GoodYear Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

1. How do consumers purchase tires?

The buying behavior varies from consumer to consumer. Some consumer purchase tires only when there is a need to replace existingones. They usually purchase when they have to prevent flat tires or when they have flat tires such as when they see a hole, nail or any other defect in their tires. As discussed in the case, the average time for the replacement of tires is something between 2.5 years however, about 50% purchases are made by car owners on the same day when they noticed a defect in their tires and sensed a need to replace their tires with new ones. About 42% of consumer purchases involved two tires, 60% purchases a set of four tires, 16% consumers purchase 2 tires and only 2% consumer purchases 3 tires. The tire consumers can be classified into three groups: quality conscious buyers (18%), value-conscious buyers (23%) and price-focused buyers (59%). Whereas price-focused buyers treated tires as a commodity purchase, quality and value-conscious buyers emphasized on quality, performance and reliability attributes of tires. Some consumers change brands and channels every time they purchase tires while some other relay on some trusted brands and channels for years. 51% of all types of consumers are not clear about their next purchases in terms of brand, channel and types of tires.

2. What is the strategic role of Aquatred?

The tire market is almost at its saturation stage and at this stage Goodyear requires Aquatred to develop its brand image as an innovative leader in an industry where competition is at its peak. The launch of this new and innovative tire range will improve the sales and profits of the company which will automatically strengthen its financial condition. Such improvements will allow Goodyear to access those resources that will enable it to compete with its competitors. In the current scenario, the company is experiencing decline in prices, low growth and low profit,therefore, Goodyear needs to introduce a powerful and superior quality product to become a market leader for premium tires.

3) How should Aquatred be priced, distributed and advertised.

Goodyear should target quality and value-conscious customers because these are the buyers who prefer to buy performance oriented tires and Aquatred is a tire with attributes improved driving traction under wet conditions. This will allow Goodyear to educate this limited target group effectively with its scarce resources and will also be able to design effective marketing campaigns. The target group can also benefit Goodyear in terms of higher sales of Aquatred because quality and value-conscious people are usually repeat customers of good products.

The Aquatred should be offered at a premium price and it is good to sell it at a price of $89.95 with black sidewall and $93.95 with white sidewall. This price will be acceptable for this target group and it will also attract new customers. Small independent dealers and manufacturer’s outlets will be a perfect choice for the distribution of Aquatred because at these channels dealers can effectively educate and brief customers about Aquatred. For advertising needs, Goodyear should use both traditional means and internet to promote its new product. Ads should be something that emphasis on safety. The advertisements should communicate that how a person can avoid life threatening accidents in a cheaper way...................

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