Goodyear: The Aquatred Launch, a HBS case

1. Goodyear
The Aquatred Launch

2. •Ranked 3rd world wide in sales after Michelin
and Bridgestone.
•41 plants in the US & 43 overseas.
•Also known as “The Gorilla”
•2000 Distribution Worldwide.
•Major portion of Passenger tier revenue (65%)
comes from Replacement tiers.

3. The Market for Passenger Tiers
Performance
tiers
(High Profit)
Broad-Line
Tiers
(Low Profit)
Low
Price
High
Price
Lower Traction
Higher Traction

4. The Market for Passenger Tiers
Major Brands
Unit Sales - 36%
Most Recognised
Goodyear,
Bridgestone,
Firestone, Michelin,
etc.
Minor Brands
Unit sales – 24%
Less Recognised
Dunlop, Uniroyal,
Cooper, etc.
Private Label
Unit Sale – 40%
Recognised
with different
retailer names.

5. Brand Share of Unit Sales
0
10
20
30
40
50
60
70
80
1975 1980 1985 1990 1991
Goodyear
Michelin
Firestone
Others
Others
include more
than 15
Companies

6. Price-constrained buyers
Value-oriented buyers
Quality buyers
Commodity buyers

7. For Replacement Passenger tiers
Price-constrained
Value-oriented
buyers
Quality
Commodity buyers

8. Garage/Service Station
Warehouse Clubs
Mass Merchandisers
Manufacturer-owned
Outlets
Small independent Tier
Dealers
Large independent Tier
Dealers

9. Goodyear Distribution
4400 small
independent
Dealers
(50% Sales)
Just Tires
(Testing Phase)
Franchised Dealers
(20%)
1047
Manufacturer
Owned Stores
(30% Sales)

10. Scenario
Is Aquatred the right product to launch at the
present time? Discuss the launching Strategy.

11. Goodyear’s Strategy
Aquatred
Wet Traction
Appearance
60000 miles
warranty
Product
10% premium
pricing over
Invicta GS
Pricing
Small
Independent
Dealers
Manufacturer
owned
outlets
Distribution

12. Goodyear and Independent Dealers
Independent Dealers grow sales, expand
brand availability & increase market share.

13. Strength
• First Mover Advantage.
• Selective Distribution Strategy matches with PLC
stage.
• New technology breakthrough.
• In 1991, 50% of independent dealers sold only
Goodyear tires.

14. Weakness
• 75% sales are promotion driven.
• Low availability in many outlets forced
consumers to buy other brands.
• Product is high priced but market is
driven low priced.

15. Consumer Behaviour
1985
1992
0
10
20
30
40
50
Price
Brand.
Outlet
1985
1992

16. Consumer Behaviour
Tread Life
Wet Traction
Handling
Snow
Traction
Dry
Traction

17. Consumer Behaviour
Price
Offers Fast Service
Can trust personnel
Store is attractive
Offers mileage warranty
Brand Selection
Maintains Convenient hours

18. Competition
0
10
20
30
40
50
60
70
Goodyear
Michelin
Other
Uncommit
ed
All Buyers
Price
Constrained
Buyers
Value-
oriented
buyers
Quality
buyers
Commodity
buyers

19. • A high profile nation wide launch of
Aquatred.
• Budget of $21
• Launch during winter Olympics in
January 1992.

20. Launching Strategy
• Promotion among travel agencies and car rental
services.
• Promotional specialised training for sales personnel
of independent dealers.
• Aggressive promotion amongst consumers in winter
Olympics.
• Aggressive promotion in high-rainfall regions.
• Promote as a high performance tire in wet condition.
• Price the tire at par with the safety feature.

21. References
• The Harvard Business School case
Goodyear: the Aquatred Launch.
• https://www.google.co.in/search?q=a
quatred+tires&biw=1242&bih=606&
source=lnms&tbm=isch&sa=X&ei=Sw
KUVanYDMzbuQSLv7HgCA&sqi=2&
ved=0CAYQ_AUoAQ#tbm=isch&q=
aquatred+tire+png

23. Disclaimer
Created by Aakash Tripathi,
IIT(BHU), during an internship
by Prof. Sameer Mathur, IIM
Lucknow.