Name: Vinayak Yadav

Section: E
Roll No.: 2016042
Good Year’s Position

• One of the five companies which dominated US tire industry from 1900s-
1970s.
• In 1991, Good Year operated 41 plants in the US, 43 plants in 25 other
countries.
• More than 2000 distribution outlets worldwide.
• Total revenue of $10.91 billion and approximately 105000 employees.
• In 1991, company has 15.0% market share in replacement market and
38% in OEM market.
• Company had a strong track record in launching innovative products, first
all season radial tire TIEMPO being one example.
Market segmentation for Tyre industry

• The consumer market was segmented into four categories:

a) Price-constrained buyers: Buy the best brand they can afford within their budget.
b) Value-oriented buyers: Buy the preferred brand at the best price.
c) Quality buyers: Loyal to outlet or brand, tended to be upscale. Further divided into sub
segments as Prestige buyers and comfortable conservatives
d) Commodity buyers: Valued price and outlet. Further divided into two sub segments as
bargain hunters and trusting patrons.

• The market for passenger tires could be segmented in 3 ways:

a) Based on Performance and broad line tires: 25% of Good year’s sales
b) Based on Replacement and OEM tires : Good Year’s passenger tire division derived 65%
of its revenue from replacement tires and 35% from OEM tires.
c) Based on Brand classification
Good Year’s Distribution Channels

• Goodyear operates through 4 channels of distribution:

i. Independent dealers: Accounted for 50% of sales revenues through 4,400 outlets (2500 active
selling full line of Goodyear tires)
ii. Manufacturer-owned outlets: Generated 27% of sales through 1,047 outlets
iii. Franchised dealers: 600 in total accounted for another 8% of sales
iv. Government agencies: 15% of sales
• Manufacturer-owned outlets: Required owner to invest $100,000 and generate revenues
of $1,000,000 pa. Sold an average of 15.5 tires/day, including both Goodyear and other
brands of tires.
• Margins:
• 28% averaged for independent dealers on Goodyear tires
• 25% for dealers carrying other major brands
• 20% for private label tires
Broadening Distribution channel or Introducing Aquatred

• Good Year should expand its distribution network to target lower end market.
• The company should distribute private labels exclusively through lower end channels
such as warehouse clubs and large independent tire chains, thereby Good Year can
effectively target the commodity customer segment.
• Distribution of private labels through Lower end channels will also reduce cannibalization
of sales of Good Year’s major brands.

• AQUARATED Launch:
• It can be launched as high-end radial tire.
• This may enable Good Year to capture some market share from Michelin.
• It should be distributed through independent dealers, manufacturer-owned outlets,
and franchised dealers