3rd largest player after Michelin and Bridgestone15% mkt share in replacementmkt and 38% in OEMIn 1981, Good Year successfully launched Eagle, 1st radial tire offering high-speed traction for sports cars41 plants in US, 43 in 25 other countries, 6 rubber plantations & 2000 distn. Outlets worldwide
Current share 15%
Strategy of Goodyear-Aquatred’s Launch and Its Implications.
Strategy of Goodyear-Aquatred’s Launch and Its Implications Group 3
Goodyear Tires• Third Largest player in the world• Market Leader in North America• Track record of launching new products• Presence in 26 countries
Market Analysis• Performance • Replacement • Major Brand Tires Tires (36%)• Broad Line • OEM • Minor Brand Tires (24%) • Private Label (40%)
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%)
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)
• Discuss whether the strategy adopted by Goodyear for launch is appropriate? Also what are its implications?
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
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)
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
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