CONCEPT APPLICATIONS – WINTER 2000

 

MARKETING STRATEGY – CHAPTER 2

For several years a local community college has operated Communiversity, an adult education program, with only marginal success. Due to a recent tax referendum, the board of trustees has decided it must either significantly increase night-school enrollments or cancel the entire program. Develop a mission statement for Communiversity and a set of 10 objectives geared toward increasing enrollments.

As a member of a management-consulting group, you have been retained by a business-to-business office-equipment manufacturer. The company’s product line consists of the five strategic business units (SBUs) shown on the next page. Use the Boston Consulting Group portfolio analysis (as shown in exhibit 2.6, page 40) to determine each SBU’s relative market share and whether the company as a whole is healthy. Describe the nature of the BCG Market Growth/Market share matrix to top management and make recommendations as to future strategies.

Strategic Business Unit (SBU) Dollar Sales (in millions) Number of Competitors Dollar Sales of the Top 3 Market Growth Rate

A

.5

8

.7,.7,.5

15%

B

1.6

22

1.6,1.6,1.0

18%

C

1.8

14

1.8,1.2,1.0

7%

D

3.2

5

3.2,.8,.7

4%

E

.5

10

2.5,1.8,1.7

4%

 

For years Greyhound Bus Lines has been faced with stiff competition from increase automobile ownership and discount airline tickets. In 1960 the bus industry accounted for 30% of interstate transportation, but by 1994 its share had dropped to 6 percent. Perform a SWOT analysis for the bus industry and make a recommendation based on your analysis to Greyhound Lines.

You are given the task of deciding the marketing strategy for a transportation service. How do the elements of the marketing mix change when the target market is (a) corporate international business travelers, (b) low-income workers without personal transportation, or (c) companies with urgent documents or perishable materials to get to customers?

 

MARKETING ENVIRONMENT – CHAPTERS 3&4

Every country has its own set of core values and beliefs. For example, if you were born and grew up in the United States, you hold a number of core values and beliefs that are distinctively American. Identify ten of these core values and beliefs and clip magazine ads that attempt to appeal to at least three of them. Explain how the ads weave core values into the message.

One of the changes in the demographic environment is the increasing proportion of older adults, who comprise many markets for certain products. Discuss how this demographic trend could affect the product features and/or distribution arrangements of the following:

    1. Minute Maid orange juice
    2. Mail-order businesses
    3. The Social Security Office

Budweiser, Calvin Klein, McDonald’s, Coca-Cola, and Chevrolet are examples of brands that have become cultural symbols for the United States. Name some brand names and products that are cultural symbols for the following countries:

    1. Japan
    2. Russia
    3. France
    4. Italy
    5. Colombia
    6. Mexico
    7. England

 

Baby boomers in America are aging. Describe how this might affect the marketing mix for the following:

    1. Bally’s Health Clubs
    2. McDonald’s
    3. Whirlpool Corporation
    4. the State of Florida
    5. JCPenny

 

What special responsibility concerns could be raised about the following Web site? For which issues does the Web site seem to exhibit social responsibility? http://www.netcasino.com/

 

CONSUMER BEHAVIOR – CHAPTER 5

How could a marketing manager for each of the following organizations use Maslow’s needs hierarchy to develop marketing strategy?

    1. American Cancer society
    2. Revlon cosmetics
    3. Colonial Penn Life Insurance
    4. The Girl Scouts
    5. Calvin Klein jeans

Which of the following products are susceptible to the most postpurchase dissonance by consumers? Why? How might retailers reduce postpurchase cognitive dissonance for those products?

    1. Jaguar
    2. Tide detergent
    3. Sony CD player
    4. Encyclopaedia Britannica
    5. Suave shampoo

Select a low-involvement brand name product (e.g., Morton’s salt, Hunt’s ketchup) that is frequently purchased by consumers and assume that your company is its competitive challenger. What actions can you recommend to convince consumers to switch to our brand? Create a print ad that demonstrates your recommended strategy.

