Executive Summary: Goodyear faces many issues with the launch of its Aquatred brand, but the most complex decision pertains to its channel strategy. Based on the case analysis, Goodyear should continue to utilize its traditional distribution channels for Aquatred since its existing channels best support the relatively high-end positioning of Aquatred tires in the marketplace. However, Goodyear should also consider expanding its product and distribution strategies to reach other segments of the tire market. Currently, Goodyear?s product and distribution strategies do not effectively address the needs of the large proportion of customers who are price sensitive. By re-introducing private label tires and placing them in lower-priced outlets, Goodyear can reach more of the market, without cannibalizing existing sales.
Marketplace Analysis: Consumers: The majority of consumers in the tire market make their purchase decision based on price. In fact, price is ranked as the most important criteria in retailer selection. Additionally, there is a trend among customers of decreasing brand loyalty, with an increasing number of customers not knowing which tire brand they intend to purchase next.
These factors lead to an increasingly commoditized market.
This is supported in the case, which indicates that customers in three of the four segments consider price a key factor in their purchase. The largest category (37% of the market) includes commodity buyers who consider price and outlet, but not brand, in their purchase decision. The second category (22% of the market) consists of price-constrained buyers who aim to purchase the best brand given their constrained budget. These customers exhibit minimal brand or outlet loyalty, and usually shop around to find the best price. The third category (18% of the market) consists of the value-oriented buyers who prefer major brands, but will also shop around for the best price. The fourth category, the quality customers,