goodyear aquatred launch

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  1. 1. Goodyear Aquatred Launch
  2. 2. Tire Industry In United States
  3. 3. Dominated by 5 major players 10.4 9.8 8.5 3.9 3.7 3.5 0 2 4 6 8 10 12 Sales (in $) 0 2 4 6 8 10 12 14 16 18 Brand shares of unit sales 1975 1985 1991
  4. 4. In 1970s and 1980s US Tire Industry experienced 3Important CHANGES
  5. 5. Nature of demands from consumers and car makers Increased foreign competition Emergence of Radial Tires Increased from 8% to 22% in 1990 Consumers replaced tires less frequently 1. 2. 3.
  6. 6. Major effects of this changes Demand for passenger tires grew sluggishly Tire prices in the market declined Increased mergers and acquisitions Tire producing capacity outstripped demand
  7. 7. Companys Background
  8. 8. Ggo Gorilla of tire industry
  9. 9. Goril la of tire indu stry 1987 1988 1989 1990 1991 Net Sales $9,905.2 $10,810.4 $10,869.3 $11,272.5 $10,906.8 Net income (loss) 770.9 350.1 206.8 (38.3) 96.6 Net income(loss) per share 12.73a 6.11 3.58 (0.66) 1.61 Tire industry had became stagnant during 1990s due to long life and reduced demand Sales and Income for Goodyear Subsidiaries
  10. 10. GOAL To create a market driven organization and serve the customer.
  11. 11. Gorilla of tire industry Market Segmentation
  12. 12. Gorilla of tire industry Distinction between performance and broad line tires Replacement and OEM tires Brand Classification
  13. 13. Consumer Behavior Price Offers fast service Can trust personnel Store is attractive Offer Mileage warranty Brand Selection Maintains convenient priceThe 7 most important criteria:
  14. 14. Gorilla of tire industry Price Constrained Buyers Value Oriented Buyers Quality Buyers Commodity buyers Consumer Market Segmentation
  15. 15. Retail Distribution Channels MajorRetailChannels Garages/ Service stations Warehouse Clubs Mass Merchandisers Manufacture Owned Outlets Small Independent Tire Dealers Large Independent tire chains Other
  16. 16. Goodyears Distribution Structure Outlets Independent Dealer Manufacturer owned outlets Franchised Dealers Government
  17. 17. Goodyears Independent Dealers 42 districts 22- 23 stores per district 1 district manager for each district and store manager for each store
  18. 18. Promotional Offers Core Events Social & Print Media
  19. 19. Competition Intent to buy (All Buyers) Goodyear Michellin Other Uncommitted Price Constrained Buyers Goodyear Michellin Other Uncommitted Value oriented buyers Goodyear Michellin Other Uncommitted Quality Buyers Goodyear Michellin Other Uncommitted Commodity Buyers Goodyear Michellin Other Uncommitted
  20. 20. Brand Loyalty among Consumers Brand Replaced Bridgesto ne Firestone Goodyear Michelin Minor Brands Private Label Total Bridgesto ne 29 4 8 8 7 43 100 Firestone 2 27 11 6 7 45 100 Goodyear 2 5 39 5 8 38 100 Michelin 3 3 7 44 6 36 100 Minor Brands 2 4 10 7 32 42 100 Private Label 2 5 8 5 7 70 100
  21. 21. Aquatred Launch
  22. 22. Two Major Concerns
  23. 23. Gorilla of tire industry Did Goodyear have the Right product for the dealers and for the consumers?
  24. 24. Product Great Wet Traction Sleek sidewall design Longer life 60,000 miles warranty Careful tread placement Different 33% 41%
  25. 25. $89.95 with a black sidewall $93.95 with a white sidewall 10% premium over the Invicta GS
  26. 26. Gorilla of tire industry 16 17 18 10 6 23 61 10 6 13 64 17 Price Constrained Buyers Value Oriented Quality Buyers Commodity Buyers Chart Title Goodyear Aquatred Invicta GS Target Segment People
  27. 27. Gorilla of tire industry Promotional Strategies 33% Newspaper Ads 21% Telephone Outlets $31 billion Full scale launch cost Winter Olympics Perfect timing for launch
  28. 28. Gorilla of tire industry PLACE 2nd major concern Distribution Channels??
  29. 29. Gorilla of tire industry 18% 0% 28% 11% 36% 4% 3% Share of Retail Sales in 1976 Garages Warehouse clubs Mass Merchanisers Manfacture Owned Outlets Small Independent Tire Dealers Large Independent Tire Chains Other 6% 6% 12% 9%40% 23% 4% Share of Retail Sales in 1991 Garages Warehouse clubs Mass Merchanisers Manfacture Owned Outlets Small Independent Tire Dealers Large Independent Tire Chains Other
  30. 30. Should expand by increasing independent retailers Expansion should be done in strategic locations Expansion should be to a certain extent, beyond which will lead to decrease in prices and unfair trade practices Expansion strategies
  31. 31. Maintain brand strength and product quality as maximum of them purchased the product based on past experience Sales person, dealers should be trained to achieve uniformity in presentation process Promotional offers on price Recommendations
  32. 32. Created by Palak Goyal, IIT Kharagpur as part of an Internship done under the guidance of Prof. Sameer Mathur, IIM Lucknow IIMInternship.com Disclaimer