Assume you are involved in the following consumer decision situations: (a) renting a video to watch with our roommates, (b) choosing a fast-food restaurant to go to with a new friend, (c) buying a popular music compact disc, (d) buying jeans to wear to class. List the factors that would influence your decision in each situation and explain your responses.

Visit Land Rover’s "Authoritative Guide to SUVs" Web site at www.best4x4.landrover.com/?authority/authority.html. How does Land Rover assist consumers in the evaluation stage of choosing a new sport utility vehicle? Develop your own hypothetical evoked set of three or four SUV models and present your comparisons. Which vehicle attributes would be most important in our purchase decision?

 

SEGMENTATION/TARGETING – CHAPTER 7

Suggest a useful way to segment the markets for the following products:

    1. Household detergents
    2. Animal feeds
    3. Household coffee
    4. Automobile tires

Psychographic segmentation attempts to divide buyers into groups based on lifestyle and/or personality. The use of psychographics can help marketers fine-tune their marketing mixes in targeting certain groups. The following list is an example of the activities, interests, and opinions (AIOs) associated with the buying behaviors of users and nonusers of shotgun ammunition. Examine the AIOs and try to determine which are associated with heavy users of ammunition and which are associated with nonusers of ammunition:

    1. I like fishing.
    2. I like danger.
    3. I would like to be on the police force.
    4. I like hunting.
    5. There is too much violence on television.
    6. I like to play poker.
    7. I love the out-of-doors.
    8. I love to eat.
    9. There should be a gun in every home.
    10. I would like to be a professional football player.
    11. I like war stories.
    12. I like to work outdoors.
    13. I would do better than average in a fist fight.
    14. I read the newspaper every day.
    15. If given a chance, most men would cheat on their wives.

 

For each of the following product categories, choose a specific product. Name (1) the brand, (2) the size, (3) the manufacturer, and (4) the product’s market-segment/positioning strategy. In each case, why do you think the manufacturer chose to target this particular segment? How is each product’s segmentation strategy obvious from its packaging or promotion?

    1. Dry breakfast cereal
    2. Facial tissue
    3. Bar soap
    4. Toothpaste

 

Examine the following clusters of U.S. magazine titles. For each cluster, suggest the market niche to which the magazines appeal. Be as specific as possible in our answer:

    1. Car and Driver, Road and Track, Motor Trend
    2. Ebony, Jet, Essence
    3. New York Woman, Sassy, Cosmopolitan
    4. Financial World, Forbes, Fortune
    5. Savvy, Worth, Success
    6. Billboard, Rolling Stone, Spin
    7. Details, GQ, Esquire
    8. Mother Jones, Village Voice, Utne Reader
    9. Guitar Player, Musician

Create a perceptual map for the different brands of one of the following products: diet and regular colas, Ford automobiles, fast-food hamburger restaurants, or a product of your choice.

 

MARKETING RESEARCH – CHAPTER 8

Evaluate the following questions found in a consumer survey. How well will each question elicit the information desired? How could the question’s wording/format be improved?

    1. What is your husband’s favorite brand of golf ball?
    2. What TV programs did you watch last Monday?
    3. How many times did you eat pizza last year?
    4. What was the total income you reported on your federal tax return last year?
    5. What are the food and nonfood products that you typically buy at the supermarket each month?

Each of the following questions appears on a paper questionnaire that respondents fill out and return to a research firm. Rephrase and/or reformat each question so that the respondent is more likely to provide the research firm with the information it needs.

    1. Which brand to you like best?
    2. Can you tell me how many children you have, whether they are girls or boys, and how old they are?
    3. How much say do you have regarding the charities that your church contributes to?
    4. With what frequency have you experienced this phenomenon of late?
    5. Are auto manufacturers making satisfactory progress in controlling auto emissions?

 

Suggest creative ways to help companies research the following issues:

    1. A liquor company needs to estimate liquor consumption in a legally dry town.
    2. A magazine distribution house wants to know how many people read a specific magazine in doctors’ offices.
    3. A men’s hair tonic producer wants to know at least four ways it can find and interview the men who use its products.

