Goodyear was one of the major tire manufacturers in the US in the 1970s. During that time, the tire industry experienced significant changes with the emergence of radial tires and increased foreign competition. This led to sluggish demand, declining prices, and excess capacity. Goodyear launched the Aquatred tire in the 1980s, which featured an unique aqua channel design for better wet traction. Based on positive test market results showing 38% market share, Goodyear decided to launch Aquatred nationally. The recommended strategy was to target value and quality focused consumers in heavy rainfall areas, position Aquatred as a safe and reliable brand, and promote aggressively during the winter Olympics.

1. GOODYEAR:
THE AQUATRED LAUNCH

2. What is
Goodyear?

3. It is one of 5 major Tire Industries in United
States during early 1970’s.
Goodyear is also known as “The Gorilla” for
it’s dominance on world tire Industries.
Goodyear has : 41 Plants in U.S
43 in other 25 countries
6 Rubber Plantations

4. Goodyear has : 4400 Independent Dealers
1300 Company owned outlets
600 Franchised Dealers
GOODYEAR is the only major U.S Tire
Manufacturer that had not been acquired during
1991.

5. The Industries experience important
changes during 1970-1980.

6. Emergencies of radial tire to replace “bias” or
“bias-belted” Tire.
Increased foreign competition
Change in nature of demand from consumer &
Car makers.

7. What is the impact due to major
changes during 1970-1980?

8. Demand grew sluggishly
New tire price declined
capacity out strapped demand
Merges and Acquisition

10. 1970 - $1.5 Billion to convert factories to radial
1977 - Launched “TiempoTire”
1981 - Launched “EagleTire”
1980’s - Invested in pipelines
1987-1991 - 13% work force furloughed
1991 June - Stanley G Gault become Chairman of GOODYEAR

12. Passenger tire segmentation.
Performance and broad line tire
Replacement and OEM tires
Broad classification : Major brand
Minor brand
Private Label

13. What is the consumer
behaviour in the Replacement
passenger tire market?

14. 5 Important performance attributes
Tread Life
Wet Traction
Handling
Snow Traction
Dry Traction

15. Customer’s Criteria for selecting
Retailer
Price
Service
Trust
Attractive Store
MileageWarranty
Brand

16. What are the consumer
segmentations?
Percent of Sales Represented by
Percent
of
Consum
ers
Major
Brands
Minor
Brands
Private
Brands
Price-
constrained buyers
22% 30% 35% 35%
Value-oriented
buyers
18 54 29 17
Quality buyers 23 51 28 21
Commodity
buyers
37 18 37 45
All tire buyers 100 33 33 34

17. Whole sale distribution
channels:
Type of Outlet 1976 1981 1986
19
91
Oil companies 9% 5% 3% 2%
Large retailers 24 20 16 19
Manufacturer-owned
outlets
11 10 13 12
Independent dealers 56 65 68 67

18. Retail Distribution channels.
Channel Share of
Retail Sales 1976 1981 1986 1991
Garages/service stations 18% 11% 8% 6%
Warehouse clubs 0 0 2 6
Mass merchandisers 28 24 16 12
Manufacturer-owned outlets 11 10 11 9
Small independent tire dealers 36 47 46 40
Large independent tire chains 4 2 12 23
Other 3 6 5 4
Total 100% 100% 100% 100%
Relative Price
Index, 1991
Sales of Private Label
Tires as a Percent of
Retail Sales Dollars, 1991
Garages/service stations 110% 57%
Warehouse clubs 80 8
Mass merchandisers 97 34
Manufacturer-owned outlets 107 16
Small independent tire dealers 100 36
Large independent tire chains 90 54
Other N/A 59

19. The Launch of Aquatred.

20. How Aquatred tires is
different from others?
Attractive
Unique Aqua channel design
Better traction under wet condition
60000 mile warranty

21. Aquatred Decision Situations.
GOODYEAR concern about
• Would dealers accept high prised Aquaterd tire with
60000 mile life compared to low prised tire with
80000 mile tires?
• Would customer prefer there Safety and Reliability of
product or low priced high mileage product?

22. Other Decision Issues:
What are we actually selling?
Should Aquatred launch?
When to launch (Timing)
Finding the target market
Brand positioning
Whether to expand distribution or not
What specific channels to be adopted
Pricing and promotion
Conflict between company outlets and independent dealers

23. Current test market:
GOODYEAR got 38% of tire Replacement
It has got 23% of value-oriented buyers and 61% of
Quality buyers
It has 91% of 4 tire buyers
It has 74% of Domestic buyers & 26% of Import
buyers.
54% of brand oriented buyers.

24. Recommended Decisions:
Since GOODYEAR has got good percentage of
buyers as per test market, it will be accepted by
dealers.
Since there are 23% of value oriented buyers
and 61 % of Quality buyers, Customer will
defiantly prefer Aquatred.

25. Other Recommended issue’s:
What are we actually selling?
Safety, Reliability and Trust.
Should Aquatred launch?
Yes, it should.
When to launch? (Timing)
Winter Olympic would be of advantage to launch and advertise
Aquatred.
Finding the target market.
Target heavy rain fall areas in U.S & target value oriented and
quality buyers.

26. Other Recommended issue’s:
Brand positioning
Capitalize high brand promotions & highlight safety, reliability &
trust within customers.
Whether to expand distribution or not?
Current distribution has met the demand of value oriented &
quality buyers. So, no expansion is necessary.
What specific channels to be adopted?
Use more independent chains & less owned outlets.

27. Other Recommended issue’s:
Pricing and promotion
Provide incentive schemes for dealers, Promote
aggressively during winter Olympics, Sponsor for
Olympics, promote sale and offers for customer buying
Conflict between company outlets and
independent dealers
Use uniform pricing strategy.

28. Recap:
 Goodyear details
 Important changes experienced by industries
 Impact of the above changes
 Market for passenger segmentation
 Consumer behaviour in tire market
 The wholesale & Retail distribution channels
 The Launch of Aquatreds
 Decision Situations & Analysis of test market
 Recommended Decisions

29. Credits:
 www.google.com
 www.flikr.com
 www.wikipedia.com
 www.hrb.org

30. Created by: Ishwarkumar Teggi,
Siddaganga Institute of
Technology, Tumakuru
During an Marketing Internship
by
Prof. Sameer Mathur,
IIM Lucknow.
(See:www.IIMInternship.com)