Company Analysis
Continental Tires
With a focus on the distribution of remoulded tires.
Table of contents
Executive Summary ............................................................................................................................ 4
Introduction ....................................................................................................................................... 4
Company: Continental Tires ........................................................................................................... 4
Reason for the changes ................................................................................................................... 5
Strategic Thinking............................................................................................................................. 5
Application of the strategic changes ............................................................................................ 5
Multinational Structure.................................................................................................................... 6
The European market .................................................................................................................. 6
The African market ...................................................................................................................... 7
Recommendations ............................................................................................................................ 8
Conclusion .......................................................................................................................................... 9
Portfolio of Evidence........................................................................................................................ 10
PESTEL-Analysis............................................................................................................................... 10
Political Environment................................................................................................................. 10
Economic Environment .............................................................................................................. 10
Social Cultural Environment ..................................................................................................... 11
Technological Factors ................................................................................................................ 11
Environmental Factors ............................................................................................................... 11
Legal Factors ............................................................................................................................... 12
SWOT-Analysis ................................................................................................................................. 12
Porter’s Five Forces ....................................................................................................................... 14
1.
Threat of new entrants...................................................................................................... 14
2.
Bargaining power of buyers .............................................................................................. 14
3.
Threat of substitute products .......................................................................................... 14
4.
Bargaining power of suppliers .......................................................................................... 14
Ashridge Mission Model .................................................................................................................. 15
Purpose: ....................................................................................................................................... 15
Values: .......................................................................................................................................... 15
Standards &Behaviours: ............................................................................................................. 16
Strategy & Scope: ....................................................................................................................... 16
Balanced Scorecard ........................................................................................................................ 17
Definition: .................................................................................................................................... 17
Translating the vision................................................................................................................. 17
Communicating and linking....................................................................................................... 18
Business planning ........................................................................................................................ 18
Feedback and learning............................................................................................................... 19
Marketing-Mix .................................................................................................................................. 19
Product ......................................................................................................................................... 19
Price .............................................................................................................................................. 20
Promotion..................................................................................................................................... 21
Placement .................................................................................................................................... 22
Marketing Research Process.......................................................................................................... 23
Define Objectives/Problems ..................................................................................................... 23
Determine Research Design ...................................................................................................... 23
Designing and Preparing a Survey ............................................................................................ 24
Sampling and Data collection ................................................................................................... 24
