Goodyear Aquatred Essay

1545 Words7 Pages
Jeff Dennis
Goodyear: Aquatred

The year is 1992 and Goodyear is planning to release its new tire the Aquatred. The new tire is a premium tire which reroutes water away from the main tread making it have superior traction in wet conditions. With the launch of this tire coming up Goodyear has some challenges they need to figure out, where should they price the Aquatred? Which type of distribution model should they use? To figure this out we will first need to discuss the existing market and modes of distribution. The tire market can be segmented in three ways. The first way is by tire, either by performance or broad-line tires. Performance tires were more expensive but gave the consumer more traction and control.
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Small independent tire dealers – have one or two locations where they sell and install tires while also offering auto services. Offer a variety of brands but make the most revenue off of private labels
Manufacturer-owned outlets – owned and operated by tire manufacturers, offered one brand of tire and performed auto services.
Warehouse clubs – low price with limited tire brand offering, did not offer auto services just tire installations.
Mass merchandisers – retail chains which sell tires as well as other auto merchandise. Carried multiple brands and offered auto services.
Large tire chains – usually had 30 – 100 outlets within one geographic region, carried many major brands and private label tires, they were low price - high volume outlets. Goodyear did not distribute its tires through all of these retail options. They only distributed their tires through independent dealers, manufacturer owned outlets and directly to government agencies. Their direct competition Michelin sold its tires mainly through large chain dealers and warehouse clubs. The small independent dealers accounted for 50% of Goodyear replacement tire sales revenues while manufacturer owned outlets accounted for about 30%. There were 4400
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