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UNIVERSITY DEGREE MARKETING
Marketing Management

Course MGMT : 5250

Case Study

Goodyear Aquatred launch

Strategic Recommendations

By Kirrily Van Riel

INTER OFFICE MEMO

To: Mr Barry Robbins

From: Kirrily Van Riel

Re: Aquatred Launch

Please find attached a summary of recommendations relating to the pending Aquatred launch as discussed at our meeting earlier this week.

If you have any further queries, please do not hesitate to contact me at the office as soon as required.

Yours sincerely,

Kirrily Van Riel

Summary of Recommendations:

The timing, targeted segments and distribution channels are critical to the successful launch of the Aquatred tire and to the reposition of Goodyear as No 1 in all its segments consideration sets. Thus;

* The Aquatred should be launched during the Olympics and be positioned as a top of the line, broad-line, major brand replacement tire. 

* The Aquatred can and should be priced at $90.

* Distribution of the Aquatred should be restricted to existing channels (Independent Dealers). 

* Immediate attention should be placed on overcoming issues associated with availability of stock and import moulds for the Aquatred.

* Goodyear should view the Mass Merchandiser and Discount Club channels as an area for extensive future growth. Immediate expansion into this channel is recommended for low to medium price/product segments. 

Notations relating to the Aquatred launch: 

* Aquatreds differentiating characteristics of superior performance, wear and consequently higher price will most likely hold highest appeal in the upper tiers of the Broadline segments of 'Quality' and 'Commodity' type tire consumers. This segment has a propensity to buy tires bearing superior attributes across each category (Appendix III)and is less likely to make trade offs of one attribute over another. These consumers also demonstrate a relatively low price sensitivity( Appendix V) making the Aquatred most suited to their purchasing habits.

* Given that the tire is most suited to the Quality and Commodity segments, it highly likely that lost market share can be regained in this area that has more recently been dominated by Michelin. 

* The Aquatred should be priced at $90. Research indicates consumers expect only a $6 increase in price when new tires enter the market, however, the Aquatred will be the only tire of its kind in the market which will justify the $10 increase. Plus, Aquatreds characteristics will appeal to the quality consumer who are relatively price inelastic in choice. (Appendix V).

* In addition, discounting the Aquatred should be discouraged amongst dealers where possible. The Aquatreds differentiating

Goodyear: The Aquatred Launch|
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Case Title: 

Authors: John A. Quelch and Bruce Isaacson

Publication: McGraw-Hill

Key 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 competition

Although 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 preferences

From 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%),...
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