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Login Goodyear Aquatred Case Analysis Contemplating the launch for the Aquatred, an innovative tire providing improved driving traction under wet driving conditions, Goodyear needs to finalize the specifics regarding their marketing plan and distribution structure.
In a time when tire purchases are becoming more price sensitive and moving towards a market demanding low cost private labels, Goodyear needs to determine an efficient strategy that markets a premium priced tire to this price dependent consumer base. By utilizing these growing channels, Goodyear will be able to establish a solid foundation as the tire distribution evolves to accommodate lower priced tires.
Based on current market trends, the only growing channel that Goodyear has yet to utilize would be that of Warehouse Clubs. Even though Warehouse Clubs are a relatively new retail format, they are quickly growing thanks to their variety of product offerings and low prices. Even though the Aquatred marketing plan would not appeal to this particular channel, Goodyear should expand distribution and market a low priced tire to be sold thorough this emerging channel.
Define the Issue In order to revitalize the company, Goodyear needs to construct and implement an appropriate marketing strategy and distribution channel for the launch of their new innovative line of tires, the Aquatred. In addition, Goodyear is debating whether to expand their overall distribution structure with the intention of boosting sales and reducing brand replacement.
Goodyear needs to analyze how the market is evolving and determine which channels they need to invest in now, in order to provide them with the best possible position to establish market share in the future. Identify Constraints and Opportunities The constraints and opportunities that Goodyear is facing can be found under Exhibit 1. The commonality between these two segments is their emphasis on tire quality, performance, and overall value.
The decision should be based on market size, market trends, and also the channels compatibility with the Goodyear company and its associated products. Preferred Alternative Aquatred Target Market: In order to fully understand the Aquatred message that Goodyear is trying to convey, the target market needs to be very precise and knowledgeable about the benefits the Aquatred tire offers.
Of the potential markets, the target market analysis in Exhibit 2 clearly illustrates the size of the market and why the Quality-Conscious Buyers would be the most profitable segment to target. Aquatred Distribution Structure: In regard to Aquatreds innovative technology, Goodyear has a great deal of time and money riding on the implementation of its strategy. Not only does Goodyear posses the greatest experience in these particular outlets, but they produce greater margins See Exhibit 4 and allow Goodyear to maintain control throughout the distribution process.
Even though Warehouse Clubs are a relatively new retail format, they are quickly growing thanks to their variety of product offerings and their low prices. Even though Aquatred would not directly fit into this particular channel structure, Goodyear should design a low cost tire to appeal specifically to this channel. Not only will this allow Goodyear to start building relationships with various warehouse clubs, but if the channel continues to grow, Goodyear will be well established, which will put them in the best possible position to compete with other companies in the future.
Actionable Marketing Plan for Aquatred Price: The price of Aquatred should be based less on cost-plus or margin techniques and should instead be calculated from a Perceived-Value Pricing strategy. Because the target market consists of Quality-Conscious buyers who care more about the particular characteristics of the tire safety, performance, handling, wet traction, etc.
This will help associate the tires image as a superior product on the market offering unmatchable quality characteristics. Even though this price may discourage some dealers at first, overall receptiveness will be high when they examine the potential revenues that Aquatred could generate for their outlet See Exhibit 5.
A Sensitivity Analysis from the above data can be found under Exhibit 6. However, Goodyear needs to focus on selling the majority of their tires though SIDs. With manufacturer-owned outlets steadily decreasing in terms of retail sales in the replacement tire industry, Goodyear needs to rejuvenate their relationship with their SIDs.
In order to gain compliance and trust, Goodyear should consider closing manufacturing-owned outlets, which are in direct competition with specific dealers. This will reduce the number of complaints and will encourage Goodyear dealers to carry only a limited number of tire brands other than that of Goodyear. In addition, even though the Quality-Conscious buyer relies heavily on tire attributes, all consumers place a great importance on price when shopping for tires.
Promotion: In order to appeal to the Quality-Conscious buyers, promotions and advertising need to illustrate and inform the consumer about the strong technical attributes that the Aquatred tire possesses. Prior to the launch, Goodyear will need to generate hype in regards to their breakthrough in wet traction performance.
This publicity needs to be targeted to the general public, news stations, and also the Aquatred dealers. Goodyear will be able to generate this hype by utilizing print and television ads. The overall advertising message will illustrate that the Aquatred is more than just premium tire, but can save lives too. In order to lower advertising costs, messages will be targeted toward promotional hot spots as shown in Exhibit 7.
These particular locations have the greatest amount of rainfall per year and promoting a tire with wet traction technology will be extremely relevant to these consumers. Additional promotional activities are illustrated in Exhibit 8. Contingency Plan The contingency plan can be found under Exhibit 9. Exhibit 1 Constraints and Opportunities Constraints: 1 Industry seems to be turning toward low-cost, high warranty tires.
Opportunities: 1 Aquatred has the technology to revolutionize the tire market, with little competition offering similar products.
Wet traction: Second most important tire attribute to consumers according to Goodyear surveys.
The result was a family of tires. Goodyear introduced the first two tires in the new Assurance tire line at a special product launch held prior to its Dealer Meeting in Kissimmee, Fla. Both all-season tires are named Assurance. One tire features "Comfortred Technology" and is geared to possible original equipment fitments. The other features "Tripletred Technology" and its more aggressive, unidirectional tread pattern. Assurance replaces the Aquatred 3, which will be phased out over the course of the year.
Goodyear replaces Aquatred with Assurance all-season tire
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Goodyear: The Aquatred Launch