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Goodyear the aquatred launch

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Goodyear: The Aquatred Launch, a HBS case

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Goodyear the aquatred launch

  1. 1. Goodyear The Aquatred Launch
  2. 2. •Ranked 3rd world wide in sales after Michelin and Bridgestone. •41 plants in the US & 43 overseas. •Also known as “The Gorilla” •2000 Distribution Worldwide. •Major portion of Passenger tier revenue (65%) comes from Replacement tiers.
  3. 3. The Market for Passenger Tiers Performance tiers (High Profit) Broad-Line Tiers (Low Profit) Low Price High Price Lower Traction Higher Traction
  4. 4. The Market for Passenger Tiers Major Brands Unit Sales - 36% Most Recognised Goodyear, Bridgestone, Firestone, Michelin, etc. Minor Brands Unit sales – 24% Less Recognised Dunlop, Uniroyal, Cooper, etc. Private Label Unit Sale – 40% Recognised with different retailer names.
  5. 5. Brand Share of Unit Sales 0 10 20 30 40 50 60 70 80 1975 1980 1985 1990 1991 Goodyear Michelin Firestone Others Others include more than 15 Companies
  6. 6. Price-constrained buyers Value-oriented buyers Quality buyers Commodity buyers
  7. 7. For Replacement Passenger tiers Price-constrained Value-oriented buyers Quality Commodity buyers
  8. 8. Garage/Service Station Warehouse Clubs Mass Merchandisers Manufacturer-owned Outlets Small independent Tier Dealers Large independent Tier Dealers
  9. 9. Goodyear Distribution 4400 small independent Dealers (50% Sales) Just Tires (Testing Phase) Franchised Dealers (20%) 1047 Manufacturer Owned Stores (30% Sales)
  10. 10. Scenario Is Aquatred the right product to launch at the present time? Discuss the launching Strategy.
  11. 11. Goodyear’s Strategy Aquatred Wet Traction Appearance 60000 miles warranty Product 10% premium pricing over Invicta GS Pricing Small Independent Dealers Manufacturer owned outlets Distribution
  12. 12. Goodyear and Independent Dealers Independent Dealers grow sales, expand brand availability & increase market share.
  13. 13. Strength • First Mover Advantage. • Selective Distribution Strategy matches with PLC stage. • New technology breakthrough. • In 1991, 50% of independent dealers sold only Goodyear tires.
  14. 14. Weakness • 75% sales are promotion driven. • Low availability in many outlets forced consumers to buy other brands. • Product is high priced but market is driven low priced.
  15. 15. Consumer Behaviour 1985 1992 0 10 20 30 40 50 Price Brand. Outlet 1985 1992
  16. 16. Consumer Behaviour Tread Life Wet Traction Handling Snow Traction Dry Traction
  17. 17. Consumer Behaviour Price Offers Fast Service Can trust personnel Store is attractive Offers mileage warranty Brand Selection Maintains Convenient hours
  18. 18. Competition 0 10 20 30 40 50 60 70 Goodyear Michelin Other Uncommit ed All Buyers Price Constrained Buyers Value- oriented buyers Quality buyers Commodity buyers
  19. 19. • A high profile nation wide launch of Aquatred. • Budget of $21 • Launch during winter Olympics in January 1992.
  20. 20. Launching Strategy • Promotion among travel agencies and car rental services. • Promotional specialised training for sales personnel of independent dealers. • Aggressive promotion amongst consumers in winter Olympics. • Aggressive promotion in high-rainfall regions. • Promote as a high performance tire in wet condition. • Price the tire at par with the safety feature.
  21. 21. References • The Harvard Business School case Goodyear: the Aquatred Launch. • https://www.google.co.in/search?q=a quatred+tires&biw=1242&bih=606& source=lnms&tbm=isch&sa=X&ei=Sw KUVanYDMzbuQSLv7HgCA&sqi=2& ved=0CAYQ_AUoAQ#tbm=isch&q= aquatred+tire+png
  22. 22. Disclaimer Created by Aakash Tripathi, IIT(BHU), during an internship by Prof. Sameer Mathur, IIM Lucknow.

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