Goodyear - Group 7
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A SYNOPSIS – GOODYEAR
PGP13 SECTION D GROUP 7
MEMBERS: ABHISHEK MAHNOT (ROLL NO: 187) DAISY BASUMATARY (ROLL NO: 197) HARISH R (ROLL NO: 207) MANDEEP SINGH CHAWLA (ROLL NO: 217) RAHUL BANSAL (ROLL NO: 227) SHIVA KUMAR R (ROLL NO: 237)
ISSUES •
Is Aquatred the right product for the dealers and the consumers taking into consideration the time and sluggish market conditions?
•
To decide on the distribution network. Whether they should go with existing network or should they expand their distribution network, and if so, what
•
should be the format of distribution network. Finalize Pricing and promotional policies for the aquatred.
ANALYSIS Existing Distribution: • • •
4,400 independent dealers accounting for 50% of sales revenues 1,047 manufacturer-owned outlets generating 27% of sales 600 franchised dealers accounting for another 8% of sales
Consumer • • •
Quality Conscious buyers – 18% Value Conscious Buyers – 23% Price-focused Buyers – 59%
•
Price and promptness of services are two most important attributes for the consumer while selecting the tire retailer.
Features : Aquatred •
Broad line segment
•
Priced at 10% premium over the Invicta GS
•
60000 miles warranty
•
Patented but patent protection difficult
•
Different appearance
•
Not to be available in the OEM market
•
Competition from Aqua Contact of Continental tires.
Important Facts
• • •
Goodyear had the highest percentage among price-constrained buyers (16%) and commodity buyers (10%), 24% of value-oriented buyers and 22% of quality buyers intended to buy Michelin tires. Private label tyres formed a significant portion (40%) of the market. Goodyear has ceased its private label tyre production and has replaced it with branded tyre of comparable price.
•
Goodyear facing lots of debt due to acquisitions and investments
•
Revitalization depends on the success of AquaTred
Price And Promotion Options
Strategy
Positives
Negatives
•
•
Sluggish Market.
•
Price sensitive consumers increasing.
•
Dealers prefer economy products
•
Cannibalization.
•
Decreased revenue.
•
Wet traction advantage cannot be leveraged
Target Value oriented and quality buyer
Target price sensitive buyers.
Projected as a premium brand
•
Higher profit margins
•
Entry into the niche segment.
•
Dealers will enthusiastically sale the product.
•
Large and loyal market.
•
Better replacement sales
.Distribution Options
Strategy Expand network using more manufacture stores and new retail format ‘Just Tyres’
Positives
Negatives
•
•
• •
Quick and Quality service to consumers Boost sales Prevent Goodyear
•
Will come as a threat to dealers .It may Cannibalize sales of already existing
OEM tires from being replaced by other tires Improve on the existing network. Train sales people.
•
Strong support.
•
No Cannibalization.
•
Leverage network
dealer
outlets.
•
Less focus by independent dealers.
•
No exclusivity
existing
RECOMMENDATIONS Pricing : •
We will go with strategy 1. Improved wet traction is a superior advantage and it should be leveraged to increase revenue.
•
They have reasonable presence in all market segments.
•
They have successfully innovated and launched successful products in this segment.
•
Due to product differentiation can capture significant market share in niche segment.
•
56% of customers bought Aquatred because of the Brand and 84% of them are value oriented and Quality buyers.
Distribution Alternative 2 •
Brand loyalty is not an issue in this segment. So dealers plays the key role in sale.
•
So they should keep the dealers happy. They should provide them with proper training so as the salespeople are able to identify target customers and pitch the product successively.
PGP13 SECTION D GROUP 7
MEMBERS: ABHISHEK MAHNOT (ROLL NO: 187) DAISY BASUMATARY (ROLL NO: 197) HARISH R (ROLL NO: 207) MANDEEP SINGH CHAWLA (ROLL NO: 217) RAHUL BANSAL (ROLL NO: 227) SHIVA KUMAR R (ROLL NO: 237)
ISSUES •
Is Aquatred the right product for the dealers and the consumers taking into consideration the time and sluggish market conditions?
•
To decide on the distribution network. Whether they should go with existing network or should they expand their distribution network, and if so, what
•
should be the format of distribution network. Finalize Pricing and promotional policies for the aquatred.
ANALYSIS Existing Distribution: • • •
4,400 independent dealers accounting for 50% of sales revenues 1,047 manufacturer-owned outlets generating 27% of sales 600 franchised dealers accounting for another 8% of sales
Consumer • • •
Quality Conscious buyers – 18% Value Conscious Buyers – 23% Price-focused Buyers – 59%
•
Price and promptness of services are two most important attributes for the consumer while selecting the tire retailer.
Features : Aquatred •
Broad line segment
•
Priced at 10% premium over the Invicta GS
•
60000 miles warranty
•
Patented but patent protection difficult
•
Different appearance
•
Not to be available in the OEM market
•
Competition from Aqua Contact of Continental tires.
Important Facts
• • •
Goodyear had the highest percentage among price-constrained buyers (16%) and commodity buyers (10%), 24% of value-oriented buyers and 22% of quality buyers intended to buy Michelin tires. Private label tyres formed a significant portion (40%) of the market. Goodyear has ceased its private label tyre production and has replaced it with branded tyre of comparable price.
•
Goodyear facing lots of debt due to acquisitions and investments
•
Revitalization depends on the success of AquaTred
Price And Promotion Options
Strategy
Positives
Negatives
•
•
Sluggish Market.
•
Price sensitive consumers increasing.
•
Dealers prefer economy products
•
Cannibalization.
•
Decreased revenue.
•
Wet traction advantage cannot be leveraged
Target Value oriented and quality buyer
Target price sensitive buyers.
Projected as a premium brand
•
Higher profit margins
•
Entry into the niche segment.
•
Dealers will enthusiastically sale the product.
•
Large and loyal market.
•
Better replacement sales
.Distribution Options
Strategy Expand network using more manufacture stores and new retail format ‘Just Tyres’
Positives
Negatives
•
•
• •
Quick and Quality service to consumers Boost sales Prevent Goodyear
•
Will come as a threat to dealers .It may Cannibalize sales of already existing
OEM tires from being replaced by other tires Improve on the existing network. Train sales people.
•
Strong support.
•
No Cannibalization.
•
Leverage network
dealer
outlets.
•
Less focus by independent dealers.
•
No exclusivity
existing
RECOMMENDATIONS Pricing : •
We will go with strategy 1. Improved wet traction is a superior advantage and it should be leveraged to increase revenue.
•
They have reasonable presence in all market segments.
•
They have successfully innovated and launched successful products in this segment.
•
Due to product differentiation can capture significant market share in niche segment.
•
56% of customers bought Aquatred because of the Brand and 84% of them are value oriented and Quality buyers.
Distribution Alternative 2 •
Brand loyalty is not an issue in this segment. So dealers plays the key role in sale.
•
So they should keep the dealers happy. They should provide them with proper training so as the salespeople are able to identify target customers and pitch the product successively.
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