Goodyear: The Aquatred Launch Harvard Case Solution & Analysis

  1. 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.

  1. 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...........................

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After years of R & D, Goodyear has developed Aquatred, innovative tires. However, the tire industry has matured and evolved, raising questions about the ability of Aquatred to enlist the support of independent dealers Goodyear tires. Students should use the information about the channel and the evolution of consumer behavior to make two decisions: either start Aquatred and whether to expand the distribution network of the company Goodyear. Also addresses issues related to the management of complex distribution structure during rapid change. "Hide
by John A. Quelch, Bruce Isaacson Source: HBS Premier Case Collection 23 pages. Publication Date: July 23, 1993. Prod. #: 594106-PDF-ENG

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