Michelin tire for 300c

Michelin Tires

Michelin MXV4 Tires for a Chrysler 300c

Method of Manufacture

The method of manufacturing for the Michelin Primacy MXV4 Tires is important in that it creates a performance level that is desired by certain drivers of specific cars, including the Chrysler 300c which is the selected target car for this particular initiative (TireRack, 2012). Though the manufacturing methods and the actual components of the tire are important in terms of product differentiation and marketing strategy, they are not expected to have any impact on the resources necessary for distributing, warehousing, and retailing the tires, and there is only one consistent quality in these tires expected from all suppliers (if indeed supplier choice is a significant factor given the single manufacturer of these tires). For this reason, manufacturing methods are not considered a major concern in this analysis.

Price Forecast

Currently, the price for a single Michelin Primacy MXV4 tire sized to fit a Chrysler 300c (with the performance enhancement package) is $170.98 at the Big-O-Tires located at 8022 Orchard Loop Lane in Elk Grove, California (Big-O-Tires, 2012). Again, this is the single unit price; sales of all four tires to a single customer would come at a discount that the company is currently offering; four units at $170.98 apiece would normally come to $683.92, however with the $70 coupon being offered this would drop to $613.92 (a per-unit price of $153.48 when all four tires are purchased at the same time) (Big-O-Tires, 2012). Considering both prices is important in determining potential revenue from retail sales.

Pricing in six months is expected to be highly similar to current pricing, perhaps with a three-percent increase in the price both to match inflation and to take advantage of heavier increased demand following the heavy summer driving season. A three percent increase on the per-unit price of $170.98 cited above for individual tires from the specific Elk Grove, California location would come to a price of $176.11 for a single tire, or $704.44 for a full-priced set of four (Big-O-Tires, 2012). If the discount offered on a set of four were to remain the same, the price for four tires would be $634.44 for a set of four, which translates to a per-unit price of $158.61; if the discount were increased along with the increase in tire price, say to $75 for a full set of four purchased at the same time, the price for the set of four would drop to $629.44, or $157.36 per unit. The current coupon is limited in timeframe, however, and while it is expected that Big-O-Tires will continue to offer coupons and discounts these offers change regularly, and it is unlikely that a discount will be offered on Michelin tires in six months (Big-O-Tires, 2012). Therefore the original given estimate without nay discount for a purchase of four is expected to be in place, and to be useful.