Analyse Data ................................................................................................................................ 25
Prepare and communicate results ........................................................................................... 25
Strategic Management Process..................................................................................................... 25
Mission .......................................................................................................................................... 25
Situation Analysis ........................................................................................................................ 26
Objectives .................................................................................................................................... 26
Strategy and Evaluation ............................................................................................................ 26
Ansoff-Matrix ................................................................................................................................... 27
BCG-Matrix ....................................................................................................................................... 28
References ........................................................................................................................................... 28
Books ................................................................................................................................................. 30
Images ............................................................................................................................................... 30
Executive Summary
Introduction
Remoulded tires, an innovative, environmentally-friendly alternative most of the people
have never heard of yet. Lots of drivers needing a more reliable tread on a car or truck might
have already thought about the use of remoulded tires or they may have thought about the
option of choosing between a new or used set of tires. However, people still have prejudice
against the use of remoulded tires even after they have been generally acknowledged as
being as reliable and high qualitative as newly produced tires. Therefore this essay should
focus on the problems Continental Tires, as the number one manufacturer of remoulded tires
has to face and should give solutions how they could overcome those problems.
Company: Continental Tires
Continental Tires belongs to the Continental AG, which is one of the world's leading suppliers
to the automotive industry with extensive know-how in tyre and brake technology, vehicle
dynamics control, as well as electronic and sensor systems. At the moment employs about
133,000 people in over 35 countries, at 190 plants, R&D centres and test tracks.
(Continental, 2015)
Founded in 1871 as a rubber manufacturing company, their
headquarters are still based in Hanover, Germany. Continental’s operating principles rely on
the invention of new innovations to enhance safety, develop eco-friendly mobility to
maximise comfort and convenience on the road. Overall Continental tires produces
passenger and light truck tires for medium-sized as well as for full-sized cars, vans, light
trucks, and RVs. Especially for the production of remoulded tires Continental has started to
franchise licenses, which allow the buyer to produce tires using their brand name. This led
to a production of over 107.4 million tires that were produced across 14 countries.
This companies producing under the brand names of Continental are:
-
Uniroyal (except in the NAFTA region, Columbia, and Peru)
-
Semperit
-
Barum
-
General Tire
-
Euzkadi
-
Viking
-
Gislaved
-
Mabor
-
Matador
-
Sime Tyres
Reason for the changes
Thinking about the objectives mentioned in the Marketing Research and in the Strategic
Management Process one could say that there are a lot of reasons Continental Tires has to
think about changes in promoting the their remoulded tires, as they have already been
introduced to the market. Until now, Continental remoulded tires are to be put in the BCGMatrix category of nearly being a “Poor Dog” as they still have to cope with a lot of prejudice.
Secondly the research showed that there is still a market gap to be filled regarding the
production of remoulded tires for the car industry.
Strategic Thinking
To overcome the problems figured out by means of Primary and Secondary Research the
management has to invent strategic aims.
The strategic aims for Continental tires would be the following:
•
To fill the gaps in the market  niche strategy
•
To apply more marketing measures to promote the product
•
To reduce the prejudice
•
To gain a wider clientele
One of the reasons to design a set of strategic aims is the threat of new entrants due to the
increasing competition in Europe as well as in the Asian region, where companies are trying
to adopt the manufacturing process in order to introduce substitutes to the market.
In applying such strategies it is important for Continental to focus on the drivers of success
figured out in the Balanced Score Card as they will help them transmitting their long-term
visions and their uniqueness into an appropriate marketing strategy.
Application of the strategic changes
Finding the right method to apply strategic changes is a process that requires a lot of
background information and the recognition of a company’s values. In order to get to know
those values one has to use the Ashridge Mission Model. According to the model Continental
Tires has several values such as being a very traditional company keeping their focus on
enhancing safety, developing environmentally-friendly mobility solutions. It is the number
one premium brand customers can trust as they practise tire technology for more than 140
years. In addition to that Continental Tires has an established set of quality standards
requiring every remoulded tire, even if it had been manufactured by a partner franchise
company, to be sold under the brand name of Continental tires offering the highest quality
and reliability according to German engineering expertise.
Multinational Structure
Regarding multinational structures it can be said that Continental remoulded tires
experience different customer reputations across different nations. Therefore the next
section should give an overview of the brand image, as well as the sales figures remoulded
tires have on the developed European and less developed African market. This comparison
will also help to find out about possible solutions to market the product and to increase sales
figures.
