Good Year: The Aquatred Launch Case study of Harvard Business School is analysed in this ppt.

1. Goodyear :
The Aquatred Launch

2. Tire industry and Goodyear
Background
 US tire industry was denominated by five companies in early 1970's .
Goodyear known as 'Gorilla' of world tire industry and ranked 3rd in
worldwide new tire sales.
 Goodyear operated 41 plants in US and 43 plants in 25 other countries,
6 rubber plantations and more than 2000 distribution outlets worldwide,
4400 Independent dealers, 1047 manufacturer owned outlets and 600
franchise dealers.
 Strong track record of innovation but profit hurt by international
competition and oil prices.

3.  In 1991, Goodyear were in severely damaged position. The company had
experience its first financial loss and the Goodyear was on the verge of
bankruptcy.
 CEO Stanley Gault sold indirect investments and set priority on new
development.
Brand image of major Tire Manufacturer
All Buyers Value
Conscious
Buyers
Quality
Conscious
Buyers
Price
Constraine
Buyers
Commodit
y Buyers
Goodyear 13% 17% 18% 16% 10%
Michelin 13 24 22 9 6
Other 19 20 25 18 16
Uncommitt
ed
55 39 35 57 68

4. Aquatred Edge over other tires
 Something that could be noticed from distance
 Developed after comparing different designs on performance and
consumer preference.
 Unique aqua Channel design channel waters from under the tire
and provides better traction in wet conditions.
 Cars equipped with Aquatred , travelling at 55 miles per hr in wet
conditions, can stop as much as two length less distance.
 60,000 mile warrenty

5. Case Decision Situation
 Managers at Goodyear have following concern
- Dealer's perspective
- Would dealers be receptive to a high priced tire when
industry is moving towards low cost long life tyres?
- Customers Perspective
- want long life warranties at low price

6. - Identifying the right target segment and brand positioning
- Type of market segment to be targeted
- Type of Customers
- Selecting the Right Marketing channel
- If distribution to be expanded
- What specific channels or retailers should be added

7. Current Market stats:
 Goodyear is able to attract 17% Value oriented buyers and 18%
Quality Buyers.
 Michelin Value Oriented Buyers is 24 % and Quality buyers 22%.
 Performance based tires provide Goodyear with a higher % profit
margin then standard radials.

8. Consumer Prefereces and Behaviour
 23% of current buyers are quality buyers.
 18% of buyers are value oriented buyers.
% of
consumers
Major Brands Minor Brands Private Brands
Price oriented 22% 30% 35% 35%
Value
oriented
18 54 29 17
Quality buyer 23 51 28 21
Commodity 37 18 37 45
All tier buyer 100 33 33 34

9. Channel Structure and Trends
 Small and Independent Distributors share 63% of total Retail sales
 Manufacturer owned outlet shares 9% of retail.

10. Proposed Strategy
 Identify area in US with heavy rainfall.
 Mapping them with no of car in respective area
 Target Value oriented and Quality Buyers
 Create Customer Awareness about Aquatred through Advertising.

11. Distribution System
 Current Distribution system meet the demand of targeting value
oriented as well as quality Buyers.
 Hence, no expansion in current distribution system is Required

12. Pros of current distribution system
 Less Complex
 No conflict created among different distributors by introduction of
new distributors
 No sales cannibalization of existing outlet
 No risk of dilution of Good year brand value.

13. Avoidance of conflict between
Manufacturer owned outlets and
Independent distributors
 By adding a knowledge centre functionality in Manufacturer owned
outlets.
- This would create value for the customers.
- Distributors would perceive this as added incentive to promotion
Uniform Pricing.

14. Building Relation with existing
Dealers
 Create a forum for dealers through which they will communicate
with Good year effectively and give their feedback and opinion.
 Dealer Family outing
 Best dealer award
 Discounts for meeting targets early.

15. Pricing Strategy

16.  Goodyear should enter the market with a Market skimming objective to
establish market leadership through a superior product with initial premium
pricing that can be later reduced.
 The price should be high enough for customers to match it with perceived
high level of quality.
 The pricing method - perceived value pricing should focus on safety image,
high traction performance, warranty and other service deliverable through
channels.

17. Thank you !
Created By:
Raghav Kumar
NSIT, Delhi