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Goodyear Case Essay

5208 words - 21 pages

Overview of the Case Study Analysis of the Situation 3 Consumer Behaviour Analysis 3 Distribution Channel Analysis 4 Aquatred ? The Anti-Hydroplaning Tire 4 Main Issue 5 I. Costs of the Aquatred 5 II. Timing of the Launch 5 III. Consumer Behaviour 5 IV. Distribution Channels 5 Selecting Main Issue 6 Alternative Solutions 6 Solution I: Implementing a New Channel ? Just Tires 6 Solution II: Distributional Expansion to Mass Merchandisers 7 Solution III: Concentrating on Independent Dealers 8 Evaluation and Choice of Best Solution 8 Evaluation Criteria and Matrix 8 Outline of Chosen Strategy 9 Implementation 10 Distributional Expansion to Mass Merchandisers 10 Launching the Aquatred 11 Notes 13 Appendix I - SWOT 14 Appendix II ? Buyer?s Behaviour for Aquatred 15 Appendix III ? Evaluation Criteria 16 Analysis of the Situation In order to analyse the overall situation of Goodyear, the findings from the SWOT (See Appendix I ?SWOT-analysis) have been applied. This situational analysis will focus on three specific parts; consumer behaviour, distribution and Goodyear?s newly developed product, the Aquatred.Currently Goodyear has a superior market position in the US, being the market leader in the pas-senger tire market. Goodyear has a strong advantage due to their extensive R&D in both con-sumer behaviour and technology. This, along with intensive advertising and good product quality, has led to a strong and well-known brand.However, the company?s financial situation is problematic, mainly because of large debt due to an emotional takeover battle in 1986 and therefore Goodyear is currently paying 1 million/day in inter-est. Furthermore, the market has been maturing since the 1970?s due to an increase in oil prices and an increasing life span of tires. Goodyear is also facing fierce competition from foreign compa-nies, particularly Michelin of France and Bridgestone/Firestone of Japan.Consumer Behaviour Analysis Consumers in the US tire market value tread life, wet traction, handling, snow traction and dry trac-tion when purchasing tires, whereas the price is the most important criterion when choosing a dealer. This is reflected from the facts that 45% of the buyers are price oriented, 22% brand ori-ented and 33% outlet oriented. A behavioural segmentation of the consumers (Fig.1) shows that the price-oriented buyers are most likely to be found in segments 1 and 4, whereas the biggest part of the brand and outlet oriented buyers match the consumers of segment 2 and 3, with an overall increasing price consciousness. When combining the tire and outlet preferences, consumers value good-quality tires at a low price, which makes most of them shop around before purchasing, pick-ing the preferred tire for the lowest price as only quality-oriented and trusting patrons commodity buyers are outlet loyal.Regarding the environment of the US market, it is clear that buyers in segment 2 and, especially, 3 are middle to upper class suburban Americans with average and...

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