Coachmen RV Aims for Consumers’ Sweet Spot
With over 20 acres of factories representing more than 1 million square feet under roof, including its own trade shops, it might appear that Coachmen Recreational Vehicle Co. LLC is about as vertically integrated as an RV manufacturer can be.
Not so, insists Coachmen RV President Michael Terlep, who has been with the firm for 21 years.
“We are not as integrated as we used to be,” Terlep said. “Vertical integration is different in a global economy. It isn’t as important as when the supply base was more limited. With commodity materials – to leverage your size and availability – you look beyond the traditional sourcing that you did years ago.”
The effect, he said, is that Coachmen products have become more innovative by incorporating design features and materials that otherwise may not have been available.
“Relative to a global market, the biggest thing is that we find ourselves designing and sourcing our products with a broader perspective,” Terlep said.
The result reflects well among consumers, according to Terlep, who noted that an independent marketing survey by brand consultant Interbrand Corp., New York, N.Y., found the Coachmen name was recognized by 82% of people who took part, the second highest percentage in the RV industry.
“Coachmen is most closely associated with having good products and a solid and responsive dealer network,” he said.
On another level, a key to Coachmen’s accomplishments has been the market positions that it has staked out.
“The secret to our success is that we have hit the sweet spots,” Terlep said. “We are selling a lot of diesel coaches for between $100,000 and $195,000, (whereas) a lot of the industry is beating up each other at $250,000 and above.”
Since 2003, Coachmen RV has invested $12 million in new facilities and $4 million in new technology and equipment while introducing virtually dozens of new models and floorplans.
For dealers, Coachmen has created a comprehensive business-to-business, password-protected website with its Coach-Link software that features parts tracking and electronic warranty submission and approval in addition to support manuals and parts catalogs.
The company also recently reorganized into diesel, gas-motorized and towable divisions to allow reps to focus on specific product categories.
Additionally, Coachmen assigns separate regional service and parts managers to each of its 400 dealerships.
When the time comes for maintenance and repairs, Coachmen stresses the importance of documenting each model since the firm’s founding.
Coachmen has specs on the coaches it has built dating back to the 1970s, and dealers can go online to access a bill of material for every VIN number produced since 1999, Terlep said.
As many in the RV industry know, Coachmen traces its roots to brothers Keith, Tom and Claude Corson who in 1964 brought their combined business, finance, manufacturing and marketing experience together to form Coachmen Industries Inc. to build travel trailers and truck campers.
The name Coachmen was derived from a motel – the Coachman – that Tom Corson spotted on an Ohio Toll Road while returning from Pittsburgh after buying the company’s first real estate property, a farm implement company in downtown Middlebury.
The first year’s production was 12 coaches, but Coachmen grew steadily, becoming publicly held in 1969, the same year company began building Class A motorhomes.
In an organizational change in 1978, Coachmen RV was formed to divide Coachmen’s corporate functions from the operations business as it related to RVmanufacturings.
Coachmen Industries Inc., with headquarters in Elkhart, Ind., is chaired by Tom Corson’s daughter, Claire Skinner, and is also the parent company to Georgie Boy Manufacturing LLC, Viking Recreational Vehicles LLC and other companies.
Others include: All American Homes, Miller Building Systems Inc., Mod-U-Kraf Homes LLC and Prodesign.
Coachmen Industries’ RV holdings produced $606 million in revenue in 2004, up 27.5% from the previous year.
The company’s housing and building divisions had revenues of $269 million, an increase of 16.1% compared to 2003.
By the way, the dalmatian featured in Coachmen’s distinctive logo was Pete, a company watchdog, who, legend has it, could tell the difference between RV dealers and salesmen, greeting dealers happily while growling at salesmen.
With Dalmations also known as “coach dogs,” a drawing of Pete leaping over the Coachmen name became a company hallmark logo.
By November last year, led by diesel-pusher sales, Coachmen RV had climbed to third in total Class A sales, second in Class C’s and fourth in towables, according to Statistical Surveys Inc., Grand Rapids, Mich.
“Over the last two years, our market share in diesel product is up nearly 100%,” Terlep said. “We are not trailing and playing catch up. We are being creative and using vision to get to where we need to be.
“There have been times in our history that we rested on our laurels and expected our brand name to carry the day,” he said. “There were periods that we lacked the energy and creativity that we needed, but we’ve driven complacency out of our company..”
Terlep said that even though Coachmen’s founding principles were established 40 years ago, they mean as much today as they ever have.
“Our word is our bond, and our customers are the focus of everything that we do,” he said. “I’m proud of our legacy, but the legacy that is in the making is more important. While we build on the principles laid down by Tom Corson, the fact is, we are the architects of the future of our company, and we are a company of change.”