Goodyear Aquatred Case Study Essay

2009 Words Apr 19th, 2011 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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Is it the right tire at the right time? Aquatred is a new product which will be marketed as a premium product with a great value proposition which includes a high quality tire to be used in wet, snow, and dry environment. It has a unique design due to its Aquachannel design. The tire also hails long-life with a maintained performance regardless of wear. Pricing for the product is relatively more expensive, even more than the Invicta line, this premium price is justified by the increased performance, durability, and reliability of the tire. The product is to be marketed in a replacement tire market which is 80% of the total (the other being OEM market). The market is filled with competition from powerful brands with high customer loyalty such as Michelin with 44% switching (exhibit 5). Goodyear itself placed second among Major Brand loyalty. Some of the market is also crowded by minor brands, and private labels (70% switching) which should be popular among price conscious consumers. Goodyear also did not have a good product diversification which should set it apart from competition among other brands, competition is harsh and brand image is endangered by low price outlets with their discounts and promotion. Sluggish income also puts some burden to Goodyear. To sum it up, the current situation of Goodyear is: 1. Market is mature and have a low growth (growth can be attributed to the growth of car owners). (Exhibit 1) 2. Heavy competition from other major brands namely
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