Hayes Enjoys a Well-Established Position as a Supplier to the Automobile

question 34

Essay

Hayes enjoys a well-established position as a supplier to the automobile industry. The firm supplied wheels to the Model T Ford. Today, Hayes is betting on a new product, fabricated aluminum wheels, which weigh up to 20 percent less than cast aluminum wheels and 40 percent less than steel ones. Hayes has signed contracts worth $50 million for the new wheels-mostly for use in spare tires-with DaimlerChrysler, Ford, General Motors, and BMW. Drawing on the industrial goods classification scheme, how would you classify the aluminum wheels? Sketch out the critical buying motives that organizations like DaimlerChrysler would emphasize in evaluating the wheels and explore Hayes' associated marketing strategy implications.

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Definitions:

Employer's Payroll Taxes

Taxes that an employer must pay based on the wages and salaries of its employees, which can include Social Security taxes, Medicare taxes, and unemployment taxes.

Medicare Tax Rate

The percentage of an individual's earnings that is deducted to fund the Medicare program, as specified by federal law.

Social Security Tax

A tax that funds the Social Security program, collected from both employers and employees to provide retirement, disability, and survivor benefits.

Hourly Wage Rate

The sum of money received for every hour worked.