Goodyear Aquatred 641l2z

Goodyear: The Aquatred Launch By Saloni Kapil (PGP 15300) Presently, Goodyear holds the largest market share in both the replacement market (15% share) and OEM market (38% share). In New Tire sales, however, it is in the 3 rd position with $8.5 billion total sales and is preceded by Michelin and Bridgestone at $10.4 and $9.8 billion sales. Market and Replacement Tire Consumer Segmentation: Segment ation Basis Sold to which customer

Tire Features

Performa nce

Replace ment (78%)

Broadline

OEM (22%)

Brand Classficat ion

Major (36%)

Minor (24%)

Private label (40%)

Type of Buyers Loyalty to Outlet Loyalty to Brand Shop around? Other Remarks Price constrained Less

Less

More

Best within budget

Value oriented Less

Major brand

Extensively Preferred brand at best price

Quality – Prestige More

More

Less

Own the best tires

Quality – CC

More

Less

Less

Outlet’s recommendation

Commodity – BH

Less

Less

Extensively Young, price conscious

Commodity – TP

More

Less

Less

Low price

Distribution Scenario: Distribution Channel Number Independent Dealers 4400 Manufacturer Owned Outlets1047 Franchised Dealers 600 Government Agencies NA

Percentage Share 50 27 8 15

Goodyear shifted to an increasing emphasis on franchise and independent dealerships. Goodyear has also been trying to experiment with “Just Tires” like retail format. Its subsidiary, Kelly-Springfield, however, has no company-owned outlets and primarily sells through mass merchandisers, independent tire dealers and gas/service stations. Recommendation: Goodyear needs to broaden its distribution to mass merchandisers. With decreasing brand loyalty amongst independent dealers, and among end consumers, it is necessary to better penetrate the market for greater visibility and sales. Aquatred, being a new, and quality product, requires extensive detailing to the consumer to enable purchase behavior, as evident through the test-marketing results. The Aquatred offering appeals to the value-oriented and quality buyers. Hence, I believe that Aquatred should not be mixed in the clutter of mass merchandisers, but should employ

existing independent and franchise channels. We should incentivize dealers and provide them with appropriate training to deliver concurrent messages at the point of sale.