data that are not cleaned and standardised do not allow for meaningful analysis. This is called Dirty Data.
The accuracy and quality of Data
You must be able to make tactical decisions and implement concrete operational actions based on the information collected. To do this, the data must be in-line with reality. It is your business at stake!
Pay special attention to the high granularity level of data, the accuracy must extend to the article for which the resulting actions are both accurate and precise. It's even more important for tyres, which are sometimes difficult to compare, due to the detail of technical features. If a panelist merely provides “16 inch tyre” data, you can't do anything with it. The data overlaps with too many references, which themselves, represent a disparity in sales volume. The proportion of “unclassifiable” data should also be taken into account before starting the analysis.

Data segmentation

In the highly technical tyre market, segmentation is a real issue. By having access to finely segmented data, actions can be adapted and implemented to different product lines.

For example, the main segmentation criteria for the passenger car tyre market are as follows:

  • vehicle type
  • brand
  • category (premium, medium, budget)
  • size
  • season
Data matching
With the size or quantity of data collected, having several millions lines of data is not necessarily a guarantee of success. Each distributor will share data flows in its own format, which often makes the analysis impossible.
It is therefore important to harmonise, unify and organise the data collected to obtain a clearly readable data line that's usable. All transmitted data must be linked to the correct product line, which is only possible through a comprehensive product database on the panelist side.
Speed of Data processing
For Big Data and the development of markets, everything moves fast. Internally, you must be able to provide the right elements to the right players on a frequent and consistent basis, so they are informed of trends and can take appropriate actions. In the tyre market, extrapolation is not permitted, so an enormous amount of Data must be collected in a limited time.
On the Trade Marketing side, timing is a real issue: sales and marketing actions must be managed accurately. For example, if sales volumes or market share collapses, it must be possible to address the situation quickly!
Data confidentiality
There are many rules and laws around data confidentiality. The panelist must be a recognised trusted third party who reworks the data collected in accordance with non-competition rules. The distribution must be segmented: pure player, specialist dealer, car centre, etc. and anonymous.
With good indicators and accurate data management, a panel can be a real asset for your company. It is a weapon that will allow you, as a tyre manufacturer, to track market performance and the competition, or even track your own performance as a distributor. It is up to you to develop a level of understanding and adapt the indicators to your sector and to the product range analysed. Are you ready to get started, or would you like access to a concrete example from the dashboard?