Professional Documents
Culture Documents
1. In 1992, 53% of consumers did not know what tire they planned to buy
next (against 36% in 1982)
2. 75% of all Goodyear tires are sold on promotion at an average discount
of 25%, and 40% of replacement tires are private labels.
5
Small
independent
dealers
(40%)
Garages /
Warehouse
Service Stations
Clubs (6%)
(6%)
Distribution
Channels
Manufacturer
Large Tire
owned stores
(9%) Chains (23%)
Mass
Merchandisers
(12%)
Independent dealers dominated the market
• Buy the best within the budget • Search for preferred brand at
• Little loyalty to brand the best price
Major brands,
Minor brands,
Private label
Consumers in the Replacement Passenger Tire Market
Goodyear also regularly surveyed car owners concerning the criteria they used
to select a tire retailer.
1. Price
2. Offers fast service
3. Can trust personnel
4. Store is attractive
5. Offers mileage warranty
6. Brand selection
7. Maintains convenient hours
• 1 of the 5 to dominate the industry, only remaining US company
• Quick to convert to radial production
• Profits hurt by international competition & oil prices
• Strong track record of innovation
• Diversified in 1980’s but earnings were sluggish
• Goodyear ranked third in worldwide sales of new tires
• 1991 Stanley G Gault Sold indirect investments Prioritized on new
development.
4400 Small
independent
dealers (50%
sales revenue)
Franchised
1047 Dealers and
Manufacturer Distribution
owned stores Channels
Govt.
(30% sales) Agencies
(20%)
Just Tires
(under
testing
phase)
• Reestablish Goodyear’s industry leadership and
reputation for product innovation, especially vis a vis
Michelin.
• less number of competitors in the high wet-traction,
broad-line tires segment, being the first to enter the
market with such products
• Refocus the dealers on product and away from the daily
tactical problems of manufacturer-dealer relations
• Motivate Goodyear’s sales staff and dealers
BARRY ROBBINS
(VICE PRESIDENT, MARKETING,
NORTH-AMERICA, GOODYEAR)
STANLEY GAULT
(CHAIRMAN, GOODYEAR)
Long buying cycles of auto manufacturers
Franchised
1047 Dealers and
Manufacturer Distribution
owned stores Channels
Govt.
(30% sales) Agencies
(20%)
Just Tires
(under
testing
phase)
Sales
0%
20% MANUFACTURER
30%
OWNED
SMALL INDEPENDENT
STORES
FRANCHISE
DEALERS/GOVT.
50%
JUST TIRES
Small and Large Independent dealers have the majority share in retail sales
replacement passenger tires.
Independent dealers have always had the majority share in wholesale
replacement tire market
• 50% of Goodyear’s independent dealers sold only Goodyear tires,
while the other 50% stocked at least one other brand.
• Among the latter, some merchandised other brands but Goodyear
tires still generated 90% of the revenues
• Three-fourths of all Goodyear tires sold in independent or company-
owned outlets were sold on promotion, at an average discount of
25%.
3
Aquatred Invicta GS
Price, then brand Extensive Moderate Very low
( s/to price)
Brand, then price Extensive High Very low
Aquatred Invicta GS
Suggested retail price in Aquatred test market $90
Goodyear’s suggested retail prices for the Aquatred were $89.95 with a black sidewall,
and $93.95 with a white sidewall.
Suggested retail price in Aquatred test market $90