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Goodyear The Aquatred Launch Condensed Case Solution

Solution Id Length Case Author Case Publisher
2505 2058 Words (8 Pages) Samuel Chun Harvard Business School : 500039
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Goodyear is a tire manufacturing company operating in the tire industry. The major distribution and Retailing strategy of the company is independent outlets of Goodyear. Goodyear's position in the market is very decisive as compared to the competitors due to its marketing and distribution strategy. Aquatred tires are the recent and premium launch of the Goodyear, which is launched with the 10% premium prices in the autonomous outlets. The distribution strategy of Goodyear is the main factor of its brand reputation and premium prices, that is why there is no need for expansion in mass merchandise. Aquatred tires are the most important product of the company and it is also sold at the autonomous outlets. The marketing strategy is of great importance in this industry, and Goodyear's marketing strategy needs improvement related to the pricing and place. The place is the independent outlets but the placement of products in these outlets should be according to pricing. Hence, a complete analysis of the case study and answers has been provided below. 

Following questions are answered in this case study solution:

  1. How do consumers buy replacement tires? How can the market be segmented?

  2. What is your evaluation of Goodyear's position in the tire industry?

  3. How would you assess the evolution of Goodyear's distribution channels in the U.S. replacement tire market?

  4. How does Aquatred fit with Goodyear's marketing and channel strategy?

  5. Should Goodyear broaden its distribution to mass merchandisers? Should they be offered the Aquatred?

  6. What other changes to the marketing program would you recommend? How would you implement your plan?

Case Study Questions Answers

1. How do consumers buy replacement tires? How can the market be segmented?

Customers buy replacement tires from companies, like Goodyear. It is a very common practice to buy replacement tires for cars, according to many consumers, this practice is a "grudge purchase", and maybe a costly but a necessity for keeping the vehicle in good condition. The option of buying replacement tires by the customers is generally made on the first day they become aware of the need for replacing old tyres. The market for replacement tires is already a segment of the market for passenger tires. In the market, the replacement tires are only sold to individual customers. This is because they do not look for a long-term life of tires, but instead why want to get more reliable and sustainable tires. This is because they know the requirements of tires for their vehicles. Instead, car companies avoid purchasing replacement tires and after buying a car it is common practice that vehicle owners to change tires into replacement tires. The life span of replacement tires is almost 2.5 years. Instead of that, it is making 65% revenue in Goodyear's passenger tire division. So, customers buy replacement tires when it is required by the vehicle and tire manufacturing companies provide replacement tires to the customers.

The market for replacement tires is segmented according to the individual customers. This is the second segment in the market of passenger tires. In the segmentation of the market of passenger tires, only individual customers were targeted for the sales of replacement tires, because is much practice of buying replacement tires for personal vehicles. The revenue of Goodyear also indicates the importance of this market and it has been segmented mainly and only for individual customers. Hence, the customers buy replacement tires for their vehicles and the market is segmented prominently according to the customer types, for replacement tires the targeted Audience is individual customers. 

2. What is your evaluation of Goodyear's position in the tire industry?

In the tyre industry, the position of Goodyear's is strong but there is still huge competition in the industry. According to the case study of Goodyear, they regularly practice surveying research from car owners to know and monitor the position of major tire brands and customers' views on it. From the analysis, it has been evaluated that position of Goodyear as a brand is very powerful in the market but virtually even with Michelin. And still, there are some factors which make Michelin strong and those are value-conscious and quality conscious consumer segmentation. This means that there are some lackings in the customer's segmentation strategy of Goodyear because of which a strong competition is prevailing in the market between Goodyear and Michelin. While it also has been evaluated that Goodyear has a tough position in the market because of its price-focused consumer segments. There is a plus point for Goodyear in this context that makes it the most valuable brand and strengthened its position as a result brand in the market and tires industry. In the progress of the company, the most important role is played by the promotion and advertising strategy. For the marketing of Goodyear tires 60% budget was used in the company for the promotion and advertising, which added to the customer's loyalty. When other brands were striving to introduce new strategies and campaigns to compete, Goodyear tires increased advertisement marketing with low prices announcements. The evaluation of these strategies in Goodyear tires provides its strong and consistent position in the tire industry. The major factors in this position are the Marketing Strategy and consumer segmentation of Goodyear. These factors make it unique and lead to a different identity. Hence, the position of Goodyear in the tire industry is very strong and builtin.

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