Goodyear Aquatred Case Analysis

2560 words 11 pages
Executive Summary

Contemplating the launch for the Aquatred, an innovative tire providing improved driving traction under wet driving conditions, Goodyear needs to finalize the specifics regarding their marketing plan and distribution structure. In a time when tire purchases are becoming more price sensitive and moving towards a market demanding low cost private labels, Goodyear needs to determine an efficient strategy that markets a premium priced tire to this price dependent consumer base. Below is a summary of the proposed marketing plan:

Year 1 Expected Sales: $76,594,350 (about 850,000 units)

In addition, Goodyear is considering expanding their entire distribution structure to occupy emerging channels in the market. By
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Not only will this allow Goodyear to start building relationships with various warehouse clubs, but if the channel continues to grow, Goodyear will be well established, which will put them in the best possible position to compete with other companies in the future.
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. Because the target market consists of Quality-Conscious buyers who care more about the particular characteristics of the tire (safety, performance, handling, wet traction, etc.) rather than the price, Goodyear should sell the Aquatred at a premium. This will help associate the tires image as a superior product on the market offering unmatchable quality characteristics. With a suggested retail price of $91.95 ($16.95 over the average selling price of all tires), Aquatred tires will be able to earn a reasonable profit margin for both Goodyear (40%) and their small independent dealers (28%) (See Exhibit 4), yet still have plenty of room for discounts and promotions to be implemented. Even though this price may discourage some dealers at first, overall receptiveness will be high when they examine the potential revenues that Aquatred could generate for their outlet (See Exhibit 5). A Sensitivity Analysis from the above data can be found under Exhibit 6.
Place: As stated earlier, Small Independent Dealers (SIDs)

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