Goodyear Aquatred Case Study

Topics: Marketing, Goodyear Tire and Rubber Company, Pricing Pages: 6 (2006 words) Published: April 12, 2011
GOODYEAR Aquatred Case Study
How do consumers purchase tires? Tire consumers (at replacement market) will buy tire at two different occasions: when they need new tire immediately (emergency occasion), and as a spare change in case of emergency (preventative occasion). It is dubbed a “grudge purchase” where consumers won’t have any choice but to buy tires in order to make sure that their car is able to run. The average time between purchases is 2.5 years but more than 50% of all consumers buy the tire at the same time they became aware of their need of the tire which means that they (most consumer) have immediate action and limited time to consider purchase. Consumers of Goodyear purchase tires according to the classification of the consumer, in the sense that consumers in each classification will perceive Goodyear tires differently, therefore will purchase the tires in a different manner/process. Tire consumers are generally consisted of: 1. Quality Conscious buyers accounted for 18%. These consumers put emphasis on the quality of the tire. Their buying decision will be determined by the quality-driven property of the tire including the long-life of the tire, the quality of the rubber, the traction it provides, the tread of the tires, as well as high quality sales and after service. These consumers perceive tire as an important investment for their car (which most likely to be expensive and/or luxurious) and will not hold back their money to purchase high quality tires. They are considerably less sensitive to the pricing, and more on the product. Exhibit 4 also shows a relatively high awareness/intent to buy at 15% for Goodyear but still lower than Michelin which consumers of this classification mostly prefer. Consumers in this classification would buy their tires mostly from their respective manufacturer dealers (car manufacturers), tire manufacturer outlets (Price Index 107%), as well as independent dealers for the specific brand. They would generally gather information to find which tires conform to their specification of quality, and this could be done at point of purchase, from technical experts or from fellow users. 2. Value Conscious buyers accounted for 23%. These consumers put emphasis on the balance between quality and price, namely the value they can get for every dollar they spend. Their buying decision will be determined by the benefit they will get from their purchase. They are less likely to spend more money on tires than the quality conscious buyers. There’s 17% intent to buy for this consumer classification for Goodyear but still lower than Michelin. Consumers in this classification would buy their tires after thorough research since they prefer benefit or value per dollar purchased. Information gathering could be from point of purchase, or advertisement (printed or otherwise.) After deciding purchase they would go to independent dealers or mass warehouse which can give them service with the tire they purchase. This is not generally limited to manufacturer-owned outlets, or independent dealers specific to Goodyear.

3. Price Conscious buyers accounted for 59%. These consumers put emphasis on the price, as opposed to the quality conscious buyers who don’t perceive price as a determining factor. Overall, price is the main drive to purchase for this consumers classification. They perceive tire as a necessity, a regular item. It is likely that they will switch brand whenever they can find lower cost. There’s 14% intent to buy for this consumer classification for Goodyear which place Goodyear ahead of Michelin. This also means that Goodyear has a good positioning for the price conscious buyers. Consumers in this classification would buy their tires at lowest price possible which include places such as warehouse clubs (Price Index 80) and large tire chains (Price Index 90). Research might be involved to find out the lowest price possible. They are also more prone to promotional activities and discounts, which...
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