Goodyear: The Aquatred Launch

By Saloni Kapil (PGP 15300)

Presently, Goodyear holds the largest market share in both the replacement market (15%
share) and OEM market (38% share). In New Tire sales, however, it is in the 3 rd position with
$8.5 billion total sales and is preceded by Michelin and Bridgestone at $10.4 and $9.8
billion sales.
Market and Replacement Tire Consumer Segmentation:
Segment
ation
Basis
Sold to
which
customer

Tire
Features

Performa
nce

Replace
ment
(78%)

Broadline

OEM
(22%)

Brand
Classficat
ion

Major
(36%)

Minor
(24%)

Private
label
(40%)

Type of Buyers Loyalty to Outlet

Loyalty to Brand
Shop around?
Other Remarks
Price constrained
Less

Less

More

Best within budget

Value oriented Less

Major brand

Extensively Preferred brand at best

price

Quality Prestige
More

More

Less

Own the best tires

Quality CC

More

Less

Less

Outlets
recommendation

Commodity
BH

Less

Less

Extensively Young, price conscious

Commodity
TP

More

Less

Less

Low price

Distribution Scenario:
Distribution Channel
Number
Independent Dealers
4400
Manufacturer Owned Outlets1047
Franchised Dealers
600
Government Agencies
NA

Percentage Share
50
27
8
15

Goodyear shifted to an increasing emphasis on franchise and independent dealerships.

Goodyear has also been trying to experiment with Just Tires like retail format. Its
subsidiary, Kelly-Springfield, however, has no company-owned outlets and primarily sells
through mass merchandisers, independent tire dealers and gas/service stations.
Recommendation:
Goodyear needs to broaden its distribution to mass merchandisers. With decreasing
brand loyalty amongst independent dealers, and among end consumers, it is necessary
to better penetrate the market for greater visibility and sales.
Aquatred, being a new, and quality product, requires extensive detailing to the consumer
to enable purchase behavior, as evident through the test-marketing results. The
Aquatred offering appeals to the value-oriented and quality buyers. Hence, I believe that
Aquatred should not be mixed in the clutter of mass merchandisers, but should employ

existing independent and franchise channels. We should incentivize dealers and provide
them with appropriate training to deliver concurrent messages at the point of sale.