Marketing case analysis - Essay Example

A Case Solution on Goodyear Tire and Rubber Company College College Marketing 18th April A Case Solution on Goodyear Tire and Rubber Company Issue The issue in this case arises when Sears offers Goodyear to accept the proposal of selling the Eagle brand to them. There are two main concerns for Goodyear: if Goodyear accepts the proposal due to their declining position in 1990 and changing management in 1991, then it would represent a significant change in the distribution policy and would probably create conflicts with its franchised dealer.

The second concern would be that Goodyear would have to consider whether to sell the Eagle brand only or all of its brands. Solutions There can be only two solutions: either accept Sears’ proposal or reject it. Accepting Sears’ proposal means that Goodyear would have to change its distribution policy. There can be certain changes such as including their own Goodyear seller that would carry this brand exclusively. The reason for doing this is that Goodyear would have their own channel through which it can sell more and more to its customers.

The customers would not have to go anywhere else for buying Goodyear’s tires because Goodyear would have its stores made available everywhere within the customers’ reach. Also, it is said that channel of distribution must be selected carefully so that it is within access of most possible customers and provides a number of prospects (Linton, n.d.) . But there are some limitations as well. Firstly, the dealers might influence the customers to buy other brands because there are very few dealers who have the full knowledge of tires.

Secondly, brand loyalty and tires have high tendency of being elastic in demand. One day, customer might want Goodyear but the other day the customer could decide to go for Sears or any other brand. Thirdly, product cannibalization might appear between Sears and the franchised dealers. Moreover, continuing sales to Sears would also trigger another concern that whether to sell the Eagle brand only or sell some other specific products as well. The other solution is to reject the proposal and maintain the status quo.

This can cause a lot of problems. Already, Goodyear is facing decline in the current market position and loss of market share by 3.2%. There is high competition and Goodyear has no strong market share outside the American continent. The cut throat competition in both price and quality might cause greater problems for Goodyear. Conclusion The conclusion lies with the decision of accepting the Sears proposal. By employing this action, there would be an increase in the distribution channel leading to an increment in the revenues for Goodyear.

This would prove beneficial because Goodyear would be able to regain the market of tire replacement. Goodyear relies heavily on the tire replacement market and would benefit from the distribution through Sears because a large market is already there with the Sears. Another main concern that is inherent with this acceptance of the proposal is that whether to sell only one brand, which is the Eagle brand, to Sears. The answer is yes, because this would make certain that no product cannibalization takes place between Goodyear and Sears.

Additional benefit from this step would be that all promotional costs for Eagle would be transferred to Sears and Goodyear would then concentrate on its other brands. How the Chosen Alternative should be Implemented and Recommendations If the chosen alternative is to be implemented, then a joint venture of Goodyear with Sears would be suitable. It is for the reason that Sears would have the authority to sell one (The Eagle brand) or all of the brands of Goodyear. It is recommended for Goodyear that it should focus on promotional activities more because the cost would already be minimized as they would be borne by Sears when they would have the joint venture.

It is suggested to Goodyear that they can have more promotional campaigns through television, magazines and auto racing competitions etc. Further, Goodyear can think of having their own personal dealers who would be responsible for handling marketing for other 12 products; this can be done by Goodyear itself or franchising these operations to other franchisees who would be willing to carry Goodyear’s products. Work CitedLinton, Ian. “Distribution Channel Selection Factors.” Demand Media. n.d. Web. 18th April 2014.