The document discusses Goodyear's strategy to launch its new Aquatred tire, including positioning it as a premium product with high quality and long warranty at a 10% higher price point than competitors, distributing primarily through small independent dealers and manufacturer owned stores, and whether this strategy and its implications are appropriate. It provides an analysis of the pros and cons and recommendations to improve the strategy.

1. Strategy of Goodyear-Aquatred’s
Launch and Its Implications
Group 3

2. Goodyear Tires
• Third Largest player in the world
• Market Leader in North America
• Track record of launching new products
• Presence in 26 countries

3. Market Analysis
• Performance • Replacement • Major Brand
Tires Tires (36%)
• Broad Line • OEM • Minor Brand
Tires (24%)
• Private Label
(40%)

4. Retail Channel for Replacement Tires
Small
independent
dealers (40%)
Garages /
Warehouse
Service
Clubs (6%)
Stations (6%)
Distribution
Channels
Manufacturer
Large Tire
owned stores
Chains (23%)
(9%)
Mass
Merchandisers
(12%)

5. Goodyear Distribution Channel
4400 Small
independent
dealers (50%
sales
revenue)
Franchised
1047
Dealers and
Manufacturer Distribution
Govt.
owned stores Channels Agencies
(30% sales)
(20%)
Just Tires
(under testing
phase)

6. • Discuss whether the strategy adopted by
Goodyear for launch is appropriate? Also what
are its implications?

7. Goodyear’s Strategy for Aquatred
• Wet traction
Product • Appearance
• 60000 miles warranty
• Premium pricing
Pricing • 10% more than Invicta GS
• Small independent dealers
Place • Manufacturer owned Outlets
???
Promotion

8. Pros
• Right Strategy to tap Quality Conscious market –
currently Goodyear lags its peers
• Selective distribution Strategy matches with PLC
stage
• First Mover Advantage
• Cannibalization concerns mitigated, supported by
test market data
• New Product is in line with company’s history of
innovative product
• The new product distribution strategy is aligned
with Bill of Rights (Exhibit 3)

9. Cons
• High price product in market driven towards
low price
• Selling at high price and as replacement tires
may not gel – Exhibit 5
• 75% sales are promotion( 25% discounts)
driven
• Absence of garage/service stations as a
distribution point

10. Appropriate??

11. Recommendations
• Sales force, retailers and dealers should be
trained to achieve uniformity in presentations
to customers
• Expansion into Garage/service stations
• Limited number of independents dealers
should be involved in distribution of Aquatred
• No discounts on Aquatred