1) Should Goodyear broaden its distribution to mass merchandisers?

 Mass merchandisers would help the company improve

coverage and sales, through its intensive distribution
 But, Goodyear’s brand image might get tarnished in the
long run, which is not good for the company.
 Once, sales are started through mass merchandisers ,
independent dealers would not be happy because of
discounts they offer as it was already mentioned in the case
 Selling through Mass merchandisers means , selling through
huge discounts, which reduces already low profits
 Also, Market share of Mass merchandisers is declining and
came down to 12% in 1991 of total retail sales compared to
28% in 1976, entering newly into new channel which is
declining in share is not advisable (Exhibit 5)
2) If Goodyear decides to add the new channels, should they be offered the
Aquatred?
 Mass Merchandisers:
o Good year is seeing Aquatred as premium product,
and wants to launch at 10% higher price than Invicta
GS, So selling Aquatred through Mass merchandisers
will result in damaging its positioning
o Share of mass merchandisers in retail replacement
tire segment have fallen from 28% in 1976 to 12% in
1991, So this will not result in any long term
advantage as decision to sell aquatred in this channel
will damage relations with independent dealers as
well
o They have wide range of brand selection available
along with their own private labels, If we place
Aquatred in this channel, it may face competition
from Good Year’s own subsidiary Kelly
 Warehouse Clubs:
o From Exhibit 9, Aquatred test market data shows that
“Aquatred” is most likely to be purchased by “Value
Oriented buyers (23%)” and “Quality buyers (61%)”
(84% of total purchases), these buyers shop around
extensively and also value the opinion of dealers,
thus giving importance to buying experience that
can’t be implemented in Warehouse clubs, with
minimal in store services available
  Garage/Service Stations:
o Garage/Service stations have been selling private
label tires as indicated by Exhibit 7 that 57% of retail
dollar sales Garage/Service stations are from private
label tires. It will be difficult for them to sell Aquatred
alongside private label tires as the price difference
shall be huge
 Others:
o These stores, gives high discount on tires as a bait to
fetch high traffic for other services they offer. Adding
Aquatred to this channel, doesn’t add any value to
the brand as they are not primarily tire retailers and
constitute only 4% share of replacement market

3) Is Aquatred the right product for Goodyear?

 Aquatred is an innovative patented product and Goodyear
is a company that has seen success with innovative
products like Tiempo, all season radial tire, in 1977 and
Eagle in 1981.
 Goodyear is currently leading the market share in Price
constrained buyers and Commodity buyers, Aquatred is the
premium innovative product, which offers best wet traction
performance, gives Goodyear a chance to draw an
additional market share in Quality and Value oriented
Buyers where Michelin is currently leading ( Exhibit 7)
 Goodyear had made commitments for commercial times
during winter Olympics 1992, which can be utilized fully if
Aquatred is launched because as a product in introduction
phase, it needs heavy awareness.
 Other competitors are launching tires with 80,000 miles life
time, But our promotion can be focused on the fact that
Aquatred can show same wet traction performance as a
new tyre even after it is 50% worn out and also based on a
survey, life time is the on only the 5th most important thing
customers look for when choosing the tyre