The European market
The European market is the most valuable market for the distribution of remoulded tires as
there are a lot of environmental policies to be complied with and European governments
subsidise the production of environmentally-friendly solutions. In addition to that
Continental tires already has an established network of distribution channels within Europe.
They are selling their tires to wholesalers offering their products on-or offline. Moreover
they have started collaborations with truck companies and manufacturers producing under
their brand name distributing the product individually. A second advantage that has been
found within the marketing-mix is that customers in Europe tend to be less price-sensitive
as they are willing to pay substantial amounts in order to get the highest quality available
that will grant them a long duration of the product purchased. However, exactly this attitude
represents the major problem Continental has in this market as remoulded tires are often
viewed as being of a lower quality even if they have to run through hundreds of tests in
order to become a Continental ‘factory fit’. To overcome this problem Marketing
Communications measures will be taken. As a first measure a survey will be carried out to
collect information about the expectations consumers have towards the product. One aim
Continental found out by gathering information by means of the survey is the lack of
knowledge consumers have about the product. This lack will be filled by directly get into
contact with companies having a potential demand of remoulded tires e.g.by creating a sales
force offering consultancy services. In addition there will be direct marketing activities such
introductory discounts or the free use of samples for corporate clients, as the targeted
audience will not be reached by traditional media such as TV, radio or billboards.
Overall it can be said that the European market can be seen as the perfect market to
distribute and promote remoulded tires as there are environmental policies intensifying the
need of consumers to change their minds.
The African market
As the African economy still can be described as being underdeveloped the comparison with
Europe is very interesting, especially regarding remoulded tires as they are known to be a
cheap alternative to new tires. However, the problem of remoulded tires not being
recognised on the African market is not due to prejudice or a lack of information. The
majority of Africans simply cannot afford buying remoulded or even new tires. They usually
rely on used tires that would have been wasted in Europe. Regarding this fact through Porters
Five Forces one could say that the bargaining power of the buyers is generally low, although
a high demand of the product is prevailed. In addition to this fact one has to admit that
there are also a minority of people having the financial possibilities to afford remoulded
tires. Regarding this information Continental tires could think about introducing
geographical price variations which maybe also attract customers with a lower bargaining
power. This price differentiation would also contribute the Strategic Management objective
of Continental’s Management objectives of serving a wider area or maybe even to export
cross-continental within the next 3 years.
Concluding this section it can be said that Continental has various options to enter the
African market and to overcome the present problems it inherits. They could either
differentiate their pricing strategy geographically or they could think about selling
production licenses to African tire manufacturer in order to show presence and to practise
on-the-spot support. This will also enable them to react faster according to potential
changes in the market.
Recommendations
This area will give possible solutions regarding the question of how the company could reach
the objectives they have set themselves beforehand.
Continental Tire’s management objectives are the following:
•
Five percent increase of profits coming from remoulded tires within the next year
•
Serving a wider area; maybe even cross-continental within the next 3 years
•
Gaining a wider clientele reaching from private customers to wholesalers
Reaching those objectives involves the selection of a target market, several implementation
tactics and effective ways to use the marketing mix tools. As already mentioned above
Continental could think about expanding to other countries or even continents applying price
differentiation strategies. Regarding the aim of reaching an increase of at least 5 per cent
in profits and the wish to place gain a better market position for remoulded tires, pushing
them away from being a poor dog, the first thing they have to do is to overcome general
prejudice. This could be done by a sales force or by direct marketing measures. One measure
that has been already carried out is a survey giving information about the expectations
customers have towards the product and the overall recognition of the brand-image, which
can be described as very high. Concerning the expectations the survey showed that durability
and reliability are the most important quality aspects leading a consumer towards a buying
decision. Therefore Continental should launch a marketing campaign providing information
about the fact of remoulded tires always performing satisfactorily following the instruction
manuals e.g. maximum vehicle loadings, air pressure and maximum speeds. In addition to
that the campaign should also make consumers aware of remoulded tires being a cheap and
environmentally friendly alternative compared to new tires. In addition to the other
strategic aims the entrance of the car tire market would be a great possibility to increase
sales and to gain a wider, differing clientele. As the distribution channels for this entrance
are already present, Continental only has to think about appropriate marketing strategies.
However, they should keep their high-quality pricing strategy as this is what their brand
name represents. With the help of the balanced scorecard Continental should also control
their short-term performance e.g. the customer’s perspective as well as internal business
processes in order to reflect real-time learning efforts.
Conclusion
In conclusion it can be said that Continental Tires is a well-established company experiencing
the luxury of having a world-wide recognised brand image even holding the position of being
the market leader. As the research already showed that the major problems of remoulded
tires being in between of either a Cash Cow or a Poor Dog are a lack of information and
