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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 companys 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 SBUs 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:
- Minute Maid orange juice
- Mail-order businesses
- The Social Security Office
Budweiser, Calvin Klein, McDonalds, 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:
- Japan
- Russia
- France
- Italy
- Colombia
- Mexico
- England
Baby boomers in America are aging. Describe how this might affect the marketing mix for
the following:
- Ballys Health Clubs
- McDonalds
- Whirlpool Corporation
- the State of Florida
- 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
Maslows needs hierarchy to develop marketing strategy?
- American Cancer society
- Revlon cosmetics
- Colonial Penn Life Insurance
- The Girl Scouts
- 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?
- Jaguar
- Tide detergent
- Sony CD player
- Encyclopaedia Britannica
- Suave shampoo
Select a low-involvement brand name product (e.g., Mortons salt, Hunts
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 Rovers "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:
- Household detergents
- Animal feeds
- Household coffee
- 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:
- I like fishing.
- I like danger.
- I would like to be on the police force.
- I like hunting.
- There is too much violence on television.
- I like to play poker.
- I love the out-of-doors.
- I love to eat.
- There should be a gun in every home.
- I would like to be a professional football player.
- I like war stories.
- I like to work outdoors.
- I would do better than average in a fist fight.
- I read the newspaper every day.
- 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 products
market-segment/positioning strategy. In each case, why do you think the manufacturer chose
to target this particular segment? How is each products segmentation strategy
obvious from its packaging or promotion?
- Dry breakfast cereal
- Facial tissue
- Bar soap
- 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:
- Car and Driver, Road and Track, Motor Trend
- Ebony, Jet, Essence
- New York Woman, Sassy, Cosmopolitan
- Financial World, Forbes, Fortune
- Savvy, Worth, Success
- Billboard, Rolling Stone, Spin
- Details, GQ, Esquire
- Mother Jones, Village Voice, Utne Reader
- 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 questions wording/format be
improved?
- What is your husbands favorite brand of golf ball?
- What TV programs did you watch last Monday?
- How many times did you eat pizza last year?
- What was the total income you reported on your federal tax return last year?
- 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.
- Which brand to you like best?
- Can you tell me how many children you have, whether they are girls or boys, and how old
they are?
- How much say do you have regarding the charities that your church contributes to?
- With what frequency have you experienced this phenomenon of late?
- Are auto manufacturers making satisfactory progress in controlling auto emissions?
Suggest creative ways to help companies research the following issues:
- A liquor company needs to estimate liquor consumption in a legally dry town.
- A magazine distribution house wants to know how many people read a specific magazine in
doctors offices.
- A mens 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.
- 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.
- 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 doesnt sell, I know that
they didnt 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 Dominos
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 Caesars and Dominos 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 Dominos (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?
- General Motors
- Bayer (maker of aspirin)
- Twentieth Century Mutual Funds
- Sears
- 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
firms managing partner, Gary Shamis, admits that the firms 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 firms 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:
- Publicity
- Advertising
- Seminars
- 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 firms
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:
- The U.S. Navy
- Organized religion
- 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.
- To whom is this service targeted? (Consider the demographics of the people who shop at
Montgomery Ward.)
- What types of legal services are likely to be offered, simple or complex?
- What types of atmospherics would you commend for the Law Store?
- What is the Law Stores pricing strategy?
- 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,
farmers 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 cant
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.
- Nonselling duties (e.g., providing technical services, giving time to public relations,
setting up displays) are most important.
- The selling task is complex and involves a sales team, such as in the selling of data
processing equipment or heavy machinery.
- The key objective is the generation of greater sales volume through new accounts.
- The company desires highly entrepreneurial sales reps who will not need much
supervision.
- Sales show a marked seasonal pattern, with sales very high in some periods and very low
in others.
- The companys major goal is increased sales coming from the one-time transactions.
- The company actively seeks long-term relationships with its customers and excellence in
customer service.
- 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 companys sales promotions. What is
this sales promotions 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 ads 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:
- Vanity and egotism
- Economy
- Performance
- Fear
- Love or romance
- Environmental consciousness
Explain why you think the advertiser selected this appeal. Do you agree or disagree
with the communicators 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 shoes
introduction and your reasons for them.
Identify an appropriate media mix for the following products:
- chewing tobacco
- People
magazine
- Weed-Eaters
- foot odor killers
- "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 Toyotas 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 Lexuss 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 companys
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. Im happy because Im
making money." React to Janets statement.
Develop a price line strategy for each of these firms:
- a college bookstore
- a restaurant
- a video-rental firm
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