Goodyear Aquatred Case Study

2012 words 9 pages
GOODYEAR Aquatred Case Study
How do consumers purchase tires? Tire consumers (at replacement market) will buy tire at two different occasions: when they need new tire immediately (emergency occasion), and as a spare change in case of emergency (preventative occasion). It is dubbed a “grudge purchase” where consumers won’t have any choice but to buy tires in order to make sure that their car is able to run. The average time between purchases is 2.5 years but more than 50% of all consumers buy the tire at the same time they became aware of their need of the tire which means that they (most consumer) have immediate action and limited time to consider purchase. Consumers of Goodyear purchase tires according to the classification of the
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(Exhibit 4) 3. Tainted brand image from low pricing of various low-price outlets. 4. Lack of control of the said outlets in point (3). 5. Low customer loyalty. (Exhibit 5) 6. Low income. (Net income less than 1% of total revenue of $10.91) 7. Too many investments in various, possibly non-related business makes the business of Goodyear an unfocused and too dispersed.

Aquatred should be positioned strategically to improve brand image. This in turn will improve consumer perception of Goodyear’s other lines. The marketing of Aquatred also has the objective to increase income for the company through increased profit margin from improved brand equity. Is it the right tire at the right time? To answer the question, we should put into account all the considerations above regarding Goodyear’s current position, also the position of the competitors. In 1991, Goodyear actually has the biggest market share in the US Passenger Tire market as can be seen in exhibit 1. For replacement tire market, Goodyear had 15% followed by Michelin with 8.5%, and Firestone with 7.5%. In 1975, Goodyear’s market share was 14% and Michelin was 2.5% for replacement tire market, a significant growth for Michelin. In 1975 Michelin also had 2% market share in OEM market, growing to 16% in 1991. Goodyear however, grown only by a small percentage. The growth of Michelin can be attributed to its wide distribution including mass merchandisers and warehouse clubs. Michelin and Bridgestone were