general prejudice against the reliability and quality of the product. To overcome these
problems Continental Tires puts a lot of effort in creating a sales force providing general
information about remoulded tires and their advantages. A second possibility would be to
highlight the fact of remoulded tires being subsidised as a result of the environmentallyfriendly production process, as adopting this image had become a huge trend amongst truck
companies in order to gain a wider clientele. In addition to that one has to say that the
principle of franchise licenses Continental already uses has become very successful.
Therefore the company planned on expanding this concept by bringing it further around the
world. In this context one has to mention that the expansion will probably not happen within
the Asian region as there are manufacturers adopting the production process in order to sell
substitutes, which consequently would lead to a saturation of the customer demand.
Regarding their competitors it can be said that they do not have to fear losing their market
position as they still have the highest sell-rates as well as the largest base of loyal customers.
In addition to that competitors such as Bandag, Bridgestone and Michellin follow different
pricing and quality strategies so that there is no fear of them getting in the way of
Continental’s drivers of success. However, it could be said that although they have to face
some difficulties in distributing remoulded tires they can easily be erased through the use
of different marketing measures as a basis of potential customers already exists.
Portfolio of Evidence
PESTEL-Analysis
As Continental is a German company, still having their headquarters in Hanover, the PESTELAnalysis will be made for Germany.
Political Environment
-
federal government
-
democratic republic
-
political system  framework known as the “Grundgesetz”
-
the chancellor Angela Merkel is the head of state elected by a majority vote
-
the president Joachim Gauck  formal head of state  appoints the federal
chancellor and the cabinet
-
Three different levels of government
o
-
1. Legislative level 2. Executive level 3. Judiciary level
Germany is a member of several international organisations
o
e. g. UN, IMF etc.
Economic Environment
-
highly developed economy
-
huge industrial capability
-
world’s 5th largest economy
-
5th largest Internet population in the world ( 20.416m)
-
Highly developed transportation system e.g. airways, railways, roadways, port etc.
-
poor in raw materials
-
The country is popular for its international trade fairs
-
70% of the GDP contribute to the service sector, industry 29,1% and agriculture only
0,9%
-
Germans are known for their expertise in engineering, automobiles, metal and
chemical goods.
-
Leading producer of wind turbines and leading provider of solar power technology
Social Cultural Environment
-
82.3 million inhabitants (42.0 million women)
-
14% under 15 years, 20% over 65 years
-
life expectancy of 77 years for men and 82 years for women
-
89% of the population lives in cities and conurbations
-
81 big cities with over 100,000 inhabitants
-
16 constituent states
-
Largest country in the EU (357,021 square kilometres)
-
Temperate seasonal climate
-
Society is shaped by a plurality of life styles
-
Established and affordable network of social security systems (pension, health,
healthcare and unemployment insurance)
-
Almost everyone is covered by health insurance.
-
Ethno-cultural diversity
-
Traditional gender roles have been dispensed with
-
Family  most important social reference unit
-
Young people  close bonds with their parents
-
Music, Architecture, Literature, Sports and Art  very important
-
Unique business culture
-
Germans tend to put facts ahead of emotions and behave very objectively
Technological Factors
-
infrastructural facilities are developed very strong
o
this facilitates the growth of any business in the country
-
one of the world’s most developed telecommunications systems
-
broadcasting media e.g. TV and Radio is deeply penetrated ( more than 90% of homes
have cable TV)
o
this provides ample opportunities for effective business promotions &
marketing
-
the country supports national science and technology ( e.g. no university fees)
-
innovations in the automobile industry
Environmental Factors
-
Lot of policies need to be complied with
-
Climate Change ( forerunner in climate and energy policies)
-
In 2011 the decision was made to stop using nuclear energy until at latest 2022
-
Germans are dependent on natural resources
-
The Government tries to fulfil the country’s needs without leaving any long-term
negative impact on the environment
-
holds a top position in environmental protection worldwide
Legal Factors
-
strict labour laws
-
rules against lay-offs
-
new German legal system was founded out of the basic law and the civil code in 1949
-
a business needs to publish annual financial reports even if it is not publicly listed
-
wage standards ( Germany has a minimum wage)
-
Public Law, Administrative Law, Private Law, Criminal Law, Civil Law
SWOT-Analysis
Strengths
 product portfolio shows a great
variety
 Continental offers several
different types of remoulded tires
for any kind of vehicle
 very traditional company
 global company with markets in
Africa, Europe, America, Asia and
Australia
 Continental is currently acquiring
companies in Malaysia and India 
expansion in emerging markets
 Good brand image sponsoring of
FIFA World Cup and other major
global sporting events
 Very effective use of marketing
communication instruments
 R&D Department Very innovative
 market share leadership
 successful use of supply chain
management strategies
 immense customer network
Weaknesses
 Until the last year, the company was not
present in emerging markets
 The products are much diversified  could
potentially cause problems  e.g.
concerning the production, brand image
etc.
 Some people still have prejudice against
remoulded tires and their comparability
with new, freshly produced tires
 The process of remoulding tends to be more
expensive and complex than the usual tire
production
 Staff needs to well-educated in order to
take care of the following things during the
production process:
The tires need to be tested
conscientiously
Hygiene  staff needs to wash hands
when remoulding a tire, otherwise they
will wear off much faster
Shearography needs to be done with
utmost care
 Disadvantages of remoulding tires the
company has to overcome:
The age of the tires being remoulded
-
Opportunities


