Goodyear Aquatred Case Analysis

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Executive Summary

Contemplating the launch for the Aquatred, an innovative tire providing improved driving traction under wet driving conditions, Goodyear needs to finalize the specifics regarding their marketing plan and distribution structure. In a time when tire purchases are becoming more price sensitive and moving towards a market demanding low cost private labels, Goodyear needs to determine an efficient strategy that markets a premium priced tire to this price dependent consumer base. Below is a summary of the proposed marketing plan:

Year 1 Expected Sales: $76,594,350 (about 850,000 units)

In addition, Goodyear is considering expanding their entire distribution structure to occupy emerging channels in the market. By utilizing these growing channels, Goodyear will be able to establish a solid foundation as the tire distribution evolves to accommodate lower priced tires. Based on current market trends, the only growing channel that Goodyear has yet to utilize would be that of Warehouse Clubs. Even though Warehouse Clubs are a relatively new retail format, they are quickly growing thanks to their variety of product offerings and low prices. Even though the Aquatred marketing plan would not appeal to this particular channel, Goodyear should expand distribution and market a low priced tire to be sold thorough this emerging channel. Define the Issue

In order to revitalize the company, Goodyear needs to construct and implement an appropriate marketing strategy and distribution channel for the launch of their new innovative line of tires, the Aquatred. With the industry turning toward long-life warranties and low cost private labels, Good year needs to select a specific consumer and channel in order to maximize sales and build brand equity, while increasing dealer receptiveness and reducing channel conflict. In addition, Goodyear is debating whether to expand their overall distribution structure with the intention of boosting sales and reducing brand replacement. Goodyear needs to analyze how the market is evolving and determine which channels they need to invest in now, in order to provide them with the best possible position to establish market share in the future. Identify Constraints and Opportunities

The constraints and opportunities that Goodyear is facing can be found under Exhibit 1. Generate Alternatives
Aquatred Target Market: After analyzing the possible consumer segments, it became apparent that two of the three segments appear to fit Goodyear’s product offering. The first segment includes “Quality-Conscious” buyers, while the second possible segment is comprised of “Value-Conscious” buyers. The commonality between these two segments is their emphasis on tire quality, performance, and overall value. Because the Aquatred is considered a premium quality tire and sold at a higher price point, the large segment of “Price-Focused” buyers can be eliminated because they consider tires as a commodity purchase and care more about finding a bargain than the actual quality attributes of the tire. Aquatred Distribution Structure: Goodyear and the Aquatred currently have two alternatives when deciding on a particular channel structure: (1) Utilize existing channel strategy (small independent dealers, manufacturer-owned outlets, large tire chains), and (2) Expand distribution by implementing a new channel structure (garage/service stations, warehouse clubs, mass merchandisers). Expanding Distribution: Goodyear is debating whether to expand their overall distribution structure and, if so, what specific channels should they add (garages/services stations, warehouse clubs, mass merchandisers). The decision should be based on market size, market trends, and also the channels compatibility with the Goodyear company and its associated products. Preferred Alternative

Aquatred Target Market: In order to fully understand the Aquatred message that Goodyear is trying to convey, the target market needs to be...
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