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matters by John Darker AMBIM
How Wincanton Contract was launched
LAUNCHING a new company or a specialist organization is an exciting business and in the competitive world of road haulage it demands clear thinking and great determination. Another essential ingredient is luck, or timing; a key feature of the promotion of Wincanton Contract was a "pop-up" model boxvan, self-erecting when withdrawn from the envelope. The terrorist letter-bomb scare could have unfortunate effects on some forms of novelty advertising.
Wincanton Contract is a subsidiary of Wincanton Transport (a member of Wincanton Group) which is in turn a subsidiary of Unigate Ltd. Unigate and Wincanton Transport together operate and maintain a fleet of more than 15,000 vehicles throughout the UK. This back-up strength in management and engineering is a crucial factor.
The decision of Wincanton Transport to expand greatly in contract hire — for six years a small number, of vehicles has been operated under contract — reflects a major revamping of the management structure and strategy of the giant Unigate company. Employing some 37,000 people and with an annual turnover in excess of 4400 million, the business empire formed in 1959 when United Dairies merged with Cow and Gate was overwhelmingly concerned with milk and milk products. Unigate consulted McKinsey and Company, and Sir James Barker was brought in as chairman and chief executive to pep up and diversify the company. The decision to make the Wincanton Group — with extensive interests in haulage, garages, engineering and plastics — a growth point led naturally to the study of contract hire as a likely activity justifying expansion. Wincanton Garages hold many commercial vehicle franchises and large spares holdings.
Research and promotion Wincanton Contract came into being in January 1972 and its strategy gradually evolved under the guidance of Ted Wall, managing director of Wincanton Transport Ltd, and of Bruce MacCormack, general manager of the contract hire division. Market research and promotion planning occupied six months before the formal launch in July 1972. It was professional enough to win coveted awards from the British Direct Mail Advertising Association and the British Industrial Marketing Association. Road haulage has needed to take marketing seriously and this campaign ranks highly with what is common in air transport and tourism.
Contract hire of vehicles is justified broadly because it enables hirers to deploy their capital assets — usually in manufacturing activities — more effectively. Wincanton Contract will almost inevitably assist the Unigate colossus itself to make better use of its capital assets. Wincanton aims to play a major role in the total field of physical distribution.
Unigate's transport and distribution activities are so vast that Wincanton is as well placed as any rival contract hire operator to know about current and future trends in physical distribution.
Wincanton Transport Ltd recently acquired Valley Carriers Ltd in South Wales, a firm with activities in bulk powder and general haulage. The tanker fleet of Wincanton, though largely concerned with milk, has for 20 years through its bulk tanker division hauled a wide range of petroleum and coal tar products and chemicals. Wincanton Engineering Ltd — part of Wincanton Group — makes road and static tanks, glass-reinforced plastic vehicle bodies, packaging machinery — even crates and pallets. The tools and infrastructure of physical distribution are thus to hand.
Freight costs Wincanton Contract's market researchers noted that the cost to British manufacturers of the physical distribution process was over £9,000 million a year, representing 16-20 per cent of total sales turnover, of which a third was spent on freight transport alone. With over 650,000 commercial vehicles (in excess of 1 ton carrying capacity) mostly owned and operated by manufacturers or hauliers the scope for contract hiring operations was seen to be vast. It is reckoned that there are four major competitors, BRS (Contracts), Avis, Hertz and Ryder. (Transfleet Services Ltd, well established in the North and planning new depots in the Midlands and South of England should also be considered.) The three competitors of American parentage are largely known for short-term vehicle hire. All the major competitors, taken together, are judged to have "much less than 20 per cent" of market share.
The great majority of contract ' operators are relatively small firms offei a localized service as regards veh maintenance. Wincanton — in contras. most of its main rivals — intends concentrate on three to five year contra eschewing short-term hire work. The range of services, not only the indispens maintenance and repair function but administrative paper work, warehouse distribution facilities, the building non-standard bodies, etc — will be provi if desired.
The intensive market research identi the common needs and location of lil customers. The decision makers who wc need to be influenced by advertising, di mail and personal canvass were identil The factors likely to influence decisiot terms of price, availability and pro( content were determined. The sti revealed the total market potential, cur individual market shares and the typt service provided.
Four categories, "target groups", v identified. They included manufactui wholesalers and distributors of all type foodstuffs — perishable and non-periiha manufacturers of furniture, departn es, exhibition contractors; manufacturand wholesale and retail distributors of -foodstuffs; and public utilities, service stries, shipping and forwarding agents Government establishments.
rporate impact he impact made by Wincanton tract in its initial promotions was tly helped by a corporate identity ;ramme devised by J. Walter Thompson the Wincanton group. The livery, onery, etc, designed for the group and related "image promotion" of Unigate itself helped to impress upon potential • s that the unknown Wincanton tract business was related to the much :r-known Unigate company.
is never easy to mount a publicity paign in a field that has been well oited by competitor firms. Because ract hire has been a familiar part of the haulage scene for a decade or more it be forgotten that most businessmen w next to nothing about transport; they tinly do not read the transport Press. cc the good sense of a Wincanton tract advertisement likening contract g of vehicles — little known — to the • g of colour TV sets — a common g situation. The theme of a 12-page hure, in full colour, was "Don't put • assets on wheels — we think you've )etter things to do with your money."
he pop-up truck would certainly have seen as a clever innovation by most of e — addressed by name and title — lying Wincanton Contract publicity. truck was mailed in batches so that the ract hire staff could process inquiries aptly. A subsequent evaluation of this ;rtising gimmick claimed that it was :tly relevant to the product; had great La and novelty value; allowed the at to be used to full effect and provided ;osition for a personal letter and y-paid card; was both useful, • mative and fun for the target group; value (the pencil, paper-clip holder and 2p bit, stuck firmly to the top, was ;ned to discourage immediate discard). irrent jargon, by using the truck it was ible to totally integrate, rather than to rimpose, the message with the medium. n ambitious growth target has been set Wincanton Contract management. ntial customers will doubtless weigh the cc offered against the price charged for le contract terms I have examined seem mably fair to both sides. Ted Wall, :anton Contract md, believes in spelling any necessary future increases in ges in the greatest detail to contract niters. A steady growth in the contract g field, at fully competitive rates, seems :ly outcome.
nigate's management philosophy is g changed from an authoritarian to a cipatory style, tapping the energies of rades of staff. There is no shortage of al — Ted Wall confided that an ;tment of less than a million was "not y significant" for the main board. This Id be assurance enough for potential omers and competitors of Wincanton ract that the new boys mean business.