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Instructor’s Manual to Accompany Essentials of Marketing V-1
Part V:
Comments on Cases in Essentials of Marketing
INTRODUCTION
This edition of Essentials of Marketing includes two different types of marketing cases: 8 video cases and
36 traditional cases (after Appendix C in the text). This part of the manual provides teaching ideas and
background for each of the 36 traditional cases, called "Suggested Cases" in the text. “Suggested Cases”
are listed at the end of each chapter. Thus, the chapter-by-chapter aids in Part IV of this manual also
provide some brief comments about using the cases – about how each specifically relates to the
chapter’s material. . In addition, Part III of this manual provides general ideas about using traditional
cases and/or video cases in your class. The separate Instructor's Manual to Accompany the Teaching
Videos for Essentials of Marketing provides more detailed information (references, ideas for related
student projects, etc.) about the video cases.
Traditional Cases
The 36 traditional cases vary: in length, in whether or not they are based on well-known or fictitious
companies, in the amount of qualitative vs. quantitative information presented, in the type of marketing
Sometimes, however, students have access to "assignment files" (for example, through a fraternity or
dorm) that might have copies of write-ups of cases from previous semesters. So the cases retained from
previous editions are sometimes disguised in a variety of ways, including: changes in the title, changes in
peoples’ names, changes in minor details, and changes in numbers and dates. Feedback from instructors
around the country indicates that these changes are effective in defeating the possible effects of the
The set of questions at the end of each video case description (printed version in the “Videocases”
section at the back of the text) can be used to get students started in thinking about the marketing issues
in the case. The questions can be assigned along with the case (printed or video form or both) as the
basis for an individual student written assignment or as preparation for in-class discussion. The
Part V
V-2 Perreault, Cannon, & McCarthy
2. Bass Pro Shops (Outdoor World)
3. Toyota Prius: The Power of Excellence in Product Innovation and Marketing
4. Potbelly Sandwich Works Grows through “Quirky” Marketing
5. Suburban Regional Shopping Malls: Can the Magic Be Restored?
6. Strategic Marketing Planning in Big Brothers Big Sisters of America
7. Invacare Says, “Yes, You Can!” to Customers Worldwide
8. Segway Finds Niche Markets for Its Human Transporter Technology
COMMENTS ON EACH OF THE TRADITIONAL CASES
Case 1: McDonald's "Seniors" Restaurant
Lisa Aham's strategy is evolving – at least with respect to her senior citizen customers. She is
encouraging a friendlier "product" and her target customers are responding. As long as this strategy does
not conflict with her other "fast-food" strategies for other customers at other times, there seems to be no
problem. NOTE: Most of the seniors do leave by 11:30 am, before the noon crowd. Regarding the bingo
idea, "parties" are now allowed, so this could be considered a "bingo party.” Bingo might cause some
seniors to stay longer, however, f the "seniors" should come in greater numbers and stay longer, they will
"crowd out" other target markets. Lisa will then have to change her evolving senior citizen strategy.
Note 1: This case is adapted from what did happen in a Detroit, Michigan McDonald's restaurant. The
bingo idea was not used there; just the heavy emphasis on seniors.
Note 2: McDonald's and some other fast-food places are allowing modification of their basic strategies to
suit local conditions. McDonald's allows franchisees to change exterior designs and interior decorations to
"fit in" to surrounding areas.
This case is placed first in the set of cases to help make the point that market-oriented strategy planning
is not just a big manufacturer activity. Further, it can be used to show that a particular business may have
to create and implement several strategies at the same time. It also can be used to emphasize that
friendly personal service can be an important part of a firm's "Product."
Case 2: Golden Valley Foods, Inc.
Golden Valley Foods is typical of the many production-oriented (volume-oriented) food processors who
can be characterized as "pea-packers.” Its production facilities can only be used for a short time each
year – when the crop is ripe – and so the natural focus is on producing as much as possible and then
"getting rid of it" later. When there are many similar producers, however, this leads them into almost pure
competition in the market price. Further, if all the other producers are trying to produce as much as they
can, then the only way for a particular producer to increase revenue is to produce more. Of course, this
can be self-defeating if industry demand is inelastic.
Golden Valley Foods has achieved brand recognition for its various products, but its major competitors
have done so as well.. This suggests monopolistic competition. However, given that the intermediaries
can and are willing to substitute one brand for another, it is clear that the market is closer to pure
competition. This helps explain why profits have almost disappeared. Unless Golden Valley Foods
becomes more market-oriented, it is likely that conditions will worsen. It appears that several competitors
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Comments on Cases in Essentials of Marketing
Instructor’s Manual to Accompany Essentials of Marketing V-3
are able to mount more profitable efforts with substitutes, and so they will have more money for promotion
or to absorb price competition. Some of its competitors' better performance may be due to production
decisions (such as vertical integration). But it is also likely that some of it is due to focusing on more
profitable products – such as "gourmet" vegetables and frozen dinners or entrees with vegetables – while
Golden Valley Foods has been volume-oriented, hitting all of its major competitors head-on in the "mass
market for commodities."