Expand to emerging economies 
Threats

Rising prices because of the recent
retreated tires are very cheap 
economic crisis as well as political issues
countries are dependent on
and government policies. This also includes
bargains
civil wars e.g. in the Ukraine & Arabian
Corporate Image  Need to
countries.
position and communicate their

The quality of the raw materials used

As people are trying to live a “greener”
advantage of producing eco-
lifestyle the demand of remoulded tire
friendly and sustainable
plants had been rapidly increasing  high
Start to expand the principle of
competition between national and
franchising  sell licenses to
international remoulding companies.
produce remoulded tires on behalf

of Continental
The Japanese and US market have reached a
maturity phase.

The increasing use of other transport
facilities e.g. underground, monorails and
trains  pollution control

Excursiveness of raw material prices and
exchange rates

Chinese companies have started to copy the
remoulding process  cheaper
Porter’s Five Forces
1.
Threat of new entrants
•
Overall competition is very high  European, as well as Chinese Competitors
-
•
Bandag
Bandvulk
Pirelli
Michellin
Marangoni ( product is called “ringtread”)
Bridgestone / Goodyear ( product is called “nexttread”)
Lower threat because of market leadership
2.
Bargaining power of buyers
•
High bargaining power as the customer is able to choose where he/she wants to buy
•
Generally high demand
 Truck delivery is still the most widely used form of transporting goods)
•
Independent production through the use of the Franchising System
3.
Threat of substitute products
•
Online competition  online merchants, Price comparison platforms as well as
cheap substitutes from China
•
High substitution threat of the product itself when Chinese manufactures are able to
collect the information they need to copy the exact manufacturing process
•
As they have the opportunities and the financial resources to advance their products
Continental tires is not bound to one specific manufacturing process or product range
4.
Bargaining power of suppliers
•
High, as the production of remoulded tires requires specific raw materials
(Natural rubber is only available in some specific regions
Ashridge Mission Model
Purpose:
• Manufacture and sell new as well as remoulded tires
• invent new, innovative tires and environmentally-friendly as well as less raw-material
consumptive
substitutes
Values:

Traditional

Enhance safety

develop eco-friendly mobility

maximizing comfort and convenience on the road

is the premium tire brand one can trust

tire technology for over 140 years

German engineering

superb braking, great handling, super performance and safety are reached throughout
technical excellence, innovation and design.

responsive braking in all weather conditions

unique world leading braking test facility, which sets the industry standards.

top places in independent tire reviews that assess performance over and above the EU
tire label. Since 2007

top in over 80% of all the independent tire tests undertaken throughout Europe.

‘Tire Manufacturer of the Year’  great products and contribution to a sustainable future
Standards &Behaviours:

Continental tries to maintain the position of being the number one tire choice for the
world’s top car manufacturers.

Becoming a ‘factory fit’ requires the tire to achieve several levels of excellence set by
Continental tires  a Continental tire has to pass over 100 tests
Strategy & Scope:

Maintain the position of the market leadership with the provision of innovative, high
quality tires

profit from the commission of sales ( Franchise System)

Franchise partners are located throughout the whole country
Balanced Scorecard
Definition:
The balanced scorecard complements traditional financial measures with criteria serving to
measure the overall performance of a company from three additional perspectives—those of
the customers, internal business processes, and objectives regarding learning and growth
visions. Therefore the balanced scorecard enabled companies to track their financial results
while contemporaneously monitoring the progress in building as well as the capabilities in
acquiring intangible assets in order to reach a future growth.
Translating the vision
This process should serve to supply an integrated set of aims, objectives and measures that
describe all the long-term drivers of success on the basis of a company’s visions and
strategies.
For Continental the long-term drivers of success would be:

Their distinctive innovation efforts

The use of sustainable materials according to the new “greener” lifestyle trend and
therefore the distribution of remoulded tires

Placing selective marketing measures promoting remoulded tires

Brand image: Combining traditional values with modern ones

Keeping the market share leadership

Continuing to work with German engineers in order to keep the “ Made in Germany”
quality signet

Extending their Franchise System

Capturing new markets  emerging countries
Communicating and linking
Traditionally, departments had been evaluated by their financial performance. However,
the balanced scorecard enables managers to ensure that all departments placed in the
organization will understand the long-term drivers of success that had been discussed
beforehand and that both; departmental and individual objectives will be connected with
it.
Concerning Continental Tires one could say that:

They should create a list showing all the different departments together with their
employees  better overview when distributing a paper containing the aims that
should be reached throughout the next financial period

