groupb11 mkt session1 goodyear

7/29/2019 GroupB11 Mkt Session1 Goodyear

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The Aquatread Launch

Group B11



Method to design a Marketing Channel

Analysis of customer needs Buying behavior

Preferences

Establishment of channel objectives

Rules and guidelines Involvement of independent dealers

Identification of alternatives

Warehouse dealers

Retail chain



Goodyear position in Tire Industry

Ranked third in worldwide sales First in U.S. market in passenger vehicle segment :

15% share in replacement and 38% in OEM

4400 dealers in U.S.

Only 13% buyers lean towards Goodyear Only 39% were brand loyal in 1991

Threat from Michelin



Market Segmentation

Replacement & OEM

152

43

22.816.3

Replacement OEM

Industry Goodyear

Replacement

OEM

Industry 77.9% 22.1%

Goodyear

58.3% 41.7%

• Major, Minor& Private Labels

Major Minor Private

Industry

36% 24% 40%

36%

24%

40%

Unit Sales Share

Major Minor Private

• Performance &Broad line

Goodyear Performance BroadLine

Unit Sales 25% 75%

Dollar

Sale

30% 70%

25%30%

75%70%

Unit Sales Dollar Sales

Performance Broadline



Consumer Segmentation

•Buy the best brand they canafford

•Little loyalty to brand or outlet

PriceConstrained

Buyers

•Brand loyal – searched for preferred brand at best price

•Little loyalty to specific outlet

ValueOrientedBuyers

•Loyal to outlet and brand•Divided into•Prestige Buyers: Owned thebest tyres available,preferred major brands

•Comfortable conservatives:Had strong lastingrelationship with specificoutlet

QualityBuyers

•Valued price and outlet•Divided into:•Bargain Hunters: Littlebrand preference / lowretailer loyalty

•Trusting Patrons: Boughtlow priced tires at apreferred retailer

CommodityBuyers

0%

10%

20%

30%

40%

50%

Price Oriented BrandOriented

OutletOriented

48%

26% 26%

45%

22%33%

1985 1992

Percent ofConsume

rs

Percent of sales representedby

MajorBrands

MinorBrands

PrivateBrands

Price ConstrainedBuyers

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%



Evolution of Distribution Channel

LargeIndependent

dealers23%

SmallIndependent

dealers40%

Manufacturer Owned outlets

9%

Mass

Merchandisers12%

WarehouseClubs6%

Garages/Service Centres

6%

Others4%

Tyre Industry Retail Distribution shares



Evolution of Distribution Channel

IndependentDealers

50%

Manufacturer Owned Outlets

27%

FranchisedDealers

8%

Government Agencies

15%

Goodyear's Distribution structure



Evolution of Distribution Channel -

Goodyear

Emphasis on franchised instead of own outlets Avoided

Garage/ Service station sales

Warehouse Clubs

Mass merchandisers Just Tires in pilot phase

Kelly Springfield

No owned or franchised stores

Sales through Mass merchandisers, independent tiredealers, service stations.



Future Scenario - To expand or not

Pros

Increased coverage Growth can be leveraged through engaging the Large

independent chains

Cons Increase of buyer power Further issues with existing distributors Cannibalization of independent dealers

Recommendation

Don’t carry out a channel expansion as it threatening for the current brands



Aquatred Launch

Pros Addresses the second most important attribute – Wet Traction

Attract Prestige buyers and Value-oriented buyers

First mover advantage in the product category

Launch the innovative product to retain brand image

Cons $21 M cost of a full-scale launch

Questionable value proposition of the product in the givensituation and customer mindset

Recommendation Target Value and Quality oriented customers and launch to

benefit from premium price and hence, greater power over theindependent dealers



Thank you

Group B11

Aditya Sharma | Atul Kumar Singh | Pranshu Dewal

Nirupam Pratap Reddy | Shubhra Ghosh | Tapan Deka

groupb11 mkt session1 goodyear

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