 

Critique the following methodologies and suggest more appropriate alternatives:

a. A supermarket was interested in determining its image. It dropped a short questionnaire into the grocery bag of each customer before putting in the groceries.

    1. To assess the extent of its trade area, a shopping mall stationed interviewers in the parking lot every Monday and Friday evening. Interviewers walked up to persons after they had parked their cars and asked them for their zip codes.
    2. To assess the popularity of a new movie, a major studio invited people to call a 900 number and vote yes, they would see it again, or no, they would not. Each caller was billed a two-dollar charge.

 

Write a reply to the following statement: "I own a restaurant in the downtown area. I see customers every day whom I know on a first-name basis. I understand their likes and dislikes. If I put something on the menu and it doesn’t sell, I know that they didn’t like it. I also read the magazine Modern Restaurants, so I know what the trends are in the industry. This is all of the marketing research I need to do."

 

 

PRODUCT MANAGEMENT – CHAPTERS 10&11

Scenario: A couple of your friends drop by, and as the conversation continues into the evening you realize that you would all like a bite to eat. So you call Domino’s and order pizza and chicken wings. Then it occurs to you: Why is a pizza place selling chicken?

Although chicken has been one of the perennial best sellers in fast-food restaurants, today Pizza Hut, Little Caesar’s and Domino’s – all of which have a deep line of pizza – have added buffalo wings to their menus. (Buffalo wings are simply chicken wings drenched in hot sauce.) Assume that you were working for Domino’s (or one of the other major pizza chains) at the time it was considering the introduction of buffalo wings. Take the buffalo wings idea through the eight-step new-product development process, spelling out the questions that will arise at each step of the process. How are pizza and buffalo wings similar? What problems might the chains encounter if the wings are too successful? Do you think buffalo wings will continue to be commercially successful for the pizza chains?

Offer a definition of the basic business of each of the following large companies. In other words, what basic needs does each company seek to satisfy?

    1. General Motors
    2. Bayer (maker of aspirin)
    3. Twentieth Century Mutual Funds
    4. Sears
    5. U.S. News & World Report (magazine)

 

A local supermarket would like to introduce their own brand of paper goods (e.g., paper towels, facial tissue, etc.) to sell alongside their current inventory. The company has hired you to generate a report outlining the advantages and disadvantages of doing so. Write the report.

You are a marketing manager for Nike. Your department has come up with the idea of manufacturing a baseball bat for use in colleges around the nation. Assuming you are in the business analysis stage, write a brief analysis based on the questions in the "Business Analysis" section of the chapter.

Place personal computers, college textbooks, video games, and microwave ovens on the product life cycle curve, and give reasons for placing them where you did.

 

 

SERVICES MARKETING – CHAPTER 12

A CPA firm based in Cleveland, Ohio, has grown from billings of $315,000 to over $5 million since 1987 – an annual growth rate of 22 percent. Amazingly, the growth has been accomplished without mergers, acquisitions, or even a large marketing budget. The firm’s managing partner, Gary Shamis, admits that the firm’s service is excellent but not particularly better than hundreds of good competitors. Hat, then, is the secret to success for this CPA firm?

The firm uses a multidimensional marketing strategy that began with the drafting of a road map – a list of specific objectives that the firm wanted to achieve. The road map is a working tool that is used and reinforced daily to keep the goals visualized in the minds of the firm’s partners and associates. In addition, Shamis believes that clients buy perception and end up with reality. Creating a positive perception requires constant attention and reinforcement. The following marketing tools can help create this perception:

    1. Publicity
    2. Advertising
    3. Seminars
    4. Printed materials

For each of these marketing tools, suggest ways that a CPA firm can differentiate its services from those of its competitors, keeping in mind that most CPA firms offer the same types of services. Who should be responsible for implementing the firm’s multidimensional success strategy?