Now that Golden Valley Foods is trying to become more profit-oriented, it may think seriously about
developing profitable strategies – rather than just marketing mixes to increase sales volume. This may
lead it to drop some items – and to place greater emphasis on particular geographic areas where
competition is not as tough. Further, it might consider new products. Perhaps it would want to think about
preparing parts of or whole dinners, i.e., instead of focusing only on “packing commodities.” Perhaps it
ought to put more convenience into its products. Packaging a variety of TV dinners, for example, might
yield a much greater return on the "peas and carrots" it has been selling as "commodities.” Unfortunately,
however, others are doing this already. So it would not be an innovator. In fact, these markets may be in
or close to market maturity already, so Golden Valley Foods has a tough job ahead! It should have
become "market-oriented" many years ago!
Case 3: NOCO United Soccer Academy
Many companies have difficulty making the transition from a successful small company with a few
employees to the next level. The case allows the instructor to discuss a variety of different topics
including: target market selection, customer equity, lifetime customer value, growth through acquiring
customers, retaining customers, and expanding business with current customers.
The case is easily understood, as most students are familiar with sports marketing situations. In fact, to
get students interested, the instructor might start the case by asking, “How many of you participated in
youth sports?”
The case offers four distinct teaching options. The first option focuses on current customers and seeks to
keep them involved with NOCO United longer. It can be easier to retain current customers – as opposed
to acquiring new customers. But, you might ask, “How easy will it be for NOCO United to keep these
customers?” As kids enter high school there are more activities competing for their attention. You might
ask, “Which of its current 14-15 year old customers are most likely to remain interested in soccer
training?” It seems that those kids who are the best soccer players, perhaps those seeking college
scholarships, are most likely to want to continue. If that is the case, then the development of a more “elite”
program, one that includes teaching them how to attract the attention of college coaches might appeal to
this group. You could discuss Promotion, Price, and Place issues – as each of these should be adapted
to the target market. A premium product might also be able to generate better margins. Promotion to this
group needs to be highly targeted. Having worked with these kids, Wesley Diekens could talk to them and
their parents directly or have targeted e-mails. Place issues might address what times of day and times of
year are most convenient for high school age participants.
The second option targets all current customers and tries to grow by increasing their use of and spending
for soccer training. This may lead to a wide-ranging discussion about what other needs these athletically-
oriented kids have. Clearly, there is a need to balance the kids’ soccer needs with NOCO United’s
strengths. While some students may bring up ideas like offering training in other sports, this neither
appeals to Diekens nor builds on NOCO United’s strengths. At this point, the instructor can point out that
the needs of the company AND its customers are important in determining a marketing strategy. Still,
there may be variations on Product. For example, off-season training might differ from in-season training.
Other options may include some sort of quantity discount price. For example, NOCO United might offer
discounts to people signing up for their third program in a given year. Students might suggest other
variations on the loyalty/rewards theme (loyalty cards, parent partner rewards, business sponsors, etc.).
The third option focuses on customer acquisition by targeting younger kids (age 6-9). Kids in this age
group have a longer potential lifetime value, assuming that Diekens can keep most of them active in his
Part V
training programs through age 15 or later. Many of these kids play in the local recreation leagues, but
some parents are looking for higher quality training to give their kids an edge. A question like, “What are
the likely challenges to developing a marketing mix to serve these customers?” helps students focus on
how marketing mixes need to be tailored to particular market segments. There might also be discussion
The fourth growth opportunity focuses on acquiring customers – but in a new geographic location. “How
would the marketing mix need to be adapted to increase market penetration in nearby Loveland or
Greeley?” The obvious answer might be offering programs in these towns. This is accompanied by the
challenge of building awareness. While NOCO United might rely on word-of-mouth, other methods might
get people interested more quickly. “How would they identify their target market?” “What would their
message be?”