The company already implemented a good quality management system also focusing
on the performance of each department and their individuals
Business planning
Managers find it difficult to implement change program initiatives which had been designed
by the company to achieve their strategic goals—a situation that nearly always leads to
disappointments regarding the results these programs show. However, with the use of the
balanced scorecard managers are able to use ambitious goals as the basis for assigning
resources and setting priorities. Overall the management can only operate and coordinate
initiatives moving them towards the achievement of their long-term strategic objectives.
The ambitious goals for Continental tires would be:

Reach their financial aims

Create new, cost-effective ways of manufacturing remoulded tires

To change the production process in terms of only using sustainable materials until
the year 2025
Feedback and learning
With the help of the balanced scorecard, which serves to analyse already existing feedback
data and verification processes concerning the compliance of their budgeted financial aims,
a company can control their short-term performance from the three additional angles— the
customer’s perspective as well as internal business processes. In conclusion it can be said
that the scorecard serves to enable companies altering their business strategies in order to
reflect real-time learning efforts.
Transferring this process to Continental tires one could say that:

Continental already has a lot of sources they could gather feedback data from

They have internal programs and platforms where their employees can communicate
possible problems and their effort in the completion of a certain project

This would also help them to measure whether the planned marketing activities
promoting the use of remoulded tires had been fruitful or if anything needs to be
changed
Marketing-Mix
Product
What does the customer expect the product to be like?
The condition of the tires used impact several different areas, therefore customers
usually have high expectations towards the quality of the product.
The renunciation of tires offering the right quality and the correct condition your
vehicle will possibly be affected e.g. when you use incorrectly inflated tires this could
cause a reduction of the breaking distances as they would reduce the grip wheels
need to have when having contact with road surface.
What kind of features does my product have to meet the expectations?

Durability

Reliability
Remoulded tires are made from an old tire whose tread is worn-out but whose basic
structure known as a carcass is still reusable. Overall remoulded tires perform
satisfactorily following the instruction manuals e.g. maximum vehicle loadings, air
pressure and maximum speeds. In addition to that remoulded tires are a cheap and
environmentally friendly alternative compared to new tires.
Is this product of a great use to the customer and how could the customer use it?
Generally, it can be said that remoulded tires are a very usable and versatile, as they
can be used by everyone private persons as well as truck companies. Especially, truck
companies could save a lot of money using remoulded tires.
What does the product look like?
As there is no big difference between remoulded and new tires except for the
production process, they look exactly like tires people already have a clear image in
their minds that does not need any further explanations.
Which sizes should the company offer?
Continental tires already offers remoulded tires in a lot of different sizes and tread
performances. The only thing the company should think about in the future is the
production of remoulded tires for the use of the car industry, which had been
neglected compared to the effort the company puts into the truck industry.
How is the product branded?
Every remoulded tire, even if it had been manufactured by a partner franchise
company, will be sold under the brand name of Continental tires in order to keep the
quality image the brand already inherits.
What differentiates the product to the ones the competitors offer?
As Continental is known as a very traditional, high quality tire manufacturer holding
the market share leadership one could say that the competition pressure is relatively
low. Of course, there are some companies trying to adapt the typical characteristics
of a Continental tire, but in fact they cannot adopt their highly recognised brand
name. Although there are several cheaper alternatives consumers, especially when
it comes to car safety, are more likely to spend more money on a high quality product.
Moreover, Continental had been the first tire manufacturer practising remoulding.
Price
What is the value of the product to the buyer?d
-
High value
-
Quality
-
Safety
-
Durability
-
Reliablitiy
Are there established price points for products or services in this area?
As there are a lot of companies offering remoulded tires to different prices and
different qualities there is no established price point for this product.
Is the customer price sensitive?
Generally, it can be said that the European customer does not tend to be price
sensitive as they focus on quality instead of bargains.
What discounts should be offered to trade customers?
Overall, Continental should over quantity and loyalty discounts.
How will the price compare with the one of Continentals competitors?
As Continental relies on a high price strategy it will not compare to those of their
competitors as most of them offer their products to a much cheaper price following
a different strategy.
Promotion
Where and when will marketing messages be brought across to the selected target market?
Concerning Marketing Communications Continental tires should think about directly
getting into contact with companies having a potential demand of remoulded tires.
This could happen through the use of sales representatives offering high quality
consultancy services to overcome prejudice and possible worries. In addition to that
they could market the product through direct marketing activities such as the
distribution of products and e-mail campaigns offering introductory discounts or the
free use of samples for corporate clients, as the targeted audience will not be
reached by traditional media such as TV, radio or billboards.
When will be the best time to promote the product?
The best time to promote the product will be during the change of seasons; both
Winter to Spring/Summer and Summer to Autumn/Winter, as by that time people
need to change tires due to legal restrictions.
How do competitors advertise?
Generally, Continentals competitors do not advertise their remoulded tires as they
rely on the principle of mouth-to-mouth advertising. Their focus mainly lies on the
promotion of newly produced tires, as those will generate their sales. This gap could
therefore be a chance for Continental tires to gain a wider client range.
Placement
Where do buyers look for the product?
The buyers will potentially look for the product on online platforms or directly get in
contact with the company or wholesalers.
How does the company access appropriate distribution channels?
Overall, Continental tires already has an established network of various distribution channels
e.g.

