1

Q 1: What was Goodyears

Position in the tire
industry?

The company was burdened with debt and

deteriorating net income.
Ranked third in worldwide sales of new tires.
Ranked first in the US OEM market with 38% share
and also in the replacement market with 15%.
Michelin - principal competitor in the branded
market with 29% OEM; 15.5% Replacement market.
The 13 % of consumers intent to buy Goodyear.
Actual purchase of 2%.
Goodyear has higher intent to buy among quality
and value buyers around 18%.

Q 2: How do consumers buy tires?

2
How
can the market be
segmented?

Attributes

Tread life
Wet Traction
Handling
Dry Traction
Snow Traction

Infrequent purchase in every 2.5 years.

Significant dollar purchase of around $ 75 per tire plus
installation costs.
High perceived risk (safety and security on long journeys).
OEM tires with 35% of Goodyear dollar sales versus
replacement tires of 65%.
Performance tires with 30% vs broad line tires with 70%.
Major brand tires (36% of industry units), minor brands
tires(24%) and private label tires (40%).

Q 3: Goodyears
Distribution in US tire
Replacement Market
Industr Goodyear
y

Garages / service
stations

Warehouse clubs

Mass merchandisers

12

Manufacturer-owned
outlets

27

63

58 (incl. franchised

Independent tire dealers

dealers)
Others

15 (gov.t agencies)

Q 4: Should Goodyear broaden its

distribution to mass merchandisers?
Should they be offered Aquatred?

Expanding distribution could boost sales and prevent

Goodyear OEM tires from being replaced by other brands in
the replacement market.
However, selling tires in lower-service outlets could erode the
value of the Goodyearbrand, cannibalize sales of existing
outlets, and might cause dealers to take on additional lines of
tires.
Aquatred should be distributed using exclusive distribution
channel design. To design the channel network, Goodyear
should understand the need of the quality Conscious
consumer segment is and where they purchase their tires
from.

Based on the analysis, this segment is interested in

performance
and
quality.
Independent
dealers
and
manufacturer outlets are most consistent with the high value
premium image that Aquatred is going to portray.