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Goodyear Tire Case Study

In: Business and Management

Submitted By coree67
Words 2464
Pages 10
Case Study: Goodyear Tire
Coree Cox
MKTG 4354
4/9/15

The Problem
Due to the growth of warehouse membership clubs and discount tire retail chains, the Goodyear brand has recorded a 3.2% decline in their market share for passenger car replacement tires in the U.S., as well as, a significant drop in their repurchased tire sales.
The Answer Goodyear needs to rethink and restructure their distribution policy by creating a joint venture with the mass merchandiser, Sears. Goodyear should only consider including their Eagle brand in the new distribution arrangement with Sears; this also means that Goodyear should continue offering a wide variety of exclusive Goodyear brands in their own dealerships. Lastly, Goodyear should continue widening its promotional base into the European marketplace.
The Rationale An estimated 2 million worn out Goodyear tires were replaced annually at 850 Sears Auto Centers across the United States; by creating a joint venture with Sears, Goodyear could address this issue. Because Goodyear market share is shrinking, having your brand in a mass merchandiser like Sears would help reverse this effect. By only stocking one of their brands in Sears, Goodyear could mitigate the risk of cannibalization with their own franchises. Goodyear is third in European market share, so by expanding their promotional base into popular European sporting events, they could compete more effectively with Michelin Group and Pirelli.
Situational Analysis Goodyear is the market share leader in the replacement tire market, a market that accounts for roughly 70-75% of tires sold annually. Goodyear does not typically sell their brands through discount multi-brand dealers, mass-merchandise chain stores, or warehouse clubs. Goodyear is the leading national advertiser of tires and number one in total market share in the United States. Goodyear’s market share

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