goodyear case study
Post on 16-Aug-2015
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Goodyear(1991)
Called “The Gorilla”
Ranked 3rd in worldwide sales of new tires
Operated 41 plants in the US, 43 abroad
2000 distribution outlets worldwide
Revenues of $10.91 billion
105,000 employees
Leader in the US market
By Performance
• Broad line tires• Performance
tires (Very Expensive)
By Time of Buying
• Replacement (Bigger Market)
• OEM
By Labels
• Major Brand(36%)
• Minor Brand(24%)
• Private Labels(40%)
Categories of tyres
Private label tires constituted 80% of the sales of Goodyear’s wholly
owned Kelly-Springfield subsidiary
Remaining under Kelly Brand
Average retail price of private label tire was 18% lower
Consumer Behavior
Tire Criteria
• 1. Price• 2. Offers fast service• 3. Can trust personnel• 4. Store is attractive• 5. Offers mileage warranty• 6. Brand selection• 7. Maintains convenient hours
Tire attributes• Tread life• Wet traction• Handling• Snow traction• Dry traction.
Customer Segments
Price-constrained buyers(22%)• Bought the best brand they could afford within budget
Value-oriented buyers(18%)• Searched for their preferred brand at the best price
Quality Buyers(23%)• Loyal, Upscale buyers
Commodity buyers(37%)• Valued price and outlet
Goodyear’s Distribution Structure
Independent Dealers Own stores Franchised Dealers+ Govt. Agencies
50%
27%
23%
Just Tires – New Retail Format under Test
Sales & Promotions
3/4th of all Goodyear tires sold in independent or company-owned outlets on promotions
Average discount of 25%
Offered via various offers (such as free tires on buying some or special discount, etc)
Goodyear’s Independent Dealers
4,400 independent dealers
Goodyear services to its dealers were not free
Goodyear supported its independent dealers by offering various services in training, advertising &
research
Goodyear’s Target
Major Brandds51%
Minor Brand28%
Private Label21%
Percent of Sales Represented by Quality Buyers
Goodyear’s Aquatred Launch Strategy
60,000-mile warranty
Wet Traction
Aimed to shed its “grudgy” perception among consumers
Its unique look
To increase customer loyalty
Initially for Replacement tire market
Challenges Goodyear Faced
Was Aquatred the right product?
Should it expand its Distribution Networks?
When to launch?
Aquatred Test Market
More popular among Quality buyers
More moved from other brands to Aquatred
91% bought 4-tires
Aquatred seems becoming brand itself
Product
Test market proved it to be a right product
60,000-mile warranty BUT competitors offered upto 80,000-mile
Priced 10% premium than its best broad line tire Invicta GS
Aquatred Distribution Strategy
Target distribution through other channels to increase its reach
Proper distribution should be assured to new dealers
Share of Retail Sales of Replacement Passenger Tires by Channel (U.S. market only)
Product Launch Time & Promotion
Winter Olympics in January of 1992
Can capitalize on high brand awareness
Initially only for Domestic Cars
Areas for Improvement
Dealers, retailers need to be trained in better way with more uniformity
No promotion should be offered like previous times
Utilize core events for marketing
Should promote and market aggressively in wet regions
Disclaimer
• Created by Anurag Jain, MNNIT Allahabad, during an internship by Prof. Sameer Mathur, IIM Lucknow.• www.IIMInternship.com
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