Make benefits tangible by changing tire appearance. The launch of this new and innovative tire range will improve the sales and profits of the company which will automatically strengthen its financial condition. In this case study, the performance of Good Year Company is discussed. Consumers are demanding improved quality product with key characteristics as defined in survey. However, the tire industry has matured and evolved, raising questions about the ability of Aquatred to enlist the support of independent dealers Goodyear tires.
It was estimated that three-fourths of all Goodyear tires sold in independent or company-owned outlets were sold on promotion, at an average discount of 25%. Manufactured owned outlets personnel were more educated to address consumer concerns with a Goodyear product line. Major brand like Goodyear has highest recognition among consumers. Additionally, it investigates issues that are involved in managing a complicated distribution arrangement in a time of accelerated change. The attractive and economic properties of Aquatred is bound to bring good sales.
Therefore, once consumers have initially purchased the product, there would be an even greater incentive to continue using Aquatred. Publication Date: July 23, 1993. This way Goodyear has a full control over its distribution channel and can control price. By defocusing on innovations in tire markets, they are facing an price wars as their differentiators from private label and other competitor are very small, as perceived by the consumer. They needed to take into heavy consideration how the product would be received and what would become of this tire down the line as it sat on the shelves. Some tire companies believed that expanding independent dealer networks would grow sales faster than company-owned outlets. Carried multiple brands and offered auto services.
Automobile sales shifted towards cars that were smaller, lighter, and had front wheel drive; these cars placed less wear on tires. Wet traction: Second most important tire attribute to consumers according to Goodyear surveys. The Aquatred was developed after comparing 10 different designs on performance and consumer preference. This gave some of the small independent dealers a disincentive to push Goodyear products. Provide Independent Dealers some initial free service in order to secure its potential buyers. Its competitors are planning to launch a wide campaign.
The Aquatred tire was to be released with a Goodyear 60,000 mile guarantee. Significant proportions of consumers who owned major brands replaced their tires with private label brands. Implementation framework differentiates good case study solutions from great case study solutions. Their buying decision will be determined by the quality-driven property of the tire including the long-life of the tire, the quality of the rubber, the traction it provides, the tread of the tires, as well as high quality sales and after service. Aquatred would appeal to consumers through a psychological need for safety by providing a functional attribute of improved traction in wet condition; through a social need for difference by providing style change and through economic benefit of getting more value than a competitive tire. When tested in wet conditions this tire stopped cars going at 55 miles per hour a whole two car lengths shorter than its all season tire competition. To design the channel network, Goodyear should understand what the need of the Quality Conscious consumer segment is and where they purchase their tires.
The price for this new tire was going to be quite expensive. Students must use information on channel evolution and consumer behavior to make two decisions: whether to launch the Aquatred and whether to expand Goodyear's distribution network. Necessary for education of the consumers, maintains of the product pricing and experiencing brand benchmarks. Price of a private label is 18% lower than the comparable brand label but with lower functional characteristics of lifetime. This case concerns the domestic replacement tire market for the passenger segment. The scope of the recommendations will be limited to the particular unit but you have to take care of the fact that your recommendations are don't directly contradict the company's overall strategy. Pricing in the case of Aquatred would lead to product image, channel image and enhancement of Goodyear reputation.
As discussed in the case, the average time for the replacement of tires is something between 2. Secondly, the company faced the issue of selecting the right channel to best market their new innovation. It can also raise some questions concerning with the capabilities of Aquatred in order to obtain support from the independent tire dealers of Goodyear. The product is seen to be priced at 10% premium over the current premium offering Invicta due to increased functional benefits. However, they faced a few problems along the way. However, they faced a few problems along the way.
Goodyear should look into meteorological patterns to determine such areas of focus. Beyond consumer behavior, behavior at the retail level and that of franchisees, the role of intermediaries in tire. Performance tires were more expensive but gave the consumer more traction and control. The behavior of consumers for tires in the replacement market are either habitual or dissonance seeking. . This made consumers feel as though they were getting a quality tire at a reasonable price, which in hindsight pushed the independent dealers to sell more of the inexpensive tires that came with the manufacturer guarantees. 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.
This means 5-10% improvement from the base value of 75 average. Exhibit 1 Constraints and Opportunities Constraints: 1 Industry seems to be turning toward low-cost, high warranty tires. Trends in the tire industry during the 1970s had resulted in consumers driving less often, replacing tires less, and using more durable and long-lasting radial tires on smaller vehicles. Goodyear developed what they called the Aquatred tire which was supposed to give greater traction during wet weather and a superior quality that would have the same traction after much use as some tires did when they were brand new. However, their described perceived value of the product could be calculated based on the average market price and differences in improvement perceptions described by the dealers.