New consumer base calls for new plans

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Trade executive suggests Spanish-language ads, boating courses as part of public school curricula

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A presentation at the December boating growth summit that showed Latinos are a rising segment of the U.S. population may have caught some by surprise, but Grant Westerson wasn’t one of them.

The president of the Connecticut Marine Trades Association thinks many boat dealers already understand that the face of America is changing. “They see the people that come through their stores every single day,” says Westerson in a wide-ranging interview on the state of the industry. “Maybe they’ve not talked about it. Maybe they’ve not recognized it in a big way, but they ultimately know their consumer base is changing … and they have to do something about it.”

Steve Murdock, former director of the Census Bureau, told the Recreational Boating Stakeholder Growth Summit in Chicago that Latinos had grown to 16.3 percent of the population in 2010 and that “non-Anglos” are projected to become the majority of the population by 2050.

So what do dealers do? Westerson suggests they consider redirecting some of their advertising dollars toward Spanish-language television and publications. “Those are two areas that I think a lot of dealers may have overlooked, and maybe overlooked because some of the people selling time on those stations haven’t necessarily approached them about taking space,” he says. “If the Spanish version of ESPN came out and knocked on your door, you’d at least be thinking about it, but I don’t think that’s happened.”

While the industry is thinking of ways to capture the rising Latino market, it also needs solutions to the perennial problem of keeping boats priced so that middle-class Americans can afford them. Westerson, interviewed during the Hartford Boat Show, says the trend today is to load boats up with options. “Maybe we need to be manufacturing and making available some more plain-Jane boats — boats that will let you go out on the water and let you go skiing and fishing, but they don’t necessarily have to have a microwave and a wide-screen television and a GPS on it,” he says.

Westerson says the costs of equipment, labor and utilities are difficult to reduce, “so we don’t have much control over the price of the boats, except on the goodies we put in them. So if we can start making some more Falcons instead of Corvettes, maybe we can get more people on the water.”

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He says if dealers focus on the fun of being on the water, buyers might be happy to choose boats with fewer bells and whistles. “I think it’s all in how the product is marketed,” he says. “Sell the joys of boating, and don’t sell the fact that it’s got 37 radios and two radars and a stereo and air conditioning. Sell the sizzle of boating.”

Westerson believes states ought to make it a priority to get their boating education programs into the schools. Boaters in Connecticut are required to obtain a safe-boating certificate, but the program is taught by volunteer teachers or through service organizations, such as the Coast Guard Auxiliary and the U.S. Power Squadrons. “Why can’t that be taught in the middle schools or the high schools?” he asks. “That way, every young person gets some education about boating.”

Westerson says the best thing the industry has going for it right now is the “cohesiveness that came out of the Chicago meeting. It’s the agreement among all of the players there that we had a pretty good kernel of an idea, a good marketing program [Grow Boating], and we’re going to support that marketing program. We’re going to maybe expand it and we’re all going to use pieces of it.”

The biggest drawbacks? The economy and the state of wholesale financing, Westerson says. “There are a lot of longtime businesses that are no longer here, and it’s difficult in many cases for a new dealer to get floorplan financing,” he says.

Westerson says the marine industry is doing a good job of reorganizing itself. “The manufacturers are reaching out, and they’re finding new dealers, and they’re coalescing and supporting the dealers now as they should, helping them to afford to go into boat shows so they can present the products to the public,” he says. “So that’s good, but it’s still a problem of finding financing for the dealers.”

Westerson thinks the solution to the financing problem is “just a little more maturing of the lenders. Lenders have gone by the wayside and I think we need to get some new lenders out there,” he says.

The economy has improved, Westerson says, but Connecticut and the rest of New England traditionally have been the last to experience a slump and the last to come out of it. “I think the economy has turned,” he says. “We all know that it’s not turned hard. It’s going to be a long, slow climb, and I think there’s going to be some more drop-offs before it gets to be real good. But I think we’ve seen the bottom.”

Connecticut has adopted a 0.65 percent luxury tax on boat purchases of $100,000 and more, which is added to the 6.35 percent sales tax. Westerson acknowledges that the levy is low, but says the perception it creates will hurt sales. He says Connecticut residents can buy a boat in neighboring Rhode Island, where there is no sales tax on boats, keep it in that state for a year, then bring it back to Connecticut. “You’re saving 7 percent,” he says. “That’s one of the burdens that our industry in Connecticut is faced with — that 7 percent differential.”

Westerson considers the growth summit a great success, though it was just a starting point. The next step, he says, will be to select an “active nucleus of people” who will make the right decisions on such matters as how the industry will finance a promotional program.

“Ultimately, the money is all going to be paid by the consumer,” he says. “That’s how it works. If on every engine that gets sold $25 goes toward advertising, the consumer pays for it. But that’s what this nucleus has to decide, and they have to decide how that pot of funds is going to be best spent to get the message across that boating’s a lot of fun and people ought to partake in it. It’s going to be important to see who’s in that group … It has to be a very broad base, like we had in Chicago.”

This article originally appeared in the March 2012 issue.

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