At the 2010 Goodyear Dealer Conference in Orlando, Fla., Tire Review had the opportunity to sit down with key company executives to see what Goodyear is planning moving forward.
Participating in the interview were the following North American Tire leaders: Rich Kramer, COO and president; Steve McClellan, president of consumer tires; Scott Rodgers, CMO; and Jack Winterton, chief customer officer.
With less disposable income and reduced budgets, 2009 saw a change in consumer spending habits. Will that alter Goodyear’s strategy moving forward?
Kramer: We have to be cognizant of a certain frugality that is a theme with consumers, and that’s very understandable given the economic climate. We balance that with a lot of value in a tire. A tire has technology and performance attributes that are good for their own sake, but they’re also what you trust your family’s safety to, and the car that you ride in every day. From our view, we want to sell the value of our tires to consumers. There won’t be a significant or automatic trade-down to cheaper tires. The value proposition that’s there will continue to result in consumers supporting our product portfolio.
Winterton: When the consumer psyche is what it is today, they really want to make a purchase that they feel comfortable with. The reason our brands have been winning is because people want that familiar name.
Rodgers: It’s the right products that deliver what consumers need. It’s value vs. price, and we need to do a better job of communicating all the technology that’s in a tire and the importance of that technology. We need to make consumers realize a tire is the only thing between their family car and the road.
How will you address fill rates in 2010?
Kramer: In the past few years, the industry as a whole has seen inventory and capacity reduced (as demand diminished), which resulted in some fill rate issues.
McClellan: It was also a behavioral change in the tire industry. At this time last year we predicted a huge overcapacity. Manufacturers throughout the industry reduced inventory, and where we were able to make marketshare gains was through our distribution. A big piece of the strategy is to be able to fill the demand that we see coming. And to do that there will be a time period where we’ll be producing more than we sell.
Kramer: Getting our supply chain right has been a huge focus for us, and you’ll see the results of that come through with the return of fill rates.
What are your plans for the Fierce brand moving forward?
Winterton: Fierce is going to continue as a significant part of the core SKU product screen. The brand is very important for the value shopper in the performance segment. We’re going to be highlighting it under the Dunlop umbrella moving forward. We’re excited about that because consumers get the best of both worlds: Fierce is very edgy and Dunlop is very well known for product quality in the high performance segment. The products complement each other.
How is Goodyear’s new multi-brand strategy different than the way your Goodyear-Dunlop-Kelly products were marketed in the past?
Rodgers: We’ve really tried to make the brands complement each other, rather than compete with ourselves. Consumers will see tires in each brand covering a core product screen, as opposed to someone having to choose between the same type of tire under two different brands. We’ve simplified that and tried to streamline it to help them make choices.
Winterton: In the past we’ve had a multiple brand strategy, and now we have a multi-brand strategy. We had a series of stand-alone brands that were married together; now we’ve finally declared how they will best fit together. It will be very transparent to consumers based on what they’re looking for, whether it’s premium, value segment or high performance.
