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Group Assignment MM-II

The document discusses Goodyear Tire's proposed launch of its new Aquatred tire line. It recommends targeting value and quality buyers and launching during the upcoming Winter Olympics with an integrated advertising campaign using video, radio, billboards and press releases. The summary also recommends utilizing Goodyear's existing independent dealer network and manufacturing outlets, providing promotional incentives and training to ensure dealers promote Aquatred consistently across all sales channels.

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Pritesh Shah
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104 views5 pages

Group Assignment MM-II

The document discusses Goodyear Tire's proposed launch of its new Aquatred tire line. It recommends targeting value and quality buyers and launching during the upcoming Winter Olympics with an integrated advertising campaign using video, radio, billboards and press releases. The summary also recommends utilizing Goodyear's existing independent dealer network and manufacturing outlets, providing promotional incentives and training to ensure dealers promote Aquatred consistently across all sales channels.

Uploaded by

Pritesh Shah
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Submitted To:-

Prof. JAYESH

SUBMITTED BY:-

PRITESH PATEL
NISHIT
AMIT SHAH

Program: - M.B.A. (P.T.) Batch: - 2008-2011

About Tire Industry in U.S.:-


From the year 1970, the U.S. Tire industry was dominated by 05 players, which were doing
business very well. Those 05 players are :-

1) Goodyear
2) Firestone
3) Uniroyal
4) BF Goodrich
5) General Tore

By the year 1991, Goodyear was the only Tire Mfg. Company of U.S. , that had not been acquired
by any one.

About Goodyear :-
Since it’s early days company was known as “The Gorilla” for it’s dominance in the worl’d Tire
Industry. In the year 1991 it had 41 Plants in the U.S. alone & 41 plants in the other countries of
the world.

Physical Presence :-
No. of Plants Distributors Outlets No. of Employees
41 in U.S. 2000 world wide > 01 Lacks

Market for Passengers Tires :-

Passenger Tires are segmented into following ways :-

1) Performance Tires
2) Broadbline Tires
3) Replacement Tires
4) OEM Tires

It can be categorized as Performance Vs Broadline Tires & Replacement Vs OEM Tires

Segmentation of consumers :-

1) Price Constrained Buyers


These are the types of buyers who bought the best brand they can afford within
their budget.

2) Value – Oriented Buyers


These type of buyers searched for their preferred brand at Best available price.
They shopped around extensively & had little loyalty to any specific outlet.

3) Quality Buyers
These types of customers are loyal to the brand & shopped for only a brief time
before purchasing. This segment could be devided into 02 sub segments, which
are Prestige Buyers & Comfortable Conservatives.

4) Commodity Buyers
These buyers can also be devided into 02 sub segments. Bargain Hunters &
Trusting Patrons.

Over the past 04 years, the buying ratio of Quality Buyers are declined by 04% &
Commodity Buyers are increased by 04%.

Goodyear’s Distribution Channel :-

Goodyear has implemented 04 distribution channels.

• Independent dealers : Accounted for 50% of sales revenues through 4,400 outlets
(2500 active selling full line of Goodyear tires)

• Manufacturer-owned outlets : Generated 27% of sales through 1,047 outlets

• Franchised dealers : 600 in total accounted for another 8% of sales


• Government agencies : 15% of sales

“Just tires” a proposed new retail format of Goodyear planned to offer tires & fast oil change
without appointment and guaranteed speed & quality of installation

Manufacturer-owned outlets :

• Greater control for opening / closing an outlet


• High associated demands for capital and management attention
• Some competition perceived by Independent dealer
• Converted some outlets into franchised dealerships.

Independent Dealer

• Required owner to invest $100,000 and generate revenues of $1,000,000 pa.

• Sold an average of 15.5 tires/day, including both Goodyear and other brands of tires

• Most Goodyear dealers had majority of their sales from Goodyear tires - average
selling price of $75 per tire.

• Margins :
– 28% averaged for independent dealers on Goodyear tires
– 25% for dealers carrying other major brands
– 20% for private label tires
• Average wholesale margins were 18% for private label tires and 14% for Goodyear
tires

Sales Operations of Goodyear :-

Goodyear’s Sales operations has been devided into 02 parts. i.e. Company Owned Outlets
& Independent Dealers. The Independent Dealers where offering following type of
services to their customers:-

 Business Mgt. System


 Certified Auto Services
 Expertise on the Product

Independent Dealers :-

• Services provided were not free.


• Paid upon receipt, ordered in full trailer loads or purchased under occasional
promotional programs.
• Allowance
– Wholesale Allowance
– Merchandising Allowance 1.5%
– Advertising Accruals 4%

Product Profile “ Aquatred ” :-

Design :-

– Performance & Consumer Preference


– Aquachannel
– Hydroplanning & Wet Traction
– 60,000 mile warranty
– Top in Broad Line

Test Market Result ( Before Launching ) :-

• Aquatred buyer were likely to replace competitors tires.


• Less Cannibalizing (GY 38-51) (M17-15)
• Information Search is extensive
• Braking the orientation (Brand 56-47)
– Uplifting Brand Equity
• Target Segments
– Value Oriented & Quality Buyer

Absences of Integrated communication at Touch Point


Launching of Aquatred :-

• A high profile nationwide launch of Aquatred was planned to have a strong impact
on the market as it was a product which would revitalize the image of Goodyear in
the market.

• An budget of $21 million

• Launch during the Winter Olympics in January 1992 was proposed to get an
advantage of the mass promotion and mileage.

Different Launch Issued faced by the company :-

• Right Product or not


• Timing
• Distribution Channel
• Initial Inventory
• Communication at Touch Point
• Pricing & Promotion

OUR RECOMMENDATIONS :-

Go-to Market Strategy

1. Customers : Value-oriented & Quality buyers segment

2. Communication Plan :
a) Message : Highlight core value of safety , trust & reliability at all weather
conditions.
b) Place : Upcoming Olympics events on Jan-1992 through a video ad with
above message.

3. This needs to be backed up with :


» Radio Ads
Teaser Ads to create inquisitiveness & awareness
Billboards
Press releases
“On Snow” Demo

Channel Strategy

1. Use existing Independent Chain & manufacturing outlets


2. Geographic spread of all contact points for maximum reach
3. Design promotional incentive schemes for dealers .
4. Motivate / train / facilitate other Independent dealers to promote Goodyear products
(total 1900 dealers)
5. Contact point integration to have same message (Training )at all touch-points.

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