They sell their products to wholesalers offering the products on- or offline.

They also have collaborations with truck companies promoting their product to
others.

They directly sell their products.

Continental’s Franchise partners sell the products individually choosing their own
distribution channels.
Does the company need a sales force?
Normally, speaking about normal tires Continental has no need to employ a sales
force, but thinking about remoulded tires, a product requiring explanation, a sales
force would be of a great use boosting their sales on a long-term view.
How are the competitors placing the product? Is there anything the company could adopt?
Basically, there is nothing Continental could adopt as all its competitors rely on the
same distribution channels as they do.
Marketing Research Process
Define Objectives/Problems
As the product “remoulded tires” have already been introduced to the market it is only
necessary to define new objectives and identify existing problems. Until now, manufacturer
have to cope with a lot of prejudice against remoulded tires, therefore this would be one
problem that need to be solved in the near future. Secondly, the company should focus on
the production and distribution for the car industry as there is still a gap in this market
segment.
Therefore the objectives would be:

To fill the gaps in the market  niche strategy

To apply more marketing measures to promote the product

To reduce the prejudice

To gain a wider clientele
The price strategy that will be used for the product is “Premium Pricing” as Continental is a
unique brand with an already existing substantial competitive advantage.
Determine Research Design
As a first measure Continental should aim for usable results to be gained by means of
exploratory research. Exploratory research is an effective way of collecting data about
competitors and their activities on the market.
The companies/competitors Continental has to involve in the research are:

Bandag  3rd biggest manufacturer of remoulded tires

Bandvulk

Pirelli

Marangoni  2nd biggest manufacturer of remoulded tires

Michellin

Bridgestone/Goodyear
With the information collected from the Secondary Research one should now be able to
create a survey asking their customers what features they expect the product to offer and
to check whether they think the product will be useful or not.
Regarding the sampling strategy “Judgemental Sampling” would be an appropriate measure,
as “the researcher decides who to include in the research” (Quinlan, 2011).
As an incentive for being part of the research there should be free trials testing remoulded
tires on vehicles of their choice. This incentive will on the one hand give potential customers
the chance to express their feelings and expectations and on the other hand will give the
company a chance to let them try their product in order to overcome potential prejudice.
In addition to that it will be cheaper than any other incentives as this method does not
require additional staff to be hired.
Designing and Preparing a Survey
A possible questionnaire to be handed out will be:
This questionnaire seeks your opinion on Continental remoulded tires for both the truck and
the car industry. Completing this survey you will help us fulfilling your needs and
expectations. Thank you for your cooperation.
1. Name of firm:
2. Occupation:
3. Phone number:
4. E-mail address:

Please rate how much the price of a product influences your buying decision on a
scale from 1 to 5 where 1 is the least and 5 the highest rating?

Have you ever heard of remoulded tires before?
o

If no, why haven’t you tried remoulded tires yet?
Have you ever bought remoulded tires?
o
If yes, have you ever tried Continental remoulded tires?


