GOODYEAR:THE AQUATRED LAUNCH

What is

Goodyear?

It is one of 5 major Tire Industries in United

States during early 1970’s.

Goodyear is also known as “The Gorilla” for

it’s dominance on world tire Industries.

Goodyear has : 41 Plants in U.S

43 in other 25 countries

6 Rubber Plantations

Goodyear has : 4400 Independent Dealers

1300 Company owned outlets

600 Franchised Dealers

GOODYEAR is the only major U.S Tire

Manufacturer that had not been acquired during

1991.

The Industries experience important

changes during 1970-1980.

Emergencies of radial tire to replace “bias” or

“bias-belted” Tire.

Increased foreign competition

Change in nature of demand from consumer &

Car makers.

What is the impact due to major

changes during 1970-1980?

Demand grew sluggishly

New tire price declined

capacity out strapped demand

Merges and Acquisition

1970 - $1.5 Billion to convert factories to radial

1977 - Launched “Tiempo Tire”

1981 - Launched “Eagle Tire”

1980’s - Invested in pipelines

1987-1991 - 13% work force furloughed

1991 June - Stanley G Gault become Chairman of GOODYEAR

Passenger tire segmentation.

Performance and broad line tire

Replacement and OEM tires

Broad classification : Major brand

Minor brand

Private Label

What is the consumer

behaviour in the Replacement

passenger tire market?

5 Important performance attributes

Tread Life

Wet Traction

Handling

Snow Traction

Dry Traction

Customer’s Criteria for selecting

RetailerPrice

Service

Trust

Attractive Store

Mileage Warranty

Brand

What are the consumer

segmentations?

Percent of Sales Represented by

Percent

of

Consum

ers

Major

Brands

Minor

Brands

Private

Brands

Price-

constrained buyers

22% 30% 35% 35%

Value-oriented

buyers

18 54 29 17

Quality buyers 23 51 28 21

Commodity

buyers

37 18 37 45

All tire buyers 100 33 33 34

Whole sale distribution

channels:

Type of Outlet 1976 1981 1986

19

91

Oil companies 9% 5% 3% 2%

Large retailers 24 20 16 19

Manufacturer-owned

outlets

11 10 13 12

Independent dealers 56 65 68 67

Retail Distribution channels.Channel Share of

Retail Sales 1976 1981 1986 1991

Garages/service stations 18% 11% 8% 6%

Warehouse clubs 0 0 2 6

Mass merchandisers 28 24 16 12

Manufacturer-owned outlets 11 10 11 9

Small independent tire dealers 36 47 46 40

Large independent tire chains 4 2 12 23

Other 3 6 5 4

Total 100% 100% 100% 100%

Relative Price

Index, 1991

Sales of Private Label

Tires as a Percent of

Retail Sales Dollars, 1991

Garages/service stations 110% 57%

Warehouse clubs 80 8

Mass merchandisers 97 34

Manufacturer-owned outlets 107 16

Small independent tire dealers 100 36

Large independent tire chains 90 54

Other N/A 59

The Launch of Aquatred.

How Aquatred tires is

different from others?

Attractive

Unique Aqua channel design

Better traction under wet condition

60000 mile warranty

Aquatred Decision Situations.

GOODYEAR concern about

• Would dealers accept high prised Aquaterd tire with

60000 mile life compared to low prised tire with

80000 mile tires?

• Would customer prefer there Safety and Reliability of

product or low priced high mileage product?

Other Decision Issues:

What are we actually selling?

Should Aquatred launch?

When to launch (Timing)

Finding the target market

Brand positioning

Whether to expand distribution or not

What specific channels to be adopted

Pricing and promotion

Conflict between company outlets and independent dealers

Current test market:

GOODYEAR got 38% of tire Replacement

It has got 23% of value-oriented buyers and 61% of Quality buyers

It has 91% of 4 tire buyers

It has 74% of Domestic buyers & 26% of Import buyers.

54% of brand oriented buyers.

Recommended Decisions:

Since GOODYEAR has got good percentage of

buyers as per test market, it will be accepted by

dealers.

Since there are 23% of value oriented buyers

and 61 % of Quality buyers, Customer will

defiantly prefer Aquatred.

Other Recommended issue’s:

What are we actually selling?

Safety, Reliability and Trust.

Should Aquatred launch?

Yes, it should.

When to launch? (Timing)

Winter Olympic would be of advantage to launch and advertise

Aquatred.

Finding the target market.

Target heavy rain fall areas in U.S & target value oriented and

quality buyers.

Other Recommended issue’s:

Brand positioning

Capitalize high brand promotions & highlight safety, reliability &

trust within customers.

Whether to expand distribution or not?

Current distribution has met the demand of value oriented &

quality buyers. So, no expansion is necessary.

What specific channels to be adopted?

Use more independent chains & less owned outlets.

Other Recommended issue’s:

Pricing and promotion

Provide incentive schemes for dealers, Promote

aggressively during winter Olympics, Sponsor for

Olympics, promote sale and offers for customer buying

Conflict between company outlets and

independent dealers

Use uniform pricing strategy.

Recap:

Goodyear details

Important changes experienced by industries

Impact of the above changes

Market for passenger segmentation

Consumer behaviour in tire market

The wholesale & Retail distribution channels

The Launch of Aquatreds

Decision Situations & Analysis of test market

Recommended Decisions

Credits:

www.google.com

www.flikr.com

www.wikipedia.com

www.hrb.org

Created by: Ishwarkumar Teggi,

Siddaganga Institute of

Technology, Tumakuru

During an Marketing Internship

by

Prof. Sameer Mathur,

IIM Lucknow.

(See:www.IIMInternship.com)