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Panacea
Ankit 092104
Bhavin 0821
Jayesh 092120
Biju 0821
Nigam 082142
More expensive
Better traction.
Less expensive
Poor handling
35% of Revenue
Cut-through Competition
Large Scope
Minor Brands
Private Label
Highest recognition
among consumers.
Larger manufacturer
used excess capacity
to service private
labels.
Goodyear, Firestone,
Dunlop, General,
Michelin, Bridgestone, Kelly , Uniroyal,
Pirelli and Goodrich.
Cooper, Yokohama
and Toyo.
Channels
Wholesale
Distribution Channels (percent of U.S. passenger tire replacement
sales in units)
Type of Outlet
Oil companies
Large retailers
Manufacturer-owned outlets
Independent dealers
1976
9
24
11
56
1981
5
20
10
65
1986
3
16
13
68
1991
2
19
12
67
Independent Dealers
Strictly whole-sellers
Retail Dealers
Retail Owners
10 %
40 %
50 %
Other dealers,
secondary outlets
Channels
Retail Distribution passenger tires
Garage /
service
station
Warehous
e clubs
Mass
Merchandi
sers
Manufactur
er-owned
outlets
Small
independe
nt tire
dealers
Large
independen
t tire
chains
Set-up
Small Outlets
Large Stores
Large Retail
space / chain
Large Outlets
One or two
outlets
Concentrated
within
geographic
regions
Outlets
Neighborhood
outlets
Some
hundreds
Various
30-100 outlets
Product
/
service
offered
Tires,
gasoline, auto
services
Food
,clothing
electronics
,tires
,hardware
Only
installation of
tires
Carried
various types
of
merchandise.
Performed
auto services
Tires
Tires
Tires
Private lab. /
Branded
Branded
Various
Branded / own
brand
One brand
Start with a
brand and add
on later /
private labels
Private labels /
Branded
Many
Sams, Pace,
Price club,
Costco
Kmart / Sears
/Wal-Mart
Manufacturers
: Goodyear /
Michelin /
Firestone
Many
Tire America,
National Tire
Warehouse,
and Discount
Tires
sold
Players
Goodyears Distribution
Structure
4 channels of distribution
:
Independent dealers : Accounted for 50% of sales revenues
through 4,400 outlets (2500 active selling full line of Goodyear
tires)
Manufacturer-owned outlets : Generated 27% of sales through
1,047 outlets
Franchised dealers : 600 in total accounted for another 8% of
sales
Government agencies : 15% of sales
Goodyear did not sell tires in garages/service stations, warehouse
clubs, or mass merchandisers. However another private label of
Goodyear Kelly Springfield was sold by mass merchandisers
Just tires a proposed new retail format of Goodyear planned to
offer tires & fast oil change without appointment and
guaranteed speed & quality of installation
Goodyears Distribution
Structure
Manufacturer-owned
outlets :
Greater control for opening / closing an outlet
High associated demands for capital and management attention
Some competition perceived by Independent dealer
Converted some outlets into franchised dealerships.
Independent Dealer
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
Most Goodyear dealers had majority of their sales from Goodyear
tires - average selling price of $75 per tire.
Margins :
28% averaged for independent dealers on Goodyear tires
25% for dealers carrying other major brands
20% for private label tires
Average wholesale margins were 18% for private label tires and
14% for Goodyear tires
Sales Operation
Company Owned Outlet
42 Districts (1 DM)
20 to 23 Stores each
(1SM)
Independent Dealers
28 Districts (1DM)
Avg. 3 SM
Services
Independent Dealers
Auto Services
Services sales $38,100 per month per
outlet
26% (1980) to 48% (1991)
20% tries related work
Margins
50% Services Labor
20% to 25% Parts installed
Revenues
70% services Labor
30% parts
Independent Dealers
Services provided were not free.
Paid upon receipt, ordered in full
trailer loads or purchased under
occasional promotional programs.
Allowance
Wholesale Allowance
Merchandising Allowance 1.5%
Advertising Accruals 4%
1991
50% 50%
Aggressively merchandised other brands
but GY generated 90% of the revenues.
Consumer Behavior
Consumer Behavior
Tire Attributes
Tread Life
Wet Traction
Handling
Snow Traction
Dry Traction
Tire Criteria
Price
Offers Fast Service
Can Trust Personnel
Store is Attractive
Offers Mileage
Warranty
Brand Selection
Maintains Convenient
Hours
Consumer Segments
Type of
Buyers
Loyalty to
Outlet
Loyalty to
Brand
Shop
Around
Other
Price
LESS
Constrained
LESS
MORE
Best in their
Budget
Value
Oriented
LESS
MAJOR
BRANDS
EXTENSIVEL
Y
Search for
best prices
QualityPrestige
MORE
MORE
LESS
Best Tires.
65% Major
Brand
Quality - CC
MORE
LESS
LESS
38% Major
Brands
Commodity- LESS
Bargain
Hunter
LESS
EXTENSIVEL
Y
YOUNG,
PRICE
Commodity- MORE
Trusting
Patrons
LESS
LESS
Lower Price
Competition
Intent to buy Major Brand Segments
60% on promotion
Promotions
1. Estimated 75% of all Goodyear tires sold in independent or
company-owned outlets were sold on promotion, at an
average discount of 25%.
Offered to the consumer by schemes like one free tire with
the purchase of three tires, one tire for half price with
purchase of another tire at full price, or 25% off the price
of selected tires.
2. Promotions organized around core eventssix 3-week
periods spread throughout the year to buy merchandise at
a discount. This was supported by radio, television, and
print advertising announcing special prices on specific tire
lines.
3. Spring dating, organized every spring , provided
extended financing on tire orders to Goodyear dealers
Aquatred
Different
Design
Performance & Consumer Preference
Aquachannel
Hydroplanning & Wet Traction
60,000 mile warranty
Top in Broad Line
Target Segments
Value Oriented & Quality Buyer
Aquatred
Invicta GS
60 K mile
Warranty
41%
10%
Great Wet
Traction
33%
38%
13%
42%
16%
9%
Wont
Hydroplane
Absences
of Integrated communication at
Touch
Other Point
29%
18%
Launch Issues
Team Recommendations
Team Recommendations
Initial Inventory
Test Market Result have shown
74% buyers of Domestic
26% buyer of Imported
Team Recommendations
Channel Strategy
1. Use existing Independent Chain & manufacturing
outlets
2. Geographic spread of all contact points for
maximum reach
3. Design promotional incentive schemes for dealers .
4. Motivate / train / facilitate other Independent
dealers to promote Goodyear products (total 1900
dealers)
5. Contact point integration to have same message
(Training )at all touch-points.
Regards,
Panacea
DISCUSSIONS