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Goodyear Case Solution Essay

1174 words - 5 pages

Goodyear:
The Aquatred
Launch

GROUP 8

Introduction to Goodyear
• The Goodyear Rubber and Tire Company was founded in
1898 by Frank Seiberling and based in Akron, Ohio.
• Known as “The Gorilla”- Dominating, High investments,
innovative products
Brand shares of unit sales in US Passenger tire market

20

Replacement Market

15
10

Goodyear
Michelin
Firestone

5
0

1975

1980

1985

1990

1991

40
OEM Market
Goodyear
Michelin
Firestone

30
20
10
0
1975

1980

1985

1990

1991

• In the early and mid- 1980s, Goodyear diversified
making large investments in pipelines for natural gas
and oil transmission
• But in 1991, ...view middle of the document...

250
200
150
100
50
0

Trends in passenger tire sales(in million of tires)

50
137
1976

37
123
1981

54

43

144

152

1986

1991

OEM (Original Replacement Manufacturer)
Replacement

Launch of the Aquatred
• Developed after comparing 10 different designs.
• It channels water out from under the tire, reducing
hydroplaning and improving traction in wet conditions.
• Breaking is more effective as compared to all-season
radial tires.
• When 50% worn, the level of wet traction is as good as
that of new all season tire.
• It gives 60,000 miles warranty.

Does Goodyear have the right product
for the dealers and for the consumers?
Reason 1:
In 1977, Goodyear introduced the Tiempo, the first allseason radial.
In 1981, Goodyear successfully launched the Eagle, the
first radial tire offering high-speed traction for sports car.
Thus, whenever Goodyear launched a new innovative
product, it succeeded.

Reason 2:
The five most important tire attributes from
higher to lesser importance were:
1. Tread life
2. Wet traction
3. Handling
4. Snow traction
5. Dry traction
All of which Aquatred possesses.

• What are the target markets?
• Which are the target customer
segments?

• Segmentation of market for Passenger tires:
1. Performance and Broad-line tires
2. Replacement and OEM tires
3. Major brands, Minor Brands
and Private labels
Brand Classification in unit sales

36

40
24

Major
Brands
Minor
Brands
Private
Labels

Revenue Earned
35

65

Replacement Tires
OEM Tires

Percentage of US market captured by Goodyear for
passenger tires v/s entire industry (in million, units)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

152

22.8
Replacement

43
Industry
Goodyear
16.3
OEM

Consumer behaviour
• Grudge purchase
• Customers looked for retailers that offered
agreeable prices, warranties, speedy service,
trustworthiness.
Percentage of Purchases
16

40
2

42

1 Tire
2 Tires
3 Tires
4 Tires

Consumer Segments

Price Oriented Bought best brand they could
Buyers
afford within their budget

Little loyalty to any
specific outlet or brand

Value
Oriented
Buyers
Quality
Buyers

Searched for their preferred brand
at the best price

Little loyalty to any
specific outlet

Commodity
Buyers

Bargain Hunters: Little brand
preference, low retailer loyalty.
Trusting patrons: Viewed brand as
unimportant & bought low priced
tires at preferred retailer.

Prestige Buyers: Want to own best Loyal to outlet and brand
tires in market.
Comfortable Conservatives: Buy
brand recommended by their
favourite outlet.
Little loyalty to any
specific outlet or brand
Disloyal to brand but
loyal to retailer

Percentage of consumers in each consumer segment for replacement passenger tires

...

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