This case study describes how a major automotive aftermarket supplier looking to offset declines in their core business found success in an adjacent product categories Rick Steinbrenner - The Global Brand Guy

1. 1
Marketing Leadership Via Brand Equity Building

2. 2
Tenneco NAAM Business Situation
1. Exhaust systems & shocks/struts have
relatively low service interval rates: #3/#6
rank
Source: AAIA
1) Engine tune-ups – 33.5%
2) Brake jobs – 21.7%
3) Exhaust system job – 6.6%
4) Radiator/Cooling Flush – 5.1%
5) Ignition Wire – 4.6%
6) Shocks & Struts – 3.6%
7) Fuel Injection – 2.2%
2. Shock/Strut market stagnant/declining
due to better quality original equipment
driving lower service replacement rates
for aftermarket shocks.
Source: IMR
3. Exhaust market declining due to better
quality original equipment – i.e.
aluminum to stainless steel exhaust
systems.
Source: IMR
North American Aftermarket Business Profile:
• Sales: ~$500MM
• Core businesses: Ride Control & Emission Control - #1 brands
• Brands: Monroe Shocks & Struts, Walker Exhaust
• 15% of total corporate revenue, balance – original equipment parts
3.3%
2.8%
2.9%
2.5%
2.6%
2.4%
2.6%
2.4%
2.2%
2.1%
2.0%
1.8%
1.7%
1.6%
1.4%
1.3%
1.2%
1.0% 1.0%
0.9%
1.2%
1.2% 1.2%
1.3%
1.4%
1.6%
1.8%
2.1%
0.0%
1.0%
2.0%
3.0%
4.0%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Shock Absorbers (actual) Struts (actual)
6.06.6
7.4
8.0
9.2
10.7
11.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2000
2001
2002
2003
2004
2005
2006
UnitsinMillions

3. 3
Tenneco NAAM Business Actions #1
Dirt and Mud
have a hard time
sticking – for a
clean/shine that
really last Black waxes highly rated by Consumer Reports
Black Waxes were “best sellers” at key customers
Ion Car Polish – next generation polish – repels dirt/mud
Non-greasy shine
Unique 2-sided wipe
Tire Shine – No sling vs. competition
Wheel Cleaner – Spray On, Hose Off
“Best Sellers” at key customers
Protect and coats
critical engine
parts for better
gas mileage
Fuel Cleaners help improve fuel flow efficiency
Engine Treatment help protect critical engine parts
Spray on, wipe off
Formula similar to wheel clr.
Carpet Clr. was best seller
Spot Free Shine
Helps keep car cleaner longer
“Best Sellers” at key customers
Licensed Product Opportunity with DuPont & Motorsports
DuPont wanted a new licensee to help re-enter Car Care market adjacent to their paint line.
NASCAR “Free” access to Jeff Gordon & 24 Car as an endorser in marketing communications
Tenneco had independently developed new “best in class” formulations in a water-based format
Identified/developed new “wear shield” friction modifier for performance chemical products

4. 4
Tenneco NAAM Business Actions #2
Brakes Parts – attractive category
#2 service item behind engine tune-ups
Very large/growing market –
Friction: $1.1B++
All brake components (i.e. rotors,
calipers) - $2.2B
Source: IMR/Frost & Sullivan
Market not heavily concentrated – top
3 brands only account for 60% of sales
Top 3 brands at the time were weak:
- Wagner: owned by Federal Mogul: No innovation
- Raybestos: Sold by Dana to Affinia – restructuring
- Bendix: Owned by Honeywell – tried to sell business to
Wagner. No investment.
Monroe equity extension beyond
Shocks - logical and easy to understand
1.
2.
3.
Brakes Pads/Shoes
64 62
57
61 62
65
63 62
63
$938 $939
$865
$950 $969
$1,029
$1,130$1,123$1,126
0
10
20
30
40
50
60
70
80
2000
2001
2002
2003
2004
2005
2006P
2007P
2008P
MMUnits
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$MM's
New Category Opportunity: Brakes

5. 5
Tenneco NAAM Business Actions #2
PREMIUM PRICE POINT
Part Numbers: 642
Applications: Mid 60’s - 2010; Pass Car, Lt. Truck
SUV, Med-Duty, some heavy duty
Formulation Type: Semi Metallic
Attributes: Hardware in box (e.g. Wire Wear Sensors,
Noise Reduction Kits, Rubber coated shims, Lube)
Part Numbers: 391
Applications: Mid 60’s - 2010; Pass Car, Lt. Truck,
SUV
Formulation Type: Ceramic/Non Asbestos Organic
blends
Attributes: Hardware in box (e.g. Wire Wear Sensors,
Noise Reduction Kits, Rubber coated shims, Lube)
Monroe premium brake pads were first OE replacement application -
engineered product – including all the hardware in box to do job right

6. Post Launch - Brake Packaging Structure & Line Graphic Change
Before: After:
1) Original Packaging Design:
1000+ SKU’s spread among two friction types – Semi
Metallic (DX) & Ceramics (CX)
Product packed in very expensive and non-customer
friendly vacuum form “skin tight” configuration
2) Packout & Design Changes:
Shifted to easy to remove and simpler shrink wrap design
Consolidated dual friction type design into one product line
look – similar to competitive packaging designs
Savings: ~$300M/yr.
Tenneco NAAM Business Actions #2

7. 7
Tenneco NAAM Business Results
DuPont Car Care:
Introduced 17 new products that generated over $5MM+ in annualized sales.
Obtained distribution in 15,000+ retail outlets: Mass Merchants/Home Centers
& Automotive retailers.
Sold Tenneco/DuPont into brand new customers: Wal-Mart, Wal-Mart-Mexico, Lowe’s,
Target and Auto-Zone.
Spray Wax, Tire Shine & Wheel Cleaner – top 10 best selling SKU’s in NPD; Wax
received #5 rating out of 28 total waxes tested in 6/’06 Consumer Reports test.
Monroe Brakes:
Achieved $20MM in sales with 100+ new customers against entrenched competitors.
Developed “best practice” new product development process resulting in $500M in new
brake pad SKU’s including a new brake shoe line in just two years.
Grew margins and supply chain effectiveness – in house manufacturing program vs. third
party suppliers. Reduced product cost by 25% and increased margin % by +8.3 ppts.