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Goodyear case

Goodyear case

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Published by Pranshu Dewal
Decision Sheet
Decision Sheet

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Published by: Pranshu Dewal on Jan 27, 2013
Copyright:Attribution Non-commercial


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Goodyear: The Aquatred Launch Section B, Group 11 Issues: • Customers are changing tires every 2.5 yrs, i.e.

roughly after 30,000 miles • Leads to wastage of tires for non-private label • Gives an image that non-private label are overpriced Should we launch Aquatred? Against • (-) Justifying the $21 M cost involved in full-scale launch • (-) Concern about right product - premium tire-vs-long-life warranties and private labels • (-) Value proposition of wet traction not supplemented by test-market results o Relevance of survey - not on common base For • (+) Wet traction considered as second most important tire attribute • (+) Likely to appeal Quality especially Prestige buyers and Value-oriented buyers – cannibalize competitor sales • (+) First mover advantage - Continental Channel developing similar product to be launched in a year • (+) Highly competitive commodity market – 16% increase in average miles travelled against 30% increase in average tire life over last decade – capacity utilization at 76% – product differentiation to gain market share • (+) In line with Goodyear's image - track record of launching innovative products Distribution Goodyear’s current distribution channels (independent dealers, manufacturer owned outlet) tapped 50% of retail sales in 1991 Large Independent tire chains accounted for 23% sales in 1991 – growing channel Channel Expansion Pros • Increased coverage, possible increase in sales Cons • Might harm company positioning • Might create conflict with other distribution channels • Cannibalization of sales of independent dealers Suggestions: • Launch Aquatred at premium – target value and quality conscious customers • Educate consumers about the health of tires so that they don’t change them too frequently, can be done via ‘just tires’, auto service (dealers) • Offer free tire checkups every 6 months, inform customers about the life of their Goodyear tire. o Eventually will help building up reputation and customer loyalty

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