When Marketing Efforts Go Flat

Reddy, Venkateshwar K.; Olson, Eric M.; Slater, Stanley F.
May 2004
Marketing Management;May/Jun2004, Vol. 13 Issue 3, p14
This article focuses on the failed marketing strategies employed by Firestone's competitors, Michelin and Goodyear. Unlike some of the tire industry's most memorable feature-based ads, the Michelin ads focused on puppies. Simple scenes of small innocent children clad only in diapers sitting in the middle of a tire while an off-screen announcer mentions that with so much is riding on the tires. These ads have become industry icons and helped to firmly establish within consumers' minds that Michelin tires are about quality and safety. These messages implied that any caring person would recognize that the small differential in price was inconsequential when compared with the safety of a child or pet. In contrast, Goodyear's business slipped big time. Much of the blame has to go to simple mismanagement of those old-fashioned marketing issues of price, product, and promotion. One of the biggest blunders Goodyear appears to have made was in the area of pricing. Rather than holding the line on prices in an effort to lure traditional Firestone customers whose confidence had been shaken, Goodyear increased prices on some products by as much as 7% in early 2001 and then tacked on additional markups mid-year. The rationale behind these hefty price increases could only have been that buyers' perceptions of Goodyear were now significantly higher than their perception of Firestone and therefore large segments of the market would be willing to pay a premium for their product. But the problem with this logic is that failure by one firm in an industry does not translate into an instantaneous belief among consumers that its competitors' products are any better.


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