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Goodyear: The Aquatred Launch Section B, Group 11 Issues: Customers are changing tires every 2.5 yrs, i.e.

. roughly after 30,000 miles Leads to wastage of tires for non-private label Gives an image that non-private label are overpriced Should we launch Aquatred? Against (-) Justifying the $21 M cost involved in full-scale launch (-) Concern about right product - premium tire-vs-long-life warranties and private labels (-) Value proposition of wet traction not supplemented by test-market results o Relevance of survey - not on common base For (+) Wet traction considered as second most important tire attribute (+) Likely to appeal Quality especially Prestige buyers and Value-oriented buyers cannibalize competitor sales (+) First mover advantage - Continental Channel developing similar product to be launched in a year (+) Highly competitive commodity market 16% increase in average miles travelled against 30% increase in average tire life over last decade capacity utilization at 76% product differentiation to gain market share (+) In line with Goodyear's image - track record of launching innovative products Distribution Goodyears current distribution channels (independent dealers, manufacturer owned outlet) tapped 50% of retail sales in 1991 Large Independent tire chains accounted for 23% sales in 1991 growing channel Channel Expansion Pros Increased coverage, possible increase in sales Cons Might harm company positioning Might create conflict with other distribution channels Cannibalization of sales of independent dealers Suggestions: Launch Aquatred at premium target value and quality conscious customers Educate consumers about the health of tires so that they dont change them too frequently, can be done via just tires, auto service (dealers) Offer free tire checkups every 6 months, inform customers about the life of their Goodyear tire. o Eventually will help building up reputation and customer loyalty