Have you been lucky with the quality and the reliability of the tires you bought?
o

If no, which brand have you bought?
If no, what could be improved to meet your expectations?
Would you be willing to test remoulded tires within your car pool?
Sampling and Data collection
The survey should be handed out via direct e-mails to both; loyal and potential customers.
This method also corresponds to the chosen sampling strategy, as it will only reach a selected
audience.
Analyse Data
In terms of analysing the data collected from both; the survey and the exploratory research
the most important thing before heading over to other measures is to structure the results
into two different sections useable and unusable data. Of course the researcher has to check
if there had been a complete understanding of the questions. Moreover, the survey will
probably show areas that indicate the need for improvement. Such results can be recognised
by a low or unsatisfactory rating. On the other hand the survey will also indicate areas in
which the company is already doing well or where there is the possibility of a future break
down.
Once the usable and important data is separated the overall structure could be set up:
1. Introduction
2. Main Body  includes results and customer advise
3. Findings/Discussion
4. Conclusion
5. Actions to be taken
By means of this analysis Continental will be able to find out about the strengths and
weaknesses, as well as about the areas of improvement their new product shows.
Prepare and communicate results
This area will answer the question of how the company could reach the objectives they have
set themselves beforehand. With the help of the survey results they are able to design a
marketing campaign only communicating the facts their target audience regard as important
towards a buying decision.
Strategic Management Process
Mission
Continental Tires is a sub-brand of the Continental AG focusing on the production of new, as
well as remoulded tires. The company can benefit consumers in terms of offering them tires
of the highest quality and service performance. Overall, it can be said that Continental’s
Tires Mission is to provide continuing innovation in the tire production such as the
distribution and the extension of remoulded tires for both; the truck and the car industry.
Situation Analysis
Regarding the situation analysis a SWOT, as well as a PESTEL-Analysis had already been
carried out. These models serve to evaluate and prioritize the company’s strengths,
weaknesses, opportunities and threats. In addition to that they enable the management to
find out which resources they can build on and to consider challenges they have to face in
the future.
Factors Continental can build on:

Offering remoulded tires as an environmentally friendly alternative

Creating further innovations for the tire production

Their widely recognised brand image
Challenges they have to face:

Economic-crises and fluctuations

Prejudice against new, innovative products

Competitors offering substitutes to a much cheaper price
Objectives
Within this step marketing objectives should be formulated. Marketing objectives should be
clear and measurable in order to serve as a basis for making any further choices and for
taking any further actions.
Continental’s Management objectives:

Five percent increase of profits coming from remoulded tires within the next year

Serving a wider area; maybe even cross-continental within the next 3 years

Gaining a wider clientele reaching from private customers to wholesalers
Strategy and Evaluation
The fourth step the management has to do is to develop an appropriate strategy to reach
the aims they have set up before. This involves the selection of a target market,
implementation tactics and effective ways to use the marketing mix tools. Having done that
one can head over to the next step “Evaluation”, which means that the management should
specify how, when and by whom the chosen tactics will be monitored and assessed.
For Continental Tires this means that the management has to find out about marketing tools
that help them to reach their chosen objectives e.g. launching a marketing campaign, special
discounts etc. in order to reach their aim of increasing their profit within one year. Regarding
the expansion to other areas they could think about collaborating with other manufacturers
and selling licenses to produce remoulded tires using their brand name.
Ansoff-Matrix
Overall, it can be said that Continental Tires tries to promote a present product in present
markets which leads to the fact of them practising Market Penetration.
With this strategy, they can easily exploit the product without necessarily changing it.
Market Penetration can be made through different measures e.g. advertisements,
promotional activities, pricing policies or a more extensive distribution.
But of course, as to all other things, there is also a certain risk involved as the product is
already familiar to the consumer and its established markets.
Secondly, regarding the plan of entering new, different markets one must admit that
Continental Tires also uses the Market Development strategy.
Market Development focuses on the business introducing already existing products to new
markets. To reach this objective Continental needs to do market segmentation in order to
identify a new clientele base. There are various approaches to enter new markets e.g. new
distribution channels, a new geographical location, redesigned product packaging, or
different pricing policies.
Concerning the entrance into new geographical markets Continental has three options.
Either they sell Franchise licenses to expand their network of branches into other areas, or
they export their goods into the targeted regions.
BCG-Matrix
Generally Continental Tires can be put into the category of being a „ Cash Cow“, but
regarding the promotion of remoulded tires they are in between of being either a Cash Cow
or a Poor Dog. This means that if they do not launch any marketing activities the product
will probably slide become a poor dog running the risk of being liquidated.
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