Identify the core need, service characteristics (quality level, features, styling, brand name, and packaging), and augmented product provided by the customers of the following service businesses:

    1. The U.S. Navy
    2. Organized religion
    3. A life insurance company

Develop a set of written guidelines for measuring and rewarding service performance in a rent-a-car agency.

Apply what you have learned about service quality to our university food service, and write a memo to the food service manager making recommendations for change, if needed.

Your nonprofit community theater is having problems attracting new patrons. Most of its current patrons are fifty years old and older. What other target markets might be viable? For each target market you choose, identify what promotion activities you would use to attract it.

 

 

DISTRIBUTION – CHAPTERS 13&14

Apply the wheel-of-retailing concept to the brokerage business. How did this industry begin? How has it changed and evolved over the years? Where does the industry stand now?

In two of its San Diego outlets, Montgomery Ward opened "law Store" booths that provide a one-time consultation for a $10 fee. Customers are ushered to a telephone booth-like enclosure, where operators connect them to a central office of lawyers who respond to queries over the telephone.

    1. To whom is this service targeted? (Consider the demographics of the people who shop at Montgomery Ward.)
    2. What types of legal services are likely to be offered, simple or complex?
    3. What types of atmospherics would you commend for the Law Store?
    4. What is the Law Store’s pricing strategy?
    5. What kinds of promotion is the Law Store likely to use?

For a number of years, computer manufacturer Gateway 2000 has been selling its computers through mail order. The company is now opening its own retail outlets. Discuss the factors involved in starting successful retail outlets. Where should Gateway locate its outlets? Once they are opened, how can Gateway assess the locations it has chosen for its outlets? What other factors will be important to Gateway'’ success in the retail industry?

Describe the most likely marketing channel structure for each of these consumer products: candy bars, Tupperware products, nonfiction books, new automobiles, farmer’s market produce, and stereo equipment. Construct alternative channels for these same products.

Decide which distribution intensity level – intensive, selective, or exclusive – is used for the following products and why: Rolex watches, Land Rover sport utility vehicles, M&Ms, special edition Barbie dolls, Crest toothpaste.

 

MARKETING COMMUNICATION/SELLING – CHAPTER 15

 

Bring to class five print ads that make use of celebrity endorsements. Is the endorser chosen for expertise, trustworthiness, or likability? How effective do you think these ads are? Are the ads believable? What is your feeling toward each of the celebrities in the ads? Do you think these ads are targeted toward you? What are some issues facing companies that use celebrity endorsers?

Black and Decker recently acquired the small-household appliances division of General electric, which manufacturers toasters, portable mixers, can openers, electric knives, irons, toaster ovens, and so forth. One of the decisions it now has to make is in the area of promotion. The small-household-appliances industry traditionally has been characterized by a push strategy, with trade promotions representing the largest proportion of dominant part of its promotional mix.

Individually or in small teams, brainstorm whether B&D should use trade or consumer promotions to launch its newly acquired product line. Would you recommend a push strategy or a pull strategy? What specific types of promotions would you use, and why?

A district sales manager voiced the following complaint at a sales meeting: "The average salesperson costs our company $40,000 in compensation and expenses. Why can’t we buy a few less $40,000 full-page ads in Time magazine and use the money to hire more people? Surely one individual working a full year can sell more products than a one-page ad in one issue of Time." Evaluate this argument.

For each situation, indicate whether the sales force should be compensated more on a straight-salary plan or more on a commission plan.

    1. Nonselling duties (e.g., providing technical services, giving time to public relations, setting up displays) are most important.
    2. The selling task is complex and involves a sales team, such as in the selling of data processing equipment or heavy machinery.
    3. The key objective is the generation of greater sales volume through new accounts.
    4. The company desires highly entrepreneurial sales reps who will not need much supervision.
    5. Sales show a marked seasonal pattern, with sales very high in some periods and very low in others.
    6. The company’s major goal is increased sales coming from the one-time transactions.
    7. The company actively seeks long-term relationships with its customers and excellence in customer service.
    8. The selling task is so routine that it amounts to order taking, such as in wholesaling and the selling of staple consumer goods.

