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Goodyear
Aquatred
Launch
Tire
Industry
In United
States
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
In 1970s and 1980s US Tire
Industry experienced 3Important
CHANGES
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.
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
Company’s Background
Ggo
Gorilla
of tire
industry
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
GOAL
To create a market
driven organization
and serve the
customer.
Gorilla
of tire
industry
Market
Segmentation
Gorilla
of tire
industry
Distinction
between
performance
and broad line
tires
Replacement
and OEM
tires
Brand
Classification
Consumer Behavior
Price
Offers fast
service
Can trust
personnel
Store is
attractive
Offer
Mileage
warranty
Brand
Selection
Maintains
convenient
priceThe 7
most
important
criteria:
Gorilla
of tire
industry
Price
Constrained
Buyers
Value
Oriented
Buyers
Quality
Buyers
Commodity
buyers
Consumer Market Segmentation
Retail Distribution Channels
MajorRetailChannels
Garages/ Service
stations
Warehouse Clubs
Mass
Merchandisers
Manufacture
Owned Outlets
Small Independent
Tire Dealers
Large Independent
tire chains
Other
Goodyear’s Distribution
Structure
Outlets
Independent Dealer
Manufacturer owned
outlets
Franchised Dealers
Government
Goodyear’s Independent Dealers
42 districts
22- 23 stores per district
1 district manager for each district
and store manager for each store
Promotional
Offers
Core Events
Social &
Print Media
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
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
Aquatred
Launch
Two
Major
Concerns
Gorilla
of tire
industry
Did Goodyear
have the Right
product for the
dealers and for the
consumers?
Goodyear   aquatred launch
Product
Great Wet
Traction
Sleek
sidewall
design
Longer life
60,000
miles
warranty
Careful
tread
placement
Different
33%
41%
• $89.95 with a black
sidewall
• $93.95 with a white
sidewall
• 10% premium over the
Invicta GS
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
Gorilla
of tire
industry
Promotional Strategies
• 33%
Newspaper
Ads
• 21%
Telephone
Outlets
• $31
billion
Full scale
launch cost
• Winter
Olympics
Perfect timing
for launch
Gorilla
of tire
industry
PLACE
2nd major concern
Distribution Channels??
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
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
• 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
Created by Palak Goyal, IIT Kharagpur as part of an
Internship done under the guidance of Prof. Sameer
Mathur, IIM Lucknow
IIMInternship.com
Disclaimer

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