Goodyear: The Aquatred LaunchBy 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 3rd 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:

Type of BuyersLoyalty to OutletLoyalty to BrandShop around?Other Remarks

Price constrainedLessLessMoreBest within budget

Value orientedLessMajor brandExtensivelyPreferred brand at best price

Quality PrestigeMoreMoreLessOwn the best tires

Quality CCMoreLessLessOutlets recommendation

Commodity BHLessLessExtensivelyYoung, price conscious

Commodity TPMoreLessLessLow price

Distribution Scenario:Distribution ChannelNumberPercentage Share

Independent Dealers440050

Manufacturer Owned Outlets104727

Franchised Dealers6008

Government AgenciesNA15

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.