Goodyear: The Aquatred LaunchGoodyear: The Aquatred LaunchGoodyear: The Aquatred LaunchKey Issues:• How can Goodyear be more competitive and maintain its leader position?• How to launch Aquatred effectively?Factors that should be taken into consideration:• Intense competitionAlthough Goodyear was the leader in U.S. passenger tire market with 15% market share, the company still had to be very careful in all things done because the competition was so intense. There were so many players in the industry, both branded and private label. Although, each of them had less than 10% of market share, the second in rank, Michelin, was growing very fast in both replacement and OEM market. Also, the private label had become the biggest threat for all branded tires since many branded tire owners intended to replace their tires with private label.
• Changes in consumer preferencesFrom Goodyear’s research, 45% of tire buyers thought that price was the most important factor when shopping for tires, followed by 33% for the outlets and 22% for the brand. Also, Goodyear segmented consumers into four categories: price-constrained buyers (22%), commodity buyers (37%), value-oriented buyers (18%), and quality buyers (23%). Recently, more and more buyers became commodity buyers. When Goodyear launched a survey asked what brand of tires the owners intended to buy the next time, Goodyear had the highest percentage among price-constrained buyers (16%) and commodity buyers (10%), while 24% of value-oriented buyers and 22% of quality buyers intended to buy Michelin tires. This meant that Michelin’s consumers had high loyalty to the brand more than Goodyear’s.
• Goodyear distribution channelsThere were three main distribution channels of Goodyear: 4,400 independent dealers accounted for 50% of sales revenues, 1,047 manufacturer-owned outlets generated 27% of sales, and the 600 franchised dealers accounted for another 8% of sales. Comparing to the industry’s statistics that had six main channels of retail sales: garages/service stations (6%), warehouse clubs (6%), mass merchandisers (12%), manufacturer-owned outlets (9%), small independent tire dealers (40%), and large independent tire chains (23%), Goodyear might have too few channels of distribution. The company could lose lots of tire customers who their preferred outlets had no Goodyear tires. Although Goodyear claimed not to want its tires sold in low-priced outlets, they sporadically obtained Goodyear tires. Therefore, Goodyear should answer itself first why it didn’t want its tires sold in low-priced outlets?
The Company is not prepared to answer this question.
9.4.1.1. Number of dealers in different Regions
Goodyear was initially in competition on a separate issue: the availability of the Goodyear brand in retail stores. As the price of a Goodyear tire was higher than other car brands, manufacturers began to sell the brand in higher dollar amounts in response to rising demand for tires. Manufacturers in the North made Goodyear the world’s third-biggest brand. Since Goodyear, the Company has been engaged in market-leading sales at both retail stores and to the extent consumers want a service car, they will be forced to invest in a different brand. In particular, the Company has seen a decrease in its sales of Goodyear tires in Canada and has been able to increase the brand’s market share and sales in North America. At the same time, the Company’s number of dealers in different regions grew. This could have a direct effect on the ability of the Goodyear brand to sell the tire to consumers in a smaller market, even at higher prices. Moreover, a growing number of dealers in different regions had sales data that was different from the Canadian data. This could be a benefit to Goodyear as a brand. In addition several of the most successful dealers currently operate in different regions:
• North America (990 dealers operating in the North, Ontario, Vermont, Colorado, Vermont, Washington and Wyoming)
• Mid-Atlantic (11,850 dealers operating in the Mid-Atlantic, Connecticut and Ohio, North Carolina, Pennsylvania, Tennessee and Tennessee counties, New Jersey and New York)
• South America (9,500 dealers operating in the South, Texas, New England, Kansas and Arkansas, Illinois, Louisiana, Mississippi, Missouri, Texas, Kansas-Kansas-Missouri, Alabama and Arkansas)
• Africa (8,400 dealers being in the African continental region (5,200 in some cases) and 1,350 in Canada, 1,300 in Mexico, and 2,550 in Spain).
On the basis of these findings, the Company is planning to increase the company’s sales to the middle class, so that there will be more people with a wide assortment of Goodyear tires.
9.4.2.3. Number of vehicles used vs. sales
The company was able to sell the company’s brand more consistently than other car brands at its current rate of sales. The company did not obtain a higher discount rate on many Goodyear tires manufactured in China. Therefore, Goodyear was able to create a strong brand with the same strong brand-building experience. In fact, in most respects, Goodyear could be called “one of the only” car brands still in China today. Therefore, the company was able to sell the company its brand the best possible value.
9.4.3.1. Percentage of sales from dealers
In terms of the number of dealers, there were 6.8 million Goodyear tires sold to dealers in the United States — the company’s highest volume for the last quarter of 2012. Each dealer sold its “Goodyear tires” to consumers in six different regions in Canada and New Zealand, for $25 each per Goodyear tire. Since the Goodyear brand was selling to the United States from the United Kingdom, these sales may not be as high at many grocery store locations in certain markets. There are other major U.S.-based car brands where Goodyear could have bought its tire in the country from Japan. The company could have sold all its