AKRON—For tire dealers, the most important aspect of Goodyear's alliance with Sumitomo Rubber Industries Ltd. arguably is the role the Dunlop brand will play in the marketplace under Goodyear's direction. Although the ink is still wet on the memorandum of understanding, and the proposed joint ventures won't start operating officially until September, Goodyear has spelled out a clear role for Dunlop.
The Dunlop brand will be the ``better'' brand in Goodyear's ``good-better-best'' product offering strategy, said Goodyear Chairman and CEO Samir Gibara, and will be available to all Goodyear dealers and at all Goodyear retail stores.
``The Goodyear marketing proposition has always been to provide the marketplace with a `good-better-best' proposition. The truth is, we had a gap in the `better' position,'' Mr. Gibara said.
``When we had to compete with Michelin and Bridgestone in North America, they (Michelin) have Uniroyal and Goodrich as their `better' offering, and then private labels in the `good' category.
``We have Kelly and the private labels in the `good' segment, where we are very strong, and we have the best, Goodyear, where we are very strong. But we had a gap in the `better' part of the proposition.
``This gap forced us to use the Goodyear brand as a fighting brand to cover a broader spectrum of the market than the Goodyear brand needed to,'' Mr. Gibara said. ``So we had to position Goodyear against Michelin, its natural positioning, but also against Uniroyal and Goodrich, which is not its natural position. The Dunlop brand fills this gap. It will be promoted as a second-tier brand to compete with second-tier brands in North America.
``North America is still largely based on exclusive distribution,'' he said. ``Offering only Goodyear hurt us in the past.
``It (Dunlop) is a better-known brand than Kelly from a consumer perspective,'' he continued. ``They (Dunlop Tire) didn't have the resources to advertise and promote it in North America. With Goodyear's presence we certainly can do what it takes to make Dunlop what it was, what it needs to be.''
In Europe, the situation is different, he said. European retailing is dominated by multi-brand distributors. Consumers have a choice of up to six brands in nearly any retail store they might choose, he explained.
``With our relatively small market share in Europe, we were not competitive,'' he said. ``Now we have two top brands, which will give us leverage with the multi-branded distributors. We can now say: `You want both brands? What volume will you give us in return?'*
``Now we have two top brands to compete with competitors which have only one top brand. Michelin has only Michelin; Continental doesn't have any well-known brand outside of Germany; Pirelli has only Pirelli.''
While Goodyear dealers definitely will have access to the Dunlop brand once the alliance is approved and starts operations, the status of Dunlop Tire's Centennial and Remington associate brands—which account for up to half of the firm's annual sales—is still to be worked out, said Richard Cahoon, Dunlop's vice president of marketing.