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Ayush pgp31017 bm

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Ayush Trivedi
Ayush Trivedi

1. Goodyear is an American tire company established in 1898 that manufactures tires in 22 countries. 2. In the 1970s-1980s, Goodyear had strong dealer relationships and sales but sales declined in the 1990s-2000s due to channel conflict. 3. Channel conflict occurs when channel partners compete against each other or a company's internal sales, undermining relationships and sales. Goodyear faced this by offering discounts to retailers, breaking promises to dealers.

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Goodyears Partnering Lessons Prepared by: Ayush Trivedi (PGP31017) Under the expert guidance of: Prof. Sameer Mathur
American Multinational tire company established in the year 1898 Manufactures products in 50 facilities in 22 countries Known for product Innovation
Ayush pgp31017 bm
IF ITS NOT GOOD YEAR, GOOD LUCK campaign by the company to increase its appeal among consumers and to enhance its brand association to safety
Goodyear be the first campaign to associate itself with victory and associate its brand to victory
GOODYEARS FAMOUS BLIMP ADVERTISING
Goodyears made to feel campaign video ad Goodyears Made to feel good video Ad
The Happy years: 1970s & 1980s Goodyear managed the top tire reseller network in the 1970s & 1980s and earned dealer loyalty through Competitive prices On time delivery Visible Marketing efforts Good quality products
Ayush pgp31017 bm
Sales slumped 14% During 1990s & 2000s Revenue loss of $550 Million Stagnation in No. of distributors for the past 6 years All this when category sales grew and a major competitor was forced to recall 6.5 million tires
Ayush pgp31017 bm
REASON: CHANNEL CONFLICT What is Channel Conflict? Channel conflict is a situation in which channel partners have to compete against one another or the vendor's internal sales department. Channel conflict can cost a company and its partners money as partners try to undercut one another. It can also lower morale within the channel and cause some partners to consider other vendors
Types of Channel Conflicts Among channel partners at different levels Producers may annoy wholesalers or retailers when they try to bypass these intermediaries Vertical Results from disagreements among partners at the same level Causes tension between different intermediaries that handle similar products Horizontal When manufacturer establishes two or more channels For example- sale of same goods through retailers and through e-commerce channels Multi-channel
Cause of Channel conflict Goal Incompatibility Ambiguous Roles Task Interdependence Communication problem Personality Difference Expectation differences Reasons for Channel Conflicts
How to solve Channel Conflicts Consultation with Channel Partners Consultation with Employees Exchange of Employees Diplomacy, Mediation and Arbitration Coherent Goals Co-potation Clearly formulated contracts Legal Recourse
Channel Conflict at Goodyear Company started offering products to discount retailers at bulk discounts Broke the promise of not selling through discount retailers At times, smaller individual dealers had to pay as much as customers could pay at discount retailers Smaller retailers started stocking other brands which impacted the sales of Goodyear
Goodyears Missteps Pressure on dealers to buy more tires than need Uneven pricing with prices changing every month Poor quality products All this led to stagnation in the dealership strength of Goodyear which stayed at 5,300 for 6 consecutive years
Ayush pgp31017 bm
Corrective Actions taken Company launched its new tire range Assurance through its authorized retailers only The company started collaborating with dealers for in-store promotion Company started compensating manufacturers for specialized marketing undertaken Care was taken to ensure minimum price fluctuations
Summary 1970s-1980s Goodyears Happy years What is Channel conflict and its types? 1990s-2000s Decline in profit and stagnation in dealership count How to solve the problem of Channel conflict? Reason Channel Conflict How Goodyear solved the problem 1 4 2 5 3 6
Created by Ayush Trivedi during Brand Management course of Second Year of PGP taken by Prof. Sameer Mathur, IIM Lucknow (See www.IIMInternship.com) Prof. Sameer Mathur, IIM Lucknow DISCLAIMER

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Ayush pgp31017 bm

  • 1. Goodyears Partnering Lessons Prepared by: Ayush Trivedi (PGP31017) Under the expert guidance of: Prof. Sameer Mathur
  • 2. American Multinational tire company established in the year 1898 Manufactures products in 50 facilities in 22 countries Known for product Innovation
  • 4. IF ITS NOT GOOD YEAR, GOOD LUCK campaign by the company to increase its appeal among consumers and to enhance its brand association to safety
  • 5. Goodyear be the first campaign to associate itself with victory and associate its brand to victory
  • 7. Goodyears made to feel campaign video ad Goodyears Made to feel good video Ad
  • 8. The Happy years: 1970s & 1980s Goodyear managed the top tire reseller network in the 1970s & 1980s and earned dealer loyalty through Competitive prices On time delivery Visible Marketing efforts Good quality products
  • 10. Sales slumped 14% During 1990s & 2000s Revenue loss of $550 Million Stagnation in No. of distributors for the past 6 years All this when category sales grew and a major competitor was forced to recall 6.5 million tires
  • 12. REASON: CHANNEL CONFLICT What is Channel Conflict? Channel conflict is a situation in which channel partners have to compete against one another or the vendor's internal sales department. Channel conflict can cost a company and its partners money as partners try to undercut one another. It can also lower morale within the channel and cause some partners to consider other vendors
  • 13. Types of Channel Conflicts Among channel partners at different levels Producers may annoy wholesalers or retailers when they try to bypass these intermediaries Vertical Results from disagreements among partners at the same level Causes tension between different intermediaries that handle similar products Horizontal When manufacturer establishes two or more channels For example- sale of same goods through retailers and through e-commerce channels Multi-channel
  • 15. How to solve Channel Conflicts Consultation with Channel Partners Consultation with Employees Exchange of Employees Diplomacy, Mediation and Arbitration Coherent Goals Co-potation Clearly formulated contracts Legal Recourse
  • 16. Channel Conflict at Goodyear Company started offering products to discount retailers at bulk discounts Broke the promise of not selling through discount retailers At times, smaller individual dealers had to pay as much as customers could pay at discount retailers Smaller retailers started stocking other brands which impacted the sales of Goodyear
  • 17. Goodyears Missteps Pressure on dealers to buy more tires than need Uneven pricing with prices changing every month Poor quality products All this led to stagnation in the dealership strength of Goodyear which stayed at 5,300 for 6 consecutive years
  • 19. Corrective Actions taken Company launched its new tire range Assurance through its authorized retailers only The company started collaborating with dealers for in-store promotion Company started compensating manufacturers for specialized marketing undertaken Care was taken to ensure minimum price fluctuations
  • 20. Summary 1970s-1980s Goodyears Happy years What is Channel conflict and its types? 1990s-2000s Decline in profit and stagnation in dealership count How to solve the problem of Channel conflict? Reason Channel Conflict How Goodyear solved the problem 1 4 2 5 3 6
  • 21. Created by Ayush Trivedi during Brand Management course of Second Year of PGP taken by Prof. Sameer Mathur, IIM Lucknow (See www.IIMInternship.com) Prof. Sameer Mathur, IIM Lucknow DISCLAIMER