Goodyear: The Aquatred Launch

Group 6

Introduction
In the tire industry, the introduction of radial tires threatened the existing strong players. The
increasing foreign competition and changes in customer demand further worsened the
conditions for local giants like Goodyear.

Customer Segment Analysis -

Primarily 4 segments :

1. Price-Constrained Buyers (values price) 3. Quality Buyers (values brand)

2. Value-Oriented Buyers (values brand & price) 4. Commodity Buyers (values price & outlet)

Company -
Ranked 3rd in worldwide sales of new tires

Competitors -

Local Foreign

Firestone, Uniroyal, BF Goodrich, General Tire Michelin, Bridgestone

Context -
Until 1970’s US tire industry was dominated by 5 local players. In 1970’s and 80’s US tire
industry exper

Distribution channels for Replacement Passenger Tyres -

Wholesale channels Retail sales channels

Oil Companies Garage/Service stations

Large Retailers Warehouse clubs

Manufacturer-owned outlets Mass merchandisers

Independent dealers Manufacturer-owned outlets

Small Independent tire dealers

Large Independent tire dealers

 Others

Q-1) Is Aquatred the right product for Goodyear?

Aquatred is a good product as it can re-establish Goodyear’s image for product innovation.
It can gain first mover advantage as there are not many competitors in the top bracket of
broad line tyre segment. It will also decrease the friction between manufacturer and retailer
which will allow more attention on the product.
It is a good product for Value-Oriented Buyers, it was rated Excellent by maximum number
of drivers who took following survey. Goodyear’s is also giving 60k miles warranty life which
adds value to customers.

Response Aquatred Drivers Invicta GS Drivers

1 (Poor Traction) 1.67% 1.00%

2 1.67% 1.67%

3 (Average) 10.00% 9.00%

4 26.67% 27.00%

5 (Excellent) 60.00% 61.33

The analysis of test market shows the following data -

Sales Analysis (Exhibit 10)
8 out of 9 salesperson are mentioning Aquatred in their presentation. The independent
outlets are pricing the product roughly in the range of $80- $100 for both Black and White
sidewall.
Segment Analysis (Exhibit 9)
The customers are primarily using Aquatred to replace Goodyear tires itself and only 17%
are replacing Michelin with Aquatred. They are getting aware about the product via
newspaper and the primary orientation is through the brand. Quality buyer is the customer
segment for Aquatred(61%) and they are buying set of four tires. Aquatred is bought for its
past experience (36%) and for the Goodyear - Aquatred name (58%).

Points of Difference(Exhibit 3)

1) Improved Wet Road Stopping,Quiet All-Season Performance.

2) Aquachannel,deep connecting grooves pump water out of the way fast
3) Exclusive new compound gives road-hugging traction and longer life
4) Careful tread placement offers a smoother,quieter ride
5) Sleek sidewall design to complement today’s automotive designs
Q-2) Should Goodyear broaden its distribution to include mass merchandisers and
warehouse clubs? If Goodyear decides to add the new channels, should they be offered the
Aquatred?