Wendy Woo failed to develop a unique marketing strategy and instead decided to compete head-on with
a firmly entrenched competitor, Eric Steele. Eric is winning in this competition, and demand is probably
not sufficient to support both Wendy and Eric even if she gets a larger share of the business than he now
has. So far, she’s not been very successful in taking business away from him, in spite of the fact that she
thinks she has better technical skills. She needs to look at this from the customer’s point of view. It may
be that Eric has better people skills, even if he doesn’t have all of Wendy’s technical skills. In this type of
Wendy has not been able to reach her sales objective of $70,000 a year, and without changes, it is
unlikely that she will. Based on the facts in the case, Wendy is mainly getting business that Eric can’t
handle in a timely basis. Some of that business involves short-term emergencies and some of it relates to
the seasonal fluctuation in demand (a weakness in her Place decision). Petoskey is where she wants to
The seasonal nature of demand may not seem like a high-priority problem to be solved now since she
doesn’t even have enough work to keep busy. But it is a basic limitation with her strategy of targeting
consumers who are not there much of the year. Even if she builds her base of residential customers
(takes some market share away from Eric) and develops more repeat business, the seasonal nature of
demand in Petoskey is a longer-term limitation. This is a service business and her “production capacity” is
Comments on Cases in Essentials of Marketing
periods in early summer and early fall as people are moving in and out, she won’t be able to keep up.
Resort town markets often create a “boom or bust” situation for all kinds of businesses!
The case tells students that Wendy is yielding about $200 a week, which is $10,400 a year, from the
emergency business. The seasonal business might yield $9,000-$12,000, based on $150-$200 a day
Students will see that there is little that Wendy has done to differentiate her offering, and many will also
argue that she probably won’t be able to offer customers a better value than they can get from Eric. What
many students will miss is that even if she is successful (over time) in taking a larger share of the market
away from Eric, the overall demand that the two of them split is not likely to grow rapidly. Thus, even in
that “optimistic” outcome, revenue that was sufficient for Eric would simply be divided between the two of
them. In that sense, while Wendy’s decision to enter the market may ultimately hurt Eric (take away some
marketing program is profitable even if no individual strategy, by itself, is.
In evaluating alternative opportunities (and strategies) she might set one screening criteria based on the
seasonality of demand. She would be better off if she could “add” a new target market and marketing mix
that would keep her busy during the slower winter months. It might be that some large business
network, installing new versions of software, replacing old computers with new models, etc.). During such
times, a company’s internal staff may be overloaded and eager for short-term help from a consultant.
Wendy might want to research opportunities such as this, and if the demand appears to be there, she
could make some sales calls on “prospects” to tell them about her capabilities. This is not the sort of
business that she is likely to get by simply sending out a flyer or advertising in the newspaper. It would
And this is certainly not the only possibility. Wendy might look for totally new areas that could use her
skills, areas where there is more potential for growth (and less competition). Consider, for example, her
decision to focus on computer service as her Product. In an upscale resort community, there is likely to
be interest in and demand for other Products like “high-end” home theater systems. These usually require
installation, technical skills that many consumers don’t have, and even occasional service. In fact, there is
a merging of technologies, such that many computer companies are now offering audio/video accessories
Regardless of the alternative opportunities Wendy decides to pursue, she will probably need a
combination of different strategies if she wants to stay in Petoskey and wants to keep a partial focus on
her “core” idea of providing computer services for home offices. She may be able to achieve her income
objective if she chooses several targeted strategies at the same time and implements them well. For
Part V
early spring (so systems are installed when residents move back to town), and work to get some large
business consulting work, especially during the winter months. By combining these strategies, she may
make enough to be able to reach her objective of making a living in Petoskey – even if she can't reach
her $70,000 objective right away.
In other words, by carefully developing several marketing strategies – rather than just one – and then
implementing them alongside each other, she may be able to stay in the area. It is important to see that
Case 5: Polystyrene Solutions
A production-oriented research engineer and her company anxiously sought a market for the component
materials it could already make (although it is now trying to sell an installation – note the product class
change at some stage in the discussion, because this calls for different marketing mixes as long as they
Before any further work is done, a more careful analysis of the probability of acceptance in various
markets should be performed – especially in the "global markets" suggested by Paige Chen, the young
engineer who developed the product. . This would be far less expensive than the trial and error
(demonstration) approach that Chen endorses, . Typically, such people like to produce tangible evidence
of their research efforts, but the added cost (time and money) of finding architects and building inspectors
who will bother to look at the products discourages Chen. Following some preliminary market research, it
Case 6: Applied Steel
Applied Steel is facing oligopoly conditions in the smaller sized markets. Although price competition is
sometimes avoided in such markets, here price competition from smaller and lower cost producers has
been pushing prices down. In the production of flanges 24 inches or larger, USX has had a monopoly;
this is the market Applied Steel is aiming at with its "new product."
