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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)