Decision Making of Good Year Cases

Decision Marketing Process

Define the Problem

The right problem statement to summarize the Goodyear conflict is "either to accept or to reject the proposal from Sears, Roebuck and Company to sell Goodyear's popular Eagle brand tire without jeopardize the existing alliance, in order to sustained sales and profits maximization".

Objective that shall be reaching by Goodyear team is to consider the best decision that they should commit between accepting and rejecting the proposal of Sears. In order to retain and improving their success measure in the tire industry which is always standing as the market leader, Goodyear also have to balancing the satisfaction of their existing alliance. This is the constraint that they should well manage.

A few example of Goodyear existing alliance were their traditional franchise store, discount multiband independent dealers, chain stores other than Sears, Goodyear company stores and other. The problem that might be faced by Goodyear resulted from these existing alliance dissatisfaction is they will refused to sell Goodyear brand and reduce the profit maximization.

Enumerate the Decision Factor

Alternatives Course of Action and Uncertainties

There were two alternatives that should be considered by Goodyear during making the decision factor. By accepting the proposal from Sears, it means Goodyear will award the Sears privilege to sell the Eagle brand exclusively. If they reject the proposal, the distribution policy will maintain status as quo, the right of existing alliance will retain as normal and most probably there are no more dissatisfaction conflict will arise.

Beside the alternatives, the uncertainties Goodyear have to aware in finalize their decision is the possibilities of existing dealers may switch customers to highest margin's tires. Some dealers prefer to recommend private brand to their customer due to high margin offered by private brand tire. The customer in other way placed the affordable price and tires recommended by dealers as their priority when choosing the replacement tires. A tire price which is highly elastic due to linked to rubber market price was the other uncertainties that Goodyear must be considering about.

SWOT Analysis

Strength

Goodyear is well established company and also well known brand. Founded in 1898 by Frank and Charles Seiberling and develop a full attention to all type of vehicle tires inclusive passenger car tires, light truck tires, highway truck tires, aircraft tires and airships. In 1926, Goodyear was the largest rubber company in the world and in 1991, Goodyear control 20 to 25 percent of the worlds tire manufacturing capacity.

Goodyear also was broadest in the product range. They produced 30 type of tire brand in a Goodyear name and have been traditionally positioned and priced as premium quality brand. Nevertheless, the company also introduced mid priced tire brand to enlarge their coverage.

In 1991, Goodyear also being named as the world market leader as cover 38% from the manufacturer brand U.S Market Share for original equipment passenger car tires. The Goodyear brand is the market share leader in North America and in Latin America.

Goodyear also has proven strong in their distribution channel. Goodyear has 8,000 retail points of sales in US and 25,000 retail outlets worldwide. In details, the company operates about 1,000 companies owned by Goodyear Auto Service Centers, 2,500 franchised Goodyear Tire Dealers and also multi brand dealers.

Weaknesses

The weaknesses that might being arise if the Sears proposal being accepted is it will affect disintermediation with existing dealers and the possibilities of a few existing dealers being dropped from Goodyear channel marketing. Goodyear also must look at their weaknesses in less strong market shared outside the American continental. Goodyear stand at number two behind Bridgestone in Japan and rated at number three behind Michelin in Europe market. By accepting the Sears proposal also, it means Goodyear have to through the stiff distribution and product policy to ensure the smoothness of transformation in distribution arrangement between Goodyear, Sears and existing retailers.

Opportunities

Goodyear will enjoy a several opportunities by accepting Sears's proposal. As Sears have the well known performance as chain stores and had a strong market presence, Goodyear