Using a typical production-oriented approach to product development, Applied Steel has introduced a
"new" component material that does not meet standard specifications, so the structural fabricators will not
buy (unless they are foolishly willing to use non-spec'd materials and assume all the liability that
otherwise would fall on the architects). Further, it has not worked with architects to get them to write a
more general set of specifications that will cover this "new" product. As long as sources of supply are
adequate and prices are the same, it is likely that the new product will not sell at all. Sales effort should
Comments on Cases in Essentials of Marketing
Instructor’s Manual to Accompany Essentials of Marketing V-7
When students address the characteristics of the market segment(s) targeted by the company, they are
likely to identify immediately the basic characteristics above, especially wealth. It’s useful to have
students list some of the different types of people who might fall into this group. These might include
politicians or others with high public visibility, corporate executives with high incomes and net worth,
entertainers (from the music, TV, and movie sectors), high-profile professional athletes, and people with
inherited wealth. Some needs are similar across these different types of customers. For example, they
was ideal. No doubt they also have different ideas about what to do with their leisure time–and that
makes it challenging for the firm to cater to their individual preferences.
Expectations of the customer group will obviously be very high. Omarama Mountain Lodge can’t get good
word-of-mouth referrals or satisfy its current customers if everything isn’t exactly the way its customers
faced by other service organizations. Disney, for example, focuses on a very different kind of market, but
it still must cope with the fact that people who go there don’t find everything they might expect as normal
(such as fast-food places with 99 cent hamburgers). Disney tourists may also get things they don’t want
or expect–like a two-hour wait in a line for a popular ride. Disney tries to deal with these problems by
using careful communications to manage expectations.
Most customers are likely to be foreigners rather than New Zealanders for the simple reason that
Omarama Mountain Lodge is more likely to be seen as interesting and exotic by someone from far away,
rateher than by someone who already lives in New Zealand–even if the person is quite wealthy. In part,
the fact that Omarama Mountain Lodge is so difficult to reach makes it attractive to people who otherwise
can have or do anything they want. This sort of wealth is not concentrated in certain countries. For
example, they might just as likely come from China, the Middle East, or Europe as from the U.S. or
It would be difficult for Omarama Mountain Lodge to perform traditional marketing research – at least if
that means quantitative surveys. Its target customer is not the kind of person who is likely to respond. On
the other hand, there is probably a good opportunity to make use of secondary data and/or to do some
informal qualitative research with guests who are actually there. For example, in the domain of secondary
data, Omarama Mountain Lodge might be able to research similar resort facilities in other parts of the
certainly have the opportunity to ask guests how they learned about the lodge, what services or features
were most interesting to them, what they found lacking, and the like.
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Part V
V-8 Perreault, Cannon, & McCarthy
Case 8: Besitti’s Restaurant
It seems doubtful that Rosa Besitti has a clearly defined marketing strategy. She picked a location (Place)
near the intersection of major traffic routes because she felt that: "obviously the potential is here.” This
perhaps family business from the neighborhood. Perhaps word-of-mouth advertising among travelers
may account for some of the growth. In any case, it is clear that she did not recognize the potential power
of promotion.
If Rosa were interested in attracting traveling people, it might have been wise for her to offer
complimentary dinners to gas service station owners and attendants in the nearby area – to acquaint
Note that she had to invest an additional $3,000 for "survival purposes," which probably means to meet
the ongoing expenses that were not met out of gross revenues. This is another case of "having to spend
money to make money," and production-oriented people are often very reluctant to spend money on
promotion to tell people what a good product they have. However, without promotion, Rosa had to wait a
long time before some customers found that she did have an attractive offering.
It is important to recognize that Besitti’s Restaurant is not yet a "big success.” Rosa is still not drawing a
salary out of the business. Further, she is planning to invest the small "surplus" into improvements that
may be necessary just to provide adequate service. Further, at $4,200 gross per week, she is still a "small
business," grossing only $218,400 per year. A typical fast-food franchise would be grossing much more –
without all of the care that Rosa is lavishing on her business. Many McDonald's fast-food restaurants
So it should be clear that Rosa has created a "small business" that may require her continued
involvement just to break even. Without a bar or at least a liquor license, he may be doomed to working at
her present level just to break even. With hard work, she may be able to make a living – but it doesn't look
like she has an outstanding strategy that will cause sales to increase much more. Therefore, she might be
wise to consider going with a franchise chain – to get someone else to do the strategy planning for her. It
may be "too late" – given that she has "locked" into this place for 10 years and has already invested a lot
This case can be used to emphasize that it is necessary to have a good strategy to make money. Hard
work alone is not enough.
