Goodyear, around the late 1980s was developing a tire that would set them apart from the competition. Unfortunately they were stuck in a time when replacing tires was not high on peoples list of pleasantries, which will be explained in greater detail. Goodyear developed what they called the Aquatred tire which was supposed to give greater traction during wet weather and a superior quality that would have the same traction after much use as some tires did when they were brand new. However, they faced a few problems along the way. The price for this new tire was going to be quite expensive. The industry at this time was not looking for a high performance tire so much, but rather something with a guarantee and that would last them a really long time. Secondly, the company faced the issue of selecting the right channel to best market their new innovation. They were at a crossroads in deciding which direction the company would take. Would Goodyear expand and become a huge distributor to everyone available or might they choose to be very specific in their advertising, possibly only promoting to the people that could afford the tire or truly saw it as a good investment for their safety. Goodyear had one last unresolved issue as they started the launch of their company. Goodyear’s advertising strategy had always been based on price by usually having lower prices than its competitors. They needed to take into heavy consideration how the product would be received and what would become of this tire down the line as it sat on the shelves.
The underlying causes of the problems in the Aquatred case are the consumers’ perception of tires as a ‘grudge purchase’, and the positioning of Aquatred as a ‘premium’ tire. The consumers’ perception of tires as a ‘grudge purchase’ hurt not only Goodyear but the wholesalers and retailers that carried them, because consumers were trained to get a discount on tires. This is estimated