Being a successful sales manager is often a function of having the right sales reps to manage. Imagine that you are a sales manager, and write three "yes" or "no" questions that you could ask yourself about the person you have just interviewed for a business-to-business sales position. Make sure your questions focus on qualities that you expect to find in your sales force. After composing your three questions, get together in our teams of five and make a list of about ten questions that will help you identify good job candidates.

 

ADVERTISING/SALES PROMOTION – CHAPTER 16

Bring to class a sample of one of your company’s sales promotions. What is this sales promotion’s objective? Do you think that it will accomplish its objective? What do you think is the most interesting or intriguing part about the sales promotion? Should it be continued? Why or why not? What are some of the negatives associated with this sales promotion, and with sales promotion in general? (Note: If you are not presently employed, bring in a sales-promotion sample from any company and analyze it using the questions above.)

When determining an ad’s message content, the communicator must determine what type of message will have the desired effect on the target audience. Bring to class examples of print ads making the following rational or emotional appeals:

    1. Vanity and egotism
    2. Economy
    3. Performance
    4. Fear
    5. Love or romance
    6. Environmental consciousness

Explain why you think the advertiser selected this appeal. Do you agree or disagree with the communicator’s decision?

As the new public relations director for a sportswear company, you have been asked to set public relations objectives for a new line of athletic shoes to be introduced to the teen market. Draft a memo outlining the objectives you propose for the shoe’s introduction and your reasons for them.

Identify an appropriate media mix for the following products:

    1. chewing tobacco
    2. People magazine
    3. Weed-Eaters
    4. foot odor killers
    5. "drink responsibly" campaigns by beer brewers

Design a full-page magazine advertisement for a new brand of soft drink. The name of the new drink, as well as package design, is at the discretion of the student. On a separate sheet, specify the benefits stressed or appeals made in the advertisement.

 

PRICING – CHAPTERS 17&18

Many consumers around the world want and can afford an expensive car. In the past, many people were willing to buy a Mercedes for its performance but thought the luxury automobile was overpriced. This gave Toyota the idea of developing a new car that could be convincingly compared to a Mercedes but could be positioned as a better value. Buyers would get the feeling that they were "smart" buyers, not just throw in their money away to gain status.

The result of Toyota’s decision was the Lexus, with its sculptured look, attractive finish, and plush interior. In one of its first advertisements, Toyota pictured a Lexus next to a Mercedes and ran the headline: "The first Time in History that Trading a $73,000 Car for a $36,000 Car Could Be considered Trading Up." Separate Lexus dealerships were set up featuring generous space, flowers, plants, free coffee, and professional salespeople and showrooms. Dealers developed a list of prospects and sent them a handsome package containing a 12-minute video dramatizing Lexus’s performance features. For example, the videotape showed an engineer placing a glass of water on the engine blocks of a Mercedes and a Lexus. When the car engines were turned on, the water shook on the Mercedes’ engine block, suggesting that the Lexus had a smoother engine and offered a smother ride. Early Lexus buyers were not only satisfied, they were delighted and raved about their new car to their friends. They became the company’s best (unpaid) salespeople.

What dilemma faces Mercedes and what are some of the possible actions it can take to respond to the challenges presented by Lexus?

Westinghouse is introducing a self-contained dishwasher that gets glasses and dishes "sparkling clean" in cold water. Westinghouse wants to evaluate the advantages and disadvantages of an introductory price-skimming approach versus a price-penetration approach. Discuss the pros and cons of each pricing strategy. On which factors will Westinghouse need to base its decision?

Go to one of the Internet auction sites listed in chapter 17. Report to the class on how the auction process works and the items being auctioned.

Janet Oliver, owner of a mid-priced dress shop notes, "My pricing objectives are simple: I just charge what my competitors’ charge. I’m happy because I’m making money." React to Janet’s statement.

 

Develop a price line strategy for each of these firms:

    1. a college bookstore
    2. a restaurant
    3. a video-rental firm