Case 9: Peaceful Rest Motor Lodge
This case describes the typical production-oriented businessperson who designs a product to satisfy
himself. As a traveling businessman, Tristan Knaus had been in many motels and now has bought one
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Comments on Cases in Essentials of Marketing
His motel is probably seen as an emergency product by some tourists and a homogeneous shopping
product by others, both of whom are just looking for an economical place to stay. He is probably losing
most of those who think of motels as heterogeneous shopping products (those who drive in and out
If Tristan Knaus wants to continue with his present "economical traveler" strategy, he probably should
consider raising prices some. There is no point in "giving away" his rooms. This will not increase the
occupancy rate, but it may increase profits. Alternatively, depending upon his present customer mix, he
might decide to raise prices even higher and count on the "emergency product" business. Whether this is
a good alternative depends upon the mix of his present customers. If most of them come in late in the
evening and stay only one night, then he might want to rely on place convenience to attract enough of
Affiliating with Days Inn of America, Inc. is the "next step" beyond the possibilities discussed above. The
major advantage of going with Days Inn is the additional business that would be generated by the
reservation service and “drive-ins” attracted by the Days Inn brand. Because no other Days Inn is
nearby, it is likely that additional business would be obtained – though probably not the 40 percent
would probably show that the Holiday Inn alternative is less attractive than one or more of the others,
because of the required improvements and the unlikely increase in sales given his poorer location (away
from the resort area). In contrast, proximity to the interstate highway may improve the likely results of
going with Days Inn. If being near this intersection is attractive to motel operators, he should expect to
see one or more motels being constructed near his motel – but closer to the intersection with the major
Depending on the instructor’s objectives, it is possible to push the analysis of the numbers in this case a
bit further. This doesn’t bring some clear resolution to the issues and is not intended to be a substitute for
a look at the qualitative considerations, but it can help students realize that a “rough cut” at a profitability
analysis can sometimes be useful even if there is a lot of missing information. For example, we know that
the motel has 60 rooms and that it has a 55 percent occupancy rate. So, on average, that means Tristan
The case does not explicitly say what price Peaceful Rest Motor Lodge would charge per night per room
if it were part of the Days Inn chain, nor does it state what occupancy rate might be achieved. However, if
the occupancy rate went up to the average level for this type of hotel (68 percent), that would be an
increase in occupancy of about 24 percent (that is, 68 percent average occupancy minus 55 percent
current occupancy is a 13 percent increase, and 13 percent divided by the current rate of 55 percent is
about 24 percent growth). Most of the expenses of running the hotel are probably fixed, and the variable
Part V
cost of renting out a room is not very high (laundry, wear and tear on linens, utilities, and maid service),
so it is likely that joining Days Inn would result in much higher revenue for Peaceful Rest Motor Lodge,
even after paying the 8 percent “commission” on gross sales. An example: if the room rate per night
remained the same as it is now, and the occupancy rate only went up to the industry average, Peaceful
Rest Motor Lodge’s revenue (after paying the fee) would be about $618,342. This is the result when you
increase the current revenue by the 24 percent increase in occupancy (which gives you about $672,111)
much to clean the rooms and keep them in shape, this looks like it might be a more profitable
arrangement than what is happening at present. If could be quite a bit more attractive if the room rate
could be higher, the occupancy rate higher, or both happened at the same time. Note that the point here
isn’t to be precise so much as it is to show that one can work with little information, yet “get a handle” on
the financial side of this issue.
The Holiday Inn arrangement requires more cash up front, but that is offset by higher room rates. For
example, if the occupancy rate went up to the industry average (68 percent) and the rooms could rent for
$75 per night on average, the total revenue would go up to about $1,027,549 (after paying the fee). This
is the result of multiplying 60 rooms x .68 occupancy rate which is 40.8 rooms (on average) per night or
about $3,060 per night in revenue multiplied by 365 nights per year is about $1,116,900 gross revenue,
from which 8 percent ($89,352) must be subtracted for the fee. If the average occupancy rate could be
be unrealistic even with the Holiday Inn reservation system kicking in. The Peaceful Rest Motor Lodge
location is a bigger disadvantage – and one he can’t easily change–if he really wants to compete against
the other better quality motels.
In short, this rough analysis suggests that either the Days Inn or Holiday Inn affiliation might be more
profitable than what Tristan is achieving at present. It would take a more complete analysis, including
Case 10: Cooper’s Ice Center
Claude Cooper is facing a very difficult problem, one that has been "solved" by most rink operators by
simply catering to the "mass market" – anyone who wants to skate in a public skating session. As
explained in the case, this leads to the ice rink catering to a mixed group. Some people want exercise
(physiological or personal needs). Others see it as a social situation. And the younger kids are just there
